Consumer Behavior

Class room Notes – Internal 1

G S Sreekiran
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 Consumer Behavior
• Is the decision process and physical activity
individuals engage in when evaluating,
acquiring, using or disposing of goods and
services

G S Sreekiran, Asst.Prof. AIMS

 Basic Consumer Behavior Role
• Initiator
• Influencer
• Buyer
• User

Initiator - individual who determines that some need or want is not

being met and authorizes a purchase to rectify the situation
Influencer – influences the purchase decision, the actual purchase
and or use of the product or service
Buyer – Who actually makes buying transactions
User – Who directly involved in consumption or use of the product
G S Sreekiran, Asst.Prof. AIMS
 Significance
• Understanding consumer’s needs wants and
demands.
• Analyzing the demand pattern the basic
reason/cause behind that.
• Market opportunity analysis
• Target market selection
• Marketing mix determination

G S Sreekiran, Asst.Prof. AIMS

 Needs, Wants & Demands
• A marketer must understand the target segment’s Needs, Wants &
Demands
• Companies must measure not only how many people want their product,
but also how many would actually be willing and able to buy it.
Demands– Wants for specific
Need s– Basic Needs products backed by an ability to
eg: Food pay

Wants– When directed to specific

G S Sreekiran, Asst.Prof. AIMS
object which satisfy the need
 Types of Demand
• Negative demand – Dislike and Avoiding
• Non Existent demand – Unaware/Uninterested
• Declining Demand – Buying less frequently
• Irregular demand – Seasonal
• Full Demand – Adequately buying
• Overfull demand – More consumers buying the product
• Unwholesome demand – buying products that have
undesirable social consequences.
“Marketing managers seek to influence the level, timing and composition of
demand to meet organizational goal. They must identify the underlying cause f
demand state and develop the strategy to shift it to desired state.”

G S Sreekiran, Asst.Prof. AIMS

 Market Opportunity Analysis
• Examining trends and conditions in the market
place
• Studying general market trends
• Consumer’s life style and income level

G S Sreekiran, Asst.Prof. AIMS

 Target Market selection
• Consists of a set of buyers who share
common needs or characteristics that the
company decides to serve.
• The process of reviewing market opportunities
often results in identifying distinct grouping of
consumers.

G S Sreekiran, Asst.Prof. AIMS

 Marketing Mix determination
• Product – size , shape, features, package etc
• Price – Sensitivity to price, How much?,
Discount etc
• Place – Where and How, Distribution, retailer
etc
• Promotion – How to communicate. Methods of
promotion, convey the best message, frequency
of communication
The decision on Marketing Mix is influenced by the consumer
behavior.
G S Sreekiran, Asst.Prof. AIMS
 Maruti Suzuki – Market opportunity
analysis – Case discussion
Maruti Eeco
• Geographical Segmentation – India
• Demographical – Middle Income Family, Big
- Family
- Prize – 2.86 L – 3.82 L
• Target Group- Middle Income Group
• Product Variants – 5 Seater, 7 Seater (w/wo AC),LPG
• Core Benefits – Big Storage space, Fuel Efficiency, 1200 cc
engine, Design on Indian Road condition
• Positioning – Big Family Car & Multi Purpose Vehicle

G S Sreekiran, Asst.Prof. AIMS

 Consumer Rights & Protection
• Many agencies at all levels of government are
involved with regulating business practices for
the purpose of protecting consumer’s welfare.
• Increased their efforts to provide consumers
with information believed useful for making
purchase decisions.

G S Sreekiran, Asst.Prof. AIMS

 Cont.
• IRDA – (Insurance Regulatory Development
Authority) – Insurance companies to
communicate all charges, policy details,
exclusions, conditions & Possible returns to the
consumer.
• SEBI – Regulates selling or Mutual Fund and other
equity products
• Ombudsman – Consumer grievance redressal
• Consumer Courts - Consumer grievance redressal
These efforts are to protect consumer rights and avoid mis-selling of
the product G S Sreekiran, Asst.Prof. AIMS
 Cont.
• FDA (Food and Drugs Administration) –
Marketers should not claim the results which
are not substantiated by research.
• Alcoholic beverages advertisements are
banned.
• Tobacco products advertisements are banned.
• Mis leading advertisement/communication.
• Defaming of persons/company/country are
regulated
G S Sreekiran, Asst.Prof. AIMS
 Social Responsibility
• Demarketing – all efforts to encourage
consumers to reduce their consumption of a
particular product or service.
• Eg: Anti Smoking campaigns, Anti sex
determination & Abortion campaigns.
• Avoid using Fur products (PETA)

G S Sreekiran, Asst.Prof. AIMS

 Cont.
• Enforced Marketing – Govt./Agency reinforce
the use of specific product/service for the
benefit of the individual/society.
• Eg: Use Seat belts, Use Helmets campaigns,
• Reduce - Reuse – Recycle campaigns.
• Teach India campaigns, Reforestation (Plat a
tree)campaigns.

G S Sreekiran, Asst.Prof. AIMS

 Cont
• Cause Related Marketing – Marketing efforts
of specific product simultaneously promoting
a ‘cause’. – ITC (Classmate note book – fixed
portion of purchase price goes for
underprivileged child education)
• Other products or services associated with
social responsibility initiatives/NGOs (CRY)

G S Sreekiran, Asst.Prof. AIMS

Ref:
• Consumer behavior: Loudon and Della Bitta

G S Sreekiran, Asst.Prof. AIMS