MMPC-06: Marketing Management
Unit 3: Consumer Behavior
3.1 Introduction
Consumer behavior refers to the study of how individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires. Understanding consumer behavior helps businesses in developing products, creating marketing strategies, and improving customer satisfaction.
3.2 Theories of Consumer Behavior
3.2.1 Economic Model
The economic model assumes that consumers are rational decision-makers who make purchases based on maximizing utility while considering the price and their budget constraints. Consumers compare the benefits and costs of a product before making a purchase.
3.2.2 Psychological Model
This model focuses on how psychological factors such as perception, motivation, learning, beliefs, and attitudes influence consumer behavior. It emphasizes the stimulus-response theory, where marketing stimuli (like advertising) can change the consumer's response, such as purchasing behavior.
3.2.3 Sociocultural Model
The sociocultural model considers the impact of society and culture on consumer behavior. It looks at influences from family, friends, social class, and culture. Consumers’ decisions are often influenced by the norms and values of the groups they belong to.
3.2.4 Psychoanalytic Model (Freudian Approach)
This model suggests that consumer behavior is influenced by unconscious desires and motives. According to Freud, consumers are driven by subconscious urges that may not always align with rational decision-making. Marketers often appeal to these hidden desires through emotional branding.
3.2.5 Howard-Sheth Model
This is a comprehensive model that examines the decision-making process of consumers. It outlines three stages of decision-making: input, processing, and output. Consumers receive stimuli from the environment, process them through a decision-making mechanism (influenced by learning and attitude), and then make a purchase decision.
3.3 Factors Influencing Consumer Behavior
3.3.1 Cultural Factors
- Culture: A set of values, beliefs, and customs shared by a group of people. It shapes consumer preferences.
- Subculture: Subsets within a culture, such as religion, ethnic groups, or regions, which influence consumption patterns.
- Social Class: Consumer behavior is often influenced by a person's social class, which is determined by factors like income, education, and occupation.
3.3.2 Social Factors
- Reference Groups: Groups that influence an individual’s attitude and behavior, including friends, family, and colleagues.
- Family: Family members play a critical role in influencing buying decisions, especially in joint decision-making for products such as homes or cars.
- Roles and Status: The roles people play in society (e.g., student, professional) and their associated status impact the type of products they purchase.
3.3.3 Personal Factors
- Age and Life Cycle Stage: Consumer preferences change with age and life stages (e.g., single, married, retired).
- Occupation: A person’s job influences their purchasing power and the types of products they need.
- Lifestyle: This includes activities, interests, and opinions that reflect how people spend their time and money.
3.3.4 Psychological Factors
- Motivation: The driving force behind consumers’ needs and wants. Maslow's Hierarchy of Needs is often used to explain motivation.
- Perception: How consumers interpret information and form an image of the product or brand.
- Learning: Changes in behavior based on past experiences. Positive experiences reinforce purchasing behavior.
- Beliefs and Attitudes: Established beliefs and attitudes shape consumer preferences and influence their buying decisions.
3.4 Consumer Decision-Making Process
3.4.1 Problem Recognition
The process starts when a consumer identifies a need or problem (e.g., running out of a product or a desire to buy something new).
3.4.2 Information Search
Consumers seek information from various sources, such as personal experience, family, friends, advertisements, or the internet, to find potential solutions.
3.4.3 Evaluation of Alternatives
Consumers compare various products or services based on factors such as price, features, and quality to determine the best option.
3.4.4 Purchase Decision
Based on the evaluation, the consumer makes a purchase decision. This could be influenced by factors like brand loyalty, convenience, or emotional appeal.
3.4.5 Post-Purchase Behavior
After the purchase, consumers evaluate whether the product met their expectations. Positive experiences lead to customer satisfaction and loyalty, while negative experiences can result in complaints or returns.
3.5 Consumer Behavior Experiments
Marketers often conduct experiments to understand consumer behavior in different settings. For example, A/B testing is used to determine which version of an advertisement or product layout appeals more to consumers. Experiments like these help refine marketing strategies and improve product designs.
3.6 Case Study: Nike's Understanding of Consumer Behavior
Nike focuses on consumer behavior by creating personalized experiences through digital platforms, offering products that align with individual needs and preferences. By understanding the psychological factors such as motivation (e.g., fitness goals) and sociocultural factors (e.g., the influence of sports celebrities), Nike tailors its marketing efforts to drive customer engagement and loyalty.
Assignments for Unit 3
- Explain the role of culture and subculture in shaping consumer behavior, with examples.
- How does Maslow's Hierarchy of Needs influence consumer motivation? Discuss with examples.
- What are the stages of the consumer decision-making process? Provide real-life examples.
Self-Study Questions
- How do reference groups influence consumer purchasing decisions? Provide an example.
- Discuss the psychological factors affecting consumer behavior and their importance in marketing strategy.
- Explain how a company can use consumer behavior insights to improve product offerings and customer satisfaction.
Possible Exam Questions
- Discuss the different models of consumer behavior and their relevance in marketing.
- How do personal factors such as age, occupation, and lifestyle affect consumer behavior? Provide examples.
- Explain the consumer decision-making process and its importance for marketers in creating effective strategies.
This class delves deep into the factors influencing consumer behavior and offers a structured understanding of consumer decision-making. The assignments and questions promote critical thinking and practical applications of consumer behavior theories.
