Friday, July 5, 2013

Consumer Behaviour - 2

Q.9. Explain with suitable examples with the importance of customer satisfaction in today’s environment. Describing the various sources of customer dissatisfaction. Explain in brief various measures that can be used for enhancing customer satisfaction.

Source of customer dissatisfaction

When the expected needs of the consumer are met, Consumer Satisfaction occurs. When the consumer gets a value from the product or service in excess of his expectation we say customer delight occurs. Such situation may occur due to many reasons.

Lack of experience with an existing product when a customer buys a CD-Rom package, he may not know what to expect, since this may be his first experience at buying the package

The product under consideration may be new product or an innovation. Doing marketing on the Internet

The quality of service varies spontaneously. Many customers having air travel fright expect that the plane should land smoothly every time. But this may not be possible every time since it depends on the climate, mood of the pilot etc.

Enhancing Consumer Satisfaction

Customer satisfaction is a continuous process, which does not being, or end with a purchase it covers the entire ownership experience, from selecting a product, to purchase through after sales service to repeat purchase. Customer satisfaction process has three phases, which are as under:

During sales
After sales


During this stage the customer’s expectations start developing through the various marketing stimuli like advertising, word of mouth, product packaging etc. here the critical issue is the availability of clear and useful information on:

Ø The product or service
Ø Its quality aspects
Ø Core benefits
Ø Price
Ø Availability at sales outlets
Ø How to obtain it.

During sales:

When the customer is experiencing the use of the product to his specific needs through the product catalogue or a sales talk of sales persons for this to happened, the following needs to exist.

Ø Opportunity to inspect the product
Ø Attractive sales environment
Ø Courteous and attentive service
Ø Reasonable and reliable delivery
Ø Enhancing the quality of goods or services
Ø Prompt redressed in case of complaint receipt.
Ø Freedom to choose without undue sales pressure

After sales

It refers to the period when the customer has started using the product or service to meet his specific needs. This will include the following:

Ø Necessary support or advice to be provided.
Ø Prompt replacement or refund if necessary
Ø A smooth and straight forward complaints procedure
Ø Efficient repair and maintenance service.
Ø Efficient and effective consumer follow-up process.

Q. 1. ‘A detailed study of consumer behaviour is essential for the success of any businessorganization in the present environment’. Examine the statement in the Indian context.

A. Consumer Behaviour
Consumer behaviour is defined as “the dynamic interaction of affect and cognition, behaviour and the environment by which human beings conduct the exchange aspect of their lives.” Means that the buying actions of consumers are greatly affected by their thought process and their feelings experienced.

Scope of consumer behaviour
Consumer behaviour can be looked upon as a study of how individual make decision on how to spend their available resource like time, money and effort on various consumption-related items. A marketer is interested in knowing answers to the following questions

Ø Why do consumers buy a particular product/service brand?
Ø How do they buy them?
Ø Where do they buy these products?
Ø How often do they buy them?
Ø When do they buy them?
Ø How often do they buy them?

Importance of Consumer Behaviour

The present business scenario is extremely complex and some highlights of it are as under:

Ø Ever increasing intensity of competition
Ø More aggressive competitors emerging with greater frequency
Ø Changing bases of competition.
Ø Geographic sources of competition are becoming wider.
Ø Niche attacks are becoming frequent.
Ø Pace of innovation is rapid.
Ø Price competition becoming more aggressive
Ø Product differentiation is declining.

Focus plans of firm’s marketing function

Customer Driven
Mission and Values
Customer Driven
Customer Driven Goals
Customer Retention
New Customer
Customer Driven Rewards

Characteristics of consumer behaviour

Consumer behaviour is dynamic

The feelings, thinking, perceptions and actions of the consumers and the society at large keep changing frequently.

Consumer behaviour involves interactions

Consumer behaviour involves interactions among people’s thinking, feelings, and actions, and the environment. This forces marketers to understand three things:

Ø What products and services mean to customers.
Ø What influences shopping purchase and consumption?
Ø What consumers need to do to purchase and consume products and service?

Consumer behaviour involves exchange

Consumer behaviour involves exchanges between human beings. People give up something of value to others receive something in return.

Problems in consumer behaviour

The problem in it is the lack of unified, well-defined and established theory on consumer behaviour. What we have only relevant ideas on buying behaviour. These ideas are based on their studies of:

1. Economics
2. Psychology and psychoanalysis
3. Social science

Q. 5. Short notes on Perceptual Selection, Price-Quality relationship and Risk Perceptions.

A. Price-Quality Relationship
Various research studies indicate that there is a strong relationship between price and quality.

Ø Consumers lack product knowledge and use as quality index.
Ø The source of price information is credible.
Ø When the product differentiation is large (Eg) Mercedes Benz, Rado Watches and Cross-pens etc.

Risk Perceptions

Factors affecting perceived risks

There is very little information about the product for example in case of pharmaceutical products consumers do not like to go in for alternative products unless they re-consult the doctor.

Ø The product is new
Ø The product is technologically complex eg. Laptop
Ø The price is very important to the consumer. For example, purchase of a car or purchase of residential flat.
Ø Price is very high eg. Jeweler.
Ø Consumers have little knowledge and confidence in evaluating the brands.
Ø Perceived absence of product definition when two products are absolutely similar the choice is difficult and people go by the name of the manufacturer.
Selective perception

Consumers in United State are exposed to about six hundred advertisements everyday. In India number is about thirty per day. Each consumer perceives a marketing stimulus selective because every individual is different as regards to his needs, attitudes, experience and personal characteristics.

Selective perception means that two consumers may perceive an identical marketing stimulus, which may be an advertisement, packaging or product very differently. One consumer may perceive a Maruti van to be highly vulnerable and risky for the body and in case of head on collision, the car will become highly useful and risky for the passengers inside while another may perceive the Van to be a highly useful car because of its spacious and large seating arrangement. Similarly followers of ayurveda regard pure ghee to be highly useful because of its medicinal value while the followers of allopathic regard pure ghee as a source of high calorie content and hence not useful.

Q. 4. How can the principles of instrumental conditioning be applied in advertising? In what way do applications of instrumental conditioning differ from those of classical conditioning?

Application of Instrumental conditioning in Marketing

Unrewarded No Power
Unrewarded No power
Try Brand C
Try Brand
Try Brand
Stimulus Situation (need for a good automobile)The concept of habit formation in case of a product purchase can well be explained with the help of this conditioning. If a consumer uses a particular shampoo for some time and realizes that his problem of dandruff n substantially reduced. This positive reinforcement become instrumental in motivating the individual to buy the same shampoo again and again in the future. Automobile dealers are extensively applying this conditioning. They motivate potential customers to take a test ride of their automobile. When the individual gets satisfaction of a drive, he gets motivated to buy the automobile.
Model of Instrumental Learning

Classical conditioning:

This theory is based on the postulate of the existence of two stimuli namely, primary and secondary and the two are in association with each other. As the association between the two stimuli becomes strong. It leads to the same reaction being yielded by the secondary stimulus as the primary.

This theory is based on the experiment conducted by a psychologist, pavolv’s experiment was conducted with the help of dogs. Whenever Pavlov gave food to his dogs.

Classical conditioning is more effective when the conditioned stimulus is new i.e., the product should be new.

Unconditioned Stimulus
Unconditioned Response

Unconditioned Stimulus
Unconditioned Stimulus
(Ringing of Bell)
Unconditioned Response
Unconditioned Response
Unconditioned Stimulus

Instrumental Conditioning

This also requires development of link between stimulus and the response. Here the individual determines that response which gives him greater satisfaction and the response is within the conscious system of the individual. This learning is based on the research of the American psychologist, Burruhus Skinner. According to him the process of instrumental conditioning rests on the unconditioned stimulus after certain behaviour. The unconditioning response is said to be the positive or negative reinforcement of the performed behaviour. While analyzing the consumer behaviour, consumers learn through trail and error process, in which some purchase decisions can have favourable outcomes. If hypothetically, Pavlov’s dogs were given two levers. One that gives food to the dogs when operated and the second which given an electric shock. When the dogs use these levers, they would after repeated experience, use only that lever which gives food.

Behaviour B
Weakening of Behaviour
No Rewards
Behaviour C
Neutral or
No Change
Behaviour A
Strengthening of Behaviour

Three types of reinforcement in Instrumental Conditioning

Q. 8. Explain the meaning of Consumerism. What were the efforts taken by the Government of India towards protection of Consumer rights? Explain the limitations for the growth of Consumerism in India.

It is defined as the organized movement of the citizens and the Government to enhance the rights and power of consumers in relation to the sellers.

The basis of consumerism is to protect the consumers from the immoral practices conducted by the marketers. Such practices may be high process, high – pressure selling, unsafe products to influence people.

Efforts taken by Government towards the protection of consumer rights

Statutory regulations enforced by the Government to protect the consumer interest are as follows:-

Trade Marks and Merchandise Marks Act, 1958
Sale of Goods Act 1935
Drugs Control Act 1950
Prevention of Food Adulteration Act 1954
Essential Commodities Act 1955
Trade Marks and Merchandise Marks Act, 1958
The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969
Packaged Commodities (Regulation) Order, 1975

Consumerism in India has not progressed because of various reasons, which are as under:

Ø Vastness of the country, imbalance in distribution of wealth, backwardness
Ø High rate of illiteracy and ignorance
Ø Traditional outlook of the people to suffer in silence, lack of information and education
Ø Inability to understand the technical complexity of the goods and accepting manufacturers at face value
Ø Consumer’s tendency to get carried away by the clever advertising and promotion tactics

Consumerism is still in its infancy stage and hence is not developed and organized. The existing laws are incapable of effectively implementing and enforcing the objective.

Consumerism is the shame of the total marketing concept. Every organization should take marketing decisions keeping in mind the organization long term interests, the consumer’s long-term interests, and society’s long term interests.

In India the developing economy the plight of the consumers is not different from that of their counter parts in the rest of the world India consumers are not all well educated and hence are unable to comprehend and understand the complex methods of marketing.

Consumerism is said to be still its infancy stage. But the consumer movement is slowly gathering momentum. At times, there is deliberate attempt on the part of the marketer to adopt misleading, false or deceptive advertisements, where only half truths are offered to the consumers, so as to give a different impression and create a different image as compared to the actual fact.

Pre-liberalization era consumers in India had hardly any voice as regards to their rights in relation to the sellers. The market has been flooded with goods and services and services and it has become difficult for the consumers to ascertain the quality or utility of these goods and services.

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