Introduction to Consumer Behavior and Marketing Strategy Chapter 1 Introduction to Consumer Behavior and Marketing Strategy McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction The marketing concept suggests an organization should satisfy consumer needs and wants in order to make a profit Need to understand customers Must stay close to customers Past problems with marketing concept

Introduction cont. Shift of focus to better serve consumers for three major reasons Dramatic success of Japanese companies Focus on providing consumers value-laden products Superior quality and lower prices of Japanese products

Introduction cont. Dramatic increase in the quality of consumer and marketing research Use of technology to identify and know customers Ability to track consumer reactions

Introduction cont. Development of the Internet as a marketing tool E-marketing potential Increased importance of consumer behavior research Ability to conduct marketing research studies

What is Consumer Behavior? The dynamic interaction of affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects of their lives

What is Consumer Behavior? cont. Involves the thoughts and feelings people experience and the actions they perform in consumption processes Includes all things in the environment that influence thoughts, feelings, and actions

What is Consumer Behavior? cont. Consumer behavior is dynamic Thinking, feelings, and actions of individual consumers, targeted consumer groups, and society at large are constantly changing Requires ongoing consumer research and analysis Makes development of marketing strategies difficult

What is Consumer Behavior? cont. Consumer behavior involves interactions Among people’s thinking, feelings and actions, and the environment Marketers need to understand What products and brands mean to consumers What consumers must do to purchase them What influences shopping, purchase, and consumption

What is Consumer Behavior? cont. Consumer behavior involves exchanges People give up value to others and receive something in return

Approaches to Consumer Behavior Research

Approaches to Consumer Behavior Research cont. Major approaches to studying consumer behavior Interpretive Based on theories and methods from cultural anthropology Objective is to understand consumption and its meanings Methods of study involve long interviews focus groups

Approaches to Consumer Behavior Research cont. Traditional Based on theories and methods from cognitive, social, and behavioral psychology, and sociology Objective is to explain consumer decision making and behavior Methods of study involve experiments surveys

Approaches to Consumer Behavior Research cont. Marketing science Based on theories and methods from economics and statistics Objective is to predict consumer choice and behavior Methods of study involve math-modeling simulation

Uses of Consumer Behavior Research Three groups use knowledge about consumer behavior and consumer behavior research

Uses of Consumer Behavior Research cont.

Uses of Consumer Behavior Research cont. Marketing organizations Businesses attempting to sell products Organizations that seek exchanges with consumers Government and political organizations Major concern is monitoring and regulating exchanges between marketing organizations and consumers

Uses of Consumer Behavior Research cont. Consumers Includes consumers and organizational buyers who exchange resources for various goods and services Interest in making exchanges

Consumer Behavior’s Role in Marketing Strategy Design, implementation, and control of a plan to influence exchanges to achieve organizational objectives

Consumer Behavior’s Role in Marketing Strategy cont. Developing and presenting marketing stimuli at selected target markets to influence What they think How they feel What they do Powerful force on consumers and society at large

Summary The marketing concept was defined and past problems were discussed The aspects of consumer behavior were presented Three major approaches to consumer behavior research were exhibited The groups that use knowledge about consumer behavior and research were identified The role of consumer behavior in a marketing strategy was discussed