Sengamala Thayaar Educational Trust Women’s College

(Affiliated to Bharathidasan University)

(Accredited with ‘A’ Grade {3.45/4.00} By NAAC)
(An ISO 9001: 2015 Certified Institution)
Sundarakkottai, Mannargudi-614 016.
Thiruvarur (Dt.), Tamil Nadu, India.

CONSUMER BEHAVIOUR

Mrs.S.INDIRANI

ASSISTANT PROFESSOR

DEPARTMENT OF MBA
 IIMBA

SEMESTER III

ELECTIVE COURSE- I CONSUMER BEHAVIOUR- P16MBA3EM1

Inst. Hours/Week : 5 Credit : 4

Course Objectives:
This course aims at enabling students to understand the process of consumer
behavior, the various external and internal factors that influence consumer
behaviour and to apply this understanding to the development of marketing
strategy.

Unit – I CONSUMER BEHAVIOUR – AN INTRODUCTION

Consumer Behaviour – meaning, definition, Significance . Application of
consumer behavior principles to strategic marketing. Role of Marketing in
Consumer behavior. Market Segmentation and Consumer behavior.

Unit – II CONSUMER AS AN INDIVIDUAL

Consumer needs and motivation, Personality and Consumer Behaviour,
Psychographics Consumer Perception, attitudes, attitude formation and change,
Learning.

Unit – III CONSUMER IN A SOCIAL & CULTURAL SETTING

Group dynamics and consumer reference groups, Family, Social class and
Consumer behaviour, The influence of Culture on Consumer behaviour. Sub –
Cultural and Cross Cultural Consumer Analysis.

Unit – IV CONSUMER DECISION MAKING PROCESS:

Personal influence and the opinion leadership. Diffusion of innovation process,
Consumer Decision making process, Comprehensive models of consumer
decision making. New Product purchase and repeat purchase.

Unit – V CONSUMER BEHAVIOUR APPLICATIONS

Consumer Behaviour applicable to Profit and Non Profit Organizations, Societal
Marketing Concept, Marketing Ethics, Consumer movement, Consumer
protection in India.

Recommended Text books :

1. Consumer Behaviour – Ramanuj Majumdar PHI learning PVT Ltd.,
2. Consumer Behaviour, CL Tyagi and Arun kumar, Atlantic publishers.
3. Consumer behaviour, India Edition, Jay D. Lindqnist and M. Joseph Sirgy, Cengage
learning.
4. Consumer behaviour, concepts, Applications and cases – MS Raju, Dominic Xardel,
Vikas publishing House PVT Ltd.,
5. Consumer Behaviour, By David L. LOUDON Albert J. Della Bitta – India Edition
Tata Mcgraw Hill. Co
Suggested Readings
1. Consumer Behaviour, Blackwell and others, India Edition, Cengage learning.
2. Consumer Behaviour, Indian Edition – Michael R. Solomon, PHI learning PVT Ltd.,
3. Consumer behaviour, Special Indian Edition, Deli Hawkins Roger J Best and others
Tata Mcgraw Hill.
4. Consumer Behaviour and Marketing Strategy By J. Paul Peter and Jerry
C. Olson, Special Indian Edition – Tata Mcgraw Hill.

**************
 Unit – I
AN INTRODUCTION
Consumer:
A Consumer is an individual who buys products or services for personal use and not for
manufacture or resale . A Consumer may be a person or group of people such as a household who
are the final users of products or services.

Introduction about consumer Behaviour:

In 1899, thorstein veblin talked about consumerism and consumption . In Initial stage he
only talked about consumerism. After that, the first text book were written in 1960’s .It consists of
growth of consumerism and consumer Legislation. Consumer behaviour is an integral part of
human behavior. We cannot separate from it.Consumer behavior is reflected from awareness about
products post purchase evaluation. This evaluation indicate whether the consumer satisfaction or
not satisfaction from purchase.
consumer behavior is a complex , dynamic ,Multidimensional process and all marketing decisions
are based on the assumptions about consumer behavior.
consumer behavior includes communicating , Purchasing , and consuming , intracting.
There are two process involved in Consumer behavior. That is
➢ Individual Process (Psychological )
➢ Group Process(Social)
Consumer behaviour is obtaining –purchase receipt of product consumer –how ,where
,when and under what circumstances use product disposing –get rid.

The Purpose of any business is to create a customer . It is the customer who determines
what a business is?It is the customer and he alone , who through being willing to pay for goods or
services , converts economic resources into wealth , things into goods. What a business thinks it
produces is not in first importance .What the customer thinks he is buying –what he considers
value is decisive ,Iit determines what a business is ,what it produces and whether it will prosper

Definition of consumer behaviuor:

“Consumer behavior is the decision process and physical activity individuals engage in
when evaluating ,acquiring using or disposing of goods and services” .
According to louden D.L.&Della Bitta.A.J.
.
“CB is defined as behavior that consumers display in searching for purchasing ,using
evaluating and disposing of products and services that expect will satisfy their needs”.
According to Schiffman
 “CB is an Obervable activities chosen to ,axi,ize satisfaction through attainment of
economic goods and services such as choice of retail outlet”.
According to Dictionary of Marketing and Adevertising

Types of Consumers
(i)Personal Consumer/ Individual consumer:
Buy the Product and services for his family and own or family.
(i)Organizational Consumers/Commercial consumers
Buy the product or services for manufacturing or reselling

Importance of CB
➢ To understand buying behavior of consumer
➢ To create and retain customers through online stores
➢ To understand the factors influencing consumer buying behavior
➢ To understand consumer decision to dispose a product or services
➢ To help marketers to sale of product and create focused marketing

Consumer is the king, Consumers do not always act or react as the theory suggest.
Consumers preferences are changing and become highly diversified. Consumers dislike identical
product and prefer different products . segmenting the market to cater the special needs of
consumers . Rapid introduction of new product with technological advancement. To sell the
products that might not sell easily.

Principles of Consumer Behaviour:

(i) Consumer is sovereign—Profit marketing
The consumer behaviour is being studied for nearly half a century to take advantage in
market-ing of products and services which are largely to earn profits but there are few areas
discussed latter which are providing social services. The consumer behaviour is basically studied
to optimize profits by taking full advantage of market situation after studying the consumer
behaviour and this is the main purpose of the study.
The segmentation of market, advertisement strategy, sales promotion schemes,
introduction of new products, variations in existing ones, producing different products for different
regions, classes, price variation, quality variation all are done based on study of consumer
behaviour. Whenever any new product or variation of existing one is introduced through
innova-tion, research is conducted to find out consumer response to a new product.
(ii) Consumer is global – Non-Profit Marketing
There are many economic activities which are undertaken for improving economic and social
welfare but not for earning profits. However, in these areas also like telecommunication, health,
public education, social welfare schemes also study of consumer behaviour plays very important
role to improve the quality of service and help in modifications of policies.
(iii)Consumers are difficult—Strategic marketing
The main purpose of study of consumer behaviour is to know the behaviour of consumer and apply
it for strategic marketing. The marketer has to decide for a particular product whether same strategy
will suit for the entire market or different strategies will have to be used for different markets.
In a country of the size and distance those companies have succeeded who have adopted
the strategy according to the type of market. For example, in India when detergent (washing
powder) was introduced it had no market in rural India and most of urban households consumers
were accustomed to use washing bar and they were not owning washing machines to use washing
powder.

Nature of Consumer Behaviour:

1. Influenced by various factors:

The various factors that influence the consumer behaviour are as follows:
a.Marketing factors such as product design, price, promotion, packaging, positioning and
dis-tribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and attitudes
towards the product.
d. Situational factors such as physical surroundings at the time of purchase, social
surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.
2. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a change over a period of time depending
on the nature of products. For example, kids prefer colourful and fancy footwear, but as they grow
up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and senior
citizens they prefer more sober footwear. The change in buying behaviour may take place due to
several other factors such as increase in income level, education level and marketing factors.
3. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different consumers behave differently.
The differences in consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a
shopping and spend beyond their means.
They borrow money from friends, relatives, banks, and at times even adopt unethical means to
spend on shopping of advance technologies. But there are other consumers who, despite having
surplus money, do not go even for the regular purchases and avoid use and purchase of advance
technologies.
4. Varies from region to region and country to county:
The consumer behaviour varies across states, regions and countries. For example, the
behaviour of the urban consumers is different from that of the rural consumers. A good number of
rural consumers are conservative in their buying behaviours.
The rich rural consumers may think twice to spend on luxuries despite having sufficient funds,
whereas the urban consumers may even take bank loans to buy luxury items such as cars and
household appliances. The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and level of development.
5.Information on consumer behaviour is important to the marketers:
Marketers need to have a good knowledge of the consumer behaviour. They need to study
the various factors that influence the consumer behaviour of their target customers.
The knowledge of consumer behaviour enables them to take appropriate marketing decisions in
respect of the following factors:
a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution
6. Leads to purchase decision:
A positive consumer behaviour leads to a purchase decision. A consumer may take the
decision of buying a product on the basis of different buying motives. The purchase decision leads
to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence
consumer behaviour to increase their purchases.
7. Varies from product to product:
Consumer behaviour is different for different products. There are some consumers who
may buy more quantity of certain items and very low or no quantity of other items. For example,
teenagers may spend heavily on products such as cell phones and branded wears for snob appeal,
but may not spend on general and academic reading. A middle- aged person may spend less on
clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.

Role of Marketing inConsumer behavior

Consumer Behavior refers to the study of buying tendencies of consumers. An individual who
goes for shopping does not necessarily end up buying products. There are several stages a
consumer goes through before he finally picks up things available in the market. Various factors,
be it cultural, social, personal or psychological influence the buying decision of individuals.
Marketers need to understand the buying behavior of consumers for their products to do well. It is
really important for marketers to understand what prompts a consumer to purchase a particular
product and what stops him from buying. To cope up with these differences and to bridge this gap
it becomes necessary to understand the behavior of different customers with different approaches.
What marketers need to understand? The psychology of consumers (what they feel about a
particular product and their brand on the whole). How consumers are influenced by their
immediate surroundings, family members, friends, co workers and so on. What a consumer thinks
when he goes out for shopping? A marketer needs to first identify his target consumers and
understand their lifestyles, psychologies, income, spending capabilities, mentalities to offer them
the right product. Individuals from lower income group would never be interested in buying
expensive and luxurious products. He would first fulfill his basic physiological needs.

Role of Consumer Behaviour in purchasing the product:

(i)Initiator:
 Individual who determines that some needs or want is not being met and authorizes to
rectify the situation.
(ii)Influencer:
Individual who intentionally or unintentionally influence the purchase decision
(iii)Buyer:
Individual who actually make the purchase
(iv)End user:
Individual who directing consume the products.

Scope of consumer behavior

The scope of a subject refer to everything .That is studied as part of that subject when
we get out to explain the scope of consumer behavior we need to refer to all that which forms
part of Consumer behavior.Consumer behavior inclues not only the actual buyer and his act of
buying but also the various roles played by different individual and theinfluence the exert on the
final purchase decision.

Nature of CB
CB is a systematic process relating to buying decision of the costomers .the buying
process consists of the following steps

I-Process
(i)Need Identification -- to buy the product
(ii)Information search relating to the product
(iii)Listing the alternatives brands
(iv)Evaluating the alternatives (Cosat benefits analysis)
(v)Purchase decision
(vi)Post purchase evaluation for the product
II-Process: Influenced by the various factors
The factors that influence the marketing ,personal psychological ,situation ,social
,cultural.
III-Process: Different for all Customers
All Consumer donot behave in the same mannaer. The difference incinsmer behavior is
due to individual factors, that is nature of the consumer’s life style , culture.
IV-Process:Consumer behavior is different for different products. These are some consumers
who may buy more quantity of certain items and very low number of quantity of some other
items.
V- Process –Region Bounded:
Consumer behavior is various across status region and countries the behavior of urban
consumers are different from the rural consumers.
VI- Process: Spread Effect
VII-Process” standard of living
VIII –Process Keep on Changing
Significance of Consumer Behaviour: Determination of Consumer behavior is

I---Cultural
Culture --- Sub Culture ---- Social Class
II --- Social
Family--- Reference Group---- role and status
III—Personal
Age--- Income---Occupation---Life style---personality
IV—Psychological
Motivation—Perception—Learning---Beliefs---Attitude
V—Economical
Personal income----Family income—Income Expectation---Liquid Assets---Government
policy.
Major classification of Consumer Behaviour:
There are five basic classification
(i)Family:
Family members make a decision buying the product
Role of Husband
of wife
Role of children
(ii)Reference Group
It may be initiator, influencer, buyers, end users, Every person belongs to some one or
more group.
(iii)Opinion Leader:
Receive some ideas , Experience form others. It may be accept or not
(iv)Culture: Traditional Events
(v)Social Class:
I-Upper Class
Upper –Upper class
Upper Middle class
Upper lower class
II-Middle class
Middle –upper class
Middle –Middle class
Middle lower class
 III-Lower Class
Lower –upper class
Lower –Middle class
Lower-Lower Class

Types or Classification of Consumer behavior based on their Character

(i)Argumentative type of consumer
➢ Emotional Person
➢ Compare price
(ii)Silent type of consumer
➢ Always calm and inactive
➢ Do not speak much
(iii)Shy type of consumer
➢ Nervous and lack of Experience in purchasing
(iv)Talkative type of consumer
➢ Opposite of silent type of consumer
(v)Suspicious type of consumer
➢ Disbelieving in others
(Vi) Friendly type of consumer:
Easy deal, More adjustable
(Vii) Hesitant type of Consumer
➢ Undecided mind
➢ Wavering mind
➢ Not steady
(viii)Impatient type of Consumers:
➢ Want immediate action expectation from salesman
(ix)Sarcastic type of consumer
➢ Who make silly ,meaningless talk, insulting remarks
(x) Pompous type of consumers:
Give high opinion to others, talent, knowledge, wealth official status, social status,
family background.
(xi)Ill-mannered or Rude type of consumer:
Lack of Education, family atmosphere,friend circle, financial condition.
(xii)Handicapped consumer
Who suffer from some physical defect like Dumb. Deaf, lame.
(xiii)Impulsive type of consumer:
Business executives ,administration talk quick decision market
(xiv)Group shopper:
Bargain and ask discount

Why we should study Consumer Behaviour:

The field of consumer behavior studies how the individual ,group, organization select
buy, use and dispose of goods, services, ideas , experience to satisfy their needs and desire.
The aim of marketing is to satisfy the consumers needs and wants . So the marketers should
study about the consumer behavior through collecting data from survey , interview, collect post
purchase experience.
The consumer survey is very important and essential one. So the marketers easy to
identify and understand the behavior ,attitudes, habits, believeness.

Reason for studying Consumer behavior:

➢ It assists to marketers in designing the marketing mix and segmenting the market place
➢ Consumer behavior analysis provide a knowledge of human behavior
➢ A study of consumer behavior provides three types of information
✓ Consumer related concept
✓ Facts about buying behavior
✓ Theories to guide the thinking process

Various Methods of studying Consumer Behaviour

➢ Observational method
➢ Interview and survey methods
➢ Focus Group
➢ Field Experimentation
➢ Consumption research products

Approaches of Consumer behavior:

➢ Managerial approach
➢ Holistic Approach
➢ Balanced approach

Managerial approach:

It is more micro and cognitive in nature . Micro means Emphasizes the individual
consumer like his attitude , perception, life style. Cognitive means emphases the thought process
of individual consumers and factors in influencing their decision.
Marketers are interested in this approach because all marketing strategy is to satisfy the
individual consumer need.

Risk in managerial approach;

Over emphasis the rationality of consumers. Overlook the dynamic of environment
factors independent of individual . focus is an purchase rather than consumption.
Holistic approach:
It is more macro in nature . It is focus on consumption experience rather than purchasing
process. It helps in understanding the environment context of consumer action.
Risk in holistic approach:
 No emphases on purchase decision . No understanding of cognitive process which is
necessary for the marketer to meet consumer needs.
Balanced Method:
In balanced approach both the managerial view and holistic view are taken by
eliminatory the drawbacks.

Dimensions in Consumer behavior:

(i) Psychology :
It is deals with the study of mind and behavior . It helps in understanding
individuals and groups by establishing general principles and researching specific
cases. Psychology play a vital role in understanding how consumers behave while
making a purchase.
(ii) Social psychology :
It is a combination of sociology and psychology .It explain how on individual
operates a group. Group dynamic play an important role in purchase decision, opinion
of peers, reference groups, the families , opinion leader. Influence individual in their
behavior
(iii) Sociology:
It is the study of groups when individuals form groups their action are some times
relating different from the action of those individual.
(iv) Cultural Anthropology:
It is the study of human being in society. It explore the development of central
belief , value and customs.

Consumer behavior and marketing strategy:

Marketing strategies and tactics are normally based on explicit and implicit beliefs about
consumer behavior . Decision based on explicit assumptions and sound theory and research are
more likely to be successful than the decisions based solely on implicit intuition.
Consumer behaviour is the study of the way people seek, purchase, use, evaluate and
dispose of products and services. ... Consumer behaviour can be used by marketers to create
the marketing strategy; targeting each consumer effectively once they understand their needs and
wants through the research of consumer behavior.
Consumer behaviour is the study of the way people seek, purchase, use, evaluate and
dispose of products and services. It is the phycology of marketing, and it is used to determine
why consumers seek one product alternative from the other.
But why do consumers seek and purchase products? This is linked to the ideology of
needs and wants. Needs and wants exist if a consumer is unsatisfied, consumers seek and
purchase the products that can provide them with maximum satisfaction.
 Consumer behaviour can be used by marketers to create the marketing strategy; targeting
each consumer effectively once they understand their needs and wants through the research of
consumer behaviour.

What is the marketing strategy?

It is a strategy used to maximise limited resources of an organisation to increase its
opportunities in sales and achieve a sustainable competitive advantage.

A marketing strategy is created by market research, which the needs, attitudes and
competitors products are evaluated, as well as the packaging, sales and distribution of a product.

How to research the consumer

Use primary and secondary research. Marketers must analyse their consumers, as well as
using secondary information to make decisions to target their market. They may do this through:
surveys, focus groups, observation, interviews and secondary methods such as online researching.

Marketers may also make decisions for their marketing strategy based on the consumers
demographic information. This information includes the consumers: income, educational level,
occupation, age, and location. This is known as segmenting the market.

This information is used to predict purchasing habits of the consumer and make key
decisions in the product they are selling, such as pricing. For example, marketers targeting
consumers will a low income in a low socio-economic area will have to be particularly price
conscious when pricing their items.

Marketers must also understand the values of the consumer; this will provide them with
more success in their marketing campaigns. An example of this is quality; when targeting
consumers who value quality, marketers must sell them products that deliver and re-enforce their
values.

Marketers will be unsuccessful in any marketing campaign that doesn’t take into account
and reflect the values of the consumer.

Values impacting consumer choices are their knowledge, beliefs, morals and customs, it
has a significant impact on the products consumers seek and purchase.

Benefits for an organisation

When the marketing strategy and consumer behaviour are intervened, marketers can expect
success in their sales, higher profit margins and competitive sustainability in the market place.
The benefits of using consumer behaviour to create a marketing strategy are the knowledge
marketer’s gain about the needs and values of their target market. Once marketers understand this,
it is most likely their message will be delivered to the correct target market, resulting in an end
sale.
Application Of Consumer Behaviour In Marketing

(i)Analysing market opportunity: Consumer behaviour study helps in identifying the

unfulfilled needs and wants of consumers. This requires examining the trends and conditions
operating in the marketplace, consumers' lifestyles, income levels and emerging influences.
This may reveal unsatisfied needs and wants. the trend towards increasing number of dual
income households and greater emphasis on convenience and leisure have led to emerging needs
for household gadgets such as washing machine, mixer grinder, vacuum cleaner and childcare
centres etc. Mosquito repellents have been marketed in response to a genuine and unfulfilled
consumer need.

(ii)Selecting target market: A review of market opportunities often helps in identifying distinct
consumer segments with very distinct and unique wants and need. Identifying these groups,
learning how they behave and how they make purchase decisions enables 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 Rs. 60 or more and would rather prefer a low priced
sachet containing enough quantity for one or two washes. The finding led companies to introduce
the shampoo sachet which became a good seller.

(iii)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.

Product:

The marketer designs the product or service that whould 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. Nestle first
introduced Maggie noodles in masala and capsicum flavours. Subsequently, keeping in view
theconsumer preferences in some regions, the company introduced garlic, Shabhar and other
flavours.

Price:

The second important component of marketing mix is price. Marketers must decide what
prrice to charge for the product or service. These decisions will influence the flow of revenue t o
the company. Should the marketer 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.

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 maketing? The answer to these question are furnished by consumer behaviour research.

Promotion:

Promotion is concerned with marketing communications to consumers, The more

important 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 target consumers, their location, what media do they have access to and
what are their media preferences, etc.

In most cases of industrial products there is very little or no advertising. Brochures

containing technical specifications are often posted to the clients and the salespeople make follow-
up visits. Consumer products get the maximum share of advertising. Pharmaceutical industry
exclusively use personal selling for prescription drugs. Insurance companies use both advertising
and personal selling.

Use in Social and Non-profits Marketing:

Consumer behaviour studies are useful to design marketing strategies by social,
governmental an not-for-profit organisations to make their programmes such as family planning,
awareness about AIDS, crime against women, safe driving, environmental concerns and other
more effective. UNICEF (greeting cards), Red Cross and CRY etc. make use of consumer
behaviour understanding to sell their services and products and also try to motivate people to
support these institutions.

What a consumer thinks when he goes out for shopping .

A marketer needs to first identify his target consumers and understand their lifestyles,
psychologies, income, spending capabilities, mentalities to offer them the right product.

Individuals from lower income group would never be interested in buying expensive and luxurious
products. He would first fulfill his basic physiological needs like food, air, water etc. Trying to sell
a Mercedes or a Rado watch to someone who finds it difficult to make ends meet would definitely
be a disaster.
Kellogg’s K special would hardly find any takers in the low income group. In this segment,
individuals would be more interested in buying fresh fruits, vegetables, pulses which are necessary
for their survival rather than spending on health supplements.

It is really essential for the marketers to understand the needs of consumers. Find out what they
are actually looking for?

There are ideally two different ways which enable marketers to understand their consumers.
Primary Research
Secondary Research
Primary Research - Primary Research refers to a research methodology where marketers interact
with consumers directly and gather as much information as they can. Information is generally
collected through surveys, questionnaires, feedback forms, interviews etc.
Secondary Research -Secondary Research often refers to relying on information which has been
collected by others at some point of time.

The background and family status of an individual also influence his/her buying behaviour.
Selling a laptop to an individual who is not much educated would be pointless. Remember
consumers would show interest in your products only if they are of any use to them or their
immediate family members. A low grade worker would never be interested in purchasing business
suits or formal shirts.
Canned juices are a hit among middle and higher income group where individuals are really
conscious about their health and fitness. Individuals who live hand to mouth would never spend
on sugar free tablets, health supplements, or for that matter “Diet Coke”.
It is also important to give complete information to end-users. Do not hide anything from them. It
is not ethical. All tobacco products come with a warning. Individuals should be familiar with not
only the benefits but also the side effects of the products.
Marketers must also take into account:
➢ Age group of consumers
➢ Geographical location
➢ Lifestyle of consumers
➢ Social Status of consumers

Consumer Behavior - Market Segmentation:

Market segmentation depends on two levels − the strategic level and the tactical level. At
a strategic level, it has a direct link with the decisions on positioning. At a tactical level, it relates
with the decision of which consumer groups are to be targeted. We will discuss here the parameters
based on which a market can be segmented.
By market segmentation we imply that the entire market is broken down into smaller
groups having similar wants. They are homogeneous in themselves and heterogeneous with other
groups. The market can be broken down on various bases. These are Demographic, Psychographic,
Benefit Segmentation etc.
The concept of divide and rule applies to the market segmentation. You divide the market,
choose your target market and then master it. Segmentation and choosing the target market is like
shooting with a rifle and not by 12-bore. If the marketing effort is spread over a wide area it does
not have that effect but if it is concentrated on a point like a rifle it can go much further and can
be more. The segmented market shows 3 groups which are homogeneous in themselves and
heterogeneous amongst themselves.
Market segmentation is a process of dividing a potential market into distinct sub-sets of
consumers with common needs and characteristics and selecting one or more segments to target
with a distinct marketing mix.
Consumers are better satisfied when a wide range of products are available to them. Thus,
market segmentation has proved to be a positive force for both consumers and markets alike. If
the market was not segmented the same product will be sold to every prospect with a single
marketing mix it satisfies a generic or a common need, and it becomes ineffective and ends up
appealing to none.
Since the consumers are different in their needs, wants, desire and are from different
backgrounds, education experience therefore segmenting the market is very necessary for effective
marketing of goods/services.
Segmentation helps in expanding the market by better satisfying the specific needs or desires of
particular customers.
Today, nearly every product category in the consumer market is highly segmented.
Forinstance, billion dollar vitamin market is segmented by age for children, young adults, the
elderly etc. The vitamin market provides benefits like increased energy, illness, tension and stress
reduction, enhanced sexuality, improved skin.
Hotels also segment their market, for example Marriott/operatesfairfield for short stay.
Residential thus Inn for extended stay which are for budget-oriented traveller and are cheap.
(i)Geographic Segmentation
Prospective customers are in local, state, regional or national marketplace segment. If a firm is
selling a product such as a farm equipment, the geographic location will remain a major factor in
segmenting the target markets because their customers are located in specific rural areas.
In case of retail stores, geographic location of the store is one of the most important considerations.
Here, urban areas are preferred.
Segmentation of customers based on geographic factors are −
Region − Segmentation by continent / country / state / district / city.
Size − Segmentation on the basis of size of an urban area as per the population size.
Population Density − Segmentation on the basis of population density such as urban / sub-urban /
rural etc.

(ii)Demographic Segmentation
Market segmentation can be done based on demographic factors such as Age. For example, Rico
watches have segmented their product portfolio according to different age groups of people.
(iii)Psychographic Segmentation
Psychographic Segmentation focuses on group customers according to their life-style and
purchasing psychology. Many businesses offer products based on the attitudes, beliefs and
emotions, ideas, and perceptions of the target market. Psychographic segmentation includes
variables such as Activities, Interests, Opinions, Attitudes, and Values.
(iv)Behavioralistic Segmentation
Markets can be segmented on the basis of buyer behavior. It is because the buying behavior of
consumers differ based on the geographic, demographic and psychographic factors. Marketers
often find practical benefits in using buying behavior as a separate segmentation basis in addition
to factors like geographic, demographics, and psychographics.

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