What is Consumer Behavior?

The study of the processes involved when individuals or groups select,

purchase, use, or dispose of products, services, ideas, or experiences to
satisfy needs and desires

Consumer

Individual who buys and uses a product or service

Consumer Behaviour

The buying habits and patterns of consumers in the acquisition and usage of goods and services

Customer

A person or company who purchases goods or services (not necessarily the end 'consumer')

Customer Acquisition Cost

the cost associated with acquiring a new customer.

Customer Lifetime Value (CLV)

The profitability of customers during the lifetime of the relationship, as opposed to profitability
on one transaction.

Customer Loyalty

Feelings or attitudes that incline a customer either to return to a company, shop or outlet to
purchase there again, or else to re-purchase a particular product, service or brand.

Customer Satisfaction

The provision of goods or services which fulfil the customer's expectations in terms of quality
and service, in relation to price paid

Buying Behaviour

The process that buyers go through when deciding whether or not to purchase goods or services.
Buying behaviour can be influenced by a variety of external factors and motivations, including
marketing activity.

Efficient Consumer Response (ECR)

Having the right product in the right place at the right price with the right promotions.
Focus Groups

A tool for market research where small groups of customers are invited to participate in guided
discussions on the topic being researched

Four M's

Money, Material, Machine and Manpower- traditional framework for viewing the resources
available to a business, which can be useful when designing a marketing plan.

Grey Marketing (also called Parallel Importing)

The illicit sale of imported products contrary to the interests of a holder of a trademark, patent or
copyright in the country of sale.

Guerrilla Marketing

The strategy of targeting small and specialised customer groups in such a way that bigger
[1]
companies will not find it worthwhile to retaliate.

[2] Unconventional marketing intended to get maximum results from minimal resources.

Keyword buying

Advertisers paying for links to their websites to appear on internet search engines along side
search results, sometimes as "sponsored links", based on keywords entered into the search
engine. See 'Search Marketing'.

Marketing Mix

The combination of marketing inputs that affect customer motivation and behaviour. These
inputs traditionally encompass four controllable variables 'the 4 Ps': product, price, promotion
and place. The list has subsequently been extended to 7 Ps, the additions being people, process
and 'physical evidence'.

Market Challenger

A firm attempting to gain market leadership through marketing efforts.

Market Follower

A firm that is happy to follow the leaders in a market place without challenging them, perhaps
taking advantages of opportunities created by leaders without the need for much marketing
investment of its own.

Market Research
[1]The gathering and analysis of data relating to market places or customers; any research which
leads to more market knowledge and better-informed decision-making.

[2] The study of the demands or needs of consumers in relation to particular goods or services.

The first step to a successful marketing communications campaign is conducting objective

[usage]
market research.

Market Segmentation

The division of the market place into distinct subgroups or segments, each characterised by
particular tastes and requiring a specific marketing mix.

Marketing

[1]Marketing is the management process responsible for identifying, anticipating and satisfying
customer requirements profitably.

[2] The commercial functions involved in transferring goods from producer to consumer.

[usage] "Marketing" is our middle name!

Marketing Audit

Scrutiny of an organisation's existing marketing system to ascertain its strengths and weaknesses.

Marketing Myopia

Lack of vision on the part of companies, particularly in failing to spot customers' desires through
excessive product focus. Term derives from the title of a seminal article by Theodore Levitt
published in Harvard Business Review in 1960.

Marketing Metrics

Measurements that help with the quantification of marketing performance, such as market share,
advertising spend, and response rates elicited by advertising and direct marketing

Marketing Research

[1]The gathering and analysis of data relating to market places or customers; any research which
leads to more market knowledge and better-informed decision-making.

[2] The study of the demands or needs of consumers in relation to particular goods or services.

The first step to a successful marketing communications campaign is conducting objective

[usage]
marketing research.
Marketing Plan
A written plan, usually in-depth, describing all activities involved in achieving a particular
marketing objective, and their relationship to one another in both time and importance.

Marketing Strategy

The set of objectives which an organisation allocates to its marketing function in order to support
the overall corporate strategy, together with the broad methods chosen to achieve these
objectives.

Neuromarketing

Technique to quantify how consumers will respond to brands and advertising. The brain is
mapped, using functional Magnetic Resonance Imaging (fMRI), to record conscious and
subconscious responses to advertising, products or brands.

Niche Marketing

The marketing of a product to a small and well-defined segment of the market place.

Point of Purchase

[1]Location where payment for goods or services takes place where the purchaser and seller are
both present.

[2] Promotional piece placed where the product is actually sold.

[usage] Point of Purchase displays and materials reinforce the buying decision.

Point of Sale

The location, usually within a retail outlet, where the customer decides whether to make a
purchase.

Qualitative Research

Market research that does not use numerical data but relies on interviews, 'focus groups',
'repertory grid', and the like, usually resulting in findings which are more detailed but also more
subjective than those of 'quantitative research'

Quantitative Research

Market research that concentrates on statistics and other numerical data, gathered through
opinion polls, customer satisfaction surveys and so on. Compare 'qualitative research'

Reference Group
A group with which the customer identifies in some way, and whose opinions and experiences
influence the customer's behaviour. For example, a sports fan might buy a brand of equipment
used by a favourite team.

Relationship Marketing

The strategy of establishing a relationship with the customer which continues well beyond the
first purchase.

Search Marketing

Promoting a company's website using internet search engines. Either getting a company website
listed in search results (unpaid) or as a listing on the same webpage as the search results (paid).

Self-Serve Advertising

advertising that can be purchased without the assistance of a sales representative.

Trade Marketing

Marketing to the retail and distributive trades

Unique Selling Proposition (USP)

The benefit that a product or service can deliver to customers that is not offered by any
competitor: one of the fundamentals of effective marketing and business.

Viral Marketing

[1]Spreading a brand message using word of mouth (or electronically - 'word of mouse') from a
few points of dissemination. Typical techniques include using email messages, jokes, web
addresses, film clips and games that get forwarded on electronically by recipients

A marketing phenomenon that facilitates and encourages people to pass along a marketing
[2]
message.
Consumer behavior is the study of when, why, how, and where people do or do not buy

products.[1] It blends elements from psychology, sociology, social anthropology and economics. It

attempts to understand the buyer decision making process, both individually and in groups. It

studies characteristics of individual consumers such as demographics and behavioural variables in

an attempt to understand people's wants. It also tries to assess influences on the consumer from

groups such as family, friends, reference groups, and society in general.

Customer behaviour study is based on consumer buying behavior, with the customer playing the

three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for

customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of

marketing through the re-affirmation of the importance of the customer or buyer. A greater

importance is also placed on consumer retention, customer relationship management,

personalisation, customisation and one-to-one marketing. Social functions can be categorized into

social choice and welfare functions.

Each method for vote counting is assumed as a social function but if Arrow’s possibility theorem is

used for a social function, social welfare function is achieved. Some specifications of the social

functions are decisiveness, neutrality, anonymity, monotonocity, unanimity, homogeneity and

weak and strong Pareto optimality. No social choice function meets these requirements in an

ordinal scale simultaneously. The most important characteristic of a social function is identification

of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing

provides services in order to satisfy customers. With that in mind, the productive system is

considered from its beginning at the production level, to the end of the cycle, the consumer

(Kioumarsi et al., 2009).

Belch and Belch define consumer behaviour as 'the process and activities people engage in when

searching for, selecting, purchasing, using, evaluating, and disposing of products and services so

as to satisfy their needs and desires'.'

Contents

 1 Information

search

 2 Information

evaluation

 3 Purchase

decision
  4 Postpurchase

evaluation

 5 Internal

influences

 6 External

influences

 7 References

 8 See also
Information search

Once the consumer has recognised a problem, they search for information on products and

services that can solve that problem. Belch and Belch (2007) explain that consumers undertake

both an internal (memory) and an external search.

Sources of information include:

 Personal sources

 Commercial sources

 Public sources

 Personal experience

The relevant internal psychological process that is associated with information search is

perception. Perception is defined as 'the process by which an individual receives, selects,

organises, and interprets information to create a meaningful picture of the world'

The selective perception process

Stage Description

- Selective exposure consumers select which promotional messages they will expose themselves

to.

- Selective attention consumers select which promotional messages they will pay attention to

- Selective comprehension consumer interpret messages in line with their beliefs, attitudes,

motives and experiences

- Selective retention consumers remember messages that are more meaningful or important to

them

The implications of this process help develop an effective promotional strategy, and select which

sources of information are more effective for the brand.CV

Information evaluation

At this time the consumer compares the brands and products that are in their evoked set. How can

the marketing organization increase the likelihood that their brand is part of the consumer's

evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and

psychological benefits that they offer. The marketing organization needs to understand what

benefits consumers are seeking and therefore which attributes are most important in terms of

making a decision.

Purchase decision

Once the alternatives have been evaluated, the consumer is ready to make a purchase decision.

Sometimes purchase intention does not result in an actual purchase. The marketing organization

must facilitate the consumer to act on their purchase intention. The provision of credit or payment

terms may encourage purchase, or a sales promotion such as the opportunity to receive a

premium or enter a competition may provide an incentive to buy now. The relevant internal

psychological process that is associated with purchase decision is integration.

Postpurchase evaluation

It is common for customers to experience concerns after making a purchase decision. This arises

from a concept that is known as “cognitive dissonance”. The customer, having bought a product,

may feel that an alternative would have been preferable. In these circumstances that customer will

not repurchase immediately, but is likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential

customer that the product will satisfy his or her needs. Then after having made a purchase, the

customer should be encouraged that he or she has made the right decision.it is not effected by

advertisement.

Internal influences

Consumer behaviour is influenced by: demographics, psychographics (lifestyle), personality,

motivation, knowledge, attitudes, beliefs, and feelings.consumer behaviour concern with consumer

needconsumer actions in the direction of satisfing needs leads to his behaviour behaviour of every

individuals depend on thinking process

External influences

Consumer behaviour is influenced by: culture,sub-culture, locality, royalty, ethnicity, family, social

class, reference groups, lifestyle, and market mix factors.