Management of Consumer Behaviour for Organizational Profitability

ANKIT SINGH RATHORE JAIMIN PANDIT - P.D.P.U - P.D.P.U

INTRODUCTION
Consumer is the most important person. The business revolves around the consumer. A consumer is anyone who engages himself in physical activities, of evaluating, acquiring, using or disposing of goods and services. The term consumer is a broader term which emphasizes not only the actual buyer or customer, but also its users, i.e. consumers. The study of consumer behavior is the study of how individuals make decisions to spend of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, and how often they use it. The study of consumer behaviour is vital in framing production policies, price policies, decisions regarding channels of distribution and above all decisions regarding sales promotion. The consumer and his life style are influenced by a number of factors shown all around the consumer. These are culture, subculture, values, demographic factors, social status, reference groups, household and also the internal makeup of the consumer, which are consumers emotions, personality motives of buying, perception and learning. Consumer is also influenced by the marketing activities and efforts of the marketer. What products and services do we buy, how often do we buy, why do we buy, From where do we buy etc. are the issues which deals with the subject of consumer behaviour management. It blends the elements from economics, psychology, sociology and social anthropology. It tries to understand both individual and group decision making process of consumers.

 SIGNIFICANCE
The importance of understanding the consumer behaviour is that to know and understand the preferences of different consumers which will enable the marketers to form the marketing strategies accordingly. Better understanding of market segment is necessary for a marketing manager to design strategies for different segments. Knowledge of consumer behaviour and taste is important factor which plays a vital role in the creation of marketing strategies. To cater to the need of a rapidly changing consumer trends, a firm has to constantly understand the latest consumer trends and tastes. Consumer behaviour provides invaluable clues and guidelines to marketers on new technological frontiers which they should explore. To identify and understand the prospective customers and their buying behaviour a management which believes in the philosophy of marketing concept will take necessary steps to constantly in touch with the customers to know their likes and dislikes or requirement and expectation of the product. The study of consumer behaviour is vital in framing production policies, price policies, decisions regarding channels of distribution and above all decisions regarding sales promotion. Production Policies: The study of consumer behaviour helps us to determine the unfulfilled needs and wants of consumer. This is done by examining trends in income, consumers lifestyles and emerging influences. To offer more comfort leisure e to the house hold women they introduced household gadgets like washing machine, dish washer etc. or moving from electric bulb to CFL lamps. Price Policies: The study of consumer behaviour helps them in pricing. What price should the marketer Charge for the product? Should it be the same as that of the competing product or lower or higher? Should any price discounts be offered? What is the customer perception of a lower or higher price? is a lower price associated with poor quality? All such question arises to a firm. The price should be such that it maintains the image of the product and also earn high revenue for the firm. The continuous study of consumer behaviour can help the marketer to face such issue. Decision regarding Channels of Distribution: What. type of retail outlets should sell the products? Should it be sold through existing outlets which also sell competing brands or should new outlets selling exclusively your brand of product be created? Does the consumer look for the nearest convenient location or is he willing to travel some distance for buying the product? So the study of consumer behaviour can help marketer to decide

the most suitable distribution channel for e.g. AMWAY has completely different kind of distribution channel than other. Decision regarding Sales Promotion: The marketer is concerned with finding out the most effective method of promotion by which the product may reach to vast majority of consumer and make it stand out it against its different competitors which helps to achieve high sales. But they had to study consumer behaviour for e.g. though television is most powerful advertising medium then also few marketers like to promote through newspaper, hoardings ,leaflet ,broacher etc. as they want to reach as many as consumers. But marketers can make these decisions only when marketers know your consumer and understand his behaviour. All marketing decisions are based on assumptions and knowledge of consumer behaviour. Researching consumer behaviour is a complex process, but understanding consumer behaviour can be used to: Provide value and customer satisfaction. Effectively target customers. Enhance the value of the company. Improve products and services. Create a competitive advantage Understand how customers view their products versus their competitors' products. Expand the knowledge base in the field of marketing,

Apply marketing strategies toward a positive effect on society (encourage people to support charities, promote healthy habits, reduce drug use etc.)

 DECISION MAKING PROCESS

Behind the visible act of making a purchase lays a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. Research suggests that customers go through a five-stage decision-making process in any purchase. This is summarized in the diagram below: NEED RECOGNITION PROBLEM AWARENESS INFORMATION SEARCH EVALUATION OF ALTERNATIVES PURCHASE POST PURCHASE EVALUATION

This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision.
NEED RECOGNITION PROBLEM AWARENESS

The buying process starts with need recognition. At this stage, the buyer recognizes a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you are attracted by the aroma of coffee and chocolate muffins). An aroused customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins. INFORMATION SEARCH A customer can obtain information from several sources: Personal sources: family, friends, neighbors etc. Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-ofsale displays Public sources: newspapers, radio, television, consumer organizations; specialist magazines Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of word of mouth). The challenge for the marketing team is to identify which information sources are most influential in their target markets. EVALUATION OF ALTERNATIVES In the evaluation stage, the customer must choose between the alternative brands, products and services. Customer tends to attract with brands which are mostly beneficial and value provider than the other alternatives. That is why Marketers always tries to attract consumers by various methods such as attractive packaging, maintaining value proposition of the respective product and other methods which differentiate their products from other competitors. PURCHASE An important determinant of the extent of evaluation is whether the customer feels involved in the product. By involvement, it means the degree of perceived relevance and personal importance that accompanies the choice. Where a purchase is highly involving, the customer is likely to carry out extensive evaluation. High-involvement purchases include those involving high expenditure or personal risk for example buying a house, a car or making investments. Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

POST PURCHASE EVALUATION - Cognitive Dissonance The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as cognitive dissonance. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

FACTORS AFFECTING CONSUMER BEHAVIOUR

There are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. Cultural: Cultural factors exert a broad and deep influence on consumer behavior. The marketer needs to understand the role played by buyers: o Culture: - Basically, culture is the part of every society and is the important cause of person wants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries. o Subculture: - Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group. o Social class: - Every society possesses some form of social class which is important to the marketers because the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes. Here we should note that social class is not only determined by income but there are various other factors as well such as: wealth, education, occupation etc. Social: A consumers behavior also is influenced by social factors, such as the consumers reference groups, family, and social roles and status. o Reference groups: - Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc. then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics).

o Family: - Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.

o Roles and status: - Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status. Personal: Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self-concept. o Age and life cycle stage: - It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc. which help marketers to develop appropriate products for each stage. o Occupation: - The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes. o Economic situation: - Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products. o Lifestyle: - Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc. and shapes his whole pattern of acting and interacting in the world.

o Personality and self-concept: - Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. A fitness freak would always look for fitness equipment whereas a music lover would happily spend on musical instruments, CDs, concerts, musical shows etc. Psychological: Four major psychological factors have their influence on a persons buying behavior. These factors are: o Motivation: - A motive is a need that is sufficiently pressing to direct the person to seek satisfaction of the need. Abraham Maslow sought to explain why people are driven by particular needs at particular times. In order of importance, they are physiological needs, safety needs, social needs, esteem needs, and selfactualization needs. A person tries to satisfy the most important need first. When that need is satisfied, it will stop being a motivator and the person will then to satisfy the next most important need. o Perception: - Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world.14 Different people perceives the same situation differently because each person receives, organizes, and interprets the sensory information in an individual way. o Learning: - Learning describes changes in an individuals behavior arising from experience. Learning theorists say that most human behavior is learned. Learning occurs through the interplay of drives, stimuli, cues, responses, and reinforcement. o Beliefs and attitudes: - Beliefs and attitudes influence buying behavior. A belief is a descriptive thought which a person maintains about something. Beliefs may be based on real knowledge, opinion, or faith and may or may not be associated with emotion. Marketers try to understand the beliefs that people formulate about specific products and services. An attitude is a persons consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them.

 Consumer Behaviour of Indian consumer

Possibly the most challenging concept in the marketing is to deal with understanding the buyer behaviour. The attitude of Indian consumers has undergone a major transformation over the last few decades. The Indian consumer today wants to lead a life full of luxury and comfort. He does not believe in savings for the future but wants to spend money. The Indian middle class has provided a big boost to the consumer culture during the recent past and it is hoped that their buying behaviour will continue to change in the coming future. Due to fast growth of the services sector per capita, income of people of India is also increasing. The number of middle class is increasing due to another fact that people are fast shifting from agriculture to the services and industry sector where growth prospects are reasonably high as compared to the agriculture sector which is showing slow growth. After the liberalization in the economy, the tastes and preferences of the current generation are changing rapidly as the financial independence at a young age, increase in number of nuclear families and increase in media exposure of the people. The new generation is ready to pay more for getting more facilities. A decade ago the credit and loan system was not popular and was also not encouraged by the society. But now people dont mind paying with credit card or buying a car on loan, which resulted into increase in market of premium products. The Indian consumer today is highly aware about the product, price, quality and the options available with him .The purchasing is done by keeping all these factors in mind. Though it is a price sensitive market then also other factors like quality are playing important role.

CONCLUSION

Earlier the businessmen or the marketers are the one who rules over the customer but now in the 21st century, the consumers have the more power because of the increase in the knowledge competitions, media exposure and the ability to switch over the different brands according to their value propositions. And also increasing competition between various brands, now consumer can switch over to different option, he can buy a product from an e-commerce site or a retail shop. So one who got a good hold on the consumer behaviour can lead the market and can manage it in a way to get maximum profit for his organization. The importance consumer behaviour for any organization is unavoidable. Marketers should emphasize on the consumer behaviour by determining their needs and wants and which type of values and qualities they are searching for. So, the success of any organization is depending upon how efficient they manage the behaviour of the consumer.

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