Consumer Behavior Chapter 1 PDF

WELCOME TO MKTG.1 – CONSUMER BEHAVIOR. WELCOME TO MARKETING DEPARTMENT OF THE COLLEGE OF BUSINESS ACCOUNTANCY.  BEFORE WE BEGIN THE STUDY OF CONSUMER BEHAVIOR LET US HAVE A QUICK REVIEW OF ALL THE BUSINESS-RELATED SUBJECTS YOU HAVE TAKEN IN THE PAST AND LET’S TRY TO...

WELCOME TO MKTG.1 – CONSUMER BEHAVIOR. WELCOME TO MARKETING DEPARTMENT OF THE COLLEGE OF BUSINESS ACCOUNTANCY.  BEFORE WE BEGIN THE STUDY OF CONSUMER BEHAVIOR LET US HAVE A QUICK REVIEW OF ALL THE BUSINESS-RELATED SUBJECTS YOU HAVE TAKEN IN THE PAST AND LET’S TRY TO RELATE IT TO CONSUMER BEHAVIOR! TAKE A LOOK! A perspective on Consumer Behavior CHAPTER 1: Introduction to Consumer Behavior and Marketing Strategy Instructor: Dante C. Fernandez FIRST PART uWhat is Consumer Behavior? qThe study of how consumers SELECT, PURCHASE, USE and DISPOSE goods and services in the process of satisfying their personal and household needs and wants. Why did consumer behavior become a separate discipline from marketing? u Marketers came to realize that consumers did not always act or react as marketing theory suggested they would. u Consumers rejected mass-marketed products, preferring differentiated products that reflected their own special needs, personalities and lifestyles u Even in industrial markets, where needs are more homogeneous than consumer markets, buyers exhibited diversified preferences and less predictable purchase behavior Other factors that contributed to the growing interest in consumer behavior u Theaccelerated rate of new product development u The consumer movement u Public policy considerations u Environmental concerns u The opening of national markets throughout the world Consumer behavior is more than just purchasing Consumer Behavior involves u Exposure to the media u Browsing u Influencing others u Being influenced by others u Complaining about and returning products Economics alone does not explain consumer behavior u Early theories based on notion that individuals act rationally to maximize their benefits (satisfaction) from purchasing u Later research discovered that consumers are just as likely to uPurchase impulsively uBe influenced by family, friends, advertisers and role models uBe influenced just as strongly by mood, situation and emotion Consumer behavior is an Interdisciplinary Field Psychology Anthropology u Consumer u Behavior Social u studies Psychology Economics Other Fields  What Do Buying Decisions Involve? Consider a decision to acquire a pet Decision entails determining: u Where to learn about pets u Where to purchase the selected pet u How much to pay for it u Who will take care of it u What supplies or services are needed for it u Where to purchase such supplies or services u How much to pay for supplies and services What is Consumer Behavior? q 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.” q In other words, consumer behavior involves the thoughts and feelings people experience and the actions they perform in consumption processes. What is Consumer Behavior? q It also includes all the things in the environment that influence these thoughts, feelings, and actions. q These include comments from other consumers, advertisements, price information, packaging, product appearance, blogs, and many others. It is important to recognize from this definition that consumer behavior is dynamic, involves interactions, and involves exchanges. What is Consumer Behavior? q Consumer behavior is dynamic because the thinking, feelings, and actions of individual consumers, targeted consumer groups, and society at large are constantly changing. For example, the Internet has changed the way people search for information about products and services. q 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. Consumer Behavior is Dynamic q The dynamic nature of consumer behavior makes development of marketing strategies an exciting yet difficult task. Strategies that work at one time or in one market may fail miserably at other times or in other markets. q Because product life cycles are shorter than ever before, many companies have to innovate constantly to create superior value for customers and stay profitable. This involves creation of new products, new versions of existing products, new brands, and new strategies for them.  Consumer Behavior involves Interactions qConsumer behavior involves interactions among people's 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.  Consumer Behavior involves Interactions qThe more marketers know about how these interactions influence individual consumers, target markets of similar consumers, and society at large, the better they can satisfy consumer needs and wants and 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 qConsumer behavior involves exchanges between human beings. In other words, people give up something of value to others and receive something in return. Much of consumer behavior involves people giving up money and other things to obtain products and services, that is, exchanges between buyers (consumers) and sellers (marketers). Approaches to Consumer Behavior Research q Consumer behavior is a complex phenomenon and an eclectic field. The majority of published research is done by marketing academics who vary greatly in their training, objectives, and methods. q There are three major approaches to studying consumer behavior. 1. Interpretive, 2. Traditional and 3. Marketing Science. Approaches to Consumer Behavior Research 1. Interpretive q The interpretive approach is relatively new in the field and has become quite influential. q This approach seeks to develop a deep understanding of consumption and its meanings. Studies use long interviews and focus groups to understand such things as what products and services mean to consumers and what consumers experience in purchasing and using them. q Other studies might concern how advertising depicts women, how art and films reflect consumption meaning, or how possessions influence self-images. Approaches to Consumer Behavior Research 2. Traditional q The traditional approach is based on theories and methods from cognitive, social, and behavioral psychology, as well as sociology. q It seeks to develop theories and methods to explain consumer decision making and behavior. q Studies involve experiments and surveys to test theories and develop insights into such things as consumer information processing, decision processes, and social influences on consumer behavior. Approaches to Consumer Behavior Research 3. Marketing Science q The marketing science approach is based on theories and methods from economics and statistics. q It commonly involves developing and testing mathematical models to predict the impact of marketing strategies on consumer choice and behavior. q This approach has become a mainstay in the consumer packaged goods industry because it can handle large scanner data sets in an efficient manner to help solve marketing problems.  Uses of Consumer Behavior MARKETING GOVERNMENT MARKETING ORGANIZATIONS PUBLIC POLICY AND POLITICAL STRATEGIES ORGANIZATIONS CONSUMER ACTIVITIES CONSUMERS RELATIONSHIPS AMONG ACTION-ORIENTED GROUPS INSTERSTED IN CONSUMER BEHAVIOR Consumer Behavior’s Role in Marketing Strategy q A marketing strategy is 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 favorable thoughts and feelings about particular products, services, and brands, and will try them and repeatedly purchase them. q Also, marketing strategies are developed by retail stores, catalog retailers, e-tailers and other direct marketers to increase the chances that consumers will have favorable thoughts and feelings about purchasing from them and will actually do so. END OF CHAPTER 1