Consumer Behavior and Marketing Strategy chapter 1 moghimi

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2. B.Moghimi@yahoo.co.uk
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3. Chapter 1
Introduction to
Consumer Behavior
and Marketing
Strategy
B.Moghimi@Yahoo.co.uk

4. 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)
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5. Do you remember what was “Paradigm”?
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6. Do you remember what was “Paradigm”?
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7. What is Paradigm Shift?
 Information Age
 Buy-Side Market Place
 Competitors
 High Expectations
 High Rate of Change in Buying Behavior
 E-Life !!!!
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8. VALUE
What is value really?
What is the first reason you buy something?
When do you feel valued?
How can we create value?
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9. 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
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10. 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…….
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11. 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.
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12. 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.
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13. 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
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14. Three Elements for Marketing Strategy
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15. 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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16. 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
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17. 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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18. 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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19. 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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20. 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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21. Exhibit 1.1 - Approaches to the Study of
Consumer Behavior
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22. 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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23. 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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24. 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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25. Exhibit 1.2 - Relationship Among ActionOriented Groups in Consumer Behavior
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26. 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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27. 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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28. 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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29. 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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30. 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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31. 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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32. Exhibit 1.3 - Marketing Strategy Queries Consumer
Behavior Research Can Help Answer
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33. Exhibit 1.3 - Marketing Strategy Queries Consumer
Behavior Research Can Help Answer
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34. 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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36. B.Moghimi@yahoo.co.uk
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