What Is Consumer Behavior? Importance of Consumer Behavior

 What Is Consumer Behavior? Importance of Consumer Behavior

MBA / BBA MARKETING MANAGEMENT 

                                QUESTION PAPER OCTOBER 2019    

                PUNE UNIVERSITY 

“Consumer behavior is the actions and the decision processes of people who purchase goods and services for personal consumption” – according to Engel, Blackwell, and Mansard,

Consumer buying behavior refers to the study of customers and how they behave while deciding to buy a product that satisfies their needs. It is a study of the actions of the consumers that drive them to buy and use certain products.

Study of consumer buying behavior is most important for marketers as they can understand the expectation of the consumers. It helps to understand what makes a consumer to buy a product. It is important to assess the kind of products liked by consumers so that they can release it to the market. Marketers can understand the likes and dislikes of consumers and design base their marketing efforts based on the findings.

Consumer buying behavior studies about the various situations such as what do consumers buy, why do they buy, when do they buy, how often do consumers buy, for what reason do they buy, and much more.

For example, consumer buying behavior is studied by consumer researchers and their aim is to know why women buy moisturizers (to reduce skin problems), the most preferred brand (Olay, L’Oréal), how often do they apply it (twice a day, thrice a day), where do the women prefer to buy it (supermarkets, online) and how many times do they buy it (weekly, monthly).

It’s insightful to listen to some of the first cut opinions on Vocalley from consumers on how they think about various brands and their expectations, when it comes to electronic products and gadgets. 

Importance of Consumer Behavior

Understanding consumer behavior is essential for a company to find success for its current products as well as new product launches. Every consumer has a different thought process and attitude towards buying a particular product. If a company fails to understand the reaction of a consumer towards a product, there are high chances of product failure.

Due to the changing fashion, technology, trends, living style, disposable income, and similar other factors, consumer behavior also changes. A marketer has to understand the factors that are changing so that the marketing efforts can be aligned accordingly.

What is the importance of consumer buying behavior? This article outlines several of them.

1. Consumer Differentiation:

In marketing, consumer differentiation is a way to distinguish a consumer from several other consumers. This helps to make a target group of consumers with the same or similar behavior.

Though you have a targeted customer demographic in your business, you can still have variations between individual customers. Each group of consumers are different and their needs and wants differ from other groups.  When a marketer is knowledgeable about differentiation of each group of consumers, he can design separate marketing programes.

Consumer differentiation will help to tailor your strategies to the needs of varying customer groups. When consumer differentiation is done, you can expand the width and breadth of your services. You will be able to effectively serve a wider group of people.

2. Retention of Consumers:

“Consumer behavior is of most importance to marketers in business studies as the main aim is to create and retain customers” says Professor Theodore Levitt (Kumar, 2004). 

Consumer behavior is not just important to attract new customers, but it is very important to retain existing customers as well. When a customer is happy about a particular product, he/she will repeat the purchase. Therefore, marketing the product should be done in such a way that it will convince customers to buy the product again and again.

Thus, it is very evident that creating customer and retaining them is very important. This can be done only by understanding and paying attention towards the consumer’s buying behavior.

3. Design Relevant Marketing Programe:

Understanding consumer behavior allows you to create effective marketing campaigns. Each campaign can speak specifically to the separate group of consumers based on their behavior.

For example, while targeting kids market, you may have to look out for venues such as TV ads, school programes and blogs targeting young mothers. You will need to take different messaging approaches for different consumer groups. 

A study of consumer behavior enables the marketers to understand what motives consumers to make purchases. Furthermore, the same  motive can be utilized in advertising media to stir the desire to make a purchase. Moreover, marketers should take decisions regarding the brand logo, coupons, packing and gifts on the basis of consumer behavior. 

4. Predicting Market Trend:

Consumer behavior analysis will be the first to indicate a shift in market trend. For example,  the recent trend of consumers is towards environment friendliness and healthy food.  This changing market trend was observed by many brands including McDonalds.  Based on the consumer behavior, McDonald’s brought healthy food options. 

By conducting consumer behavior study, a company saves a lot of resources that might otherwise be allocated to produce a product that will not be sold in the market. For example, in summer a brand will not waste its resources for producing a product that will not sell in summer. Based on consumer behavior the company decides on production strategy which will save on warehouse costs and marketing costs.

5. Competition:

One of the most important reasons to study consumer behavior is to find out answers to some of the questions:

Is the customer buying from your competitor?

Why is a consumer buying from your competitor?

What features attracts a consumer to your competitor products?

What gaps are your consumers identifying in your products when compared to your competitors? 

Studying consumer behavior facilitates in understanding and facing competition. Based on consumers’ expectations, your brand can offer competitive advantages. 

6. Innovate New Products:

We all know some of the big names such as New Coke, Crystal Pepsi, Colgate Kitchen Entrées, Earring Magic Ken Doll, and Wheaties Dunk-a-Balls Cereal. Can you see the similarities in these products? Yes, they all failed!!

The sad truth is that most new products and new ideas end up in failure. There is an estimate of new product failures – they range from 33% to 90% based on the kind of industry.

Companies consistently strive hard to improve the success rate of their new products or new ideas. One of the most important ways is to conduct sound and thoughtful consumer behavior study. 

With the help of consumer behavior analysis, Nike realized that most of its target audience is not professional athletes, but many of them were striving to be more like them. So at the 2012 Olympics in London, Nike introduced a campaign to encourage athletics called  ‘Find Your Greatness’. It aimed to promote the aspirations of being an athlete, not just with high-performing athletes, but wanted to include all people regardless of their physical capability. The campaign was well planned and was data-driven, of course, carefully analyzed before taking any action. This message inspired many consumers and had enormous appeal for target consumers.  

7. Stay Relevant in the Market

When the world is changing as rapidly as it is happening today, the biggest challenge we all face is staying relevant to our target market. And do you know what is the main reason behind the rapid changes? It is the ever-changing behavior of our customers.

Today’s consumers have greater choices and opportunities, which means they can easily switch to a company that offers better products and services.  

“The pre-eminent skill required to shift ahead in the twenty-first century is the ability to see and seize.” -Adamson and Steckel, authors of Shift Ahead.

Losing relevance will only cost the company its market share. Haven’t we seen Sony Walkman failing to stay relevant in the digital music era, and the taxi industry doom with no preparedness to battle the UBER uprise!!

8. Improve Customer Service

Consumers require different levels of customer service, and understanding the differences within your customer base will help you provide the most appropriate service for individual needs.

For example, if you own an electronics store, high school or college students who buy a new laptop are more likely to understand the features they’re looking for than a person buying his first computer. With the first demographic, your service goal will be to provide information about the latest trends in technology, while with the second demographic, you’ll need to spend more time educating the customer, finding out what his specific needs are, and even teaching him how to use the features of his new electronic device.

Scope of Consumer Behaviour

 Scope of Consumer Behaviour

MBA / BBA MARKETING MANAGEMENT 

                                QUESTION PAPER OCTOBER 2019    

                PUNE UNIVERSITY 

1. Demand Forecasting : Marketers can estimate the demand of their product if they know how would a consumer behave and react after seeing their product. 

 

2. Marketing: Consumer Behaviour helps to identify the need, expectations and problems of the consumers. Therefore, they can easily build the product having those functions which the consumers exactly want.

3. Advertising: Different consumers may have different opinions and reactions on certain form of advertisement. Therefore, Marketers can target the customers with most prominent form of advertisement as per their behaviour.

4. Human Behaviour: If marketers are aware about the human behaviour of there consumers and which factors influence their behaviour, then they can make their product 100% compatible with the requirement of consumer.

 

CONSUMER BEHAVIOUR: NATURE, OF CONSUMER BEHAVIOUR

 

CONSUMER BEHAVIOUR: NATURE,   OF CONSUMER BEHAVIOUR

MBA / BBA MARKETING MANAGEMENT 

                                QUESTION PAPER OCTOBER 2019    

                PUNE UNIVERSITY 

 Nature of Consumer Behaviour

1. Complex Nature: Since every individual has different needs and desires, and marketers have to target customers as per their needs. Therefore, it becomes a complex task for the marketers to find the pattern of every individual.

2. Varies for different consumers: Different consumers have different needs and desires. Hence, It is impossible for marketers to target each and every consumer for their products. Therefore, Marketers try to identify their target consumers for the products and services.

 

3. Dynamic Nature: The behaviour and mentality of each consumer evolves with the time. Therefore, the marketers may find any potential customer for their products and services who once hated them.

4. Influenced by various factors: Consumer behaviour is also influenced by certain factors like friends, family, culture, lifestyle etc.

EX: People promoting different products among their peers due to the satisfaction they achieved by using it.

5. Important for Marketers: Consumer Behaviour is very important for marketers as they have to develop their products as per the behaviour of consumers that whether they are willing to purchase it or not.

6. Brand Loyalty: Consumers have a tendency to buy products and services from a certain organization which they may like due to certain reasons. They develop a brand loyalty towards these organizations and tends to buy only their products even if their rival is performing better in the market.

 

Top 10 powerful people in the world

1. Joseph Robinette Biden Jr.

 

BY-dən; born November 20, 1942) is an American politician and the president-elect of the United States. He defeated incumbent president Donald Trump in the 2020 presidential election and will be inaugurated as the 46th president on January 20, 2021. A member of the Democratic Party, Biden served as the 47th vice president during the Obama administration from 2009 to 2017. He represented Delaware in the United States Senate from 1973 to 2009.

2. Vladimir  Putin

Vladimir Vladimirovich Putin (/ˈpuːtɪn/; Russian: Владимир Владимирович Путин [vɫɐˈdʲimʲɪr vɫɐˈdʲimʲɪrəvʲɪtɕ ˈputʲɪn] (About this soundlisten); born 7 October 1952) is a Russian politician and a former officer of the KGB who has served as President of Russia since 2012, previously holding the position from 1999 until 2008.[c][6][7][8] He was also Prime Minister of Russia from 1999 to 2000 and again from 2008 to 2012.

3.  Angela Merkel

·         Merkel became the first female Chancellor of Germany in 2005 and is serving her fourth term.

·         In November 2018, Merkel stepped down as leader of the Christian Democratic Union and announced she wouldn't seek another term as chancellor in 2021.

·         Merkel remains the de facto leader of Europe, leading the region's largest economy after steering Germany through financial crisis and back to growth.

·         Her leadership is marked by her steely reserve, from standing up to Donald Trump to allowing more than a million Syrian refugees into Germany.

 

4.Narendra Damodardas Modi

(Gujarati pronunciation: [ˈnəɾendrə dɑmodəɾˈdɑs ˈmodiː] (About this soundlisten); born 17 September 1950) is an Indian politician serving as the 14th and current Prime Minister of India since 2014. He was the Chief Minister of Gujarat from 2001 to 2014 and is the Member of Parliament for Varanasi. Modi is a member of the Bharatiya Janata Party (BJP) and of the Rashtriya Swayamsevak Sangh (RSS), a Hindu nationalist volunteer organisation. He is the first prime minister outside of the Indian National Congress to win two consecutive terms with a full majority and the second to complete more than five years in office after Atal Bihari Vajpayee.[3

 

5. Emmanuel Macron,

The president of France, officially the President of the French Republic (French: Président de la République française) is the head of state and head of executive of France as well as the Commander-in-Chief of the French Armed Forces. The French presidency is the supreme magistracy of the country, and the president is the holder of the highest office in France. The powers, functions and duties of prior presidential offices, as well as their relation with the prime minister and Government of France, have over time differed with the various constitutional documents since the French Second Republic. The president of the French Republic is also the ex officio co-prince of Andorra, grand master of the Legion of Honour and of the National Order of Merit. The officeholder is also honorary proto-canon of the Archbasilica of Saint John Lateran in Rome (although some have rejected the title in the past).

 

6. Pope Francis

 

·         Pope Francis is the spiritual leader to more than one-sixth of the world's population, 1.3 billion people.

·         He has made it his personal mission to transform the longstanding conservative image of the Catholic Church.

·         In November 2016 he gave priests the power to forgive women who undergo abortions.

·         He has continued to push for climate change reform, better treatment of refugees and greater attention to persecution of religious minorities.

 

7. Xi Jinping

 

·         The leader of the world's most populated country and second largest economy (GDP), Xi Jinping holds a firm grasp on China's only political party.

·         In March, China's parliament amended its constitution, broadening Xi's power and scrapping term limits.

·         After ascending to the presidency in 2012, Xi was quick to see the benefits of privatization-friendly reform.

·         He is widely credited with the slogan Chinese Dream - a set of personal and national ideals for the advancement of Chinese society.

 

8. Jeff Bezos

·         Jeff Bezos founded e-commerce colossus Amazon in 1994 out of his garage in Seattle. He runs it as CEO and owns an 11.1% stake.

·         Between March and April 2020, amid the pandemic, Amazon said it hired 175,000 additional workers.

·         In April 2020, Bezos said he would give $100 million to Feed America, a nonprofit that operates food banks and food pantries across the country.

 

 

9. Elon Reeve Musk

Elon Reeve Musk FRS (/ˈiːlɒn/; born June 28, 1971) is a business magnate, industrial designer and engineer.[6] He is the founder, CEO, CTO and chief designer of SpaceX; early investor,[b] CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI. He was elected a Fellow of the Royal Society (FRS) in 2018.[9][10] Also that year, he was ranked 25th on the Forbes list of The World's Most Powerful People,[11] and was ranked joint-first on the Forbes list of the Most Innovative Leaders of 2019.[12] As of November 24, 2020, his net worth is estimated by Forbes to be US$126.2 billion,[13][14] making him the second-richest person in the world, behind Jeff Bezos. As CEO of Tesla, he is the longest tenured CEO in history of any automotive manufacturer globally.

 

10. Boris   Johnson 

Alexander Boris de Pfeffel Johnson MP born  19 June 1964) is a British politician, author, and former journalist who has been Prime Minister of the United Kingdom and Leader of the Conservative Party since 2019. He was Foreign Secretary from 2016 to 2018 and Mayor of London from 2008 to 2016. Johnson was Member of Parliament (MP) for Henley from 2001 to 2008 and has been MP for Uxbridge and South Ruislip since 2015. Ideologically, he identifies as a one-nation conservative.

CONSUMER RIGHTS-

 

CONSUMER RIGHTS-

                EXPLAIN THE CONCEPT OF CONSUME

MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

                                PUNE UNIVERSITY 

 

Right to Safety
Means right to be protected against the marketing of goods and services, which are hazardous to life and property. The purchased goods and services availed of should not only meet their immediate needs, but also fulfil long term interests.

Before purchasing, consumers should insist on the quality of the products as well as on the guarantee of the products and services. They should preferably purchase quality marked products such as ISI,AGMARK, etc
 

Right to be Informed
Means right to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices.

Consumer should insist on getting all the information about the product or service before making a choice or a decision. This will enable him to act wisely and responsibly and also enable him to desist from falling prey to high pressure selling techniques.
 

Right to Choose
Means right to be assured, wherever possible of access to variety of goods and services at competitive price. In case of monopolies, it means right to be assured of satisfactory quality and service at a fair price. It also includes right to basic goods and services. This is because unrestricted right of the minority to choose can mean a denial for the majority of its fair share. This right can be better exercised in a competitive market where a variety of goods are available at competitive prices
 

Right to be Heard
Means that consumer's interests will receive due consideration at appropriate forums. It also includes right to be represented in various forums formed to consider the consumer's welfare.

The Consumers should form non-political and non-commercial consumer organizations which can be given representation in various committees formed by the Government and other bodies in matters relating to consumers.
 

Right to Seek redressal
Means right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It also includes right to fair settlement of the genuine grievances of the consumer.

Consumers must make complaint for their genuine grievances.Many a times their complaint may be of small value but its impact on the society as a whole may be very large. They can also take the help of consumer organisations in seeking redressal of their grievances.
 

Right to Consumer Education
Means the right to acquire the knowledge and skill to be an informed consumer throughout life.Ignorance of consumers, particularly of rural consumers, is mainly responsible for their exploitation. They should know their rights and must exercise them. Only then real consumer protection can be achieved with success.

 

EXPLAIN THE CONCEPT OF CONSUMERISM.

           EXPLAIN THE CONCEPT OF CONSUMERISM.

                 MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

                                PUNE UNIVERSITY 

Concept of Consumerism :

  meaning of the term consumerism is, "the promotion of the consumer'S

interests". or It is thus the opposite of anti-consumerism and producerism

 

Anti-consumerism is the socio-political movement against consumerism

Producerism emphasizes the interests of the producers that is based on

belief that the producers, who have invested a lot of resources have the right to

decide what they sell and at what price.

 

Economics and Consumerism :

In the context of economics consumerism refers to economic policies placing emphasis on consumption. In an abstract sense it is the belief that the free choice of consumers should dictate the economic structure of a society

 

Market Economy and Consumerism : In the context of a market economy

economy, consumerism is used to describe the tendency of people to display

their wealth and identify strongly with the products or services they consume

and their brand names, especially those that enhance their perceived status

appeal. For instance, owning a luxury ca.r, designer clothing, expensive

jewellery, a luxury boat etc., sets them apart from the others.

CONSUMER ROLES.

 

 CONSUMER ROLES.

MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

            PUNE UNIVERSITY 

 Initiator :

 The Person Who Initiates The Process Buy.

Searching Out The Need For A Product.

E.G. The Growing Children Are Normally The Initiators

For Buying Latest Music Systems,

L.C.Ds, Plazrna Sets, D.V'd, Super Bikes, Watching Movie Etc.

 

Influencers :

The Person/Persons Who Influence The Selection Of Alternative.

They Are Generally Neighbors, Elders In Family, Respected

Person Of Family, Opinion Leader.

Advertisements And Promotions Also Acts As Influencers.

 

 

Deciders :

The Person Who Finally Takes The Buying Decision.

Generally, The Housewife Or The Head Of The Family

(Who Eventually Pay For The Product).

 

 

Buyers :

The Actual Purchase May Done By Any One Delegated To Do The

Job Of Buying.

 

 

Users :

 The Ultimate Users E.G. Health Drinks A-Re Consumed Buy The

Growing Children.

Consumer vs Customer

 

Consumer vs Customer

MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

            PUNE UNIVERSITY 

Consumer

Consumer is the one who consume the product or service bought or purchased

by him.

Consumers have certain objectives while buying different items.

Consumers are normally an individual or family.

A consumer is the ultimate user of the product or service

 

 Customer

Customers are the people or organizations of any particular brand, shop, or

retail store.

Customer buy the products or services, generally for his own use or for resale

Customers can be anv individual, or an organizational buyer.

A customer purchases and pays for a product or service.

Explain Three Dimensional Concept Of Consumer.

 Define The Term 'Consumer'.

MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

            PUNE UNIVERSITY 

Explain Three Dimensional Concept Of Consumer.   

The Literal Meaning Of The Word 'Consumer' Is 'A Person Who Consumes'. A Person Who Pays For Any Goods And Serwices, Is A Consumer.  Because He Is Getting Something Out Of Those Goods And Services. The Consumer Is A Person Is Satisfying His Needs, Wants And Desires With The Help Of Goods And Services. The Person Actually Gets Satisfied After Using The Particular Products/Goods Or Availing The Services.  In Simple Word, Consumer Can Also Be Termed As An 'User'.

  As A King :

Consumer Is Regarded As A 'King' In Modern Business. Consumer Has A Good Purchasing Power. Consumer Can Take The Decision Any Time As Per His Wish  In Today's World Of Business, Consumer Gets Top most Priority. The Consumer Is Treated Like A King Of The Market. Each And Every Seller From The Market Tries To Gain Maximum Satisfaction To The Consumer And Retain His Faith.

  As A Kingpin Of Democracy:

A Consumer Is Regarded As A Kingpin Of Democrary.

The Consumer Comes Together Collectively, To Put Pressure On The Government For Implementing Pro-Consumer Economic Policies

And Compels The Government To Make Laws For Consumer Protection, The Consumer Movement Prevents The Exploitation Of Consumers And

Develops A Sense Of Unity And Co-Operation Among Them'.

It Also Encourages Consumers To Fight Against Their Rights.

 As a Capital : 

Each and every activity of business is carried out to

satisfy the demands and wants of a consumer. For the survival  of the

business as well as for the financial growth of the organization,  

business has entirely dependent on the consumers.

State the Scope of Coneumer Behaviour.

State the Scope of Coneumer Behaviour.

 

MBA / BBA MARKETING MANAGEMENT 

QUESTION PAPER OCTOBER 2019    

            PUNE UNIVERSITY 

  Product Analysls : Product analysis involves finding out information of

the product such as product type, shape, size, colour etc.

Product analysis enables a marketer to identify the unique feature in his product, highlight it and try to create a separate niche for it.

 CONSUMER ANALYSIS :

Consumer analysis is a key to marketing. Modern marketing concept revolves around the consumer. It is just not sufficient to satisfy the consumer, it is also necessary to delight them. For this, his preferences, tastes, expectations, income, culture etc. has to be understood properly.

 Competltive Analysis : Most successful marketers do not desire to beat the competition", but to make the competitors totally irrelevant to their

customers.

It involves offering such products and services, quoting such a price

and making it available at the doorstep of the consumer and thereby building

long-term relationship with the customers.

 Determination of Marketing Strategy : The determination of suitable

marketing strategy depends upon the study of various aspects of consumer

behavior.

 Conjoint Analysis: It is always necessary to measure the consumer

Preference before introducing any new product in the market.

The Preference be measured through conjoint analysis.