Consumer Behaviour - chapter 1 | Management Paradise
15+ million members; + million publications; k+ research . Market segmentation is a consumer-oriented process and .. elasticity can be defined as the relationship between changes in consumers' income level and. Understanding the relationship between your research and your decisions When you want to target a market segment, you must research the overall market You must know the total scope of possible consumers for your product or service. What is the relationship between market segmentation, market targeting and product positioning? a product in the eyes of the consumers which means how you want to display the product. Marry Carlson, Research Analyst ( present).
Relationship Between Market Research & Market Segmentation
An understanding of consumer behavior provides important clues that can help you identify market segments most likely to respond to your product or service offerings and marketing communication programs. Quantitative Market Segmentation When identifying target markets, marketers commonly employ four types of quantitative and qualitative market segmentation tools to assess influences that affect buying decisions: Geographic and demographic influences help to identify market segments by quantitative, observable factors such as location, age, family income, gender, education attainment, occupation and ethnicity.
These observable influences provide insight into "who is" your target market and can help make inferences about cultural, social and lifestyle influences that drive consumer behavior. Qualitative Market Segmentation Psychographic and behavioral influences are qualitative, emotional factors that help explain "why" your target market behaves as it does. Psychographic influences include beliefs, attitudes, personality, values, opinions, interests and self image.
Behavioral influences relate to relationships that consumers have with brands in terms of knowledge, experience, usage and perceptions.
Understand how segmentation, targeting, and positioning are used in the study of consumer behavior. Define customer value, satisfaction, and retention. Discuss the role of ethics in marketing. Describe the societal marketing concept. Briefly discuss the three interlocking stages of consumer decision-making. Consumer research is the methodology used to study consumer behavior; it takes place at every phase of the consumption process: Consumer behavior is interdisciplinary; that is, it is based on concepts and theories about people that have been developed by scientists in such diverse disciplines as psychology, sociology, social psychology, cultural anthropology, and economics.
Consumer behavior has become an integral part of strategic market planning. Consumer behavior has changed dramatically in the past decade. For example, the use of the Internet has allowed consumers to order online, receive information without leaving their homes, and sell products without advertising in the local newspaper.
All of these new ways of selling products and services became available to consumers during the past fifteen years and are the result of digital technologies. They exist today because they reflect an understanding of consumer needs and consumer behavior.
Consumer behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.
The term consumer behavior is often used to describe two different kinds of consuming entities: Despite the importance of both categories of consumers, individuals and organizations, this book will focus on the individual consumer, who purchases for his or her own personal use or for household use.
The field of consumer behavior is rooted in the marketing concept, a business orientation that evolved in the s through several alternative approaches toward doing business referred to, respectively, as the production concept, the product concept, and the selling concept.
The production concept is characterized as the concept used by Henry Ford in the early s. The product concept assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features.
The selling concept is a natural extension of the production and product concepts. The field of consumer behavior is rooted in a marketing strategy that evolved in the late s.
Instead of trying to persuade customers to buy what the firm had already produced, marketing-oriented firms found that it was a lot easier to produce only products they had first confirmed, through research, that consumers wanted. The marketing concept is based on the premise that a marketer should make what it can sell, instead of trying to sell what it has made.
The widespread adoption of the marketing concept by American business fed the need to study consumer behavior. They discovered that consumers were highly complex individuals, subject to a variety of psychological and social needs quite apart from their survival needs.
The term consumer research represents the process and tools used to study consumer behavior. Segmentation, Targeting, and Positioning 1. The focus of the marketing concept is consumer needs. The marketer must adapt the image of its product so that each market segment perceives the product as better fulfilling its specific needs than competitive products. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics.
Market targeting is the selection of one or more of the segments identified for the company to pursue. Positioning refers to the development of a distinct image for the product or service in the mind of the consumer, an image that will differentiate the offering from competing ones and squarely communicate to the target audience that the particular product or service will fulfill their needs better than competing brands.
Four basic elements known as the four Ps include: Since the s many companies have successfully adopted the marketing concept.
The marketplace is now increasingly competitive. Savvy marketers today realize that in order to outperform competitors they must achieve full profit potential from each and every consumer. Three drivers of successful relationships between marketers and consumers are: The concept of customer satisfaction is a function of customer expectations.
With respect to customer satisfaction there might be several types of customers: The overall objective of providing value to customers continuously and more effectively than the competition is to have and to retain highly satisfied customers. This strategy of customer retention makes it in the best interest of customers to stay with the company rather than switch to another firm 3.
In almost all business situations, it is more expensive to win new customers than to keep existing ones. Studies have shown that small reductions in customer defections produce significant increases in profits because: Loyal customers buy more products.
Loyal customers spread positive word-of-mouth and refer other customers. Digital technologies allow much greater customization of products, services, and promotional messages than older marketing tools. Online communication and emerging digital technologies have introduced several drastic changes into the business environment. Some suggest that because virtual competition eliminates distance and location-based benefits, online sellers will compete almost exclusively on the basis of price for branded merchandise.
The societal marketing concept requires that all marketers adhere to principles of social responsibility in the marketing of their goods and services. A restructured definition of the marketing concept to reflect social responsibility would be to fulfill the needs of the target audience in ways that improve society as a whole while fulfilling the objectives of the organization.
The primary purpose for studying consumer behavior as part of a marketing curriculum is to understand why and how consumers make their purchase decisions. These insights enable marketers to design more effective marketing strategies, especially today when advanced technologies enable marketers to collect more data about consumers and target them more precisely.
It is better to self-regulate than to be regulated by government. Marketing ethics and social responsibility are important components of organizational effectiveness. Consumer behavior was a relatively new field of study in the mid-to-late s. Marketing theorists borrowed heavily from concepts developed in other scientific disciplines: Many early theories concerning consumer behavior were based on economic theory, the idea that individuals act rationally to maximize their benefits satisfactions in the purchase of goods and services.
Later research discovered that consumers are just as likely to purchase impulsively, and to be influenced not only by family, friends, advertisers and role models, but by mood, situation, and emotion. The process of consumer decision-making can be viewed as three distinct but interlocking stages: The process stage focuses on how consumers make decisions.
The output stage of the consumer decision-making model consists of two closely-related post decision activities: Part II discusses the Consumer as an Individual.
Chapter 1 introduces the reader to the study of consumer behavior as an interdisciplinary science, the reasons for the development of consumer behavior as an academic discipline and an applied science, and it introduces a simplified model of consumer decision-making. Chapter 2 examines the methodology of consumer research, including the assumptions underlying qualitative and quantitative research approaches. Chapter 3 discusses the process of market segmentation, including the demographic, sociocultural, and psychographic bases for segmenting markets.
Chapter 4 discusses how individuals are motivated. Chapter 5 examines the impact of individual personality characteristics on consumer behavior. Chapter 6 explores consumer perception. Chapter 7 examines how consumers learn.
Relationship Between Consumer Behavior & Target Markets | avesisland.info
Chapter 8 discusses consumer attitudes. Chapter 9 concludes Part 2 with an examination of the communications process and consumer persuasion. Chapter 10 focuses on consumers as members of society, subject to varying external influences on their buying behavior, such as their group and family memberships. Chapter 11 looks at social class. Chapters 12 and 13 examine the broad cultural and specific subcultural groups to which members of society belong. The importance of cross-cultural consumer research to international marketing is explored in Chapter Describe the interrelationship between consumer behavior as an academic discipline and the marketing concept.
The term consumer behavior refers to the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.
The study of consumer behavior is the study of how individuals make consumption-related decisions. The key assumption underlying the marketing concept is that a company must determine the needs and wants of specific target markets, and deliver the desired satisfaction better than the competition. The marketing concept is based on the premise that a marketer should make what they can sell, instead of trying to sell what they have made.
The needs of the dissatisfied are likely to be met by an existing or emerging competing organisation. The variables used to segment markets may be demographic e. According to Engel et al. Conceptual Framework The technique of segmenting a market helps an enterprise decide how far it can go in tailoring its product or service to the needs of distinct groups of customers. Mumby defines market segmentation as: This involves collecting information about the different segments that the company has identified.
Market whilst some market segments may be attractive in terms of potential profitability, the enterprise will only be able to serve these if its resources match the needs of those segments Crawford, Thus, for instance, a small company marketing indigenous branded rice might see great opportunities in targeting low income earning families but not having the necessary number of salesmen and product quality to adequately serve this segment.
The market segmentation concept is related to product differentiation. If you aim at different market segments, you might adapt different variations of your offering to satisfy those segments, scsrjournals scholarconsult. Demand Function Implications and equally if you adapt different versions of your offering, this may appeal to different market segments Ries and Trout, Demographic refers to the vital and measurable statistics of a Population such as age, sex, marital status, income, occupation, and education, Bello, A lot of studies have classified segments into demographics and geographical designations, but for us to have a suitable conceptualization of the family market segments in Nigeria, it would be pertinent to synergize the two concepts to help us come to terms with the type of concept we want to adopt for the study.
A family is a group of two or more persons related by blood, marriage, or adoption who reside together; there are two main types of family nuclear and extended family Bello, This study will analyze types of family as affected by Geodemographics taking into consideration: Preferably this study used MOSAIC geodemographic segmentation system developed by Experian and marketed in over twenty countries worldwide.
Our Market Segmentation of the Nigerian family therefore will consist of the following categories: Mosaic Geodemographic Segmentation of the Family CATEGORY GROUP TYPE Wealthy achievers Flourishing families Large families, prosperous suburbs Well-off working families with mortgages Well-off managers, detached houses Large families and houses in rural areas Urban prosperity Prosperous educated families Well-off professionals, larger houses Older professionals in detached houses Affluent urban professionals, flats Young educated workers, flats Comfortably off Starting out and secure Young couples, flats Young white-collar couples Working families in towns Established home-owning workers Home-owning workers Moderate means Struggling city families Low-income larger families High-rise hardship inner city Skilled older families Struggling village families Young family workers Older people, low income Low-income, high unemployment families Large families, many children and poorly struggling village poor village families Single parents Poor families in Multi-ethnic settlements Source: Demand Function Implications b Consumer behavior The term consumer behavior is defined as the behavior that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs Bello, This need satisfaction is frequently sought out by Nigerian families belonging to the various social strata in the society.
There is a high tendency for families rising above the middle class in Nigeria to engage in opulence show of wealth resulting in ostentatious expenditures for material items. Buyer behaviour may be defined as the activities and decision processes involved in choosing between alternatives, procuring and using products or services. It is sometimes suggested that buyer behaviour is only of interest to marketers because they wish to influence and change it Crawford, Bello, is of the view that consumer behavior is the behavior that consumer display in searching for purchasing, using, evaluating and disposing of product and services that they expect will satisfy their needs; there are three perspectives of studying consumer behavior, and two of them are Bello, ; a Consumer Influence Perspective: Under this perspective, Consumer behavior is said to be of particular interest to those who, for various reasons, desire to influence or change that behavior, including those whose primary concern is marketing, consumer education and protection and public policy.
Consumer Behavior Market Segmentation
Consumer behavior according to this perspective goes beyond consumption. Researchers in this area argue that purchase decision is only a small component in the constellation of events involved in the consumption experience and that it is time for consumer experts to take consumption as the central emphasis and examine all facets of the value potentially provided when some living organism acquires, uses, or disposes of any product that might achieve a goal, fulfill a need, or satisfy a want.
Consumer influence and holistic perspectives gives rise to the demand and loyalty for local rice brands. Adapted from Conceptual Framework of Study 2. The person who has achieved this highest level of presses toward the full use and exploitation of his or her talents, capacities, and potentialities.
In short, to self actualize is to become the kind of person we are capable of becoming — to reach the peak of our potential Larry A hierarchy of needs theory was advocated by A.
According to him, man always has needs to satisfy. These needs can scsrjournals scholarconsult. Demand Function Implications be classified in a hierarchical order starting from the basic needs to the higher order needs. Once a particular need is satisfied, it ceases to be a motivator of behaviors and another need emerges Maslow According to Maslow, these needs can be classified into five: Below is a constrained utility function Olayemi and Olayide, The theoretical model refers to consumption behavior or an individual consumer only, whereas an empirical demand analysis may have to be at a higher demand level of aggregation.
Empirical demand models are economic models adapted to statistical analysis. They attempt to explain the variation in quantities demanded in terms of a set of causal factors. In an attempt to explain as much of the variations as much as possible, it is often necessary to render the demand model dynamic, sometimes by making allowance for delayed or distributed response to changes in the demand-influencing factors.
This is a micro- economic type of study, because it tries to analyze the demand for locally branded rice in some part of Benue State in respect of the total market for the commodity f Nigeria. The purpose is to confine ourselves to single-equation models involving the use of the ordinary least squares method of estimation.
In this context, many functional forms can be used although the linear form is perhaps the most common. Within a narrow range of observations on demand variables, a linear function would often give a good fit. More generally, a nonlinear function would be more theoretically plausible. The demand function can be used mainly for two purposes: The former is obvious. The latter refers to the use of demand functions to determine the pattern of consumer response to changes in economic variables and to evaluate empirical results in the light of economic theory Olayemi and Olayide, Method and Materials a Sampling Framework: Quota sampling non- probability sampling technique was used by selecting 20 families from each settlement, which resulted to a sample frame of respondents for the study.
A self-structured questionnaire was developed to collect the required primary data from the families used in the study. To avoid stigmatization and putting each family on the spot, the questionnaire instrument was structured in such a way as to hide the family segmentation types.
Accessing and collecting data through questioner was carried out be friends scsrjournals scholarconsult. Demand Function Implications and relatives due to time constraints. Questionnaires were systematically distributed utilizing a convenience sampling from the various family members mostly in the evenings and at weekends. Even though the sampling method adopted in this study was convenient and contained some limitations in terms of generalisibility as compared to other probability methods of sampling, it was logically assumed that the sample in this study represented the whole population of families residing in Abuja FCT.
The critical components in this study had content validity because an extensive review of the literature was conducted in selecting the measurement items. A measuring instrument gives similar, close or the same result when different researchers under the same conditions use it. Reliability therefore, is the consistency between independent measurements of the same phenomenon.
It is the stability, dependability and predictability of a measuring instrument. It is also the accuracy or precision of a measuring instrument. The exogenous items used for this study were subjected to exploratory factor analysis to investigate whether the constructs as described in the literature fits the factors derived from the factor analysis. From table 3, five factors of the family market segment with Eigenvalue, 1.
Our KMO result in this analysis is up to the threshold value of 0. Therefore, we are confident that our sample and data are adequate for this study.
Our result has strong construct validity, because the various sorghum value chain items were tested for correlation and it was found out that there was a high degree of measures between the measures of the same construct, indicating that correlation exists amongst them.
Thus the critical components in this study had content validity because an extensive review of the literature was conducted in selecting the measurement items.
- Consumer Behavior - Market Segmentation
- Relationship Between Market Research and Market Segmentation
- Consumer Behaviour - chapter 1
Demand Function Implications not form a composite score for the variable in question. All five items for this study appear to be useful and contribute to the overall reliability of family market segment variables. Data from the questionnaire instrument will be subjected to parametric measures, which makes specific assumptions about the distribution in the population.
A number of approaches to classifying people's lifestyles have been developed but perhaps the system most frequently cited is that of Plummer This approach involves presenting respondents with a lengthy questionnaire in an attempt to measure their activities, interests and opinions AIO as well as their demographics.
The descriptive statistics data for the study will be collected, coded and analyzed using computer-based Statistical Package for Social Sciences SPSS version 21 for Windows.