1. Principles of Consumer Behavior:
Consumer behavior is dynamic. It involves thinking, feeling as well as actions of consumers, consumer groups and society. The study of consumer behavior looks at how people buy, what they buy, when they buy and why they buy it. It examines the buyer decision process, both individually and in groups. It also examines characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants and assess consumer influences (such as family, friends, reference groups, and society in general). Ultimately, the focus is on the dynamic interaction of affect, cognition, behavior, and the environment by which human beings exchange aspects of their lives. 2. Who determines what consumers buy?
The consumer determines what factors are important to fufilling their needs. These consumer needs are not only made up by personal preference, but by the consumer environment, the social and physical stimuli that inadvertently affect buying behavior. The major influences of consumer behavior are advertisements, price information, packaging, product appearance and comments from other customers. Consumer behavior researchers determine what customers buy by studying the influencers. 3. What are the major ways to study consumer behavior and what issues addressed in a “marketing analysis”? There are three major approaches to studying consumer behavior: interpretive, traditional and market science. Interpretive is based on theories and methods from cultural anthropology. The objective is to understand consumption and its meanings. The methods involve the use of long interviews and focus groups to extrapolate knowledge and information. The traditional approach is based on cognitive, social and behavioral psychology and sociology. The objective is to develop theories and methods to explain consumer decision making behavior and uses experiments and surveys to explain these decisions. Finally, the market science approach is based on theories and methods from economic and statistical data. The objective is to develop and test mathematical models to predict the impact of marketing strategies on consumer choice and behavior. Market science is often used in consumer packaged goods where large amounts of data can be collected on consumer behavior and analyzed to determine the attractiveness of the market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. There are several dimensions of a market analysis including: market size, market growth rate, profitability, industry cost structure, distribution channels, market trends and key success factors. 4. What is market segmentation?
Market segmentation is a way of assessing and analyzing a population and dividing it into smaller groups (or sub groups). The market segment level deals with the affective, cognitive, behavioral and environmental aspects of particular market segments. For example, there is a very large population interested in automobiles. Within that large market are several subgroups: those interested in high-end automobiles, those interested in fuel-efficient hybrids or economy cars or sports utility vehicles etc. By segmenting, breaking up into in smaller groups, the automobile consumer, specific targeted marketing can be implemented so that the consumer group seeking an economy car will be exposed to specific ads that peak their interest and meet their needs. Segmenting the market allows a marketing campaign to be much more efficient with reaching the proper consumer groups with the appropriate messages. 5. Importance of demographics in understanding consumer behavior? Demographics are arguably, the most important aspect of...
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