Consumer Behavior and Marketing Strategy

Why study consumer behaviour?
• By studying consumer behaviour we try to understand & gain insight into:

– Consumer decision making processes
– What we buy, how we buy, and why we buy
• Enables us to become better consumers and marketers

Definitions of Consumer Behaviour

• 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.

• The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspects of their lives (American Marketing Association)

• Those behaviours performed by decision-making units in the purchase, usage and disposal of goods and services (Kotler & Levy) • The decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services (London & Della Bitta)

Application of Consumer Behavior

Marketing Strategy/ regulatory Policy/Social Marketing/Informed Individual Consumer Behaviour and Marketing Strategy

Cross Cultural Variations in Consumer Behavior

Culture is the most pervasive external force on an individual’s consumption behavior.

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It would be difficult to overlook the importance of culture as a motivator of consumer behavior. The attitude people possess, the values they hold dear, the lifestyles they enjoy and the interpersonal behavior patterns they adopt are the outcomes of the cultural settings. Failure to carefully consider cultural differences is often responsible for monumental marketing failure.

The concept of Culture

Culture is the complex whole that includes knowledge, belief, art, law, morals, customs and any other capabilities and habits acquired by humans as members of society.

▪ First, culture is a comprehensive concept. It includes almost everything that influences an individual’s thought processes and behaviors. ▪ Second, culture is acquired. It does not include inherited responses and predispositions. Much of human behavior is learned rather than innate, culture does not affect a wide array of behaviors. ▪ Third, the complexity of modern societies is such that culture seldom provides detailed prescriptions for appropriate behavior.

Culture provides boundaries within which most individual think and act. ▪ Finally, the nature of cultural influences is such that we are seldom aware of them. One think behave, feels in a manner consistent with other members of the same culture because it seems “natural” or “right” to do. The boundaries that culture sets on behavior are called Norms which are simple rules that specify or prohibit certain behaviors in specific situations Norms are derived from Cultural Value, widely held beliefs that shared standards of what is acceptable or unacceptable, good or bad, desirable or undesirable. Violation of cultural norms results in sanctions, or penalties ranging from mild social disapproval to banishment from the group. Variations in cultural values

• Cultural values are widely held beliefs that affirm what is desirable. A useful approach to understanding cultural variations in behavior is to understand the values embraced by different cultures. The classifications of cultural values

1. Other oriented[Individual/Collective, Youth/Age, extended/Limited Family, Masculine/feminine, Competitive/Cooperative, Diversity/Uniformity] 2. Environmental oriented [ Cleanliness, Performance/Status, Tradition/Change, Risk Taking/Security, Problem solving/Fatalistic, Nature] 3. Self-oriented [ Active/Passive, Sensual gratification/Abstinence, Material/Nonmaterial, Hard work/Leisure, Postponed gratification/immediate gratification, Religious/Secular]

The use people make of space and the meaning they assign to their use of space constitute a second form of nonverbal communication. In America, the office space in corporations generally is allocated according to rank and prestige rather than need. A second major use of space is personal space. It is the nearest that others can come to anyone in various situations without feeling uncomfortable

Symbols

A symbol may be defined as the sign or representation of something moral or intellectual by the images or properties of natural things as” the Lion the symbol of courage”. Different studies on cultures identified two types of symbols used by people in communicating among them, they are

1. Referential symbol

2. Expressive symbol

Relationship

The rights and obligations imposed by friendship are another nonverbal communication variable. Americans, more so than most other cultures, make friends quickly and easily and drop them easily also. To most Asian and Latin Americans, good personal relations and feeling are all that really matter in a long term agreement. Americans negotiate a contract, the Japanese negotiate a relationship. In many countries, the written word is used simple to satisfy legalities. In their eyes, emotion and personal relations are more important than cold facts.

Agreement

Americans rely on an extensive and generally, highly efficient legal system for ensuring that business obligations are honored and for resolving disagreements. Many other cultures have not developed such system and rely instead on friendship and local moral, principles, or informal customs to guide business conduct. In many developed counties, prices are uniform for all buyers, but in some Asian and Middle East countries, the procedure is different

Things

The cultural meaning of things leadfs to purchase patterns that one would not otherwise predicts. The different meaning that cultures attached to things, including products, make gift giving a particular difficult task.

Etiquette

Etiquette represents generally accepted ways of behaving in social situations. Behaviors considered rude or obnoxious in one culture may be quite acceptable in another. Normal voice tone, pitch and speed of speech differ between culture and languages as do the use of gestures. For example, a Japanese executive will seldom say “No” directly during negotiations, as this would be considered impolite. Considerations in approaching a foreign market

▪ Is the geographic area Homogeneous or heterogeneous with respect to culture? ▪ What needs can this product or a version of it fill in this culture? ▪ Can enough of the people needing the product afford it? ▪ What values or patterns of values are relevant to the purchase and use of this product? ▪ What are the distribution, political, and legal structures for the product? ▪ In what way can we communicate about the product?

▪ What are the Ethical implications of marketing this product in this country? http://www.somewhereinblog.net/blog/alihusainkaisar/29525858

http://www.somewhereinblog.net/blog/abdullah_muslim2010/29411963

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OUTCOMES: Individual/ Firm/ Society

CONSUMER DECISION PROCESS: Problem recognition/Information search/Alternative evaluation/Purchase/ Use/ Evaluation

MARKETING STRATEGY: Product/Price/Distribution/Promotion/Service

MARKET SEGMENTATION: Identify product related need sets/ Group customer with similar need sets/ Describe each group/ Select attractive segment(s) to target

MARKET ANALYSIS: Company/Competitors/ Conditions/Consumers