CHAPTER 1
CONSUMER BEHAVIOR
AND MARKETING STRATEGY
LEARNING OBJECTIVES
LEARNING OBJECTIVES
LO1: Define consumer behavior
LO3: Explain how consumer behavior can be used to develop marketing strategy
LO4: Explain the components that constitute a conceptual model of consumer behavior
SUMMARY
LO1: Define consumer behavior
The field of consumer behavior is the study of individuals, groups, or organizations and the
LO2: Summarize the applications of consumer behavior
Consumer behavior can be applied in four areas, namely (a) marketing strategy, (b) regulatory
policy, (c) social marketing, and (d) creating informed individuals. Developing marketing
strategy involves setting levels of the marketing mix based on an understanding of the market
LO3: Explain how consumer behavior can be used to develop marketing strategy
The interplay between consumer behavior and marketing strategy involves five stages. First is
market analysis which involves gathering data and tracking trends related to the company,
market conditions. Third is marketing strategy which involves setting appropriate levels for
the marketing mix as a function of the segments being targeted and the market conditions that
exist. Fourth is the consumer decision process which is a series of steps starting with problem
effects of their marketing efforts.
LO4: Explain the components that constitute a conceptual model of consumer behavior
The conceptual model of consumer behavior developed here can be broken into four
interrelated parts. External and internal influences affect the consumer’s self-concept and
lifestyle which, in turn, affects the decision process. External influences (Part 2 of the text)
include culture, reference groups, demographics, and marketing activities. Internal influences
(Part 3) include perception, emotions, attitudes, and personality. Self-concept is the totality of
an individual’s thoughts and feelings about him– or herself. Lifestyle is, quite simply, how one
LO5: Discuss issues involving consumption meanings and firm attempts to influence
them
Consumption has meaning beyond the satisfaction of minimum or basic consumer needs.
Thus, consumers might purchase Nike sneakers not only to satisfy the functional needs
associated with safety and support, but also for symbolic needs associated with status,
LECTURE TIPS AND AIDS
1) It is important to get the student to believe that knowledge of consumer behavior can help
managers understand why people behave as they do, and that this understanding can help
managers predict behavior. One rather simple “gimmick” to help get this point across goes as
follows:
Before the start of class, pin up a card with the number 3 printed on it making sure that none of the
students can see the number. Then, during the lecture, when you are pointing out that some
behaviors can be predicted, ask the students to pick a number between 1 and 4 inclusive and
2) It should be pointed out that the model presented in the text is explanatory in nature, the purpose
3) Have students select a product of interest and discuss how various components of the model could
aid development of marketing strategies for various brands of the product.
4) If you allow any free-ranging discussion, students will generally ask about particular ads that they
find annoying or otherwise distasteful. Many will claim that they will never buy the product
5) Initiate a discussion on injurious consumption and the responsibilities of marketers, consumers,
and the government. After the students discuss harmful products such as alcohol or tobacco, point
Review Questions
1) How is the field of consumer behavior defined?
It is the study of individuals, groups, or organizations and the processes they use to select, secure,
2) What conclusions can be drawn from the examples at the beginning of this chapter?
Successful marketing decisions require extensive information on consumer behavior theory.
regulators, and others use consumer behavior and knowledge to make decisions.
3) What are the four major uses or applications of an understanding of consumer behavior?
(1) Developing marketing strategy, (2) Developing regulatory policy for marketing actions, (3)
Social marketing, and (4) Understanding how societies function.
4) What is social marketing?
5) What is customer value and why is it important to marketers?
It is the difference between all of the benefits derived from a total product and all the costs of
acquiring those benefits. It is important because consumers choose those options that they believe
will provide them the most value.
6) What is required to provide superior customer value?
7) What is a total product?
It is all aspects of the product including its price, package, distribution system, image, and so
forth.
8) What is involved in the consumer analysis phase of market analysis in Figure 1-1?
The organization must be able to anticipate evolving consumer needs which requires a complete
9) What is involved in the company analysis phase of market analysis in Figure 1–1?
The firm must understand its ability to meet evolving customer needs better than the competition.
10) What is involved in the competitor analysis phase of market analysis in Figure 1–1?
A firm should know its key competitors as well as it knows itself (see #6 above). For particular
11) What is involved in the conditions analysis phase of market analysis in Figure 1-1?
This is an analysis of the state of the relevant economies, government regulations, the physical
environment, and technological developments.
12) Describe the process of market segmentation.
13) What is marketing strategy?
Marketing strategy is the answer to the question: “How will we provide superior customer value to
our target market at a profit?” It is deciding how to meet the needs of a defined target segment. It
involves structuring the marketing mix.
14) What is a marketing mix?
15) What is a product?
A product is anything a consumer acquires or could acquire to meet a perceived need. It is useful
to think of a product in terms of the benefits it provides. It includes both physical products and
primary services such as haircuts.
16) What does an effective communications strategy require?
It requires sound answers to these questions: (1) Who exactly do we want to communicate with?
17) What is a price? How does the price of a product differ from the cost of the product to the
consumer?
The price is the amount of money one must pay to obtain the right to use the product. The cost of
18) How is service defined in the text?
Service is defined not as a primary service such as a haircut, which is treated as product, but as an
19) What is involved in creating satisfied customers?
Creating satisfied customers requires that customers continue to believe that the brand purchased
20) What are the major outcomes for the firm of the marketing process and consumers’ responses to
it?
(1) A product position or image in the minds of the consumers, (2) sales and profits, and (3)
satisfied (at some level) customers.
21) What are the major outcomes for the individual of the marketing process and consumers’
responses to it?
22) What are the major outcomes for society of the marketing process and consumers’ responses to it?
(1) Economic impacts, (2) environmental impacts, and (3) social impacts.
23) What is product position?
It is what consumers think of and feel about a brand in relation to competing brands.
25) What is meant by consumer lifestyle?
Lifestyle is how the consumer lives including the products that they purchase, how they use them,
and what they think of them. It is the sum of past decisions and future plans.
26) Describe the consumer decision process.
Discussion Questions
27) Why would someone shop on the Internet? Buy an iPad? Eat at Chili’s frequently?
a) Why would someone else not make those purchases?
b) How would you choose one outlet, brand, or model over the others? Would others make the
same choice in the same way?
Discussion should focus on lifestyles and the role these products play in relation to various
28) Respond to the questions in Consumer Insight 1–1.
1. Answers will vary but this question should get students thinking about the segments and
2. Answers will vary. Most likely, the basic need sets of consumers will be similar whether in a
3. a. Steady Shoppers: Retailers should try to keep their brand at the top–of-mind awareness
c. Black Friday Shoppers: Retailers should focus on this group’s need to find the best deal possible
through special promotions with even bigger discounts for loyalty program members or email
subscribers. Since Black Friday shopping is often a social event, having shareable, friends and
family discounts could be advantageous as well.
hours, expedited online–to–in-store pick up for brick and mortar retailers, and expedited free
shipping and late shipping guarantees for online retailers.
29) Of what use, if any, are models such as the one in Figure 1-3 to managers?
Even though the model does not allow for prediction, point out the value of understanding how all
30) What changes would you suggest in the model in Figure 1-3? Why?
Students will probably find this to be a difficult question. Ask them if it would be a better model if
it were more specific. Then point out the relative advantages and disadvantages of specificity.
internal and external factors should both be considered as lifestyle determinants.
31) Describe your lifestyle. How does it differ from your parents’ lifestyle?
As this question will arise early in the semester, it may be difficult to get students to “volunteer”
this kind of information about themselves. If you are brave, use yourself as the example. (One of
the authors does this using a great deal of literary license!) Or construct a “typical student” such as
Leonard Moffit.
Leonard is a senior majoring in marketing at a major state university. He lives in a fraternity
and sees himself as an upper-middle-class person. He drives a 3-year-old Mustang convertible
Leonard is from a small town in Illinois where his parents have a rather large pig farm.
Neither of his parents went to college (in fact his dad did not graduate from high school), but
they are relatively well off financially. Both parents are fairly conservative and strongly
religious people.
Ask the class what differences there might be in Leonard’s and his parents’ lifestyles and why they
might have occurred (school, religion, and so forth). Also, ask them how Leonard’s lifestyle differs
from their own. Encourage students to be creative.
32) Do you anticipate any changes in your lifestyle in the next five years? What will cause these
changes? What new products or brands will you consume because of these changes?
33) Describe a recent purchase you made. To what extent did you follow the consumer decision–
making process described in this chapter? How would you explain any differences?
Again, you may have to lead this discussion off with a purchase of your own. Be sure to pick a
product relevant to students (e.g., most students aren’t buying homes at this stage in their life) such
34) Describe several “total products” that are more than their direct physical features.
Products such as Coca-Cola or Bayer are good products to lead with. Point out that most
35) Describe the needs that the following items might satisfy and the total cost to the consumer of
obtaining the benefits of the total product.
a) Digital video recorder (e.g., TiVo)
b) Lasik eye surgery
c) Motorcycle
d) SUV
This is a fun question. The point is to illustrate how the same product can meet multiple needs in
the same or different people. For example, a motorcycle could meet functional needs for some
36) How would you define the product that the Hard Rock Cafe provides? What needs does it meet?
You can use a fun oriented local restaurant or bar if your students are not familiar with Hard Rock
37) To what extent, if any, are marketers responsible for injurious consumption involving their
products?
You can spend a large part of a class on this. If your students are mostly conservative, you may
38) How could social marketing help alleviate some of society’s problems?
Pick a particular problem such as improper diets among teenagers. After the class realizes the
39) Respond to the questions in Consumer Insight 1–2.
Q1 – There are many answers to this question. Consumers naturally imbue brands with person-like
traits that are inferred from such aspects as packaging, design, and brand name. Experiences
associated with a product (first gig played with a certain guitar) can create meaning. People
Q3 – Here, it can be useful to talk about what we mean by “need.” Often, while a product doesn’t
fulfill a physically necessary need to survive, it does serve a psychological or social need to fit in,
40) Is the criticism of Nike for creating a shoe that is symbolic of success to some groups valid? Why
or why not??
Most students will not see this as a problem and many should point out that most societies
41) Robert’s American gourmet snack foods produced herbal-based snacks such as Spirulina Spirals and
St. John’s Wort Tortilla Chips, and now makes Pirate’s Booty baked snacks. According to the
company president, “We’re selling like crazy. We don’t do research. We react as sort of a karma
thing.”
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How would you explain the firm’s success? What are the advantages and risks of this
approach?
The focus of this discussion should be on the trends that occur in consumer needs and desires and
the use of intuition versus research to predict each. In the discussion of advantages and risks, it