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Copyright © 2006, New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
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UBLISHING

FOR

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WORLD
NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHERS
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Visit us at www.newagepublishers.com
ISBN (13) : 978-81-224-2552-9
Preface
The book Consumer Behaviour and Advertising Management has been written for the
management students of Indian institutions. It clearly explains the fundamentals of the subject
and is designed to give an insight to the students with Indian examples. The book is written in
simple language so that it can be understood by the students and teachers.
Almost all the topics on consumer behaviour and advertising have been covered in this

PART I: Consumer Behaviour
1 Consumer Behaviour 3
1.1 Introduction to Consumer Behaviour—Definition 4
1.2 Reasons for Studying Consumer Behaviour 5
1.3 Applying Consumer Behaviour Knowledge 6
1.4 Marketing Strategy and Consumer Behaviour 8
1.5 Market Analysis 9
Questions 12
1.6 Consumer Behaviour and Market Segment 13
1.7 Bases for Segmentation 14
2 Psychographic or Lifestyle Segmentation 17
2.1 Introduction 18
Questions 23
3 Environmental Influences 25
3.1 Introduction 26
3.2 Individual Determinants 27
3.3 External Environmental Factors Affecting Consumer Behaviour 29
Questions 31
4Concept of Culture and Subculture 33
4.1 Introduction 34
Questions 40
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( x )
5 Cultural Variations in Non-Verbal Communications 41
5.1 Introduction 42
Questions 47
6 Social Class 49
6.1 What is a Social Class 50
Questions 55

( xi )
12.2 Maslow’s Theory of Motivation 104
12.3 Marketing Strategies Based on Motivation 107
12.4 Involvement 108
Questions 110
13 Information Processing Learning and Memory 111
13.1 Introduction 112
13.2 Learning Memory and Product Positioning 114
13.3 Memory 116
Questions 118
14Attitude Development and Alternate Evaluation in Buying 119
14.1 Introduction 120
14.2 Heuristics (The Choice-making Rules) 122
14.3 Multi-Attribute Choice Models 124
Questions 128
15 Decision-Making Process 129
15.1 Problem Recognition and Purchase Behaviour 131
Questions 137
16 Search and Evaluation 139
16.1 Introduction 140
Questions 147
17 Purchasing Process and Outlet Selection 149
17.1 Introduction 150
Questions 157
18 Purchase Behaviour (Situational Factors) 159
18.1 Introduction 160
Questions 165
19 Post-Purchase Behaviour 167
19.1 Introduction 168
Questions 171

25.1 Introduction 220
25.2 The Objectives of the Study 221
25.3 Secondary Data 221
25.4 Primary Data 223
25.5 Purchase Behaviour 223
25.6 Semantic Differential Scale 225
25.7 Observation, Experimentation, Survey and Interviews 227
25.8 Data Analysis 229
Questions 230
26 Changing Consumer Behaviour 231
26.1 In the Indian Context 232
Questions 234
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27 Case Studies 235
27.1 Case I: Factors Affecting Consumer Behaviour 236
Questions 236
27.2 Case II: Organisational Buying Behaviour 236
Questions 237
27.3 Case III: Family Influences 237
Questions 237
27.4 Case IV: Health Conscious Consumer 238
Questions 238
27.5 Case V: A.T.O. Model of Consumer Behaviour 239
Questions 239
27.6 Case VI: Vending Machines (Motivation) 240
Questions 240
27.7 Case VII: Buyer’s Behaviour 240
Questions 241

Questions 290
7 Message Creation and Copywriting 291
Questions 302
8 Role of Creativity in Copywriting 303
Questions 309
9 Advertising Objectives (Mission) 311
Questions 315
10 Media Planning 317
Questions 325
11 Testing for Advertising Effectiveness 327
11.1 Source 328
11.2 Message 328
11.3 Media Strategies 328
11.4 Budget 329
11.5 Physiological Tests 330
Questions 334
12 Preparation and Choice of Methods of Advertising Budget 335
12.1 Budgeting Methods 336
12.2 Budgeting Approaches 337
12.3 Other Factors Affecting the Allocation of Advertising Budget 340
Questions 341
13 Ethical and Social Issues in Advertising 343
13.1 Ethical Advertising 344
13.2 Social Issues in Advertising 345
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14Management of Advertising Agency 349
14.1 Function of an Advertising Agency 351
14.2 Types of Agencies 352

Reasons for studying consumer behaviourReasons for studying consumer behaviour
Reasons for studying consumer behaviour
•
Understanding consumer behaviourUnderstanding consumer behaviour
Understanding consumer behaviourUnderstanding consumer behaviour
Understanding consumer behaviour
•
Marketing strategy and consumer behaviourMarketing strategy and consumer behaviour
Marketing strategy and consumer behaviourMarketing strategy and consumer behaviour
Marketing strategy and consumer behaviour
Customer is profit, all else is overload......
1
Consumer Behaviour
C
HAPTER

1
4
1.1 Introduction to Consumer BehaviourDefinition
All of us are consumers. We consume things of daily use, we also consume and buy these
products according to our needs, preferences and buying power. These can be consumable
goods, durable goods, speciality goods or, industrial goods.
What we buy, how we buy, where and when we buy, in how much quantity we buy
depends on our perception, self concept, social and cultural background and our age and family
cycle, our attitudes, beliefs, values, motivation, personality, social class and many other factors
that are both internal and external to us. While buying, we also consider whether to buy or not
to buy and, from which source or seller to buy. In some societies, there is a lot of affluence and,
these societies can afford to buy in greater quantities and at shorter intervals. In poor societies,
the consumer can barely meet his barest needs.
Consumer behaviour can be defined as the decision-making process and physical activ-

The individual who determines that certain need or want is not being fulfilled and
purchases a product to fulfill the need.
Influencer
A person who by some intentional or unintentional word or action influences the
purchase decision.
Buyer
The individual who actually makes the purchase transaction mostly is the head of
the family.
User
The person or persons who consume or use the purchase product.
To understand the consumer, researches are made. Sometimes, motivational research
is handy to bring out hidden attitude, uncover emotions and feelings. Many firms send
questionnaire to customers to ask about their satisfaction, future needs and ideas for a new
product. On the basis of the answers received a change in the marketing mix is made and
advertising is also streamlined.
1.2 Reasons for Studying Consumer Behaviour
The most important reason for studying consumer behaviour is the role that it plays in our
lives. We spend a lot of time in shops and market places. We talk and discuss with friends
about products and services and get lot of information from T.V. This influences our daily
lives.
Consumer decisions are affected by their behaviour. Therefore, consumer behaviour is
said to be an applied discipline. This leads to the microperspective and societal perspective.
Micro Perspective. It involves understanding consumer for the purpose of helping a
firm or organization to achieve its objectives. All the Managers in different departments are
keen to understand the consumer.
They may be Advertising Managers, Product Designers, Marketing and Sales Manag-
ers and so on.
Societal Perspective is on the macro level. Consumers collectively influenced eco-
nomic and social conditions within a society. Consumers strongly influence what will be prod-
uct, what resources will be used and it affects our standard of living.

When does the market buy? Monthly, weekly etc. prescribed by doctor Occasions
(medicinal)
Where does the market buy? Supermarket, retail store etc. Outlet
Why does the market buy? For cleansing, bathing, fresh feeling etc. Objectives
(taken from multi-marketeer)
Consumer behaviour is a complex, dynamic, multi-dimensional process, and all market-
ing decisions are based on assumptions about consumer behaviour.
Marketing strategy is the game plan which the firms must adhere to, in order to outdo
the competitor or the plans to achieve the desired objective. In formulating the marketing
strategy, to sell the product effectively, cost-benefit analysis must be undertaken.
1.3 Applying Consumer Behaviour Knowledge
(1) Consumer behaviour knowledge is applied in Marketing Management. A sound
understanding of the consumer behaviour is essential to the long-term success of
any marketing programme. It is the corner stone of marketing concept which stress
on consumer wants and needs, target market selection, integrated marketing and
profits through the satisfaction of the consumers.
(2) Consumer behaviour is also important in non-profit and social organizations. Such
organizations are govt. agencies, religious organizations, universities and charitable
organizations.
CONSUMER BEHAVIOUR
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(3) Consumer behaviour is applied to improve the performance of government agencies
as well. For instance, the performance of government transportation is poor. It can
be improved by knowing the needs and wants of the consumers. Getting checks from
them for their likes or dislikes. Same can be applied to other organizations like
universities and charitable organizations.
(4) Consumer behaviour also helps in marketing of various goods which are in scarcity.
People are made aware that gas, fuel, water and natural resources are in scarcity.

P
r
o
c
e
s
s
i
n
g
Marketing
activities
Culture
Subculture
ValuesMotives
Personality
Emotions
Households
Reference
groups
Demo-
graphics
Social
status
Learning
(memory)
Perception
Situations
Problem
recognition

(c) Competition
(d) Condition
(ii) Marketing Segmentation
(e) Identify product-related needs
(f) Group customers with similar need sets
(g) Describe each group
(h) Select target market
(iii) Marketing Strategy
(i) Product
(j) Price
(k) Distribution
(l) Communication
(m) Service
(iv) Consumer Decision Process
(n) Problem recognition
(o) Information search—internal, external
(p) Alternative evaluation
(q) Purchase
(r) Use
(s) Evaluation
(v) Outcomes
(t) Customer satisfaction
(u) Sales
(v) Product/Brand image
Fig. 1.2 Marketing strategy and consumer behaviour