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B.M

oghimi@

yahoo.co.uk

Chapter 1Introduction to

Consumer Behavior and Marketing

Strategy

B.Moghimi@Yahoo.co.uk

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Quotation

Only two things are infinite, the universe and human stupidity, and I'm not sure about the former!

Albert EinsteinUS (German-born) physicist (1879 – 1955)

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Do you remember what was “Paradigm”?

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Do you remember what was “Paradigm”?

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What is Paradigm Shift?

Information Age

Buy-Side Market Place

Competitors

High Expectations

High Rate of Change in Buying Behavior

E-Life !!!!

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VALUE

What is value really?

What is the first reason you buy something?

When do you feel valued?

How can we create value?

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What is Marketing? ..

Marketing involves in developing product that provides superior value, and prices, distributes and promotes them effectively.

AdvertisingAdvertising and sellingselling are only part of a larger marketing marketing mixmix- a set of tools that work together to satisfy customer needs and build customer relationship

Thus Thus marketing is …marketing is … All All social and managerial social and managerial processes processes by which individuals by which individuals

and groups obtain what they need and want through and groups obtain what they need and want through creating and exchange products and value with otherscreating and exchange products and value with others

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What is Marketing? …

... processes processes by which companies create by which companies create value for customers and build strong value for customers and build strong

customer relationships in order to customer relationships in order to capture value from customers in return. capture value from customers in return.

It involves building profitable, value It involves building profitable, value exchange exchange relationship with customers……. relationship with customers…….

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The marketing concept suggests an organization should satisfy consumer needs and wants in order to make a profit.Need to understand customers.Must stay close to customers.

Early views on marketing conceptThe concept was not implemented in the entire

organization and viewed more as a marketing task.

Introduction to Consumer Behavior

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Reasons for revised focus on the marketing concept:Dramatic success of Japanese companiesFocus on providing consumers value-laden products.Superior quality and lower prices of Japanese products.Increased consumer interest in world markets.

Dramatic increase in the quality of consumer and marketing researchUse of technology to identify and know customers

personally.Ability to track consumer reactions.

Introduction to Consumer Behavior (cont.)

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Reasons for revised focus on the marketing concept:Development of the Internet as a marketing toolE-marketing potentialIncreased importance of consumer behavior researchAbility to conduct marketing research studies

Introduction to Consumer Behavior (cont.)

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Three Elements for Marketing Strategy

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The American Marketing Association 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.

Involves thoughts and feelings people experience and actions they perform in the consumption processes.

What is Consumer Behavior?

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What Is Consumer Behavior?

Consumer behavior entails all consumer activities associated with the purchase, use, and disposal of goods and services, including the consumer’s emotional, mental, and behavioral responses that precede, determine, or follow these activities

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Includes all things in the environment that influence thoughts, feelings, and actions.Comments from other consumersAdvertisementsPrice informationPackagingProduct appearance

What is Consumer Behavior? (cont.)

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Thinking, feelings, and actions of individual consumers, targeted consumer groups, and society at large are constantly changing.Requires ongoing consumer research and analysis

of important trends.Makes development of marketing strategies

difficult and exciting.Shorter product life-cycle increases importance of

constant innovation.

Consumer Behavior is Dynamic

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Interactions among people’s thinking, feelings and actions, and the environmentMarketers need to understand:What products and brands mean to consumers?What consumers must do to purchase and use them?What influences shopping, purchase, and consumption?

Consumer Behavior Involves Interactions

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Exchange between people involves giving up of something of value and receiving something in return.Role of marketing in society is to help create

exchanges by formulating and implementing marketing strategies.

Consumer Behavior Involves Exchanges

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Exhibit 1.1 - Approaches to the Study of Consumer Behavior

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InterpretiveBased on theories and methods from cultural

anthropology.Objective is to understand consumption and its

meanings.Methods of study involve: Long interviews Focus groups

Major Approaches to Studying Consumer Behavior

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TraditionalBased on theories and methods from cognitive, social,

and behavioral psychology, and sociology.Objective is to develop theories and methods to

explain consumer decision making and behavior.Methods of study involve:ExperimentsSurveys

Major Approaches to Studying Consumer Behavior (cont.)

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Marketing scienceBased on theories and methods from economics and

statistics.Objective is to develop and test mathematical models

to predict the impact of marketing strategies on consumer choice and behavior.This method of study has become popular in the

consumer packaged goods industry since it can handle large scanner data sets.

Major Approaches to Studying Consumer Behavior (cont.)

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Exhibit 1.2 - Relationship Among Action-Oriented Groups in Consumer Behavior

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Three groups use knowledge about consumer behavior and consumer behavior researchMarketing organizationsBusinesses attempting to sell products.Organizations that seek exchanges with consumers.

Government and political organizationsMajor concern is monitoring and regulating exchanges

between marketing organizations and consumers.

Uses of Consumer Behavior Research

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ConsumersIncludes consumers and organizational buyers who

exchange resources for various goods and services.Interest in making exchanges that help them achieve their

goals and the understanding of their own behavior.

Uses of Consumer Behavior Research (cont.)

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Marketing strategyDesign, implementation, and control of a plan to

influence exchanges to achieve organizational objectives.In consumer markets, these are designed to:Increase chances of favorable thoughts and feelings of

particular products, services and brands among consumers. Increase chances of trial and purchase.

Consumer Behavior’s Role in Marketing Strategy

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Marketing strategyDeveloped by manufacturers, retail stores, catalog

retailers, e-tailers and other direct marketers to: Increase chances of favorable thoughts and feelings among

consumers about purchasing from them.Increase chances of actual purchase.

Developed by companies that make funds available for purchase to:Increase chances of usage of services offered by

consumers.

Consumer Behavior’s Role in Marketing Strategy (cont.)

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Marketing strategies involve developing and presenting marketing stimuli directed at selected target markets to influence: What they think?How they feel?What they do?

Essence of marketing strategy is to understand markets, develop and implement superior strategies to attract and hold them profitably.

Consumer Behavior’s Role in Marketing Strategy (cont.)

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Powerful force on consumers and society at largeThe power of marketing and the ability of consumer

research and analysis to yield insight into consumer behavior should not be discounted or misused.

Consumer Behavior’s Role in Marketing Strategy (cont.)

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Exhibit 1.3 - Marketing Strategy Queries Consumer Behavior Research Can Help Answer

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Exhibit 1.3 - Marketing Strategy Queries Consumer Behavior Research Can Help Answer

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Defined the marketing concept and discussed early views.Presented aspects of consumer behavior.Examined three major approaches to consumer

behavior research.Identified the groups that use knowledge about

consumer behavior and research.Discussed the role of consumer behavior in

marketing strategy.

Summary

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