UNDERSTANDING CONSUMER

BEHAVIOUR

CONSUMER BEHAVIOUR ???

PARENTS

RELATIVES

FRIENDS

ROLE MODELS
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Session outline

Relevance of understanding consumer behavior

Model of Consumer Behavior
Key sources of data
Approach to developing consumer insights

Why should I understand consumer behaviour?

The market place is dynamic
Changes in competition
New brands
New competitive moves which affect the 4 Ps

Changes in the consumer

Cultural, social, personal and psychological

Changes in the environment

Economic, technological, political, cultural

Changes in my brand
Change in the 4 Ps
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A few problems that a brand manager faces

How do I achieve growth?
New users (from which brand), increased frequency or higher

depth
Therefore new benefits/uses highlighted, new positioning,

consumer promotions, new pack sizes

How do I keep my brand relevant for my target segment,

which I think is changing?
What and how do I need to change -- positioning, promotion,

packaging, distribution

A few problems that a brand manager faces

How do I take advantage of the change in technological
advances that are taking place in products / packaging,
distribution, media?
Should I and how should I react to significant moves made
by competition?

What does a brand manager need to do ?

Understand consumer behaviour

Develop consumer insights
Create a competitive position
Add value through mix development
Establish brand franchise

How does a brand manager meet his objectives?

The brand manager must be good at
Networking within the organisation
Managing the environment
Dominating the market place
Building brand franchise overtime

Model of consumer behavior

5 Ws:
Who is the consumer?
What is the product he/she buys?
When does he/she buy?
Where does he/she buy?
Why does he/she buy?

--- Consumer
--- Brand
--- Occasion
--- Distribution
--- Benefit

Key sources of data

Regular, Periodic

As & When required

Secondary data

Qualitative & Quantitative

research to focus on specific
problems

NCAER data
NRS/IRS data
ORG Retail Store Audit data
ORG rural panel data
IMRB Household Panel data

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Approach for developing

consumer insights

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Would you tell me, please, which way I ought to go

from here?
asked Alice
That depends a good deal on where you want to get
to,
said the Cat

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What are consumer insights?

Consumer insights are relevant and simple home truths about
the consumer which are often too obvious yet capable of
touching the consumers nerve
An inexperienced, unexplored consumer need
Sharp, focussed understanding of an element of consumer
behaviour linked to Whys and Hows of his behavioral
response to a brand/product

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What are consumer insights? (contd.)

An insight is a deep psychological truth about your consumer
in the context of your product
It is a statement with which the target audience instinctively
agrees both at the rational and emotional level

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An approach to building consumer insights

Analyse the market and competition

Understand the consumer

Identify the target market, segments

and consumers for the brand

Analyse each consumer segment

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Market analysis
We first start with the category the brand operates in
Information sources

Analysis process

Output

ORG Retail Audit

Company sales
data
Industry estimates

Overall market
trends
Size and growth
Market structure
Players
Market shares

Current scenario
Future
projections (1-2
years) if status
quo remains

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Understanding the current consumer behaviour

Information sources
Household panel
data (if available)
U&A studies
Consumer
observations
Market visits

Analysis process

Output

We rely on the 5 W model of

consumer behaviour
Who is buying the
product?
What does he/she buy?
(Brands)
Why is he/she buying
it? (Reasons to buy)
Where is he/she buying
it?
When is he/she buying
it?

An approach to
consumer
segmentation
Hypothesis
regarding
consumer needs
and preference

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Identify the target market segments

Target Market : The market who the brand wants
to actively target
Who are the people your brand is actively targetting ?
Example :
Dabur chyawanprash

People who want a cure from colds or

people seeking immunity

A restaurant

People who enjoy restaurant food

Any lubes

People who buy or use lubricants for

their vehicle

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Identify the target market segments (contd.)

Each definition of the target market :
Has different long term and short term implications for the

brand (i.e. market share, line extensions, competitor set)

Could be too narrow
Could be too broad

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Target segments
Every target market can be segmented in a million ways .
Who
What
When
Where
Why

Key issue is to identify the key purchase drivers that explain

80%+ of the purchase decisions/behaviour

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Target segments (contd.)

In order to define the target segments you need to analyse the
following :
Current target group :
Who is using the product now?
If a new brand, who is it intended for ?
Who should be the target for our brand ? Think of as many viable

alternative target segments either large enough or viable enough to

support your brand
E.g. for a shampoo aspiring for a 5% market share, possible target
segments would be :

All hhs with MF1 of Rs. 5,000 +

People who want natural shampoos
Women (long thick hair)
Others (can you think of more)

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Target segments (contd.)

Do we first decide the brand objectives and then define
the target segment
Or
do we decide on the target segment and then define
the brand objectives

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Analysis of each consumer segment

Inputs

Process

Specific research
studies to assess
consumer
attitudes,
understand a
particular type of
user; concept tests
etc.

Fine tune the

segmentation approach
Describe each segment in
terms of :
Profile
Needs
Brand preferences
Need gaps

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Output
An in-depth
understanding of
each segment in
terms of
Physically
Emotionally
Economically
Socially
Attitudinally
Product usage
patterns

Developing consumer insights

What we have done till now provides the backdrop of all the
information we require
We need to now process the information in order to develop
consumer insights
There is no set way to do it - you need to discipline your
mind, step out of your comfort zone and think, think ! .. !
We are now going to share a checklist which will help you remember it is just an aid and not the tool .

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Where to look for insights ?

Consumers buy benefits not brands
You need to examine the target consumers reasons not to
buy the brand vs. its competition
Current purchase barriers

The functional reasons not to buy the brands vs. competition today
The rational reasons not to buy the brand vs. competition today
The emotional reasons not to buy the brand vs. competition today

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4 benefits barriers which are usually quoted

I dont know
I dont want
I dont believe
I have already got benefits

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Dont want the benefit

Area of barrier
Who needs it
O.K. a bit better but not worth the price

Job of consumer insight

Make the benefit particularly desirable

Questions to ask and think over

What are the need gaps of the target consumer?
What is the most important need gap and when is it important ?
How can my brand try to improve the quality of life ?
Where is my brand failing today?

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Dont believe you deliver the benefit

Area of barrier
Credibility regarding delivering full range of benefits or a

specific benefit

Job of consumer insight

Build credibility that product delivers full range of benefits or a

specific benefit

Questions to ask and think over

Do consumers have trouble understanding how your brand

works?
Are the substantiators / reasons to believe, strong enough ?

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Already got the benefit

Area of barrier
Lack of interest

Job of consumer insight

Stop the consumer from being complacent and make him re-

evaluate

Questions to ask and think over

What is the current standard of excellence?
What can my brand do to establish unparalleled standards of

excellence ?
How do I communicate / substantiate it?

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