CONSUMER BEHAVIOUR

AND NEURO MARKETING

Dr.Prem Knowles
Module 1
INTRODUCTION TO CONSUMER
BEHAVIOUR

Consumer Behaviour
Concept of Consumer Behaviour

“Consumer behavior is the actions and the decision

processes of people who purchase goods and
services for personal consumption” – according to
Engel, Blackwell
Nature of Consumer Behaviour
Varies from customer to customer
Varies from product to product
Varies across geographical regions
Important for marketers
Reflects status
Results in spread-Effect
Improves standard of living
Varies from time- to-time
Dimensions of Consumer Behaviour
Who Buys
When Consumers Buy
How Consumers Buy
Where does Consumer Buy
Why does Consumer Buy
Factors Influencing Consumer Behaviour
Cultural Factors
Culture
Sub-Culture
Social Class

Social Factors
Reference Group
Family
Roles and Status
Personal Factors
Age and Stage in the Life Cycle
Occupation and Economic Circumstances
Lifestyle
Personality

Psychological Factors
Motivation
Perception
Learning
Beliefs
Attitudes
Important of Consumer Behaviour

Attitude
Culture
Lifestyle
Experience
Decision-Making
Product use/Complements
Application of Consumer Behaviour
Knowledge in Marketing Decisions

Analysing Marketing Opportunity

Selecting Target Market
Marketing-Mix Decisions
Use in Social and Non-Profits Marketing
Target Marketing : STP Approrch
Steps in Target Marketing

Identifying Market Segments (Market Segmentation)

Selecting Target Market (Market Targeting)
Developing Market Positions (Market Positioning)
Market Segmentation

Concept of Market Segmentation

Basis for Market Segmentation
Geographic Segmentation
Demographic Segmentation
a) Age and life cycle stage
b) Gender and sexual orientation
c) Martial Status
d) Income
e) Social class
f) Family size
g) Occupation
h) Educational level
i) Religion
Psychological Segmentation
a)Lifestyle

b)Personality

c)Values

d)Beliefs

Behavioural Segmentation
a)Occasions

b)Benefits

c)User Status
d)Quantity Consumed/Usage Rate

e)Buyer Readiness Stage

f)Loyalty Status

g)Attitude
Identification of Market Segments: The
Process of Market Segmentation

 Determining Demand Pattern/Survey Stage

 Establishing Possible Bases of Segmentation/Analysis
Stage
 Identifying Potential Market Segments/Profiling Stage
Use of Market Segmentation in Consumer
Behaviour
 Adjustment of Product and Market Appeals
 Better Position to spot marketing opportunities
 Allocation of Marketing Budget
 Understanding and Meeting the needs of consumers
 Stronger Positioning
 Enhanced Efficiency
 Competitive Advantages
 Targeted media
 Market Expansion
 Better Communication
 Increases Profitability
 Identifies New Markets
 Reduces Costs
 Reduces Credit Risks
Targeting: Strategic Targeting
Process of Targeting the Market
Selecting Target Markets: Target Market Strategies
 Limited Market Coverage Targeting
a) Single-Segment Concentration
b) Selective Specialisation
c) Product Specialisation
d) Market Specialisation

 Full Market Coverage Targeting

a) Undifferentiated Marketing
b) Differentiated Marketing
c) Concentrated Marketing
Criteria for Selection of Target Market
 Company`s Image and Experience
 Responsiveness
 Substantial
 Competitive
 Profitable
Difference between Segmentation and Targeting
Positioning
Concept of Positioning
Developing and Communication a Positioning Strategy:
Process of Positioning
 Competitor`s Identification
 Determining How Competitors are Perceived and
Evaluated
 Determining the Competitors Position
 Analysing Customer`s Preferences
 Making the Positioning Decision
 Monitoring the positioning decision
 Monitoring the position
Positioning Strategies
 Attribute Positioning
 Price/Quality Positioning
 Use or Application Positioning
 Product User Positioning
 Usage and Use Time Positioning
 Product Class Positioning
 Category Positioning
 Benefit Positioning
 Price-Quality Positioning
 Competitive Positioning
 Corporate Identity Positioning
 Brand Endorsement Positioning
Significance of Positioning

 Placing the product in customers` Mind

 Connects Product Offerings with Target Market
 Product Cannot be `Everything to Everyone`
 Creates a Locus in Customers` Mind
 Providing Competitive Advantage
 Better Serving and Covering the market
Consumer Behaviour in INDIA
Characteristics of Indian Consumers

 Demographic features of Indian Consumers

a) Population Size
b) Literacy Rate
c) Young Population
d) Better Sex Ratio
e) Employment
 Socio-Economic features
a) Change in way of living
b) Rise in income
c) Aspirational levels
d) Value Consciousness
e) Working women
f) Traditionalism
g) Better purchasing power
h) Social Awareness
i) Brand Switching
Need for studying Indian Consumer Behaviour

 Decision-Making
 Product Usage
 Environmental Factors
 Knowing and Predicting about Consumers`
Behaviour
 Consumers` Perspective
Problems Faced by Indian Consumers

 Absence of Leadership
 Lack of consumer education
 Difficulty in Spreading awareness about
consumers` rights
 Difficult legal proceedings
 Absence of implementation of legislation
New Consumption Patterns of Indian Consumer
 Buying in Large Quantities
 Occasional Affordable Buying
 Lifestyle Trends
 Adolescents as Prospects Customers
 Gender Based Purchasing
 Packaged foods v/s loose food
 Working women as new target group
 Traditional v/s modern food
Consumer Behaviour and Technological
Technology- stages of Transition
 Pre-1800s: Traditional Shops
 1800s: The birth of department stores
 Late 1800s-mid 1900s: Mail order and
catalogues
 1900s: Baby boom
 Late 1900s: The Era of big box stores
 2000s-Now: The internet age
Role of Information Technology in Consumer Behaviour

 Customers are connected

 Consumers desires have changed
 New Correspondence Channels
Technological Changes and Consumer Behaviour
 Consumers` Benchmarks
 Experimenting Behaviour
 Social Media Platforms
 Ineffective word of mouth
 Consumers Becoming Switchers
 Customers are connected
 Consumer expectations have changed
Trends in Technological Innovation
 Smart phones
 Social media
 Online education
 Mobile payments
 Mobile apps
Strategic Marketing

Concept of Strategic Marketing

Key Definitions of Strategic Marketing

 Market Analysis
 Market Segmentation
 Targeting
 Marketing Placement
Features of Strategic Marketing

 Emphasis on Long-term Implications

 Corporate Inputs
 Varying Roles for different Products/Markets
 Organizational Level
 Relationship with Finance
Impact of Strategic Marketing/Importance
of Strategic Marketing
Module 2
Consumer as an Individual
Consumer Motivation
Concept of Motivation
Consumer Needs

Types of Consumer Needs

 Social Needs
 Non-social Needs
 Functional Needs
 Symbolic Needs
 Hedonic Needs
Consumer Motives
Types of Motives
 Personal Motives:
a) Role-Playing
b) Diversion
c) Learning about New Trends
d) Sensory Stimulation
 Social Motives:
a) Social Experience
b) Status and Authority
c) Pleasure of Bargaining
Types of Motivation

 Positive Motivation verses Negative Motivation

 Rational Motivation verses Emotional Motivation
 Primary Motivation verses Secondary Motivation
 Intrinsic Motivation verses Extrinsic Motivation
 Financial Motivation verses Non-Financial
Motivation/Incentives
Theories of Motivation
Maslow`s Hierarchy of Needs
 Basic Physiological Needs
 Safety and Security Needs
 Social Needs
 Esteem Needs or Ego Needs
 Self- Actualisation Needs
McClelland`s Needs Theory of Motivation

 Need for Achievement (n Ach)

 Need for Power (n Pow)
 Need for Affiliation (n Aff )
McGuire`s Psychological Motives
Cognitive Preservation Motives
 Motives for consistency ( Active, Internal)
 Motives for attribution (Active, External)
 Motives to categorise (Passive, Internal)
 Motives for objectification (Passive, External)
Cognitive Growth Motives
 Motives for autonomy (Active, Internal)
 Motives to stimulation (Active, External)
 Technological Motives (Passive, Internal)
 Utilitarian Motives (Passive, External)
Affective Preservative Motives
 Motives for Tension Reduction (Active, Internal)
 Motives for Expression (Active, External)
 Motives for Ego Defence (Passive, Internal)
 Motives for Reinforcement (Passive, External)

Effective Growth Motives

 Motives for Assertion (Active, Internal)
 Motives for Affiliation (Active, External)
 Motives for Identification (Passive, Internal)
 Motives for Modelling (Passive, External)
Influence of Motivation on Consumer Behaviour

 Defining basic strivings

 Recognising goal objects
 Influencing choice criteria
 Directive other influences
Personality
Introduction
Overview of Personality Theories

Freudian Theory
 Id
 Ego
 Super Ego

Neo-Freudian Theory
 Harry stack Sullivan
 Karen Horney
 Carl Jung
Trait Theory
 Big five model
 R.B. Cattel Theory
Determinants of Personality
Biological Contribution
 Heredity
 Brain
 Physical features
Social Factors
 Home Environment
 Family Members
 Social Groups
Culture Factors
Situational Factors
Physical Envirnoment
Personality and Consumer Behaviour: Influence of
Personality on Consumer Behaviour
 Compliance, Aggressiveness, and Detachment
 Generalised self-confidence
 Self-Consciousness
 Self-Monitoring
 Self-Esteem
 Rigidity
 Tolerance of Ambiguity
 Attention to social comparison information
Brand Personality

Importance of Brand Personality

 Broadens Understanding
 Provides Distinct Identity
 Guides Communication Effort
 Builds Brand Equity
 Better Understanding
 Aid to Brand Revitalisation
Consumer Learning
Meaning and Definition of Learning
Components of Consumer Learning
 Motivation
 Cues
 Response
 Reinforcement
Principles of Learning
 Principle of Association
 Principle of Readiness
 Principle of Effect
 Principle of Intensity
 Principal of Recency
 Principle of Reinforcement
Consumer Learning Process
 Phase 1 : Attention
 Phase 2 : Expectancy
 Phase 3 : Retrievel of Relevant Information to
Working Memory
 Phase 4 : Selective Perception
 Phase 5 : Encoding – Entry of Information into
Long-Term storage
 Phase 6 : Responding
 Phase 7 : Feedback
 Phase 8 : Cueing Retrieval
Influence of Learning on Consumer Behaviour

 Recognition and Recall

 Cognitive Response to Advertising
 Attitudinal and Behavioural Measures of Brand
Loyalty
 Brand Equity
Consumer Attitude

Introduction
Components of Attitudes

 Cognitive Components
 Affective Component
 Behavioural Components
Attitude Formation

 Classical Conditioning
 Instrumental Conditioning
 Cognitive Learning Theory
Sources of Influence on Attitude
Formation
 Direct and Past experience
 Direct Marketing
 Exposure to Mass Media
 Personality Factors
 Direct Personal Experiences
 Association
 Social Learning
Change in Attitude
Factors Responsible For Attitude Change
Inherent Nature of Consumers

Personality Traits
 Extrovert
 Introvert

Social Influences
 Family
 Childhood Socialization
 Social groups
 Religion and Tradition
 Lifestyles
Attitude Changing Strategies for Marketers
 Changing The Basic Motivational Function
 Linking the product with a special group, event or
cause
 Resolving Two Conflicting Attitudes
 Altering Components of the Multi-attribute model
 Elaboration Likelihood Model
 Change Evaluation
 Encourage Attitude Formation based on Imagined
Experience
 Changing Attitudes through information giving
Importance of Attitude

 Determines Meaning of Environment

 Rationalises the Actions
 Organises Facts
 Facilities Selection of Facts
Influence of Attitude on Consumer Behaviour

 Negative Learned Attitudes

 Positive Learned Attitudes
 Negative Learned Attitudes
 Positive Experience Attitudes
Consumer Perception
Components of Consumer Perception

 Sensation
 Sensory Thresholds
 Subliminal Perception
Factors Influencing Perception
Factors in the Perceiver (Internal Factors)
 Needs and Motives
 Self-Concept
 Beliefs
 Past Experience
 Current Psychological State
 Expectations
Factors in the target or Perceived (External Factors)
 Size
 Intensity
 Frequency
 Status
 Contrast

Factors in the Situation

Influence in Perception on Consumer Behaviour

 Forms decision about company or product

 Perception about risks
 Increases brand loyalty
 Helps in noticing the difference
Perception Process
Perceptual Selection
Processes Defining Perceptual Selection
 Exposure
 Attention
 Selective Perception
Selective Perception
 Selective Exposure
 Selective Attention
 Perceptual Defence
 Perceptual Blocking
Perceptual Organization
Factors Affecting Perceptual Organization
 Figure and Ground
 Perceptual Grouping
 Perceptual Constancy
 Perceptual Context
 Perceptual Defence
Perceptual Interpretation: Factors that
Distort Individual Perception

Perceptual Distortion
 Physical Appearances
 Stereotypes
 First Impressions
 Jumping to Conclusions
 Halo Effect
Communication
Introduction
Elements of Communication

 Sender/Encoder
 Message
 Medium/Channels
 Receiver/Decoder/Listener
 Feedback
Communication Process
 Source
 Message
 Perception
 Channel
 Receiver
 Effect
 Feedback
 Noise
Methods of Communication: Kinds of
Promotion
 Advertising
 Sales Promotion
 Personal Selling
 Publicity
 Public Relations
 Direct Marketing
 Word-of-Mouth
 Online Marketing
Communication and Persuasion
 Communication Strategy
 Target Audience
 Media Strategy
 Message Strategies
Self-Image/Self-Concept
Introduction
Components of Self-Image
 Real Self
 Self-Image
 Ideal Self
 Looking-glass Self
 Possible Selves
Types of Self-Image

 Independent Self-Concept
 Interdependent Self-Concept
Applications of Self-Image
 Multiple-Selves and Branding
 Brands, Actual Self, and Ideal Self
 Reality to a State of Altered Reality
 Brand Preposition for a Global Brand
 Perception and its Significance for Brands
Life Style Analysis
Introduction
Characteristics of Lifestyle

 Group Phenomenon
 Pervades Different Life Aspects
 Implies a central life Interest
 Vary According to Sociologically Relevant Variables
Applications of Lifestyle Marketing

 Positioning of New Products

 Repositioning an Old/Existing Product
 Development New Product Concepts
 Creating Promotional Strategies
Influence of Lifestyle on Consumer
Behaviour

 Technological Lifestyles
 Outdoor Lifestyles
 Status-Seeking Lifestyles
MODULE 5 & 6
NEURO MARKETING
 What Is Traditional Marketing?

 Traditional marketing is the process of fulfilling the target audience’s

needs using offline channels and making a profit out of it.

 In simpler terms, traditional marketing refers to the satisfaction of needs

and wants for consumers via those marketing channels that existed
before individuals had access to modern digital platforms.

 It involves fulfilling the 4ps of marketing without making use of digital

marketing channels. This traditional marketing mix includes:
 Building a product that operates and fulfils customers’ demands online. For
example, a washing machine.
 Using a pricing strategy that’s not dependent on online channels.
 Using offline channels of distribution to reach out to the customers.
 Promoting the product using offline channels like TV, radio, newspapers,
etc.

 Traditional marketing encompasses a wide range of advertising and

marketing strategies. It was and is the most well-known type of marketing

that customers see every day.
• Offline Channels: The traditional marketing mix involves
techniques, strategies, and tools that don’t involve digital channels at
all. The product, price, place, and promotion are strategised and
executed using offline channels.
• Less Segmentation: Traditional marketing delivers the message to
the masses. The traditional marketing strategies can’t micro-segment
the target audience based on of age, sex, income, behaviour etc.
• Strong Relationships: Traditional marketing channels help create
credibility and build relations among the parties through physical
contact, question answering, suggestions, etc. Moreover, the local
audience trust traditional marketing efforts more than digital
marketing efforts.
• Better value: Traditional marketing also involves
physical touch where the brand connects with the
customers through salespeople that lead to better value
creation and more loyalty on the part of the customers.
• More Credible: Since it’s an old form of marketing,
customers consider it more credible than digital marketing
and often make important decisions after being triggered
by traditional marketing activities.
• Captures a Larger Audience: Traditional marketing
strategies ensure to reach a bigger group of people from
various categories. Because these marketing strategies are
extremely individualised, marketing media sources such as
direct mailer tactics provide excellent client engagements.
Traditional Marketing Channels
 OOH Marketing: Out-of-home marketing, often referred to as OOH, is a
marketing and advertising method used to communicate with customers or
audiences outside of their homes and businesses. That’s in the form of
visual advertising media. Traditionally, out-of-home marketing relies more
on images than words to communicate a message to the audience. In
addition to billboards, signs, and street furniture such as benches and bus
shelters, this advertising method also incorporates mediums such as
stadiums, retail malls, and cinemas.
 Broadcasting: Broadcasting refers to the act of transmitting information or
programmes through mediums such as radio and television. Businesses
may reach a significant amount of people quickly by using such broadcast
marketing methods like television ads and radio to increase 
brand awareness. Television allows marketers and advertisers to create
more compelling commercials since it allows for the visual presentation of
items and demonstrations of their functionality. The radio broadcast can
help brands reach a local audience in a more effective way than other
mediums.
 Print Media: Print media marketing comprises advertising products and services
through newspapers, magazines, and other print media mediums such as books and
journals. As a mass-marketing approach, printed advertisements allow firms to reach
significant individuals, irrespective of how keen they are on the product or service. It is
also used to target specific groups of people, such as magazines for women or fashion.
 Direct Mail: Direct mail refers to commercial literature that is sent to potential clients by
postal mail. Different types of direct-mail marketing methods such as brochures, letters,
postcards, catalogues, flyers, and other printed material are distributed directly to
customers to build awareness about various products. Information is passed on to a
specified target audience or market in this style of marketing. Direct-mail marketing is a
great tool to have at one’s disposal to generate new leads and increase revenue.
 Telemarketing: Different businesses hire sales employees to make phone calls for
promotional or marketing activities in telemarketing. It is often referred to as cold
calling. A cold call is one that involves contacting, informing, and persuading potential
consumers over the phone. Due to its many uses, organisations can utilise it for various
purposes, including marketing their products and services or gathering data for lead
generation purposes.
Neuromarketing

 Neuromarketing is the study of the mind of the consumers with the help of
using medical technologies to study the response of the brain of the
consumer towards the marketing stimuli.
 

What is Neuromarketing?
 Neuromarketing is new in the field of marketing and helps marketers to
research on the behavior of the consumer in order to improve the 
marketing strategies that are applied especially in the field of selling and 
advertising. It is first emerged and adopted in the year 2002 by the
advertising and marketing professionals.
Techniques used in neuromarketing strategies

a) FMRI: – (functional magnetic resonance imaging)

It is used to measure the activity of the brain with the help of detecting the
level of oxygen in the blood flow when the brain is active it requires more
oxygen.
b) MRI (Magnetic resonance imaging):-
It is used to detect brain tumors and help to understand how the human
brain processes and understand messages being transmitted by the content
of the advertising.
c) EEG (Electroencephalography):-
It measures and records the electrical activity of the brain.
d) MEG (magnetoencephalography):-
it helps in giving information about the brain activity with the help of using
magnetic field .it is used to measure direct brain activity, unlike fMRI.
E) SST (steady state topography):-
It is used to record and measure the activity of the brain .it is having a high
temporal resolution which helps to make it possible to use steady-state topography
in the test of neuromarketing which is concerned with the advertisement on TV.
f) Respiratory rate:-
It is the number of times a person takes for 1 minute.
g) Heart rate:-
It is the count of heartbeats taken place for 1 minute. Pupil meter is a device which
is used to measure the dilation of the pupil with respect to the visual stimulus.
h) Galvanic skin response or skin conductance:-
It is used to detect the changes being occurred on the skin depending on the level of
moisture.
I) Eye tracking method:-
It is a method in which eyes are tracked where they are focusing.
j) Voice Analysis:-
It helps in measuring psychophysiological stress that comes out of the voice with
respect to the vocal cords to such stress.
 
Neuroscience

 Neuroscience is an interdisciplinary science that works closely with other

disciplines, such as mathematics, linguistics, engineering, computer science,
chemistry, philosophy, psychology, and medicine.

 Neuroscientists study the cellular, functional, behavioral, evolutionary,

computational, molecular, cellular, and medical aspects of the nervous system.
There are various fields that focus on different aspects, but they often overlap.
Major branches

 Affective neuroscience
 Behavioral neuroscience
 Clinical neuroscience
 Cognitive neuroscience
 Computational neuroscience:
 Cultural neuroscience:
 Developmental neuroscience
 Molecular and cellular neuroscience:
 Neuroengineering
 Neuroimaging:
 Neuroinformatics:
 Neurolinguistics:
 Neurophysiology:
Neuromarketing research has revealed the following results
about all human beings:
• Humans are driven mainly by emotions, not logic (but we
justify our emotional signals with logical reasons)
• 95% of decisions are made subconsciously
• Avoiding pain is a stronger motivator than seeking pleasure
• Social norms such as reciprocity, authority and social proof
influence our behaviour
• Certain colours elicit a particular emotional reaction
• Visuals are processed more quickly than words
• Images of beautiful women, children, and puppies are
universally appealing
• Prices with round numbers (like £100) are processed more
easily, yet numbers like £99.99are perceived as a better deal
Sensory
The five Marketing
senses of sensory marketing
Sensory marketing applies to all five senses, although some types embrace every kind of
businesses whereas others are more sector-specific.
Visual marketing
Visual marketing is the most traditional type of sensory marketing. It’s the use of pictures,
videos and other kinds of visual arrangements to reinforce brand identity and communicate
more directly with customers. A picture is worth a thousand words: the human minds
processes images 60 thousand times faster than words.

Sound marketing
In the era of voice assistants, podcasts and Clubhouse, the audio dimension of experience is
increasingly gaining importance. Not only jingles: the right background music to the
consumer experience can have a groundbreaking impact.

Tactile marketing
Tactile marketing involves not only the touch & feel of a specific product, but also the whole
in-store physical experience. 75% of consumers say that they’d prefer to “feel” a product before
they buy it: on a subconscious level, every purchase is influenced by texture, shape, weight and
even temperature.
Taste marketing
Although fairly limited to the Food & Beverage field, taste marketing is
based on a scientific fact: the average person has over 10,000 taste buds,
that make taste an integrated experience also made of scent, suggestion
and memory. Sampling, dinner events, signature drinks, chocolate swag:
the campaign formats are potentially endless.

Olfactory marketing
The limbic system in the brain that is responsible for processing smells is
also in control of our memories and emotions: scent can not only bring a
memory to life, but also, on a practical level, attract more people into a
store and make them spend more money.
________________________________________
Pros

 Provides fresh, innovative insights; neuromarketing is innovative because it gives

new information that traditional marketing is not capable of. It provides us with
knowledge about the brain that is not visible with the naked eye;
 Neuromarketing can add value to consumers and society; If it’s used for products
and services that help others, support healthy behavior or makes the connection
between consumers and products easier;
 Able to investigate subconscious responses; with its techniques, we can look at
brain activity and reactions to marketing tools (like an advertisement) that
consumers are not aware of;
 Gives more objective measurements; especially when you ask consumers about
preference or taste, their answers are often very subjective. Neuromarketing gives
more objective results;
 Measures emotional responses; emotion plays a huge role in our decision making,
but it’s often difficult to measure. With techniques like facial coding, it’s possible to
measure emotions related to a package, website or color.