Ch. 1 Consumer Behavior vs. Marketing Strategy What is Consumer Behavior? • The dynamic interaction of affect and cognition, behavior, and environmental events by which human beings conduct the exchange aspects of their lives. • The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Why Is It Important? • “The purpose of a business is to create and keep a customer.” -- Ted Levitt Ex: Federal Express • A deep understanding of consumers is extremely useful for developing effective marketing strategies. Ex: Pizza, Coffee • It is also important to public policy makers. Relationships among Action-Oriented Groups Interested in Consumer Behavior Marketing organizations Marketing strategies Public Policy Consumer activities Consumers Government and political organizations Marketing Strategy A plan designed to influence exchanges to achieve organizational objectives. Marketing Strategy Internal Influence Typically, a marketing strategy is intended to increase the probability or frequency of certain consumer behaviors. Marketing Strategy and Consumer Behavior 1-1 Outcomes Consumer Decision Process Marketing Strategy Marketing Segmentation Marketing Analysis Individual Firm Society Problem Recognition Information Search Alternative Evaluation Purchase Use Evaluation Product, Price, Distribution, Promotion, Service Identify product-related need sets Group Customers with similar need sets Describe each group Select attractive segment(s) to target Company Competitors Conditions Consumers Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Overall Model of Consumer Behavior 1-5 EXTERNAL INFLUENCES Culture Subculture Demographics Social Status Reference Groups Family Marketing Activities INTERNAL INFLUENCES Perception Learning Memory Motives Personality Emotions Attitudes Experiences and Acquisitions SITUATIONS Problem Recognition Information Search SELF-CONCEPT and LIFESTYLE Needs Alternative Evaluation and Selection Desires Outlet Selection and Purchases Postpurchase Processes Experiences and Acquisitions SITUATIONS Approaches to the Study of Consumer Behavior Approach Interpretive Core Disciplines Cultural anthropology Primary Objectives Understand consumption and its meaning Primary Methods Long interviews & focus groups Approaches to the Study of Consumer Behavior (cont.) Approach Traditional Core Disciplines Psychology & Sociology Primary Objectives Explain consumer decision making and behavior Primary Methods ?? Approaches to the Study of Consumer Behavior (cont.) Approach Marketing Science Core Disciplines Economics & Statistics Primary Objectives Predict consumer choice and behavior Primary Methods ??