Consumer Behaviour and Marketing Research

1. Individuals can have different relationships with brands and products. It is suggested that
an individual can have a self-concept attachment, a nostalgic attachment, interdependence,
or love. Choose any five brands or products that you use and comment on whether you feel
any of these attachments towards them. (5 Marks)

Firstly, “Christian Dior” is one of brand that I experienced the most, mainly thanks to their quality products.
While wearing Dior, it makes me powerful because it is one of the best French brand. Then,
“DSQUARED2” it’s a clothing brand and same thing than Dior, I’m purchasing their pants because they
are trendy and comfortable. I have a particular attachment toward the brand “Dinh-Van” because I bought
for my niece a bracelet when she was born and I still purchase the brand for myself because of the emotional
aspect. In addition, “MONOPRIX” is a brand that I particularly liked because of their convenience, they
are able to deliver my items for free to my house. Therefore, I’m doing all my food shopping in this store.
Finally, “Apple” is my favorite cell phone and laptop brand. Their products are so attractive and convenient
that I will never buy another phone from another company.

Students are likely to choose a variety of everyday brand products in their assessment of
their attachment to them. The four suggested levels of attachment will certainly suggest that
the individual has chosen these brands for particular reasons, some of which will be difficult
to define. The comparative attachment between different products is interesting as far as
marketers are concerned, the greater the attachment, the more leverage they will have on
the consumer in order to encourage them to immerse themselves in more related products
and developments.

As a business, it’s important to develop a relationship with your customers. However,

according to Michael R. Solomon in his book “Consumer Behavior: Buying, Having
and Being,” the type of relationships people have with businesses varies.
According to Solomon, here are different types of relationships a person could have
with a product or service:
Self-concept attachment: “The product helps to establish the user’s identity.”
Nostalgic attachment: “The product serves as a link with a past self.”
Interdependence: “The product is a part of the user’s daily routine.”
Love: “The product elicits emotional bonds of warmth, passion or other strong
emotion.”

As a health club, you should strive to foster the last two relationship types:
Interdependence and Love. Here are a couple strategies for cultivating both.
Interdependence
To foster this type of relationship with members, your onboarding process is crucial.
 According to Precor, “A well-designed and thoughtfully executed onboarding process
will enhance member experience and maximize retention … The first four weeks are
the most crucial in the membership lifecycle, and gym operators should have an
onboarding process to generate a high number of visits within that period, as well as
the weeks following.”
With this in mind, review your onboarding process. Are you incentivizing members to
come frequently within the first 90 days? Are you checking in on new members often?
If not, your chances of becoming a part of their daily routine diminishes greatly —
lowering the chances of creating a relationship of interdependence.
Love
According to The Muse, there are six strategies companies can use to get people to
fall in love with their brands:
1. Provide awesome customer service
2. Boast high-end design (logo, branding, website)
3. Create brilliant content
4. Stir up emotions
5. Under promise and over deliver
6. Encourage feedback and listen
Scott Dockweiller writes for The Muse, “In order to gain customers — and keep them
for life — you’ve got to do more than introduce them to your brand, business or
product. You’ve got to make them fall in love with it.”

Relationship strength and the consumer-brand bond[edit]

Brand attachment[edit]
Many studies evoke the concept of brand love on Sternberg' triangular theory of love. Some argue
that brand love is similar to interpersonal love while others, such as Batra, Ahuvia, and Bagozzi
(2012) state that "there are compelling reasons these conceptualizations of interpersonal love should
not be applied directly to brand love[6]" (p. 1). Some suggest brand love is more a parasocial love
relationship.[7][8]
Multi-faceted strength notions are also recommended. Among these are Fournier's Brand
Relationship Quality index, which has seven facets:

 Love/Passion
 Brand-Self Identity Connection
 Brand-Social Other Communal connection
 Commitment
 Interdependence
 Intimacy
 Brand partner quality
Through an analysis conducted by Fournier (1998), a six faceted brand relationship quality construct
was drafted. There are dimensions in a relationship in which they all determine the strength of a
consumer-brand relationship, these dimensions include: love and passion, self-connection,
interdependence, commitment, intimacy, and brand partner quality.[9]
Love and passion is the essence of all strong brand relationships. It refers to the depth of the
emotional connection between that brand and the consumer.[9] There are many works about brand
love. Most notable is the one by Batra, Ahuvia, Bagozzi (2012).
Self-connection is the extent to which the brand conveys important identity concerns, tasks, or
themes, therefore communicates a significant aspect of self.[9] A strong brand relationship is
maintained by strong self-connections to the brand. This is due to the ever-growing protective
feelings of uniqueness, dependency, and encouragement of resilience in the face of negative
events.
Interdependence involves regular interactions between the brand and the consumer, increased
scope and diversity of brand-related actions, and the increased intensity of personal experiences.
Commitment refers to the stability of the consumer's attitude towards the brand relationship, and
can be seen as the intention and dedication to the longevity of the relationship.[9]
Intimacy refers to how close the consumers feel with the brand, and also refers to the mutual
understanding and acceptance of both the brand and the consumer.[9]
Brand partner quality represents what the consumer thinks about the performance of the brand in
the relationship. The factors of this quality are trust, reliability, and expectation fulfillment.

2. It’s increasingly clear that many postings on blogs and product reviews on Web sites are
fake or are posted there to manipulate consumers’ opinions. How big a problem is this if
consumers increasingly look to consumer-generated product reviews during the stage of
information search? What steps, if any, can marketers take to nip this problem in the bud?
(5 Marks)

For any local business owner, dealing with an angry customer in person or on the phone is sometimes
just part of doing business. And poor customer experiences have the potential to turn into a negative
review or comment on a review site, social media page, or other websites. But situations like these don’t
have to affect your online reputation – especially if you can recognize the issue early and turn that
negative experience into a positive one. Plus, how you handle a customer complaint will not only resonate
with that particular customer but will also reinforce your customer loyalty strategy with other existing and
potential customers. So, here are a few tips to keep in mind when you to respond to an angry customer to
avoid getting a negative review and strengthen your overall customer service strategy.

Address a Complaint Immediately

If a customer appears upset in your store or on the phone, find out what the problem is immediately, and
most importantly, ask what you can do to correct it. Being able to recognize an unsatisfied customer and
quickly address their complaint is the first step in mitigating a potentially damaging situation before it turns
into a negative review for your business.
Don’t Start an Argument
Whether or not a customer has a legitimate complaint, don’t get defensive, make up an excuse, or assign
blame Instead, assume ownership over the situation and take responsibility for what you can. If the error
is on your end, apologize for the mistake and assure the customer you will take the necessary steps to
resolve the issue. Chances are, if you remain cool, calm and professional with them, the customer will
calm down and be more understanding as well.

Consider Offering a Freebie or Refund

In some cases, a discount, refund, or complimentary product or service, can help smooth over a minor
situation and help the customer leave with a positive impression of your business. If your mistake was
small, such as double-booking an appointment, compensating the customer for lost time or resources is a
great way to show them that you still value their business. However, be aware that a simple discount may
not work for every situation, as more serious problems may require more serious solutions.

Address the Root Cause of the Issue

When a customer has a bad experience with your business, there is often an underlying business issue at
hand. Was the service unsatisfactory? Was your product damaged? Were your employees rude or
unhelpful? Once you determine the problem, take the steps to correct the fundamental cause of the
grievance. Addressing the root cause of the issue will not only show the customer you are serious about
customer service and help solve the issue at hand, it will also help you avoid experiencing similar issues
later on with other customers. One way to address issues like these is to train employees on how to
deliver even better customer service. You can also turn this into an opportunity to educate your staff on
how to answer phone calls, respond to customer questions, and deliver prompt and friendly service. You
may even want to create an employee handbook that outlines proper employee behavior and procedures.

Deliver Great Customer Service – Always

By making great customer service a top priority for your business and employees in your store, on the
phone, and online, you help can drive positive reviews and word of mouth that will likely outweigh any
complaints that may surface about your business online. It’s important to remain upbeat, speak in a
friendly tone, listen to what your customers have to say, and teach your employees to do the same. Even
if your business consistently delivers outstanding service, having an occasional negative review or
complaint written about your business online is sometimes unavoidable. If you do receive a negative
review or comment, it’s important to reply to the complaint and address the problem within your business
to maintain a positive online reputation.

What tactics have you used to handle an unhappy customer before they write a negative review of your
business? How does the way you resolve customer complaints fit into your customer service and
reputation management strategies?

Given the expose in the Whole Foods miniscandal, let’s hope the others are less likely to
repeat these offenses. If this assumption is true then consumers are likely to get genuine
reviews from genuine customers. Shortof verifying ID’s or customer/order numbers to see
if the blogger is a real customer, marketers have few options to combat this problem. Possible
solutions According to a 2012 UK report on consumer attitudes to user-generated online feedback,
consumers want more detail about controls, and more stringent verification processes in order to have
greater reassurance of the legitimacy (i.e. credibility) of online postings. Consumers are also calling for
guidance on what can and cannot be said in posts, to protect them from legal action.14 Moreover, they
express the need for reassurance about data protection issues, including the right to anonymity and
privacy. According to a report commissioned by ANEC, review sites, given their increasing importance,
would benefit from regulation or standardisation of some kind. The key issues the report identifies are:
clear/transparent information about ownership and impartiality of a site, as well as the basis for reviews;
the structure of reviews (i.e. a structure in the feedback template so that consumers are asked
relevant/useful questions); verification of reviews (processes in place to ensure that reviews are genuine);
and dealing with complaints/abuse. As a solution, the report recommends European regulation, or
standardisation, of consumer review sites. It also suggests involving ANEC in the development of the
recently proposed international ISO standard on review sites. BEUC also believes that it is essential to
establish and monitor rules concerning consumer information, the posting of misleading messages and
unfair marketing practices related to review websites. The UK Competition and Markets Authority report
on online reviews suggests steps that should be taken both by businesses and review sites. Businesses
should not offer inducements to a customer in return for a positive review; pretend to be a customer; or
write fake reviews about their own or other businesses’ goods or services. On the other hand, they should
ensure that advertising and paid promotions are clearly identifiable to readers as paid-for content. Review
sites should clearly state how reviews are obtained and checked; publish all reviews (including the
negative ones) provided they are genuine and lawful; and explain the circumstances in which reviews
might be edited or not published at all (for instance if they include abusive language or defamatory
remarks). They should also ensure that there is no unreasonable delay before publishing reviews; disclose
commercial relationships with businesses that appear on their site (and how that affects their ranking);
clearly identify advertising and paid promotions; and have appropriate procedures in place to detect and
remove fake reviews. Some observers argue that efforts to counter fake reviews should focus mainly on
firms that promote fake reviews or that take no meaningful action to curb the practice on their sites,
rather than deal with individuals who engage in the practice at the incitement of businesses that benefit.
However, solely relying on a command-and- control approach (with legislatures banning specific
behaviour, regulators policing compliance, and courts imposing sanctions) could be inadequate.
Regulating firms alone would mean pinning guilt for breaches that sometimes involve many people upon
particular entities, without consideration for the fact that such behaviour might be driven by the culture
that prevails in the sector concerned or by forces of competition. Smart regulation involving educative,
deterrence-based, responsive and targeted approaches could complement measures such as industry
codes of conduct, feedback mechanisms and monitoring, administrative sanctions, corrective advertising
and generalised standard-setting requirements. Enforcement action can serve as a deterrent. Self-
regulation (for instance online platform providers investing in identifying and dealing with fake reviews;
possibly also EPRS Online consumer reviews Members' Research Service Page 8 of 10 bringing defamation
actions against offenders as a way to gain greater credibility) can also be useful. Promoting official and
reliable comparison sites, consumer complaints ombudsman schemes, and standards to ensure better
quality and control of reviews could also constitute part of the solution. The AFNOR opt-in standard, for
example, includes the following core principles and requirements for online reviews: buying consumer
reviews is forbidden, and, if need be, it should be possible to establish the identity of consumers posting
reviews. Provision of evidence that a product or service has actually been bought and used is an optional
requirement. Once posted online, reviews cannot be edited but their authors retain the right to take them
offline. The most recent opinions need to be displayed first. The standard also requires transparency
regarding the methods used to calculate aggregate ratings and the delay before new ratings are integrated
into the aggregate rating shown on-screen. It also mentions the right to a reply, which is free of charge
and published within seven days. Improving the digital skills and digital literacy15 of consumers could help
them avoid deception, manipulation, and persuasion via online misinformation. Educating16 them about
fake online reviews would not only help them identify potential fake reviews but also contribute to
reducing related consumer detriment.

3. Research supports the argument that the way we pay for a product changes the way we
perceive it. More specifically, credit cards prime people to focus less on the costs of the
item and more on the benefits. Using plastic decouples the expense of the purchase so we
tend to buy more when we can charge it. Newer innovations like digital wallets take this a
step further so payment—at least at the time of purchase—are even less painful. Are these
formats going to create problems if they prime us to think more about short-term
gratification and less about the long-term hit to our budgets? Do marketers have an
obligation to try to prevent these problems? (5 marks)

Do People Really Spend More With

Credit Cards?
When you use credit cards responsibly, you can earn airline miles and cash back rewards. As
long as you pay your balance in full and on time every month, you can enjoy these perks and
avoid costly interest fees. However, research indicates you may end up spending more money
with credit cards than you would with cash.

Studies show consumers spend more when shopping with a credit card. (Shutterstock)

A number of studies have indicated that people do spend more when paying with a credit card. In
2001, Drazen Prelec and Duncan Simester of MIT published the results of their research
in Marketing Letters. They found shoppers spend up to 100% more when using their credit card
to pay instead of cash.

In one of their studies, they offered participants the opportunity to buy basketball tickets to a
desirable game. Those told they could pay by credit card were willing to pay twice as much as
those who had to pay in cash.

Today In: Money

Why do people spend more with plastic? First, it is simply easier to do. Let's say you have $100
budgeted for a romantic dinner with your significant other. If you only have the $100 in cash,
you will pay careful attention to what you are ordering to make sure you have enough to pay for
your meal and tip. However, if you have a credit card, there is really no immediate penalty for
over-spending, so it's easier to go over your budget.

Another reason is a phenomenon called coupling. When someone buys an item with cash, they
immediately know how much that item cost, which can be painful. However, when someone
pays with a credit card, there is a time period between when they purchase the item and when
they have to pay for it, which makes the cost seem less important, according to Psychology
Today.

Because items purchased with a credit card have been decoupled from emotion, shoppers can
focus on the benefits of the purchase instead of the cost. Thus, paying with a credit card makes it
more difficult to focus on the cost or complete a more rational cost-benefit analysis. For
example, if a person had to count out $0.99 to purchase an app, they might be less inclined to
buy it. However, since we can quickly buy apps with our credit card, the cost seems negligible,
and we can focus on the momentary happiness of the purchase.

If you want to reap the benefits of a credit card without overspending, there are some things you
can do. First, force yourself to write down credit card purchases at the end of each day, either on
a spreadsheet, in a budgeting app, or with a pen and paper. Instead of seeing the financial
damage when your statement arrives, you will be confronting your purchases immediately,
which may train you to more carefully consider your purchases. Additionally, keeping track of
credit card purchases will also help ensure you have enough cash to pay your entire balance
every month.

4. The analysis of consumer behavior is necessary for deciding on Positioning Strategy for
any product or service. Please elaborate on above with a suitable example which you have
come across in the recent past. (5 Marks)

Importance Of Consumer Behaviour

Introduction
Understanding consumer behaviour is important for any organization before launching
a product. If the organization failed to analyse how a customer will respond to a
particular product, the company will face losses. Consumer behaviour is very complex
because each consumer has different mind and attitude towards purchase, consumption
and disposal of product (Solomon, 2009). Understanding the theories and concepts of
consumer behaviour helps to market the product or services successfully. Moreover,
studying consumer behaviour helps in many aspects. As there is constant change in the
living standards, trend, fashion and change in technology; consumer’s attitude towards
the purchase of product varies (Kumar, 2004). Understanding these factors is of utmost
importance because the marketing of product are largely dependent on these factors.
Thus, consumer behaviour serves as a successful tool for marketers in meeting their
sales objectives.

This essay discusses the value to marketers of understanding the importance of, and applying
consumer behaviour concepts and theories.

Consumer Behaviour
Consumer Behaviour or the Buyer Behaviour is referred to the behaviour that is
displayed by the individual while they are buying, consuming or disposing any particular
product or services. These behaviours can be affected by multiple factors. Moreover, it
also involves search for a product, evaluation of product where the consumer evaluate
different features, purchase and consumption of product. Later the post purchase
behaviour of product is studied which shows the consumer satisfaction or dissatisfaction
where it involves disposal of product (Solomon, 2009).

The customers while buying a product goes through many steps. The study of consumer
behaviour helps to understand how the buying decision is made and how they look for
a product. Moreover, the understanding consumer behaviour also helps marketers to
know the what, where, when, how and why of the consumption of product consumption
(Kumar, 2004). These help marketers or organizations to know the reason behind the
purchase of product by consumers and how it satisfies them. Among other factors, the
basic needs like shelter and hunger along with craving for psychological fulfilment tends
consumer to buy a certain product or services.

Importance of Consumer Behaviour to business managers

The main purpose behind marketing a product is to satisfy demands and wants of the
Consumers. Study of consumer behaviour helps to achieve this purpose. As consumers
are the most important person for marketer or sales person, therefore it is important for
them to consider the likes and dislikes the consumers so that they can provide them
with the goods and services accordingly (Solomon, 2009). The more careful analysis
helps in more exact prediction about the behaviour of consumers of any product or
services. The study of consumer behaviours helps business manager, sales person and
marketers in the following way.

 To design the best possible product or service that fully satisfies consumer’s needs and
demands.
 To decide where the service or product would be made available for easy access of
consumers.
  To decide the price at which the consumers would be ready to buy that product or
service.
 To find out the best method of promotion that will prove to be effective to attract
customers to buy a product.
 To understand why, when, how, what and other factors that influence buying decision of
the consumers.

Importance of Consumer Behaviour to Marketers

It is important for marketers to study consumer behaviour. It is important for them to
know consumers as individual or groups opt for, purchase, consumer or dispose
products and services and how they share their experience to satisfy their wants or
needs (Solomon, 2009). This helps marketers to investigate and understand the way in
which consumers behave so that they can position their products to specific group of
people or targeted individuals.

In regard to the marketer’s view point, they assume that the basic purpose of marketing
is to sell goods and services to more people so that more profit could be made. This
principle of making profits is heavily applied by almost all marketers. Earlier, the
marketers were successful in accomplishing their purpose. However, today, as the
consumers are more aware about the use of product and other information of the
product, it is not easy to sell or attract customer to buy the product (Kumar, 2004). Thus,
in order to sell a product or service or to convince consumers to buy product, the
marketers have to undergo through proper research to win them over.

The following are some of the points discussed that explains the value to marketers of
understanding and applying consumer behaviour concepts and theories.

1. To understand Buying Behaviour of consumers

The study of consumer behaviour helps marketers to recognize and forecast the
purchase behaviour of the consumers while they are purchasing a product. The study of
consumer behaviour helps the marketers not only to understand what consumer’s
purchase, but helps to understand why they purchase it (Kumar, 2004). Moreover, other
questions like how, where and when they purchase it are also answered. The
consumption and the reasons behind disposition of that particular product or services
help marketers to be fully aware of the product that is marketed. The consumer
behaviour studies also help marketers to understand the post purchase behaviour of the
consumers. Thus, the marketers become fully aware about every phase of consumption
process i.e., pre-purchase behaviour, behaviour during purchase and post purchase
behaviour. Many studies in the past shows that each consumer behaves differently for a
product i.e., they buy the product for different reasons, pays different prices, used the
product differently and have different emotional attachments with the product
(Solomon, 2009).

2. To create and retain customers though online stores

Professor Theodore Levitt says that consumer behaviour is of most importance to
marketers in business studies as the main aim is to create and retain customers (Kumar,
2004). If the consumers are satisfied with the product, he or she will buy the same
product again. Therefore, the product should be marketed by markers in such a way that
convince customer to buy the product. Thus, creating customer and the retaining those
customers are important. These can be done through understanding and paying close
attention towards the consumer’s behaviour while making purchase decision or buying
a product in market place. Moreover, the information published on the websites largely
influence the customer’s buying behaviour. Such information on published sources
arouse consumer to buy a product or service. Moreover, updating such information will
help the consumer to retain to a product or re try the product if the product has
dissatisfied them (Solomon, 2009).

3. To understand the factors influencing Consumer’s buying Behaviour

It is important for marketers to consider the factors that affect the buying behaviour of
consumer before entering the market. There are many factors that can influence the
purchase decision of consumers such as social influence, cultural influences,
psychological factors and personal factors (Super Professeur, 2011). Understanding
these factors helps marketers to market the product on right time to the right
consumers. For example, if marketer is marketing a product which is Halal. The
marketers first consider all the factors that can influence consumers to buy Halal
products, where they can target specific areas where Halal food is more sold.

The marketers need to pay attention to cultural influences such as religion, values and
norms of the people or societies targeted and lifestyle of the targeted consumers. The
marketers can propose different strategies that convince the targeted consumers to buy
marketed products or services.

Moreover, the marketers should be ascertain the factors that influence and affects
purchase decision of consumers (Solomon, 2009). If the marketers failed to understand
the factors that might influence consumers, they will fail to convince the consumer to
purchase that product or will fail to meet the demands of consumers. Some variables
cannot be directly observed (Super Professeur, 2011). In such case, thorough
understanding of concepts and theories of consumer behaviour helps marketers to
predict the consumer’s buying behaviour to a reasonable extent. Thus, understanding
consumer’s behaviour to buy a product is complex and requires marketers to
continuously understand and apply various concepts and theories for successful
marketing.

4. To increase the knowledge of sales person influence consumer to buy product

All the products and services marketed revolve around the behaviour of consumers that
how they will respond to them. Effective marketing of a product by sales people may
help to deliver right product to right people. Consumer behaviour deals with the
knowledge of what the consumers need and want to buy and what goods and services
are available to satisfy their needs. Thus, consumer behaviour deals with particularly with
the behaviour of people i.e., consumers. It is important for sales person to be fully
aware of the customer’s requirement so that he or she could clearly communicate the
benefits of the product to the customers. Moreover, the sales person by understanding
consumer’s demand and need for a product can sell goods that are most closely related
to their requirement. Besides understanding consumer behaviour, the sales person
should also have command over their spoken language. This is because any
miscommunication could harm brand reputation. Moreover, if the consumers have more
knowledge about the product than the sales person, the sales might fail to meet their
targets. Thus, analysing consumer’s behaviour and knowledge for effective marketing of
products by sales people are important. The sales people must be fully aware of the
consumer’s behaviour in different situations so that they could help them in meeting
their demands and satisfaction (Solomon, 2009).

5. To understand the consumer’s decision to dispose a product or services

Disposal of product involves throwing away of products by the consumers (Solomon,
2009). This behaviour of consumer is very complex and requires more importance by the
marketers. Understanding the consumer’s behaviour about how and when consumers
dispose a product, the marketers or the companies can position themselves so that this
behaviour could be limited (Raghavan, 2010).

If the product or services that have failed to deliver required or expected satisfaction by
the consumers, the product is disposed by the customers. For this, some marketers track
the follow up from the consumers so that they can gauge the reason behind failure of
the product. Moreover, in order to retain customers, some marketers or organizations
offer customers with services like exchange of product, money back guarantee etc.
Although, these tools are helpful to influence post purchase behaviour of consumers to
some extent.

The method of disposition varies transversely from product to product. Some of the
factors that lead to consumer’s behaviour to dispose a product include psychological
characteristics, situational factors or the intrinsic factors of product. The psychological
characteristics include attitude, mood, emotion, social class, social conscience,
perception etc. The situational factors such as urgency, functional use, fashion change
etc. and intrinsic factors such as product style, durability, reliability, adaptability,
replacement cost, colour, size etc. can lead to consumer’s decision to dispose a product
(Rao, 2011).

For example, the personal computers sold previously were largely demanded by
consumers. However, due to change in size, advancing technology, affordability,
convenience; most people have switched to laptops and mobiles with operating systems
have disposed personal computers to a greater extent.

6. To help marketers to optimize sale of product and create focused marketing

strategies
The theories and concepts of Consumer behaviour help marketers to optimize their
sales and to create efficient marketing strategies. Moreover, these theories provides
marketers with information on the consumer’s behaviour to spend money, likely causes
that incline them to spend more money on a product, and these two information help to
plan strategies that should be practiced by the marketers for successful marketing of a
product (Goessl, 2011). Studying different consumer behaviour theories helps to
understand the different choices that consumers make to buy a product. There are some
factors that need to be carefully analysed by the marketers which help them to increase
their sales and develop effective marketing strategies. These factors are discussed as
follows:

Consumer’s rational behaviour: It is foremost important for a marketer to understand

the situations where consumers behave rationally. Many consumer behaviour theories
suggest that the consumers want to get maximum benefit and satisfaction from the
product by spending minimum amount of money. This shows that consumers do not
spend all their money to buy a product and keeps a certain amount of money as their
savings. However, on the other hand, the consumers having limited money spend all
their money on purchase of their basic needs such as shelter, food and clothing. Thus,
the marketer must carefully analyse these two situations of consumers before marketing
a product or services (WiseGEEK, n.d.).

Consumer’s taste and preferences: Understanding consumer taste and preferences helps
marketers to revamp their product so that they could meet customer satisfaction. These
factors may change from time to time. The change in consumer’s behaviour affecting by
these factors should be carefully monitored. The marketers need carefully understand
the consumer’s interest in the products by breaking down the targeted consumers into
demographics, like age, occupation and location as they contribute investigating
information about consumer preferences.

Price of Products: Prices of products are a widely discussed factor in consumer behavior
theories. The theories suggest that marketers should keep their prices low without
affecting the quality to attract consumers. This is because consumers go mostly for
products that are of low price but satisfies their demand (Open Learning World, 2011).

Features of Product: Increased number of features offered by the product tends to

increase the price of products. In such case, consumers go for added features in a
product at affordable price. Therefore, the markers design their products in such a way
that the product gives maximum value or features to consumers at affordable price
(Goessl, 2011)

Consumer’s knowledge about a product: The marketer must know to what extent the
consumers have knowledge about a product. Mostly, consumers select products with
which they are familiar with. For example, if the consumers are aware of the health
effects of eating high fat food or fast food, marketing of such a product to health
conscious consumer will end up in failure.

Conclusion
In a nutshell, consumer behaviour theories and concepts are of most importance to the
sales people or the marketers. As products are made to cater consumer’s needs and
demands, therefore, the products should be carefully marketed for the successful
achievements of organizational goals. The study of consumer behaviour helps them in
analysing different factors that has influence on the buying decision of the consumers. If
the marketers failed to understand these factors, they would not meet their targets.

5. Division Inc. is a company manufacturing smart mobile phones priced around Rs. 25000
has commissioned a Market Research organization [MRO] for finding out the motivations
and preferences of youth of Bangalore between ages 20 to 25 years. You are the head of
this MRO. (10 Marks)
A. Please prepare ‘Terms of Reference’, which clearly sets out the objectives of the
task, for approval of the client company.
B. Prepare a ‘Market Research Plan’ for this task for approval of the CEO of the MRO.
C. What type of questionnaire will be used and why?
D. Based on your ideas and knowledge of this product, what could be possible
outcome of this research?

mrp : how collect data ? what survey questions? likert scale – Symentic differential
Project Terms of Reference (TOR)
Template
BY ERIC MCCONNELL · MARCH 16, 2012

Terms of Reference (TOR) provide a statement of the

background, objectives, and purpose of a proposed project. A TOR template
includes a range of criteria that are necessary for strategic project decision
making. This document defines the activities to be done and indicate the
issues, budget and expertise related to the project. The following Project
Terms of Reference Template provides an overview of the key sections of a
TOR document. In this article I describe the definition and content of TOR.
The template is available for fee download as a .doc file.

Terms Of Reference Template Free Download

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Definition and Purpose of TOR

Terms of Reference (TOR) are a strategy-level document that defines the tasks
and duties required of a project contractor, and highlights project background
and objectives at high level. The document also states the planned activities,
expected inputs and outputs, project budget, working schedules, and job
descriptions. It is used to judge about the performance of contractors,
consultants, experts, and other project stakeholders.
The purpose of TOR is to specify the amount and type of work to be
accomplished by the project. It is a governance document that establishes
and determines the relationships between all project stakeholders. Terms of
Reference are developed once a project has been identified, defined and
planned.
TOR of a project provides a clear description of the following critical
information:
 The rationale behind undertaking the project
 The proposed methodology of project management along with work plans
and activity schedules
 The expected resource requirements, primarily regarding personnel
 Reporting rules and requirements

Content of TOR
The development of Project Terms of Reference is required for making the
decision on whether or not to allocate necessary funds to a proposed project.
It is the result of the project proposal process, and TOR serves as the primary
report of this process. TOR is usually required for:
 Pre-feasibility and feasibility analyses
 Appraisal activity
 Implementation contracts designing and monitoring
 Evaluation studies
 Reporting and audit
 Other advisory work required at any project stage
Considering the listed items, the content of Project Terms of Reference should
include business-critical information necessary for starting, implementing and
monitoring project activities. Meanwhile, the exact content of TOR varies from
project to project and significantly depends upon the scope of a proposed
project.

A generic content format of Project Terms of Reference is suggested below:

 Project Background
 Project Objectives
 Issues to be explored and analyzed against certain criteria
 Implementation Methodology to be applied
 Expertise required
  Reporting requirements
 Work plan, including activity schedules
Please note these are the common sections of a TOR template. They can be
changed or omitted, depending on the scope of a particular project. The
following below description of the TOR sections is general and provided as an
overview for guidance purposes. It means a particular project will require a
deeper analysis of the content to be included in a TOR template. When you
plan for your project, you must first analyze and define the work that needs to
be contracted out, and then proceed with the development of Project Terms of
Reference.
1. Background
The background of a project provides an overview of the history behind the
project. It should clearly state why perform the project and refer to a
programming context. The purpose is to provide the reader with a brief
explanation of the need behind the project.

The Background section of a TOR template usually includes several

paragraphs which address the following issues:

 Describe the project in the context of a related business need

 State the general role of stakeholders in doing project activities
 Highlight a brief overview of the project to date
2. Objectives
The objectives of a project are those desired accomplishments that can be
reasonably delivered upon project completion, with consumption of available
resources and within an expected timeframe. They should clearly identify and
define what is expected from the project and who the target audience is.

The Objectives section of a Terms of Reference template should describe

desired achievements at different stages of project lifecycle. It should also
state the primary objectives of the project, which must be achieved upon
success project completion. Here’s an example of how it should look like.
Work Type/Project Stage Generic Objective
Project Completion To increase sales of product “A” by 15% over a 3-month period

To provide decision makers with sufficient information necessary for acceptance or rejection of th
– Feasibility study
project

To provide decision makers with sufficient information necessary to make informed judgment re
– Monitoring
performance of the project

– Audit To ensure the project remains relevant and reasonable in legal, economical and technical te

3. Issues
Any project involves a number of issues and problematic areas that must be
addressed in order for the project to be implemented smoothly. The issues are
the points of discussion or dispute throughout the project lifecycle. They cover
any concern, query, request for change, or anything else that requires a
resolution during the project. Unresolved issues may cause project failure.
The Issues section of a TOR template should highlight key issues to be
studied and disputed at every stage of the project lifecycle. Usually TOR
includes a range of evaluation criteria to be used for issue analysis and
solving. Here are generic issue evaluation criteria for most projects:
 Efficiency – this criterion determines how well a given activity transforms
available resources into desired outputs in terms of quantity, quality and
time
 Relevance – it help analyze whether a given activity is being performed
with the desired benefits
 Effectiveness – it concerns how far the project’s outputs have been
utilized and whether the project’s purpose has been realized
 Impact – this measure helps figure out the extent to which the project’s
benefits received by the target audience have an overall effect on larger
numbers of people concerned
 Sustainability – this criterion identifies whether the project’s positive
outcomes will continue after funding ends.
4. Methodology
The implementation methodology of a project provides a set of broad
principles and rules from which specific procedures will be derived in order to
define how to carry out the project in a cost-effective way. It describes the
main methods of project implementation.

The Methodology section of a Project Terms of Reference template should therefore include a
description of the following items:

 Key phases of the project implementation process

 The required level of stakeholder involvement that ensures smooth implementation
 The content and duration of project activities and tasks
 The information collection tools to be used throughout the project for monitoring purposes
 Data analysis rules
5. Expertise
The expertise needed for doing a project defines a set of professional requirements for the
individuals and teams involved in project implementation. It will be the basis for team building,
including training and skill assessment.

The Expertise section of a Project Terms of Reference template should identify the following:

 The type of work involved in the project

 The type of skills and abilities required to do project work
 The exact number of individuals involved, including a description of their qualifications,
experience, and other professional attributes
 The period of engagement of each team member
 A description of the duties and responsibility per teammate
 The relationship between the team members, including leadership roles
6. Reporting
Reports provide valued information about project performance over a certain period. Reporting
is a process that starts once a project is launched and continues until the project is completed
and its product is handed over. Reporting requirements will define how to write and submit
project reports and what information to include.
The Reporting Requirements section of a Terms of Reference template should clearly specify
the requirements for the reporting process, and might include the details of:

 Table of contents for project reports

 Rules for composing annexes
 Report templates
 The language to be used in reports
 Computer software programmes to be used
 Submission dates
 People responsible for reporting and approving
 Other sufficient information, such as number of copies to be created, responsibilities for
report production and presentation, etc.
7. Work Plan
A work plan is a kind of strategy that aims to help solve problems throughout a project and
boost employee drive and focus. It determines what actions need to be taken to start,
implement, and complete the project within a specified time period and under defined budget. It
is often used as a general guide for developing a project implementation plan.
The Work Plan section of a Project Terms of Reference template should set out the
activities and necessary resources required for achieving the project’s results and
purpose. It should therefore include a summary of the anticipated work and time
schedule, which are based upon the following:

 An analysis of the issues, in terms of the evaluation criteria

 The proposed implementation methodology
 The reporting requirements
 The finance resources allocated to the project.
 Project Terms of Reference Template
 Provide an overview of the history behind the proposed
project
1.Background  Clearly state why perform the project, and also refer to
a programming context
 State the general role of stakeholders in doing project
activities
 Write a brief explanation of the need behind the project
 State the major objectives of the proposed project
 Describe the intended achievements to be gained at
2.Objectives different stages of the project lifecycle
 Provide an overview of the resources required
 Clearly identify and define what is expected from the
project and who the target audience is
 Highlight the key issues to be studied and disputed at
every stage of the project lifecycle
3.Issues  List the criteria (including Efficiency, Relevance,
Effectiveness, Impact, Sustainability) against which the
issues will be analyzed and evaluated
 Define the key phases of the project implementation
process
4.Methodology  Specify the required level of stakeholder involvement
 Describe the content and duration of project activities
 List the information collection tools necessary for
monitoring purposes
 Provide data analysis rules
 Specify the type of work involved in the proposed project
 Describe the type of skills and abilities required
5.Expertise  Define the exact number of individuals involved
 Point at the period of engagement of each team member
 Describe the duties and responsibility per teammate
 Identify the relationships between the team members
 Provide the Table of Contents for project reports
 Define rules for composing annexes
6.Reporting  Add report templates
 Set submission dates
 List the computer software programmes to be used for
report writing
 Refer to people responsible for reporting and approving
 Provide other sufficient information such as number of
copies to be created, responsibilities for report
production and presentation, etc.
 Provide a summary of the anticipated work
 Describe the activities and necessary resources required
7.Work plan for achieving the project’s results and purpose
 Provide the activity schedule template
 Describe The finance resources allocated to the project