Consumer Behaviour-Ramanuj Majumdar
Consumer Behaviour-Ramanuj Majumdar
Consumer Behaviour-Ramanuj Majumdar
PHI Learning
CONSUMERBEHAVIOUR
Consumer behaviour entails the totality of consumers decision involvedinacquiring,consumingand disposing of goods and services, as well as making use of experiences andideas.
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ConsumerBehaviour isaComplexDynamicProcess
ConsumersPerspective MarketersPerspective
Prepurchase issues
Purchase issues
Postpurchase issues
Eachstageposesvariedissuesandofferssubsequentchallengesforthemarketer.
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PrepurchaseChallengesfortheMarketer
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Howareconsumers attitudestowardsproductsformedand/orchanged?
Consumer behaviour
PsychologicalFactors Consumerinvolvement Consumermotivation Consumersperception PersonalFactors Personalityandlifestyle Familylifecycle SocialFactors Referencegroups Family
Itisessentialforthemarketertounderstandhoweachofthese factorsinfluencesconsumersbuyingdecision. Hecanthenformulatestrategiesinlinewithcustomerneedsand demands. Consumer Behaviour: Insights from Indian MarketRamanuj Majumdar
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Howdopsychologicalfactorsaffecttheconsumerspurchasedecision?
Changingconsumerperception
LearningSuperioraftersaleservice
Motivationthesecretof energy
BeliefTATAsignifiestrust
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Howdopersonalfactorsaffecttheconsumerspurchasedecision?(Contd.)
Lifestyle
SelfConceptDefinitelymale
GenderTargetingthemale
AgeTargetingtheyouth
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Howdosocialfactorsaffecttheconsumerspurchasedecision?
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Howdoculturalfactorsaffecttheconsumerspurchasedecision?
TargetingonthebasisofCulture
Subculture:TargetingtheFullofLife
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Whatcues/inferencesdoconsumersusetochooseandinferwhich brand/productissuperiortoothers?
VariousSourcesofInformationtheMarketercanTap
Radio Transport
Events
Outdoor
Sport
Podcasts
TV
Magazines Newspapers
WordofMouth
Posters
Directmailers
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PurchaseTimeChallengesfortheMarketer
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Howdosituationalfactorsaffectconsumerspurchasedecision?
Whentopurchase
Wheretopurchase
Howtopurchase
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PostpurchaseChallengesfortheMarketer
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MarketersusevariousstrategiestopositivelyinfluenceconsumersPostpurchasebehaviour
Postpurchase Service
Feedbackfrom Consumer
Loyalty Programmes
Advertisements
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ThankYou
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ConsumerMotivation
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WhatisMotivation?
Motivation refers to an activated state of needs within a person that leads to goaldirected behaviour. Types of Needs Innate or learned Expressive (emotional) Utilitarian (practical and functional) Hedonistic
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Maslows HierarchyofNeeds
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CharacteristicsofNeeds
Needs: Aredynamic. Havehierarchy. Canbeinternallyandexternallyaroused. Canconflict.
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MotivationalConflictand NeedPriorities
Satisfying a particular need often comes at the expense of another need. These trade-offs cause motivational conflict.
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TypesofMotivationalConflict
Approach-approach: deciding between two desirable options Avoidance-avoidance: deciding between two undesirable options Approach-avoidance: behaviour has both positive and negative consequences.
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ConsumerMotivation
Represents the drive to satisfy both physiological and psychological needs through product purchase and consumption. It gives insights into why people buy certain products. Stems from consumer needs: industries have been built around basic human needs.
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MotivatedPurchase
Conspicuous consumption: Purchases motivated to some extent by the desire to show other people how successful they are. Companies reinforce the consumer motivations notion that products enable users to communicate their social status. In general, marketers try to create an image or personality for their brands.
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Motivation
ConsumerBehaviour
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ModeloftheMotivationProcess
Previous learning
Tension
Drive
Behaviour
Goal/Need fulfillment
Cognitive processes
Tension reduction
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Needs/Wants
Beliefs
AModelofConsumerMotivation
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Emerging Trend
Emotional Needs
Years for success in his career Feels he deserves better quality products. Tries to upgrade his lifestyle.
Key Influencers
Likes
Just bought his first new bike (TVS Apache) and a new mobile (Nokia N Series). Shops for clothes, shoes, etc. often in malls and shopping complexes. Often eats out (with friends). Likes to visit pubs and discos.
Receptivity
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WhatareHisNeeds/Motivations?
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Offline
Online
SelfActualization Self-Esteem
Ability to take on a community role that develops skills and opens up new opportunities
Social
Physiological
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Motivational Intensity
Depends on: How strongly consumers are motivated to satisfy a particular need. Importance of Involvement: Degree to which an object or behaviour is personally relevant. Motivational intensity and involvement determine the amount of effort consumers exert in satisfying needs.
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TheChallengeofUnderstanding ConsumerMotivation
Reasons underlying consumer motivation are not always obvious. Research is necessary to discover real motivations behind behaviours. Consumers at times do not always want to disclose real reasons for their particular choice or actions. Consumers do not always know why they do what they do: unconscious motivation. Motivations change over time. Let us take an example of car buying and its underlying motivations.
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WhyAutomobile?
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AutomotiveSector
ClassificationoftheAutomotiveIndustry Commercialvehicles(TrucksandBuses) PassengerCarsandMultiutilityvehicles Twowheelers Threewheelers Tractors Forexplainingmotivations,wewillconcentrateon passengercarsandmultiutilityvehicles.
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AutomotiveSectorDemandDrivers
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MeansendChainsStructure
Attributes:Descriptivefeaturesthatcharacterizea product. Benefits:Personalbeliefsandmeaningsattachedor derivedfromvariousproductattributes. Values:Stableandenduringpersonalgoals.
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Issuesatypicalconsumerconsiders whenhechoosesacar
Reliability/Durability Interiordesignandcomfort Manufacturersreputation, Brandnameanditsvalue Exteriorappearanceand aesthetics Petrolvs.Dieselmodel
FuelEfficiencyorMileage Recommendationofpeergroup,Word ofMouth(WOM)anddealersopinion aboutservicingandoverall performance. Servicingandthedeal offered PassengerandLuggagecarryingcapacity Size,length,machinecapacity PriceandResaleValueofoldcarmodel andTermsofPayment
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AutomobilePurchase:DemographicFactors
Family life cycle
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Bachelor
Committed/ recentlymarried
Impactoffamilylifecycleon consumerneed/preference
Marriedwith children
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FamilyLifeCycle
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Thingsdonotchange, wechange
HENRYDAVIDTHOREAU
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InformationGathering
Talkingtodealers Talkingtofriends/Colleagues/Relatives Inspectingthecar Carads Talkingtomechanics Carbrochures/Articles/Programmes Internet
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MajorMotivators/Triggers
Increasingfamilysneed Needtotravellongdistance Problemwitholdcar Status/Prestige
Rational Factors
Emotional Factors
Promotion Peerpressure
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SocialInfluences
CombinedeffectsofOccupation,EducationandIncomelevels
Conspicuousandcompensatoryconsumptiontrends
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Sex
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ThankYou.
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Consumer Perception
Consumer Perception
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Perception is Reality
LOUIS CHESKIN
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Perception Process by which sensations are selected, organized, and interpreted Adding meaning to raw sensations
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Elements of Perception
Sensation Absolute threshold Differential threshold Subliminal threshold
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Sensation
Immediate response of our sensory receptors eyes, ears, nose, mouth, fingers to basic stimuli such as light, colour, sound, odour, and texture advertisements, brand names, commercials, and packages depends on the sensitivity of the individual
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Attention
The extent to which processing activity is devoted to a particular stimulus
Competition for our attention 3,500 ad info pieces per day Multitasking Marketers need to break through the clutter Microsofts butterfly decals on sidewalks 3D logos on cricket grounds
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Subliminal Perception
Perception of very weak or rapid stimuli received below the level of conscious awareness
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Perceptual Selection
Stimulus Selection Factors
Webers Law Differences in size, colour, position, and novelty Interpretation: assigned meaning to stimuli Schema leads to stimulus evaluation
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Webers Law
A theory concerning the perceived differentiation between similar stimuli of varying intensities (i.e. the stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different).
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Perceptual Selection
Depends on two major factors
Consumers previous experience (expectations) Consumers motives
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Stimulus Organization
Stimulus interpretation is associated with other related events, sensations, or images Gestalt: The whole is greater than the sum of its parts.
The Closure PrinciplePeople tend to perceive an incomplete picture as complete. The Principle of SimilarityGroups objects share similar characteristics. The FigureGround PrincipleOne part of the stimulus will dominate (the figure/background).
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vs.
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Law of Proximity
Things that are relatively close to one another tend to be grouped together.
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This billboard for Wrangler jeans makes creative use of the figure-ground principle.
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Perceptual Positioning
Brand perceptions =functional attributes + symbolic attributes Perceptual map
Companys own strengths and weaknesses in comparison with competitors
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Excellent product quality
Perceptual Map
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ConsumerPerception
Consumerselects,organizesandinterpretsstimuli intoameaningfulandcoherentpictureoftheworld. HowweviewtheWorldaroundus! Consumersmakedecisionsbasedonwhatthey perceiveratherthanwhattheobjectiverealityis. Consumersseewhattheywanttosee!
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ElementsofPerception
Sensation:StimuliandIntensity Absolutethreshold(e.g.seeinganad) Sensoryadaptation(Phenomenonofgettingusedto), e.g.changeadcampaigns,package DifferentialthresholdJND(WebersLaw);product improvementdecisions Negativechanges(Pricerise,size,qualityreductions, etc.)
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SelectivePerceptions
Natureofthestimulus:Whatyouwanttoseeisbased onwhatyourmotivesareatthattime. Selectiveexposure:Pleasantads Expectationsandpreviousexperience
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PerceivedRisk
Anuncertaintyariseswhenconsumerscannot foreseetheconsequencesoftheirpurchasedecisions. Dependsontheperson,the product,andthepurchase situation. Highriskperceiverscategorizedasnarrow categorizers.
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BroadCategories
Productcategoryperceivedrisk,e.g.tobuyadigital cameraornot. Productspecificperceivedrisk,e.g.whichbrandof cameratobuy.
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TypesofPerceivedRisk
Functionalrisk:Theriskthattheproductwillnot performasexpected. WillthecellphoneIboughtworkforthegiven warrantyperiod? Physicalrisk:Therisktoselfandothersthatthe productmaypose. Willthecellphonedamagemyhealth?Isitsafeto use?
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TypesofPerceivedRisk
Financialrisk:Theriskthattheproductwillnot beworthitsprice. Willthepriceofmobile/laptopdropafterIbuyit? Socialrisk:Theriskthatapoorproductchoice mayresultinsomeformofsocialembarrassment. Willmymobilelooklikeanoutdatedmodel?
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TypesofPerceivedRisk
Psychologicalrisk:TheRiskthatapoorproductchoice willbruisetheconsumersego. Afterbuyingthisproduct,willmypeergroupmembers laughthatitisawrongchoice? Timerisk:Theriskthatthetimespentinproductsearch maybewastediftheproductdoesnotperformas expected. Ihavespentsomuchtimeinbuyinganewcamera/laptop. Wasitworthorawasteoftime?
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HowCustomersHandleRisk
Seekinformation, wordofmouth,newspapers Buyknownbrands/becomeloyal, e.g.buyAnnapurna Atta. SelectbyCompany/Brandimage,
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HowCustomersHandleRisk(cont.)
RelyonStoreimage,e.g.buyingfromknownshops. Buythemostexpensivemodel. Seekreassurance (moneybackguarantees,prepurchasetrial,warranty period).
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ApplicationoftheConcept
Findoutthenatureofriskcustomersperceivebefore purchasingnewproducts. Removethenatureofanxietyofcustomers.
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Thank You
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Consumer Beliefs Consumer Attitudes Consumer Feelings Consumer Intentions Consumer Behaviour
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Beliefs are the knowledge and inferences that a consumer has about products/brands and possible benefits derived from using them. Beliefs result from cognitive learning. Attribute importance springs from: A persons assessment of the significance of an attribute. The amount of attention directed to it. A persons self-concept, advertising, and the salience of the attribute can influence the attention focussed on it.
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Brand distinctiveness: Consumer perception of a brand and companys marketing effort leads to developing certain personality of each brand, e.g. Tanishq Jewellery. Inferential beliefs: Information about one product of a company makes consumers to form belief about another, price-quality beliefs, partially comparative pricing, e.g. Akai TV, Big Bazaar retail. Consumer confusion: Insufficient/conflicting information, mistaken identity, irrelevant ad slogan/appeal, change in the brands key focus and positioning, e.g. Marie biscuits (Britannia, Parle).
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Beliefs Companies or Retailers mark up prices before putting them up on sale. Discounts offered by reputed companies are genuine reduction in prices.
Celebrities are admired by their followers though Success of soaps and they do not use the product they endorse. cosmetics Lower price generally means inferior quality. Higher priced brands are not superior in quality by the same degree of multiplier. Shopping in a big departmental store saves money. Packaged ready-to-eat food items marketed in India are generally not fresh. Positioning at a lower quality end, as done by Haier, Lenovo Big Bazaar, Subhiksha Limited success of MTR, ITC foods
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As part of Advertising Experience: Influence on viewers moods, attitudes, recall, affinity, Examples: Hamara Bajaj Campaign, Amul ButterUtterly, butterly delicious As part of Shopping Experience: Influence of availability, environment/ambience Examples: Maruti service centres, Cafe Coffee Day, Brista coffee As part of Consumption Experience: Influence consumers consumption evaluation Examples: Vanilla Coke, Blue Pepsi, Asian Paints
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a kind of feeling for or against a stimulus; stored in long-term memory; the cognitive knowledge about an object; predicted by beliefs in high involvement purchase situations.
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Utilitarian function: Used to obtain rewards and avoid punishments Ego-defensive function: Self-protection Example: mouthwash Knowledge function: Simplifies decisions Example: Forming of loyalty to certain brands Value-expressive function: Expresses identity to others Example: use of (IIM-C) labelled t-shirts
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Direct formation Corresponds to the decision-making perspective and cognitive learning. Linked to the experiential perspective. Classical conditioning/Associative learning: Positive affect is attached to objectusing a jingle. Mere exposurefrequent exposure to stimulus increases ones desire for it. Environmental forces Example: design of the physical environment, cafes
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Decision-making hierarchies: High involvement: beliefs Low involvement: beliefs Experiential hierarchy: Affect behaviour
attitudes behaviour
behaviour attitudes
beliefs
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Changing beliefs: Comparative advertising Example: Sugar Free, Saffola oil (less cholesterol) Changing attribute importance: Identification of new, improved attributes Example: Washing powders, soaps Changing ideal points
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BI A SN
act
= =
A =
act
+ SN
i j
b ie NB
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MC
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Altering consumers preferences for what the Ideal product should look like.
It is far more difficult than any other approach in changing consumers, attitudes toward brand and product.
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The best way to capture customer is to adjust with his or her desirable situation and favourable attitudes.
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Post-purchase Action
Attitude Learning
Perception Attention Exposure
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Consumer Behaviour
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Consumer Involvement
Cars Furniture
Apparels Perfume
Toothpaste Salt
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Involvement
What is Involvement ? Perceived relevance of the object of consideration based on inherent needs, values and interests A general level of interest in or concern about an object or activity without reference to a specific position
Types of Involvement Situational (Purchase-Decision) Involvement The level of concern/care the consumer brings to bear on a particular purchase decision Enduring Involvement The level of interest the buyer maintains for a class of product/activity, well beyond the specific purchase situation
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Involvement (Cont.)
Enduring involvement is related to the way one views oneself and is often linked to Family, Group and Lifestyle (Psychographic) variables. Perceived risk is related to purchase involvement. In Low Involvement situations: In High Involvement situations: Behaviour Attitudes Attitudes Behaviour
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Purchase Involvement
Is Effected by: The Product Class
The Individual
Involvement
The Situation
Communication
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Product Characteristics Time commitment Price Symbolic meanings Potential for harm Potential for poor performance
INVOLVEMENT
Situational context Purchase situation Intended-use situation Time pressure Social environment Physical environment
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PRODUCT KNOWLEDGE
SELF KNOWLEDGE
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Low
Attributes are less important (very few used) Wide Latitude of Acceptance Large Evoked Set Spurious Brand Loyalty
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Low
Peripheral Route Arguments Reminder Ads and Ads with Little Substance Frequent AdsLittle or no Contentonly a few points Price may be Relatively Less Important Info Search is Passive.
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Low Involvement
Problem Recognition
Selective
Information Search
Internal (Limited)
Analysis of Alternatives
Purchase Decision
No Dissonance
Post-Purchase Behaviour
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Medium Involvement
Generic Problem Recognition
Information Search
Few Simple
Analysis of Alternatives
Purchase Decision
Post-Purchase Behaviour
No Dissonance
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High Involvement
Generic Problem Recognition
Information Search
Internal External
Many Complex
Analysis of Alternatives
Purchase Decision
Post-Purchase Behaviour
Dissonance
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Creative Tactics
INVOLVEMENT LOW HIGH
MOTIVATION
INFORMATIONAL (ve)
TRANSFORMATIONAL (+ve)
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Motivation
Preference formation
Justification
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Symbolic Brands
Emotions
Low Involvement
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Symbolic Brands
Functional Brands
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Positioning a Brand
Why? For whom?
When?
Against whom?
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Relationship
Culture
Re fle
ctio n
Se
e ag m lf-I
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rce
pti on o
fQ ua
lity
Bra nd A
wa re
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Thank You
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Consumer Learning
Itisthecognitiveprocessofacquiringskilland knowledge;learningistheacquisitionand developmentofmemoriesandbehaviours, includingskills,knowledge,understanding, values,andwisdom.
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Importance of Learning
Marketersmustteachconsumers:
wheretobuy bywhomandforwhomthepurchaseistobedone howtouse,feelandperceivetheproduct howtomaintaintheproduct howtodisposeofproducts
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Learning Taxonomy
Learning
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Learning Theories
Behavioural Theories Theories based on the premise that learning takes place as a result of observable responses to external stimuli. Also known as stimulus responsetheory. CognitiveTheories Atheoryoflearningbased on mental information processing, often in response to problem solving.
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Learning Processes
Intentional Incidental Learning acquired as a Learning acquired by result of a careful accident or without searchforinformation. mucheffort.
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Reinforcement
Apositiveornegative outcomethat influencesthe likelihood thata specificbehaviour will berepeatedinthe futureinresponseto aparticularcueor stimulus.
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Stimulus Generalization
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Reinforcement Positive Reinforcement Positiveoutcomesthat strengthenthe likelihoodofaspecific response Example: Adshowing beautifulhairasa reinforcementtobuy shampoo Negative Reinforcement Unpleasantornegative outcomesthatserveto encourageaspecific behaviour Example: Adshowing wrinkledskinas reinforcementtobuyskin cream
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Punishment
Choosereinforcementratherthanpunishment.
Extinction
Combatwithconsumersatisfaction.
Forgetting
Combatwithrepetition.
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Observational Learning
A process by which individuals observe the behaviour ofothers,and consequences of such behaviour. Also known asmodelling orvicarious learning.
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Attention
Retention
Production Process
Motivation
ObservationalLearning
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Holds that the kind of learning most characteristicofhuman beings is problem solving, which enables individuals to gain somecontrolovertheir environment.
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Classical Conditioning
A behavioural learning theory, according to which a stimulus is paired with another stimulus that elicits a known response which serves to produce the same response when used alone.
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A behavioural theory of learning based on trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviours.
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Reinforcement
Likelihood OfBehaviour
Behaviour
Negative Reinforcement
Likelihood OfBehaviour
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Ehrenberg
ATR
Model
Awareness Trial
Reinforcement
Advertising
Note: Thethicker(darker)linesdenotethe majoreffects.
Repeat purchase
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Behavioural Loyalty
Loyalty
Attitudinal Loyalty
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Brand Loyalty vs. Habit Habit:theconsumerpicks productwithoutmuch thought,perhapsfor convenience. Loyalty: theconsumer activelyseekstheproduct.
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Brand Loyalty
FunctionofThreeGroupsofInfluences
1. Consumerdrivers 2. Branddrivers 3. Socialdrivers
Fourtypesofloyalty
1. 2. 3. 4. Noloyalty Covetousloyalty Inertialoyalty Premiumloyalty
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Developing Brand Loyalty: Tricks and Traps 1. Productquality>satisfaction 2. Salespromotions 3. Stealingloyalconsumersawayfrom others 4. Price
value exclusiveness
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Memory
Shortterm(comparetoRAM>volatile)
mnemonicdevices
STM
REHEARSAL
LTM
DECAY
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Retention
Informationisstoredin longterm memory
Episodically:bytheorder inwhichitisacquired Semantically:accordingto significantconcepts Totalpackageofassociations iscalledaschema.
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Short-term Memory
Long-term Memory
Retrievall
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Information Processing
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Information Processing
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Experiential Marketing
IdentityRelated
Logo/Names (NIKE)
Communication/ Advertising
(TASTEOFINDIA)
ProductPresence
Design/Packaging (FRAGRANCES)
ExperientialMarketing
CoBranding
Events/Sponsorships (FEMINAMISSINDIA)
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ConsumersDissonance
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CognitiveDissonance
Psychologicaldiscomfortcausedby inconsistenciesamongapersonsbeliefs, attitudes,andactions. Variesinintensitybasedonimportanceofissue anddegreeofinconsistency. Inducesadrivestate toavoidorreduce dissonancebychangingbeliefs,attitudes,or behaviours andtherebyrestoreconsistency.
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WhytheDissonance?
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CausesofDissonance
Performancerisk Physicalrisk(wearout) Highfinancialcommitment Highinvolvementlevel Highsocialvisibility Informationoverload
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IstheGrassGreeneron theOtherSide?
Dissonancepredominantlypostpurchasebehaviour Lackofconfidence(doubts)aboutthecorrectnessofa priorpurchasedecisionandeffortstoreconciledoubts
Did I do the right thing?
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ReactionstoDissonance
TheConsumereliminatingorreevaluatingoneofthecognitive elements,orhisresponsibility,orcontrolovertheactordecision. Informationcanbedeniedordistortedorforgottenintheservice ofdissonancereduction. Minimizingtheimportanceoftheissueordecisionthatledtothe dissonantstate. Newcognitiveelementscanbeaddedtosupportthedecision. PotentialReactions
Returntheproduct. Seekconfirmatoryinformation.
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Thank You.
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Direct Communication
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What is Communication?
A tool used by marketers to persuade consumers to act in a desired way. Transmission of message from a sender to a receiver via a medium of transmission. Modern technology is inducing tremendous change in mass communication media.
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The Sender
Initiator of a communication Formal sourceorganization Informal sourceA close friend, peer group or relative who provides information or advice.
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The Receiver
A targeted prospect or a customer Every receiver interprets the message in his/her own perceptions and experiences. Intermediary receiversThose who would specify or prescribe the marketers products (Wholesalers, retailers and distributors). Unintended receiversShareholders, creditors, suppliers, employees, bankers, and the local community.
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The Medium
The communications channel Impersonala mass media InterpersonalFormal or Informal
Formalbetween a marketers agent (sales person) and a customer Informalbetween two or more people by mail, etc.
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SocialMedia:Definition
Social media describes the online technologies and practices that people use to share opinions, insights, experiences, and perspectives with each other. Social media can take many different forms, including text, images, audio, and video. Popular social media include blogs, message boards, podcasts, wikis, and vlogs.
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Simply put:
Social Media refer to people having communication online.
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The Message
Verbal
Spoken or written Has more product specific information.
Non-verbal
A photograph, an illustration or a symbol Stays in the mind of a customer for long.
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Feedback
Permits the sender to reinforce, to change or to modify the message so that it is understood in the intended way. Common forms of feedback
Body language Facial gestures Verbal feedback
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Credibility of Informal Sources Credibility of Formal Sources Credibility of Spokespersons and Endorsers Message Credibility
Neutral sources have the greatest credibility. Source credibility judged on past performance, reputation, service, quality, spokespersons image, retailers, and social responsibility. Institutional advertising used to promote favourable company image.
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The message Synergy between the endorser and the type of product Demographic characteristics of the endorser Corporate credibility Endorsement wording
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FeedbackReceivers Response
Feedback should be gathered:
Promptly Accurately
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Target Audience
Segmentation is the key.
Media Strategy
Consumer profile Audience profiles
Message Strategy
Involvement theory
Central and peripheral routes
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Word Play
An ad with word play used for signifying the need to save water.
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THANK YOU.
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Consumer Personality
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Personality Selection
Psychological
Brand Personality
Product
Target Segment
Functional
Economic
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Brand Personality
Personality created to appeal target customers Association with brand:
Character/Personality Emotional
Positioning of brand:
Social Values
Benefits provided:
Attributes Quality
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Dimensions
Source:DimensionsofBrandPersonalitybyJenniferL.Aaker
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Consumer Expectations
Product
Clothes Cars Mobile Phone Insurance Cellular Service Computer House
Expectations
Sharp appearance, Style, Attractiveness, Comfort, Ruggedness Comfort, Value for money, Social status, Family product, Performance Durability, Style, Social status Peace of mind, Secured future Connectivity, Closeness to loved ones Pleasure, Profits from miracle of modern technology Comfort, Contentment, Good investment, Pride of ownership
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Personality-Colour Association
Respect Authority Secure Natural Relaxed Human Exciting, Hot Strong Passionate Informal Masculine Nature Sophistication Power Authority
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Brand Names
Red Bull, Power Horse Energy Drinks Himalayan Mineral Water Le Bon Cheese TwiningsDarjeeling Tea Puma Footwear Dove Bathing Soap
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Role of Age
Consumption Perception
Behaviour Learning
Choice
CONSUMER
Knowledge
Preference
Ideology
Intuition
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Tech savvy
Convenience
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Old
Convenience
Shift focus from saving for children to enjoying their own life
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Age-specific Targeting
set of products
Target kids, adults and older consumers with different Customers classificationnew born (0-1month), infant (25 months), cruiser (6-12 months), toddler (1318 months), explorer (1923 months), preschoolers (24 + months) Targeted 21 years old with the boxy image, sexy college kids partying, but 42 yr olds felt nostalgic about their youth and bought the car EZ squirt ketchup for teens $3 million marketing to attract 1224 yr olds.
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Higher expenditure
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Decision-Making Process
Type of Families Delayed marriages Dual career families Smaller families Role of spouses Husband-dominant decisions Wife-dominant decisions Autonomous decisions Joint decisions
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Low
Personally Delivered
Low
High
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Contents
1 2 3 4
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Reference Group
Values
Formation
Attitudes Behaviour
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Contactual
Aspirational
Disclaimant
Avoidance
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Faith Groups
Religious Ritual Worship Spiritual Caste based Social marketing quotient
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Early School
Middle School
Career Choice
Sphere of Influence
Graduation (Entry)
PostGraduation
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Hypotheses
1
Early School, unlike Middle School, is still governed more by proximity to home than by reference groups
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Regional variations arise as supplydemand of occupations & societal opinion govern graduation & career
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Reference Group influences changes while at graduation Individual chooses Reference group now
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ImpactofCulture onConsumerBehaviour
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WhatisCulture?
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CULTURE
Culture is a combination of learned beliefs, values and customs that can direct the behaviour of consumers in a specific society.
Knowledge & beliefs
Values
Customs
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Characteristics of Culture
Characteristics
Culture is learned rather than being born with. Culture is manifested within boundaries of acceptable behaviour. Transmitted from generation to generation. Rituals practiced. Dress sense(Sari is the traditional Indian dress while jeans, skirts, frock, etc. are considered more modern.
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Informal Rules
Technical Rules
Involve implicit standards as to what constitutes a good product. In Bollywood, normally a Hindi movie must have at least five good songs to be successful.
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Sub-cultures
Sub-cultures consist of ethnic groups such as regional, linguistic, rural vs. urban, family composition, economic strata etc. Variations seen within a culture. These groups have common traditions, heritage, beliefs, customs and experiences that would differentiate different sub-cultures. For example, there are certain common aspects in the Indian culture but almost each state in the country reflects a sub-culture. Dress, eating habits, customs etc. are somewhat unique in different parts of India and also, the life style pattern varies.
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Indian teenagers
Grew up in period of fast economic growth with good prospects. Confronted by new realities through the mass media but with few real-life experiences. Have more sheltered home environment and stable family life. Youth live with family of origin until their marriage. Are less independent and self-sufficient. Are idealistic in their expectations and tend to deal only with issues that touch them personally. Lead a less stressful life as achievement in studies is paramount and other matters appear secondary.
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FeaturesofIndianCulture
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DiversityinLanguage,Religious Customs,Beliefs
Thereare28statesand22languages Numerousdialectsspokenbypeople Religiouscustoms,ritualsandbeliefsvary Differentidentities,ideologies,interestsandoutlook
ImplicationforMarketers
Communication&packaginginlocallanguage Productsneedtobealignedwithculture
Thereisarightwayandwrongwayforeverything,butthatcanchangefrom placetoplace.
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Ruralvs.UrbanIndia
30%ofthepopulationliveinurbanareas. 70%liveinruralareasbutthismeansthemajorityofthe marketisspreadacrossthecountry. DifferentincomelevelsinruralandurbanIndia. Ruralcustomersattachmoreimportancetofunctionality whileurbanconsumersgiveimportanceto aesthetics/serviceparameters.
ImplicationforMarketers
Differentmarketingmixforboththemarkets Modeofdistribution/channelsdiffers
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Richvs.Poor:Differentneedstofulfill
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GeographicalDiversity
AnAverage UrbanNorth IndianConsumer
Beliefs&valuesconservativein thinking,respectful Lifestyleflamboyant,likestohavealot ofexternalglitter Behaviourwarmandfriendly,herd mentality,inquisitive
AnAverageUrbanEastern IndiaConsumer
Beliefs&valuesslowinspeed, relaxed,simple Lifestyletraditional,simplebasic Behaviouropinionated,slow adopters,rigid
AnaverageUrbanWestern IndiaConsumer
Beliefs&valuesprogressivebynature, professional,valuestime Lifestylebalanced,butverytask oriented Behaviournoninterferingbuthelpful, earlyadopter,trendsetter,calculative
AnAverageUrbanSouth IndianConsumer
Beliefs&valuesorthodoxanddeep rooted Lifestylesimple Behaviourcurtbutpragmatic, practical,conservative,cautious,not arisktaker 282
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MarketersmustUnderstand IndianCultureinOrdertoSucceed
Ford carsspeciallydesignedforIndianroads. Electrolux's madeforIndiafridgechilldrinkingwater,keepsfoodfresh& withstandslongpowercuts. Samsungmicrowaveovenwithgrill. Nokia launchedahandsetMadeforIndia Nokia1100. McDonaldsMcAloo Tikki Burger&PizzaMcPuff. CartoonNetwork introducedSouthIndianfolktaleTenali Ram. WaltDisney cartoonTVshowsareinHindi. Omega watchespickedanIndianfilmpersonalitytoreplaceCindy Crawfordinitsadcampaign. CocaCola hasredesigneditscratesaswellastrucksforsafedeliveryon poorroads.
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OverallMarketersneedto
Indianize,Humanize,Harmonize!!
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AModelofConsumerBehaviour
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Buyer Decision Process Problem Recognition Information Search Evaluation Decision Post-purchase Behaviour
Post-purchase Evaluation Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount
Trial
Repeat Purchase
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Decision-Making Process
ProblemRecognition Perceiving a difference between a persons ideal and PerceivingaNeed actualsituationbigenoughtotriggeradecision
InformationSearch
AnalysisofAlternatives
PurchaseDecision
Decisiononwhen,whereandfromwhomtobuy BuyingValue
PostPurchase Behaviour
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Problem Recognition
WhydoIneedit?
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Problem Recognition
IdealState
SimpleExpectations Futuregoals/Aspirations Motivations/SelfImage Culture ChangeinPersonal Circumstances
ActualState
Difference
Physicalfactors Need ExternalStimuli
ProblemRecognition
Perceiveddifferencebetweenanidealstateandactualstate motivatestheconsumertotakeactions.
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Information Search
InternalSearch
Process of recalling stored informationfrommemory Dependent on motivation, ability&opportunity More recall in high involvement,perceivedrisk Informationretrieved Brand Attribute Evaluation Experience
ExternalSearch
Usingoutsidesources Types: Prepurchase Duetoproblemrecognition Ongoing Regular; due to enduring involvement Retailer;media;experiential; interpersonal;independent
InformationSearch
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TotalSet
AwarenessSet
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Post-Purchase Behaviour
Consumer evaluates the product during consumption to see if it satisfiestheneed/expectation.
Influencedbytypeofprecedingdecisionmakingprocesses. Dependsonthelevelofpurchaseinvolvementorthelevelofinterest inapurchase. Cognitive dissonance and Experiential marketing play an important roleinshapingupthesebehaviours.
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SelectiveSearch forEvidence
Gathersfactsthatsupportsaparticulardecision Disregardsfactsthatsupportotherconclusion.
Conservatism andInertia
Unwillingnesstochangethoughtpattern
GroupThink
Peerpressuretoconformtoviewsheldbyagroup
Recency
Experiential Limitations
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WhatisCelebrityEndorsement?
Theuseofcelebritiesinordertoincreasethesalesand/or therecallvalueofabrandiscalledcelebrityendorsements.
TypesofCelebrityEndorsements
Testimonial: Attestationbyacelebritybasedonpersonalusage. Endorsement: Celebritylendshis/hernameandappearson behalfoftheproductorservice. Actor: Characterendorsement. Spokesperson: Celebrityrepresentsthebrandorcompanyover anextendedpartoftime.
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Advantages
Instantawareness,knowledgeaboutthebrandand easyrecall. Valuesandimageofthebrandaredefined, highlightedandrefreshedbythecelebrity. Thecelebrityaddsnewedgeanddimensiontothe brand. Credibility,trust,association,aspirationand connectivitytobrand. Beliefinefficiencyandnewappearancethatwill resultinatleasttrialusage.
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Hypothesis 1
Everyproducthasitsownidentityanditsveryimportantto endorseaproductwithasuitablepersonality.
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TheRightPersonality
Perfectmatchbetweenbrandimageandcelebrity Celebrity'sfitwiththebrandimageandthecelebrity targetaudiencematch. Celebrityassociatedvaluesandthecelebrityproduct match. Costsofacquiringthecelebrityandhisorher popularityalongwithcontroversyrisksassociatedwith thecelebrity. Credibility,availabilityandphysicalattractivenessof celebrity.
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Hypothesis2
Indianconsumershavematuredandcelebrity endorsementaloneisnotsufficienttoattractthem.
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Hypothesis3
Therearechancesthatthecelebritygainshigher popularitythantheproductendorsed.
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Hypothesis4
SinglecelebrityMultipleproducts:Consumers dilemmatoassociatethebrandswiththecelebrity.
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Hypothesis5
Consumerbuysaproductbasedonitsfeaturesrather thanthecelebrityendorsement.
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ThankYou!
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Impulse Buying
Sudden, compelling, unplanned, hedonically complex purchase. Generates billions of dollars in sales every year for consumer products. Reacts often mindlessly to stimuli that trigger certain automated responses. Information processing might have taken place earlier; otherwise, behaviour may be totally impulse driven.
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Examples
A fan of Arsenal Football Club watching a football match of the team in a mall deciding to buy an Arsenal T-shirt on display at the same store.
A person with no special passion for a brand of high end wristwatches is impressed with the look and make of a Rado watch and buys it.
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Hypothesis 1
Promotion and placement of product in the supermarkets have positive impact on impulsive purchase behaviour Promotion Advertisement of product in print and visual media Various promotional activities regarding product Erecting hoardings and distributing pamphlets of product Display Packaging of product Placing of product in store
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Hypothesis 2
Lifestyle traits of a person characterize his impulsive purchase. Traits considered: Fashion involvement Price consciousness
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Hypothesis 3
Discount offers on products have a strong positive effect on impulsive buying consumer behaviour.
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Hypothesis 4
Shopping with others increases impulsive purchasing. Impulsive purchasing at individual level vs. impulsive purchasing with others Shopping with family members, friends and colleagues Factors
Susceptibility to influence Normative: conformance to social norms
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Demographic Diversity
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Diversity in Men
Normally, an Indian Male is:
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Contented Conservative Anxious Rebel Troubled Homebody Tight-Fisted Traditionalist Affluent Sophisticated Contemporary Housewife Gracious Hedonist
Diversity in Women
Normally, an Indian Woman is: Housewife; happy with her state of her life/society
Working women; happy with existing state of affairs Housewife; unsure of sitting at home Traditional; believes in saving for future Affluent; comfortable with the finer things in life Housewife; active & sees herself as equal to husband Working women; believes in looking after herself
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Diversity in Youth
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Types of Diversity
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Socio-Economic Diversity
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Diversity in Cuisine
The food available in India is as diverse as its culture, its racial structure, its geography and climate. The essence of good cooking revolves around appropriate use of aromatic spices. The cultures that have influenced Indian food are the traditions of different religions.
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Diversity in Clothing
Traditional Indian clothings for women are sari, salwar-kameez, ghagra-choli. For men, it is kurta, dhoti, pancha. Influenced by western culture: Blend of Indian and Western clothings.
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ImportanceofRuralIndia
Indiastilllivesinhervillages. Urbanmarketsareovercrowdedandgettingsaturated. Theunderstandingoftherural consumerbehaviour isdiffused andsometimesconfusing. Ruralmarkets needdifferentapproachfrommarketingin urbanlocations.
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DefiningRuralIndia
Organization NSSO(Census) Definition Populationdensity <400/sqkm 75%ofthemale workingpopulation isengagedin agriculture. Limitations Ruralnotdefined
Planning Commission
Characteristicsnot defined
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RuralIndiaPopulationTrends
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RuralIncomeDispersal
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FMCGConsumptionTrends
Products ToiletSoap DetergentCake CookingOil HairOil/Cream Tea Toothpaste WashingPowder ElectricBulb Shampoo Biscuits HealthBeverages Urban(1000HH) 998 980 968 897 876 822 819 723 663 579 324 Rural(1000HH) 992 950 952 787 758 449 576 394 352 314 67
*HH=Households Source:NationalCouncilforAppliedEconomicResearch,2002
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RuralSECclassification
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Upmarket RuralConsumers
RuralSECGroups
H o w D iffe re n t A re U p -M a rk e t R u ra l C o n s u m e rs ?
45 Percentage Of HH's Owning 40 35 30 25 20 15 10 5 0 R1 R2 R3 R4 C olTV C & S C onn Tw o-W hlrs P hone F ridge A /C ooler F our-W hlr W /M ac h
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RuralMarkethasEmerged byitsSheerSize
742millionpeople Estimatedannualsizeoftheruralmarket(Rs.,crore)
FMCG Durables Agriinputs(includingtractors) Two/FourWheelers Total 65,000 5,000 45,000 8,000 1,23,000
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MarketingOpportunities
Lowpenetrationratesinruralareas(per1000households) Durables MotorCycle CTV PressureCooker Refrigerator UrbanRural 77 28 304 48 635 178 335 35 Total 42 121 309 120
FMCGUrban Shampoo 663 ToothPaste 822 HealthBeverage 324 PackagedBiscuits 579 FaceCream 429
RuralTotal 352 442 449 556 67 140 315 390 185 254
Source: NCAER2002
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MediaExposureLevels
U p m a rk e t C o n s u m e rs U s e M o re M e d ia
Percentage Exposed At Least Once/ Week 80 70 60 50 40 30 20 10 0 R1 R2 R3 R4 P re s s TV C & S TV R a d io
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InfrastructureImprovingRapidly
70 60 50 40 30 20 10 0 Satellite TV Radio Press Cinema TV All Media
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20% 0%
AGRI
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Myth6: Reachandonlyreachisthekey.
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DistributionofVillages
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KEEPITSIMPLE
I am eager to adopt or buy, but I do so only if you talk in my language and signage.
SupportingInsights
Itsgreatfun towatchTV,butIcannotunderstandandrelatetoit. Iamwillingtolisten andchange,onlyifyouinteractandengage withme. IamsimpleItakethingsliterally,especiallywhenitcomestoads. Icantreadorwrite,butIcanunderstandsymbols,colours and images. Talktomeinmylanguageinasimpleway,thatswhatI understand.
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FAMILIARITYBREEDSCOMFORT
Only if its familiar, will I trust.
SupportingInsights IhavefaithintheBrandsIhaveused. IfIamsatisfiedwithmyfamiliarproducts,thenwhyshould Ichange? Iamaversetotakingrisks,particularlyifitisnewand unfamiliar. Familiarthingsmakemesecure. IfIfindmyvillagefolksareusingaparticularbrand,thenI feelreassured.
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Jo Chahoon Woh Paoon, Lekin Panch Rupai Mein (Will get what I want, but only at Rs. 5) SupportingInsights Ibuylowcostproductsbecausetheyfitintomybudget, astheygivethevalue Iamseeking. AtanytimeIhavelimitedamounttospend,butIneed to buy a number of things, so luxury products are important. Rs.5mylakshman rekhaIdonothavemorethanthat tospend. Rs. 5 and Rs. 10 are magical price points in rural India.
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SHOWVALUEThenRuralBuyers WILLBUY
I will pay more only if you show me that I get more tangible benefits that I want out of the product.
SupportingInsights IfIseeandfeelthedifference onlythenwillIbelieveandact. ShowmethevaluePerformancequalityorquantity;only thenwillIbuy. IfIcansensethedifference,Idontmindpayingalittleextraforit. IfIcantseethedifference,Ishallselectthecheaperone. Priceisimportant;yetitshouldmeetmyexpectations.
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HAATMERIDUNIYAN
Haats (village markets) are my window to the worldwhere I experience new things.
SupportingInsights
Haat ismyouting.Iamlookingtoexplore. Haat givesmeanopportunitytobuyproductsthatI wishtobuy. Haats areafestiveoutingandlotsoffunwhereIgetto seenewthings. Ihavesomeplaces(Haats)whichIregularlyvisitand whereIamopentochange.
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DiscoveriesaboutRuralMarket
Discovery1 Discovery2 : Theruralmarketisahugepotentialmarket. : Theruralconsumercanbereachedwitha combinationofmassandunconventionalmedia. Discovery3 : Theruralmarketisadifferentiatedmarket. Discovery4 : RuralGDPisnotaboutagriculturealone. Discovery5 : Ruraldisposableincomesaregrowingand growingfast. Discovery6 : Qualityofreachandnotmerereachisgoingto bethekeydifferentiatorfortheruralmarket. Discovery7 : Needforaruralmarketingmix. Ruralrelevantadvertising Consumeractivation Useofnonconventionalmedialikehaats,fairs,etc. PricepointSKUs.
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The future lies with those companies who see the poor as their customers.
CK Prahalad, Jan 2000
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4Ps&4As
ProductPricePlacePromotion AcceptabilityAffordabilityAvailabilityAwareness
MarketingTools Product Price Place Promotion MarketingChallenges Acceptability Affordability Availability Awareness
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Product
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AppropriateProductStrategies
Smallunitpackaging Productfeaturesservicequalitypriceand performancerelationship Simplicityisthekey Newproductdesigns Sturdyproducts Utilityorientedproducts Brandingstrategy
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Packaging
Associatedwithaffordability convenience consumer recognition,andproductprotection Packagingmaterial,size,convenienceandaesthetics
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Fakes:SomeExamples
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Pricing
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IssuesinPricingAffordability
Lowcost/cheapproducts Avoidsophisticatedpacking Refillpacks/reusablepackaging Highlightingvalue Priceadaptations
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ExamplesofRuralPricingStrategies
Godrej:Cinthol,FairGlowand Godrej in50gpacks,pricedat Rs.45,meantspecificallyfor Madhya Pradesh,Biharand UttarPradesh. HLL:LifebuoyatRs.2for50g. CocaCola:Thereturnable 200mlglassbottlepricedat Rs.5.
Colgate Cibaca
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PlaceRuralDistributionChallenges
Largenumberofsmallmarkets Dispersedpopulationandtrade Poorconnectivity Lowavailabilityofsuitabledealers Inadequatebanking/creditfacilities Poorproductdisplayandvisibility Poorcommunicationofoffersandschemes
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LevelsofDistribution
Level Partner CompanyDepot/C&FA Distributor/VanOperator/ SuperStockist /Rural Distributor SubDistributor/Retail Stockist/SubStockist/Star Seller Wholesaler Retailer Location National/Statelevel Districtlevel
1 2
4 5
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DistributionAdaptations
HubandSpokeModelExample:CocaCola UseofaffinitygroupsExample:ProjectShakti Haat ActivationExample:Colgate SyndicateddistributionExample:Cavin Care&Amrutanjan UseofmarketingcooperativesExample:Warna Bazaar in RuralAreas MobiletradersExample:FMCGcompanies
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PromotionIssues
Mostoftheproductsaresoldinthelocalruralhaats.Result:
Theymaynotfetchaverygoodprice. Theyhavelimiteddemandresultinginlowturnoverandlow income. Chanceforproductimprovementislimited.
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PromotionAdaptations
Conventional Television Radio Non Conventional Haat andMela FolkMedia(puppetandmagic show) VideoVan Mandi (Market) Personalised Directmailer POS(demonstration,leaflet)
Press Cinema
Wordofmouth Interpersonalcommunication
Outdoor:WallPainting, Hoarding
Animator
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Melas &Haats
Melas 1. 25,000melas 2. Companiescanconcentrateonthe top100melas 3. Pushkar Mela inRajasthan 4. OrganizedbythestateVeterinary Department 5. Productsales,promotion, demonstrationanddatabase generation 6. Culturalactivitiesandruralsports
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TypesofPromotions
Advertising Salespromotionscoupons,contests,demonstrationsandsampling, Example:Tata Shakti Haat Hungama Directmarketing,Example:Videocon Publicity,Example:ProjectShakti andAPOnline Usingadirectsellingthroughasalesforce,Example:Swasthya Chetna forLifebuoy Pushstrategysalesforce andtradepromotion Pullstrategyadvertisingandconsumerpromotion
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FutureProspects
RuralpercapitaconsumptionofFMCGs toequalcurrent urbanlevelsby2017. IndustryanalystsexpecttheFMCGsectorinruralareasto grow40%against25%inurbanareas. Telecomexpectedtogrowfrom100millionconnections todayto300millionby2012 Semiurban&rurallifeinsurancemarketexpectedtorise fromUS$5bn toUS$20bn by2012. Governmentspendingwillcontinuetogrow.
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Is India Different?
India has shown tremendous growth in the last two decades. Brand India is riding high. Happy times for Indian consumer as disposable income has increased considerably over the years. India's growing consumer goods market provides the opportunity for multinationals. But with this opportunity lies the hurdle to understand the ever changing Indian consumer.
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People are deeply rooted in Indian culture and traditions yet connected to and curious about the outside world. People in the middle-income segment still spend about half their budgets on the basics, that amount is falling every year, leaving more money for other areas of consumption. Beyond basic needs, households make their children's future a clear priority. Education is seen as a passport to a better tomorrow. To gain a winning edge, parents spend much money and effort choosing the right schools and tutoring for their children and invest in nutrition, computer games, and books.
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Eating Out
In urban India, families that do not eat out are considered oldfashioned and conservative. Most popular-multi-cuisine restaurants offering Indian fare, along with a form of Chinese and Western fast food. Pizza and cheese, with Indian flavours and spice.
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Metro-sexual Male
Male grooming a growing business in India Annually growing at 15% Currently, usage is restricted to the young, urban upper income male.
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Women Empowerment
More women entering the workforce Increased use of cosmetics Increasing time pressures Convenience gains value Easy to cook food, home delivery, wide choices in shops, etc. Demand for ancillary services/products, e.g. cook, domestic help, microwave oven
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Teens
With increased awareness through television and advertising, teens are an important influence on family decision-making in urban India. Have mastered the art of bullying their parents into making purchases. Gadgets or products that they want
newly launched chocolate bar, instant noodles and breakfast cereals. mobile phones, the TV remote, DVD player and computer programs
Marketing mangers also exploiting this surge in the number of ads for children
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Marriage
Earlier, arranged marriages used to happen with elders consent. Many people nowadays rely on individual choice and judgement. Examples: matrimonial sites proliferate shaadi.com, bharatmatrimony.com
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Luxury
India is experiencing a rise in incomes and higher consumption patterns. Demand for luxury products is also on the rise. Vertu mobiles, Tag Heuer, Louis Vuitton, Hugo Boss, Porsche, Ferrari, Parker Pen.
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Digitalization
Young people in urban areas are increasingly using the Internet. Online banking for service payments and even for buying company shares. Success of social networking websites. Avail Online booking of tickets for movies, trains and airlines.
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Credit
Earlier, people avoided buying things (nonessential) on credit/loan. Controlling desires Instant gratification Easy availability of credit Rise in number of home and vehicle (Two, four wheelers) loans
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Snacking
Eating 2 or 3 times a day Eating when hungry. Snacks and chocolates of wide variety available Lays, Kurkure, Perk, Cadbury Dairy Milk chocolates, Britannia biscuits, etc
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Western Influences
Opening of Indian economy, mass and social media exposure and increase in overseas travelling Acceptance of western clothing, especially in urban India Gifting Cards Pub culture
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THANK YOU
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