Unit 2: Consumer behaviour and product decisions

Cognitive dissonance is post-purchase doubt ("Did I make the right choice?"); marketers reduce it with reassurance, warranties and follow-up. Types of buying behaviour: complex (high involvement, big differences), dissonance-reducing, habitual and variety-seeking.

Market segmentation is dividing a market into distinct groups of buyers with different needs, characteristics or behaviour who might require separate products or marketing programmes. Need: better understanding of customers, efficient use of resources, competitive advantage and tailored offers.

Requirements for effective segments: measurable, accessible, substantial, differentiable and actionable.

• Competitive positions: market leader (expand market, defend share), challenger (attack), follower (imitate), nicher (specialise).

• Product levels: core benefit → basic product → expected product → augmented product → potential product.
• Product mix: width (number of lines), length (total items), depth (variants per item), consistency.
• Brand equity: value added by a brand name — Aaker's model: brand awareness, perceived quality, brand associations, brand loyalty, other assets; Keller's CBBE pyramid: identity → meaning → response → relationship (resonance).

• Positioning: the place a product occupies in consumers' minds relative to competitors (Volvo = safety; Patanjali = natural/Ayurvedic).
• Branding: a brand is a name, term, sign, symbol or design identifying a seller's goods. Decisions: brand name, brand sponsor (manufacturer or private label), and brand strategy (line extension, brand extension, multibrands, new brands). Brand equity is the added value a brand gives a product.
• Packaging: protects the product, provides convenience, promotes and differentiates it.
• Labelling: identifies the product and gives information — in India the Legal Metrology rules require details such as MRP, net quantity, manufacturer, date of manufacture and expiry where applicable.

A product is anything offered to a market for attention, acquisition, use or consumption that satisfies a want or need. Levels: core benefit, actual product (features, design, brand, packaging) and augmented product (installation, warranty, after-sales service).

• People: front-line employees are the service in the customer's eyes; other customers also shape the experience (a noisy table in a restaurant).
• Physical evidence: the environment and tangibles that signal quality — a hospital's cleanliness, a bank's interiors, a website's design.
• Process: the actual procedures and flow — standardised (McDonald's) or customised (wealth management); online check-in in airlines.