CHAPTER 1
CONSUMER BEHAVIOR AN INTRODUCTION
TO C O N S U M E R
BUYING, HAVING, AND BEING B E H AV I O R
THE EVALUATION GRADING SYSTEM
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THE BOOK
Consumer Behavior
Buying, Having, And
Being
10th E d i t i o n
Micheal R. Soliman
CHAPTER OBJECTIVES
When students finish this The Web is changing
chapter, they should consumer behavior.
understand why:
Our beliefs and actions as
We use products to help us consumers strongly connect
define our identities in to other issues in our lives.
different settings.
Many different types of
Consumer behavior is a specialists study consumer
process. behavior.
Marketers need to There are two major
understand the wants and perspectives on consumer
needs of different consumer behavior.
segments.
The 2017 Nobel prize in economics was awarded to Richard H.
Thaler, an American economist at the University of Chicago, for his
contributions to Behavioral Economics.
Oct 9, 2017
INTRODUCTION
1-6
WHAT IS CONSUMER BEHAVIOR?
Consumer Behavior is the study of Consumer Behavior is a Process:
the processes involved when Exchange: (an essential part of
individuals or groups select, Marketing) A transaction in which
purchase, use, or dispose of two or more organizations give
products, services ideas, or and receive something of value
experiences to satisfy needs and
desires Though exchange is an
important part of consumer
behavior yet CB process goes
beyond that to include an entire
ongoing process that influences
the consumer before, during and
after a purchase.
CONSUMER BEHAVIOR INVOLVES
MANY DIFFERENT ACTORS
Consumer:
A person who identifies a
need or desire, makes a
purchase, and then
disposes (examine) of the
product
Many people may be
involved in this sequence of
events (Purchaser / User /
Influencer).
Consumers may take the
form of organizations or
groups.
CONSUMPTION PROCESS STAGES ISSUES
Cues : signs
Infer : Conclude
Figure 1.1
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Customer Value is the
difference between all the
benefits derived from the total
product and all the costs of
acquiring those benefits.
Providing superior customer
value requires the
organization to do a better job
of anticipating and reacting to
customer needs than the
competition does.
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Step 1. Market Analysis
Market Strategy begins with
an analysis of the market the
organization is considering,
requiring a detailed analysis:
- Organization’s capabilities
- Strengths and weaknesses
of competitors.
- Economic and technological
forces.
- Current and potential
customers
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Step 2. Market Segmentation
On the basis of the consumer
analysis, the organization
identifies groups of
individuals, households, or
firms with similar needs.
These market segments are
described in terms such as
demographics, media
preferences, geographic
location, etc.
Management then selects the
segment(s) to target.
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Step 3. Marketing Strategy
Marketing Strategy seeks to
provide the customer with more
value than the competition,
while still producing a profit for
the firm.
Marketing strategy is
formulated in terms of the
marketing mix, which involves
determining the product
features, price,
communications, distribution
and services that will provide
customers with superior value,
resulting in the total product.
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Step 4. Consumer Decision
Process
The total product is presented
to the target market, which is
consistently engaged in
processing information and
making decisions designed to
maintain or enhance its lifestyle
or performance.
Many firms are wrapping
experiences around their
traditional products and service
in order to sell them better.
For example, retailers have
been moving to lifestyle
centers in an effort to create a
more pleasing shopping
experience.
CONSUMER’S IMPACT ON MARKETING
STRATEGY
Step 5. Outcomes
Society – the cumulative effect
of the marketing process
affects economic growth,
pollution, social problems.
Firm – reaction of the target
market to the total product
produces an image of the
product/brand/organization.
Individual – the process results
in some level of need
satisfaction, financial
expenditure, attitude
development/change, and/or
behavioral changes.
CONSUMERS’ IMPACT ON
MARKETING STRATEGY (CONT.)
Relationship Marketing: Its building bonds with consumers
The strategic perspective that stresses the long-term, human side of
buyer-seller interactions
CONSUMERS’ IMPACT ON
MARKETING STRATEGY (CONT.)
Database marketing:
Tracking consumers’ buying
habits very closely, and then
crafting products and
messages tailored precisely
to people’s wants and needs
based on this information
MARKETING’S IMPACT ON CONSUMERS
Marketing and Culture:
Popular Culture:
Music, movies, sports,
books, celebrities, and
other forms of
entertainment consumed
by the mass market.
Marketers play a significant
role in our view of the world
and how we live in it.
THE ROLE THEORY
Role Theory:
Identifies consumers as
actors on the marketplace
stage
People alter their
consumption decisions
based on the role they play
at a particular time
MARKETING’S IMPACT ON
CONSUMERS
People often buy products not
for what they do, but for what
they mean.
Types of relationships a person
may have with a product:
Self-concept attachment: The
product helps to establish the
user’s identity
Nostalgic attachment: The
product serves as a link with a
past self
Interdependence: The product
is a part of the user’s daily
routine
Love: The product causes
emotional bonds of warmth,
passion, etc.
MARKETING’S IMPACT ON
CONSUMERS: THE MEANING OF
CONSUMPTION (CONT.)
Consumption includes
intangible experiences, ideas
and services in addition to
tangible objects.
Four types of Consumption
Activities:
Consuming as experience –
Universal studios, test drive
Consuming as integration –
living in a compound
Consuming as classification
social club members
Consuming as play
let’s try a cigarette
MARKETING’S IMPACT ON
CONSUMERS: THE GLOBAL
CONSUMER
Sophisticated marketing
strategies contribute to a
global consumer culture.
Even smaller companies look
to expand overseas.
Globalization has resulted in
varied perceptions of almost
all countries around the world
(both positive and negative).
MARKETING’S IMPACT ON
CONSUMERS: VIRTUAL
CONSUMPTION
The Digital Revolution is one of
the most significant influences on
consumer behavior.
Electronic marketing increases
convenience by breaking down
the barriers of time and location.
U-commerce:
The use of ubiquitous
(universal) networks that will
slowly but surely become part
of us (i.e., wearable computers,
customized advertisements
beamed to cell phones, etc.)
Cyberspace has created a
revolution in C2C (consumer-to-
consumer) activity.
DISTORTED
BOUNDARIES
MARKETING AND
REALITY
Marketers and consumers
coexist in a complicated two-
way relationship.
It’s increasingly difficult for
consumers to distinguish the
boundary between the
fabricated world and reality.
Marketing influences both
popular culture and consumer Augmented reality (AR) is a live direct or
perceptions of reality. indirect view of a physical, real-world
environment whose elements are augmented
(or supplemented) by computer-generated
sensory input such as sound, video, graphics
or GPS data.
MARKETING ETHICS AND PUBLIC
POLICY
Business Ethics:
Rules of conduct that guide
actions in the marketplace
The standards against
which most people in the
culture judge what is right
and what is wrong, good or
bad
Philosophies of right and
wrong differ among people,
organizations, and cultures.
False Advertisements
Do marketers promise
miracles?
NEEDS AND WANTS: Advertisers simply don’t know
DO MARKETERS enough about people to
MANIPULATE manipulate them. New
products failure rate 40-80%
CONSUMERS?
Consumer-space – Who
controls the market?
Do marketers create artificial
needs?
Need: A basic biological
motive
Want: One way that society
has taught us that need can
be satisfied
Are advertising and marketing
necessary?
Economics of information
perspective: Advertising is
an important source of
consumer information.
Social Marketing:
CONSUMERISM AND Using marketing techniques to
CONSUMER encourage positive activities
(e.g. literacy) and to
RESEARCH discourage negative activities
(e.g. drunk driving)
Consumerism as a social and
economic order and ideology
encourages the acquisition of
goods and services in ever-
greater amounts.
Kennedy’s “Declaration of
Consumer Rights” (1962)
Green Marketing:
When a firm chooses to
protect or enhance the
natural environment as it
goes about its activities
Reducing wasteful
packaging
Donations to charity
CONSUMER BEHAVIOR
AS A FIELD OF STUDY
Consumer behavior only recently became a formal field of
study
