1. Consumer Behavior:
Its Origins and
Strategic Applications
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2. Consumer Behavior
The behavior that consumers display in
searching for, purchasing, using,
evaluating, and disposing of products
and services that they expect will satisfy
their needs.
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3. Customer Behaviour con’t…
People do not buy products--- they buy
benefits
One product can have different benefits for
different people
– a watch to a time keeper
– watch as a birthday gift
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4. Relevance of Studying consumer
Behavior
Consumers source or source of information: Is it the traditional
source, or is it the new technology supported source such as the
Internet, website or combination of all?
• Consumers perception about the manufacturers: What does a
consumer think about the product, its producer and what kind of
perception he holds about the competitor producer and his
products.
• Consumers way of using and consuming the products and
services: The marketer today is keen to study the ways and styles
used by the consumer to use and consume the products. So that
the marketer can learn himself as well as educate the consumer on
the correct usage. Thus it is a two way process where the
marketers learn about the consumer habit, usage pattern s and
other consumption peculiarities and then educate him as to how to
bring about improvement in them to draw better satisfaction from
the products or services on the offer.
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5. • Consumers source of buying: The buying source of the
consumers, their frequency of buying, and their reasons for
buying are all enigmas that a marketer wants to understand and
solve.
• Consumers adaptability to changing faces of technology: How far
is the consumer today able to keep pace with the ever changing
technology? How far and how he has the new technology affected
the buying decisions and buying habits of the modern consumer?
• Comprehensive research into consumer behavior: The study of
consumer behavior has to be more than simple researching into
the buying habits of a consumer. The comprehensive research on
consumer behavior has to be a dynamic process that must pace
with the change in the behavior of the consumer and his buying
habits, hit decision making and his response to decision
influencers.
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6. Personal Consumer
The individual who buys goods and
services for his or her own use, for
household use, for the use of a family
member, or for a friend.
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7. Organizational Consumer
A business, government agency, or other
institution (profit or nonprofit) that buys
the goods, services, and/or equipment
necessary for the organization to
function.
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8. Model of
Consumer Behavior
Stimulus Response Model
– Marketing and other stimuli enter the
buyer’s “black box” and produce certain
choice/purchase responses.
– Marketers must figure out what is inside
of the buyer’s “black box” and how
stimuli are changed to responses.
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9. Characteristics Affecting
Consumer Behavior
Key Factors Culture
Subculture
Cultural – Punjabi
Social – Gujarati
– Rajasthani
Personal – Marathi
Psychological
Social Class
9 1-9

10. Characteristics Affecting
Consumer Behavior
Key Factors
Reference Groups
Cultural – Membership
Social – Aspirational groups
– Opinion leaders
Personal
Family
Psychological
– Children can influence
Roles and Status
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11. Characteristics Affecting
Consumer Behavior
Key Factors Age and life cycle
Occupation
Cultural Economic situation
Lifestyle
Social – Activities, interests, and
opinions
Personal
– Lifestyle segmentation
Psychological Personality and self-concept
11 1 - 11

12. Characteristics Affecting
Consumer Behavior motives
Motivation
– Needs provide
Key Factors for consumer behavior
– Motivation research
– Maslow’s hierarchy of
Cultural needs
Perception
Social – Selective attention,
Personal selective distortion,
selective retention
Psychological Learning
– Drives, stimuli, cues,
responses and
reinforcement
Beliefs and attitudes
12 1 - 12

13. Characteristics Affecting
Consumer Behavior
Maslow’s Hierarchy of Needs
Self-actualization
Esteem Needs
Social Needs
Safety Needs
Physiological Needs
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14. Evolution of Marketing Thinking
Consumer
Behaviour
14 1 - 14

15. Evolution of Marketing Thinking
Marketing has evolved through five stages:
– in the product-focus stage, emphasis is on
producing more and better products
– at the sales-orientation stage, focus shift to
selling, moving product from warehouse to
customer
– at the customer-interest stage, emphasis shifts to
the customer and the satisfaction of needs
– the customer-service stage places emphasis on
customer service as well as good products
– the customer-relationship stage sees a much
longer-term focus on building relationships with
customers
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16. The Production Concept
• Assumes that consumers are
interested primarily in product
availability at low prices
• Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market expansion
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17. The Product Concept
• Assumes that consumers will buy the
product that offers them the highest
quality, the best performance, and the
most features
• Marketing objectives:
– Quality improvement
– Addition of features
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18. The Selling Concept
• Assumes that consumers are unlikely
to buy a product unless they are
aggressively persuaded to do so
• Marketing objectives:
– Sell, sell, sell
• Lack of concern for customer needs
and satisfaction
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19. The Marketing Concept
• Assumes that to be successful, a
company must determine the needs
and wants of specific target markets
and deliver the desired satisfactions
better than the competition
• Marketing objectives:
– Make what you can sell
– Focus on buyer’s needs
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20. The Marketing Concept
Implementing the
Marketing Concept
• Consumer • The process and
Research tools used to study
• Segmentation consumer behavior
• Targeting • Two perspectives:
• Positioning – Positivist approach
– Interpretivist
approach
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21. The Marketing Concept
Implementing the
Marketing Concept
• Consumer • Process of dividing
Research the market into
• Segmentation subsets of
• Targeting consumers with
common needs or
• Positioning
characteristics
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22. The Marketing Concept
Implementing the
Marketing Concept
• Consumer The selection of one
Research or more of the
• Segmentation segments to pursue
• Targeting
• Positioning
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23. The Marketing Concept
Implementing the
Marketing Concept
• Consumer • Developing a distinct image
Research for the product in the mind
of the consumer
• Segmentation
• Successful positioning
• Targeting includes:
• Positioning – Communicating the
benefits of the product
– Communicating a unique
selling proposition
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24. This product is
positioned as
a solution to
facial redness.
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25. Successful Relationships
Customer Customer
Value Retention
Customer
Satisfaction
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26. Successful Relationships
Value, Satisfaction,
and Retention
• Defined as the ratio between
• Customer
the customer’s supposed
Value benefits and the resources
• Customer used to obtain those
Satisfaction benefits
• Perceived value is relative
• Customer
and subjective
Retention
• Developing a value
proposition is critical
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27. Successful Relationships
Value, Satisfaction,
and Retention
• Customer • The individual's perception of
the performance of the product
Value or service in relation to his or
• Customer her expectations.
Satisfaction • Customers identified based on
• Customer loyalty include loyalists,
apostles, defectors, terrorists,
Retention
hostages, and mercenaries
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28. Successful Relationships
Value, Satisfaction,
and Retention
• The objective of providing value
• Customer is to retain highly satisfied
Value customers.
• Customer • Loyal customers are key
Satisfaction – They buy more products
• Customer – They are less price sensitive
Retention – They pay less attention to
competitors’ advertising
– Servicing them is cheaper
– They spread positive word of
mouth
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29. Customer Profitability-Focused
Marketing
• Follows costs and revenues of
individual consumers
• Categorizes them into tiers based on
consumption behavior
• A customer pyramid groups customers
into four tiers
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30. Customer Profitability-Focused
Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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31. Traditional Marketing Concept Vs. Value
and Retention Focused Marketing
Table 1-2
Traditional Marketing Value and Retention
Concept Focused Marketing
Make only what you can sell instead Use technology that enables
of trying to sell what you make customers to customize what
you make
Do not focus on the product; focus on Focus on the product’s
the need that it satisfies perceived value, as well as the
need that it satisfies
Market products and services that Utilize an understanding of
match customers’ needs better than customer needs to develop
competitors’ offerings offerings that customers
perceive as more valuable than
competitors’ offerings
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32. Impact of Digital Technologies
• Consumers have more power and access to
information
• Marketers can gather more information about
consumers
• The exchange between marketer and
customers is interactive and immediate and
goes beyond the PC.
• Marketers must offer more products and
services
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33. Customers Search for Products
weblink
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34. Consumer Behavior Is
Interdisciplinary
• Psychology ( It involved the study of consumer as
an individual. The study found that every individual
consumer has a complex set of deep seated motives
which drive him towards specific buying behavior
and socially acceptable decision.
• Sociology : It studied the influences of society on
the individual by close family groups as well as by
the social order and the social classes he
represents.
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35. • Cultural Anthropology: It studied the individual in relaation to
the influences of culture and society he belonged to. It shows
the individual behavior as an outcome of the cultural infleuence
wielded on him by society over many generations and modified
by the sucessive development inn socieety in its historical
jourey.
• Economics: The study of human behavior in this discipline is
based on the understanding that the economic behavior is a
fundamental component of human nature. The propagators of
this thought process belived that all human being by nature
behave economically. That is all human beings have a vested
interest of expecting a gerater utility return on their scared
resource. These resourcueus are time, effort and money
Copyright 2007 by Prentice Hall 1 - 35

36. A Model of Consumer Decision Making
Sociocultural Environment
External Influence
Firm’s Marketing Efforts
1. Family
1. Product
2. Informal sources
2. Promotion
Input 3. Other noncommercial
3. Price
sources
4. Place (Channels of distribution)
4. Social class
5. People
5. Subculture and culture
Consumer Decision Making
Psychological Field
Need 1. Motivation
Recognition 2. Perception
3. Learning
Prepurchase 4. Personality
Process
Search 5. Attitudes
Evaluation of
Alternatives Experience
Purchase
Post-Decision
Behavior
1. Trial
Output 2. Repeat purchase
Postpurchase Evaluation
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37. Cinemas...
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38. THE CINEMA LANDSCAPE
Fact: Movie Theatres can currently be classified into 2 types:
•The Foreign Model:
•Smart, Re-furnished, Smaller Halls/ Multiplexes.
•Focus on technology, décor, the consumer.
•Tickets priced Rs.80/- to Rs. 100/-
•Emphasis on the movie experience.
•Owner has control over the canteen.
•The Desi Model:
•Older Theatres, strategically located.
•Part of a city’s culture.
•Suffer from an “edifice-complex” - mammoth sizes.
•Usually have a strong canteen operator.
•Dual canteens addressing Balcony & Stalls.
•Tickets are priced at Rs. 50/- to Rs. 70/- and Rs. 20/- to
Rs. 30/-
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39. THE CINEMA LANDSCAPE
Fact: Foreign Model can be further classified into 2types:
•Multiplex Only:
•Presence of 3 - 5 movie screens
•Consumer gets a choice of movies and options of various time
slots
•Mall cum Multiplex
•Presence of 3-5 movie screens within a shopping mall
•Shopping mall with all leading brands
Eating & Drinking - McDonald’s, Domino’s, Barista
Shopping - Colorplus, Benetton, Reebok
•Consumer has the choice of - Eating and Drinking, shopping,
hanging out in addition to movie watching
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40. Lets understand the Cinema
Consumer…..
“Broad movie-going
behaviour”
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41. How Often Do We Go To The Movies?
One in three go to the movies once a month or more frequently
Once a week or more often 4
10 Heavy
Several times a month 6
Twice a month 11
24 Medium
Once a month 13
Once every 2 or 3 months 27 27 Light
Once or twice a year 23
39 Very Light
Less often 17
0% 50% 100%
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42. How Does Movie Behaviour Differ By
Age?
Teens and 18-24 year olds the biggest supporters of the cinema channel
Infrequent % 2
17 12 11 17
29 29
23
23 27 29
23 26
27 48
40 33
26 25
24
23 19 17 16
17
Frequent 10 4 4
All 14+ 14-17 18-24 25-34 35-49 50+
Several x/mth plus 1/2 per month 2-3 mths 1-2 yrs Less Often
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43. So Why Go To The Movies?
Movies = The Big Escape
Two broad drivers:
Getting out of
The Movie
the house with
Experience
my friends
• Teens • Teens
Escaping With My Friends Escaping Into The Big Screen
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44. ... Plus It’s A Practical Option
Easy
Permissible Convenient No Hassles
– allowed to – cinema complexes – everyone likes it
are everywhere
– everyone can – wear what you
– close to public want
transport/home
– familiar process/
know what to
expect
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45. Who Do They Go To The Movies With?
Under 18’s going with “the group”
Over 18’s going with their partner
14-17 18-24
(50)% (101)%
Self 5 2 2
Opportunity: Partner 32 9 3
Focus on 7
socialising
Family 21 6 5
aspect of brand
and movies
1-2 friends 21 24 27
3-5 friends 13 32 2
20 58 2 29
More than 5 friends 7 26 7
0% 50% 100%
45 1 - 45

46. What Do They Do Before The Movies?
1 in 2 doing some activity before the movies. Mcd is a key gathering
place for teens. Combining movies and dinner is popular with adults.
14-17 18-24
(50)% (101)%
Did something 50 73 56
McDonalds 9 Opportunity: 35 8
14 Relocate sales to 41 14
Other fast food 5 Concessions 6 6
Video games 6 19 10
Shopping 9
15 9
Restaurant/Cafe 22
11 26
Pub/Bar 4
- 6
0% 50% 100%
46 1 - 46

47. When They Get To The Cinema
Most arrive in time to see everything, even the slides. Teens more
likely to gather very early.
14-17 18-24
(50) (101)
% %
Early, to hang out with friends 10
25 11
10-15 mins before the show 56 48 54
78
As show began 22
26 20
Previews started 8
1 15
Movie started 1
- 1
0% 50% 100%
47 1 - 47

48. Key Consumer Insights
Movie going is a popular past time amongst
all consumers
Teens and young adults are the heaviest
users
The movie experience is all about ‘escape’
Movie going is a social occasion, that involves
other activities and people
Concessions are an integral part of the movie
experience
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49. Coca-Cola Cinema strategy...
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50. The New Cinema Strategy
Taking your Key Business Drivers …...
VOLUME TRAFFIC ENTERTAINMENT
..and building a Business Plan which leverages the strength of the Coca-Cola
System
Refreshing Promoting Entertaining
Movie Movie Movie
goers going goers
• Driving incidence • Building an
• Promotional
through association
programs which
promotional between Coca-
relates Coca Cola
programs and Cola brands and
and Movie going
operational the movie
excellence experience
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51. Step 1: Persuading
Consumers to Purchase
Refreshing Promoting Entertaining
Movie Movie Movie
goers going goers
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52. Refreshing Movie Goers
Objective Driving Volume
Strategy
Marketing Plan Operational Excellence
Resources • Merchandising • Service / Equipment
• Promotions • Staff Training
• Promotional Allowance
Outcome • Consumer Research
• Post Evaluation
Drive Gross Profit
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53. Step 2: Driving Traffic
Refreshing Promoting Entertaining
Movie Movie Movie
goers going goers
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54. Promote Movie Going
Objective Drive Traffic
Strategy
Total Circuit Competitive Zones
• Cross Promotions
• Sponsorship Properties
• Loyalty Programs
Resources
• Promotional Allowance
Outcome • Cinema Tickets
Drive Admission Revenue
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55. Step 3: Enhance The
Experience
Refreshing Promoting Entertaining
Movie Movie Movie
goers going goers
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56. Entertaining Movie Goers
Objective: Build Coca-Cola brand preference
Enhance the movie going experience
Strategy: Utilise cinema channel as a media
- screen advertising
- billboard
Resources: Media fund
Creative development fund
Consumer research
Outcomes: Increase consumer satisfaction
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57. Entertaining Movie Goers
Objective: Build Coca-Cola brand preference
Enhance the movie going experience
Strategy: Utilise cinema channel as a media
- screen advertising
- billboard
Resources: Media fund
Creative development fund
Consumer research
Outcomes: Increase consumer satisfaction
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58. Summary
Understand Consumer Cinema Going behavior
Understand Consumer Needs
Understand Consumer Purchase Behavior
Focus Marketing efforts on the Key Profit
Drivers:
– Refreshing Movie Goers
– Promoting Movie Going
– Entertaining Movie Goers
58 1 - 58

59. Eight Roles in the Family Decision-Making Process
ROLE DESCRIPTION
Influencers Family member(s) who provide information to other members about a
product or service
Gatekeepers Family member(s) who control the flow of information about a product
or service into the family
Deciders Family member(s) with the power to decided by one or jointly whether
to shop for, purchase, use, consume, or dispose of a specific product or
service
Buyers Family member(s) who make the actual purchase of a particular product
or service
Preparers Family member(s) who transform the product into a form suitable for
consumption by other family members
Users Family member(s) who use or consume a particular product or service
Maintainers Family member(s) who service or repair the product so that it will
provide continued satisfaction.
Disposers Family member(s) who initiate or carry out the disposal or
discontinuation of a particular product or service
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60. Thanking You
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