KARELIA UNIVERSITY OF APPLIED SCIENCES

Degree Programme in International Business

LITERATURE REVIEW: CONSUMER BEHAVIOR IN

MARKETING

Research Seminar
Ari Stenroos& Adam Lerch
Autumn 2014
CONTENTS

1 INTRODUCTION ............................................................................................ 3
2 CONSUMER BEHAVIOR IN MARKETING .................................................... 3
2.1 Definition of Consumer Behavior ................................................................. 3
2.2 Market segmentation and consumer behavior ............................................... 4
2.3 Key factors of consumer’s motivation: Needs, Drives and Goals .................... 4
2.4 Consumer’s Attitudes ................................................................................ 6
2.5 Consumer’s Perceptions ............................................................................ 7
3 CONCLUSIONS .............................................................................................. 9
REFERENCES ................................................................................................... 11
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1 INTRODUCTION

Marketing and consumer behavior have a significant impact in the world. Additionally,
management and marketing help people to organize and determine correct strategies for
the future development of the business (Strydom, 2005). Moreover, consumer behavior
theory gives a clear image and an explanation of the consumers’ actions in the business
environment (Noel, 2009).

It can be stated that the purpose of the literature review is to get a clear understanding of
consumer behavior theory. I have chosen this topic due to the fact that my thesis
research project strongly interacts with behavior of Russian consumers. The theoretical
overview of this topic will help me to understand the main elements and factors which
have a certain impact on consumer behavior in the business life.

2 CONSUMER BEHAVIOR IN MARKETING

2.1 Definition of Consumer Behavior

Even though every person is unique, there are some similarities in consumer buying
behavior and they are called behavioral patterns (Cant, Jooste, Plessis &Strydom 2009,
63). These similarities help to unite customers in certain groups and make the marketing
process easier.

It can be said that consumer behavior is a key element in marketing which defines target
markets and marketing mixes (Sandhusen 2000, 217). Without understanding
behavioral patterns it is impossible to define correct marketing strategy for the future.

In marketing, consumer behavior is complex and consists of various pivotal elements.

For instance, according to Deborah, Maclnnis, Wayne D. Hoyer (2008, 5) consumer
behavior involves the following components: goods, services, activities, experiences,
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people and ideas. Another important aspect which has a dramatic impact on the
consumer decision making process is time: a consumer needs to have an understanding
about the value of time and the opportunity cost (Deborah, Maclnnis &Wayne D.
Hoyer, 2008, 6).

2.2 Market segmentation and consumer behavior

In marketing, understanding consumer behavior helps to divide potential customers in

the certain groups. According to Cant, Jooste, Plessis &Strydom (2009, 103)
segmentation can be defined as “a process of dividing a total market into segments or a
target market with consumers with common needs or characteristics and selecting one
or more segments to target with a distinct marketing mix” .

One market segment consists of a group of customers who are united together by
similar needs and wants (Brady, Goodman, Hansen, Keller &Kotler, 2009, 334). The
segments are introduced to simplify the complexity of the whole target market, but they
are strongly generalized and do not cover personal preferences of individual consumers
(Brady, Goodman, Hansen, Keller &Kotler, 2009, 334).

2.3 Key factors of consumer’s motivation: Needs, Drives and Goals

The most important elements which dramatically affect a motivation of consumer are
needs, drives and goals. Need is the basic element which provokes consumer to start the
certain actions to satisfy the certain desire. Other elements can be considered of the
same importance as needs, but need is a key element in chain of needs-drives-goals
(Jansson-Boyd, 2010, 116).

According to Lantos needs can be defined as states of the felt lack of vital physiological
requirements for optimal environment conditions (Lantos, 2010, 5). It should be
mentioned that need is only a small impulse for the future actions; there are also other
factors which have more influence on the motivation (Strydom, 2005).
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The needs can be divided into two basic groups: utilitarian and hedonic. The major
difference is: hedonic needs acquire to satisfy the need with emotional element, but
utilitarian are meant to simply satisfy the aroused need and to receive benefit (Lantos,
2010, 5)

Abraham Maslow introduced another classification of human needs. Maslow had an

idea that all humans try to learn more about themselves and be beneficial for the society.
(Kirst-Ashman &Zastrow, 2009, 448). He made the certain hierarchy of needs
according to their importance (Hughes, Kapoor &Pride, 2011, 281). The whole
hierarchy can be seen in more detail on Figure 1.

Figure 1 Maslow’s Hierarchy of Needs

Source: (Hughes, Kapoor &Pride, 2011, 281).

According to Maslow there are several groups of needs which need to be satisfied in
order of importance. It can be said that the most important and the most basic needs are
physiology needs. Without satisfying the base needs an individual is not able to survive
(Steinberg, 2007, 22).

Safety needs can be also classified as basic needs. A human being needs to feel secure
and protected. Need for shelter, job, and being protected are the most common examples
of safety needs. (Steinberg , 2007, 22.).

People have a tendency to belong to the certain groups. Stratifying social needs makes
humans think that they are important to the society. From psychological perspective
individuals like to be appreciated and loved (Smoke, 2005, 123.).
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Esteem needs can be divided to two different groups: self-esteem and appreciation from
the other group members. It is a common knowledge that people who have lower levels
of needs satisfied are keen on spending and investing money in luxury and expensive
goods to show their reference to the certain social status (Smoke, 2005, 124.).

The main self-actualization need according to Jarvis (2005, 120) is “to find personal
fulfillment and achieve one’s potential”. But before a person can become self-actualized
all other lower levels in Maslow’s hierarchy have to be satisfied.

Need plays the role of the first impulse in decision making process. Figure 2 represented
above gives a general image of the consumer steps towards the desired goal based on a
need for pair of shoes example.

Figure 2 Relationship between Needs, Drives and Goals

Source: (Jansson-Boyd, 2010, 116)

As it can be seen on the Figure 2 drives plays a roles of an intermediary between Need
and Goal. In marketing, drives or motives are action-oriented and show the direction in
which a consumer should move to reach a certain goal (Ghosh, 2000, 133).

Goal is a result of the motivated behavior towards the need satisfaction Goals can be
classified in several groups: generic goals and product-specific goals. Generic goal is a
satisfaction of the aroused need with no specific preferences. Product-specific goal is
aimed at the satisfaction of the need from the emotional perspective with a concrete
product or service. (Jansson-Boyd, 2010, 117.).

2.4 Consumer’s Attitudes

A consumer attitude can be defined as a certain way of behavior in the certain situation
at the certain period of time towards market-related objects (Strydom, 2005). In
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marketing, it is a key point in understanding the decision-making process and

determining potential consumer behavior in the certain situation.

Attitudes have a certain impact on consumer decision-making process, but might not be
a reason of the actual behavior. Having positive attitude towards something does not
necessarily mean an actual purchase of the preferred good (Noel, 2009).

There are various factors which have influence on the consumer attitude and buying
behavior. Basically, it can be mentioned that consumer behavior and the whole
decision-making process is strongly influenced by the background of a potential buyer.
According to Sandhusen (2000, 221): “social class predicts buying behavior”. It is a
common knowledge that people who belong to the same social class have similar
attitudes, needs, wants and demands. Additionally, reference groups play a pivotal role
in building the attitude and forming a behavioral pattern (Sandhusen, 2000, 221).

Personality also has an impact on the consumer attitude. But it should be mentioned that
personalities have a tendency to change over a certain period of time (Hansen, Kanuk,
&Shiffman, 2008, 135). Basically, in conclusion, it should be mentioned that there is
nothing constant in the consumer buying behavior and attitude.

2.5 Consumer’s Perceptions

Perception is a phenomenon widely used in consumer behavior theory. The term

“perception” can be defined as a process of interpreting the environmental factors such
as smell, touch, vision, sound within the customer’s frame of reference (Strydom,
2005).

Perception is a complex process which is widely used in theory of consumer behavior.

The procedure consists of three main stages: sensation, attention, and interpretation
(Askergaard, Bamossy, Hogg &Solomon, 2006, 36). It is important to follow the
consumer on the perception path, it helps to understand the possible reactions and
analyze the problem from the psychological perspective.

The physical effects such as smell, vision, sound, touch have a strong impact on the
consumer’s perception and marketing strategy (Askergaard, Bamossy, Hogg
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&Solomon, 2006, 36-46). Consumers have a tendency to have an overview of the

product just from the physical characteristics and build a complete image about the
object.

Quality perceptions have a strong impact on the marketing and quality management.
Understanding the perception of the quality helps a company to determine the right
strategy to attract more customers and maintain the old ones. SERVQUAL is widely
used instrument to determine the quality of the service. The main idea of the concept is
to understand the ratio between perceived service quality and the actual quality of the
service (Dabade, Wankhade, 2010, 3.)

It is pivotal to understand that a customer has his own perspective on the understanding
of the quality of a service or a product. Quality makes the sales more efficient and keeps
the customer satisfied. (Berry, Parasuraman &Zeithaml, 2010.).
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3 CONCLUSIONS

The main point of the literature review was to understand the main aspects of consumer
behavior. All the elements such as needs, drives, goals, attitudes, and perceptions are
the key elements which help marketers to determine the most suitable strategy for a
product.

Even though there is enough theory on consumer behavior, it does not make the
implementation of the strategy easier in the real life. All perceptions and attitudes might
vary, and cannot remain constant in long-term (Hansen, Kanuk, &Shiffman, 2008, 135).
But understanding of the key elements of consumer’ attitudes helps to predict actions of
the certain consumer groups (Noel, 2009). Basically, it helps to choose relevant target
market and to divide it in segments more effectively (Cant, Jooste, Plessis &Strydom,
2009) Segmentation helps to focus on particular target groups and to study market more
precisely (Cant, Jooste, Plessis &Strydom, 2009, 103).

The main risk while reading and interpreting the consumer behavior is the fact of high
level of individualism in the modern society. Majority of people have their own
preferences towards various products, as a consequence their consumer behavior can be
misunderstood by marketers due to the fact that target groups are highly generalized
(Brady, Goodman, Hansen, Keller &Kotler, 2009, 334).Understanding the consumer
behavior from the wrong perspective might cause the problems to a firm.

There are certain areas which research does not focus on due to the fact that consumer
behavior is complex. To understand consumer behavior in more detail it is necessary to
understand the psychology of an individual in the first place. Psychological perspective
has a dramatic impact on business and consumer behavior theory: analyzing the
memory and self-concept phenomena might be the factors to consider in future.
Additionally, studying the background of a consumer more precisely is highly
recommended due the fact that culture, subculture, lifestyle and social class have a
dramatic influence on an individual.
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In my personal opinion, consumer behavior should be studied and analyzed in more

detail each time. Consumers are individuals and their personalities might also change or
be affected by the reference groups or other external factors (Sandhusen, 2000, 221).
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REFERENCES
Askergaard, S., Bamossy, H., Hogg, M., Solomon, M., 2006. Consumer behavior: a
European perspective. UK: Pearson Education Limited.

Berry, L.L., Parasuraman, A., Zeithaml, V. A. 2010. Delivering Quality Service. USA:
The free press New York

Brady, M., Goodman, M., Hansen, T., Keller, K. L., Kotler, P. 2009. Marketing
management. UK: Pearson Education Limited.

Cant, M., Jooste, C., Plessis, P., Strydom, J. 2009. Marketing Management. South
Africa: Juta and Company, Ltd.

Dabade, B., Wankhade, L. 2010. Quality Uncertainty and Perception: Information

asymmetry and management of quality uncertainty and quality perception.
Germany: Springer-Verlag Berlin Heidelberg.

Deborah, J., Maclnnis, Wayne D. Hoyer. 2008. Consumer behavior. USA: Cengage
Learning, Inc.

Ghosh, B. 2000. Human Resources Development and Management. India: VIKAS

Publishing house PVT Ltd.

Hansen, H., Kanuk, L.L., Shiffman, L.G. 2008. Consumer behavior: an European
outlook. UK: Pearson Education Limited.

Hughes, R., Kapoor, J., Pride, W. 2011. Business. USA:Cengage Learning, Inc.

Jackson, F. 1977. Perception: A Representative theory UK: Cambridge University Press

Jarvis, M. 2005. The Psychology of Effective Learning and Teaching

Jansson-Boyd, K. 2010. Consumer Psychology. UK: Bell and Bain Ltd., Glasgow.

Kirst-Ashman, K., Zastrow, C. 2009. Understanding Human Behavior and Social

Environment. USA: Cengage Learning, Inc.

Lantos, G.P. 2010. Consumer Behavior in Action Real-life Applications for Marketing
Managers. USA: The Copy Workshop.

Noel, H. 2009. Consumer behavior. Switzerland: AVA Publishing SA.

Sandhusen, R. 2000. Marketing. USA: Barron’s.

Smoke, K. 2005. Company Officer. USA: Cengage Learning, Inc.

Steinberg, S. 2007. An introduction to communication studies. South Africa: Uta and

company Ltd.

Strydom, J. 2005. Introduction to Marketing. Republic of South Africa: Paarl Print.