MODULE C — BUSINESS-TO-CONSUMER (B2C) MARKETING

B2C Marketing

focuses on the strategies, tools, and understanding required to market products or services directly to individual consumers.

5-Step Consumer Decision Process

Problem Recognition, Information Search, Evaluation of Alternatives, Purchase Decision, Post-Purchase Behavior

Psychological Influences

Motivation, Personality, Perception, Learning, Beliefs & Attitudes

Sociocultural Influences

Family, Social class, Reference groups, Culture & subculture

Situational Influences

Physical surroundings, Social surroundings, Temporal effects, Purchase task, Antecedent states

Prospect Theory

explains how people actually make decisions under risk — often irrationally. People evaluate outcomes relative to a reference point, not absolute value.
They are loss-averse — losses hurt more than gains feel good.

Diminishing sensitivity

The Value Function: Concave for gains

More pain per unit of loss

The Value Function: Convex for losses

Reflects loss aversion

The Value Function: Steeper for losses

Mixed gain

Win $200, lose $180 vs. Win $20

Net gain is same, but split feels worse

Multiple gains

Win $70 + $20 vs. Win $90

Separate wins feel better

Multiple losses

Owe $150 + $50 vs. $200

Combined losses feel worse

Mixed loss

Lose $250, win $50 vs. Lose $200

Offset feels better than net loss

Framing Effect

Decisions change based on how options are worded.
E.g., “90% fat-free” vs. “10% fat”

Status Quo Bias

Preference to maintain current state
→ Explains resistance to switching brands

Endowment Effect

People value what they already own more than what they don't
→ Makes returns and cancellations feel painful

Reframe pricing

Present price as “avoiding a loss”

Bundle gains

Make multiple small wins feel larger

Separate losses

Avoid reminding of total pain

Trial-based marketing

Endowment effect makes users reluctant to return items

Limited-time offers

Use loss aversion (fear of missing out)

Freemium

Give away core product for free

while selling premium