The Foundations of Consumer Behaviour

MCD 2064 Consumer Behaviour

CONSUMER BEHAVIOUR

• Behaviour that consumers display in

searching for, purchasing, using, evaluating
and disposing of products and services that
they expect to satisfy their needs
 PERSONAL AND ORGANISATIONAL
CONSUMERS
• Personal consumer
- his or her own use/for the household/another member
of the household
- gift for a friend

• Organizational consumer
- profit and non-profit organizations
- public sector agencies
- institutions
BUYERS AND USERS (CONSUMERS)

• Purchaser – procures or obtains

product/service
• Payer – person who provides the money or
object of value to obtain the product/service
• Consumer – person that consumes or uses
product/service
INTERDISCIPLINARY SCIENCES IN
CONSUMER BEHAVIOUR

• Psychology
• Sociology
• Social psychology
• Cultural anthropology
• Economics
A MODEL OF CONSUMER DECISION-
MAKING
External Influences

Firm’s Marketing Efforts Socio-cultural Environment

Input 1. Product 1. Family
2. Promotion 2. Informal sources
3. Price 3. Other noncommercial sources
4. Channels of Distribution 4. Social class
5. Subculture and culture
Process Consumer Decision Making
Psychological Field
Need Recognition 1. Motivation
2. Perception
Prepurchase Search 3. Learning
4. Personality
Evaluation of Alternatives 5. Attitudes
Output
Experience
Post-decision behaviour

Purchase
1. Trial Post purchase Evaluation
2. Repeat Purchase
WHY STUDY CONSUMER BEHAVIOUR?
• Key information in marketing strategies
- Market segmentation
- Target market selection
- Positioning
- Product or service decisions
- Pricing decisions
- Distribution decisions
- Promotion decisions
WHY STUDY CONSUMER BEHAVIOUR?
(..cont’d)
- Shorter product life cycles
- Environmental concerns
- Consumer protection and public policy
concerns
- Growth of services marketing
- Not-for-profit/social marketing
- Growth of global marketing
CONSUMER BEHAVIOUR SCOPE IN A
NUTSHELL

• How individuals make

decisions to spend their
resources
• How individuals dispose
of their once new
purchases
SUCCESSFUL RELATIONSHIPS

CUSTOMER VALUE

CUSTOMER SATISFACTION

CUSTOMER RETENTION
SEGMENTATION,TARGETING AND
POSITIONING
• Segmentation - process of dividing the market
into subsets of consumers with common needs
and characteristics
• Targeting – selecting one or more of the
segments to pursue
• Positioning- developing a distinct image for
the product in mind of customer
 THE FOUR Ps

PRODUCT PRICE

MARKETING MIX

PLACE
PROMO
DEVELOPMENT OF THE MARKETING
CONCEPT

PRODUCTION CONCEPT

PRODUCT CONCEPT

SELLING CONCEPT

MARKETING CONCEPT
THE PRODUCTION CONCEPT

• Assumes consumers are interested primarily

in product availability at low prices
• Marketing objectives:
- Cheap, efficient production
- Intensive distribution
- Market expansion
THE PRODUCT CONCEPT

• Assumes the consumers will buy the product

that offers them the highest quality, best
performance and most features
• Marketing objectives:
- Quality improvement
- Addition of features
THE SELLING CONCEPT

• Assumes that consumers are unlikely to buy

a product unless they are aggressively
persuaded to do so
• Lack of concern for customer needs and
satisfaction
• Marketing objectives:
- Sell, sell, sell!
THE MARKETING CONCEPT

• Assumes that a company must determine

the needs and wants of specific target
markets and deliver the desired satisfaction
better than the competition
• Marketing objectives:
- Profits through customer satisfaction
SOCIETAL MARKETING CONCEPT
• A revision of traditional marketing concepts
• Suggests marketers to adhere to principles of
social responsibility in the marketing of their
goods and services
• Must endeavour to satisfy needs and wants of
their target markets
• To enhance the well-being of consumers and
society as a whole
SOCIETAL MARKETING CONCEPT
(..cont’d)

• All companies prosper when society

prospers
• Companies will be better off if social
responsibility was an integral component of
every marketing decision
McDonald’s
Viva La Glam - MAC
GAP