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Consumer Behaviour 1. Who is a personal consumer?

The individual who buys goods & services for his or her own use, for household use, for the use of a family member or for a friend is called personal consumer. 2. Who is an organizational consumer?

A business, govt. agency or other institution (profit or nonprofit) that buys the goods, services, and or equipment necessary for the organization to function is called organizational consumer. 3. What do you mean by customer value? It is defined as the ratio between the customers perceived benefits & the resources used to obtain those benefits. 4. Importance of customer retention Customer retention is an important strategy to all marketers. The goal is to make customers stay with your company and generate positive word of mouth about your service and products. The Internet and cell phones have helped marketers maintain closer relations with their consumers and have opened easier channels for the customer to contact the company if they have questions, problems, or suggestions. 5. What is value & retention focused marketing strategy? Use technology that enables customers to customize what you make. Focus on the products perceived value, as well as the need that it satisfies. Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors offerings. Research the levels of profit associated with various consumer needs and characteristics. Understand consumer behavior in relation to the companys product. Make each customer transaction part of an ongoing relationship with the customer. 6. Why consumer research is important for marketers? Consumer research has developed from the more general field of market research. It is a field of study that has been influenced by researchers and practitioners in several other fields, including psychology, sociology, and anthropology. Consumer research is important for marketers as the competitive landscape in almost every industry becomes even more challenging and with growth in global and crosscultural markets. 7. How do we classify consumer research process? Information can be classified as either primary or secondary. Secondary information is information that has been collected for another purpose. It is already available to the researcher often for a fee. Primary research can be either qualitative or quantitative. Qualitative research includes focus groups and in-

depth interviews. The more numerically-oriented quantitative research includes observational research, experimentation, and survey research. 8. Depth Interview Method Usually called one-on-one interview Usually 20 minutes to 1 hour Non-structured Interviewer will often probe to get more feedback (see following slide for probing) Session is usually recorded 9. Focus Group Method 8-10 participants Respondents are recruited through a screener questionnaire Lasts about 2 hours Always taped or videotaped to assist analysis Often held in front of two-way mirrors 10. Projective Techniques Projective techniques have their roots in psychoanalytic theory and practice. As a group, they tap into the consumers unconscious associations and motivations. There are a variety of these techniques and they are generally administered one-on-one with the respondent in a closed setting. In many situations, the research purpose is disguised and the respondent simply knows they are answering questions for a researcher. 11. What is quantitative research? Quantitative research findings are descriptive and empirical. Unlike qualitative research, they can often be generalized to larger populations. Quantitative research helps marketers predict future needs, trends, and levels of satisfaction and is heavily used in research. Observation and experimentation can often be done without the subjects input but a survey always needs direct cooperation from the subject. 12. What is observational research? In observational research, the researcher does not interact with the subject but watches their actions and behavior. Observation research can be done in stores, in malls, and in peoples homes. Observation research is very helpful in uncovering problems with a product as well as to gain ideas for product improvements and new products. This type of research is often done to understand how people interact with the product, each other, the design of the stores, and complementary products. 13. What is experimentation? Experimentation is useful for researchers in testing variables, including package design, alternative price points, and promotional offers. It is helpful for understanding cause-and-effect situations like the

change in sales that is associated with a coupon. An example of an experiment might be to find out how much the use of a celebrity endorser will affect sales. 14. What is validity & reliability of sample data? It is important for research to be both valid and reliable. It is only with these two characteristics that you can ensure that the data you have collected is useful for the purpose and can be expanded from the sample to the population. Validity asks the question of whether the data is really applying to the objectives you have set and reliability tells you, the researcher, if the results would be repeated if conducted on a similar group at the same time. 15. Why consumer segmentation is necessary? Consumer needs differs Differentiation helps products compete Segmentation helps identify media 16. What is positioning? The value proposition, expressed through promotion, stating the products or services capacity to deliver specific benefits. 17. What are the criteria for effective targeting? Identifiable Sizeable Stable Accessible 18. What are the consumers rooted segmentation bases? Demographics Geodemographic Personality traits Lifestyles Sociocultural 19. What are the demographic segmentation bases? Age Gender Marital Status Family life cycle Income Education Occupation

20. What are the geodemographic segmentation bases?

Geodemographic segmentation is a popular use of geography in targeting. People who live close to one another are likely to be similar in tastes, incomes, lifestyles and consumption. They might eat similar foods, like the same movies, and take the same types of vacations. 21. 22. What are the consumption specific segmentation bases? Usage rate Usage situation Benefit segmentation Perceived brand loyalty Brand relationship What is consumer motivation?

Motivation is produced by a state of tension, by having a need which is unfulfilled. Consumers want to fulfill these needs and reduce the state of tension. For example, when you are very hungry, you are extremely motivated to find food. Perhaps when you need a new pair of pants, you are a bit less motivated to fulfill this need as compared to your need for food. In the case of needing pants, it is important for marketers to help increase your motivation and/or specify your need for their products perhaps Lee Jeans. 23. What is need? Needs are the essence of the marketing concept. Marketers do not create needs but can make consumers aware of needs. 24. What is innate need? Physiological (or biogenic) needs that are considered primary needs or motives 25. What is acquired need? Learned in response to our culture or environment. secondary needs. Are generally psychological and considered

26. Rational vs. emotional motives Rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or miles per gallon Emotional motives imply the selection of goals according to personal or subjective criteria 27. What is personality? It is the inner psychological characteristics that both determine & reflect how a person responds to his or her environment. 28. Nature of personality There are some interesting findings regarding the nature of personality. First of all, personality reflects individual differences. Because no two people are exactly the same, marketers can look for certain

similar personality traits in different consumers. These consumers can then be grouped together based on this identified personality train. Personality is consistent and enduring. This helps marketers predict consumer behavior over time in terms of personality. Finally, personality can change due to major life events, such as marriage. 29. Who is a consumer innovator? Consumer innovators are the group of consumers that are very open to new ideas and are usually the first to purchase products. Innovativeness is the underlying trait that describes a consumers willingness to try new products. Companies have found this very important when introducing brand extensions because it is a key factor in the consumers likelihood to try the new product. 30. What is dogmatism? A personality trait that reflects the degree of rigidity a person displays toward the unfamiliar and toward information that is contrary to his or her own established beliefs 31. What is Optimum Situation Level? Optimum stimulation levels are related to how a consumer tends to like or dislike novel, complex, and unusual experiences and products. High optimum stimulation levels lead consumers to take risks and try new products. Similar to a person with high innovativeness, these consumers are important to marketers of new products. 32. What is consumer ethnocentrism? Ethnocentric consumers feel it is wrong to purchase foreign-made products because of the impact on the economy They can be targeted by stressing nationalistic themes 33. What is cosmopolitanism? A cosmopolitan orientation would consider the word to be their marketplace and would be attracted to products from other cultures and countries. 34. What is brand personification? Consumers perception of brands attributes for a human-like character 35. What is consumer perception? The process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. Perception is how we see the world around us. You and your friend might see the same person, thing, or event yet you will interpret in different ways. This interpretation is highly individualized and depends on each persons own needs, values, and expectations.

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What are the elements of consumer perceptions? Sensation Absolute threshold Differential threshold Subliminal perception What is sensation?

Sensation is the response of the sensory organs, including the eyes, ears, nose, mouth, and skin. Most of marketing focuses on sight and sound but much research is being done on smell and touch. The web link on this page connects to a company that uses smell as a marketing tactic. Advertisers must reach the absolute threshold for consumers to be able to experience their advertising tactic. It is interesting that the absolute threshold changes over time. Consumers adapt and get used to a certain ad or message so no longer notice it. This is one of the reasons why advertisers change their ads frequently. 38. What is differential threshold? Minimal difference that can be detected between two similar stimuli. Marketers are very concerned with the differential threshold, which is also called the just noticeable difference. It was a German scientist named Ernst Weber who realized that this difference was not a fixed amount. The best example is when you buy a low-priced product like a cup of coffee from CCD. A Re1 increase in your tall coffee would be noticed by you. But if you were buying a laptop whose price changed from Rs.45500 to Rs.45600 you might not even notice. 39. What are the different aspects of perception? Selection Organization Interpretation Consumers are bombarded by stimuli and are therefore very selective as to what messages and information they perceive. As new information comes to their mind, it is organized within their mind. Finally, consumers interpret the stimuli based on their needs, expectations, and experience. 40. What is Halo Effect? Consumers perceive and evaluate multiple objects based on just one dimension. With the halo effect, a person uses just one dimension in evaluating a person, product, or service. For instance, a consumer might consider a clean waiting room as an indication of a good dentist. For this reason, marketers use the halo effect when licensing names of products or choosing spokespeople. 41. What is perceptual mapping technique? An analytical technique that enables marketers to plot graphically consumers perceptions concerning product attributes of specific brands. Perceptual mapping helps the marketer visualize how their

product is positioned in the consumers mind. It is a graph of products within a category based on two major benefits or attributes. It allows them to see gaps in the positioning of all the products and identify areas for new products. 42. How consumers handle risk? Seek Information Stay Brand Loyal Select by Brand Image Rely on Store Image Buy the Most Expensive Model Seek Reassurance 43. What is consumer learning? The process by which individuals acquire the purchase and consumption knowledge and experience that they apply to future related behavior. It is important to realize that it is a process, that it changes over time as new knowledge and experiences are gained by the consumer. New knowledge and experience serve as feedback to the consumer and will influence their future behavior. 44. What are the elements of consumer learning? Motivation Cues Response Reinforcement 45. What is consumer motivation? Motivation is important because it will differ from one consumer to the next. We may all have a need, but some are more motivated to fulfill the need versus another. Often, a consumer does not realize they have a need. 46. What is cue? A cue is the stimulus that helps direct a consumers motives. They include price, styling, packaging, advertising, and store displays. 47. What is response? A consumer will have a response to a drive or a cue. The response is how the consumer behaves after being exposed to a cue or developing motivation. 48. What is reinforcement? Reinforcement is tied to the likelihood that the response will occur in the future.

49. What is behavioral learning theory? Based on observable behaviors (responses) that occur as the result of exposure to stimuli. 50. What is cognitive learning theory? Learning based on mental information processing, often in response to problem solving. 51. What is classical conditioning theory? A behavioral learning theory according to which a stimulus is paired with another stimulus that elicits a known response that serves to produce the same response when used alone. Example of Pavlovs dog. 52. What is stimulus generalization? Stimulus generalization is when a consumer applies a conditioned response to a stimulus that is not the same but is similar to conditioned stimuli. An example you might recognize is when we react to someone in a certain way because they remind us of someone we know and have interacted with before. Stimulus generalization can be helpful as marketers extend their product line, product form, and product category. 53. What is stimulus discrimination? Stimulus discrimination is closely linked to the concept of positioning. Marketers want you to think of their product differently than the rest when you are looking at the shelf in the grocery store. Using the example of the brand Dettol, the manufacturer would want you to know that it is superior to the Savlon brand. 54. What is instrumental conditioning? A behavioral theory of learning based on a trial-and-error process, with habits forced as the result of positive experiences (reinforcement) resulting from certain responses or behaviors. 55. What is observational learning? A process by which individuals learn behavior by observing the behavior of others and the consequences of such behavior. 56. What is consumer attitude? A learned predisposition to behave in a consistently favorable or unfavorable manner with respect to a given object. 57. What is cognitive component? The knowledge and perceptions that are acquired by a combination of direct experience with the attitude object and related information from various sources

58. What is affective component? A consumers emotions or feelings about a particular product or brand 59. What is conative component? The likelihood or tendency that an individual will undertake a specific action or behave in a particular way with regard to the attitude object 60. What is the role of reference groups in consumer buying process? Reference groups are considered very credible sources since they help define a persons behavior. For instance, your family or friends give you a sense of what to buy, where to eat, and the type of clothes to wear to a given event. These are normative reference groups. Comparative reference groups also set benchmarks but for a much narrower part of your lifestyle. People often become members of groups, like a fraternity, and are influenced by other members purchases. Finally, a symbolic group is one in which you are not a member but take on the values and attitudes of the group. 61. What is the role of opinion leader in consumer buying process? Informal sources have a lot of influence on consumers because they appear to have nothing to gain from their recommendations. Opinion leaders tend to be category specific and specialize in the areas in which they offer information and advice. Word of Mouth is actually a two-way process that commonly takes place online through social networks, brand communities, and message boards and blogs. 62. What is consumer socialization? The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers 63. What is social class? The division of members of a society into a hierarchy of distinct status classes, so that members of each class have either higher or lower status than members of other classes. 64. What is geodemographic clusters? A composite segmentation strategy that uses both geographic variables (zip codes, neighborhoods) and demographic variables (e.g., income, occupation) to identify target markets. 65. What is culture? The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society 66. What is enculturation?

The learning of ones own culture is termed as enculturation. We learn about our own culture from the time we are small children. Through both informal and formal learning, we learn how to behave and the difference between right and wrong. The learning of our own culture usually happens slowly over time. 67. What is acculturation? The learning of a new or foreign culture is termed as acculturation. Quite often, when someone moves, they must learn a new culture. This process of acculturation can be very difficult and will differ based on age, interest in the culture, and desire to become part of the new society. This web link gives you information on doing business in Japan and some cultural issues, including etiquette and manners. 68. What is the importance of rituals in consumer buying process? A ritual is a type of symbolic activity consisting of a series of steps Rituals extend over the human life cycle Marketers realize that rituals often involve products 69. Mention the methods for measuring culture? Content analysis Consumer fieldwork Value measurement instrument 70. What is content analysis? A method for systematically analyzing the content of verbal and/or pictorial communication. The method is frequently used to determine prevailing social values of a society 71. What is consumer fieldwork? Field Observation a. Natural setting b. Subject unaware c. Focus on observation of behavior Participant Observation 72. What is subculture? A distinct cultural group that exists as an identifiable segment within a larger, more complex society 73. What is cross cultural consumer analysis? The effort to determine to what extent the consumers of two or more nations are similar or different 74. What is consumer diffusion process? The process by which the acceptance of an innovation is spread by communication to members of a social system over a period of time

75. What are the elements of diffusion process? The innovation The channels of communication The social system Time 76. What are the innovation product characteristics? Relative advantage o Degree to which consumer consider it superior to existing substitutes Compatibility o Degree to which consumer feel it is consistent with their present needs, values & practices Complexity o The degree to which it is difficult to understand or use Trialability o The degree to which it can be tried on a limited basis Observability o The degree to which its benefits can be observed, imaged or described 77. What are the five adopter categories? Innovators o First to buy Early adopters o Will buy shortly after products introduction Early majority o Members of the 1st half of the mass market Late majority o 2nd half of the mass market who will purchase the mature product Laggards o Very last to purchase the product 78. What is adoption process? The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product. 79. Mention the stages of adoption process. Awareness o Consumer is first exposed to the product innovation. Interest o Consumer is interested in the product and searches for additional information. Evaluation o Consumer decides whether or not to believe that this product or service will satisfy the need a kind of mental trial. Trial

o Consumer uses the product on a limited basis Adoption (Rejection) o If trial is favorable, consumer decides to use the product on a full, rather than a limited basis if unfavorable, the consumer decides to reject it. 80. What is societal marketing concept? Marketers should endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole, while fulfilling the objectives of the organization 81. What is cause related marketing? Contribute a portion of revenues Good fit between cause and companys positioning is important 82. What is green marketing? Promoting of healthy, reusable, and eco-friendly products 83. What is consumer interest? Every customer shows inclination towards particular products and services. Consumer interest is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket. 84. What are cultural factors? Cultural factors comprise of set of values and ideologies of a particular community or group of individuals. It is the culture of an individual which decides the way he/she behaves. In simpler words, culture is nothing but values of an individual. What an individual learns from his parents and relatives as a child becomes his culture. 85. What is reference group? Every individual has some people around who influence him/her in any way. Reference groups comprise of people that individuals compare themselves with. Every individual knows some people in the society who become their idols in due course of time. 86. Who are comes under primary group? Friends Family members Relatives Co workers 87. What is social status? An individual from an upper middle class would spend on luxurious items whereas an individual from middle to lower income group would buy items required for his/her survival.

88. What are the different processes which lead to difference in perception? Selective attention Selective distortion Selective retention 89. What is selective attention? Selective attention refers to the process where individuals pay attention to information that is of use to them or their immediate family members. An individual in a single day is exposed to numerous advertisements, billboards, hoardings etc but he is interested in only those which would benefit him in any way. He would not be interested in information which is not relevant at the moment. 90. What is selective distortion? Consumers tend to perceive information in a way which would be in line to their existing thoughts and beliefs. 91. What is selective retention? Consumers remember information which would be useful to them, rest all they forget in due course of time. 92. What is consumer learning? Learning comes only through experience. An individual comes to know about a product and service only after he/she uses the same. An individual who is satisfied with a particular product/service will show a strong inclination towards buying the same product again. 93. What is belief & attitude? Beliefs and attitude play an essential role in influencing the buying decision of consumers. Individuals create a certain image of every product or service available in the market. Every brand has an image attached to it, also called its brand image. 94. What is primary research? Primary Research refers to a research methodology where marketers interact with consumers directly and gather as much information as they can. Information is generally collected through surveys, questionnaires, feedback forms, interviews etc. 95. Secondary research? Secondary Research often refers to relying on information which has been collected by others at some point of time. 96. What is role of family members in consumer purchasing decision?

An individual tends to discuss with his immediate family members before purchasing a particular product or service. Family members might support an individuals decision to buy a particular product, stop him for purchasing it or suggest few other options. 97. Mention the different types of consumer decision making process. Extended decision making Deliberate choice process Routine purchase process Impulse buying decisions 98. What is innovation decision process? Knowledge Persuasion Decision Implementation Confirmation 99. What is norms? Rules dictating what are right or wrong, acceptable or unacceptable. 100. What is rituals?

A set of multiple, symbolic behaviors that occur in a fixed sequence and that tend to be repeated periodically.