Consumers referred to all those individuals who buy products and services either for themselves or on behalf of their households. They can be either users of products or services, or responsible for the welfare and wellbeing of those who use them. Consumers buy products or services in order to meet the physical demands of life, apart from using, purchases to indicate their roles in the society, to express their personalities, communicate their attitudes and opinions, stress on the values held by them and also to demonstrate their wealth.
This means that the products and services purchased by consumers not only satisfy their physiological needs but also their psychological and sociological needs. The marketer therefore tries to understand the needs of different consumers and having understood his different behaviours which require an in-depth study of their internal and external environment, they formulate their plans for marketing. It was during the 1950s, that marketing concept developed, and thus the need to study the behaviour of consumers was recognised. Marketing starts with the needs of the customer and ends with his satisfaction.
When everything revolves round the customer, then the study of consumer becomes a necessity. It starts with the buying of goods. Goods can be bought individually, or in groups. Goods can be bought under stress to satisfy an immediate need, for comfort and luxury in small quantities or in bulk. For all this, exchange is required. This exchange is usually between the seller and the buyer. It can also be between consumers.
Relationship between “Marketing and Consumer”.
The relationship between marketing and customer as a business philosophy is concerned with creating and keeping profitable customers, where: * Creating customers requires the organisation to continuously monitor its environment, identify the opportunities presented by the changing consumer needs and make efforts to convert them into actual customers. * Keeping customers implies that organisations make all efforts to minimize threats to their existing customer base which could occur either due to changing customer needs or competitors activities. * Profitable customers are those who have the potential to generate revenues which can offset the costs of the business.
A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. To understand the likes and dislikes of the consumer, extensive consumer research studies are being conducted. These researches try to find out: * What the consumer thinks of the company’s products and those of its competitors? * How can the product be improved in their opinion?
* How the customers use the product? * What is the customer’s attitude towards the product and its advertising? * What is the role of the customer in his family? Need for understanding Consumer by Marketer.
1. Evolving Consumer preference: Change is the norm today. Preference of a consumer is the driving force behind every product or service in the market. 2. Changing Life-Style: Lifestyle reflects a person’s view about the world. Marketers have to monitor these new trends in consumer lifestyle and incorporate these changes in their products. 3. Shorter product life cycles: More variety, more options and consumers are looking for change more often. This result in shorter life cycles of products. 4. Environmental concerns: As environmental awareness amongst consumers grows, firms are coming up with new products that are environmental friendly. 5. Faster Technology adoption: The advent of the Internet has led to an information boom. The internet allows users to compare and review products before they decide on a purchase.
The Psychology of Consumers.
Successful marketing requires that companies fully connect with their customers. Adopting a holistic marketing orientation means understanding consumers - gaining a 360 degree view of both their daily lives and the changes that occur during their lifetime. Gaining a through, in-depth consumer understanding helps to ensure that the right products are marketed to the right consumers in the right way.
Consumer Psychology is about understanding why and how individuals and groups engage in consumer activities, as well as how they are affected by them. A large part of this aspect is focused on the cognitive processes and behaviour, involved when people purchase and use products and services. Without knowing how people process information and how they subsequently act, it would be difficult to explain consumer behaviour. Consumer Psychology is an interdisciplinary subject area and it combines theories and research methods from Psychology, Marketing, Advertising, Economics, Sociology and Anthropology. There are many areas of specialization and they have been rapidly growing. When learning about Consumer Psychology, it is important to establish a broad understanding of why consumers behave and think the way they do.
The study of consumers helps the organisations to improve their marketing strategies by understanding issues such as:- * The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products, and retailers); * The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, 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; and * How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
A set of psychological processes combine with certain consumer characteristics to result in decision process and purchase decision. The marketer’s task is to understand what happens in the consumer’s consciousness between the arrival of the outside marketing stimuli and the ultimate purchase decisions. This paper explores individual consumer buying dynamics or the psychology that are influenced by four key processes- Motivation, Perception, Learning and Memory fundamentally influence consumer response to the various market stimuli. A. Consumer Motivation.
Motivation is the driving force behind any action. It is defined as the psychological force that determines the direction of a person’s behaviour, the level of effort, and the level of persistence in the face of obstacles. A motive is the inner force that simulates and compels certain behavioural response and provides specific directions towards that. Customers have different motivations for buying a variety of products or availing of many services.
The Drive Theory of motivation focus on biological needs, the desire for a product, service or experience arises from some inner drives both physiological and psychological, which led to the purchase act. According to Expectancy Theory, consumers’ actions are mainly driven by expectations of desirable outcomes rather than a push from inside. The specific manner in which a need is satisfied depends on the consumer’s unique history, personal belief, learning or experiences and the environment.Maslow’s theory of motivation explains how people are driven by different needs at a particular point of time. Five major needs which is explained in a hierarchical format in an ascending order are
Mc Guire in his theory proposed a motive classification system divided into various needs as consistency, attribute causation, categorical, cues, self-expression, ego-defence, reinforcement, affiliation, role model, novelty and assertion. B. Perception.
Our perception is an approximation of reality. Human brain attempts to make sense out of the stimuli to which we are exposed and imagine a view. Several sequential factors influence our perception. * Exposure involves the extent to which we encounter a stimulus. For example, we are exposed to numerous commercial messages while driving on the freeway: bill boards, radio advertisements, bumper-stickers on cars, and signs and banners placed at shopping malls that we pass. Most of this exposure is random—we don’t plan to seek it out. However, if we are shopping for a car, we may deliberately seek out advertisements and “tune in” when dealer advertisements come on the radio or TV. Exposure is not enough to significantly impact the individual. In order for stimuli to be consciously processed, attention is needed.
* Attention is actually a matter of degree. Our attention may be quite high when we read directions for getting an income tax refund, but low when commercials come on during a television program. * Interpretation involves making sense out of the stimulus. For example, when we see a ‘red’ can, we may categorize it as a Coke. * Relevance, Consumers are more likely to attend to pleasant stimuli but when the consumer cannot escape, very unpleasant stimuli are also likely to get attention. Thus, many irritating advertisements are remarkably effective.
* Repetition one of the most important factor. Consumers often do not give much attention to a stimulus, particularly a low priority one such as an advertisement at any one time, but if it is seen over and over again, the cumulative impact will be greater. * Surprising stimuli are likely to get more attention; survival instinct requires us to give more attention to something unknown that may require action. * A greater contrast, is the difference between the stimulus and its surroundings as well as greater prominence (e.g., greater size, center placement) also tend to increase likelihood of dealing it. C. Consumer Learning.
Learning involves changes in an individual’s behaviour arising from experience. Learning can be deﬁned as a relatively permanent change in behaviour which is linked to experience. The experiences that affect learning can be direct ones or indirect ones. Learning theorist believe that learning is produced through the interplay of drives, stimuli, cues, responses and reinforcement.
1. Internal drive: Encourages an individual to take action to learn. The likelihood that learning will occur may be inﬂuences by an emotional response such as fear or happiness.
2. Cue stimuli: This is when a consumer encounters an external stimulus that encourages learning. Such stimulus could be an advertisement, a point-of-purchase display or perhaps a leaf-let. Cues are not generally as inﬂuential as internal drives in the learning process.
3. Response: This is the way in which consumers respond to both the internal drive and cue stimuli. If the internal drive comes together with the cue, then the likelihood of purchase increases. However, future purchases will be determined on the experiences they have after having tested the product and not on the combined drive and cue response.
4. Reinforcement: The consumer experiences a positive outcome of some kind as the result of having consumed or purchased a particular product or service. For example, it may be due to affirmative feedback from others or from the products functionality. If the product purchase is not positively reinforced, the consumer will continue to try different purchases until their needs are satisﬁed.
5. Retention: This is whether or not the learned material reaches long-term memory and can subsequently be remembered. Most kinds of learning are based upon an association between two mental representations (Dickinson, 1980). For example, we may learn to associate the brand Mercedes-Benz with luxury. Much of what the consumer learns is incidental, even though some learning is intentional. There are three main schools of thought as to how consumers learn: behavioural theories, cognitive theories and social theories .