Definition of consumer behaviour:
Consumer Behaviour consist of a combination of activities and influences that occur before, during and after a purchase.
The term consumer behaviour includes the following dimensions:
• Types of consumer: Household or business consumers.
• The three consumer roles: The buyer, the payer and the user.
• Physical and mental activities: Physical activities include visiting a store and discussing a product with a salesperson, whilst mental activities include the consumer assessing the compatibility of the product with his or her needs.
The reasons why consumer behaviour plays an important role in the success of an organisation.
- Realising that the purpose of the business is based on consumer satisfaction
- Carrying out the marketing concept
- Achieving a consumer focus
Customer Satisfaction and Retention
- More expensive to recruit new customers than to keep existing customers.
- Growth in consumer loyalty since businesses has recognised the advantages.
- Linked to understanding the needs and wants of customers.
- Focus have shifted from seeing short term transactional view to seeing customers as a long term income stream.
- Key in business success is building relationships between brands and customers that can lst a life time.
The Marketing Concept
Production orientated:
Sales Orientated:
Marketing Orientation:
Societal Marketing Orientation:
Production orientated:
19th, 20th century primary purpose was production.
Focus was on the internal capabilities of the business rather than the needs and desires of the market place.
Sales Orientated:
- Based on the premise that people would buy more if aggresive sales techniques were used and that high sales resulted in high profits.
- Marketing simply meant selling.
- Still lacking a understaning of the needs and desires of the market place.
- Focus on needs of sellers and on exsisting products.
Marketing Orientation:
- Focus on the needs of the buyers.
- Make what it could sell and not sell what it could make.
- Foundation of contemparary marketing philosiphy, is based on understanding that a sale depends not on aggressive sales force but rather on customers decision to buy a product.
- (Consumer orientation. Profit orientation. Organisational orientation.)
Societal Marketing Orientation:
- Questions if marketing orientation stands is asequate in age of environmental problems, resource shortage, rapid population growth, world wide economics, neglected social services.
- Requiers marketers to balance company profits, customers wants and society’s intrest.
Customer Focus
Organisations taht focus on custumer needs ensure that the needs of society as a whole are served better.
Customer loyalty depends on the perceived value of the products to sustomers, therefore a produt will only sell if it meets the needs of customers
The application of knowledge of consumer behaviour:
- An organisation’s marketing strategy is based on certain beliefs about consumer behaviour, such as why consumers buy certain products, or how an individual’s family may influence his or her buying behaviour. An organisation that knows more than its competitors about consumer behaviour has an advantage over them.
- The social marketing strategy of an organisation also requires a sound understanding of consumer behaviour. For example, before an organisation can launch a socially responsible campaign, such as sponsoring an underprivileged soccer team, it needs to understand how this will influence consumer perceptions of the organisation.
- Informed individuals can develop a sound knowledge of consumer behaviour, and can help to enhance individuals’ understanding of themselves and of their environment.
Application: Marketing Strategy
Any marketing strategy is based on explicit or implicit beliefs about customer behaviour.
Assumptions, sound theory, aswell as the results of pertinent and relevant market research are more likely to succeed that intuation alone.
Customers behaviour affects the strategic situation and strategy selection of the organisation.
Application: Social Marketing
Marketers should see their role in broader terms, and concider the ethical, envirnmental, legal and social context of their activities.
Social marketing can be carried out in various ways:
- support behaviour change campaigns
- promoting social issues through activities such as sponsorships
- donating money, goods or time to help non profitorganisations
- implementing business practises that protect the environment
Application: Becoming a better informed individual
- It is important that customers understand the strategies and the tactics that companies are using to influence them in oder for them to make proporly informed decisions about what they buy.
- Understanding how customers behave can increase our understanding of ourselves and our environment.
- First gain an understanding of customers, then try to influencesociety as a whole and certain groups of people in particular to buy their products. This occurs through product packaging, product features, sales themes and store environments.
The role of consumer behaviour
- Consumer reaction to an organisation’s strategy will determine the organisation’s success.
- This reaction will also help consumers to determine how successful the organisation has been in fulfilling their needs
- market analysis
- market segmentation
- marketing strategy
- consumer decisions
- outcomes.
Market analysis
- A market analysis requires an in-depth understanding of an organisation’s own capabilities, its competitors’ capabilities, consumer behaviour and the environmental As far as its customers are concerned, an organisation needs to have an in-depth understanding of their behaviour. An organisation can use marketing research to identify the needs and wants of customers.
- The organisation must also understand its own capabilities, such as its managerial skills, reputation in the market and financial capabilities.
- An organisation’s competitors must be studied thoroughly in terms of their capabilities and strategies, in order for the organisation to meet the needs of its customers better than its competitors.
- The environment in which the organisation operates must also be examined, because failure to take variables into account, such as the economy and the technological environment, could lead to the failure of an organisation.
Segmentation
It is vitally important for an organisation to divide the total heterogeneous market into smaller homogenous segments based on similar consumer characteristics. This enables organisations to understand and cater for the diverse needs of consumers better. Note the steps in the market segmentation process when you read this section.
The Marketing Strategy:
The combination of these elements or 4 Ps (product, price, place and promotion) is called the marketing mix. These elements can be summarised as follows:
- The product is a set of tangible (ie we can touch, smell or taste them, such as a packaged product) and intangible (ie we cannot physically touch, smell or taste them, such as the service delivered/or rendered in a restaurant) attributes.
- The function of the marketing communications or promotion element is to inform, persuade and remind the market about the organisation or its product or service. Marketing communication includes: personal selling, advertising, publicity, sales promotion and public relations.
- The price is the amount of money needed to obtain a product or service.
- The role of the distribution element in the mix is to get the product or service to the organisation’s target market, because if it is not where the consumer requires it to be, the organisation will be unable to satisfy the consumer’s needs.
Outcomes
Different outcomes that are pursued and strived for by the organisation, the individual and society.
- The organisation would like to position its products positively in the mind of the consumer, generate sales and keep their customers happy.
- The individual, on the other hand, would like to experience fulfilment and needs satisfaction,
- Society wants to achieve economic growth and encourage people to buy environmentally friendly products or services.
