INTRODUCTION TO CONSUMER PSYCHOLOGY:Consumer research

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INTRODUCTION TO CONSUMER PSYCHOLOGY:Marketing Mix, Product, Price >>

Consumer Psychology (PSY - 514)

Lesson 02

INTRODUCTION TO CONSUMER PSYCHOLOGY

(IMPLEMENTING THE MARKETING CONCEPT)

OBJECTIVES:

Introducing Implementation of the Marketing Concept

o The role of Consumer Research

o Overview of Strategic Tool for Implementing the Marketing Concept

Market Segmentation

Market Targeting

Market Positioning

Implementing the Marketing Concept

The wide spread adoption of marketing concept in the American business Industry provided impetus for the study

of consumer behavior. To identify unsatisfied needs companies had to engage in extensive marketing research.

The needs of customers differ dramatically across different segments of society.

1. Consumer research

Consumer Research is a collection of tools & methods to study Consumer Behavior. Broadly speaking there are

two theoretical perspectives that guide the development of consumer research methodology.

Consumer

Research

Interpretivist Approach

Positivist Approach

A. Positivist Approach

Objective and Empirical.

Studies are conducted to research the causes of behavior that could be generalized to larger populations

Consumer research designed to provide data to be used for strategic managerial decisions falls into this

category

B. Interpretivist Approach

Tends to be qualitative and based upon small samples.

Interpretivists view each consumption situation as unique and non-predictable

Search for common patterns of operative values and meanings across consumption situations

2. STRATEGIC TOOLS FOR IMPLEMENTING THE MARKETING CONCEPT

Focus of the Marketing Concept is consumer needs. At the same time recognizing high degree of diversity among us,

consumer researchers seek to identify the many similarities or constants- that exist among the people of the

world.

Consumer Psychology (PSY - 514)

For example we all have similar biological needs, no matter where we are born the needs for food,

nourishment, for water, for air and for shelter all remain the same.

We also develop acquired needs after we are born. These needs are shaped by our culture, and environment in

which we live, by our education and our experiences. The interesting thing about acquired needs is that there are

usually many people who develop the same needs. This commonality of needs enables the marketers to

target consumers with specifically designed products and /or promotional appeals that satisfy the needs of that

segment.

The three element of this strategic framework are:

Market segmentation

Market Targeting and;

Market Positioning

1. Market Segmentation

Market Segmentation is dividing the market into subsets of consumers with common needs. Consumers are

grouped together according to some criteria, such that those within a group will respond similarly to a marketing

action and those in different groups will respond differently. Some of the potential segmentation variables may by:

Sex

Age

Race

Income

Marital Status

No. of Children

Usage History

Advantages of Customer Segmentation

Focuses efforts on who to find out more about

Are the segments identifiable

Is the segment large enough

The geographical concentration of the segment

How price sensitive are the individuals

How competitive is the segment

How vulnerable is the segment to additional entrants

Once the relevant segments of the market are identified these are accordingly targeted. The nature of marketing

effort changes according to the type of segment targeted

2. Market Targeting

"Market Targeting is selecting one or more of the segments identified for the company to pursue"

Prerequisites for Targeting:

Following questions may be considered before targeting a particular segment:

Is there sufficient heterogeneity in preferences amongst the consumer in a particular segment?

Is the segment properly identifiable?

Is the segment large enough to be worthwhile?

How competitive is the segment

3. Market Positioning

Market Positioning is developing a distinct image for the product or service in the mind of the consumer - the

image that will differentiate the offering from the competing ones and squarely communicate to consumers that

the particular product or service will fulfill their needs better than competing brands.

Consumer Psychology (PSY - 514)

Successful positioning centers around two main principles:

Communicating the benefits that the product will provide rather than the product's features

Unique Selling Proposition a distinct benefit or point of difference for the product or service

Choosing a Positioning Strategy:

Following points may be considered while choosing a positioning strategy

Identifying possible competitive advantages

Products, services, channels, people or image can be sources of differentiation.

Choosing the right competitive advantage

How many differences to promote?

Unique selling proposition

Positioning errors to be avoided

Which differences to promote?

Criteria for Meaningful Differences:

Different kinds of criteria for meaningful differences may be developed to rank the product in comparison with its

competitors. Such criteria usually consist of the following points

· Important

· Superior

· Preemptive

· Distinctive

· Communicable

· Affordable

· Profitable

Positioning along many dimensions:

Positioning may be done on many dimensions. Some of which may be:

Product Attributes

Effects

Price

User

Usage

Relation to other products

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