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Consumer Behavior and Marketing Strategy Chapter #01 Consumer behavior strategies focus on the buyer and the

immediate antecedents and consequences of the purchasing process. There are various applications of consumer behavior like marketing strategy, regulatory policy, social marketing, etc. It is important to understand consumer behavior before applying marketing strategies, as it helps in understanding the needs and wants and reaction of consumers towards different products in different circumstances. There are various market analysis components like the consumers, the company, the competitors, and the conditions. A firm cannot develop a sound marketing strategy without anticipating the conditions under which the strategy will be implemented. Market segmentation is also very important. It involves the identification of product related need sets, grouping customers with similar need sets, describing each group and selecting the attractive segments to serve. Marketing strategy is to determine how to provide superior customer value to the target market. And the marketing mix is the product, price, communication, distribution and services provided to the target market. The customers of the firms marketing strategy are determined by its interaction with the consumer decision process. The outcomes can be determined by product position, sales and customer satisfaction. These are the outcomes of a firm. Individual outcomes include need satisfaction and injurious consumption and this occurs when individuals or groups

make consumption decisions that have consequences for their long-run-well-being.


Society outcomes include economic outcomes, physical environment outcomes and social welfare. There are external and internal influences that affect consumers and their decision patterns. External influence includes culture, values, religion, etc, whereas internal influence consists of personality, behavior, emotions, etc. Cross Cultural Variations in Consumer Behavior Chapter #02 In developing marketing strategies, cultural values and norms should be kept in mind, as different societies have different cultural values that affect the marketing of the product. There are three broad forms of cultural values other oriented, environment oriented and self-oriented. Other oriented values reflect a societys view of the relationships between individuals and groups. Whereas environmentoriented values reflect a societys relationship with its technical, economic and physical environments. And self oriented values reflect the approaches to life that individual members of society find desirable. There are also cultural variations in non verbal communications. It is easy to identify variations in verbal language whereas its difficult to understand variations in nonverbal communication. Non verbal communication includes time, space, symbols, friendship, agreements, things and etiquette. Different cultures approve different symbols and signs which might not be approved by other cultures. Hence understanding of non verbal communication is extremely important.

Demographics describe a population in terms of its size, structure, and distribution. They differ widely across cultures, and influence cultural values as well as consumption patterns. In entering a foreign market, there are certain considerations: Geography, area, distribution, structure, etc should be kept in mind. The Changing Society Values Chapter #03 Values are relative and these vary from society to society. In Pakistani society we place a greater value on older persons, religious values, etc. Cultural values are widely held beliefs that affirm what is desirable. When it comes to self oriented values, Pakistanis have not been very active and hardworking, but our society is somewhat religious. Personal debt, personal bankruptcies and credit sales continue to climb. The ratio of working women has increased and also the percentage of married women who work outside the home for wages has also increased. Environment oriented values prescribe a societys relationship with its economic, technical, and physical environments. Hygiene is not very important issue to majority of the Pakistanis. Our society is very traditional and not very welcoming towards change. We are not much concerned about the environment and neither are we involved in any of the environmental activities. Other oriented values reflect a societys view of the appropriate relationships, between individuals and groups within that society. Our society does not emphasize on individualism. Older people are considered wiser than young people and looked upon as models and leaders. We value and take responsibly of extended families unlike American society.

There is no concern about environmental activities in Pakistan hence there is almost no concept of green marketing, though Pakistani society has the concept of social marketing (charity shows, AIDS awareness program, etc). Gender roles are ascribed roles based on the sex of the individual rather than on characteristics the individual can control. Gender roles, particularly female roles, have undergone radical changes especially in urban areas of Pakistan. Female roles have been shifted and now more women work even after marriage. All aspects of our society, including marketing activities, have been affected by this shift. Demographics and Social Stratification Chapter #04 Demographics have several variables like income, education, and occupation. Occupation helps defining and evaluating individuals. Education helps in decision making i.e. which product is worth buying, how to spend money wisely, etc. Income is generally more effective variable than other variables because it determines the purchasing power of the consumer. Age is also a very important aspect as it influences the consumption pattern. Analyzing generations often provide more meaningful marketing strategies. A generation is a group of persons who experience a common social, political, historical and economic environment. The pre-depression generation is composed of those individuals who were born before 1930. The depression generation consists of people who were been between 1930 and 1945. Baby Boom generation consists of those people who grew up during the prosperous 1950s and 1960s. Generation X was born between 1965 and 1976 whereas generation Y is between 1977 and 1994.

The young members of this generation are students whereas the old members are in the workforce or college. This generation is currently the target market of majority of marketers. The newest generation is Millennial - those people who were born after 1994. A social system can be defined as a hierarchical division of a society into relatively and homogenous groups with respect to attitudes, values and lifestyles. There are various social classes depending on demographic variables like upper class consists of social elite, lower upper class (newly rich, newly successful elite), upper middle class, (their key aspect is education and occupation), middle class consists of white collar and high paid blue collar workers, upper lower class individuals with poor education and very low income, and lower lower class people having very low income and minimal education. According to the classes, the marketers position their products and usually marketers are criticized for not targeting the lower class. Also there are two approaches to the measurement of social classes. 1- A Multi Item Index 2- Single Item Index Multi item indexes are designed to measure individuals on overall rank or social position within the community. Perception Chapter #08 Perception consists of exposure, attention and interpretation and then there come the memory which helps in making purchase and consumption decisions. Exposure occurs when a stimulus occurs within range of our sensory receptor nerves. People are constantly exposed to thousands of more stimuli then they can process.

Attention is the most important part that marketers want from customers. Attention is determined by three factors: the stimulus, the individual, and the situation. Stimulus factors are size and intensity of the ads, color and movement, placement of the ad, isolation, format, contrast/expectation, interestingness and information quantity. Individual factors include the interest and need of the individuals whereas situational factors vary i.e. if people are more involved in a particular program then they are more likely to see those ads that come first and during that program. Interpretation is the assignment of meaning to sensations. Peoples interpretation is influenced by learning and expectations. Learning habits differ from culture to culture. People learn from environment, friendship, time, etc. Situational characteristics as well as stimulus characteristics also influence interpretations. By understanding the perception, marketers can play different strategies to remain in consumers memory. Retail strategy is one in which retailers take care about the shelf position and amount of shelf space that which item should take the amount of space, etc. Then there is the strategy of selecting the easy and precise brand name and logo so that people could easily remember it. Then there is media strategy in which it is decided that which media should be targeted to market the product. Advertisements and packages perform two critical tasks: capture attention, and convey meaning. Information processing theory guides a wide range of advertising evaluation techniques. Last but not the least; marketers need to be sensitive to the host of ethical issues that arise when developing marketing messages.

Learning Memory and Product Positioning Chapter #09 There are four activities of information processing i.e. exposure, attention, interpretation and memory. Learning is the term used to describe the process by which memory and behavior are changed as a result of conscious and non conscious information processing. High involvement learning is one in which people intentionally gather the information and in low involvement learning the consumer has little or no motivation to process or learn the material. There are various theories of learning that help us understand how consumers learn across a variety of situations. These theories are classical conditioning, operant conditioning, iconic rote learning, vicarious learning or modeling and reasoning / analogy. Five most important characteristics of learning are strength of learning, extinction, stimulus generalization, stimulus discrimination and the response environment. Marketers need to focus on these factors to improve the learning skills of consumers and they can get the idea of repositioning /positioning of the product. Memory is the total accumulation of prior learning experiences. It consists of two interrelated components: short term and long term memory - information from previous information processing that has been stored for future use. Brand image is a major focus of marketing activity. Product positioning is a decision by a marketer to attempt to attain a defined brand image. A brand is said to have brand equity when consumers respond favorably towards it in the market.

Motivation, Personality and Emotion Chapter #10 Motivation is the reason for behavior. A motive is why an individual does something. There are different approaches of motivation i.e. Maslows need hierarchy (described in general terms) and McGuire Work (specific aspects are discussed). McGuires motives are divided into four categories. The first one is cognitive motive that focuses on the persons needs for being adaptive towards the environment. Affective motives deal with the need to reach satisfying feeling states and to achieve personal goals. Preservation oriented motives emphasize the individual as striving to maintain equilibrium, and growth motives emphasize development. Consumers do not buy products. Instead, they buy motive satisfaction or problem solutions. Hence marketers need to understand the motivation theory that includes purchase motives and also these are multiple motives involved. For developing marketing strategies, motivation conflicts are needed to be understood as well. There are three types of motivational conflicts. First is the approach-approach conflict in which whatever the given options - both are beneficial. The second approach is the approach-avoidance conflict. A consumer confronts both the positive and negative consequences. The third conflict is the avoidanceavoidance conflict. Only negative consequences occur in this conflict. Personality is extremely important in marketing. There is a five factor model of personality that includes extroversion, instability, agreeableness, openness to experience and conscientiousness. Brand personality includes sincerity, excitement, competence, sophistication and ruggedness.

Emotional contact in advertisements enhances their attention, attraction and maintenance capabilities. Some researches have suggested that pleasure, arousal and dominance underlie all emotion. Emotions definitely affect consumers thoughts and behaviors. Attitudes and Influencing Attitudes Chapter #11 An attitude is the way one thinks, feels and acts towards some aspect of his or her environment. Attitude serves four key functions for individuals. The first is the knowledge function in which based on knowledge and perception, the decision is made. The second is the value expressive function in which other attitudes are formed and serve to express an individuals central values and self concept. Third is the utilitarian function in which people tend to form favorable and unfavorable attitudes. And the last is the ego defensive function in which people defend their ego and self images. Attitudes have three components: i) ii) iii) Cognitive that is based on beliefs. Affective that is based on feelings and emotions. Behavioral i.e. response tendencies.

The effectiveness of one vs two-sides messages depends largely on the situation and characteristics of the target audience. Nonverbal aspects of the ad also affect attitudes. Attitudes, particularly the cognitive component, are the basis for market segmentation strategies, such as benefit segmentation, and for new product development strategies. Situational Influences Chapter #13 A consumer situation is a set of factors outside of and removed from the individual consumer, as well as removed from the characteristics or attitudes of the product. There are four broad categories or types of situations: the communications situation, the purchase situation, the usage situation, and the disposition situation. The communication situation includes the purchase, use and disposition of the product. In communication situation you are influenced by moods, suggestions of friends, etc. There are situational characteristics and consumption behavior that include physical features, social surroundings, temporal perspective, task definition and antecedent states. The characteristics of the other persons present, their roles, and their intersectional interaction are potentially important social situational influences. Temporal perspectives deal with the effect of time on consumer behavior. Antecedent states are features of the individual person that are not lasting, such as moods. Ritual situations are also of major importance to marketers because they often involve prescribed consumption behaviors.

All these three components are said to be consistent i.e. change in one attitude component tends to produce related changes in the other components. The appeals used to change attitudes are important and are varied. Fear appeals and humorous appeals are effective in influencing attitudes. Comparative ads are good for unknown brands. Emotional appeals have a strong effect on attitudes towards both the ads and the products.

Consumer Decision Process and Problem Recognition Chapter #14 Before consumer makes any decision, there are different involvements that affect the decision making process of the consumer. The first one is the purchase involvement that is influenced by the interaction of individual, product and situational characteristics. The other type of involvement is the product involvement in which consumer is brand loyal and doesnt give much of a thought to other products while making decision. In nominal decision making there is low involvement of purchase. There is limited information search and very limited evaluation. High involvement exists when we move from nominal to limited or to extended decision making. Similarly evaluation process becomes more detailed i.e. complex evaluation is done. Problem recognition means there is the difference between the consumers desires state. A number of factors beyond the control of the marketing manager can affect problem recognition. The desired state can be influenced by culture/subculture, social status, reference groups, household characteristics, financial status, expectations, previous decisions, individual development, motives, emotions and the current situation. The actual state is influenced by past decision, normal depletion, product/brand performance, individual development, emotions, governments/consumer groups, availability of products and the current situation. Surveys and focus groups using activity, product, or problem analysis are commonly used to measure problem recognition. Once the problem is identified, marketing mix can be generated to solve the problems.

Information Search Chapter #15 Information search is not free. It takes time, money and energy and sometimes you have to give up the desirable activities. Nature of information search includes internal search and external search. In internal search, longterm memory is used to determine the solution and when internal search gets failed then external search is used. Consumers using the evaluation criteria for the solution of a problem then find out various alternative solutions and then the performance level or characteristics of alternative solutions is evaluated. There are i) ii) iii) iv) four major types of external sources: Personal sources Independent sources Marketing sources and Experiential sources

People use internet as well for purpose of searching. Marketing managers are particularly interested in external information search, as this provides them with direct access to the consumers. As information search is not free, therefore consumers should engage in external search only to the extent that the expected benefits such as lower price or a more satisfactory purchase outweigh the expected costs. Various marketing strategies based on information search patterns can be used i.e. maintenance strategy, disrupt strategy, capture strategy, intercept strategy, preference strategy and acceptance strategy.

Alternate Evaluation and Selection Chapter #16 This chapter discusses the evaluation and selection of alternatives. Alternatives evaluation and selection process involves various steps like three different criteria are evaluated individually in the process of evaluation of alternatives. The first is the evaluative criteria, second is importance of criteria and third is alternatives considered. These all criteria are evaluated and then decision rules are applied and finally alternatives are selected. There are numbers of ways through which consumers make choices. Effective choice is made when the brand cant be decomposed like the selection of the cloths and not computer/peripheral devices. Feeling is the important factor in making effective choices. Attribute-based choice involves the use of general attitudes, intuitions or heuristics and no attribute-by-attribute comparisons are made at the time of choosing. Rational choice theory assumes a rational decision maker with well-defined preferences that do not depend upon how the options are presented. The consumer is assumed to have sufficient skill to calculate which option will maximize his or her value and will choose on this basis. In evaluation criteria, various benefits are evaluated. Different brands are compared on the basis of different features. Marketing strategies are developed by utilizing evaluation criteria that involves 1) Which evaluative criteria are used by the consumer 2) How the consumer perceives the various alternatives on each criterion and 3) The relative importance of each criterion

A decision rule specifies how a consumer compares two or more brands. Five commonly used decision rules are: Disjunctive, Conjunctive, Lexicographic, aspects, and Compensatory. Elimination-by-

Outlet Selection and Purchase Chapter #17 There are three basic sequences a consumer can follow when making a purchase decision: 1) Brand first, outlet second 2) Outlet first, brand second 3) Brand and outlet simultaneously Retail outlet image is very important to the consumer. The major dimensions of store image are merchandise, service, clientele, physical facilities, convenience, promotion, store atmosphere, institutional and post-transaction factors. Usually closer outlets are preferred over distant ones and larger outlets are preferred over smaller ones. Shopping orientation refers to the general approach one takes to acquiring both brands and non-purchase satisfactions from various types of retail outlets. When consumers purchase a brand that differs from their plans before entering the store, then such purchases are referred to as unplanned purchases. Some are impulse purchases made with little or no deliberation in response to a sudden, powerful urge to buy or consume the product. Online retailers lose sales because consumers intending to make a purchase dont purchase because of frustration with the web site, fear of providing the credit card number over the internet, concern over shipping charges or delivery, or other reasons.