MARKETING MANAGEMENT

COURSE CREDIT: 3 HOURS : 40

Course Objectives
1. Assess market opportunities by analyzing customers, competitors, collaborators,
context, and the strengths and weaknesses of a company.
2. Understand consumers’ requirements and their behaviors.
3. Develop effective marketing strategies to achieve organizational objectives.
4. Communicate and defend your recommendations and critically examine and build
upon the recommendations of your classmates both quantitatively and qualitatively.
5. Develop the understanding the current global and digital aspect of marketing.

Unit 1(6 hours)

Introduction: Nature and scope of marketing, Various marketing orientations, Need, Want,
Demand, Elements of Marketing mix, customer value and the value delivery process.
Understanding Consumer Behavior: Buying motives, factors influencing buying behavior,
buying habits, stages in consumer buying decision process, types of consumer buying
decisions.

Unit 2 (8 hours)
Market segmentation, Targeting and Positioning: Meaning, Factors influencing
segmentation, Market Aggregation, Basis for segmentation, Segmentation of Consumer.
Targeting: Meaning, Basis for identifying target customers, Target Market Strategies.
Positioning: Meaning, product differentiation strategies, tasks involved in positioning.
Branding: Concept of Branding, Brand Types, Brand equity, Branding Positioning.

Unit 3 (8 hours)
Product Decisions: Concept, product hierarchy, new product development, diffusion
process, Product Life cycle, Product mix strategies. Packaging / Labeling: Packaging as a
marketing tool, requirement of good packaging, Role of labeling in packaging. Pricing
Decisions: Pricing concepts for establishing value, Pricing Strategies-Value based, Cost
based, Market based, Competitor based, New product pricing – Price Skimming &
Penetration pricing

Unit 4 (8 hours)
Place Decision: Meaning, Purpose, Channel alternatives, Factors affecting channel choice,
Channel design and Channel management decisions, Channel conflict, Retailing & Types
of Retailers. Advertising: Advertising Objectives, Advertising Budget, Advertising Copy,
AIDA model, Public Relation: Meaning, Objectives, Types, and Functions of Public
Relations. Sales Promotion: Sales Promotion Mix, Kinds of promotion, Tools and
Techniques of sales promotion, Push-pull strategies of promotion, Personal Selling:
Concept, Features, Functions, Steps/process involved in Personal Selling, Direct
Marketing: Meaning, Features, Functions, Growth and benefits of direct marketing,
different forms.

Unit 5 (6 hours)
CRM: Meaning, Relationship Marketing Vs. Relationship Management, Types of
Relationship Management, Significance of Customer Relationship Management. Global
Marketing: current scenario, Global Marketing environment, Entry strategies, Global P’s
of Marketing., Recent trends and Innovation in Marketing- Green Marketing, Agile
Marketing
 UNIT 1
Marketing Management- Introduction, objectives, Scope and Importance

In today’s world of marketing, everywhere you go you are being marketed to in one form or
another. Marketing is with you each second of your walking life. From morning to night you
are exposed to thousands of marketing messages everyday. Marketing is something that
affects you even though you may not necessarily be conscious of it.

After reading this post you’ll understand – What exactly the marketing is, to whom it is
beneficial for, and what are the nature and scope of marketing.

Definition of Marketing

According to American Marketing Association (2004) – “Marketing is an organisational

function and set of processes for creating, communicating and delivering value to customers
and for managing relationships in a way that benefits both the organisation and the
stakeholder.”

AMA (1960) – “Marketing is the performance of business activities that direct the flow of
goods and services from producer to consumer or user.”

According to Eldridge (1970) – “Marketing is the combination of activities designed to

produce profit through ascertaining, creating, stimulating, and satisfying the needs and/or
wants of a selected segment of the market.”

According to Kotler (2000) – “A societal process by which individuals and groups obtain
what they need and want through creating, offering, and freely exchanging products and
services of value with others.”

Nature of Marketing

1. Marketing is an Economic Function

Marketing embraces all the business activities involved in getting goods and services, from
the hands of producers into the hands of final consumers. The business steps through which
goods progress on their way to final consumers is the concern of marketing.

2. Marketing is a Legal Process by which Ownership Transfers

In the process of marketing the ownership of goods transfers from seller to the purchaser or
from producer to the end user.

3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise, institution, or organization

interacts with the customers and stakeholders with the objective to earn
profit, satisfy customers, and manage relationship. It is the performance of business activities
that direct the flow of goods and services from producer to consumer or user.
4. Marketing is a Managerial function

According to managerial or systems approach – “Marketing is the combination of activities

designed to produce profit through ascertaining, creating, stimulating, and satisfying the
needs and/or wants of a selected segment of the market.”

According to this approach the emphasis is on how the individual organization processes
marketing and develops the strategic dimensions of marketing activities.

5. Marketing is a social process

Marketing is the delivery of a standard of living to society. According to Cunningham and

Cunningham (1981) societal marketing performs three essential functions:-

 Knowing and understanding the consumer’s changing needs and wants;

 efficiently and effectively managing the supply and demand of products and
services; and
 Efficient provision of distribution and payment processing systems.

 Marketing is a philosophy based on consumer orientation and satisfaction

 Marketing had dual objectives – profit making and consumer satisfactio

Scope of Marketing

1. Study of Consumer Wants and Needs

Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer
needs and wants. These needs and wants motivates consumer to purchase.

2. Study of Consumer behavior

A marketer performs study of consumer behavior. Analysis of buyer behavior helps marketer
in market segmentation and targeting.

3. Production planning and development

Product planning and development starts with the generation of product idea and ends with
the product development and commercialization. Product planning includes everything from
branding and packaging to product line expansion and contraction.

4. Pricing Policies

Marketer has to determine pricing policies for their products. Pricing policies differs form
product to product. It depends on the level of competition, product life cycle, marketing goals
and objectives, etc.

5. Distribution
 Study of distribution channel is important in marketing. For maximum sales and profit goods
are required to be distributed to the maximum consumers at minimum cost.

6. Promotion

Promotion includes personal selling, sales promotion, and advertising. Right promotion mix
is crucial in accomplishment of marketing goals.

7. Consumer Satisfaction

The product or service offered must satisfy consumer. Consumer satisfaction is the major
objective of marketing.

8. Marketing Control

Marketing audit is done to control the marketing activities.

The basic purpose of marketing management is to achieve the objectives of the business. A
business aims at earning reasonable profits by satisfying the needs of customers.

Objectives of marketing management as follows:

1. Creation of Demand

The marketing management’s first objective is to create demand through various means. A
conscious attempt is made to find out the preferences and tastes of the consumers. Goods and
services are produced to satisfy the needs of the customers. Demand is also created by
informing the customers the utility of various goods and services.

2. Customer Satisfaction

The marketing manager must study the demands of customers before offering them any
goods or services. Selling the goods or services is not that important as the satisfaction of the
customers’ needs. Modern marketing is customer- oriented. It begins and ends with the
customer.

3. Market Share

Every business aims at increasing its market share, i.e., the ratio of its sales to the total sales
in the economy. For instance, both Pepsi and Coke compete with each other to increase their
market share. For this, they have adopted innovative advertising, innovative packaging, sales
promotion activities, etc.

4. Generation of Profits

The marketing department is the only department which generates revenue for the business.
Sufficient profits must be earned as a result of sale of want-satisfying products. If the firm is
 not earning profits, it will not be able to survive in the market. Moreover, profits are also
needed for the growth and diversification of the firm.
5. Creation of Goodwill and Public Image

To build up the public image of a firm over a period is another objective of marketing. The
marketing department provides quality products to customers at reasonable prices and thus
creates its impact on the customers.

The marketing manager attempts to raise the goodwill of the business by initiating image-
building activities such a sales promotion, publicity and advertisement, high quality,
reasonable price, convenient distribution outlets, etc.

7 Major Importance of Marketing Management

(1) Marketing Helps in Transfer, Exchange and Movement of Goods

Marketing is very helpful in transfer, exchange and movement of goods. Goods and services
are made available to customers through various intermediaries’ viz., wholesalers and
retailers etc. Marketing is helpful to both producers and consumers.

To the former, it tells about the specific needs and preferences of consumers and to the latter
about the products that manufacturers can offer. According to Prof. Haney Hansen
“Marketing involves the design of the products acceptable to the consumers and the conduct
of those activities which facilitate the transfer of ownership between seller and buyer.”

(2) Marketing Is Helpful In Raising and Maintaining The Standard Of Living Of The
Community

Marketing is above all the giving of a standard of living to the community. Paul Mazur states,
“Marketing is the delivery of standard of living”. Professor Malcolm McNair has further
added that “Marketing is the creation and delivery of standard of living to the society”.

By making available the uninterrupted supply of goods and services to consumers at a

reasonable price, marketing has played an important role in raising and maintaining
living standards of the community. Community comprises of three classes of people i.e., rich,
middle and poor. Everything which is used by these different classes of people is supplied by
marketing.

In the modern times, with the emergence of latest marketing techniques even the poorer
sections of society have attained a reasonable level of living standard. This is basically due to
large scale production and lesser prices of commodities and services. Marketing has infact,
revolutionised and modernised the living standard of people in modern times.

(3) Marketing Creates Employment

Marketing is complex mechanism involving many people in one form or the other. The major
marketing functions are buying, selling, financing, transport, warehousing, risk bearing and
standardization, etc. In each such function different activities are performed by a large
number of individuals and bodies.
 Thus, marketing gives employment to many people. It is estimated that about 40% of total
population is directly or indirectly dependent upon marketing. In the modern era of large
scale production and industrialization, role of marketing has widened.

This enlarged role of marketing has created many employment opportunities for people.
Converse, Huegy and Mitchell have rightly pointed out that “In order to have continuous
production, there must be continuous marketing, only then employment can be sustained and
high level of business activity can be continued”.

(4) Marketing as a Source of Income and Revenue

The performance of marketing function is all important, because it is the only way through
which the concern could generate revenue or income and bring in profits. Buskirk has pointed
out that, “Any activity connected with obtaining income is a marketing action. It is all too
easy for the accountant, engineer, etc., to operate under the broad assumption that the
Company will realise many dollars in total sales volume.

However, someone must actually go into the market place and obtain dollars from society in
order to sustain the activities of the company, because without these funds the organization
will perish.”

Marketing does provide many opportunities to earn profits in the process of buying and
selling the goods, by creating time, place and possession utilities. This income and profit are
reinvested in the concern, thereby earning more profits in future. Marketing should be given
the greatest importance, since the very survival of the firm depends on the effectiveness of
the marketing function.

(5) Marketing Acts as a Basis for Making Decisions

A businessman is confronted with many problems in the form of what, how, when, how
much and for whom to produce? In the past problems was less on account of local markets.
There was a direct link between producer and consumer.

In modern times marketing has become a very complex and tedious task. Marketing has
emerged as new specialized activity along with production.

As a result, producers are depending largely on the mechanism of marketing, to decide what
to produce and sell. With the help of marketing techniques a producer can regulate his
production accordingly.

(6) Marketing Acts as a Source of New Ideas

The concept of marketing is a dynamic concept. It has changed altogether with the passage of
time. Such changes have far reaching effects on production and distribution. With the rapid
change in tastes and preference of people, marketing has to come up with the same.

Marketing as an instrument of measurement, gives scope for understanding this new demand
pattern and thereby produce and make available the goods accordingly.
(7) Marketing Is Helpful In Development Of An Economy

Adam Smith has remarked that “nothing happens in our country until somebody sells
something”. Marketing is the kingpin that sets the economy revolving. The marketing
organization, more scientifically organized, makes the economy strong and stable, the
lesser the stress on the marketing function, the weaker will be the economy.

The types of market you are in determine the type of business strategy you need to
have. Strategies for consumer markets are completely different from that of industrial
markets. Industrial markets deal in bulk product selling whereas consumer products
generally involve breaking the bulk. Costing and marketing is a critical function for
both types of markets.

Furthermore, with the rise of globalization, companies have themselves gone global
and thus their marketing strategies have adapted accordingly. There are several factors
which are added to normal business strategies when you are considering going global.
And last but not the least, the Government and Institutional business which are the real
revenue generators because of their huge orders. Lets discuss each of these type of
markets one by one.

Market orientation is a customer-centered approach to product design. It involves market

research aimed at determining what consumers view as their immediate needs, primary
concerns, or personal preferences within a particular product category.
The Five Concepts Described

The Production Concept. This concept is the oldest of the concepts in business. It
holds that consumers will prefer products that are widely available and
inexpensive. Managers focusing on this concept concentrate on achieving high production
efficiency, low costs, and mass distribution. They assume that consumers are primarily
interested in product availability and low prices. This orientation makes sense in developing
countries, where consumers are more interested in obtaining the product than in its features.

The Product Concept. This orientation holds that consumers will favor those
products that offer the most quality, performance, or innovative features. Managers focusing
on this concept concentrate on making superior products and improving them over time. They
assume that buyers admire well-made products and can appraise quality and
performance. However, these managers are sometimes caught up in a love affair with their
product and do not realize what the market needs. Management might commit the “better-
mousetrap” fallacy, believing that a better mousetrap will lead people to beat a path to its
door.

The Selling Concept. This is another common business orientation. It holds that
consumers and businesses, if left alone, will ordinarily not buy enough of the selling
company’s products. The organization must, therefore, undertake an aggressive selling and
promotion effort. This concept assumes that consumers typically sho9w buyi8ng inertia or
resistance and must be coaxed into buying. It also assumes that the company has a whole
battery of effective selling and promotional tools to stimulate more buying. Most firms
practice the selling concept when they have overcapacity. Their aim is to sell what they make
rather than make what the market wants.

The Marketing Concept. This is a business philosophy that challenges the above
three business orientations. Its central tenets crystallized in the 1950s. It holds that the key
to achieving its organizational goals (goals of the selling company) consists of the company
being more effective than competitors in creating, delivering, and communicating customer
value to its selected target customers. The marketing concept rests on four pillars: target
market, customer needs, integrated marketing and profitability.

Distinctions between the Sales Concept and the Marketing Concept:

1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses
on the needs of the buyer.

2. The Sales Concept is preoccupied with the seller’s need to convert his/her product
into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the
customer by means of the product as a solution to the customer’s problem (needs).

The Marketing Concept represents the major change in today’s company orientation
that provides the foundation to achieve competitive advantage. This philosophy is the
foundation of consultative selling.

The Marketing Concept has evolved into a fifth and more refined company
orientation: The Societal Marketing Concept. This concept is more theoretical and will
undoubtedly influence future forms of marketing and selling approaches.

The Societal Marketing Concept. This concept holds that the organization’s task is
to determine the needs, wants, and interests of target markets and to deliver the desired
satisfactions more effectively and efficiently than competitors (this is the original Marketing
Concept). Additionally, it holds that this all must be done in a way that preserves or
enhances the consumer’s and the society’s well-being.

What is a Marketing Mix?

Marketing mix is a set of actions a business takes to build and market its product or service to
its customers.

It helps to make sure that you are able to offer your customers the right product, at the right
time and at the right place for the right price.

Whereas traditionally the marketing mix was executed through the 4 Ps of marketing,
nowadays 3 more additional tools have been added to the mix, making it the 7 Ps of
marketing. Businesses use a blend of these marketing mix elements to generate the response
they want from their audience.
 Importance of Marketing Mix

There are several benefits of the marketing mix that makes it important to businesses;

 Helps understand what your product or service can offer to your customers
 Helps plan a successful product offering
 Helps with planning, developing and executing effective marketing strategies
 Helps businesses make use of their strengths and avoid unnecessary costs
 Helps be proactive in the face of risks
 Help determine whether your product or service is suitable for your customers
 Helps identify and understand the requirements of customers
 Helps learn when and how to promote your product or service to your customers

The 4 Ps of Marketing Mix

4 Ps of Marketing Mix

Product

Product is a good (such as music players, shoes etc.) or service (such as hotels, airlines, etc.)
that is offered as a solution to satisfy the needs of your customer.

When developing the product, you need to consider its life cycle and plan for different
challenges that may arise during the stages of it. Once the product reaches its final stage
(sales decline phase), it’s time to reinvent the item to win the demand of the customers again.
Price

The next element of the marketing mix is the price your customer is willing to pay for your
product. This helps determine the profit you will be able to generate.

When setting a price for your product, consider how much you have spent on producing it,
the price ranges of your competitors, and the perceived product value.

Place

This is about the distribution center of the product and the methods used in distributing it to
the customer.

Wherever this is, it should be easily accessible to the customer. For example, if you have a
physical store, it should be located in a place that can be easily discovered by the customer. If
you own a website to market your product, make sure it is easily navigable.

Promotion

Promotion refers to the methods a business uses to gain the attention of the customers to their
product. These includes sales promotions, customer service, public relations, advertising etc.

When creating your promotion strategy, consider the tactics used by your competitors, the
channels that are most effective in reaching your customers, and whether they match the
perceived value of your product.

The 7 Ps of Marketing Mix

7 Ps of marketing mix is an extended, modified version of the 4 Ps of marketing. This model

is widely used in the service industry. It adds 3 more elements to the 4 Ps discussed above.
Marketing Mix 7 Ps

People

This refers to the people – both your customers and employees – who are directly related to
the product or service.

While you need to study your target market to understand whether they are in need of the
type of product you are offering, you need to hire the right people who are capable of giving
their best to build it.

Process

Systems and processes play an important role in building and delivering a quality service to
your customer.
Physical Evidence

Physical evidence refers to what the customers see when consuming your product or service.
This could include your branding, packaging, the physical environment where you are selling
your product etc.

MARKETING IS A VALUE CREATING AND VALUE DELIVERING PROCESS

Value-creation and value-delivery is the main task of marketing. Marketing in its entirety is a
value creating and value-delivering process. The whole bunch of tasks involved in marketing,
serve the purpose of value delivery. They actually form a sequence leading to value delivery.

Marketing planning, buyer analysis, market segmentation and targeting are concerned with
value selection. Product development, manufacturing, service planning, pricing, distribution
and servicing, are concerned with value creation & value delivery. Personal selling,
advertising, publicity and sales promotion are concerned with value communication.
Activities like market research and market control assess the effectiveness of the value
delivery process, the level of satisfaction the customer has actually received and how it
compares with the firms intention as well as with other competing offers for the purpose of
enhancing value.

In any marketing situation, one can discern four distinct steps in the value providing process:

* Value selection.
* Value creation/value delivery
* Value communication (making a value proposition and communicating it.)
* Value enhancement.

Value Selection

It is obvious that selecting the value to be offered is the first step in the value delivering
process. Everything else follows. Only after selecting the value to be offered, can the firm
proceed with production, sales and promotion. What needs to be specifically understood here
is that the firm finds out what constitutes value in the estimation of the customer and accepts
it as the value to be offered. Value selection is thus not only the first step in the sequence but
also the most crucial one.

Value Creation / Value Delivery

This constitutes the bulk of the marketing job. What the firm has promised to provide the
customer has to be actually provided. The product offering must actually carry the benefits
the firm has promised and it must be reached to the customer in the most satisfying manner.
Value creation/value delivery signifies the successful execution of the firms promise. Most
firms fumble here because they promise to provide all sorts of things, but they fail deliver;
their products fail to carry the value they were supposed to carry. The entire firm with all the
functions and activities is involved in this step. In creating and delivering the product with all
the associated benefits, which the firm has decided to offer, there is a role for technology,
design and engineering finance management and the organizational set-up
Value Communication

After selecting the value to be offered and deciding how the value has to be created
/delivered, the firm tries to communicate the value to the customer. In this step, there are
actually two components. The firm works out a value proposition and then communicates it
to the customer.

Making a Value Proposition

In a marketing endeavour, what the firm offers to the customer is not a mere physical
product; it offers a value proposition. The product offer consisting of the best possible
benefits/value is put forward as a value proposition, explaining how the offer matches the
customers requirement s and how it works out to be the best among all the competing offers.

Communicating the Value Proposition

The firm then, communicates the value proposition to the customer. It explains the
uniqueness of its offer through a well-formulated marketing communication mix. The
customers exercise of assessing the value of the offer actually starts from this stage.

Value Enhancement

The firm also continuously and proactively enhances the value. It collects feedback from the
consumer about his level of satisfaction with the product and upgrades the value. It actually is
a non-stop job for the firm to search for the customers satisfaction level and augment the
offer. Competing products, including substitute products, keep attacking the value
proposition of the firm.

Expectations of customers too keep changing. The firm has to search for the new
expectations of the customers, locate product gaps/ benefits gaps and keep making new and
better offers to the customer to stay ahead of the competition in value rankings.

Sales promotion gimmicks do not normally serve the purpose of sustained value addition.
Sales promotion measures like consumer deals and trade deals result in just a temporary shift
in the value-cost equation in favor of the consumer. When the deals are withdrawn,
consumers turn away from the product.

What is the meaning of consumer behaviour?

Consumer behaviour is the study of consumers and the processes they use to choose, use
(consume), and dispose of products and services, including consumers’ emotional, mental,
and behavioural responses.

Why is consumer behaviour important?

Studying consumer behaviour is important because it helps marketers understand what

influences consumers’ buying decisions.
By understanding how consumers decide on a product, they can fill in the gap in the market
and identify the products that are needed and the products that are obsolete.

Studying consumer behaviour also helps marketers decide how to present their products in a
way that generates a maximum impact on consumers. Understanding consumer buying
behaviour is the key secret to reaching and engaging your clients, and converting them to
purchase from you.

A consumer behaviour analysis should reveal:

What consumers think and how they feel about various alternatives (brands, products, etc.);

What influences consumers to choose between various options;

Consumers’ behaviour while researching and shopping;

How consumers’ environment (friends, family, media, etc.) influences their behavior.

Consumer behavior is often influenced by different factors. Marketers should study consumer
purchase patterns and figure out buyer trends.

In most cases, brands influence consumer behavior only with the things they can control;
think about how IKEA seems to compel you to spend more than what you intended to every
time you walk into the store.

So what are the factors that influence consumers to say yes? There are three categories of
factors that influence consumer behaviour:

Personal factors: an individual’s interests and opinions can be influenced by

demographics (age, gender, culture, etc.).

Psychological factors: an individual’s response to a marketing message will depend on

their perceptions and attitudes.

Social factors: family, friends, education level, social media, income, all influence
consumers’ behaviour.

Types of consumer behaviour

There are four main types of consumer behaviour:

1. Complex buying behavior

This type of behaviour is encountered when consumers are buying an expensive, infrequently
bought product. They are highly involved in the purchase process and consumers’ research
before committing to a high-value investment. Imagine buying a house or a car; these are an
example of a complex buying behaviour.

2. Dissonance-reducing buying behavior

The consumer is highly involved in the purchase process but has difficulties determining the
differences between brands. ‘Dissonance’ can occur when the consumer worries that they
will regret their choice.

Imagine you are buying a lawnmower. You will choose one based on price and convenience,
but after the purchase, you will seek confirmation that you’ve made the right choice.

3. Habitual buying behavior

Habitual purchases are characterized by the fact that the consumer has very little involvement
in the product or brand category. Imagine grocery shopping: you go to the store and buy your
preferred type of bread. You are exhibiting a habitual pattern, not strong brand loyalty.

4. Variety seeking behavior

In this situation, a consumer purchases a different product not because they weren’t satisfied
with the previous one, but because they seek variety. Like when you are trying out new
shower gel scents.

What affects consumer behavior?

Many things can affect consumer behavior, but the most frequent factors influencing
consumer behavior are:

1. Marketing campaigns

Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with
the right marketing message, they can even persuade consumers to change brands or opt for
more expensive alternatives.

Marketing campaigns, such as Facebook ads for eCommerce, can even be used as reminders
for products/services that need to be bought regularly but are not necessarily on customers’
top of mind (like an insurance for example). A good marketing message can influence
impulse purchases.

2. Economic conditions

For expensive products especially (like houses or cars), economic conditions play a big part.
A positive economic environment is known to make consumers more confident and willing to
indulge in purchases irrespective of their financial liabilities.

The consumer’s decision-making process is longer for expensive purchases and it can be
influenced by more personal factors at the same time.

3. Personal preferences

Consumer behavior can also be influenced by personal factors: likes, dislikes, priorities,
morals, and values. In industries like fashion or food, personal opinions are especially
powerful.
Of course, advertisements can influence behaviour but, at the end of the day, consumers’
choices are greatly influenced by their preferences. If you’re vegan, it doesn’t matter how
many burger joint ads you see, you’re not gonna start eating meat because of that.

4. Group influence

Peer pressure also influences consumer behaviour. What our family members, classmates,
immediate relatives, neighbours, and acquaintances think or do can play a significant role in
our decisions.

Social psychology impacts consumer behaviour. Choosing fast food over home-cooked
meals, for example, is just one of such situations. Education levels and social factors can have
an impact.

5. Purchasing power

Last but not least, our purchasing power plays a significant role in influencing our behavior.
Unless you are a billionaire, you will consider your budget before making a purchase
decision.

The product might be excellent, the marketing could be on point, but if you don’t have the
money for it, you won’t buy it.

Segmenting consumers based on their buying capacity will help marketers determine eligible
consumers and achieve better results.

Customer behavior patterns

Buying behavior patterns are not synonymous with buying habits. Habits are developed as
tendencies towards an action and they become spontaneous over time, while patterns show a
predictable mental design.

Each customer has his unique buying habits, while buying behavior patterns are collective
and offer marketers a unique characterization. Customer behavior patterns can be grouped
into:

1. Place of purchase

Most of the time, customers will divide their purchases between several stores even if all
items are available in the same store. Think of your favourite hypermarket: although you can
find clothes and shoes there as well, you’re probably buying those from actual clothing
brands.

When a customer has the capability and the access to purchase the same products in different
stores, they are not permanently loyal to any store, unless that’s the only store they have
access to. Studying customer behaviour in terms of choice of place will help marketers
identify key store locations.

2. Items purchased
Analyzing a shopping cart can give marketers lots of consumer insights about the items that
were purchased and how much of each item was purchased. Necessity items can be bought in
bulk while luxury items are more likely to be purchased less frequently and in small
quantities.

The amount of each item purchased is influenced by the perishability of the item, the
purchasing power of the buyer, unit of sale, price, number of consumers for whom the item is
intended, etc.

3. Time and frequency of purchase

Customers will go shopping according to their feasibility and will expect service even during
the oddest hours; especially now in the era of e-commerce where everything is only a few
clicks away.

It’s the shop’s responsibility to meet these demands by identifying a purchase pattern and
match its service according to the time and frequency of purchases.

One thing to keep in mind: seasonal variations and regional differences must also be
accounted for.

4. Method of purchase

A customer can either walk into a store and buy an item right then and there or order online
and pay online via credit card or on delivery.

The method of purchase can also induce more spending from the customer (for online
shopping, you might also be charged a shipping fee for example).

The way a customer chooses to purchase an item also says a lot about the type of customer he
is. Gathering information about their behavior patterns helps you identify new ways to make
customers buy again, more often, and higher values.

Consumer Behavior and Buying Decision Process

Consumer behavior includes the acts and individuals directly involved in obtaining goods and
services including a sequence of the decision process. It is important in marketing how a
consumer makes a buying decision and which all parameters are been considered by a
consumer to buy a particular product.

1. Problem Recognition

It’s in fact, the beginning of the buying process It is a perception. We realize what we should
ideally have and what we have at present. The decision to buy a particular product depends
on the necessity of that product to the buyer from FMCG to a luxury product

2.Information Seeking
This follows the problem recognization stage. The search is mostly directed towards the
products that are consistent with our needs. The amount and type of information that is
collected are related to the product in relation to the need for the product information that can
be gathered by ads, visiting the store through the internet or by talking with your friends.

3.Evaluation of Alternatives

When the consumer seeks information he realizes the alternative choices available and gets
the background against which choices can be made.The brand which consumer considers
while making a purchase decision forms an evoked set which is a small proportion of the total
available brands. Promotion, especially advertising provides information to the consumers
enabling him to evaluate

4. Buying Decision

After the alternative choices are evaluated. The brands are ranked & the top-ranking brand
may be purchased. Ultimate buying decisions may undergo a change if the preferred brand is
not available.

5.Post-Purchase Evaluation

Now the product has been bought and consumed. It is the stage for post-purchase evaluation.
The consumer may either be satisfied or dissatisfied. A satisfied consumer stores the product
information in his memory and uses it next time at the time of the problem recognition stage.
A dissatisfied consumer may go in for another brand next time he is out to buy. He will seek
additional & will consider another set of brands

Example

Lets us understand the complete process by taking a hypothetical example.

Step: 1 Need Recognition

Steve met with an accident while returning home from work and broke his Cell Phone.
Consequently, he lost connectivity with his family and social circle. Hence, he decided to buy
a new one.

Step: 2 Information Search

He searched the E-commerce Apps, Websites and visited the nearby Retail Outlets. His
friends also recommended some brands and models.

Step: 3 Evaluation of Alternatives

After detailed research, Steve figured out that he wanted a 50mgpx Camera and 5g enabled
phone. In addition, he was looking out for the vendors providing mobile cover for free.
Steve filtered three brands offering the above features in his budget. Two of them were
selling the phone without any offer. In contrast, the third vendor offered two free mobile
covers with the phone.

Step: 4 Purchase Decision

Steve purchased the phone from the third vendor satisfying all his needs.
Step: 5 Post Purchase Behaviour
He was satisfied with the phone and recommended the same to all his friends.

Conclusion

In conclusion, the consumer decision-making process is a problem-solving process. It starts

with an unsatisfied need and ends with purchasing a suitable product.

It is essential from the marketing point of view. Because it enlightens them in manufacturing
and delivering valuable products.