Part I: Marketing Research

Unit 1: Introduction to Marketing Research

1.1 Meaning of Market Research and Marketing Research

A. Market Research:
Market research involves systematically gathering, analyzing, and interpreting data to make
informed decisions regarding market opportunities, consumer behavior, and competitive
positioning.
• Definition: Market research is the systematic study of market dynamics, focusing on
buyers, sellers, market transactions, and exchange processes. It aims to identify
consumer needs, measure market demand, and assess market trends.
• Objective: To provide actionable insights that aid in product development, pricing,
promotion, and distribution strategies.
• Example: A smartphone manufacturer conducts market research to determine the
demand for 5G-enabled phones among different consumer segments.

B. Marketing Research:
Marketing research is a broader and more comprehensive concept that encompasses market
research and other functions, such as product development, pricing strategies, and
promotional effectiveness.
• Definitions of Marketing Research:
1. American Marketing Association (AMA):
▪ “The systematic gathering, recording, and analysis of data about
problems relating to the marketing of goods and services.”
2. Philip Kotler:
▪ “Marketing research links the consumer, customer, and public to the
marketer through information used to identify and define marketing
opportunities and problems.”
Key Components of Marketing Research:
• Problem Identification
• Data Collection
• Data Analysis
• Data Interpretation
 • Reporting and Decision-Making
Examples:
1. HUL: Conducts quarterly sales analysis to identify consumer preferences for personal
care products.
2. Coca-Cola: Studies consumer buying behavior to adjust promotional strategies for
new product launches.

1.2 Objectives of Marketing Research

Marketing research serves several key objectives, each aiming to facilitate better marketing
decision-making:
1. To Provide Basis for Proper Planning:
o Marketing research provides data to formulate marketing plans, strategies, and
programs.
o Example: HUL uses quarterly sales data to plan promotional strategies for its
detergents and soaps.
2. To Reduce Marketing Costs:
o Research helps identify cost-effective promotional strategies, distribution
channels, and product designs.
o Example: A food delivery company may analyze delivery route data to minimize
transportation costs.
3. To Discover New Markets for Products:
o Identifies untapped or emerging markets for existing products or services.
o Example: Bollywood identified China as a potential market for Bollywood
movies, resulting in successful releases like PK and Dangal.
4. To Determine Appropriate Pricing Policies:
o Helps set competitive prices based on consumer willingness to pay and
competitor pricing.
o Example: FMCG companies often conduct pricing research to decide on the
best price point for new products.
5. To Study Consumer Preferences and Buying Patterns:
o Research assesses consumer preferences, buying motives, and purchase
behavior.
o Example: A toothpaste brand may conduct research to determine consumer
preference for mint, clove, or charcoal flavors.
 6. To Assess Market Competition:
o Monitors competitor strategies, market share, and product positioning.
o Example: A telecom company analyzes Jio’s pricing strategies and network
coverage to adjust its own plans.
7. To Understand External Influences on Marketing:
o Assesses the impact of external factors such as government policies, economic
conditions, and technological advancements.
o Example: Analyzing the impact of COVID-19 on online retail shopping behavior.

1.3 Decision-Making Perspective in Marketing Research

Marketing research is crucial for making informed marketing decisions. There are two primary
approaches to decision-making in marketing research:
A. First Approach: Marketing Decision-Making Process
1. Situation Analysis:
o Identifies demographic shifts, market trends, and emerging competitors.
o Example: Analyzing the impact of increased working women on demand for
ready-to-eat meals.
2. Strategy Development:
o Defines the business scope, target market segments, and performance
objectives.
o Example: A cosmetics company targeting premium urban consumers for
organic skincare products.
3. Development of Marketing Program:
o Involves product design, distribution planning, and promotional strategies.
o Example: ITC launched Dark Fantasy as a premium chocolate biscuit targeting
high-income consumers.
4. Implementation:
o Executing the marketing program and monitoring its effectiveness.
o Example: Launching a festive discount campaign for smartphones and
measuring its impact on sales.
5. Feedback and Refinement:
o Collecting feedback and making necessary adjustments to the marketing plan.
 o Example: Analyzing consumer complaints to modify a recently launched
smartphone model.

B. Second Approach: Marketing Functions Perspective

1. Strategic Approach:
o Focuses on long-term marketing strategies such as STP (Segmentation,
Targeting, Positioning).
o Example: Developing premium positioning for Ashirwad Select wheat flour
targeting health-conscious consumers.
2. Tactical Approach:
o Focuses on short-term marketing tactics such as promotional offers and
discounts.
o Example: Launching a Diwali sales campaign offering 20% off on selected
FMCG products.

1.4 Marketing Research Process

The marketing research process consists of five major steps:
1. Problem Definition:
o Clearly identifying the marketing problem or opportunity.
o Example: A smartphone company may define the problem as “Why are sales
declining in rural areas?”
2. Research Design:
o Developing a comprehensive plan that includes data collection methods,
sampling techniques, and data analysis tools.
o Types of Research Designs:
▪ Exploratory Research: Identifies underlying problems and formulates
hypotheses.
▪ Descriptive Research: Quantifies the variables and describes the
market characteristics.
▪ Causal Research: Establishes cause-effect relationships between
variables.
3. Data Collection:
o Collecting data using primary and secondary research methods.
 o Primary Data: Data collected directly from respondents through surveys,
interviews, focus groups.
o Secondary Data: Data obtained from existing reports, government
publications, and online databases.
4. Data Analysis:
o Analyzing the data using statistical tools and software to identify patterns and
draw conclusions.
o Example: Using SPSS or Python to analyze consumer feedback data.
5. Reporting and Interpretation:
o Presenting the findings in a structured report format, with actionable insights
and recommendations.
o Example: Presenting a report on changing consumer preferences for mobile
apps during festive sales.

1.5 Real-Life Examples of Marketing Research Applications

1. HUL – Product Development:

o Conducted focus group interviews to understand consumer preferences for a
new line of skincare products targeting millennials.
2. Jio – Pricing Strategy:
o Analyzed customer data to identify demand for low-cost data plans, leading to
the successful launch of region-specific plans.
3. FMCG Sector:
o A detergent brand conducted in-depth interviews in both rural and urban areas
to identify consumer preferences in fragrance and packaging.

Summary of Unit 1: Introduction to Marketing Research

• Market Research focuses on studying the market, identifying consumer needs, and
assessing market trends.
• Marketing Research is broader and includes problem identification, data collection,
analysis, and decision-making.
• Objectives of marketing research include reducing marketing costs, discovering new
markets, and assessing competition.
• The marketing research process involves problem definition, research design, data
collection, data analysis, and report preparation.
• Two primary decision-making approaches in marketing research are the Marketing
Decision-Making Process and the Marketing Functions Perspective.
• Real-life examples from FMCG, telecom, and retail sectors illustrate the practical
application of marketing research concepts.
Part I: Marketing Research
Unit 2: Marketing Research Process

2.1 Introduction to the Marketing Research Process

The marketing research process is a systematic sequence of steps that guide researchers in
gathering and analyzing data to resolve marketing problems or capitalize on opportunities.
The process includes five key stages:
1. Problem Identification and Definition
2. Research Design
3. Data Collection
4. Data Analysis
5. Report Preparation and Presentation

2.2 Problem Identification and Definition

A. Understanding the Problem:
• Identifying and defining the problem is the most critical step in the research process.
• A poorly defined problem leads to irrelevant data and ineffective solutions.
Definitions of Business Research:
1. Definition by Philip Kotler:
o “Marketing research is the systematic collection and analysis of data to address
marketing problems and opportunities.”
2. Business Research Definition:
o A structured approach to collecting and analyzing data to provide relevant
information for managerial decision-making.

B. Process of Problem Identification:

1. Define the Business Research Problem:
o The business research problem is a broad statement of the general problem
and identifies its specific components.
o Example: A smartphone company observes a decline in sales. The research
problem could be, “What factors are causing the decline in smartphone sales in
urban areas?”
 2. Identify Management Dilemma:
o The management dilemma refers to the underlying cause of the problem.
o Examples of management dilemmas:
▪ Declining sales revenue.
▪ Decreasing market share.
▪ High customer churn rate.
3. Formulate Management Question:
o The management question is the specific question that the research seeks to
answer.
o Example: “How can the company improve its market share in the premium
smartphone segment?”
4. Define Research Questions:
o Research questions are specific inquiries that focus on different aspects of the
problem.
o Example:
▪ “What are the key features preferred by premium smartphone users?”
▪ “What are the competitor’s strategies in the premium segment?”

2.3 Research Design

Research Design: The framework that outlines the methods and procedures for collecting
and analyzing data. It serves as a blueprint for the entire research process.
Types of Research Designs:
1. Exploratory Research:
o Objective: To explore unknown areas and gain insights into the problem.
o Techniques: Focus groups, in-depth interviews, secondary data analysis.
o Example: Conducting focus group discussions to understand consumer
perceptions of a new skincare product.
2. Descriptive Research:
o Objective: To describe the characteristics of a population or phenomenon.
o Techniques: Surveys, observational studies, structured questionnaires.
o Example: Surveying 500 customers to determine their satisfaction with a new
mobile application.
 3. Causal Research:
o Objective: To identify cause-effect relationships between variables.
o Techniques: Experiments, controlled studies.
o Example: Analyzing the impact of a 20% price reduction on sales volume.

Components of Research Design:

1. Research Methodology:
o Determines the overall strategy and approach.
o Quantitative vs. Qualitative methods.
2. Data Collection Methods:
o Primary Data Collection: Surveys, interviews, experiments.
o Secondary Data Collection: Online databases, government reports, industry
publications.
3. Sampling Plan:
o Sample Unit: Who is to be surveyed? (e.g., urban smartphone users aged 25-
40)
o Sample Size: How many people will be surveyed? (e.g., 200 respondents)
o Sampling Method: Random, stratified, cluster, quota, etc.
4. Research Instrument:
o The tool used to collect data, such as questionnaires, interview guides, or
observation checklists.

2.4 Data Collection

Data collection is the process of gathering information from primary and secondary sources
to address the research objectives.
Types of Data:
1. Primary Data:
o Data collected directly for a specific research purpose.
o Methods: Surveys, focus groups, in-depth interviews, observation, experiments.
o Example: Conducting a survey among 300 mobile app users to assess app
features.
 2. Secondary Data:
o Data already collected by other sources for a different purpose.
o Sources: Government reports, industry publications, academic journals,
company records.
o Example: Analyzing industry reports to assess market trends in the smartphone
segment.

Data Collection Techniques:

1. Surveys:
o Structured questionnaires with open-ended or close-ended questions.
o Example: A survey to assess customer satisfaction with a new product.
2. Interviews:
o Direct interaction with respondents to gather in-depth information.
o Types: Structured, semi-structured, unstructured.
3. Focus Groups:
o Small groups of participants (6-10) discussing a topic guided by a moderator.
o Example: Discussing the packaging of a new beverage product.
4. Observation:
o Recording behavioral data without direct interaction.
o Example: Observing consumer behavior in a retail store.
5. Experiments:
o Manipulating variables to assess cause-effect relationships.
o Example: Testing the impact of price discounts on online sales.

2.5 Data Analysis

Data analysis involves processing collected data to draw meaningful conclusions and make
data-driven decisions.
Data Analysis Techniques:
1. Quantitative Analysis:
o Numerical data analysis using statistical methods.
o Techniques: Regression analysis, ANOVA, hypothesis testing.
 2. Qualitative Analysis:
o Analysis of non-numerical data to identify patterns and insights.
o Techniques: Thematic analysis, content analysis, narrative analysis.

2.6 Report Preparation and Presentation

The final stage involves organizing and presenting the research findings in a structured report.
Structure of the Research Report:
1. Executive Summary: Overview of the research objectives, methods, and key findings.
2. Introduction: Statement of the problem and research objectives.
3. Methodology: Detailed explanation of the research design, data collection methods,
and sampling techniques.
4. Data Analysis and Findings: Presentation of data using tables, charts, and graphs.
5. Conclusions and Recommendations: Key insights and actionable suggestions.
6. References and Appendices: Supporting data, questionnaires, and secondary data
sources.

Summary of Unit 2: Marketing Research Process

• The marketing research process involves five key steps: problem identification,
research design, data collection, data analysis, and report preparation.
• Effective problem identification is crucial to developing a relevant and focused
research plan.
• Research design serves as a blueprint and includes exploratory, descriptive, and
causal research.
• Data collection involves gathering primary and secondary data using various methods
such as surveys, interviews, and experiments.
• Data analysis converts raw data into meaningful insights using quantitative and
qualitative techniques.
• The research report presents findings, conclusions, and recommendations in a
structured and actionable format.
Part I: Marketing Research
Unit 3: Research Tools & Techniques

3.1 Introduction to Research Tools and Techniques

Research tools and techniques are essential for analyzing data and deriving actionable
insights in marketing research. They are broadly categorized into:
• Quantitative Techniques: Statistical analysis, numerical data analysis.
• Qualitative Techniques: Interpretive techniques, subjective analysis.
Applications of Research Tools in Marketing Research:
• Segmenting and Positioning
• New Product Development
• Pricing Research
• Media Research

3.2 Factor Analysis

Definition:
Factor analysis is a statistical technique that reduces a large set of variables into a smaller set
of factors or components. It identifies underlying relationships between variables to simplify
data analysis.
Objective:
• To identify key variables (factors) that explain the maximum variance in the data set.
• To reduce data complexity without significant information loss.

Types of Factor Analysis:

1. Exploratory Factor Analysis (EFA): Identifies the underlying structure of data without
predetermined factors.
2. Confirmatory Factor Analysis (CFA): Tests whether data fits a hypothesized factor
structure.
Steps in Factor Analysis:
1. Data Collection: Collect data using surveys or questionnaires with multiple variables.
2. Correlation Matrix Creation: Calculate correlations among variables.
 3. Extraction of Factors: Identify factors that explain the highest variance using
techniques like Principal Component Analysis (PCA).
4. Rotation of Factors: Simplify factor structure using Varimax or Oblique rotation
methods.
5. Interpretation: Assign meaning to the factors based on high-loading variables.

Example of Factor Analysis:

• A retail chain wants to understand the factors influencing customer satisfaction.
• Variables include pricing, product quality, store ambience, staff behavior, and product
variety.
• Factor analysis reveals that these variables can be grouped into two main factors:
Service Quality and Product Attributes.

3.3 Multi-Dimensional Scaling (MDS)

Definition:
MDS is a data analysis technique used to visualize the similarity or dissimilarity between data
points in a geometric space. It transforms data into a spatial map, where similar items are
plotted closer together.
Objective:
• To identify the relative positioning of products, brands, or services based on consumer
perceptions.
• To assist in market segmentation and positioning.

Steps in MDS:
1. Data Collection: Collect similarity/dissimilarity ratings between objects (e.g., brands
or products).
2. Distance Matrix Creation: Calculate distances between pairs of objects.
3. Spatial Mapping: Plot objects in a multi-dimensional space based on distances.
4. Interpretation: Analyze spatial configuration to identify clusters, gaps, and relative
positioning.

Example of MDS Application:

 • A mobile phone company wants to assess the relative positioning of its products
against competitors.
• Consumers rate the similarity of brands based on price, features, and design.
• MDS reveals that Brand A and Brand B are perceived as similar in terms of price and
features, while Brand C is positioned as a premium product.

3.4 Conjoint Analysis

Definition:
Conjoint analysis evaluates how consumers value different attributes of a product or service.
It determines the optimal combination of features that maximize consumer satisfaction.
Objective:
• To identify the most influential product attributes.
• To determine the optimal product configuration that maximizes consumer utility.

Steps in Conjoint Analysis:

1. Select Attributes and Levels: Identify key product attributes (e.g., price, quality,
brand) and define levels for each attribute.
2. Design Experimental Profiles: Create product profiles with different attribute
combinations.
3. Data Collection: Ask respondents to rank or rate the product profiles.
4. Statistical Analysis: Calculate the utility values for each attribute level.
5. Interpretation: Determine the importance of each attribute in influencing consumer
preference.

Example of Conjoint Analysis:

• A car manufacturer wants to assess consumer preferences for a new car model.
• Attributes include Price (₹10 lakh, ₹12 lakh, ₹15 lakh), Mileage (15 kmpl, 20 kmpl),
and Color (Red, Black, Blue).
• Conjoint analysis reveals that mileage is the most important attribute, followed by
price, and then color.

3.5 Discriminant Analysis

Definition:
Discriminant analysis is a classification technique that identifies differences between two or
more groups based on selected variables. It determines which variables best differentiate
between groups.
Objective:
• To classify data into distinct groups.
• To predict group membership based on variable scores.

Steps in Discriminant Analysis:

1. Data Collection: Collect data with known group memberships.
2. Identify Predictor Variables: Select variables that can differentiate groups (e.g.,
income, age, education).
3. Model Building: Develop a discriminant function using the selected variables.
4. Classification: Classify cases based on the discriminant function.
5. Validation: Assess the accuracy of the classification.

Example of Discriminant Analysis:

• A bank wants to classify loan applicants as high risk or low risk based on income,
credit score, and loan amount.
• Discriminant analysis identifies that credit score is the most significant predictor of
loan default.

3.6 Cluster Analysis

Definition:
Cluster analysis is a technique used to group similar data points based on selected attributes.
It helps in identifying distinct market segments.
Objective:
• To identify customer segments with similar characteristics.
• To develop targeted marketing strategies for each segment.

Types of Clustering:
1. Hierarchical Clustering: Creates a dendrogram to illustrate clusters.
 2. K-Means Clustering: Divides data into K clusters based on distance measures.

Steps in Cluster Analysis:

1. Data Preparation: Collect data on variables to be clustered (e.g., demographics,
buying behavior).
2. Determine Distance Measures: Use Euclidean distance or Manhattan distance.
3. Cluster Formation: Apply algorithms to form clusters.
4. Validation: Assess cluster quality using statistical measures.

Example of Cluster Analysis:

• A retail company segments its customer base based on age, income, and purchase
frequency.
• Cluster analysis reveals three segments:
o Young, high-income, frequent buyers.
o Middle-aged, moderate-income, occasional buyers.
o Elderly, low-income, rare buyers.

3.7 Applications of Marketing Research

1. Segmenting and Positioning:

o Identifying market segments based on demographics, psychographics, and
behavior.
o Example: A smartphone company uses cluster analysis to target youth,
working professionals, and elderly consumers.
2. New Product Development:
o Testing product attributes and combinations through conjoint analysis.
o Example: A soft drink company assesses the optimal combination of flavor,
packaging, and price.
3. Pricing Research:
o Determining optimal pricing using conjoint analysis and factor analysis.
o Example: Analyzing consumer price sensitivity for a new shampoo brand.
4. Media Research:
 o Identifying the most effective media channels for advertising through factor
analysis and MDS.
o Example: Assessing media consumption patterns for targeting digital ads.

Summary of Unit 3: Research Tools & Techniques

• Research tools like factor analysis, MDS, conjoint analysis, discriminant analysis, and
cluster analysis play a critical role in data analysis and decision-making.
• These tools help in identifying customer segments, predicting consumer behavior,
optimizing product features, and setting pricing strategies.
• Applications in segmenting, positioning, new product development, pricing research,
and media research demonstrate the practical significance of these techniques.
Part II: Consumer Behaviour
Unit 4: Consumer Behaviour – Introduction & Fundamentals

4.1 Introduction to Consumer Behaviour

Definition of Consumer Behaviour:
Consumer Behaviour (CB) refers to the study of how individuals, groups, or organizations
select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs
and desires. It encompasses the psychological, social, and economic factors that influence
purchase decisions.

Key Definitions:
1. Leon Schiffman and Leslie Kanuk:
o “Consumer behaviour is the behaviour that consumers display in searching for,
purchasing, using, evaluating, and disposing of products and services that they
expect will satisfy their needs.”
2. Philip Kotler:
o “Consumer behaviour is the study of how people buy, what they buy, when they
buy, and why they buy.”

Importance of Studying Consumer Behaviour:

• Product Development: Identifies consumer preferences and expectations.
• Targeting and Positioning: Helps in segmenting the market effectively.
• Pricing Strategies: Determines the price consumers are willing to pay.
• Promotion Strategies: Helps in selecting the right communication channels.
• Customer Retention: Builds long-term relationships based on customer satisfaction.

4.2 Determinants of Buyer Behaviour and Framework of Buyer Behaviour

Consumer behaviour is influenced by multiple factors categorized as:
1. Cultural Factors
2. Social Factors
3. Personal Factors
4. Psychological Factors
1. Cultural Factors:
Culture is the most fundamental determinant of a person’s wants and behavior. It influences
deeply held values, perceptions, preferences, and behaviors.
• Culture: The shared values, beliefs, and norms that shape consumer behavior.
o Example: In Indian culture, buying gold during festivals is considered
auspicious.
• Subculture: Smaller groups within a culture that have distinct values or lifestyles.
o Examples: Regional subcultures (North vs. South India), religious subcultures
(Hindus vs. Christians).
• Social Class: Hierarchical divisions in society based on income, education, and
occupation.
o Example: Upper-class consumers may prefer luxury brands like Audi or Rolex,
while middle-class consumers may opt for value-for-money brands like Maruti
Suzuki.

2. Social Factors:
Social factors include family, reference groups, and roles that influence consumer behavior.
• Family: Primary source of influence, especially for young consumers.
o Example: A child’s preference for a specific toy may be influenced by family
members.
• Reference Groups: Groups that influence an individual’s attitudes, values, and
behavior.
o Examples: Friends, colleagues, celebrities.
o Marketers often use celebrity endorsements to influence consumer
preferences.
• Roles and Status: Social roles and status impact buying decisions.
o Example: A corporate executive may prefer premium products to showcase
their status, such as Apple MacBook Pro over budget laptops.

3. Personal Factors:
Personal characteristics such as age, occupation, lifestyle, and economic status also impact
buying behavior.
• Age and Life Cycle:
 o Young adults may spend more on fashion and entertainment, while older adults
may prioritize healthcare products.
• Occupation:
o A factory worker may prefer durable work boots, while a corporate executive
may opt for formal shoes.
• Lifestyle:
o A fitness enthusiast may purchase gym memberships and health supplements.
• Economic Situation:
o A consumer’s financial stability influences spending patterns.
o During economic downturns, consumers tend to cut down on discretionary
spending.

4. Psychological Factors:
Psychological factors include motivation, perception, learning, beliefs, and attitudes.
• Motivation:
o A motive is a need that drives a person to act. Maslow’s Hierarchy of Needs
identifies five levels of needs:
1. Physiological Needs – Food, water.
2. Safety Needs – Security, shelter.
3. Social Needs – Love, belonging.
4. Esteem Needs – Recognition, respect.
5. Self-Actualization – Personal growth.
• Perception:
o The process of selecting, organizing, and interpreting information.
o Example: Two consumers may perceive the same advertisement differently
based on their prior experiences.
• Learning:
o A change in behavior due to experience.
o Example: A customer who had a positive experience with Samsung may be
more inclined to buy other Samsung products.
• Beliefs and Attitudes:
o Beliefs are descriptive thoughts about a brand.
 o Attitudes are favorable or unfavorable evaluations of a brand.

4.3 Consumer Decision-Making Process

The consumer decision-making process consists of five stages:
1. Problem Recognition:
o The consumer identifies a need or problem.
o Example: A student realizes they need a new laptop for online classes.
2. Information Search:
o The consumer seeks information about possible solutions.
o Sources: Friends, family, internet, advertisements.
o Example: Comparing laptops online based on price, features, and brand.
3. Evaluation of Alternatives:
o The consumer assesses various options based on criteria such as price, quality,
and brand.
o Example: Comparing HP, Dell, and Lenovo laptops based on battery life and
storage capacity.
4. Purchase Decision:
o The consumer selects the preferred option and makes the purchase.
o Influencing Factors: Discounts, store location, payment methods.
5. Post-Purchase Behavior:
o The consumer evaluates the purchase decision, leading to satisfaction or
dissatisfaction.
o Example: A consumer may experience cognitive dissonance if the purchased
product does not meet expectations.

4.4 Perceptual Mapping and Positioning

Perceptual Mapping:
• A graphical representation that shows how consumers perceive products or brands in
relation to each other.
• It helps identify market gaps, competitive positioning, and potential opportunities.
Steps in Creating a Perceptual Map:
 1. Identify key product attributes (e.g., price, quality, features).
2. Collect data through surveys or focus groups.
3. Plot products/brands on a map based on consumer perceptions.
4. Analyze the map to identify clusters, gaps, and market positions.

Example of Perceptual Mapping:

• A smartphone company analyzes the market to assess how consumers perceive
different brands based on price and camera quality.
• The map reveals that Apple and Samsung are perceived as premium, high-quality
brands, while Xiaomi is perceived as affordable with good features.
Positioning Strategy:
• Positioning involves creating a distinct image of the brand in the consumer’s mind.
• Strategies include:
o Attribute-Based Positioning (e.g., Colgate – Cavity protection)
o User-Based Positioning (e.g., Nike – Athletes and fitness enthusiasts)
o Competitor-Based Positioning (e.g., Pepsi vs. Coke)

Summary of Unit 4: Consumer Behaviour – Introduction & Fundamentals

• Consumer Behaviour examines the buying decisions and actions of individuals and
groups.
• Key determinants include cultural, social, personal, and psychological factors.
• The consumer decision-making process consists of five stages: problem recognition,
information search, evaluation of alternatives, purchase decision, and post-purchase
behavior.
• Perceptual mapping helps in visualizing consumer perceptions of competing products
and identifying market gaps.
• Positioning strategies ensure that the brand occupies a distinct place in the
consumer’s mind.
Part II: Consumer Behaviour
Unit 5: Post-Purchase Consumer Behaviour

5.1 Introduction to Post-Purchase Behaviour

Definition:
Post-purchase behaviour refers to the actions, reactions, and decisions made by a consumer
after purchasing a product or service. It is a crucial stage in the consumer decision-making
process as it determines customer satisfaction, brand loyalty, and potential repeat
purchases.

Importance of Studying Post-Purchase Behaviour:

• Customer Retention: Satisfied customers are more likely to become repeat buyers.
• Brand Loyalty: Positive post-purchase experiences foster brand loyalty.
• Feedback and Improvement: Companies can gather valuable feedback for product
enhancement.
• Word-of-Mouth Marketing: Satisfied customers are more likely to recommend
products to others.

5.2 Post-Purchase Processes

After purchasing a product, consumers engage in several post-purchase processes:
1. Post-Purchase Evaluation:
o The consumer evaluates whether the product meets, exceeds, or falls short of
expectations.
o If the product meets expectations, the consumer is satisfied.
o If it exceeds expectations, the consumer is delighted.
o If it falls short, the consumer is dissatisfied.
Example: A customer buys a smartphone expecting superior camera quality. After using it,
they compare the camera quality with other brands to evaluate its performance.

2. Cognitive Dissonance:
o Cognitive dissonance occurs when a consumer experiences doubt or
discomfort about their purchase decision.
 o It is common when the purchase involves a high-priced, complex, or
infrequently purchased product.
Example: A customer purchases a high-end laptop and later questions whether it was worth
the investment, especially after seeing a similar model at a lower price.
How Marketers Address Cognitive Dissonance:
o Offering reassurance through post-purchase communication.
o Providing warranties and guarantees.
o Encouraging positive word-of-mouth and reviews.

3. Product Use and Disposal:

o After purchasing the product, the consumer uses it and eventually disposes of
it.
o Product disposal can impact brand image and consumer satisfaction.
o Companies can implement sustainable practices to encourage proper
disposal.
Example: A consumer purchases a skincare product and uses it for a month. Once the
product is finished, they dispose of the packaging. Brands like The Body Shop promote
recycling by encouraging customers to return empty containers.

4. Complaint Behaviour:
o Dissatisfied customers may complain about the product or service.
o Effective complaint handling can turn negative experiences into positive
outcomes.
Types of Complaints:
o Direct complaints to the company.
o Negative word-of-mouth to friends and family.
o Online reviews or social media complaints.
Example: A dissatisfied customer posts a negative review about poor service at a restaurant.
The restaurant can address the complaint by offering compensation or an apology.

5.3 Customer Satisfaction and Customer Value

A. Customer Satisfaction:
Customer satisfaction is the level of contentment a consumer feels after using a product or
service. It is determined by comparing actual performance with expected performance.
Formula:
Customer Satisfaction=Perceived Performance−Expected Performance\text{Customer
Satisfaction} = \text{Perceived Performance} - \text{Expected
Performance}Customer Satisfaction=Perceived Performance−Expected Performance
• Positive Satisfaction: Performance exceeds expectations.
• Neutral Satisfaction: Performance meets expectations.
• Negative Satisfaction: Performance falls short of expectations.

Factors Influencing Customer Satisfaction:

1. Product Quality: High-quality products lead to higher satisfaction.
2. Service Quality: Courteous and timely service can enhance customer experiences.
3. Pricing: Fair and transparent pricing increases satisfaction.
4. Brand Image: Strong brand reputation can positively influence satisfaction.
5. After-Sales Support: Quick response to queries and complaints boosts satisfaction.

B. Customer Value:
Customer value is the perceived worth of a product or service in comparison to its cost. It is
the balance between benefits received and the cost incurred.
Formula:
Customer Value=Benefits ReceivedCost Incurred\text{Customer Value} = \frac{\text{Benefits
Received}}{\text{Cost Incurred}}Customer Value=Cost IncurredBenefits Received
• High Value: When perceived benefits outweigh costs.
• Low Value: When costs outweigh perceived benefits.
Example:
• A customer buys a smartphone for ₹30,000 and perceives the value to be high due to
excellent camera quality, battery life, and after-sales service.

5.4 Measuring Satisfaction and Value

Measuring customer satisfaction and value involves collecting data on customer experiences
and perceptions.
Methods to Measure Satisfaction:
1. Surveys and Questionnaires:
o Collect quantitative and qualitative data on customer satisfaction.
o Example: A post-purchase survey asks customers to rate their experience with
the product.
2. Net Promoter Score (NPS):
o Measures the likelihood of customers recommending the product to others.
o NPS = % of Promoters - % of Detractors
3. Customer Feedback and Reviews:
o Collect feedback through online reviews, social media, and feedback forms.
o Example: Amazon encourages customers to rate products and provide
feedback.
4. Customer Loyalty Programs:
o Track repeat purchases and reward loyal customers.
5. Complaint Analysis:
o Analyzing complaints can reveal patterns of dissatisfaction.

Methods to Measure Customer Value:

1. Value Perception Surveys: Assess how customers perceive the value relative to price.
2. Cost-Benefit Analysis: Evaluate the tangible and intangible benefits against the cost.
3. Usage Analysis: Monitor how customers use the product and derive value from it.
4. Customer Lifetime Value (CLV): Calculate the total revenue a customer generates
over the entire relationship period.

5.5 Satisfaction and Retention

Customer Retention:
Customer retention involves keeping existing customers and encouraging repeat purchases.
Retention is directly linked to customer satisfaction and value.

Strategies for Customer Retention:

1. Personalized Communication:
 o Send follow-up emails, product recommendations, and exclusive offers.
o Example: Netflix recommends shows based on viewing history.
2. Loyalty Programs:
o Reward repeat purchases with points, discounts, or exclusive benefits.
o Example: Starbucks Rewards Program offers free drinks and birthday offers.
3. Complaint Resolution:
o Address complaints promptly to prevent churn.
o Example: Zappos provides 24/7 customer service to resolve issues.
4. Quality Improvements:
o Continuously improve product quality to exceed customer expectations.
5. Customer Feedback Loop:
o Collect, analyze, and act on feedback to refine product offerings.

Summary of Unit 5: Post-Purchase Consumer Behaviour

• Post-purchase behaviour is crucial for determining overall satisfaction and influencing
future purchase decisions.
• It involves processes like evaluation, cognitive dissonance, complaint behaviour, and
product disposal.
• Customer satisfaction and value are key metrics that impact retention, loyalty, and
word-of-mouth marketing.
• Companies can measure satisfaction using surveys, NPS, complaint analysis, and
loyalty programs.
• Effective retention strategies include personalized communication, loyalty programs,
and quality improvements.
Part II: Consumer Behaviour
Unit 6: Influences on Consumer Behaviour

6.1 Introduction to Influences on Consumer Behaviour

Consumer behaviour is shaped by a variety of factors, both internal (personal and
psychological) and external (social and cultural). Understanding these influences helps
marketers develop effective strategies for targeting and positioning products.
Major Influences on Consumer Behaviour:
1. Internal Influences
2. External Influences

6.2 Internal Influences on Consumer Behaviour

Internal influences are individual factors that impact how a consumer perceives, evaluates,
and makes purchasing decisions. These include:
1. Motivation:
• Motivation is the driving force that compels a consumer to act and satisfy a need.
• It is influenced by internal and external stimuli, such as hunger, thirst, desire for
recognition, or social approval.
Maslow’s Hierarchy of Needs:
• Physiological Needs: Food, water, shelter.
• Safety Needs: Security, stability.
• Social Needs: Love, belonging.
• Esteem Needs: Status, recognition.
• Self-Actualization: Personal growth, self-fulfillment.
Example: A consumer buys a premium car like BMW to fulfill esteem needs (status and
recognition).

2. Perception:
• Perception is the process by which consumers select, organize, and interpret
information to create a meaningful picture of the world.
Perceptual Processes:
• Selective Attention: Consumers focus only on stimuli that are relevant to them.
 • Selective Distortion: Consumers interpret information in a way that aligns with their
beliefs.
• Selective Retention: Consumers remember information that reinforces their existing
beliefs.
Example: A health-conscious consumer may focus on organic labels and ignore regular food
products.

3. Learning:
• Learning is the change in behaviour resulting from experiences.
• It is influenced by stimuli, responses, and reinforcement.
Types of Learning:
• Classical Conditioning: Learning through association.
o Example: Associating the Cadbury Dairy Milk jingle with happiness and
celebration.
• Operant Conditioning: Learning through rewards and punishments.
o Example: Receiving a discount on the next purchase after a successful
transaction.

4. Personality and Self-Concept:

• Personality: The unique psychological traits that determine a person’s consistent
responses to stimuli.
o Traits: Introversion, extroversion, confidence, aggression.
o Example: A confident consumer may choose a bold and stylish brand like
Harley Davidson.
• Self-Concept: How a person perceives themselves, including their identity and image.
o Example: A consumer who views themselves as eco-friendly may prefer Tesla
or The Body Shop products.

5. Attitudes and Beliefs:

• Beliefs: Descriptive thoughts that a consumer holds about a product.
• Attitudes: A person’s evaluations, feelings, and tendencies toward a product or brand.
Example:
• Belief: Apple products are high-quality.
 • Attitude: Preference for Apple over other brands due to perceived quality.

6.3 External Influences on Consumer Behaviour

External influences include factors outside the individual that affect buying behaviour, such
as social, cultural, and environmental factors.
1. Social Class and Social Stratification:
• Social class refers to the hierarchical divisions in society based on income, education,
and occupation.
• It affects consumer preferences, purchasing power, and buying patterns.
Social Classes in India:
• Upper Class: Affluent, high-income, luxury-oriented.
• Middle Class: Value-oriented, aspirational.
• Lower Class: Price-sensitive, necessity-driven.
Example:
• Upper Class: Prefers luxury brands like Louis Vuitton, Rolex.
• Middle Class: Prefers value-for-money brands like Titan, Maruti Suzuki.

2. Family Influences:
• Family is a primary reference group that shapes consumer behaviour.
Roles in Family Buying Decisions:
• Initiator: The person who suggests a purchase.
• Influencer: The person whose opinion influences the decision.
• Decider: The person who makes the final decision.
• Buyer: The person who makes the purchase.
• User: The person who uses the product.
Example: In a family, a child may initiate the desire for a video game console, but the parents
may decide to buy it based on their budget.

3. Reference Groups and Opinion Leaders:

• Reference Groups: Groups that influence a consumer’s attitudes, values, and
behaviour.
 o Types: Family, friends, colleagues, celebrities.
• Opinion Leaders: Individuals who have expertise in a particular area and influence
others’ decisions.
o Example: Tech bloggers influencing gadget purchases.
Example:
• A consumer may choose a particular mobile brand based on recommendations from
tech influencers.

4. Social Influences: In-Group vs. Out-Group

• In-Group: Groups with which a person identifies and whose norms they follow.
o Example: A college student may identify with a group of gamers.
• Out-Group: Groups that a person does not identify with or may reject.
o Example: A fitness enthusiast may not align with a group of junk food lovers.
Impact on Marketing:
• Marketers can target in-groups by associating products with shared values and
lifestyles.

5. Cultural Influences on Consumer Behaviour

Culture is the most fundamental influence on consumer behaviour, affecting values,
preferences, and buying patterns.
• Culture: The set of values, beliefs, and practices shared by a society.
o Example: In India, buying gold during Diwali is considered auspicious.
• Subculture: Distinct cultural groups within a larger culture.
o Examples: Regional subcultures (Punjabi, Bengali), religious subcultures
(Hindu, Muslim).
• Cross-Cultural Influences: The impact of global cultures on local consumer
behaviour.
o Example: The rise of Western fast food chains like McDonald's in India.

6.6 Marketing Implications of Consumer Behaviour Influences:

1. Product Design and Branding:
 o Design products that align with cultural values (e.g., eco-friendly packaging for
environmentally conscious consumers).
2. Advertising and Promotions:
o Use social and cultural symbols to communicate brand messages effectively.
3. Pricing Strategies:
o Set prices that reflect the economic status of target consumers.
4. Distribution and Placement:
o Position products in stores frequented by specific social classes or cultural
groups.
5. Customer Service:
o Provide personalized service to build long-term relationships with influential
consumer groups.

Summary of Unit 6: Influences on Consumer Behaviour

• Consumer behaviour is influenced by both internal (motivation, perception, learning,
attitudes) and external factors (social class, family, culture).
• Social class affects purchasing power and product preferences.
• Family members play different roles in the buying decision-making process.
• Reference groups and opinion leaders can significantly impact brand choices.
• Culture shapes consumer values and buying patterns, making it crucial for marketers
to adapt their strategies to cultural contexts.