Consumer behaviour and the psychology of marketing

Introduction

The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how

°The psychology of how consumers think, feel, reason an select between different alternatives

°The psychology of how the consumer is influenced by his environment like family, culture, media

°The behaviour of consumers while shopping or making other marketing decisions

°Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome

°How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer

°How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer

One of often needed definition 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, or ideas to satisfy needs and the impacts that these processes have on the consumer an society “. There are elements of psychology, sociology, sociopsychology and economics influencing the buyer´s decision. Consumer behaviour is the study of how people buy, what they buy, when and why they buy. Consumer behaviour involves services and ideas as well as tangible products. The main applications are marketing strategy, public policy, social marketing and as a final benefit, studying consumer behaviour should make us better consumers.

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Consumer research methods

Market research is often needed to ensure that we produce what customers really want and not what we think they want.

Research will often help us reduce risks associated with new products, but it cannot take the risk away entirely. It is also important to ascertain whether the research has been complete. For example, Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to prefer the taste. However, consumers were not prepared to have this drink replace traditional coke.

The 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.

Problem recognition

Problem recognition is that result when there is a difference between one´s desired state and one´s actual state. Consumers are motivated to address this discrepancy and therefore they commence the buying process.

Sources of problem recognition include New products, Marketer-induced, related products, Consumer needs and wants and Dissatisfaction with a current product and service.

The relevant internal psychological process that is associated with problem recognition is motivation.

A motive is a factor that compels action. Belch and Belch provide an explanation of motivation based on Maslow´s hierarchy of needs and Freud´s psychoanalytic theory.

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Demographics

Demographics are belonging to the internal influences in the structure of a population. For example, in some rapidly growing countries, a large percentage of the population is concentrated among younger generations. In countries like China and Korea this has helped stimulate economic growth, other countries such as Japan or Germany in contrast, experience problems with an elder society where fewer working people are around to support an increasing number of aging seniors. Therefore the German government has issued large financial incentives, in the forms of subsidies, for women with children. In the United States, population growth occurs both through birth and immigration.

Segmentation

Segmentation involves finding out what kinds of consumers with different needs exist, For example in the automobile market some consumers want speed and per-formance, while others demand low consumption and safety.

Generically there are three approaches to marketing. In the undifferentiated strategy, all consumers are treated as the same. It does function when the product is a standard one without competition.

In the concentrated strategy one firm chooses to focus on one of several segments that exist while leaving other segments to competitors. For example there are airlines which are focussing on price sensitive consumers. Most other airlines follow the differentiated strategy and offer high price tickets with many advantages and high comfort, but they fill up remaining seats with price sensitive passengers who can buy two weeks in advance and stay over. And there is a large number of variables that can be used to differentiate consumers of a given product category. We might thus decide, that the variables that are most relevant in separating different kinds of soft drink consumers are (1) preference for taste vs. low calories, (2) preference for Coke vs. non Coke taste, (3)price sensitivity not willing to pay for brand names and (4) heavy vs. light consumers. Putting these variables together you arrive at various combinations.

Demographic variables essentially refer to personal statistics such as income, educa-

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