Page 12 - DMGT506_CONSUMER_BEHAVIOUR

Unit 1: Introduction to Consumer Behaviour

these groups, learning how they behave and how they make purchase decisions enables Notes
the marketer to design and market products or services particularly suited to their wants
and needs. For example, consumer studies revealed that many existing and potential
shampoo users did not want to buy shampoo packs priced at 60 or more and would
rather prefer a low priced sachet containing enough quantity for one or two washes. This
finding led companies to introduce the shampoo sachet which became a good seller.
3. Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer
has to determine the right mix of product, price, distribution and promotion. Here too,
consumer behaviour study is very helpful in finding answers to many perplexing questions.
(a) Product: The marketer designs the product or service that would satisfy unfulfilled
needs or wants. Further decisions regarding the product concern to size, shape and
features. The marketer has also to decide about packaging, important aspects of
service, warranties and accessories etc.

Example: Nestle first introduced Maggi noodles in masala and capsicum
flavours. Subsequently, keeping in view the consumer preferences in some regions,
the company introduced garlic, Sambar and other flavours.
(b) Price: The second important component of marketing mix is price. Marketers must
decide what price to charge for the product or service. These decisions will influence
the flow of revenue to the company. Should the marketer charge the same, higher,
or lower price in comparison to competition? Is the consumer price sensitive and
would a lower price stimulate sales? Should there be any price discounts? Do
consumers perceive lower price as being indicative of poor quality?
To answer such questions, the marketer must understand the way the company’s
product is perceived by consumers, the importance of price as a purchase decision
variable and how different price levels would affect sales. It is only through consumer
behaviour study in actual buying situations that the marketer can hope to find
answers to these important issues.
(c) Distribution: The next decision relates to the distribution channel, that is, where and
how to offer products and services for sale. Should the products be sold through all
the retail outlets or only through selected ones? Should the marketer use only the
existing outlets, which also sell competing brands, or should new exclusive outlets
selling only the marketer’s brands be created? Is the location of retail outlets
important from consumers’ point of view? Should the company think of direct
marketing?
The answers to these questions are furnished by consumer behaviour research.

Example: When Eureka Forbes introduced its vacuum cleaners many years
ago, few stores knew anything about this product and most were not willing to buy
it. Consumer awareness about the product was also low and no retail shops carried
the product. Under these circumstances, the company decided to sell the product
only through personal selling, with salespeople calling directly on the consumer at
her/his home. These salespeople had enough time to explain and demonstrate the
vacuum cleaner and convince prospects about its usefulness. Retail outlets would
not have been suitable for this sales approach. This strategy was based on
understanding of consumer behaviour and yielded good results.
(d) Promotion: Promotion is concerned with marketing communications to consumers.
The more important promotion methods are advertising, personal selling, sales
promotion, publicity and direct marketing. The marketer has to decide which method
would be most suitable to effectively reach the consumers. Should it be advertising
alone or should it be combined with sales promotion? The company has to know the

LOVELY PROFESSIONAL UNIVERSITY 7