Chapter 1
Introduction to
Consumer Behavior
and Marketing
Strategy
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Three Elements for Marketing Strategy
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Introduction
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.
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Introduction (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.
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Introduction (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
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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.
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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
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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.
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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?
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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.
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Exhibit 1.1 - Approaches to the Study of
Consumer Behavior
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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
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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
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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.
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Exhibit 1.2 - Relationship Among ActionOriented Groups in Consumer Behavior
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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.
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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.
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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.
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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.
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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.
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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.
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Exhibit 1.3 - Marketing Strategy Queries Consumer
Behavior Research Can Help Answer
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Exhibit 1.3 - Marketing Strategy Queries Consumer
Behavior Research Can Help Answer
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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.
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