Consumer Behavior Introduction PDF

KNOWING WHY CONSUMERS ARE BUYING WHAT THEY ARE BUYING IS THE BEST WAY TO LEARN HOW TO MARKET YOUR PRODUCT IN WAY THAT SELLS. WHY ARE THESE ITEMS PLACED AT THE CASHIER AREA? WHY ARE THESE ITEMS PLACED AT THE CASHIER AREA? Point-of-purchase merchandising uses...

KNOWING WHY CONSUMERS ARE BUYING WHAT THEY ARE BUYING IS THE BEST WAY TO LEARN HOW TO MARKET YOUR PRODUCT IN WAY THAT SELLS. WHY ARE THESE ITEMS PLACED AT THE CASHIER AREA? WHY ARE THESE ITEMS PLACED AT THE CASHIER AREA? Point-of-purchase merchandising uses strategically placed products -- usually near the front of the store or by the cash register -- to spur consumer impulse buying. A study of supermarkets showed that out of 2,473 shoppers, 38 percent purchased an item they had never bought before. The fact that the item was prominently displayed was cited as the most common reason for the purchase.  Consumer behavior is a captivating and intricate field of study that explores the diverse processes individuals undergo when making choices about the acquisition, utilization, and disposal of goods and services. Understanding consumer behavior is instrumental for businesses aiming to ✓ Forge meaningful connections with their target audiences ✓ Tailor products and services to meet evolving needs ✓ Navigate the dynamic landscape of market trends. This field delves into various factors influencing consumers, ranging from psychological and social dynamics to cultural and personal dimensions. By unraveling the intricacies of why consumers make specific choices, businesses can gain valuable insights that inform marketing strategies, product development, and overall business planning.  The purpose of segmentation is to Purchasing behaviour relates determine which potential buyers strongly to how the market is are most likely to behave favourably segmented. towards our organization, and its products & services.  CONSUMER BEHAVIOUR & THE MARKETING MIX Product The bundle of benefits consumers acquire is the basis of their decision- making Rational decisions start with the drawbacks of the products Price If the product is complex, there will be learning cost attached to figuring out how to use it. If the product is dangerous, there may be cost attached to consequent injury. Place Convenient locations for making purchases are essential. Most large retailers now have “mini marts” for easy reach. Promotion When exposed to advertisements, consumers usually pay some attention & enjoy the experience.  CONSUMERS, RELATIONSHIP MARKETING & MARKETING PLANNING Relationship marketing – to generate long-tern partnership with customers rather than focusing on the single transaction. Establishing a relationship in a B2B context is easier than that of B2C. The reasons are: ✓ Businesses change their needs less often than customers do. ✓ There are fewer suppliers & customers in B2B markets. ✓ B2B transactions almost always involve the personal relationships that seek engagement from the organization, its sales people & the buyers, whereas B2B relationships are often impersonal, since people often buy goods online or in self-service stores. ✓ The possibilities for mutual advantage in establishing relationships are often much greater in a B2B context. Transactional marketing Relationship marketing Focus on single sale Focus on customer retention Orientation on product features Orientation on product benefits Short timescale Long timescale Little emphasis on customer service High emphasis on customer service Limited customer commitment High customer commitment Moderate customer contact High customer contact Quality is the concern of the production Quality is the concern of all department  MARKETING PLANNING CUSTOMER-CENTRIC V FIRM-CENTRIC  CONSUMERS’ IMPACT ON MARKETING STRATEGY Consumers play a crucial role in shaping and influencing marketing strategy. The dynamics of the market have shifted significantly in recent years, and businesses now recognize the importance of understanding and responding to consumer behavior. Here are several ways in which consumers impact marketing strategy:  CONT. 1. Consumer Insights and Research Data-driven Decision Making Marketers collect and analyze consumer data to gain insights into their preferences, behaviors, and needs. This information is used to make informed decisions about product development, pricing, and promotional activities. Market Segmentation Understanding different consumer segments allows marketers to tailor their strategies to specific demographics, ensuring that messages and offerings resonate with the target audience.  CONT. 2. Customer-Centric Approach Personalization Consumers expect personalized experiences. Marketing strategies often incorporate personalization, such as personalized content, recommendations, and offers, to enhance the overall customer experience. Customer Journey Mapping Marketers map out the customer journey to identify touchpoints and optimize each stage based on consumer needs and expectations.  CONT. 3. Social Media and User-Generated Content Word-of-Mouth Influence Consumers often rely on recommendations from friends, family, and online communities. Social media platforms and user-generated content play a significant role in shaping brand perception and influencing purchasing decisions. Brand Advocacy Satisfied customers can become brand advocates, contributing to positive word-of-mouth marketing. Companies may leverage user-generated content in their marketing strategies to build trust and authenticity.  CONT. 4. Feedback and Reviews Online Reviews Consumers have the ability to share their experiences and opinions online. Positive reviews can boost a brand's reputation, while negative reviews can prompt companies to address issues and improve their offerings. Feedback Loops Marketers use feedback loops to gather insights from customers and adapt strategies accordingly. Continuous improvement is essential to meet evolving consumer expectations.  CONT. 5. Technology and Digital Transformation E-Commerce and Online The shift towards e-commerce has accelerated, and consumers Presence increasingly prefer online shopping. Marketing strategies need to adapt to the digital landscape, incorporating online channels and technologies to reach and engage consumers effectively. Mobile Marketing As more consumers use mobile devices, mobile marketing strategies, such as mobile apps and responsive websites, have become essential to connect with consumers on the go.  CONT. 6. Sustainability and Social Responsibility Ethical Consumerism Consumers are increasingly conscious of ethical and environmental considerations. Brands that demonstrate a commitment to sustainability and social responsibility can attract and retain customers who align with these values. ✓ In summary, consumers have a significant impact on marketing strategy, influencing everything from product development to communication channels. ✓ Businesses that prioritize understanding and responding to consumer needs are better positioned to build lasting relationships and succeed in a dynamic market. MARKETING IMPACT ON CONSUMERS Influence on Brand Awareness purchasing perception/Brand decisions Image Consumer Information & Engagement behaviour Education Digital Cultural/Social experience Impact  CONSUMER RESEARCH Consumer research is a systematic process of collecting, analyzing, and interpreting information about consumers, their preferences, behaviors, and attitudes. The primary goal of consumer research is to gain valuable insights into the factors that influence consumers in their decision-making processes related to products, services, brands, or marketing strategies. This information is crucial for businesses to make informed decisions, develop effective marketing strategies, and meet the needs of their target audience. CONSUMER RESEARCH METHOD Survey/Questionnaires Focus groups In-depth interviews Observational studies Online analytics If businesses are about people, why is it that companies consistently report their successes and failures in financial terms? Why not report on how pleased our customers are with the experience, or on how loyal they are? Why not report on how many customers recommended us to their friends? If a product has an inelastic demand curve, what does that imply for marketers? How would the marketing mix be for this type of product?