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Consumer Behavior and Marketing Strategy

Definitions of consumer behaviour

The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspects of their lives (American Marketing Association)

A discipline dealing with how and why consumers purchase (or dont purchase) products and services.(Neal et al.)

Those behaviours performed by decision making units in the purchase, usage and disposal of goods and services
(Kotler & Levy)

Marketing decisions
It is important to have an understanding of consumer behavior before the development of marketing strategy.

Marketing decisions are based on: Market segmentation Product positioning Marketing mix

Consumer behaviour is product person-situation specific

Consumer behaviour is product person-situation specific

Product specific Depends on the nature of the product Person-individual Different customers behave differently due to needs, personalities and values Situation Buying behaviour is dependent on the given situation

The Nature of Consumer Behavior

Situations and Consumer Decisions Consumer decisions result from perceived problems and opportunities. Consumer problems arise in specific situations and the nature of the situation influences the resulting consumer behavior.

Consumer behaviour and marketing strategy

Positioning strategy

Market segmentation New products New market applications Global marketing Marketing mix Consumerism Non-profit marketing


How consumer influences drive marketing decisions


Consumer lifestyle and consumer decisions


Consumers needs/attitudes influence consumption decisions These are reflected in consumer choices In turn, consumers respond to: Reduce, maintain or enhance their lifestyle Consumer lifestyle - a basis for understanding consumption


Consumer decision process



Applications of Consumer Behavior Marketing Strategy

Marketing strategies and tactics are based on explicit or implicit beliefs about consumer behavior. Knowledge of consumer behavior can be an important competitive advantage and can greatly reduce the odds of bad decisions and market failures!


Marketing Strategy and Consumer Behavior

Customer value is the difference between all the benefits derived from a total product and all the costs of acquiring those benefits. Providing superior customer value requires the organization to do a better job of anticipating and reacting to customer needs than the competition does



Step 1. Market Analysis

Marketing Strategy begins with an analysis of the market the organization is considering, requiring a detailed analysis of the: organizations capabilities strengths and weaknesses of competitors economic and technological forces current and potential customers


Market Analysis Components

1. The Consumers 2. The Company 3. The Competitors 4. The Conditions


Step 2. Market Segmentation

On the basis of the consumer analysis, the organization identifies groups of individuals, households, or firms with similar needs. These market segments are described in terms such as demographics, media preferences, geographic location, etc. Management then selects the segment(s) to target




Step 3. Marketing Strategy

Marketing Strategy seeks to provide the customer with more value than the competition, while still producing a profit for the firm. Marketing strategy is formulated in terms of the marketing mix, which involves determining the product features, price, communications, distribution and services that will provide customers with superior value, resulting in the total product.

Step 4. Consumer Decision Process

The total product is presented to the target market, which is consistently engaged in processing information and making decisions designed to maintain or enhance its lifestyle or performance.


Step 5. Outcomes
Society the cumulative effect of the marketing process affects economic growth, pollution, social problems. Firm reaction of the target market to the total product produces an image of the product/brand/organization. Individual the process results in some level of need satisfaction, financial expenditure, attitude development/change, and/or behavioral changes.



The consumer decision process intervenes between the marketing strategy, as implemented in the marketing mix, and the outcomes. The firm can succeed only if consumers see a need that its product can solve, become aware of the product and its capabilities, decide that it is the best available solution, proceed to buy it, and become satisfied with the result of the purchase.