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TOPIC 1 SUB-TOPIC(s)
Learning Outcome)
Introduction to 1.0 Overview of buyer behavior and consumer analysis (CLO1) CLO1
Consumer 1.1 Understanding key theories and concepts of consumer Apply the theories
Behaviour & buying behavior and marketing intelligence. and concepts of
Market 1.2 The importance of Holistic marketing buyer behaviour.
Intelligence 1.3 Aligning project with organizational strategic goals

1.0 Introduction

Artificial intelligence (AI), natural language processing (NLP), sensor technology, and the Internet of Things (IoT)
have great potential to be game-changing for how marketers understand consumer behaviour. To achieve it,
companies must leverage a balanced symbiosis between consumer buying behaviour and marketing
intelligence. Given its omnipresence and digital presence, the study of consumer behaviour has critical
implications for areas such as marketing, public policy, and ethics. It also helps us learn about ourselves—why we
buy.
Consumer behaviour involves understanding the set of decisions (what, whether, why, when, how, where, how
much, and how often) that an individual or group of consumers make over time. Consumer behaviour is about
far more than buying or acquiring products; it also examines issues regarding the use and disposition of goods,
services, ideas and other offerings.

1.1 Understanding Key Theories and Concepts of Consumer Buying Behavior and Marketing Intelligence

Studying consumer buying behaviour is important for marketers as it enables them to understand the
expectations of consumers. It helps to understand what makes a consumer buy a product. It is important to assess
the kinds of products that are liked by consumers so that they are released to the market. Studying consumer
behaviour also helps marketers decide how to present their products in a way that generates the maximum
impact on consumers. Understanding consumer buying behaviour is the key secret to reaching and engaging
your clients and converting them to purchasing from you.

Model for Consumer Behavior

The stimulus-response model must be properly identified in order to understand customer behaviour. Particular
environmental and marketing stimuli enter the consciousness of the customer, and a set of psychological
processes mix with certain consumer attributes to produce decision-making and purchase decisions. The
marketer's job is to figure out what happens in the consumer's mind between the time external marketing stimuli
arrive and the final purchase decision.

Source: Kotler and Keller (2016)

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The key theories and concepts of consumer behaviour include the Rokeach Value Survey (RVS). Milton Rokeach
(1973) stated that how can one get a better idea of what values motivate or drive a group of people in order to
target, accommodate or reach out to that population? The value survey asks subjects to ‘Rank each value in its
order of importance to you’. Study the list and think of how much each value may act as a guiding principle in
your life.

Rokeach Value Survey (RVS), Milton Rokeach (1973)

Source: Trompenaars, F. and Coebergh, P.H. (2014)

A well-known variant was created by social psychologist Shalom H. Schwartz, who concluded that ten types of
universal values exist: achievement, benevolence, conformity, hedonism, power, security, self-direction,
stimulation, tradition and universalism. The Schwartz scheme was used as the basis for our illustration of the value-
scheme approach.

Advertising agency Young & Rubicam developed the Cross-Cultural Consumer Characterization (4 Cs), a
psychographical segmentation model that places consumers into seven-character groups based on the
motivations that drive them: survival, escapism, security, status, control, discovery, enlightenment. Combining this
segmentation with databases on consumer habits allows for analysis of how brand and media consumption of
each psychographical group changes over time.

Consumer Behaviour model, John Howard and Jagdish Sheth (1969) discuss how do consumer decision-making
processes work. There are four major components that form consumer buying behaviour: stimuli, perception,
learning and output. Howard and Sheth distinguish three levels of problem-solving in their theory:

1. Extensive problem-solving: When the buyer has little information about brands and has not yet developed
well-defined and structured criteria
2. Limited problem-solving: When choice criteria are well defined, but the buyer is still undecided
3. Routinized response behaviour: When buyers have well-defined choice criteria and also have strong
predispositions towards the brand

The model tries to explain brand-choice behaviour over time as learning takes place and the buyer moves from
exclusive to routinized problem-solving behaviour.

Consumer involvement is the degree of personal relevance that the product or purchase holds for the consumer.
High-involvement purchases are very important to the consumer (e.g., in terms of perceived risk) and thus
provoke extensive problem-solving and information processing. Under this scenario, both automobiles and

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dandruff shampoo can represent high-involvement purchases: the automobile because of its high-perceived
financial risk (to most people) and the shampoo because of its high-perceived social risk (to some people). Low-
involvement purchases are not very important, hold little relevance, have little perceived risk, and provoke limited
information processing.

1.2 The Importance of Holistic Marketing

This section illustrates the importance of effective relationship marketing, integrated marketing, internal
marketing, and performance marketing in holistic marketing.

Holistic Marketing Dimensions

Source: Kotler and Keller (2016)

Relationship advertising and marketing targets to construct together pleasing long-term relationships with key
elements on the way to earn and keep their enterprise. The four key elements for courting advertising and
marketing are clients, personnel, advertising and marketing partners (channels, suppliers, distributors, dealers,
agencies), and contributors of the monetary community (shareholders, investors, analysts).

Integrated advertising and marketing happen while the marketer devises sports and applications to create,
communicate, and supply fees for patrons such that “the entire is more than the sum of its parts.” Two key issues
are that (1) many specific advertising and marketing sports can create, communicate, and supply fees; and (2)
entrepreneurs have to lay out and put in force every advertising and marketing hobby with all different sports in
mind. When a medical institution buys an MRI gadget from General Electric, for instance, it expects proper
installation, maintenance, and education offerings to go along with the purchase. All enterprise communications
additionally should be included in order that they give a boost and supplement every different consumer. A
marketer may selectively hire television, radio, print advertising, public members of the family and events; and
PR and worldwide website online communications. So, every advertisement contributes to its personnel and
improves the effectiveness of the others even by handing over a steady logo message at each contact.

Internal advertising and marketing, a detail of holistic advertising and marketing, is the mission of hiring,
educating, and motivating enable personnel who need to serve clients well. Smart entrepreneurs understand
that advertising and marketing sports inside the corporation may be as crucial as, or than the ones directed out
of doors of the enterprise.

Performance advertising and marketing calls for expertising the monetary and non-financial returns to enterprises
and society from advertising and marketing sports and applications. As cited previously, pinnacle entrepreneurs
are more and more going past income sales to interpret what is taking place to marketplace share, purchaser
loss rate, purchaser satisfaction, product quality, and the different measures. They also are thinking about the
legal, ethical, social, and environmental outcomes of advertising and marketing sports and applications.

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Managing cross-cultural relationships model is achieved by making decisions based on merit, encouraging
different perspectives and challenging those behaviours that undermine other cultural or gender groups. It also
means developing attitudes, practices and procedures that provide genuine equality of treatment and
opportunity for all employees. Several specific techniques are particularly valuable.

The best organizations recognize that, in a world where standardization and processes dominate, it is the
combination of different people and the fusion of different ideas that generates progress and promotes success.
The best businesses reach out to customers and employees, managing and valuing cross-cultural relationships
and ensuring maximum productivity, innovation and sales. Cultural diversity can be a valuable differentiator,
enabling organizations to attract and retain the best people and helping them achieve their full potential.

From a simple sales department to an organisational structure where marketers primarily operate in cross-
disciplinary teams, the modern marketing department has changed over time. Some businesses are organised
according to functional expertise, while others are organised according to geography and regionalization,
product and brand management, or market segment management. Some businesses create a matrix
organisation that includes product and market management.

Customer focus and form collaboration among marketing, R&D, engineering, purchasing, production,
operations, finance, accounting, and credit are hallmarks of effective modern marketing firms. Through their
legal, ethical, and social statements and actions, businesses must demonstrate social responsibility. Companies
can use cause marketing to link social responsibility to consumer marketing campaigns in a constructive way. A
nonprofit or government agency uses social marketing to reach out to people directly.

A creative strategic marketing plan is useless unless it is well implemented, which includes identifying and
diagnosing a problem, assessing the problem's location, and evaluating the results. Marketing operations must
be regularly monitored and controlled by the marketing department. Controlling the marketing plan guarantees
that the organisation meets its annual sales, profit, and other objectives. Sales analysis, market share analysis,
marketing expense-to-sales analysis, and financial analysis of the marketing plan are the most important
instruments.

Product profitability, territory profitability, customer group profitability, trade channel profitability, and order size
profitability are all measured and controlled through profitability control. Efficiency control seeks to improve the
sales force's, advertising, sales promotions, and distribution efficiency. Strategy control evaluates the company's
strategic approach to the marketplace on a regular basis, as well as marketing effectiveness and marketing
excellence assessments.

1.3 Aligning Project with Organizational Strategic Goals

Ansoff’s Product Matrix provides a useful means of clarifying your thinking by generating a snapshot of where you
are, and where would you like to be and enabling you to identify strategic priorities. By helping you to see the
gap between the current situation and your goals. The Product Matrix serves to illuminate your situation, your
goals, you're thinking and the route you need to take. Knowing your goal isn’t enough: you need to know what
needs to be done in order to get there. The strategy consists of two elements: portfolio strategy and competitive
strategy. Portfolio strategy sets the goals for each product and market while competitive strategy determines
how to achieve those goals.

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Product/Market Growth Matrix, Igor Ansoff (1957)

Source: Trompenaars, F. and Coebergh, P.H. (2014)

The portfolio strategy explores each product and market combination as geographical growth vectors. These
vectors have three aspects – market needs, market location and product needs (such as required technology).
The three-dimensional nature of Ansoff’s grid highlights the many points of intersection of current and potential
products, market locations and market needs. By seeing how these aspects intersect, it will clarify the strategic
options that are open to your company.

Ansoff’s Product Matrix provides a clear snapshot to help you set and achieve strategic goals. There are four
aspects to using the matrixes that are all connected – the priorities you set in one will inevitably affect the others.
The four aspects are:

1 The geographical growth vector. Know where you are and where you want to be. Assess your current product
and market combinations and decide what and where you would like those combinations to be in the
future.
2 Competitive advantages. Determine your core strengths and what gives you a competitive edge. Then identify
the resources and capabilities needed to achieve goals – know what your company does well and not
so well as the skills, resources and technology it will need to acquire.
3 Synergies. Identify synergies between activities, cut costs and bolster competitiveness.
4 Flexibility. Ensure that your company is prepared for the unexpected and is able to respond quickly and
effectively to change. Make sure that one part of the company can incorporate change without harming other
parts.

End of Topic

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