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Consumer Behavior

The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

We Are Consumers Why?

Because : We are always consuming something. We are sometimes planning future consumption We are sometimes enjoying the memory of past


Consumer Behavior is the Mental and

Physical Activity: Buying a product; preparing

Mental Activity: Evaluating a product in your

Physical Activities undertaken to Acquire and Consume the Products and Services so as to fulfill Needs and Wants.

a product for consumption, etc.

Reasons for Studying Consumer Behavior

To stay in business by attracting and retaining

customers To benefit from understanding consumer problems To establish competitive advantage


The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);

The behavior of consumers while shopping or

making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.


1. ExchangeAn interchange between two parties
where each receives value

2. ResourcesSomething that others value 3. ValueSum total of all benefits we receive from a

Five Resources:

Money Time Physical energy Knowledge & Skills Social capital


To Make Money OR To Create a Satisfied Customer.

Focus on Consumers Needs Rather Than

Identify Consumers Latent Needs Understand Consumer Behavior


Consumer knowledge
Importance of consumer knowledge
Knowledge shapes inferences about unknown

product attributes using known product attributes

Knowledge about competitors prices can

determine consumer acceptance of a companys price

Knowledge can influence consumer response to


Types of consumer knowledge

Product knowledge

Purchase knowledge
Consumption and usage knowledge Persuasion knowledge Self-knowledge

Product knowledge
Represents information stored in consumers memory about products
Product knowledge

Product novices possess very simple levels of product category knowledge

Product experts possess vast amounts of product category knowledge

Brand knowledge

Whether the consumer is aware of the brand or not is the most fundamental aspect of brand knowledge

Creating knowledge of the brands existence is a challenge facing:

new products in the current market. established brands and companies in the current market. established brands and companies in new markets.

Assessing awareness
Recall: which brands can be retrieved from memory Top-of-the-mind awareness: the particular brand that is remembered first Recognition: identify familiar brands from a list Choosing the best indicator of knowledge depends on whether consumers construct their consideration sets based on recall or recognition

Brand image: defined by entire array of

associations activated from memory when consumers think about a brand.

May also include endorsers, ad campaigns,

symbols, product slogans, etc.

Purchase knowledge
Encompasses the various pieces of information

consumers possess about buying products.

Includes information about the products price, where

it can be purchased, and whether it can be purchased less expensively later.

How much does it cost?

Knowledge about typical range of prices for a

product helps consumer evaluate fairness of the price of a particular brand.

Businesses are concerned about the accuracy of

consumers price knowledge and what consumers know about their competitors prices (relative price knowledge)

When to buy?
Knowledge about when a product typically goes

on sale may delay purchase May determine when new innovations are purchased many consumers do not purchase new innovations when introduced because they believe the price will drop over time

Where to buy?
Knowledge about where to buy a product guides

purchase decisions and from whom to buy. Includes knowledge about where product is located in the store when consumers are unfamiliar with store layout, they rely more on instore information

Consumption and usage knowledge

Encompasses the information in memory about

how a product can be consumed and what is required to actually use it.
Consumers are unlikely to buy a product when

they lack information about how to use it.

Sometimes consumer have incomplete

information about different ways a product can be consumed.

Care must be taken in selecting new uses for an

existing product so not to lower its appeal.

Persuasion knowledge
Information about what consumers know about

the goals and tactics of those trying to persuade them.

Persuasion knowledge influences how

consumers respond to persuasion attempts.

Knowledge about a particular tactic may

eliminate its effectiveness.

A persons understanding of ones own mental

Can the consumer accurately assess and report

the importance of product attributes used in the decision process?

Companies are better off relying on the results of

statistical models than those reported by consumers.

Sources of consumer knowledge

Personal versus impersonal.
Business versus non-business controlled. Business sources of knowledge are often viewed

with suspicion.
Consumers have more faith in personal

knowledge sources that are not controlled by businesses.

Differing credibility of sources. Relative influence of product sources depends

on the type of information conveyed.

Marketing Strategy and Consumer Behavior






Market Analysis Components

Firms Competitors Conditions (environment)

Market Segmentation
Product-related need sets
Segments: customers with similar

needs and responses Segment description Segment selection

Elements in Marketing Strategy




Product position/perception

Customer satisfaction

Need satisfaction
Injurious consumption

Physical environment Social welfare

Market Segmentation

Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

Segmenting Consumer Markets

Geographical segmentation

Demographic segmentation
Most popular segmentation

Psychographic segmentation
Lifestyle, social class, and personality-based

segmentation Behavioral segmentation

Segmenting Business Markets

Demographic segmentation
Industry, company size, location

Operating variables
Technology, usage status, customer capabilities

Purchasing approaches Situational factors

Urgency, specific application, size of order

Personal characteristics
Buyer-seller similarity, attitudes toward risk,


Components of Communication contd

Basic Communication Model
Sender (Source)



Receiver (Consumer)


The Communication Process

A companys marketing communications are designed to:

- make the consumer aware of the product or service - induce purchase or commitment - create a positive attitude toward the product - give the product a symbolic meaning, or show how it can solve the consumers problem better than a competitive product.

Thank You!