Combined 6

Chapter One: Consumer Behavior Basics

1. Consumer Behavior Overview

  • Definition: The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

  • Importance in marketing strategies and understanding consumer decisions.

2. Types of Consumers

  • Personal Consumers:

    • Individual who buys goods and services for personal use, household, family members, or friends.

  • Organizational Consumers:

    • Businesses, government agencies, or institutions that purchase goods, services, and equipment necessary for functioning.

3. Historical Development of Marketing Concepts

  • Production Orientation (1850s - late 1920s):

    • Focus on production capabilities due to demand exceeding supply.

  • Sales Orientation (1930s - mid 1950s):

    • Shift to selling due to supply exceeding customer demand.

  • Marketing Concept (1950s - present):

    • Emphasis on identifying customer needs and delivering satisfaction better than the competition.

  • Societal Marketing Concept:

    • Considers consumer interests and societal welfare in addition to company profits.

4. Tools of the Marketing Concept

  • Consumer Research:

    • Study consumer behavior to gather insights.

  • Segmentation:

    • Dividing market into subsets based on common needs or characteristics.

  • Market Targeting:

    • Selecting segments to pursue based on their potential.

  • Positioning:

    • Developing a unique image for a product in consumers' minds, including communicating benefits and a unique selling proposition.

5. Key Characteristics of Consumer Behavior

  • Complex procedure involving exchanges of goods, services, or ideas.

  • Continuous process with many decisions.

  • Dynamic nature, involving various influences.

  • Crucial for marketers to understand these behaviors to improve strategies.

6. Factors Influencing Consumer Behavior

  1. Economic Factors:

    • Personal, discretionary, and family income, consumer credit availability, and standard of living.

  2. Personal Factors:

    • Age, occupation, life cycle stage, lifestyle, and personality.

  3. Cultural and Social Factors:

    • Culture, subculture, and social class impacting preferences and choices.

  4. Psychological Factors:

    • Motivation, perception, learning, attitude, and self-concept.

7. The Role of Family in Consumer Behavior

  • Types of families: nuclear, extended, and single-parent.

  • Changing dynamics and household spending patterns.

  • Influence of family on consumer socialization and decision-making.

  • Family Decision Making:

    • Dynamics include dominant roles of husbands, wives, or joint decision-making and the role of children as influencers.

8. Social Class and Consumer Behavior

  • Definition: Division of society into distinct status classes affecting consumer behavior and preferences.

  • Social class measured through subjective and objective means involving income, education, and occupation.

  • Breakdown of social classes in society:

    • Upper, upper-middle, middle, working, and lower classes.

9. Consumer Decision-Making Process

  • Multi-staged process influenced by various factors.

  • Types of Decision-Making:

    • Extensive Problem Solving (EPS): Unfamiliar products requiring information search.

    • Limited Problem Solving (LPS): Familiarity with products but not brands.

    • Routinized Problem Solving (RPS): Frequent purchases with brand loyalty.

10. Diffusion of Innovation

  • Diffusion defined as the spread of new products or ideas within society.

  • Factors influencing adoption rates of innovations.

    • Characteristics include relative advantage, compatibility, complexity, trialability, and visibility.

  • Adoption process consists of awareness, interest, evaluation, trial, and final adoption or rejection.