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Consumer Behavior – Summary week 1 Author: HuisinghCB Summary Chapter 1 Peter & Olson (2001)
Introduction to Consumer Behavior and Marketing Strategy
Introduction
The marketing concept is the philosophy for conducting business. This concept suggests an
organization should satisfy consumer needs and wants to make profits. To implement this concept,
organizations must understand their consumers and stay close to them to provide products/services
that consumers will purchase and use appropriately.
Some companies viewed implementing the marketing concept as a marketing task, rather than a
general shared view, in which all the departments should be involved. These organizations would
conduct market and consumer research, but they would not use it as a basis for the organizational or
marketing strategy. Many of the most successful companies today, have become successful by
designing the entire organization to serve consumers and stay close to them.
Companies are making changes to serve consumers better for 3 reasons:
1. The dramatic success of Japanese companies that focus on providing consumers with value-
laden products has spurred other companies to follow suit.
2. Dramatic increase in the quality of consumer and marketing research. In the past, companies
did not have access to detailed information on the actual purchases and users of their
products. Due to technological development this information is now available, allowing
companies to better implement the marketing concept.
3. The development of internet as a marketing tool. This change is an opportunity for small
entrepreneurs, since start up costs of marketing products are greatly reduced, compared
with traditional marketing methods. Internet can be used to communicate amounts of
information to consumers and to sell products/services directly to them. Internet can also be
used to conduct marketing research studies.
Many successful companies have recognized the importance of consumers and have sophisticated
data and approaches from which to develop organizational and marketing strategies.
What is consumer behaviour?
Consumer behavior The American Marketing Association (AMA) defines consumer behavior as
"the dynamic interaction of affect and cognition, behavior, and the environment by which human
beings conduct the exchange aspects of their lives”.
CB involves…
• Affect & Cognition
• Behavior
• Environment
CB is…
• Dynamic
• About interaction
• About exchanges
1
,In other words, consumer behavior involves the thoughts and feelings people experience and the
actions they perform in consumption processes. It also includes all the things in the environment that
influence these thoughts, feelings, and actions. Consumer behavior is dynamic, involves interactions,
and involves exchanges.
Consume r behavior is dynamic
Consumer behavior is dynamic because thinking, feelings and actions of consumers or consumer
groups are constantly changing. Needs and wants change at different times for different consumer
groups. For example, the Internet has changed the way people search for information about
products and services. The fact that consumers and their environments are constantly changing
highlights the importance of ongoing consumer research and analysis by marketers to keep abreast
of important trends. Strategies that work at one time or in one market may fail miserably at other
times or in other markets.
Consumer behavior involves interactions
Consumer behavior involves interactions among peoples thinking, feelings and actions and the
environment. Thus marketers need to understand what products and brands mean to consumers,
what consumers must do to purchase and use them, and what influences shopping, purchase and
consumption. The more marketers know about how these interactions influence individual
consumers, target markets of similar consumers and society, the better they can create value for
them. For example, one major change in society is the shrinking number of middle-income
consumers and the increase in low- and high-income groups. How this change affects consumers’
thoughts, feelings, and actions has important implications for marketing strategy.
Consumer behavior involves exchanges
Consumer behavior involves exchanges between human beings, people give up something of value
to others and receive something in return (often giving up money). The role of marketing in society is
to help create exchanges by formulating and implementing marketing strategies.
Approaches to consumer behavior research
There are three major approaches to studying consumer behavior:
1. The interpretive approach Based on theories and methods from cultural anthropology. Seeks to
develop a deep understanding of consumption and its meaning. Studies use long interviews and
focus groups to understand such thing as what products and services mean to consumers and what
consumers experience in purchasing and using them. E.g. how advertising depicts women; how art
and films reflect consumption meaning. DESCRIPTION
2. The traditional approach Based on theories and methods from cognitive, social and behavioral
psychology, as well as sociology. Seeks to develop theories and methods to explain consumer
decision making and behaviour. Methods involve experiments and surveys to test theories, decision
processes and social influences on consumer behavior. EXPLANATION
2
, 3. The marketing science approach is based on theories and methods from economics and
statistics. It involves developing and testing mathematical models to predict the impact of marketing
strategies on consumer choice and behavior. PREDICTION
Uses of consumer behavior research
Relationships among Action-oriented Groups interested in Consumer Behavior:
Three groups use knowledge about consumer behavior and consumer behavior research. Each group
is interested in consumer behavior as it influences the consumers interactions and exchanges with
the other groups:
• Marketing organizations This group includes all organizations that seek exchanges with
consumers. E.g. businesses to sell products, museums, law firms, universities, etc.
• Government and political organizations include government agencies such as the Federal
Trade Commission. The major concern of these organizations is monitoring and regulating
the exchanges between marketing organizations and consumers. This is accomplished
through the development of public policies.
• Consumers and organizational buyers Individuals or organizations who exchange
resources for various goods and services. Their interest is in making exchanges that help
them achieve their goals and understanding their own behavior. They accomplish this
through consumer activities.
Consumer behavior’s role in marketing strategy
Marketing strategy The design, implementation and control of a plan to influence exchanges to
achieve organizational objectives. In consumer markets, marketing strategies are typically designed
to increase the chances that consumers will have favourable thoughts (cognitions) and feelings
(affection) about particular products, services, brands and will try them and repeatedly purchase
them (behavior).
Marketing strategies involve developing and presenting marketing stimuli (environment) directed at
selected target markets to influence what they think, how they feel and what they do.
Marketers have to analyze and understand not only consumers of their products and brands, but also
consumers of competitive offerings. Understanding markets and developing and implementing
superior strategies to attract and hold them profitably is the essence of marketing strategy.
Marketing strategies have a powerful force on consumers and society, they do not only adapt to
consumer needs and wants but also change what consumers think and feel about themselves and
the environment.
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