Understanding Human

Behavior
Unit 1
Marketing
• Definition and Purpose: Marketing is the process of creating,
communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large. It encompasses
various activities aimed at promoting and selling products or services,
including market research, advertising, sales, and customer service.
Understanding Marketing beh.
• Market Research: Understanding the market, identifying customer needs
and preferences, analyzing competitors, and assessing market trends.
• Product Development: Designing and creating products or services that
meet consumer needs.
• Promotion: Communicating the benefits of the product or service
through advertising, public relations, and sales promotions.
• Distribution: Ensuring the product or service is available to customers
through appropriate channels.
• Pricing: Setting a price that reflects the value of the product or service
and is acceptable to customers.
Marketing and consumer beh.
• Consumer Behavior: Consumer behavior refers to the study of how
individuals or groups select, purchase, use, and dispose of goods,
services, ideas, or experiences. Understanding consumer behavior
helps marketers design better products, create effective promotional
strategies, and deliver superior customer satisfaction.
• Factors Influencing Consumer Behavior:
1.Cultural Factors: Culture, subculture, and social class significantly
impact consumer preferences and behaviors.
2.Social Factors: Family, reference groups, and social roles influence
buying decisions.
3.Personal Factors: Age, occupation, lifestyle, personality, and self-
concept affect individual buying behavior.
4.Psychological Factors: Motivation, perception, learning, beliefs, and
attitudes drive consumer decisions.
Evolution of Marketing and Consumer Behavior Research
• 1. Production Era (Pre-1920s)
• Focus on mass production and efficiency.
• Limited consumer choice.
• Marketing primarily consisted of informing consumers about product availability.
• 2. Sales Era (1920s-1950s)
• Emphasis on persuading consumers to buy.
• Rise of aggressive sales techniques and advertising.
• Limited focus on consumer needs and preferences.
• 3. Marketing Era (1950s-1980s)
• Shift towards understanding and satisfying customer needs.
• Development of the marketing concept: customer satisfaction as the key to
achieving business goals.
• Increased use of market research.
• 4. Relationship Era (1980s-Present)
• Focus on building long-term relationships with customers.
• Emergence of relationship marketing and customer relationship
management (CRM).
• Greater emphasis on customer loyalty and retention.
• 5. Digital Era (2000s-Present)
• Rapid growth of digital marketing and e-commerce.
• Use of data analytics and big data to understand consumer behavior.
• Integration of social media and mobile marketing.
Marketing Mix
• Product: This involves the actual goods or services being offered to
meet customer needs. Key considerations include product design,
quality, features, branding, packaging, and the product lifecycle.
• Price: This element involves the pricing strategy for the product or
service. Factors include cost of production, target market's ability to
pay, competitor pricing, market demand, and perceived value. Pricing
strategies can include discounts, payment terms, and pricing models
(e.g., subscription-based or one-time payment).
• Place: This pertains to the distribution channels and locations where
the product is available to consumers. It encompasses logistics, supply
chain management, retail locations, online presence, and the overall
accessibility of the product.
• Promotion: This encompasses all the activities and tactics used to
promote the product and persuade customers to purchase it. It
includes advertising, sales promotions, public relations, direct
marketing, social media marketing, and other forms of
communication.
Market Sementation
• Market segmentation involves dividing a broad consumer or business
market into sub-groups of consumers based on some type of shared
characteristics. The main goal is to tailor marketing efforts to specific
segments to meet their needs more effectively.
• Demographic Segmentation: Based on measurable statistics such as
age, gender, income, education, occupation, and family size.
• Geographic Segmentation: Based on location, such as country, region,
city, or neighborhood. It can also include climate or population
density.
• Psychographic Segmentation: Based on lifestyle, values, interests,
and personality traits.
• Behavioral Segmentation: Based on consumer behaviors such as
purchasing habits, brand loyalty, usage rate, and benefits sought.
• Firmographic Segmentation: For B2B markets, this involves
segmenting based on company characteristics like industry, company
size, and revenue.
Market Targeting
• Once the market is segmented, the next step is to evaluate the
attractiveness of each segment and select one or more to target.
• Evaluating Segment Attractiveness: Consider factors such as segment
size, growth potential, competitive intensity, and alignment with the
company's objectives and resources.
• Positioning: After selecting the target market, the company needs to
position its product or service in the minds of the target consumers.
This involves creating a unique, favorable, and distinct image of the
product relative to competing products. Positioning strategies can be
based on attributes such as quality, price, use, and customer benefits.
Selecting Target Markets: Choose which segments to focus on. There
are several targeting strategies a company can use:
• Undifferentiated (Mass) Marketing: Targeting the entire market with
a single offer.
• Differentiated (Segmented) Marketing: Targeting several market
segments with a different offer for each.
• Concentrated (Niche) Marketing: Focusing on a large share of a small
market segment.
• Micromarketing: Tailoring products and marketing programs to the
needs and wants of specific individuals and local customer segments
(e.g., local marketing and individual marketing).
Consumer Decision Making Process
• The consumer decision-making process is the series of steps that consumers
go through before, during, and after making purchases. Understanding this
process helps marketers develop strategies to influence consumers at each
stage.
1. Problem Recognition: This is the first stage where the consumer identifies a
need or a problem that requires a solution. This recognition can be triggered
by internal stimuli (e.g., hunger, thirst) or external stimuli (e.g., advertising,
word of mouth).
2. Information Search: Once the need is recognized, consumers seek
information about how to satisfy it. This search can be internal (recalling past
experiences) or external (seeking information from friends, family,
advertisements, reviews, and online searches).
3. Evaluation of Alternatives
• During this stage, consumers compare different products or services
based on various attributes such as price, quality, features, and brand
reputation. They may create a shortlist of options and weigh the pros
and cons of each.
4. Purchase Decision
• After evaluating the alternatives, the consumer makes a purchase
decision. This decision can be influenced by several factors, including
the consumer's attitude towards the product, the opinions of others,
and situational factors such as availability and price promotions.
Post-Purchase Behavior
• After the purchase, the consumer evaluates their satisfaction with the
decision. This stage can lead to different outcomes:
• Satisfied Customers: Likely to make repeat purchases and
recommend the product to others.
• Dissatisfied Customers: May experience buyer's remorse and
potentially return the product, leave negative reviews, or spread
negative word of mouth.
Influences on decision making
process
• Cultural Factors: Culture, subculture, and social class shape consumer
preferences and behaviors.
• Social Factors: Family, friends, social networks, and roles can impact
purchasing decisions.
• Personal Factors: Individual characteristics such as age, occupation,
lifestyle, economic situation, and personality.
• Psychological Factors: Motivation, perception, learning, beliefs, and
attitudes affect how consumers view products and make decisions.
Psychological factors influencing
consumer beh.
• Motivation
Motivation refers to the internal drives that prompt a consumer to take
action. Maslow's hierarchy of needs is often used to understand consumer
motivation. According to Maslow, individuals have five levels of needs:
Physiological Needs: Basic necessities like food, water, and shelter.
Safety Needs: Security and protection from physical and emotional harm.
Social Needs: Love, belonging, and social interactions.
Esteem Needs: Self-esteem, recognition, and status.
Self-Actualization Needs: Personal growth and self-fulfillment.
Perception
• Perception is the process by which consumers select, organize, and
interpret information to create a meaningful picture of the world. This
process involves three stages:
• Selective Attention: Consumers focus on certain stimuli while
ignoring others.
• Selective Distortion: Consumers interpret information in a way that
supports their existing beliefs and attitudes.
• Selective Retention: Consumers remember information that supports
their beliefs and forget information that contradicts them.
Learning
• Learning refers to the changes in an individual's behavior arising from
experience. It can occur through:
• Classical Conditioning: Associating a product with a particular
stimulus to elicit a desired response.
• Operant Conditioning: Using rewards and punishments to reinforce
desired behaviors.
• Observational Learning: Learning by observing others and mimicking
their actions.
Beliefs and Attitudes
• Beliefs are the descriptive thoughts that a person holds about
something, while attitudes are a person’s consistently favorable or
unfavorable evaluations, feelings, and tendencies toward an object or
idea. These are shaped by personal experiences, cultural influences,
and information received from various sources.
• Marketers can influence beliefs and attitudes through persuasive
communication and by aligning their products with consumers' values
and lifestyles.
• Personality and Self-Concept
• Personality refers to the unique psychological characteristics that lead
to consistent and lasting responses to the consumer's environment.
Self-concept, or self-image, is how individuals perceive themselves
and their behavior.
• Marketers often use personality traits (e.g., adventurous,
conservative) and self-concept themes (e.g., how the product
enhances one's image) in their campaigns to appeal to specific
consumer segments.
• Lifestyle
• Lifestyle is a person's pattern of living as expressed in their activities,
interests, and opinions (AIOs). Lifestyle segmentation helps marketers
identify groups of consumers with similar lifestyles and tailor their
products and marketing strategies to these groups.
Ethical and Social Responsibilities in
Marketing
• Honesty and Fairness: Marketers should ensure that their
advertisements are truthful and not misleading. Claims about products
should be substantiated.
• Transparency: Clear communication regarding product information,
pricing, and terms of service is essential. Hidden fees and ambiguous
terms should be avoided.
• Respect for Privacy: Consumer data should be collected and used
responsibly, with explicit consent. Data should be protected from
breaches and misuse.
• Avoidance of Manipulative Tactics: Techniques such as false scarcity,
high-pressure sales, and deceptive advertising should be avoided.
Corporate Social Responsibility (CSR):
• Community Engagement: Businesses should engage with and
contribute to the communities in which they operate, supporting local
initiatives and charities.
• Environmental Stewardship: Companies should minimize their
environmental footprint through sustainable practices, such as reducing
waste, conserving resources, and supporting renewable energy.
• Ethical Labor Practices: Ensuring fair wages, safe working conditions,
and respecting workers' rights, both within the company and in its
supply chain.
• Inclusive Marketing: Marketing should be inclusive and respectful of
diverse cultures, genders, and identities, avoiding stereotypes and
discrimination.
• Sustainable Marketing Practices
• Sustainability in Marketing:
• Eco-friendly Products: Promoting products that are environmentally
friendly, such as those made from sustainable materials or with
minimal environmental impact.
• Sustainable Packaging: Using packaging that is recyclable,
biodegradable, or made from recycled materials to reduce waste.
• Life Cycle Assessment: Evaluating the environmental impact of a
product throughout its lifecycle and making improvements to reduce
its footprint.
• Green Marketing Claims: Ensuring that environmental claims are
truthful and not misleading (e.g., avoiding greenwashing).
• Long-term Perspective:
• Future Generations: Considering the long-term impact of marketing
decisions on future generations and the planet.
• Continuous Improvement: Regularly assessing and improving
marketing practices to enhance sustainability.
• Consumer Education:
• Awareness Campaigns: Educating consumers about the importance
of sustainability and how they can make eco-friendly choices.
• Transparency: Providing detailed information about the sustainability
efforts and practices of the company to build trust with consumers.