BUS502: Strategic Marketing

Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services. Consumer behaviour consists of how the consumer's emotions, attitudes, and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, ethnology, marketing, and economics (especially behavioural economics).

The study of consumer behaviour formally investigates individual qualities such as demographics, personality lifestyles, and behavioural variables (such as usage rates, usage occasion, loyalty, brand advocacy, and willingness to provide referrals), in an attempt to understand people's wants and consumption patterns. Consumer behaviour also investigates on the influences on the consumer, from social groups such as family, friends, sports, and reference groups, to society in general (brand-influencers, opinion leaders).

Research has shown that consumer behaviour is difficult to predict, even for experts in the field; however, new research methods, such as ethnography, consumer neuroscience, and machine learning are shedding new light on how consumers make decisions. In addition, customer relationship management (CRM) databases have become an asset for the analysis of customer behaviour. The extensive data produced by these databases enables detailed examination of behavioural factors that contribute to customer re-purchase intentions, consumer retention, loyalty, and other behavioural intentions such as the willingness to provide positive referrals, become brand advocates, or engage in customer citizenship activities. Databases also assist in market segmentation, especially behavioural segmentation such as developing loyalty segments, which can be used to develop tightly targeted customized marketing strategies on a one-to-one basis.

Origins of consumer behaviour

In the 1940s and '50s, marketing was dominated by the so-called classical schools of thought which were highly descriptive and relied heavily on case study approaches with only occasional use of interview methods. At the end of the 1950s, two important reports criticized marketing for its lack of methodological rigor, especially the failure to adopt mathematically-oriented behavioral science research methods. The stage was set for marketing to become more inter-disciplinary by adopting a consumer-behaviorist perspective.

From the 1950s, marketing began to shift its reliance away from economics and towards other disciplines, notably the behavioral sciences, including sociology, anthropology, and clinical psychology. This resulted in a new emphasis on the customer as a unit of analysis. As a result, new substantive knowledge was added to the marketing discipline – including such ideas as opinion leadership, reference groups, and brand loyalty. Market segmentation, especially demographic segmentation based on socioeconomic status (SES) index and household life-cycle, also became fashionable. With the addition of consumer behavior, the marketing discipline exhibited increasing scientific sophistication with respect to theory development and testing procedures.

In its early years, consumer behavior was heavily influenced by motivation research, which had increased the understanding of customers, and had been used extensively by consultants in the advertising industry and also within the discipline of psychology in the 1920s, '30s, and '40s. By the 1950s, marketing began to adopt techniques used by motivation researchers including depth interviews, projective techniques, thematic apperception tests, and a range of qualitative and quantitative research methods. More recently, scholars have added a new set of tools including ethnography, photo-elicitation techniques, and phenomenological interviewing. Today, consumer behavior (or CB as it is affectionately known) is regarded as an important sub-discipline within marketing and is included as a unit of study in almost all undergraduate marketing programs.

Definition and explanation

Consumer behaviour entails "all activities associated with the purchase, use and disposal of goods and services, including the consumer's emotional, mental and behavioural responses that precede or follow these activities". The term consumer can refer to individual consumers as well as organisational consumers, and more specifically, "an end user, and not necessarily a purchaser, in the distribution chain of a good or service". Consumer behaviour is concerned with:

• purchase activities: the purchase of goods or services; how consumers acquire products and services, and all the activities leading up to a purchase decision, including information search, evaluating goods and services, and payment methods including the purchase experience
• use or consumption activities: concerns the who, where, when, and how of consumption and the usage experience, including the symbolic associations and the way that goods are distributed within families or consumption units
• disposal activities: concerns the way that consumers dispose of products and packaging; may also include reselling activities such as eBay and second-hand markets

Consumer responses may be:

• emotional (or affective) responses: refer to emotions such as feelings or moods,
• mental (or cognitive) responses: refer to the consumer's thought processes, their
• behavioural (or conative) responses: refer to the consumer's observable responses in relation to the purchase and disposal of goods or services.
  

According to the American Marketing Association, consumer behaviour can be defined as "the dynamic interaction of affect and cognition, behaviour, and environmental events by which human beings conduct the exchange aspects of their lives".

As a field of study, consumer behaviour is an applied social science. Consumer behaviour analysis is the "use of behaviour principles, usually gained experimentally, to interpret human economic consumption". As a discipline, consumer behaviour stands at the intersection of economic psychology and marketing science.

Source: Wikipedia, https://en.wikipedia.org/wiki/Consumer_behaviour
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