Consumer Behaviour

Introduction to Consumer Behaviour

Chapter 1
Learning Objectives
 Participants will be able to
 Define consumer behavior and enumerate the characteristics
 Define the need to study consumer behavior and elaborate the various types of
behavior
 Understand buying motives and list the types of buying motives
 Understand the need to study the role of consumer behavior in Marketing
 Study the elements affecting consumer behavior
 Determine consumer behavior patterns
 Study the impact of Consumer Behavior on product/product design
 Understand the importance of Customer behavior Segmentation
What is Consumer Behaviour?
 Consumer behavior is the study of consumers’ choices during
searching, evaluating, purchasing, and using products and
services that they believe would satisfy their needs.
 Consumer behavior explains how people decide to spend their
money, time, and effort on goods that marketers offer for sale
and describes which products and brands consumers select and
why, where and when they purchase them.
 Refer to the print ads in the next slide.
What is Consumer Behaviour?

Unfulfilled dreams cost a lot more

Of all the emotions you can expect while driving a

Boxster, regret will never be one of them. The top
glides down. The Boxster engine comes to life, its
nimble, mid-engine balance recreates the thrills of
Porsche motorsports legends. And its philosophy is
getting more from less, the core of Porsche Intelligent
Performance, invokes another feeling altogether, the
harmony of your heart and head. Porsche. There is no
substitute.

The Boxster. Starting at $47600

What is Consumer Behaviour?
 What is Consumer Behaviour?
 The tagline in the Porsche Boxster ad states that “unfulfilled dreams cost a lot more,” and urges buyers to
“fulfill their dreams rather than deny them.”
 Recognizing that many daydream about buying the top-of-the-line and exceptionally engineered Porsche
but might feel conflicted because of its high price, the ad states, “It is expensive to fulfill one’s dreams,
but it is worth the expense.” The ad also reinforces the decisions of consumers who had purchased the car:
“Of all the emotions you can expect while driving a Boxster, regret will never be one of them,” and ends
with Porsche’s classic tagline: “Porsche. There is no substitute.”
 While Porsche appeals to fulfilling a dream, an advertising campaign for the Scion’s sporty car— which
appeals to young adults with emotions such as standing out – see they add where they extol their consumers
to Always Zag when others Zig and Become one of us by becoming none of us.
 The prices of the two cars are far apart and the two brands target different consumer groups. Porsche tells
consumers that, although the car is very pricey, it is worth the price. The much more affordable Scion also
targets young people by appealing to drivers who want to stand out and appear distinctive from others.
Nevertheless, both ads appeal to unfilled needs and demonstrate marketers’ grasp of car buyers’ mindsets.
 What is Consumer Behaviour?
 Characteristics of consumer behaviour
 It is a process where the consumer decides what to buy, when to buy, how to buy, where to buy and how much to buy.
 It comprises both mental and physical activities of the consumer
 Consumer behaviour is very complex and dynamic which keeps changing constantly
 Individual buying behaviour is affected by various internal factors such as needs, wants, attitudes and motives and
also external factors like social groups, culture, status, environmental factors etc.
 Consumer behaviour starts before buying and even after buying.
 It is hard to understand consumer behaviour because it often defies logic and common sense. For example,
one study discovered that consumers would order the least healthy food when there was a healthy choice on
the menu: More consumers ordered French fries when the menu included a green salad because the mere
presence of a healthy option “licensed” eating unhealthy food.
 Need to Study Consumer Behaviour
 To make better strategies for increasing profits
 To know the buying decisions and how the consumer makes consumption
 Consistent change in consumer’s tastes or preferences
 Consumer behaviour study is necessary to make pricing policies
 To avoid future market failures

Types of Consumer Behaviour

 Complex
 Dissonance reducing
 Habitual;
 Variety Seeking
 Need to Study Consumer Behaviour
 To make better strategies for increasing profits
 To know the buying decisions and how the consumer makes consumption
 Consistent change in consumer’s tastes or preferences
 Consumer behaviour study is necessary to make pricing policies
 To avoid future market failures

Types of Consumer Behaviour

 Complex
 Dissonance reducing
 Habitual;
 Variety Seeking
 Buying motives
According to D J Ducan, “Buying Motives are those influences or considerations which provide the impulse
to buy, induce action or determine choice in the purchase of goods and services
Types of Buying motives
Types of Buying motives
Types of Buying motives

Marketers Love emotional Buyers like customers who

get influenced by Influencers.
Types of Buying motives

Example:- I am hungry….satisfy the hunger and Thirst

Inherent Motives:- Dal n Rice and Coffee
Learnt Motives:- Brands like KFC and Macdonlds and Starbucks
Types of Buying motives

Example:- Influence by Social Circle

Role of Consumer Behaviour in Marketing
 As dicussed previously, Consumer behavior is the study of consumers and the processes they use to
choose, use (consume), and dispose of products and services, including consumers’ emotional, mental,
and behavioral responses.
 Understanding consumer behavior is crucial for businesses to create effective marketing strategies that
can influence consumers’ decision-making processes.
 By understanding consumer behavior, businesses can tailor their marketing efforts to target specific
groups, improve brand loyalty, and identify emerging trends. This knowledge can also help businesses
stay ahead of their competition and adapt to changes in consumer behavior.
 Let’s look at the different aspects and facets of consumer behavior and discuss the most effective types of
customer segmentation.
Role of Consumer Behaviour in Marketing
 Studying consumer behavior is important because it helps marketers understand what influences
consumers’ buying decisions.
 A consumer behavior analysis should reveal:
 What consumers think and how they feel about various alternatives (brands, products, etc.);
 What influences consumers to choose between various options;
 Consumers’ behavior while researching and shopping;
 How consumers’ environment (friends, family, media, etc.) influences their behavior.
 Consumer behavior is often influenced by different factors. Marketers should study consumer purchase
patterns and figure out buyer trends.
 There are three categories of factors that influence consumer behavior:
 Personal factors: an individual’s interests and opinions can be influenced by demographics (age, gender, culture,
etc.).
 Psychological factors: an individual’s response to a marketing message will depend on their perceptions and
attitudes.
 Social factors: family, friends, education level, social media, income, all influence consumers’ behavior.
Types of Consumer Behaviour
 There are four main types of consumer behavior:
 Complex buying behavior - This behavior is encountered when consumers buy an expensive, infrequently
bought product. They are highly involved in purchasing and consumer research before committing to a high-value
investment. Imagine buying a house or a car; and House these are an example of complex buying behavior.
 Dissonance-reducing buying behavior - The consumer is highly involved in the purchase process but has
difficulties determining the differences between brands. ‘Dissonance’ can occur when the consumer worries that
they will regret their choice. Imagine you are buying a lawnmower. You will choose one based on price and
convenience, but after the purchase, you will seek confirmation that you’ve made the right choice.Example:-
Process of Buying a EV car vs a petrol car
 Habitual buying behavior - Habitual purchases are characterized by the consumer having very little involvement
in the product or brand category. Imagine grocery shopping: you go to the store and buy your preferred type of
bread. You are exhibiting a habitual pattern, not strong brand loyalty.Example:- Auto pilot or muscle memory
 Variety-seeking behavior - In this situation, a consumer purchases a different product not because they weren’t
satisfied with the previous one, but because they seek variety. Like when you are trying out new shower gel
scents.
 Knowing what types of customers your business attracts will give you a better idea about how to segment
customer types.
What affects Consumer Behaviour?
Many things can affect consumer behavior, but the most frequent factors influencing consumer behavior are:
 Marketing campaigns
 Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with the right marketing
message, they can even persuade consumers to change brands or opt for more expensive alternatives.
 Marketing campaigns, such as Facebook ads for eCommerce, can even be used as reminders for products/services
that need to be bought regularly but are not necessarily on customers’ top of mind (like insurance for example). A
good marketing message can influence impulse purchases.
 Economic conditions
 For expensive products, especially (like houses or cars), economic conditions play a big part. A positive economic
environment is known to make consumers more confident and willing to indulge in purchases irrespective of their
financial liabilities.
 The consumer’s decision-making process is longer for expensive purchases and it can be influenced by more
personal factors at the same time.
What affects Consumer Behaviour?
 Personal preferences
 Consumer behavior can also be influenced by personal factors: likes, dislikes, priorities, morals, and values. In
industries like fashion or food, personal opinions are especially powerful.
 Advertisements can influence behavior but, ultimately, consumers’ choices are greatly influenced by their
preferences.
 If you’re vegetarian, it doesn’t matter how many KFC ads you see, you’re not going to start eating meat
because of that.
 Group influence
 Peer pressure also influences consumer behavior. What our family members, classmates, immediate relatives,
neighbors, and acquaintances think or do can play a significant role in our decisions.
 Social psychology impacts consumer behaviour. Choosing fast food over home-cooked meals, for example, is
just one such situation. Education levels and social factors can have an impact.
What affects Consumer Behaviour?
 Purchasing power
 Purchasing power plays a significant role in influencing our behavior. Unless you are a billionaire, you will
consider your budget before making a purchase decision.
 The product might be excellent, and the marketing could be on point, but if you don’t have the money for it, you
won’t buy it.
 Segmenting consumers based on their buying capacity will help marketers determine eligible consumers and
achieve better results.

 Example of TITAN:- Seat for 2 CR

Customer Behaviour Patterns
Buying behavior patterns are not synonymous with buying habits. Habits are developed as
tendencies towards action and they become spontaneous over time, while patterns show a
predictable mental design.
Each customer has his unique buying habits while buying behavior patterns are collective and
offer marketers a unique characterization. Customer behavior patterns can be grouped into:
 Place of purchase
 Most of the time, customers will divide their purchases between several stores even if all items are
available in the same store. Think of your favorite hypermarket: although you can find clothes and
shoes there as well, you’re probably buying those from actual clothing brands.
 When a customer has the capability and access to purchase the same products in different stores,
they are not permanently loyal to any store unless that’s the only store they have access to. Studying
customer behavior in terms of choice of place will help marketers identify key store locations.
Customer Behavior Patterns
 Items purchased
 Analyzing a shopping cart can give marketers lots of consumer insights about the items that were
purchased and how much of each item was purchased. Necessity items can be bought in bulk while
luxury items are more likely to be purchased less frequently and in small quantities.
 The amount of each item purchased is influenced by the perishability of the item, the purchasing
power of the buyer, the unit of sale, the price, the number of consumers for whom the item is
intended, etc.
 Time and frequency of purchase
 Customers will go shopping according to their feasibility and will expect service even during the
oddest hours, especially now in the era of e-commerce where everything is only a few clicks away.
 It’s the shop’s responsibility to meet these demands by identifying a purchase pattern and matching its
service according to the time and frequency of purchases.
 One thing to keep in mind: seasonal variations and regional differences must also be accounted for.
Customer Behavior patterns
 Method of purchase
 A customer can either walk into a store and buy an item right then and there or order
online and pay online via credit card or on delivery.
 The method of purchase can also induce more spending from the customer (for online
shopping, you might also be charged a shipping fee for example).
 The way a customer chooses to purchase an item also says a lot about the type of
customer he is. Gathering information about their behavior patterns helps you
identify new ways to make customers buy again, more often, and with higher values.
Impact of Consumer Behavior on product/product design
Some examples of how Consumer Behaviour has shaped products / product
design
 Tata Nano came into existence as TATA identified the need for a safer alternative to
more than 2 riders on two wheelers
 McDonald’s: McDonald’s India had to customize their food menu to suit the Indian
Taste and there fore the Maharaja Mac was born
 Xiaomi: Xiaomi is a smartphone brand that gained immense popularity in India by
offering feature-rich smartphones at affordable prices. They have adapted their
product design to cater to the Indian market's demand for long battery life, large
storage capacity, and localized software features.
 Patanjali Ayurved: Patanjali Ayurved is a homegrown Indian brand that specializes
in natural and Ayurvedic products. Their product portfolio includes personal care,
food, and healthcare products that align with Indian consumers' preference for natural
and herbal solutions.
Customer Behavior Segmentation
Behavioral segmentation refers to a process in marketing which divides
customers into segments depending on their behavior patterns when interacting
with a particular business or website.

These segments could include grouping customers by:

 Their attitude toward the product, brand or service;
 Their use of the product or service,
 Their overall knowledge of the brand and your brand’s products,
 Their purchasing tendencies, such as buying on special occasions like
birthdays or holidays only, etc.
Importance of Customer Behaviour Segmentation

 It identifies the most engaged users – e.g, those regularly opening a brands
emails, or spend the most time with your product pages or engaging with
the social media page – enables marketers to make more informed decisions
on how and where to best allocate time, budget, and resources. In return, this
makes the marketing more cost-effective, as you’re not burning through budget
trying to warm up predominantly cold leads.
 Improves messaging accuracy. Behavioral segmentation allows marketers to
optimize their positioning and marketing messages toward the customer data at
hand.
 Imagine you’ve already identified that 24-35-year-olds are the most active segment
on your fashion e-Commerce store.
 Behavioral segmentation allows you to enrich this demographic data by splitting the
segment based on their interests and preferences, such as “interested in activewear”
vs “interested in formal attire,” or “one-time shopper” vs “wardrobe overhauler.”
Importance of Customer behavior Segmentation

 Provides refined personalized experiences. To provide a sense of brand

persona and uniqueness, deeply analyzing the audience and resonating with
customer needs, wants, concerns, and demands can make noticeable differences.
 Personalized approaches, such as displaying complementary products on the website
or sending an upsell email after a recent purchase can not only lower bounce rate,
reduce cart abandonment, or speed up the purchasing process, but also cement
customer loyalty.
 Builds brand loyalty. Customers who feel they are being attended to throughout
their customer journey will instinctively favor the brand over competitors.
 Behavioral segmentation enables eCommerce businesses to reach extraordinary
levels of customer satisfaction & retention, increase customer lifetime value, and
boost long-term revenue. All due to increased targeting accuracy and higher levels of
personalization.
Six types of behavioral segmentation

 Purchasing behavior
 Purchase-related segmentation categorizes customers by their likelihood of buying
from the brand, purchase frequency, or buying considerations.
 For example, customers who prefer to undertake research will often turn to search engines
or reviews to be assured they are making the right decision purchasing from a brand,
whilst customers that are particularly thrifty may only interact with the brand or product
when on sale.
 Ultimately, both of these customer types can fall into the same product affinity category.
However, targeting all of them with the same marketing materials and messaging is
destined to waste resources. The aforementioned careful consumer may not respond to
discount promotions in the same manner as the thrifty one.
Six types of behavioral segmentation

 Customer satisfaction
 Segmenting by customer satisfaction groups people according to how satisfied they
are with the products or services rendered.
 One can create such segments based on data you collect through NPS scoring, surveys,
and reviews.
 Other customer satisfaction indicators can come from analyzing the sentiment of support
interactions and social media posts. You can also include engagement or inactivity metrics
to calculate a customized satisfaction score from multiple data points.
Six types of behavioral segmentation

 Customer loyalty, engagement, and usage

 Usage, engagement, and loyalty are similar but not the same. While there’s no fixed
definition for each approach, businesses generally measure:
 Usage based on activity within your product or platform. Often, usage behavior helps predict
other factors such as churn, brand loyalty, or satisfaction.
 Customer engagement through usage and other interactions with or about your brand,
like website visits, social media mentions, or email click rate.
 Loyalty through spending frequency, amount, and annual or customer lifetime value.
 Say a loyal customer makes big purchases infrequently. Assuming your loyalty program is based on annual or
lifetime spending, that person is then a loyal customer, but not an engaged or high-usage one.
 Conversely, a daily user of your free app who talks about it on social media goes into the highly engaged and heavy
user segments. They don’t classify as a loyal customer since they’re not spending anything.
 EXAMPLE:- RFM Model( Recency , Frequency and Monetory value)
Six types of behavioral segmentation

 Customer journey
 When you use the customer journey for segmentation, you organize people by journey
phases, like awareness, consideration, decision, retention, and advocacy. Doing so lets you
tailor communications and the experience to each stage to increase conversions. You can
also figure out who isn’t progressing from one phase to the next and launch initiatives to
remove obstacles and move them along.
Six types of behavioral segmentation

 Customer status
 Customer status segments people by their relationship to your business at
that particular moment in time. e/g most app give varying plans such as basic,
pro, free trial etc
 Status segmentation can overlap with other approaches but does give a different and
helpful perspective, especially when you combine it with other groupings.
 Staying with the app example, most Pro subscribers are likely engaged. Still, some
might have gone inactive and are close to churning or downgrading. This
combination of status and engagement segmentation helps you discover trends within
different subsets of your customer base.
Six types of behavioral segmentation

 Customer interest
 You can figure out customer interests from behavioral data. The pages people view
on your site, the topics they click on in your social media, and the type of products
they buy tell you about their interests.
 By segmenting customers in this way, you can provide many personalized
experiences, such as the marketing messages you send them, the products you
recommend.
Six types of behavioral segmentation

 Customer interest
 You can figure out customer interests from behavioral data. The pages people view
on your site, the topics they click on in your social media, and the type of products
they buy tell you about their interests.
 By segmenting customers in this way, you can provide many personalized
experiences, such as the marketing messages you send them, the products you
recommend.

,
What is Consumer Research?
 Consumer research is a part of market research in which inclination, motivation and
purchase behavior of the targeted customers are identified. Consumer research helps
businesses or organizations understand customer psychology and create detailed
purchasing behavior profiles.
 It uses research techniques to provide systematic information about what customers
need. Using this information brands can make changes in their products and services,
making them more customer-centric thereby increasing customer satisfaction. This will
in turn help to boost business.
 It is observed that consumers generally hesitate to reveal the basic reason behind purchasing a
particular product. Here, researchers use two different types of research methodologies to
study consumer behaviors −
 Quantitative Research
 Qualitative Research
What is Consumer Research?
 Quantitative Research
 Quantitative research is the application of quantitative research techniques while carrying out the
research process.
 This method is used to predict the consumer behavior and is descriptive in nature. It consists of
experiments, survey techniques, and observation. It typically involves the construction of
questionnaires and scales.
 Respondents are asked to complete the survey. Marketers use the obtained information to
understand the needs of individuals in the marketplace, and to create strategies and marketing
plans.
 To analyze data and draw conclusions, both descriptive and inferential statistical techniques can be
used. It may include hypotheses, or random sampling techniques to enable inference from the
sample to the population.
What is Consumer Research?
 Qualitative Research
 Qualitative research involves an in-depth understanding of consumer behavior and the
reasons that govern that behavior. Qualitative research largely relies on the reasons behind
various aspects of behavior.
 The methods include techniques such as in-depth interviews, focus groups and projective
techniques. In this method, the sample sizes are small, so it can’t be generalized to the larger
population. This method investigates the why and how of decision-making, as compared to
what, where and when of quantitative research.
 In the qualitative research method, responses are verbal and not in numbers and the
respondent is asked to rate the answer in his own words. This approach allows the researcher to
discover the consumption motives, attitudes, opinions, perceptions, preferences, experiences,
actions, etc. of the consumers.
Consumer Research process
Consumer Research Process
 Developing Research Objectives
 This involves defining the purposes and objectives to ensure an appropriate design. A statement of
objective helps to define the type and level of information needed.
 Your research objective could be to understand:
 Customer experience and attitude about a product offered by your company
 Customer’s satisfaction level with the services
 Change in customer’s preference and interests
 Impact of marketing campaign
 Reason for a product’s poor performance in the market
 You must clearly identify and establish the objective to have a clear picture of the goal you are
trying to achieve at the end of the consumer research. A well-defined objective can help design
the research process and prevent any costly mistakes during the process.
 Examples:- Paid Surveys by research companies to know about particular products
Consumer Research Process
 Quantitative Research
 A quantitative research study is comprised of research design, the data collection methods,
instruments to be used, and the sample design.
 Following are the three basic designs or approaches used for quantitative design −
 Observational Research − In this method of observational research, the people or customers
are observed effectively when they purchase a particular product. It helps the researcher to gain
in-depth understanding of the relationship between the people and products by observing them
while purchasing and using the product. Examples:- People in malls fishing to understand
products
 Experimentation − Experimentation is a type of research where only certain variables are
manipulated while others are kept constant in order to encourage the change in the constant
variable.Example:- Limited time menu in mac donalds
 Surveys − A survey is a method of research in which an interviewer interacts with respondents
to obtain facts, opinions and attitudes. Survey methods generally used can be Personal
Interviews, Telephone Survey, Mail Survey, Online surveys and Quantitative research data
collection instruments
 Consumer Research Process
 Qualitative Research
 Being known as descriptive in nature, qualitative research is a method that includes open-
ended questions for gaining insightful feedback from respondents. It relies on the
following methods of research:
 Following are the three basic designs or approaches used for qualitative research −
 Focus Groups: A focus group is defined as a small group of subject experts who sit together to
effectively analyze a specific product or service. There are typically 6-10 members in a focus
group.
 One-to-one Interview: It is a conversational method where the data is collected by asking
open-ended questions to the respondents. This method consumes a lot of time and requires more
than a single attempt for gathering insightful data.
 Text Analysis: A popular qualitative research method, text analysis is a process in which
researchers decode words & images from the available documents for analysis. In this method,
researchers draw conclusions from the used images. The right example for text analysis is social
media.
Consumer Research Process
 Establish your Sample Size
 It is not possible for any company to gather customer insight from all of their customers, even
by using online surveys. For this reason, marketers use sampling to narrow down their target
population.
 Sample of a population refers to a number of selected respondents who share similar
characteristics as the target population. A sample, thus represents the entire population.
 To establish a sample size there are three steps you should follow, these steps will
make it easier to define your sample size:
 Who do you want to sample?
 How many people do you need to survey?
 Which sampling procedure should you use?
Consumer Research Process
 Collect and Analyze the Research Data
 Now that you have decided on the sample size as well as on the research method, it is time you
collect the data. The collected data requires analysis to draw actionable insights from it. The
analysis of the research data will help draw conclusions and give answers to the research
objective.
 In the case of qualitative research, the data is gathered and codified based on the recurring themes.
These repeating themes are then later analyzed to gain in-depth understanding.
 Create Report from your Consumer Research
 At the end of the research process you need to create a report that defines the research findings. The
report should be made in a way that it is easy for the reader to understand the objective and the
meaning of the end result.
 Your research report must also describe the entire research process. It should explain the objective,
the purpose of research, the methods used for data collection and data analysis.
 Example:- Consultants like AC Nielsen, KPMG
Use of Big Data to Target Customers Through Behavioural Analytics

What is Big data?

 In marketing, big data comprises gathering, analyzing, and using massive amounts of digital
information to improve business operations, such as:
 Getting a 360-degree view of their audiences: The concept of “know your customer” (KYC) was
initially conceived many years ago to prevent bank fraud. KYC provides insight into customer
behavior that was once limited to large financial institutions. Now, because of the accessibility of
big data, the benefits of KYC are available to even small and medium businesses, thanks to cloud
computing and big data.
 Customer engagement, specifically how your customers view and interact with your brand, is a
key factor in your marketing efforts. Big data analytics provides the business intelligence you need
to bring about positive change, like improving existing products or increasing revenue per customer.
 Example:- Amazon has Big data…what products they prefer worldwide. For example Samsung in
India is more price conscious than US, so this information can be given to BRANDS
 What ppl prefer in Mumbai to Delhi
Use of Big Data to Target Customers Through Behavioural Analytics

What is Big data?

 The 360-degree view from big data allows marketers to present customer-specific content when and
where it is most effective to improve online and in-store brand recognition and recall.
 Improved customer acquisition is another great benefit that big data brings to marketing. A
McKinsey survey found that “intensive users of customer analytics are 23 times more likely to
clearly outperform their competitors in terms of new customer acquisition.” Leveraging the cloud
allows for the gathering and analysis of consistent and personalized data from multiple sources,
such as web, mobile applications, email, live chat, and even in-store interactions.
 Big data can help marketers leverage real-time data in cloud computing environments. The
ability of big data to acquire, process, and analyze real-time data quickly and accurately enough to
take immediate and effective action cannot be matched by any other technology. This is critical
when analyzing data from GPS, clicks on a webpage, or other real-time data.
 Big data analytics is an essential component of big data. It provides business intelligence that
results in time and cost savings by optimizing marketing performance.
Use of Big Data to Target Customers Through Behavioural Analytics

Big data is used to target customers through behavioral analytics by analyzing

large volumes of data related to customer behavior, preferences, and interactions.
Here's how it works, along with examples
 Customer Segmentation:
 Big data analytics helps in segmenting customers based on their behavior and preferences. By
analyzing patterns and trends in the data, businesses can identify distinct customer segments and
tailor their marketing strategies accordingly.
 For example, an e-commerce company may segment its customers into categories like "frequent
shoppers," "occasional buyers," or "deal seekers" based on their purchase history and browsing
behavior. Each segment can then be targeted with personalized offers or recommendations.
Use of Big Data to Target Customers Through Behavioural Analytics

 Personalized Marketing Campaigns:

 Big data analytics enables businesses to create personalized marketing campaigns by understanding
customer behavior.
 By analyzing customer interactions across multiple channels such as website visits, social media
interactions, and email engagement, companies can gather insights about individual preferences and
interests.
 For instance, a retail brand may use data analysis to determine that a customer is interested in
fitness-related products. They can then send personalized offers or content related to fitness gear or
workout equipment.
 Predictive Analytics:
 Big data can be used to predict customer behavior and anticipate their needs. By analyzing historical
data and applying machine learning algorithms, businesses can identify patterns and make
predictions about future behavior.
 For example, an online streaming service can use data on user preferences, viewing history, and
engagement patterns to recommend personalized content and predict which shows or movies a user
is likely to enjoy next.
Use of Big Data to Target Customers Through Behavioural Analytics

 Sentiment Analysis:
 Big data analytics can help gauge customer sentiment by analyzing social media posts, reviews, and
customer feedback.
 By employing natural language processing techniques, businesses can identify positive or negative
sentiment towards their products or services. This information can be used to understand customer
perceptions, address concerns, and make improvements.
 For instance, a hotel chain may analyze online reviews to identify common complaints or areas of
dissatisfaction and take corrective measures.
 Dynamic Pricing:
 Big data analytics enables businesses to implement dynamic pricing strategies based on customer
behavior and market conditions.
 By analyzing factors like demand patterns, competitor pricing, and customer buying behavior,
companies can optimize prices in real-time.
 For example, ride-hailing companies often use surge pricing during peak hours or high-demand
periods to balance supply and demand and maximize revenue.
Use of Big Data to Target Customers Through Behavioural Analytics

 Some examples of brands using Big Data to leverage their marketing strategies
 Amazon: Amazon is renowned for its use of big data and behavioral analytics to personalize
customer experiences. They analyze customer browsing and purchase history to offer personalized
product recommendations, tailored email campaigns, and targeted advertising based on individual
preferences.
 Netflix: Netflix leverages big data and behavioral analytics to recommend personalized content to
its users. By analyzing user viewing history, ratings, and interactions, Netflix suggests shows and
movies that align with each user's preferences, resulting in a highly personalized streaming
experience.
 Spotify: Spotify uses big data analytics to provide personalized music recommendations. By
analyzing user listening habits, playlists, and engagement patterns, Spotify creates custom playlists,
suggests new songs or artists, and curates personalized music discovery features for each user.
Use of Big Data to Target Customers Through Behavioural Analytics

 Some examples of brands using Big Data to leverage their marketing strategies
 Google: Google utilizes big data and behavioral analytics to offer personalized search results and
targeted advertising. By analyzing user search history, location data, and online behavior, Google
delivers search results, ads, and recommendations tailored to individual interests and preferences.
 Nike: Nike utilizes big data and behavioral analytics to personalize its marketing efforts. They
analyze customer activity data from their Nike+ app, which tracks users' fitness activities, to offer
personalized training plans, customized product recommendations, and targeted promotions based
on individual fitness goals and preferences.
 Starbucks: Starbucks uses big data and behavioral analytics to enhance customer experiences and
drive loyalty. Through their mobile app and loyalty program, they gather data on customer
purchases, preferences, and location. This data is then used to offer personalized promotions,
rewards, and recommendations to customers.
 In an Indian context we have brands such as Flipkart, OLA, MakemyTrip, Zomato and others who
do the same.
Consumer Decision Making Process
Consumer Decision Making Process

5 important stages of the consumer decision making process

 Need Recognition
 The first stage in the consumer decision-making process for a consumer is to figure out what they need.
The most important thing that leads someone to buy a product or service is their need for it. All buying
decisions are based on what people need.
 Finding out what the customer needs is the first move to evaluating the Consumer Decision Making Process.
Finding out what needs and wants the target market has can help with many marketing decisions.
 Information Search
 Consumers need all the facts before they spend their money. After figuring out their need, the potential consumer
moves on to the second stage: searching for and gathering information.
 The buyer considers all the benefits and drawbacks of the purchase at this stage of their decision-making
process. Because of changing styles and online shopping sites, consumers know much more about what they
want to buy and can make better choices.
 Consumers can get information from many different places, like books, magazines, the Internet, and reviews
of products by other people. It’s important to make a purchase decision, so the consumer shouldn’t be in a
hurry when learning about the products and brands on the market.
Consumer Decision Making Process

5 important stages of the consumer decision making process

 Evaluation of Alternatives
 The third stage in the consumer decision making process is to carefully look at all the alternatives and
substitutes on the market. Once consumers know what they need and where to get it, they will start looking for
the best deals or options.
 At this stage, the consumer compares options based on price, product quality, quantity, value-added
features, or other essential factors. Before choosing the product that best meets your needs, look at
customer reviews and compare prices for the alternatives.
 After finding helpful information, the consumer chooses the best product on the market based on their taste,
style, income, or preference.
 Purchase Decision
 After going through the above stages, the customer decides what to buy and where to buy it. The consumer
makes a smart choice to buy a product based on his needs and wants after he has looked at all the facts.
 Needs and wants are often sparked by marketing campaigns, recommendations from friends and family,
or sometimes by both.
Consumer Decision Making Process

5 important stages of the consumer decision making process

 Post-purchase evaluation
 In the last stage of the consumer decision making process, the consumer evaluates or analyzes the product they
bought. They look at how helpful the product is, how satisfied they are with it, and how much it is worth to meet
their needs.
 If consumers know that the product they bought was worth what they paid for and met their expectations, they
will stick with that
 Conclusion
 Understanding this process from beginning to end is vital if you want to attract more potential consumers
and turn them into buyers. By breaking down the consumer decision making process into the stages above,
you will understand how to get the most out of your marketing efforts.
 If you want a potential consumer to become a loyal brand advocate, you must build trust and keep them
interested throughout the process.
 Example:- TV Search or a CAR search
Projects:-

 Group 1
 How does the cultural diversity of India impact consumer behavior?
 Share the influence of social norms and values on Indian consumers.
 Group 2
 Share case studies of Indian brands that have effectively understood and targeted
consumer behavior.
 Group 3:-
 How does the joint decision-making process within Indian families impact consumer
behavior?
 Analyze case studies of Indian brands that have successfully utilized the consumer
decision-making process.