Marketing

CONSUMER NEEDS AND MOTIVATION

Diversity is not a new phenomenon. We all seek different pleasures and spend our money in different ways. One husband and wife may spend their vacation on a cruise to Singapore, their friends may prefer a camping trip to Nathiagali. One father and mother may buy their young child a bicycle; another may buy theirs a personal computer. One woman may spend her Christmas bonus on a new washer/dryer; her neighbor may spend hers to join a health club.

Human needs – consumer needs – are the basis of all modern marketing. Needs are the essence of the marketing concept. The key to a company’s survival, profitability and growth in a highly competitive marketing environment is its ability to identify and satisfy unfulfilled consumer needs better and sooner than the competition.

Marketers do not create needs, though in some instances they may make consumers more keenly aware of unfelt needs. Successful marketers define their markets in terms of the needs they presume to satisfy, rather than in the terms of the products they sell. This is a market-oriented, rather than a production-oriented, approach to marketing. A marketing orientation focuses on the needs of the buyer; a production-orientation focuses on the needs of the seller. The Marketing concept implies that the manufacturer will make only what it knows people will buy; a production orientation implies that the manufacturer will try to sell what it decides to make.

There are countless examples of products that have succeeded in the marketplace because they fulfilled consumer needs; there are even more examples of products and companies that have failed because they didn’t recognize or understand consumer needs.

What is Motivation?

We are interested in motivation because it is the driving force of behavior and there must be a reason, a motive for purchasing, and using products.

Motivation can be described as the driving force within individuals that impels them to action. The driving force is produced by a state of tension, which exists as a result of an unfulfilled need. Individuals strive –both consciously and unconsciously – to reduce this tension through behaviour which they anticipate will fulfill their needs and thus relieve them of the stress they feel. People experience wishes, desires and needs. These can originate from unmet physical needs or from fantasy or imagery. On this basis, we can assume that needs can be triggered by both internal and external forces.

There are many factors that can trigger motivation, and motivational researchers try to identify and understand these factors. Until now, there has been a tendency to focus on needs, and a popular approach has been to assume that people do not act of their own will. Freud introduced the notion are largely unconscious of the real psychological forces shaping their behaviour. his theory assumes that we grow up repressing many urges. These urges are never eliminated or under perfect control; they emerge as dreams, slips of the tongue, or in neurotic and obsessive behaviour. So, reasons for purchasing a product may be conscious or unconscious.

Needs

We use the term ‘need’ when referring to any human requirement, although there is a variety of other words that may be sued – such as wants or desires. Every individual has needs; some are innate, others are acquired, but, most importantly, needs underlie all human action. Innate needs are physiological (i.e. biogenic); they include the needs for food, water, air, clothing, shelter and sex. Because they are needed to sustain biological life, biogenic needs are considered primary needs or motives.

Acquired needs are needs that we learn in response to our culture or environment. They may include the need for self-esteem, prestige, affection, power or learning. Because acquired needs are generally psychological (i.e. psychogenic), they are considered secondary needs or motives.

Goals

Goals are sought-after results of motivated behaviour. All behaviour is goal-oriented. Our discussion of motivation is in part connected to generic goals – that is, the general classes or categories of goals that consumers select to fulfill their needs. Marketers are even more concerned with consumers’ product-specific goals – that is, the specifically branded or labeled products they select to fulfill their needs. For example, Lipton Company wants their consumers to view iced tea as a good way to quench summer thirst (i.e. as a product-specific goal).

The Selection of Goals

People have many needs, and for any given need there are many different and appropriate goals. The goals selected by individuals depend on their personal experiences, physical capacity, prevailing norms and values, and the goal’s accessibility in the physical and social environment. For example, a young man may have a strong hunger need. If he is a young university athlete, he may envision a thick sirloin steak as his goal object; if his doctor has advised him not to consume red meat, he may then settle for tuna steak. If he has never tasted steak, if it is outside the realm of personal experience, he would probably not even think of it, but instead select a food that has previously satisfied his hunger.

Our perception of ourselves also serves to influence the specific goals we select. The products we own, would like to own, or would not like to own, are often perceived in terms of how closely they reflect our self-image. A product that is perceived as matching our self-image has a greater probability of being selected than one that is not. Thus, a man who perceives himself as young or sophisticated may drive a Porsche who perceives herself as rich and conservative may drive a Mercedes.

Interdependence of Needs and Goals

Needs and goals are interdependent; neither exist without the other. However, people are often not as aware of their needs as they are of their goals. For example, a teenager may not be consciously aware of her social needs but may join a photography club to meet new friends. A local politician may not be aware of a power need but may regularly run for public office.

Positive and Negative Motivation

Motivation can be positive or negative in direction. We may feel a strong driving force towards some object or condition, or a driving force away form some object or condition. For example, a person may be impelled towards a restaurant to fulfill a hunger need and away form motorcycle transportation to fulfill a safety need.

Rational versus Emotional Motives

Some consumer behaviorists distinguish between so called rational motives and emotional (or-rational) motives. They use the term rationally when they carefully consider all alternatives and choose those that give them greatest utility. In a marketing context, rationality implies that consumers select goals based on totally objective criteria, such as size, weight, price, or kilometers per liter. Emotional motives imply the selection of goals according to personal or subjective criteria (e.g. pride, fear, or the desire for individuality, affection, status).

The Dynamic Nature of Motivation

Motivation is a highly dynamic construct that is constantly changing in reaction to life experience.

Needs and Goals are Constantly Changing

Our needs and goals are always growing and changing in response to our physical condition, environment, interactions with others, and experiences. As we attain our goals, we develop new ones. If we do not attain our goals, we continue to strive for old ones, or develop substitute goals. Some of the reasons why need-driven human activity never ceases include the following:

· Existing needs are never completely satisfied; they continually induce activity designed to attain or maintain fulfillment.

· As needs become satisfied, new and higher order needs emerge to be fulfilled.

· People who achieve their goals set new and higher goals for themselves.

Arousal of Motives

Most of our specific needs are dormant much of the time. The arousal of any specific set of needs at a specific point in time may be caused by internal stimuli found in our physiological conditions, or in our emotional or cognitive processes, or by external stimuli in the outside environment. For the most part, purchases will not be made unless we experience a need and are activated to satisfy it. Unsatisfied needs create a state of tension.

There is agreement that most individuals are tension avoiders. However, if tension cannot be avoided, most of us would wish to resolve the tension as quickly as possible, and this creates a certain type pf behavior. The amount of energy we are willing to expend in the purchase of a product is a function of both the level of tension the unsatisfied need state creates and the degree to which we think the product will satisfy the need. Motivation levels can, therefore, range from passion to inertia. In turn, this affects the level of involvement that consumers display in the purchase situation.

Physiological Arousal

Bodily needs at any specific moment are rooted in our physiological condition at that moment. A drop in blood sugar level, or stomach contractions, will trigger awareness of a hunger need. A decrease in body temperature will induce shivering, which makes us aware of the need for warmth.

Emotional Arousal

Thinking or daydreaming sometimes results in the arousal or stimulation of latent needs. People who are bored or frustrated in attempts to achieve their goals often engage in daydreaming, in which they imagine themselves in all sorts of desirable situations. These thoughts tend to arouse dormant needs, which may produce uncomfortable tensions that ‘push’ them into goal-oriented behavior. A young woman who dreams of becoming a business tycoon may enroll in business school. A young man who wants to play professional football may identify with a major league player and use the products he endorses commercially.

Cognitive Arousal

Sometimes random thoughts or a personal achievement can lead to a cognitive awareness of needs. An advertisement that provokes memories of home might trigger instant recognition of the need to speak with someone special.

Environmental Arousal

The set of needs activated at a particular time are often determined by specific cues in the environment. Without these cues, the needs would remain dormant. For example, the six o’ clock news, the sight or smell of freshly baked bread, fast food TV commercials, the children’s return from school – all these may arouse the “need” for food.

Hierarchy of Needs

One of the most widely accepted theories for human motivation has been developed by Abraham Maslow. His theory can be applied to interpreting how consumer goods and services can be perceived as satisfying different level of needs of consumers.

In summary, the hierarchy of needs theory postulates a five-level hierarchy of prepotent human needs. Higher-order needs become the driving force behind human behavior as lower-level needs are satisfied. The theory says, in effect, that dissatisfaction – not satisfaction – motivates behavior.

A Trio of Needs

Some psychologists believe in the existence of a trio of basic needs: the needs for power, affiliation,

and achievement.

The power need relates to our desire to control our environment. It includes the need to control other people and various objects. This need appears to be closely related to the ego need, in that many individuals experience increased self enhancement when they exercise power over objects or people. A number of products, such as cars, lend themselves to promises of power or superiority for users.

Affiliation is a well-known and well-researched social motive that has far-reaching influence on consumer behavior. The affiliation need suggests that behavior is highly influenced by the desire for friendship, acceptance, and belonging. People with high affiliation needs tend to have a strong dependence on others. They often select goods they feel will meet with the approval of friends.

A considerable number of research studies have focused on the achievement need. Individuals with a strong need for achievement often regard often regard personal accomplishment as an end in itself. The achievement need is closely related to both the egoistic need and self-actualization need. People with a high need for achievement have certain traits that make them open to relevant appeals. They are more self-confident, and enjoy taking calculated risks. They research their environment actively, and are very interested in feedback. Their interest in monetary rewards or profits is primarily due to the feedback that money provides as to how they are doing.

METHODS FOR STUDYING CONSUMER BEHAVIOR

THE NEED FOR RESEARCH

There are many ways to learn about consumer behavior. Each time a marketer talks to or observes a consumer or a salesperson interacts with a potential customer, or a customer returns a comment card, some information about consumer behavior may be transmitted. As a marketing manager gains experience with products and markets, he develops some ideas about why consumers buy his product. These ideas take the form of relatively complex “theories” about consumers, particularly among more seasoned managers. Often these implicit “theories” are quite useful and are a valuable aid when the manager is planning a marketing campaign.

It is particularly important that knowledge about consumer behavior be developed by systematic observation of a representative set of consumers. The vehicle for obtaining these systematic observations is scientific research. There are many types of scientific research that may be used to study consumer behavior: interviews, observations, survey results, and experimentation. All of these methods, however, have in common the use of a scientific method.

THE SCIENTIFIC METHOD

There are many ways to obtain knowledge about the world in which we live. Each method, whether it be intuitive or the scientific method, may be considered valid in its own way. There is nothing about the scientific method that makes it better, in an absolute sense, than other means of obtaining information. It is, however a method that has particular characteristics. It is, however a method that has particular characteristics. Use of the scientific method means following a set of rules to acquire information. While there is some debate among philosophers and scientists about these rules, there is general agreement about the basic approach.

The scientific method seeks objectivity, that is, it is concerned with identifying facts and relationships that can be publicly verified. If an observation is made about consumer behavior by one individual, it should be possible for others, at least those with similar instruments, tools, and expertise, to make the same observation.

Public verification and empiricism jointly emphasize the need for replacing research findings. Thus, results of a test market in one city may be verified by a test market in a second city.

METHODS FOR STUDYING CONSUMER BEHAVIOR

QUALITATIVE RESEARCH

Certain occasions require the study in detail of a small number of consumers. This may occur when one desires a great deal of information from each consumer and when relatively little is known about the phenomenon of interest. The best way to obtain detailed information about what a consumer likes and dislikes about a product, store, or advertisement is to use qualitative research.

Qualitative research typically takes the form of in-depth interviews with a small number of consumers. These interviews may be done one individual at a time, or in groups. Individual interviews have the advantages of providing very rich information and avoiding the influence of others on the opinion of any one individual. Individual interviews are very expensive and time consuming, however, and as a result, it is not likely that any one research program will interview large number of individuals.

FOCUS GROUPS

A more common and less time consuming method for interviewing consumers is the group method. Focus groups involve a group interview led by a trained moderator. They are called focus groups because they tend to focus on some topic, a product, a problem, or an advertisement. The moderator usually poses relatively few questions about the topic of interest and allows the group to discuss each question in detail. This free-flowing group discussion often suggests new information or perspective that the marketer finds useful.

PROJECTIVE TECHINQUES

Although it is often sufficient merely to ask direct questions of consumers in order to garner responses, it is sometimes helpful to use standardized techniques for eliciting responses. Most of these techniques fall within the domain of projective techniques.

· Word Association: Word association is one of the best known and most widely used forms of projective technique, since it is relatively easy to apply and can be used effectively to screen brand names for negative connotations or to uncover consumer’s feeling about new products. Typically the respondent is asked to give the first word that comes to mind in response to each of a list of unrelated words. For example, if researchers were seeking consumer reactions to “cake mix,” they might submit a list of words in which “cake mix” was intermixed with other food products, such as bread, steak, eggs, and soup.

· Sentence Completion: Another frequently used projective technique is the sentence-completion tests. As its name implies, a word or phrase is given as the stimulus, and the respondent is asked to add words that come to mind in order to complete the thought. For example, the stimulus “When I bake a cake a cake, _______” might give rise to such responses as “I always use Betty Crocker Cake Mix,” “I feel like I’m doing something special for my family,” “I get it over with as quickly as possible,” or “I am always afraid it will dry out before we eat it all.”

· Picture and Visual Methods: They can show a marketing situation, a product-in-use situation, and so forth. The important aspect of the picture method is that respondents project themselves into the situation, revealing their attitudes by the way they fill in the cartoon balloon.

A number of variations on the “empty-balloon” technique have been devised. In one variation, two individuals are shown disagreeing on some point, and the respondent is asked which he or she agrees with and why. Or a respondent may be shown a picture of a particular product or brand in use and be asked to comment or tell a story about it.

· Situational Methods: Situational methods are related to picture and visual techniques, although they differ from them in that a verbal rather than a pictorial stimulus is used. Typically, a situational approach will ask respondents to describe in detail the kind of person who would buy a particular product, shop at a particular store, or perform some particular act. Another approach is to have the interviewer describe a situation and ask the respondent how the situation is resolved.

SURVEY RESEARCH

The type of consumer research that no doubt involves contact with the greater number of consumers is survey research. Survey research attempts to obtain answers to relatively structured questions form a reasonably representative set of consumers. Most often the set of consumers is large (several hundred at a minimum) so that statistical inferences may be drawn about the larger population that the survey respondents represent. Survey research may be carried out by personal interview, mail interview, telephone interview, or some combination of these methods.

OBSERVATION AND SIMULATION

The last method of obtaining information about consumers is less common than other methods. It involves the direct observation of the behavior of individuals, groups, or organizations. It has an number of disadvantages. Since it does not rely on self-reports, it may not require the cooperation of consumers and indeed, may be the only source of information when consumers are unaware of certain aspects of their own behavior. Observation eliminates problems associated with forgetting or distorting of information caused by an interviewer and the interviewing process.

Direct observation does entail limitations, however. Such internal events vas beliefs, feelings, and preferences cannot be observed. A wide variety of personal behavior is simply not accessible to observation. Finally, when consumers are aware that they are being observed, they may change their behavior.

CONSUMER MARKETING AND BEHAVIOR

DEFINING CUSTOMER BEHAVIOR

“Consumer behavior” has been defined as the acquisition, consumption, and disposition of goods, services, time, and ideas by decision making units. Thus consumer behavior encompasses a wide range of activities which may be carried out by individuals or organizations. Since we spend much of our lives consuming economic products – houses, clothing, food, cosmetics, recreation services and equipment – it follows that consumer behavior is an integral part of human behavior and cannot be separated from it.

MANAGING MARKETS --- WHY STUDY CONSUMER BEHAVIOR?

Consumer behavior lies at the heart of modern marketing. The successful marketer is one who efficiently develops products and brands that are of value to consumers’ and one who effectively presents these products and brands to consumers in appealing and persuasive ways. One essential reason for studying consumer behavior is to enable marketing mangers to make better marketing decisions while reducing the incidence of product failures.

Marketing is a complex activity, requiring systematic analysis, financial evaluation, and business judgment. It also requires inspiration and creativity, thus demanding quite diverse talents seldom found in a single individual. In this sense, marketing can be thought of as a group activity or a group process.

The successful marketing manager who is responsible for analyzing, forecasting, planning, and overseeing the execution and evaluation of the marketing plan is a business person. He or she is a decision maker, business trained and profit oriented. Infrequently is a marketing manager a creative genius. Yet, creative inspiration is the spark that fires the marketing effort, transforming a marketing plan from a lifeless document into a dynamic, driving achievement.

Analysis, planning, and business judgment provide the vehicle for a marketing plan. Creative contributors then fuel this vehicle, giving it impetus and thrust.

Many business school graduates will eventually move into positions of corporate responsibility where they will be making decisions about marketing and advertising. The study of consumer behavior may help them give some understanding of consumers and their needs, so that when these young managers look at a proposed product position or advertising campaign, they can do so with understanding and an open mind – not with the tunnel vision of the amateur.

It is the task of the marketing manger to manager i.e., exercise control of the marketing function of the firm. This task certainly involves managing the product, price, advertising, and other aspects of the firm’s marketing mix, but it also involves efforts to control the behavior of consumers in the market place. This control is exercised by making the product more accessible than competitive products, by suggesting decision rules for consumers to use when selecting a product, by designing products that more nearly match the needs and desires of particular groups of consumers.

CONSUMER BEHAVIOR AS A DECISION PROCESS

Consumer behavior can also be described as a decision process. Most consumers have limited resources – that is, they cannot buy everything that want. They have to make decisions as to which goods and services they will purchase and which they will do about – a new refrigerator or a new washing machine; a new car or a vacation; a pack of cigarettes or a beer. Even after a decision to purchase a product has been made, other decisions still remain. The buyer of an automobile has a wide variety of features, brands, colors, styles, and prices form which to select. The purchase of a box of cake mix is faced by a twenty-foot section in the supermarket containing a wide variety brands, flavors and prices. The purchase of a load of bread has as many as forty or fifty alternatives in a major supermarket.

The decision process has at least five steps: (a) the recognition of a problem requiring a decision (b) a search for alternative ways for satisfying the problems’ requirements; (c) an evaluation of the possible alternative solution; (d) the decision itself; and (e) an evaluation of the adequacy of the decision.

Although five steps in the decision process were identified above, it is obvious that the consumer does not consciously go through each step to make every decision. Instead, the consumer often seems to shortcut the process, to make many purchases without conscious deliberation, and to engage in what may be described as “habitual” behavior. This introduces the whole question of brand loyalty.

CONSUMER BEHAVIOUR AND MARKETING STRATEGY

The field of consumer behaviour is the study of individuals, groups, or organisations 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.

MARKETING STRATEGY AND CONSUMER BEHAVIOUR

To survive in a competitive environment, an organization must provide target customers more value than is provided by its competitors. Customer value is the difference between all the benefits derived from a total product and all the costs of acquiring those benefits. For example, owning a car can provide a number of benefits (depending on the person and type of car), including flexible transportation, image, status, pleasure, comfort, and even companionship. However, securing those benefits requires paying for the car, gasoline, insurance, maintenance, and parking fees, as well as risking injury from an accident, adding to the environmental pollution, and dealing with traffic and other frustrations. It is the difference between the total benefits and the total costs that constitutes customer value.

Providing superior customer value requires the organisation to do a better job of anticipating and reacting to customer needs than the competition does.

Marketing strategy is conceptually very simple. It begins with analysis of market that organisation is considering. This requires a detailed analysis of the organisation’s capabilities, the strengths and weaknesses of competitors, the customers in the market. Based on the consumer analysis portion of this step, the organisation identifies groups of individuals, households, or firms with similar needs. These market segments are described in terms of demographics, media preferences, geographic location and so forth. One or more of these segments are then selected as target markets based on the firms capabilities relative to those of the competition.

Next, marketing strategy is formulated. Marketing strategy seeks to provide customer with more value than the competition while still producing a profit for the firm. Marketing strategy is formulated in terms of the marketing mix. That is, it involves determining the product features, price, communications, distribution, and services that will provide customers with superior value. This entire set of characteristics is often referred to as the total product. The total product is presented to the target market, which is consistently engaged in processing information and making decisions designed to maintain or enhance its lifestyle (individuals and households) or performance (businesses and other organizations).

MARKETING ANALYSIS COMPONENTS

Market analysis requires

· thorough understanding of the organisation’s own capabilities,

· the capabilities of current and future competitors,

· the consumption process of potential customers, and

· the economic, physical, and technological environment in which these elements will interact.

THE CONSUMERS

It is not possible to anticipate and react to customers’ needs and desires without a complete understanding of consumer behaviour. Discovering customers’ current needs is a complex process, but it can generally be accomplished by direct marketing research.

THE COMPANY

A firm must fully understand its own ability to meet consumer needs. This involves evaluating all aspects of the firm, including its financial condition, general managerial skills, production capabilities, research and development capabilities, technological sophistication, reputation and marketing skills. Marketing skills would include new product development capabilities, channel strength, advertising abilities, service capabilities, marketing research abilities, market and consumer knowledge, and so forth.

Failure to adequately understand one’s own strengths can cause serious problems. IBM’s first attempt to enter the home computer market with the PC Jr. was a failure in part for this very reason. While IBM had an excellent reputation with large business customers and a very strong direct sales force for serving them, these strengths were not relevant to the household consumer market.

THE COMPETITORS

It is not possible to consistently do a better job of meeting customer needs than the competition without a thorough understanding of the competitor’s capabilities and strategies. This requires the same level of knowledge of a firm’s key competitors that is required of one’s own firm. In addition, for any significant marketing action, the following questions must be answered:

If we are successful, which firms will be hurt (lose sales or sales opportunities)?

Of those firms that are injured, which have the capability (financial resources, marketing strengths) to respond?

How are they likely to respond (reduce prices, increase advertising, introduce a new product)?

Is our strategy (planned action) robust enough to withstand the likely actions of our competitors, or do we need additional contingency plans?

THE CONDITIONS

The state of the economy, the physical environment, government regulations, and technological developments affect consumer needs and expectations as well as company and competitor capabilities. The deterioration of the physical environment has produced not only consumer demand for environmentally sound products but also government regulations affecting product design and manufacturing.

MARKETING SEGMENTATION

Perhaps the most important marketing decision a firm makes is selection of one or more market segments on which to focus. A market segment is a portion of a larger market whose needs differ somewhat form the larger market. Since a market segment has unique needs, a firm that develops a total product focused solely on the needs of that segment will be able to meet the segment’s desires better than a form whose products or service attempts to meet the needs of multiple segments.

To be viable, a segment must be large enough to be served profitably. To some extent, each individual or household has unique needs for most products. The smaller the segment, the closer the total product can be to that segment’s desires. Historically, the smaller the segment, the more it costs to serve the segment. Thus, a tailor-made suit costs more than a mass-produced suit. However, flexible manufacturing and customised media are making it increasingly cost effective to develop products and communications for small segments or even individuals customers.

MARKETING STRATEGY

Marketing strategy is basically the answer to the question: How will we provide superior customer value to our target market? The answer to this question requires the formulation of a consistent marketing mix. The marketing mix is the product, price, communications, distribution, and services provided to the target market. It is the combination of these elements that meet customer needs and provides customer value.

THE PRODUCT

A product is anything a consumer acquires or might acquire to meet a perceived need. Consumers are generally buying need satisfaction, not physical product attributes. Thus, consumers don’t purchase quarter-inch drill bits but the ability to create quarter-inch holes. Federal Express lost much of its overnight letter delivery business not to UPS or Airborne but to fax machines and the internet because they could meet the same consumer needs faster, cheaper or more conveniently.

COMMUNICATIONS

Marketing communications include advertising, the sales force, public relations, packaging, and nay other signal that the firm provides about itself and its products. An effective communications strategy requires answers to the following questions:

With whom exactly, do we want to communicate?

What effect do we ant our communication to have on the target audience?

What message will achieve the desired effect on our audience?

What means and media should we use to reach the target audience?

When should we communicate with the target audience?

PRICE

Price is the amount of money one must pay to obtain the right to use a product. One can buy ownership of a product or, for many products, limited usage rights (i.e. one can rent or lease a product such as a video). Economists often assume that lower prices for the same product can result in more sales than higher prices. However, price sometimes serves as a signal of quality. A product priced “too low” might be perceived as having low quality. Owning expensive items also provides information about the owner. If nothing else, it indicates that the owner can afford the expensive item. This is a desirable feature to some consumers. Therefore, setting a price requires a thorough understanding of the symbolic role that price plays for the product and target market in question.

It is important to note that the price of a product is not the same as the cost of the product to the customer. The consumer cost is everything the consumer must surrender in order to receive the benefits of owning or using the product. The cost of owning or using an automobile include insurance, gasoline, maintenance, finance charges, license fees, parking fees, time and discomfort while shopping for the car, and perhaps even discomfort about increasing pollution, in addition to the purchase price. One of the ways that firms seek to provide customer value is to reduce the nonprice costs of owning or operating a product. If successful, the total cost to the customer decreases while the revenue to the marketer stays the same or even increases.

DISTRIBUTION

Distribution, having the product available where target customers can buy it, is essential to success. Only in rare cases will customers go to much trouble to secure a particular brand. Obviously, good channel decisions require a sound knowledge of where target customers shop for the product in question.

CONSUMER DECISIONS

The consumer decision process intervenes between the market strategy and the outcomes. That is, the outcomes of the firm’s marketing strategy are determined by its interaction with the consumer decision process. The firm can succeed only if consumers see a need that its products can solve, become aware of the product and its capabilities decide that it is the best available solution, proceed to buy it, and become satisfied with result of the purchase.

OUTCOME

FIRM OUTCOMES

Product Position

The most basic outcome for a firm of a marketing strategy is its product position – an image of the product or brand in the consumer’s mind relative to competing products and brands.

Sales

Sales are a critical outcome, as they produce the revenue necessary for the firm to continue in business. Therefore, virtually all firms evaluate the success of their marketing programs in terms of sales. As we have seen, sales are likely to occur only if the initial consumer analysis was correct and if the marketing mix matches the consumer decision process.

Customer Satisfaction

Marketers have discovered that it is generally more profitable to maintain existing customers than to replace them with new customers retaining current customers requires that they be satisfied with their purchase and use of the product. Thus, customer satisfaction is the major concern for marketers.

INDIVIDUAL OUTCOMES

Need Satisfaction

The most obvious outcome of the consumption process for an individual, whether or not a purchase is made, is some level of satisfaction of the need that initiated the consumption process. This can range from none (or even negative if the purchase increases the need rather than increasing it) to complete. Two key processes are involved – actual need fulfilment and the perceived need fulfilment.

Injurious Consumption

While we tend to focus on the benefits of consumption, we must remain aware that consumer behaviour has a dark side. Injurious consumption occurs when individuals or groups make consumption decisions that have negative consequences for their long-run well-being.

For most consumers, fulfilling one need impacts their ability to fulfil others due to either financial or time constraints. For example, some estimates indicate that more Pakistanis are not saving at a level that will allow them to maintain a lifestyle near their current one when they retire.

SOCIETY OUTCOMES

Economic Outcomes

The cumulative impact of consumers’ purchase decisions (including the decision to forgo consumption) is a major determinant of the state of a given economy. Consumers’ decisions on whether to buy or save impact economic growth, the availability and cost o capital, employment levels, and so forth.

Physical environment outcomes

Consumers make decisions that have a major impact on the physical environments of both their own and other societies. The cumulative impact of Pakistani consumers’ decision to rely on private cars rather than mass transit results in significant air pollution in Pakistani cities as well as the consumption of significant non-renewable resources from other countries.

Social welfare

Consumer decisions affect the general social welfare of a society. Decisions concerning how much to spend for private goods (personal purchases) rather than public goods (support for public education, parks, health care, and so forth) are generally made indirectly by consumers’ elected representatives.

Injurious consumption impacts society as well as the individuals involved. The social costs of smoking-inducing illnesses, alcoholism, and drug abuse are staggering. To the extent that marketing activities increase or decrease injurious consumption, they have a major impact on the social welfare of a society.

THE NATURE OF CONSUMER BEHAVIOUR

The figure below is the model of consumer behaviour that we use to capture the general structure and process of consumer behaviour. However, it does reflect our beliefs about the general nature of consumer behaviour. Individuals develop self-concepts and subsequent lifestyles based on a variety of internal (mainly psychological and physiological) and external (mainly sociological and demographical) influences. These self-concepts and lifestyles produce needs and desires, many of which require consumption decisions to satisfy. As individuals encounter relevant situations, the consumer decision process is activated.