Consumer Behavior: Origins and Marketing

Learning outcomes

• Understanding the origin and development of consumer behavior is essential.
• Understanding consumer behavior is important.
• The relationship between consumer behavior and marketing is important.
• Understanding the theory behind consumer behavior is important.

Opening case study

• John and Andrew, recent graduates, have secured jobs requiring specific professional attire.
• John needs formal attire for client interactions but lacks a clothing allowance.
• Andrew must adhere to a strict dress code at his new job without financial assistance.
• Despite having the same budget and shopping at the same store, John takes longer to find suitable clothing.
• Even though they have the same purchase objective, formal wear, background difference results in varied levels of experience
• Their need differ subsequently in terms of the type and amount of informatIon they need to make an informed decision.
• Marketplace behavior can be explained through different perspectives.

Defining Consumer Behavior

• Consumer Behavior includes the processes individuals or groups go through to select, use, or dispose of products, servIces, ideas, or experiences to satisfy needs and desires

Why Study Consumer Behavior?

• Studying consumer behavior protects and educates consumers.
• Consumers are taught how to detect deception.
• Studying consumer behavior helps formulate public and personal policy.
• Understanding consumer behavior helps organizations formulate marketing strategies.
• It improves marketing by understanding how consumers think, reason, and select goods/services.
• It sheds light on what influence buyers.
• Highlights how decision-making processes differ by individual.
• Enable organizations to retain loyal consumers.
• It is essential for businesses to stay at the forefront of market economies.
• Cut-throat competition is faced by businesses through the internet.
• The best reader of consumer behavior and understanding consumer trends wins.

Origin and Background

• Two schools of thought emerged in consumer behavior including; Rational and Non-Rational
• The rational view, emerged from classic economic theory (1890s-1900s).
• People are self-interested and maximize profits in the rational view.
• Non-rational view developed in psychology around unconscious motivation in 1910.

Origin & Development of CB Perspectives

• Economics perspective: Consumers are rational beings making objective decisions based on formal analysis and full information to maximize benefits and minimize costs.
• In reality, multiple factors influence buying decisions beyond simple economic principles.
• Psychology perspective focuses on how people think about products.
• Psychological theories on temporal choices show the temptation of immediate ownership can outweigh concerns about installment payments.
• Consumers often buy on emotion and are inclined to choose stores that support their self-image.
• Sociology perspective: Consumer socialization is based on affiliations and associations within groups
• Judgements of products are based on shared meaning attached to image, brand or product.
• The perspective looks at the influence of family, peer group etc on behavior.
• Cultural perspective: Consumption behavior is linked to product needs of a specific culture
• Retailers in multicultural societies need ethnic and religious sensitivity.
• Grouping, presentation, and advertisement of foods should caters to specific segments.

Marketing and Consumer Behaviour

• Considerations for marketing: target market, uniqueness, user benefits and spec, feedback and reviews.

Relationship Between Consumer Behavior & Marketing

• Marketing theory aims to understand consumer needs.
• A marketing strategy involves allocating resources to develop and sell products/services that provide excellent customer value.
• Key aspects of this strategy are based on consumer behavior, including the customers willingness to pay.
• Identifying and selecting target markets is based on the understanding of the customer.
• Consumer behavior impacts marketing communication strategies.
• Marketing communication encompasses personal selling, publicity, ads, and sales promotion techniques.
• A marketing communication strategy includes market analysis, market segmentation, marketing mix strategies, and implementation.
• Market analysis involves analyzing changing consumer trends and gaining consumer insight.
• Segmentation involves dividing the market into segments that share common characteristics for better communication.
• Segmentation can target gender, size, lifestyles, attitudes, opinions, geographic locations, income, and desired benefits.
• Essential consumer issues for marketers: segmentation, product, price, promotion, place, positioning, people, processes, and physical evidence.
• Marketing mix focuses on product, price, place, promotion.

Evolution of Marketing Concept

• The evolution of the Marketing Concept includes;
• Production orientation in the 1940s,
• Product orientation in the 1950's
• Sales oreintation in the 1960's,
• Customer/Comsumer orientation in the 1970's,
• Relationship orientation in the 1990's
• Personal/Social orientation at present

Issues During the Consumption Process

• Consumers consider their needs and information sources when deciding to adopt alternative products.
• Marketers are concerned as to how the consumers are influenced and what makes a product superior to others.
• Factors such as store displays and consumer's perception of is the product stressful or pleasant affect their purchase decisions.
• Satisfied customers may buy again.
• Dissatisfied customers may advise others about a bad product and reduce sales.

Underlying Principles of Consumer Behaviour

• Consumers are sovereign, with desires of consumers being globally similar.
• Segmentation focuses on similarities of groups.
• Consumers have rights, and deceit, poor quality, pollution, or ignoring complaints are illegitimate.