Published on February 5, 2014
B.Moghimi@yahoo.co.uk 2 1-2
Chapter 1 Introduction to Consumer Behavior and Marketing Strategy B.Moghimi@Yahoo.co.uk
Quotation Only two things are infinite, the universe and human stupidity, and I'm not sure about the former! Albert Einstein US (German-born) physicist (1879 – 1955) 1-4
Do you remember what was “Paradigm”? 1-5
Do you remember what was “Paradigm”? 1-6
What is Paradigm Shift? Information Age Buy-Side Market Place Competitors High Expectations High Rate of Change in Buying Behavior E-Life !!!! 1-7
VALUE What is value really? What is the first reason you buy something? When do you feel valued? How can we create value? 1-8
What is Marketing? .. Marketing involves in developing product that provides superior value, and prices, distributes and promotes them effectively. Advertising and selling are only part of a larger marketing mixmix a set of tools that work together to satisfy customer needs and build customer relationship Thus marketing is … All social and managerial processes by which individuals and groups obtain what they need and want through creating and exchange products and value with others 1-9
What is Marketing? … ... processes by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. It involves building profitable, value exchange relationship with customers……. 1-10
Introduction to Consumer Behavior 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 concept The concept was not implemented in the entire organization and viewed more as a marketing task. 1-11
Introduction to Consumer Behavior (cont.) Reasons for revised focus on the marketing concept: Dramatic success of Japanese companies Focus 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 research Use of technology to identify and know customers personally. Ability to track consumer reactions. 1-12
Introduction to Consumer Behavior (cont.) Reasons for revised focus on the marketing concept: Development of the Internet as a marketing tool E-marketing potential Increased importance of consumer behavior research Ability to conduct marketing research studies 1-13
Three Elements for Marketing Strategy 1-14
What is Consumer Behavior? 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. 1-15
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 1-16
What is Consumer Behavior? (cont.) Includes all things in the environment that influence thoughts, feelings, and actions. Comments from other consumers Advertisements Price information Packaging Product appearance 1-17
Consumer Behavior is Dynamic 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. 1-18
Consumer Behavior Involves Interactions Interactions among people’s thinking, feelings and actions, and the environment Marketers 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? 1-19
Consumer Behavior Involves Exchanges 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. 1-20
Exhibit 1.1 - Approaches to the Study of Consumer Behavior 1-21
Major Approaches to Studying Consumer Behavior Interpretive Based on theories and methods from cultural anthropology. Objective is to understand consumption and its meanings. Methods of study involve: Long interviews Focus groups 1-22
Major Approaches to Studying Consumer Behavior (cont.) Traditional Based 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: Experiments Surveys 1-23
Major Approaches to Studying Consumer Behavior (cont.) Marketing science Based 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. 1-24
Exhibit 1.2 - Relationship Among ActionOriented Groups in Consumer Behavior 1-25
Uses of Consumer Behavior Research Three groups use knowledge about consumer behavior and consumer behavior research Marketing organizations Businesses attempting to sell products. Organizations that seek exchanges with consumers. Government and political organizations Major concern is monitoring and regulating exchanges between marketing organizations and consumers. 1-26
Uses of Consumer Behavior Research (cont.) Consumers Includes 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. 1-27
Consumer Behavior’s Role in Marketing Strategy Marketing strategy Design, 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. 1-28
Consumer Behavior’s Role in Marketing Strategy (cont.) Marketing strategy Developed 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. 1-29
Consumer Behavior’s Role in Marketing Strategy (cont.) 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. 1-30
Consumer Behavior’s Role in Marketing Strategy (cont.) Powerful force on consumers and society at large The power of marketing and the ability of consumer research and analysis to yield insight into consumer behavior should not be discounted or misused. 1-31
Exhibit 1.3 - Marketing Strategy Queries Consumer Behavior Research Can Help Answer 1-32
Exhibit 1.3 - Marketing Strategy Queries Consumer Behavior Research Can Help Answer 1-33
Summary 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. 1-34
B.Moghimi@yahoo.co.uk 36 1-36
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