Question

Consumer decision making varies from routine, to limited, to extensive, depending upon the nature of the product or service to be purchased. Explain this statement and illustrate with examples how managers may adjust their marketing strategy in each of those three situations.

Answer 1

the statement talks about the types of consumer behaviour

CONSUMER BEHAVIOUR

Buying Behavior is the decision processes and acts of people involved in buying and using products.

The three type of consumer buying behavior are:

• Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.
• Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.
• Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding.
  Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process.

HOW MARKETING MANGER TACKLES THIS?

Marketing strategies and tactics are normally based on explicit and implicit beliefs about consumer behavior. Decisions based on explicit assumptions and sound theory and research are more likely to be successful than the decisions based solely on implicit intuition.

Analyzing Market Opportunity

Consumer behavior helps in identifying the unfulfilled needs and wants of consumers. This requires scanning the trends and conditions operating in the market area, customer’s lifestyles, income levels and growing influences.

Selecting Target Market

The scanning and evaluating of market opportunities helps in identifying different consumer segments with different and exceptional wants and needs. Identifying these groups, learning how to make buying decisions enables the marketer to design products or services as per the requirements.

Example − Consumer studies show that many existing and potential shampoo users did not want to buy shampoo packs priced at Rs 60 or more. They would rather prefer a low price packet/sachet containing sufficient quantity for one or two washes. This resulted in companies introducing shampoo sachets at a minimal price which has provided unbelievable returns and the trick paid off wonderfully well.

Marketing-Mix Decisions

Once the unfulfilled needs and wants are identified, the marketer has to determine the precise mix of four P’s, i.e., Product, Price, Place, and Promotion.

Product

A marketer needs to design products or services that would satisfy the unsatisfied needs or wants of consumers. Decisions taken for the product are related to size, shape, and features. The marketer also has to decide about packaging, important aspects of service, warranties, conditions, and accessories.

Example − Nestle first introduced Maggi noodles in masala and capsicum flavors. Subsequently, keeping consumer preferences in other regions in mind, the company introduced Garlic, Sambar, Atta Maggi, Soupy noodles, and other flavours.

Price

The second important component of marketing mix is price. Marketers must decide what price to be charged for a product or service, to stay competitive in a tough market. These decisions influence the flow of returns to the company.

Place

The next decision is related to the distribution channel, i.e., where and how to offer the products and services at the final stage. The following decisions are taken regarding the distribution mix −

• Are the products to be sold through all the retail outlets or only through the selected ones?

• Should the marketer use only the existing outlets that sell the competing brands? Or, should they indulge in new elite outlets selling only the marketer’s brands?

• Is the location of the retail outlets important from the customers’ point of view?

• Should the company think of direct marketing and selling?

Promotion

Promotion deals with building a relationship with the consumers through the channels of marketing communication. Some of the popular promotion techniques include advertising, personal selling, sales promotion, publicity, and direct marketing and selling.

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 techniques? The company has to know its target consumers, their location, their taste and preferences, which media do they have access to, lifestyles, etc.

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