Chapter # 2

What is Consumer Behavior

• Consumer Behavior involves the thoughts and
feelings people experience and the actions they
perform in consumption process.
• It also includes all the things in the environment that
influence these thoughts, feelings and actions.
• These includes comments from the consumers,
advertisements, price information, packing, product
appearance etc.
• Consumer behavior is Dynamic as it involves
interactions and exchanges.
 Consumer Behavior is Dynamic

• Consumer Behavior is Dynamic because the thinking, feelings and actions

of individual consumers , targeted consumer groups, and society at large
are constantly changing.
• E.g., Internet has changed people search for information about products and
services. E.g. amazon.com, ebay.com
• The dynamic nature of consumer behavior makes development of
marketing strategies an exciting yet difficult task.
• Strategies that work in one time or in one market may miserably fail at
other times and markets. Because Product life cycles are shorter than ever
before e.g. Mobile phones, Cars.
• This involves creation of new products, new versions of existing products,
new brands and new strategies.
 Consumer Behavior involves Interactions

• Consumer behavior involves interactions among

people’s thinking, feelings and actions and the
environment.
• Thus marketers need to understand what products and
brands mean to consumers, what consumer must do
to purchase and use them and what influences
shopping, purchase and consumption.
• E.g income pattern of different classes, companies
offer their products and services accordingly.
 Consumer behavior involves exchanges

• Consumer behavior involves exchanges between

human beings.
• People give up some thing of value to others and
receive some thing in return e.g. money to seller to
get product/service (buyers).
• Companies spend millions of dollars to study
consumer. These companies do their own research or
hire marketing research firms, ad agencies, consulting
firms, academics to help them develop better
marketing strategies to serve consumers.
 Consumer behavior role in Marketing Strategy

• A marketing strategy is the design, implementation and

control of a plan to influence exchanges to achieve
organizational objectives.
• In consumer markets, marketing strategies are developed
to increase the chance that consumers will have favorable
thoughts and feelings about particular products, services
and brands and will try them and repeatedly purchase
them.
• Marketing strategies involves developing and presenting
marketing stimuli directed at selected markets to
influence what they think, how they feel, and what they
do.
 Some Marketing Strategy Questions Consumer
behavior research can help answer
• Which consumers are likely to buy this product and our brand,
what are they like, how are they different from consumers who
don’t buy and how do we reach them ?
• What strategies should be used to encourage consumers to
purchase our brands and not to purchase our competitors’
brand ?
• What price are consumers willing to pay for our product and
still believe that they are getting good value ?
• What do consumers think and feel about our brand versus
competitive brands ?
• What can be done to improve their opinion about our brand ?
• What should we do to retain our customers and make them
loyal to our brand ?
• Three Elements of Consumer Analysis

• 1) Consumer Affect and Cognition

• 2) Consumer Behavior
• 3) Consumer Environment
 1) Consumer Affect and Cognition

• Consumers affect and cognition refers to 2 types of

responses consumers have to stimuli and events in
their environment.

• Affect refers to their feelings about stimuli and events

such as whether they like or dislike a product.

• Cognition refers to their thinking, such as their belief

about a particular product.
• Affective responses can be favorable or unfavorable
and vary in intensity.
• Affects includes relatively intense emotions such as
love or anger, less strong feeling states such as
satisfaction or frustration, moods such as boredom or
relaxation, and milder overall attitudes such liking
McDonald’s french fries or disliking Andey wala
Burger.
• Marketers typically develop strategies to create
positive affect for their products and brands to
increase the chance that consumers will buy them.
• Cognition refers to the mental structures and processes
involved in thinking, understanding, and interpreting
stimuli and events. It includes the knowledge, meaning
and beliefs that consumers have developed from their
experiences and have stored in their memories which
helps in making purchase decisions and choices.
• Marketers often try to increase consumers’ attention to
products and their knowledge about them. E.g. Volvo ads
often feature detailed information about the construction
of the cars to make them safer in order to increase
consumers’ knowledge and the chances that they will buy
them.
 2) Consumer Behavior

• Behavior refers to the physical actions of consumers that can

be directly observed and measured by others.
• It is also called OVERT behavior to distinguish it from mental
activities such as thinking, that can’t be measured.
• Examples of behavior includes shopping at stores or on the
internet, buying products etc.
• Behavior is critical for marketing strategy because it is only
through behavior that sales can be made and profits can be
earned.
• Thus its critical for marketers to analyze, understand and
influence overt behavior.
• This can be done in many ways including offering
superior quality (Toyota), Lower Prices (Lidl), greater
convenience (Hyper mall), easy availability (coke in
millions of stores) and Better services (DHL).
• Marketing can also influence overt behavior by
offering products, stores and brands e.g Nike (more
popular sports items), Classy (Calvin klein jeans),
more trendier (The Gap).
 3) Consumer Environment

• The consumer environment refers to every thing external to

consumers that influences what they think, feel and do.
• It includes social stimuli, such as actions of others in cultures
and families, that influence consumers.
• It also includes other physical stimuli such as stores, products,
advertisements and signs that can change consumer’s thoughts,
feelings and actions.
• The consumer environment is important to marketing strategy
because it is the medium in which stimuli are placed to
influence consumers.
• E.g. Marketers run commercials during shows that
their target market watch in order to inform ,
persuade and remind them to buy certain products
and brands.
• Marketers can send free samples, coupons, catalogs
and advertisements by mail or email to get them in
consumers’ environment.
• Stores are located close to populated areas to get them
in the proximity (closeness) of consumers.
Relationship among Affect and Cognition, Behavior
and the Environment

• A consumer might see an ad for a new laundry detergent that

promises to clean clothes better than Ariel.

• This ad might change what the consumer thinks about the new
brand and lead to purchase of it.

• In this case a change in the consumer’s environment (the ad

for the new detergent) led to change in cognition ( the
consumer believed the new detergent was better) which lead to
change in the behavior ( the consumer bought the new brand)
 Marketing Strategy
• Marketing strategy is a set of stimuli placed in consumers’
environments designed to influence their affect, cognition and
behavior.
• These stimuli include products, brands, packaging, ads, sales people
communication, sounds (music), smells (perfume).
• Marketing strategy is hub of the wheel because it is the central
marketing activity and is designed by marketing organizations to
influence consumers.
• Marketing strategies should also be designed in response to
consumers. e.g. change the ad or its content if consumers respond
negatively.
• If the consumers in the target market do not shop (behavior) in
stores where a company’s product is featured, then the distribution
strategy may have to be changed.
• If the consumers want to get information from company’s website
but not available, company should provide.
 Market Segments
• Successful firms divide the total market into segment and try
to appeal most to one or more of them.

• For example, many consumers are involved in sports but

specific shoes designed to play each sport effectively were not
always available.

• They range in different styles, designs, prices for cycling,

running, soccer, basketball.