Unit-2 Consumer Behaviour and Marketing Segmentation | Gauhati University BCom 5th Sem | GU Principles of Marketing Notes 2023

Q. What is consumer behaviour ? ANSWER: Consumer behavior, also known as consumer buying behavior, refers to the study of how individuals and group

Unit-2 Consumer Behaviour and Marketing Segmentation | Gauhati University BCom 5th Sem | GU Principles of Marketing Notes 2023

Gauhati University B.Com 5th Sem.
Principle of Marketing  Notes 2023


1. What is consumer behaviour (Consumer Buying Behaviour)? State its characteristic. Explain the importance of consumer behaviour. Explain the various factors that influencing consumer behaviour. 2015, 2016, 2017,2021,2022

ANSWER:  Consumer behavior, also known as consumer buying behavior, refers to the study of how individuals and groups make decisions to select, purchase, and use products and services. It involves understanding the process consumers go through when deciding what to buy, where to buy it, and how to use it. 

The  characteristics of consumer behavior:

1. Complex Process: Consumer behavior is a multi-faceted and intricate process influenced by various factors.

2. Individual Differences: Different consumers exhibit unique preferences, attitudes, and behaviors.

3. Dynamic: Consumer behavior can change over time due to evolving tastes, trends, and external influences.

4. Affected by Marketing: Marketing strategies and advertising play a significant role in shaping consumer decisions.

5. Psychological Aspect: Understanding consumers' psychological and emotional responses is crucial.

The importance of studying consumer behavior:

1. Better Consumer: The study of consumer behaviour enables us to become a better consumer. It will help the consumer take more precise consumption-related decisions.

2. Studying the need of consumers: It helps marketers understand consumer buying behaviour and make better marketing decisions.

3. Market Prediction: The size of the consumer market is constantly expanding, and their preferences are also changing and becoming highly diversified. So without studying it, marketers cannot predict the future of their business.

4. Economic Stability: It is significant for regulating the consumption of goods and thereby maintaining economic stability.

5. Efficient Utilization of Resources: It is useful in developing ways for the more efficient utilization of marketing resources. It also helps in solving marketing management problems in a more effective manner.

6. Studying Consumer’s Mood: Today, consumers give more importance to environmentally friendly products. They are concerned about health, hygiene, and fitness. They prefer natural products. Hence, a detailed study of upcoming groups of consumers is essential for any firm.

7. Consumer Protection: The growth of the consumer protection movement has created an urgent need to understand how consumers make their consumption and buying decisions.

8. Studying Consumer’s Preferences: Consumers' tastes and preferences are ever-changing. The study of consumer behavior provides information regarding color, design, size, etc., which consumers want. In short, consumer behavior helps in formulating production policies.

9. Market Segmentation: For effective market segmentation and target marketing, it is essential to have an understanding of consumers and their behavior.

10. Marketing Research: Marketing managers regard consumer behavior discipline as an applied marketing science. If they could predict consumer behavior, they could influence it. This approach has come to be known as positivism, and the consumer researchers who are primarily concerned with predicting consumer behavior are known as positivists.

Factors influencing consumer behavior:

1. Cultural Factors: Culture, subculture, and social class impact consumers' values, beliefs, and buying habits.

2. Social Factors: Reference groups, family, and social networks influence consumer choices.

3. Personal Factors: Age, occupation, lifestyle, and personality traits shape buying behavior.

4. Psychological Factors: Motivation, perception, learning, and memory affect decision-making.

5. Economic Factors: Income, savings, and economic conditions influence purchasing power.

6. Marketing Mix: Product, price, promotion, and place (distribution) have a significant impact.

7. External Influences: Environmental factors, such as legal, political, and cultural changes, can affect consumer behavior.

8. Situational Factors: Immediate circumstances, like the shopping environment or time constraints, play a role.

2. What are various stages in Consumer Buying Process? What are the Personal, Psychological and Social factors that influence consumer behaviour? 2014, 2017, 2018, 2019

ANSWER: The consumer buying process typically consists of several stages that individuals go through when making a purchase decision. These stages can vary slightly depending on the complexity of the purchase, but generally include the following:

1. Problem Recognition: This is the initial stage where consumers recognize a need or problem that can be solved through purchasing a product or service. The need can be triggered by internal factors (e.g., hunger) or external factors (e.g., advertising).

2. Information Search: Once the need is recognized, consumers seek information about potential solutions. They gather information through various sources like friends, family, online research, or advertising.

3. Evaluation of Alternatives: In this stage, consumers assess the available options and compare them based on factors like price, quality, features, and brand reputation. They may create a list of pros and cons for each option.

4. Purchase Decision: After evaluating the alternatives, consumers make their decision to buy a specific product or service. Factors like budget constraints and personal preferences play a significant role in this decision.

5. Post-Purchase Evaluation: After the purchase, consumers assess their satisfaction with the product or service. If it meets or exceeds their expectations, it can lead to brand loyalty and repeat purchases. If not, it can result in dissatisfaction and potentially negative word-of-mouth.

Personal, psychological, and social factors influence consumer behavior:

Personal Factors:

- Age and Life Stage: Different age groups have varying preferences and needs.

- Occupation: A person's job can influence their purchasing decisions.

- Lifestyle and Personality: Individuals with similar lifestyles and personalities may have similar buying habits.

- Economic Situation: Income, savings, and financial stability impact what consumers can afford.

- Lifestyle: Hobbies, interests, and activities influence product choices.

Psychological Factors:

- Motivation: The underlying reason or need that drives a consumer's purchase decision.

- Perception: How consumers interpret and make sense of information about products.

- Learning and Experience: Past experiences and knowledge affect consumer choices.

- Attitudes and Beliefs: Personal values and beliefs can influence preferences.

- Memory: How consumers remember information about products and brands.

Social Factors:

- Culture and Subculture: Cultural norms and values shape consumer behavior.

- Social Class: An individual's social class can influence product choices.

- Reference Groups: People are influenced by the opinions and behaviors of those around them.

- Family: Family dynamics and roles impact purchase decisions.

- Social Networks: Online and offline networks can influence product recommendations.

3. What do you mean by market segmentation? Discuss its objectives and importance to a marketer in big country like India.

ANSWER:  A market consists of large number of individual customers who differ in terms of their needs, preferences and buying capacity. Therefore, it becomes necessary to divide the total market into different segments or homogeneous customer groups. Such division is called market segmentation.

According to Philip Kotler, market segmentation means "the act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes.".

Objectives of Market Segmentation:

1. Identifying Target Markets: Market segmentation helps in pinpointing the most promising customer groups within a larger market, enabling companies to allocate resources more effectively.

2. Tailored Marketing: It allows businesses to create marketing campaigns, messages, and products/services that resonate with the specific needs and preferences of each segment, increasing the likelihood of success.

3. Resource Efficiency: By focusing marketing efforts on well-defined segments, companies can reduce wastage and use their resources more efficiently.

4. Competitive Advantage: Segmenting the market effectively can provide a competitive edge by addressing customer needs better than competitors and establishing brand loyalty.

5. Product Development: Understanding the unique needs of each segment can guide product development and innovation, leading to offerings that cater to a wider range of customer preferences.

6. Improved Customer Satisfaction: Tailored products and services lead to higher customer satisfaction and loyalty, as consumers feel that their specific needs are being addressed.

In a large and diverse country like India, market segmentation is of utmost importance to marketers due to the following reasons:

1. Cultural Diversity: India is a diverse country with numerous languages, cultures, and regional preferences. Effective segmentation allows businesses to tailor their offerings to different cultural and regional nuances.

2. Varying Income Levels: India has a wide range of income levels, from low-income to high-income consumers. Segmentation helps in addressing the unique purchasing power and preferences of each income group.

3. Urban-Rural Divide: There's a significant urban-rural divide in India. Segmentation helps in crafting strategies that cater to the specific needs and lifestyles of urban and rural consumers.

4. Product Variability: India's consumer preferences vary greatly across product categories like clothing, food, and electronics. Effective segmentation allows companies to adapt their offerings accordingly.

5. Age and Demographics: India has a large population with varying age groups, each with its own set of preferences. Segmenting by age and demographics is crucial for targeted marketing.

6. Technological Adoption: The pace of technological adoption varies across different regions and demographics. Market segmentation assists in tailoring technology-related products and services accordingly.

In summary, market segmentation is crucial for marketers in a diverse and vast country like India to efficiently target specific customer groups, understand local nuances, and offer products and services that resonate with the unique characteristics and needs of each segment. It helps businesses maximize their reach and success in a complex market landscape.

4. What is Market Segmentation?Explain the importance of market segmentation. What factors involved in market segmentation?   2018,2021,2022

ANSWER: A market consists of large number of individual customers who differ in terms of their needs, preferences and buying capacity. Therefore, it becomes necessary to divide the total market into different segments or homogeneous customer groups. Such division is called market segmentation.

According to Philip Kotler, market segmentation means "the act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes."

Advantages/Importance/Significance of Market Segmentation:

1) Facilitates consumer-oriented marketing: Market segmentation allows for a more specific marketing mix tailored to different consumer segments, making it more effective than a one-size-fits-all approach.

2) Facilitates the introduction of a suitable marketing mix: Segment-wise data collection helps producers understand consumer needs, behaviors, and expectations, leading to more informed decisions about the marketing mix (Four Ps).

3) Facilitates the introduction of an effective product strategy: Market segmentation ensures that product development aligns with consumer needs, resulting in consumer satisfaction, higher sales, and increased profits for the marketing firm.

4) Facilitates the selection of promising markets: Segmentation helps identify sub-markets that can be served efficiently with limited resources, allowing firms to focus on the most productive and profitable segments.

5) Facilitates the exploitation of better marketing opportunities: Market segmentation helps identify promising opportunities by distinguishing between different customer groups within a market, enabling marketers to target the right audience from the start.

6) Facilitates the selection of a proper marketing program: Segmentation provides reliable information about target market needs, allowing marketers to tailor their marketing programs accordingly.

7) Provides proper direction to marketing efforts: Segmentation helps firms avoid unprofitable and irrelevant markets, enabling them to concentrate on promising segments, thereby directing marketing efforts effectively.

8) Facilitates effective advertising: Segmentation ensures that advertising efforts are focused on the segments that matter, making advertising more result-oriented by using media channels that reach specific segments.

5. What are the bases of market segmentation? 2014, 2016, 2019,2021

ANSWER: Bases of Market Segmentation:

1) Geographical Factors:

   - State-wise

   - Region-wise

   - Nation-wise

   - Different areas due to climate, culture, etc.

2) Demographic Factors:

   a. Age:

      - Children's market

      - Teenagers' market

      - Adults' market

      - Market for older people

   b. Sex:

      - Variation in consumption behavior between males & females

   c. Family Life Cycle:

      - Influence on consumer behavior

      - Bachelor, boy, married man, etc.

3) Psychological Factors (Psychographic Segmentation):

   - Personality traits

   - Attitude

   - Lifestyle

   - Value system

   - Consumer preferences and norms

4) Economic Factors:

   - Classifications in Western countries:

      - Upper Class, Upper-upper class, Lower-upper class

      - Middle class, Upper-middle class, Lower-middle class

      - Lower class, Upper-lower class, Lower-lower class

   - In our country: upper class (rich), middle class, lower class

   - Income-based classifications: Very Rich, The Rich class, The Aspiration Class, The Destitute

5) Behavioral Factors:

   a. Occasions:

      - Demand fluctuations during specific events (festivals, holidays, etc.)

   b. Benefits:

      - Consumer expectations and desires from products

   c. Attitude:

      - Enthusiastic market, indifferent market, positive market, negative market based on consumer attitudes

These bases help in segmenting markets effectively and tailoring marketing strategies to meet the needs and preferences of different consumer groups.

6. Distinguish between product differentiation and market segmentation. 2017

ANSWER: Distinguish between product differentiation and market segmentation:-


Product Differentiation

Market Segmentation


Product differentiation is a marketing strategy that involves creating a unique product or service that is different from competitors

Market segmentation, on the other hand, is a marketing strategy that involves dividing a larger market into smaller groups of consumers with similar needs, wants, or characteristics.


Product differentiation is more focused on the product itself.

while market segmentation is more focused on the customer.


The goal of product differentiation is to create a competitive advantage by offering a unique product or service

The goal of market segmentation is to tailor marketing efforts to specific customer segments.


Product differentiation aims to create a unique selling proposition for a product or service

Market segmentation aims to identify the needs and preferences of specific customer segments


Product differentiation involves creating a unique product or service through various means, such as design, features, performance, quality, and branding

Market segmentation involves dividing a larger market into smaller groups and developing marketing messages and products tailored to each segment.


Product differentiation is more suited to businesses that have a unique product or service

Market segmentation is more suited to businesses that have a larger and diverse customer base.


Product differentiation can be costly and time-consuming, as it requires significant investment in research and development, production, and marketing.

Market segmentation can also be complex and time-consuming, as it requires significant research and data analysis.

Competitive Advantage

Product differentiation can create a competitive advantage by offering a unique product or service, but this advantage can be lost if competitors are able to replicate or improve upon the differentiated product.

Market segmentation can create a competitive advantage by tailoring marketing efforts to specific customer segments, which can lead to higher sales and customer loyalty.

Customer Loyalty

Product differentiation can help to build brand loyalty, as customers are more likely to stick with a brand that offers a unique and valuable product.

Market segmentation can also help to increase customer loyalty, as customers are more likely to remain loyal to a brand that understands and meets their needs.

Research and Data Analysis

Product differentiation requires research and data analysis to identify unique features, designs, or branding.

Market segmentation requires even more research and data analysis to identify and analyze different customer segments.

7. Define target marketing, test marketing and product positioning.


- Target Marketing: Target marketing is a strategy where a business identifies and focuses its marketing efforts on a specific group of potential customers who are most likely to be interested in its products or services. This involves analyzing demographic, psychographic, and behavioral factors to tailor marketing messages and tactics to the preferences and needs of the chosen target audience.

- Test Marketing: Test marketing is a stage in the product development process where a company introduces a new product or service to a limited geographic area or a small group of potential customers to assess its viability and gather feedback. This allows the company to make necessary adjustments before a full-scale launch to ensure the product's success.

- Product Positioning: Product positioning refers to the way a product or service is perceived by consumers relative to competitors in the market. It involves defining the unique characteristics and benefits of the product, which set it apart from others, and then creating a marketing strategy to establish this perception in the minds of the target audience. Effective product positioning helps attract the right customers and build a competitive advantage.

8. What is product positioning? Explain its importance and bases.

ANSWER: Product positioning is a marketing strategy that focuses on how a product or service is perceived by consumers relative to its competitors in the market. It involves creating a distinct image and identity for the product in the minds of the target audience. 


1. Competitive Advantage: Effective product positioning helps a company differentiate its offerings from those of competitors. It highlights what makes the product unique, whether it's features, quality, price, or other factors. This differentiation can give a company a competitive edge in the market.

2. Customer Relevance: By understanding the needs, preferences, and problems of their target audience, companies can position their products as solutions to specific customer problems. This relevance resonates with consumers and can lead to increased sales and loyalty.

3. Brand Identity: Product positioning contributes to the overall brand identity of a company. It shapes how consumers perceive the brand and its values. A well-executed positioning strategy can enhance brand reputation and recognition.

4. Marketing Focus: Positioning guides marketing efforts, messaging, and communication strategies. It helps marketers tailor their messages to resonate with the target audience, making marketing campaigns more effective.

There are several bases or criteria on which product positioning can be established:

1. Product Features and Benefits: Positioning based on the unique features or benefits of the product, emphasizing what sets it apart from competitors.

2. Price: Positioning based on offering the product as a high-end, premium option or as an affordable, budget-friendly choice.

3. Quality: Positioning based on the perception of superior quality, reliability, or durability.

4. Usage or Application: Positioning based on how the product is used or the problems it solves. It can target specific use cases or customer segments.

5. Product Category: Positioning within a specific product category, emphasizing the product's fit and function within that category.

6. Target Market: Positioning aimed at a specific demographic, psychographic, or geographic segment of the market.

7. Competitor Comparison: Positioning by directly comparing the product to competitors, highlighting advantages or addressing shortcomings.

8. Cultural or Emotional Appeal: Positioning that taps into cultural or emotional factors to create a unique connection with consumers.

In summary, product positioning is essential for companies to establish a clear identity, stand out in the market, and connect with their target audience. It's a strategic tool that shapes marketing efforts and influences consumer perceptions of a product or service.

9. Explain the significance of the study of consumer behaviour. 2022

ANSWER: The significance of the study of consumer behaviour:- 

1. Marketing Effectiveness: Understanding how and why consumers make purchasing decisions helps businesses tailor their marketing strategies. This knowledge enables companies to create more effective advertising campaigns, product designs, and pricing strategies.

2. Product Development: Consumer insights guide product development by identifying consumer needs and preferences. This ensures that products meet market demand and are more likely to succeed.

3. Competitive Advantage: Firms that understand consumer behavior can gain a competitive edge. They can differentiate their offerings, improve customer satisfaction, and build brand loyalty.

4. Market Segmentation: By analyzing consumer behavior, businesses can segment markets based on characteristics like demographics, psychographics, and buying habits. This allows them to target specific customer groups more effectively.

5. Risk Mitigation: Understanding consumer behavior can help companies anticipate market shifts and economic changes, reducing the risk of product failures or market downturns.

6. Pricing Strategies: Consumer behavior studies aid in setting appropriate pricing strategies. Knowing what consumers are willing to pay helps optimize pricing for profitability.

7. Customer Satisfaction: Insights into consumer preferences allow businesses to improve customer satisfaction, leading to repeat business and positive word-of-mouth marketing.

8. Policy and Regulation: Governments and regulatory bodies use consumer behavior research to create policies that protect consumers and promote fair competition in the marketplace.

In summary, the study of consumer behavior is essential for businesses and policymakers alike, as it provides valuable insights into the dynamics of markets, helping shape strategies, products, and policies to better serve consumers and drive economic growth.


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