Consumer behaviour and advertising managerment

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Consumer behaviour and advertising managerment

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This page intentionally left blank Copyright © 2006, New Age International (P) Ltd., Publishers Published by New Age International (P) Ltd., Publishers All rights reserved. No part of this ebook may be reproduced in any form, by photostat, microfilm, xerography, or any other means, or incorporated into any information retrieval system, electronic or mechanical, without the written permission of the publisher. All inquiries should be emailed to rights@newagepublishers.com

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  2. Copyright © 2006, New Age International (P) Ltd., Publishers Published by New Age International (P) Ltd., Publishers All rights reserved. No part of this ebook may be reproduced in any form, by photostat, microfilm, xerography, or any other means, or incorporated into any information retrieval system, electronic or mechanical, without the written permission of the publisher. All inquiries should be emailed to rights@newagepublishers.com ISBN (13) : 978-81-224-2552-9 PUBLISHING FOR ONE WORLD NEW AGE INTERNATIONAL (P) LIMITED, PUBLISHERS 4835/24, Ansari Road, Daryaganj, New Delhi - 110002 Visit us at www.newagepublishers.com
  3. 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 book. The entire syllabi of the I.E.T. has been covered and the book will be useful for the students. All the factors effecting consumer behaviour and some cases have been dealt in the book. In advertising, besides the promotional tools, five 5 Ms of advertising, ethical and social issues have also been dealt in a comprehensive manner. Both the sections of the book are supplemented with brief examples of cases for the understanding of the students. —Matin Khan
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  5. Acknowledgement This book could not have been written without the motivation and guidance of the publishers of New Age International (P) Ltd. They invited me to write a book on Consumer Behaviour and Advertising exclusively for the I.E.T. students. They guided me to cover all the aspects given in the course outline. My students, earlier, had appreciated and liked my book Consumer Behaviour which was written in simple language. I am thankful to the students who have been under me from a number of institutions. I would like to thank Mr. L.N. Mishra of Lucknow branch of New Age International (P) Ltd. who has been a source of inspiration. I want to acknowledge the help I received from my family members, and would like to thank my wife Shamin Khan, my daugh- ters Maria and Sara and my son Ishrat who gave me time and discussed various issues with me. In would like to thank Prof. and Head of Deptt. Prof. J.K. Sharma, Dr. S. Medhabi, Dr. Rita Narang and my other colleagues and students whom I have been associated with. Thanks are also due to others who have helped me in bringing out this book. —Matin Khan
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  7. Contents Preface v Acknowledgements vii 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 4 Concept of Culture and Subculture 33 4.1 Introduction 34 Questions 40
  8. (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 7 Social Group 57 7.1 Introduction 58 7.2 Reference Groups and the Influence Exerted by them 60 7.3 Reference Group, Social Influence and Social Power 61 7.4 Reference Group Applications in Marketing 63 Questions 66 8 Family Buying Influences, Family Life Cycle and Buying Roles 67 8.1 Introduction 68 8.2 Family Buying Influences 70 8.3 The Family Life Cycle Stages 72 8.4 Personal Influences 74 Questions 76 9 Diffusion of Innovation 77 9.1 Introduction 78 9.2 Innovation 78 9.3 Diffusion Process 80 Questions 85 10 Individual Determinants 87 10.1 Perception 88 10.2 Misinterpretation of Marketing Messages 91 11 Personality and Self Concept 93 11.1 Personality 94 11.2 Types of Behaviour 97 11.3 Emotions and Marketing Strategy 99 11.4 Self-concept 99 Questions 101 12 Motivation and Involvement 103 12.1 Introduction 104
  9. ( 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 14 Attitude 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 20 Models of Consumer Behaviour 173 20.1 Introduction 174 Questions 187
  10. ( xii ) 21 Consumerism (Public Policy and Consumer Protection) 189 21.1 Introduction 191 Questions 196 22 Organisational Buying Behaviour 197 22.1 Introduction 198 22.2 Characteristics of ORG Buying (O.B.B.) 199 22.3 Organisational Customers 201 22.4 Factors Influencing Organisational Buying 202 22.5 Factors that Affect Risk 203 22.6 Organisational Buying Situations 204 Questions 206 23 Customer Delight 207 23.1 Introduction 208 23.2 Need for Delight 209 23.3 Expectation and Delight 210 23.4 Generating Delight 211 Questions 212 24 E-Consumer Behaviour 213 24.1 The Computer Age 214 24.2 E-Business 214 24.3 Web (World Wide Web) WWW 216 24.4 Application to Customer Behaviour 216 Questions 218 25 Consumer Research 219 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
  11. ( xiii ) 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 27.8 Case VIII: Promoting Beauty Products (Marketing Strategy) 241 Questions 242 27.9 Case IX: Organisation Buying 242 Questions 243 PART II: Advertising Management 1 Advertising Management Overview 247 1.1 Meaning 248 1.2 Nature of Advertising 248 1.3 Scope of Advertising 249 1.4 Types of Advertising 252 Questions 257 2 Advertising and Other Promotional Tools 259 2.1 Meaning 260 2.2 Publicity 263 Questions 264 3 Role of Advertising in Promotion Mix 265 Questions 267 4 Process of Advertising 269 4.1 Introduction 270 4.2 The Customer and Competition 276
  12. ( xiv ) 4.3 Competitive Analysis 278 Questions 279 5 Strategies for Advertising 281 5.1 Introduction 282 5.2 Strategies for Advertising 284 5.3 Advertising Planning 285 6 Advertising Campaign Planning 287 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
  13. ( xv ) 14 Management of Advertising Agency 349 14.1 Function of an Advertising Agency 351 14.2 Types of Agencies 352 Questions 355 15 Role of Advertising in National Development 357 15.1 General Advertising 358 15.2 Cases and Institutional Advertising 361 Questions 362 Index 369
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  15. PART I Consumer Behaviour
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  17. 1 Consumer Behaviour Customer is profit, all else is overload...... This chapter provides an introduction to consumer behaviour. “Consumer is the most important person. The business revolves around the consumer.” After finishing this chapter, one should be able to understand: • What is meant by consumer behaviour • Reasons for studying consumer behaviour • Understanding consumer behaviour • Marketing strategy and consumer behaviour

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