1. Introduction TO Consumer Behaviour PDF

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INTRODUCTION TO CONSUMER BEHAVIOUR: - To define consumer behaviour To understand consumer behaviour and types of consumers - To explain the process of customer-driven marketing strategy To identify the relationship between consumer behaviour and marketing acitivitiies -

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INTRODUCTION: - Basic marketing concept is to understand the needs and wants of your customer and to meet those needs and wants better than your competitor - Behavioural components of humans in this unit are divided into o Internal: motivation, perception, learning, attitudes, personality and emotions o External: Reference groups, opinion leaders, cultures and social values - Behavioural components come into play when customers go through the decision making process of consumption - One of the major goals of marketers is to increase a consumer’s memory of their brand, product or service. - Internal factors provide knowledge that is critical to your ability to affect a consumer’s memory retention of your product or service - External factors reinforce each consumer’s memory for a product or service by giving it the appropriate social and cultural context CONSUMER BEHAVIOUR: - Is the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of the products and services that they expect will satisfy their needs - Focuses on how individuals, consumers, families etc. spend their money - Two types of consumer’s: o Personal: buys goods for personal use or for use by the household or as a gif o Organisational: buy products, equipment’s and services in order to run their organisation - The buyer is the person who undertakes the activities to procure or obtain the product/service - The payer is the person who provides money for the service - The user is the person who ultimately uses or consumes the product/service SECTORS TARGETING CONSUMERS: - Non-profit: tries to sell products through organises charitable, cultural, educational, political, recreational, social or sporting activities on a not for profit basis - Public sector: provides government services for consumers and organisations - Private sector: commercial companies that market goods, services and experiences to consumers, private, public and non-profit sectors SEGMENTING YOUR TARGET MARKET:

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Divide your market into smaller, more manageable groups of customers with similar needs and wants Ensures that the needs of the market are met more effectively Makes target market more manageable by: o Easily identify each segments needs and wants and can differentiate market offerings accordingly o Easily communicate to each segment by knowing the differences between each segments preference for media usage and work/leisure activities o Track movements of the segment which can give us information on how our target market is changing in composition and size Five different levels of segmentation can be identified: o Segments o Niches o Local areas o Individuals o Self-marketing Characteristic of segments include: o Demographic o Geographic o Psychographic (lifestyle) aspects o Behavioural o Hybrid (combination of methods)

GEOGRAPHICAL SEGMENTATION: - State - Regions - Location - Housing density - Climate - Stands to reason that people who live in the same location have similar wants and needs e.g. swimmer pools will sell in warmer climates than cooler ones DEMOGRAPHIC SEGMENTATION: - Age - Sex - Marital status - Income - Education - Occupation - Most easily accessible and cost effective - Age and life-cycle segments are frequently used as a basis for new product development and marketing communications - Limitation of psychographic information on each individual consumer PSYCHOGRAPHC SEGMENTATION: - Needs-motivation - Personality - Risk perception - Learning-involvement

- Attitudes - Lifestyle SOCIO-CULTURAL SEGMENTATION: - Culture - Sub-culture - Religion - Race/ethnicity - Social class - Family life-cycle - Culture and race is useful because there are a number of lifestyle activities, customs and values associated BEHAVIOURAL SEGMENTATION: - Relies on information about how consumers behave in relation to the product, brand or service being marketed - User-related (usage rate, awareness status, brand loyalty) o Helps to identify brand loyal customers and those who provide the best profit margins - Use-situational (time, objective, location, person) o Consumers buying for certain occasions - Benefit segmentation (convenience, prestige, economy, value for money) o Focuses on learning what causes segments o Focuses on what people are seeking as the basic reason for purchasing decisions HYBRID APPROACHES: - Geo-demographic: Geographic and demographic information - Psychographic: lifestyle values with demographic profiles REQUIREMENTS FOR EFFECTIVE SEGMENTATION: - Customers with common wants exist - Segment members are identifiable/measurable - Segment members are accessible - The segment responds to marketing efforts differently than does the market as a whole - Specialised communications media are available - The seller has a competitive edge in the target segment - The segment is large enough to make substantial profit VALUE AND LIFESTYLE SURVEYS (VALS): - Developed in late 1970s - Is a psychological measure that attempts to divide consumers on the basis of enduring values and attitudes? - There are 42 measured statements in the survey in which they have to agree/disagree - The first dimension is self-orientation and second is resource TARGETING: - Identifiable: divide the market on the basis of common/ shared needs/characteristics

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Sizeable: a segment consisting of enough consumers to make targeting profitable Stable: target consumer segments that are relatively stable in terms of lifestyles and consumption patterns Accessible: marketers must be able to reach the segments in an economical way Congruent with company’s objectives and resources- effective targeting need to be compatible with the company’s objectives

THE MARKETING MIX: - Product/ service (product features, attributes, design, brands and packaging) - Price (listed price, discounts, allowances) - Place (distribution through specific store and non-store outlets) - Promotion: (advertising, sales promotion, public relations, personal selling and digital marketing) APPLICATION OF CONSUMER BEHAVIOUR PRINCIPLES TO MARKETING MANAGEMENT: DEVELOPMENT OF THE MARKETING CONCEPT: - Production concept (efficient production and intensive distribution): consumers needs and wants aren’t taken into consideration - Product concept (focus on the highest quality, the best performance and the features of the product): customers’ needs and wants aren’t taken into account - Selling concept (focus on selling the product) - Marketing concept (the consumer-oriented marketing philosophy) - Societal marketing concept (adhering to principles of social responsibility in marketing their goods and services) EMBRACING THE MARKETING CONCEPT: - Identify unsatisfied and unrecognised needs of consumers - Conduct market research - Monitor consumers’ needs and preferences - Study consumers and their consumption behaviour

Segmentation: the process of dividing a market into subsets of consumers with common needs and characteristics Targeting: selecting target segments Positioning: developing a distinct image of the product/service in the mind of consumers...