Consumer Behavior.pptx

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&

MARKETING STRATEGY

CONSUMER BEHAVIOUR

By:

Sai Dutta Panda

R Charan Teja


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BEHAVIOURAL ECONOMICS

It is a term for a range of approaches that seek tounderstand and explain consumer behaviour

more accurately than predictions associated with

traditional economic theory.


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BEHAVIOURAL MODELS

Economic model.

Learning model.

Psychological model.

Sociological model.


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MARKETING STRATEGY

The marketing logic by which the business unithopes to create customer value and achieve

profitable customer relationships.


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MARKETING STRATEGY

For formulation of marketing strategy,

2 questions need to be answered:

Which customers will the company serve?(targeting and segmentation)

How can we serve these customers best?

(positioning)


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MARKETING STRATEGY

Marketing strategy includes:

Positioning.

Product strategy. Pricing strategy.

Distribution strategy.

Market communication strategy.

Market research.


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CONSUMER BEHAVIOUR

Cultural

Culture

Subculture

Social Class

Social

ReferenceGroups

Family

Roles AndStatus

Personal

Age Occupation

EconomicSituation

Lifestyle

Personality & SelfConcept

Psychological

Motivation Perception

Learning

Beliefs &Attitudes


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ARE WE RATIONAL


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LOSS AVERSION

People dislike losing something twice as much

as they like gaining it.

More sensitive to losses compared to gains of

similar magnitude.


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LOSS AVERSION

Disposition Effect: the tendency of investors to

continue holding assets that have dropped in value

and to sell assets that have increased in value.


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Endowment Effect: the tendency of individuals toplace a higher price or value on an object if they

own it than if they do not.

We generally demand more money to part with

something once we own it than we would be

willing to pay for it in the first place

LOSS

AVERSION


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STATUS QUO BIAS

Tendency to stick with current choices andpatterns of behaviour

Application:

Offer a free subscription for a fixed period,

which then reverts automatically to a full payment

Automatic enrolment into personal pension plans

in the US.(NEST)


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DEFAULT OPTION Tendency of individuals to stick with the default

option offered, rather than make a conscious

decision.

Termed choice architecture, which encapsulates

how choices are framed, or presented, to individuals.

Examples:

University of Chicago Professors

Annual car insurance policies


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FRAMING EFFECTS

The appraisal of alternative options can also dependon the way the choice is presented, or framed.

Preference for positive rather than negative frames,

(loss aversion).

Example: presentation of past performance

statistics.


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ANCHORING EFFECT

Anchoring effect is a type of framing effect wherethe appraisal of options is affected by an original

starting value (or anchor).

Example: conservative, moderate and aggressive

(0%, 40%, 80%) (40%,70% ,100%)


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HYPERBOLIC DISCOUNTING AND

PROCRASTINATION

The decision maker makes value comparisonsbetween immediate and delayed consequences

and the decision is influenced by his time

preference.

The longer the delay, the larger the IDR for futureoutcome.

IDR also declines with the size of the outcome.


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HYPERBOLIC DISCOUNTING AND

PROCRASTINATION

Simply put, people have a tendency to prefer

short-term gratification over longer term returns.

Effects of hyperbolic discounting may be

exacerbated by our tendency to procrastinate.

Example: Pension Commission.


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MENTAL ACCOUNTING

Mental accounting occurs when sums of moneyare treated and valued differently depending on

where they came from and/or where they are

kept. (fungible).

Example:

people coming to a store to buy at lamp and to

buy a dinner table.

New York taxi drivers.


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AVAILABILITY EFFECT AND

SALIENCE

People judge the likelihood of an outcomeoccurring by how easily the outcome can be

brought to mind or imagined.

Overestimate the likelihood of outcomes that are

particularly memorable, highly emotional or have

happened recently.


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AVAILABILITY EFFECT AND

SALIENCE

Example:

High level of insurance purchases made

immediately after disasters such as floods and

earthquakes.

Tendency to invest too much money in the stock

market when in boom and too little when it has

been on the decline.


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OVERCONFIDENCE

Example:

People rated their own accuracy in prediction of

market stocks at 68% while the actual accuracy

was only 47%.

Consumers opt to forgo the opportunity to insure

themselves against unforeseen circumstances.

Investors choose actively managed funds rather

than passive index trackers


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TRUST

The more an individual trusts another individualor organisation, the less it is necessary to check

information and impose controls.

Example: voluntary and community organisations

may be better placed to deliver financial services.


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Size

Composition

Location Trends

Resources

Reputation Constraints

Values

Strengths

Weaknesses

Current

Positioning

Define, analyse

market segments.

Analyse

possibilities for

differentiation.

Select target

segments to

serve.

Select benefits to

emphasise on

customers.

Articulate desiredposition in market.

Marketing

Action Plan.

Marketing Strategy by Michael R. Pearce

MARKET

ANALYSIS

INTERNALANALYSIS

COMPETITOR

ANALYSIS

MARKETING STRATEGY AT BANCO AZTECA


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Date post:	08-Aug-2018
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Consumer Behavior.pptx

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