Consumer Behavior and Marketing Mix

Consumer Behavior and the Marketing Mix

• Product: Consumers purchase products for functional or hedonic benefits, developing brand loyalty and adopting innovations. New product ideas originate from consumer research and feedback.

Promotions

• Promotional strategies: Audiences respond to marketing promotions like advertising. Special promotions often trigger consumer purchasing. Consumers are active creators and sharers of brand experiences on social media.

Place

• Location, store settings and online options: Store locations can provide convenience or a perceived status. Retail buying is transitioning to digital and omni-channel formats. Marketers must adapt to the consumer demand for wider product choices and convenience.

Price

• Price perception: Consumers view price as a measure of quality. Price changes affect consumer response. Marketers use pricing to stimulate bulk purchases (e.g., FMCG products) or create perceptions of exclusivity (luxury goods).

Physical Evidence

• Tangibility and perception: Physical evidence, crucial for intangible services (e.g., hotels), helps differentiate brands based on perceived quality. Retail store design and layout influence customer perception and buying behavior.

People

• Customer service staff: Customer satisfaction is greatly influenced by the effectiveness of customer service staff. Companies need to select staff suitable for their product category and target customer.

Process

• Customer experience and digital channels: Seamless customer transactions with minimal friction are key to consumer convenience. Digital processes and omni-channel marketing (online search, offline purchase) are becoming increasingly important.

Consumer Decision Making Model (NIAPP)

• Stage 1: Need Recognition: Consumers recognize a gap or deprivation. Dissatisfaction with the existing situation or awareness of a better alternative initiates the purchase cycle. Marketing stimuli (ads, displays, online messaging) trigger this need recognition.

• Stage 2: Information Search: Consumers collect relevant information. The extent of search depends on the perceived risk associated with the purchase. Customers research through various sources, including stores, online channels, social media, and past experiences. Motivation drives the search, based on unmet needs.

• Stage 3: Alternative Evaluation: Consumers evaluate product attributes and brands. This involves rating products and brands, often using multiple criteria and assigning importance factors to specific attributes (the 'multi-attribute model'). Selective perception guides consumers towards marketing stimuli relevant to their needs.

• Stage 4: Purchase: Consumers decide to purchase their preferred brand. Purchase intentions don't always lead to immediate action. Unexpected factors and external influences (e.g., abandoned shopping carts) might alter the decision. Marketers aim to encourage purchases through promotions and incentives. Attitudes influence how consumers evaluate options.

• Stage 5: Post-Purchase Behavior: Consumers experience satisfaction based on the performance relative to their expectations. Post-purchase provides opportunities to build relationships and encourage repeat buying (loyalty). Companies must actively manage customer complaints and feedback.

• Cognitive Dissonance: This occurs when consumers feel uncertain about their choices, realizing potential benefits missed from other options. Marketers alleviate this by highlighting the chosen brand's benefits and addressing any anxiety through advertising and post-sales service.

Consumer Behavior – External Factors

• Culture: Cultural values, norms, language, religion, and customs shape consumer behavior. Marketers need to be culturally sensitive and adapt to local preferences for localized marketing.

• Subcultures: Subgroups within a culture share common values and experiences (e.g., nationality, religion, racial background, geographic location).

• Social Class: Social class influences consumer behavior and product preferences (e.g., clothing, home furnishing).

• Groups: People seek advice and influence from others, which affects purchase decisions, particularly through peer-to-peer influence. Social media plays a critical role in this regard. Word-of-mouth is often more persuasive than advertising. Families are primary influencers, shaping values and lifestyle choices.

Consumer Behavior – Internal Factors

• Motivation: Needs and wants drive consumer behavior. Products satisfy needs and wants. Marketers identify unsatisfied needs/wants and strategically utilize ads and promotions to stimulate behavior.

• Needs and Wants: Needs represent felt deprivation (e.g., hunger) prompting behavioral attempts to fulfillment, while wants are shaped by culture and marketing. Hedonic (pleasure) and utilitarian (functionality) needs influence product choices.

• Perception: Consumers actively choose from countless stimuli in the market, leading to selective perception. Gestalt theory describes holistic perception, noting consistency. Marketers should accommodate the JND (just noticeable difference) and the differential threshold when adjusting pricing.