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CHAPTER 1

CONSUMER
BEHAVIOR AND
MARKETING
STRATEGY

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Consumer Behavior and Marketing


Strategy

Consumer behavior is the


study of individuals, groups, or
organizations and the processes
they use to select, secure, use,
and dispose of products,
services, experiences, or ideas
to satisfy needs and the impacts
that these processes have on
the consumer and society.

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Consumer Behavior In The News…


Segmenting the Automobile Market
¾ J.D. Powers Examined Car
Car--Buyer Segments.
¾ Can You Predict the Market for Each Brand?
¾ Honda
H d CiCivic
i
¾ Honda Accord
¾ Toyota Sienna Mini Van
¾ Cadillac STS
¾ Lexus LS 430

Source: D. Kiley, “Sexy or Sensible?” Business Week, January 16, 2006, p. 60-61.
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1
Consumer Behavior In The News…
Segmenting the Automobile Market
¾ J.D. Powers Examined Car
Car--Buyer Segments.
¾ Can You Predict the Market for Each Brand?
¾ Honda
H d CiCivic
i – “teenage
“t tterror””
¾ Honda Accord – “recent MBA grad”
¾ Toyota Sienna Mini Van – “suburban mom”
¾ Cadillac STS – “mid
“mid--career executive”
¾ Lexus LS 430 – “titan of industry”

Source: D. Kiley, “Sexy or Sensible?” Business Week, January 16, 2006, p. 60-61.
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Applications of Consumer Behavior

1. Marketing Strategy

2 Regulatory
2. R l t Policy
P li

3. Social Marketing

4. Informed Individuals

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Applications of Consumer Behavior

Social marketing is applying marketing strategies


and tactics to alter or create behaviors that have a
positive effect on the targeted individuals or society as
a whole.
For example …

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2
Marketing Strategy and Consumer Behavior

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Market Segmentation

Market segmentation
is a portion of a larger
market whose needs
differ from the larger
market.

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Market Segmentation

Market Segmentation Involves Four Steps:

1. Identifying Product-Related Need Sets

2 Grouping
2. G i C Customers
t with
ith Si
Similar
il N Need
dSSets
t

3. Describing Each Group

4. Selecting an Attractive Segment(s) to Serve

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Marketing Strategy
¾ Marketing Strategy is the answer to the question:
How will we provide superior customer value to our
target market?
¾ This requires the formulation of a consistent
marketing mix,
mix which includes the
1. Product
2. Price
3. Communications
4. Distribution
Distribution, and
5. Services

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Consumer Decisions

The consumer decision process intervenes between


the marketing strategy,
strategy as implemented in the
marketing mix,
mix and the outcomes
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.

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Outcomes

Creating Satisfied Customers

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The Nature of Consumer Behavior
Overall Conceptual Model of Consumer Behavior

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The Nature of Consumer Behavior

External Influences
The following are the major external
influences:
• Culture
C lt
• Demographics and social stratification
• Ethnic, religious, and regional subcultures
• Families and households
• Groups

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The Nature of Consumer Behavior

Internal Influences
Internal influences include:
• Perception
• Learning
• Memory
• Motives
• Personality
•Emotions
•Attitudes

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5
The Nature of Consumer Behavior

Self--Concept and Lifestyle


Self
Self-concept is the totality of
Self-
an individual’s thoughts and
feelings about oneself.
Lifestyle is how one lives,
including the products one
buys, how one uses them,
what one thinks about them,
and how one feels about them.

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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 Using Outdoor Media to Trigger Problem Recognition
consumer behavior.
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