Marketing Management religion, geography, or nationality.

Subcultures can
Lesson 1: Marketing Behavior have distinct consumer behavior patterns.
Consumer II. SOCIAL CLASS
It refers to an individual, group, or entity that Social class is determined by factors like income,
engages in the process of purchasing and using occupation, and education. It significantly affects a
goods, services, ideas, or experiences to fulfill their consumer's purchasing decisions and preferences.
needs, desires, or wants. Social Factor
Behavior Humans are social beings and they live around
It pertains to the actions and decision-making many people who influence their buying behavior.
processes that individuals or groups go through Humans try to imitate other humans and also wish
when engaging with the marketplace. to be socially accepted in the society. Hence their
Consumer behavior refers to the study of buying behavior is influenced by other people
consumers and the actions and the decision around them.
processes they use to purchase goods and services I. FAMILY
to satisfy their needs and wants, including The primary social group that significantly
emotional, mental, and behavioral responses with influences consumer behavior through shared
the aim of determining what influences consumers’ values, preferences, and purchasing patterns.
buying decisions. II. REFERENCE GROUPS
Why is consumer behavior important? Reference groups are social circles or communities
- Business Success that impact consumer choices. People within these
- Market Segmentation groups tend to share common behaviors and
- Product Development influence one another's buying decisions.
- Competitive Advantage III. ROLES AND STATUS
- Risk Mitigation The social roles individuals occupy in society and
Types of Consumer Behavior their associated status, which can influence their
1. COMPLEX BUYING BEHAVIOR purchasing decisions based on their perceived
This refers to those rare, expensive purchases that societal roles.
will often see the consumer researching their Personal Factors
options thoroughly. Factors that are personal to the consumers
2. DISSONANCE- REDUCING BEHAVIOR influence their buying behavior. These personal
Customer is highly involved in the decisioning factors differ from person to person, thereby
process and is unable to differentiate between producing different perceptions and consumer
different options and brands available in the behavior.
market to fulfill the need. I. AGE
3. HABITUAL BUYING BEHAVIOR Age in consumer behavior signifies the impact of a
A buying behavior of customers where they are person's life stage on their product preferences
making repeat purchases number of times of an and buying habits, with different age groups
already known brand without the process of high exhibiting distinct consumption patterns.
involvement and decisioning. II. INCOME
4. VARIETY-SEEKING BEHAVIOR Income plays a crucial role in consumer behavior,
When a consumer enjoys trying new products and as it determines a person's purchasing power and
seeks variety in their buying patterns. influences the types of products and services they
Factors Influencing Consumer Behavior can afford.
1. Cultural Factor III. OCCUPATION
2. Social Factor Occupation refers to an individual's profession or
3. Personal Factor job, which can influence their purchasing choices
4. Psychological Factor based on their work-related needs and
Cultural Factor preferences.
A group of people is associated with a set of values IV. LIFESTYLE
and ideologies that belong to a particular Lifestyle denotes an individual's overall way of
community. When a person comes from a living, encompassing their values, interests,
particular community, his/her behavior is highly activities, and habits, which can guide their
influenced by the culture relating to that particular consumption patterns.
community. Psychological Factors
I. CULTURE Human psychology is a major determinant of
Culture encompasses the shared values, norms, consumer behavior. These factors are difficult to
and behaviors of a particular community or society. measure but are powerful enough to influence a
It strongly influences consumer preferences and buying decision.
choices. I. MOTIVATION
II. SUBCULTURE Motivation in consumer behavior refers to the
Subcultures are smaller cultural groups within a internal and external forces that drive individuals
larger society, often defined by characteristics like to fulfill their needs and desires through the
purchase of products or services.
II. PERCEPTION desires and longings.
Perception is the process through which consumers - According to Mr. Freud, human personality
gather information and interpret it to form has three parts namely:
impressions and opinions about products, brands, - The ID, the source of all mental energy
and experiences. which drives one to an action;
III. LEARNING - The Super Ego, the internal representation
Learning in consumer behavior encompasses the of what is socially approved—one‘s
acquisition of knowledge, attitudes, and conscience; and
preferences through experiences and exposure to - The Ego, the conscious director of
information, which subsequently influences ID‘ impulses for finding satisfaction in
purchasing decisions. socially acceptable manner.
IV. ATTITUDES AND BELIEFS 3. Learning Model
Attitudes and beliefs are the mental and emotional - All theories of buyer behavior have been
constructs that shape a consumer's preferences basically based on a learning model namely,
and predispositions toward products, brands, or Stimulation-Response or more popularly
companies. known as SR model.
Consumer Buying Behavior Models - Learning is the centrifugal point in the
CONSUMER BUYING BEHAVIOR entire study to human behavior, refers to a
The study of how and why people purchase goods change in the behavior which occurs as a
and services; the decision-making processes from result of practice.
those that precede the purchase of goods or - Pavlovian stimulus or learning of buyer
services to the final experience of using the behavior is widely accepted. He says that
product or service. buyer behavior is capable of being
CONSUMER BUYING BEHAVIOR MODELS manipulated by human drives, stimuli, and
Draw together the various influences on, and the responses of the buyer
process of, the buying decision. - Learning process involves three steps
1. The Black Box Model namely: Drive—a strong internal stimulus
- Explained by Kotler et al (2024) which impels action; Cues determine when
- Suggests consumers will respond in the buyer will respond; and response is the
particular ways to different stimuli after final stage which is needed to fulfill the
they have 'processed' those stimuli in their drive or as a need which was acting as a
minds strong stimulus.
- the model suggests that factors external to - Repeated reinforcement leads to a habit
the consumer will act as a stimulus for formation and the decision process for an
behavior, but that the consumer's personal individual becomes a matter of routine.
characteristics and decision- making 4. Sociological Model
process will interact with the stimulus - According to sociological model, the
before a particular behavioral response is individual buyer behavior is influenced by
generated. society—by intimate groups as well as
- It is called the 'black box' model because we social classes.
still know so little about how the human - As a part of sociological model— two
mind works. important variations can be considered
namely, one that of Nicosia and another
Howard & Sheth. These models are systems
models where human being analyzed as a
system with stimuli as INPUT and behavior
as an output.
4.1 Nicosia Model
- Prof. Francesco M. Nicosia presented his
buyer model in 1966 which attempts to
establish linkages between the marketing
firm and its consumer.
2. Psychoanalytical Model - The essence is how the activities of the firm
- Draws from Freudian psychology (by influence the consumer and result in his
Sigmund Freud). direction to buy.
- According to this model, the individual HIS MODEL LUMPS THESE ACTIVITIES INTO FOUR
consumer has a complex set of deep-seated BASIC FIELDS.
motives which drive him towards certain
buying decisions. The buyer has a private
world with all his hidden fears, suppressed
desires and totally subjective longings. His
buying action can be influenced by
appealing to those
• Field One has two sub-fields namely, the firms
attributes and the consumer attributes. An ad
message from the firm reaches consumer‘s
attributes. Depending on the way the messages
received by the consumer, a certain attribute may
develop and this becomes the input for the field
two.
• Field Two is the area of search and evaluation of Functions of CRM
the advertised product and other alternatives. If 1. Direct Function - necessary to survive in the
this process results in a motivation to buy, it competitive marketplace (Profit, volume,
becomes the input for field three. safeguard)
• Field Three consist of the act of purchase. 2. Indirect Function - necessary to convince
• Field Four consists of use of the purchased item. the customer to participate (Innovation,
There is an output from field Four --- feed back of Market)
sales results to the firm. Roles of a Sales Person within a Business
4.2 HOWARD SHETH MODEL - They are the individuals who serves as
- John Howard and Jagdish Sheth presented relationship builders and as relationship
their buyer model in 1969. promoters.
- It assumes problem solving approach in - Identify the potential customer,
buying and adopts input-output or system approaches the potential customer,
approach in buying. negotiates and encourages to develop a
Analysis of Consumer Behavior mutual trust.
According to the recent research on consumer 3 Stages in Managing the Customer Relationship
behavior on the Internet users (Cotte, Chowdhury, 1. Initiating the relationship
Ratenshwar & Ricci, 2006), there are four distinct 2. Developing the relationship
consumer groups with different intentions and 3. Enhancing the relationship
motivations: Initiating the Relationship = Acquisition Phase
1. Shopping 1. Gathering data from every contact with
2. Exploration customers
3. Entertainment 2. Developing a data strategy to retain
4. Music Videos customers.
5. Information Customer Acquisition
6. Lyric Music - Process of identifying, approaching, and
Customer Relationship Management developing new customer relationships.
- The development and maintenance of One of the most important and critical
mutually beneficial long-term relationships factors in the success of a business.
with strategically significant customers Importance of Acquisition
Einstein College of Engineering. • Does not depend on the volume of customers
- Refers to the principles, practices, and gained but the value that the customer will bring
guidelines that an organization follows • This enables the company to prepare to adapt to
when interacting with its customers. unexpected changes in the market
(Investopedia). Goals of Customer Acquiring
- The combination of practices, strategies • Prospective customers that meets your criteria
and technologies that companies use to • Prospective customers that does not meet the
manage and analyze customer interactions Criteria
and data throughout the customer lifecycle. • This Goal leads an increase on the Return on
Goal of C.R.M Investment
The goal is to improve customer service Important Factor of Customer Acquisition
relationships and assist in customer retention and • Ensuring that a company’s methods and goals is
drive sales growth. aligned with their customer acquiring strategies.
Three Component of CRM according to ECOE • Cultural beliefs and values
- Customer 3 Common Mistakes in Customer Acquisition
- Relationship Strategies for Business
- Management • Not tracking the ROI
Determinants of a Customer Relationship • Choosing Wrong Acquisition Strategies or
1. Trust Platform
2. Value • Weak Offer
3. Understand customer needs and problems; Customer retention refers to the proportion of
4. Commitments; established customer relationships that a small
5. Provide superior after sales support; business can maintain long-term, impacting on its
6. Honesty net growth rate.
7. Passionate interest in establishing and
retaining a long-term relationship
Strategies for Retaining Customers Promote the price value relationship. Establish
• Employee retention is a crucial customer the foundation for a long term relationship.
retention strategy for small businesses, as high Know the associated costs.
turnover can weaken customer relationships and 4. Loyalty Phase
service quality due to changing contact persons or Goal – to extend your customers loyalty. Define
negative work environments. loyalty and customer lifetime value and average
• Enhancing staff satisfaction through career net worth. Counteract defection rates and
growth opportunities and involvement helps patterns. Understand loyalty calculations. Know
decrease turnover. costs associated with their loyalty. Provide them
• Another method involves institutionalizing with accurate customer information.
customer relations by engaging the entire Relationship Attrition is the number of client who
company, offering information, education, do not renew their relationship per month. this is
newsletters, or loyalty programs. expressed as a percentage of the total customers
Customer Defection is the loss of customers who at the beginning of the month. This is a key
stop buying from your business. It can have a indicator of the relationship management
negative impact on your revenue, reputation, and performance of the business and should be
growth. reviewed at least monthly.
Why Customers are Losing The measure of Relationship Retention is an
YOUR SALES TACTICS ARE OUT-OF-DATE. important indicator of how effective your business
Aggressive sales techniques are more likely to drive has been fulfilling the requirements of the
customers away than lead to positive results. customer. In some cases attrition rates can be very
INCONSISTENT high and alarming.
Inconsistent branding, including using your
company's name or logo differently on your own
site and on social networks, plus inconsistent L’6
quality, or service, all have the potential to drive brand strategy - crucial for every business. It defines the
essence of your brand and sets you apart from the
customers away. competition.
YOUR PRODUCT OR SERVICE FAILED TO MEET Why Brand Strategy?
EXPECTATIONS. 1. Memorable - A well-crafted brand strategy helps your
Disappointed customers are likely to share their brand become memorable, increasing customer
disappointment with friends on social media. And recognition and loyalty.
angry customers will post angry reviews for other 2. Competitive advantage - nd strategy ensures you have
a unique positioning in the market, giving you a
prospective customers to see.
competitive advantge
Key Reasons Why Customers Switch 3. Consistency - A solid brand strategy ensures
- Too little contact consistency in your brand messaging, visual identity, and
- Too little individual attention customer experience.
- Poor quality attention Components of a brand strategy
- Generally poor service levels and standards 1. Target audience
2. Brand positioning
Tips for Success
3. Brand messaging
1. Customer Product 4. Brand identity
2. High Perceived Value Benefits of a strong brand strategy
3. Clear Benefit 1. Brand recognition
4. Reliability 2. Customer trust
5. Customer Service 3. Market share
4. Brand equity
6. Guarantee/Warranty
Tips for developing an effective brand strategy
7. Accessibility 1. Market research
8. Complaint Resolution 2. Define your story
9. Positive Experience 3. Consistency is key
Life Cycle Stage Marketing channels for e-commerce label
1. Contact Phase 1. Newspaper and e magazines
Goal – to gain a new customer. Contact through 2. Email marketing
3. Blog
marketing, advertising, telemarketing, personal 4. Online marketing
selling, direct mail, promotion and publicity. 5. Mobile marketing
2. Retention Phase 6. Social media marketing
Goal - to create long term and committed loyal 7. Data mining
customers. Develop a service philosophy. Increase 8. Sponsoring
responsiveness to customers. Identify and close 9. Video (yt or livestream)
Target group - is about the segmentation that we have to
service gaps. Improve the service recovery process.
do to limit the audience to which we will direct our
3. Acquisition Phase campaigns.
Goal – to increase customer retention. Collect Key factors
as much information about the customer as 1. Brand positioning
possible. Understand their purchase condition. 2. Market you are targeting
Offer them post purchase re-assurance. 3. Age range
WHY IS IT IMPORTANT?
Each target group needs a different approach as
they do not have the same interest.
Direct Target Group - includes the individuals
you want to target in an unmediated way with your
project activities. Indirect Target Group -
includes persons in the general environment of the
direct target group.
Defining your target market or group
1. Compile data on your current customers
2. Incorporate social data
3. Check out competition
4. Clarify the value of a product or service
5. Create a target market statement