INSTITUT SUPERIOR DE COMMUNICATION ET

DE GESTION
(ISCG)

Porto Novo

Notes on

Consumer Behaviour

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 Table of contents

Consumer Behavior

Motivation and consumer behavior

Consumer satisfaction

Customer satisfaction and orientation in marketing insight

Issues in consumerism

Psychology in marketing

Nature of communication in consumer behavior

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 Consumer Behaviour
Communication with consumers and receiving feedback from them is a crucial part of consumer
behavior which is of interest to marketers. That is, consumer behavior involves the acquisition and
use of information. Understanding and managing the production, acquisition, consumption, and
disposal of goods, services, ideas, and experiences is the focus of businesses, governments, and
consumer organizations. Consumers may consist of individual or groups. Consuming groups
include families, clubs and organizations, purchasing units within organizations, and government.
On the other hand, acquiring includes activities such as receiving, producing and definitely,
purchasing. Also, behaviours such as collecting, preparing, wearing, sharing and storing equally
play important roles in consumer behavior. Ultimately, disposing spans a range of behaviours that
includes giving, throwing away, recycling and depleting.

Each of these behaviours can involve goods, services, ideas and experiences. Hence, it is the
interaction between these processes that shapes the consumption behavior of a consumer or group
of consumers.

The Nature of Consumer Behaviour

Individuals develop self-concepts and subsequent lifestyles based on a variety of internal and
external influences. These self-concepts and lifestyles produce needs and desires, many of which
require consumption decisions to satisfy. As individuals encounter relevant situations, the
consumer decision process is activated. This process and the experiences and acquisitions it
produces in turn influence the consumers’ and lifestyle by affecting their internal and external
characteristics.

Our view of ourselves and the way we try to live are determined by internal factors such as
personality, values, emotions and external factors such as culture, age, and friends. Our view of
ourselves and the way we try to live results in desires and needs that we bring to the multitude of
situations we encounter daily. Many of these situations will make us to consider a purchase. Our
decision, and even the process of making it, will cause learning and may affect many other internal
and external factors that will change or reinforce our current self-concept and lifestyle.

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External Influences

We organize our discussions of external influences from large-scale macro-groups to smaller, more
micro-group influences. Culture is perhaps the most pervasive influence on consumer behavior.
For instance, while Americans share many values and consumption behavior, there is also rich
diversity and ongoing change in this society that create both marketing opportunities and unique
social energy. Other external influences like income, education, occupation, age and location also
play significant roles in influencing consumer behavior.

Internal Influences

Internal influences begin with perception, the process by which individuals receive and assign
meaning to stimuli. This is followed by learning, that is, changes in the content or structure of
long-term memory; motivation - the reason for a behavior; personality – an individual’s
characteristic response tendencies across similar situations; and emotions – strong, relatively
uncontrolled feelings that affect our behavior.

Self – Concept and Lifestyle

The self-concept is the totality of an individual’s thoughts and feelings about him – or herself.
Lifestyle is, quite simply, how one lives. It includes the products one buys, how one uses them,
what one thinks about them, and how one feels about them. It is the manifestation of the
individual’s self-concept – the total image the person has of him or herself as a result of the culture
he or she lives in and the individual situations and experiences that comprise his or her daily
existence. It is the sum of the person’s past decisions and future plans.

Situation and Consumer Decisions

Consumer decisions result from perceived problems and opportunities. Consumer problems arise
in specific situations and the nature of the situation influences the resulting consumer behavior. It
is important to note that for most purchases, consumers devote very little effort to the decision

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process, and emotions and feelings often have as much or more influence on the outcome as do
facts or product features. Despite the limited effort that consumers often devote to the decision
process, the results have an important effect on the individual consumer, the firm, and the larger
society.

Informed Individuals

Most economically developed societies are legitimately referred to as consumption societies. Most
individuals in these societies spend more time engaged in consumption than in any other activity.
Therefore, knowledge of consumer behavior can enhance our understanding of our environment
and ourselves. Such an understanding is essential for effective purchase behavior and reasoned
business ethics.

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 MOTIVATION AND CONSUMER BEHAVIOUR
Why do people buy and consume the products, services, experiences, and brands they do? This
question is key to consumer behavior. Motive is a critical factor that shapes consumption.
Motivation is an inner drive that reflects goal-directed arousal. In a consumer behavior context,
the result of this internal drive is a desire for a product, service, or experience. The motivated
consumer is aroused, ready, and willing to engage in an activity. This section deals with the
application of motivational concepts to the realm of consumer behavior.

Classic Theories of Motivation

Freud’s Theory – believes that the human psyche is broadly divided into the conscious and the
unconscious. The ego represents that conscious mind. It is composed of perceptions, thoughts,
memories, and feelings. The ego gives the personality a sense of identity and continuity. The
unconscious mind is called the id. It includes all the instincts and psychic energies that exist at
birth. In this sense, the id is biologically determined. The motivations that derive from the
unconscious mind are both innate and unique to the individual.

Some kinds of consumer behaviours are driven by unconscious motives. Consumers often have
difficulty articulating exactly why they like something or why they have purchased something.
For this reason, marketing researchers often make use of techniques that facilitate an understanding
of unconscious motives.

Jung’s Theory – Jung specified that there were forces beyond the individual (the collective
unconscious) that play an important role in directing human behavior. He conceived of the
unconscious as being subdivided into the personal unconscious and the collective unconscious.
The personal unconscious holds previously conscious experiences that have been repressed,
forgotten, suppressed, or ignored. For the collective unconscious theory, Jung saw archetypes as
an important bridge between the way humans consciously express their thoughts and a more
instinctive, visual form of expression. Archetypes are a common reservoir of images that represent

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the collective unconscious. Jung’s approach is important for marketers because it provides a way
to explore myths, images, and symbols. In turn, myths and symbols are the building blocks for
creating marketing phenomena, such as advertisements and promotions.

Maslow’s Theory – Maslow’s hierarchy of needs appears as a pyramid, with a broad base of
the pyramid representing the most dominant needs. Maslow’s approach specifies that needs are
arranged in a sequence from lower-level needs to higher-level needs as depicted below:

Self-fulfillment Self-actualisation

Prestige, status, self-respect Ego

Affection, friendship Social

Protection, order, stability Safety and security

Food, water, air, shelter, sex Physiological

Altogether, five needs are identified as illustrated in the diagram above. The lower-level needs,
starting with the physiological, are considered to dominate the higher-level needs. That is,
consumers must satisfy lower-level needs before they begin to pursue higher-order needs. The
highest level of need according to Maslow, is related to self-actualisation. Consumers desire to
live up to their full potential. They want to maximize the use of their skills and abilities. This need
for self-actualisation only becomes activated if all four of the lower-level needs have already been

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satisfied. Maslow’s need hierarchy provides a useful summary or inventory of human needs that
may guide consumer behavior.

Murray’s Theory– Murray believes that people differ in their priority ranking of needs. He
had a view of the self and motives that derived from Western psychology, and his theory is culture-
bound, that is, it does not necessarily apply outside the society where the theory was developed.
However, because his inventory of motives is so comprehensive it is more adaptable to different
cultural traditions. One of the major criticisms of Murray’s work is that it is just a lengthy inventory
of needs, which is difficult and impractical for marketers to use. Murray identified acquisition
needs (to gain possession or property), order needs (to put things in order, achieve cleanliness,
arrangement, organization, balance), and retention needs (to retain possession of things: to hoard:
to be frugal, economical, and miserly) as among the most basic human needs.

Cross-Cultural Examination of Motives

The study of motivation centers on why people begin, stops, and persist in specific actions in
particular circumstances. Marketers are interested in this at different levels. For example, they are
interested in the basic needs for the acquisition of possession or the particular desire for a type of
product, but they are also interested in understanding and predicting why a particular consumer in
a specific social, cultural setting buys a special brand. Hence the need to discuss the five types of
motives as follows:

The Achievement Motive – The Achievement need is defined as the need to experience emotion
in connection with evaluated performance. Where the individually oriented achievement motive
implies striving for its own sake, the socially oriented achievement motive has the goal of meeting
expectations of significant others. Thus, the motive to achieve goals can be for social and collective
reasons.

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The Power Motive – The Power need is defined as the need to have control or influence over
another person, group, or the world at large. There is a general conclusion that people who have a
high need for power strive to be assertive. Although everyone may have some desire for agency
and control, assertiveness may not be the control strategy of choice. For example, people in many
Asian cultures appear to use what is termed secondary control. This involves accommodating
existing circumstances and may mean limiting individualism in order to fit with present
circumstances. One socially acceptable way for people to fulfill their power need is by collecting
prestige possessions, or symbols of power.

The Uniqueness/Novelty Motive – The Uniqueness need, that is, the need to perceive oneself as
different from others, is referred to as “pursuit of difference”. Individuals in independent-self
cultures express the desire to be independent and unique. Many cultures in particular put a
premium on standing out and being unique. The need for uniqueness is closely related to self-
esteem motives. Individuals with an independent view of self-seek to maintain self-esteem by
distinguishing and differentiating themselves from others. One way consumers can differentiate
themselves is through attitudes and beliefs. Another way is through uniqueness attributes, for
example, physical qualities, information or experiences.

The Affiliation Motive – The Affiliation need is defined as the need to be with people. One of
people’s most basic social behavior is the urge for contact. The universality of the need to belong
is revealed by the use of ostracism as a punishment in many societies. Research reveals that
feelings of belonging are strongly motivating. However, despite the importance of belonging, in
some cases the urge for contact and shared action can take primitive and even destructive forms
such as mob behaviuor. It has been observed that in industrialized societies, consumers feel more
and more detached as years unfold. As a result, consumers sometimes experience a strong
motivation to reconnect and associate with groups. Many consumers are eager to find ways to
overcome feelings of detachment, depersonalization and isolation. Advertisers often try to position
products and services as symbols of affiliation or as a means that will enable consumers to achieve
connection with people.

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The Self-Esteem Motive – This is the need to maintain a positive view of one’s self. Studies show
that some people take credit for successes, explain away failures, and see themselves as better than
most others in most ways. This is referred to as Self-enhancing bias. This is a noticeable difference
between the American and the Japanese cultures. While this motive is seen as fundamental in the
Western culture, its appeals are perceived quite negatively in the Japanese culture.

Consumer Involvement
Motives need to be understood in terms of the effort that consumers are willing to commit. When
motivation to achieve a goal is high, consumers are likely to invest substantial effort. Pursuing
goals, the motivated consumer may feel involved- interest, excitement, anxiety, passion,
engagement, and flow.

Involvement can include heightened thinking and processing information about the goal object,
referred to as cognitive involvement. Involvement can also or instead include heightened feelings
and emotional energy, referred to as affective involvement. Advertisements that encourage people
to experience the feelings and sensations associated with a product are stimulating affective
involvement. On the other hand, adverts that provide a detailed enumeration of information about
a product or websites that include comprehensive brand comparisons appeal to cognitive
involvement.

Consumer involvement is a function of the goal object, the individual, and the decision situation.
Involvement is the perceived level of personal importance or interest evoked by a stimulus within
a specific situation. Therefore, a consumer’s involvement level varies with the person’s
interpretation of a given stimulus and according to his or her personal values or interest.
Involvement is equivalent to a person’s activation level at a particular moment of time.
Involvement becomes activated when personal needs, values, or self-concept is stimulated within
a given situation.

Some products and brands may generate many feelings and thoughts; others may stimulate almost
no feelings or thoughts. The same product can have different involvement levels across people.

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One reason for this difference across people is that all consumers do not share the same motivations
and needs at the same time. Enduring involvement represents the long term interest that a consumer
has in a product class. Products that consumers continue to be involved with over time are central
to a consumer’s values, needs, or self-concept.

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 CONSUMER SATISFACTION
Individual post-purchase consumer behavior is of growing concern to marketers as they shift their
focus from inducing consumers to purchase products and services to developing profitable long-
term relationships with them. Long-term relationships are more likely if marketers concern
themselves with how best to satisfy customers in both the short and long run. Therefore, there is a
need to discuss factors that lead to satisfaction and the outcomes of satisfaction for consumers and
marketers.

Satisfaction can be described as a judgment of a pleasurable level of consumption-related

fulfillment, including levels of under-fulfillment or over-fulfillment. Consumers can make
satisfaction judgments with respect to any or all of the aspects or stages of product and service
experience. As a result, each aspect or stage becomes a potential point of differentiation for a
market offering. However, it is a mistake to assume that all judgments sum up to an overall level.
Satisfaction is more complex than that. It should be noted that satisfaction emerges across the
service or product experience and even when uncomfortable things happen, events may evolve in
such a way as to make an experience satisfying overall.

Satisfaction focuses on fulfillment - Fulfillment could come in different varieties. For example,
consumers may feel fulfilled or satisfied with the removal of a negative state (e.g. repair of a
computer hardware problem). Or the feeling of over-fulfillment and satisfaction with a product or
service experience that provides unexpected pleasure. Also, consumers can experience satisfaction
when a product or service experience gives greater pleasure than anticipated in a given situation
even though it does not exactly fill them up, that is, under-fulfillment.

Satisfaction is an internal state - This means accounts of satisfaction must highlight the meanings
that operate in the customers’ field of awareness. Judgments of satisfaction vary and different
customers make different satisfaction judgments about the same level of performance. For
instance, we cannot categorically say that “product quality leads to satisfaction” without examining
customer’s experience.

Hence, dissatisfaction could be defined as an unpleasant level of consumption-related fulfillment.

However, factors that contribute to higher levels of satisfaction may sometimes differ from those
that contribute to higher levels of dissatisfaction.

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Causes of Satisfaction

The following have been stated as the identifiable causes of satisfaction by various authors:

a. Positive change from an earlier perceived negative situation will give a consumer the
satisfaction desired.
b. Satisfaction takes place where the sense of achievement surpasses what is originally
predicted by the consumption of a good or service by the consumer.
c. Satisfaction is tailor-made to the requirements of the consumer. Hence, the level of
satisfaction.

Relationship between Performance and Satisfaction

Many managers believe that product performance or service quality paves the road to satisfaction.
Mission statements, company slogans and promotional materials often claim quality as an ideal
and assert a close relationship between quality and satisfaction. Despite the fact that service or
product quality is a frequent organizational goal, a single managerially useful meaning of quality
and performance eludes us.

There is no such thing as objective quality (judgment are always based on perception), and
managers interested in customer satisfaction need to find out how customers (who buy the product
or service) perceive quality. Nevertheless, looking across many descriptions of quality, one can
conclude that perceived quality involves preferences, is based on comparative standards, differs
among customers and situations, and resides in the use or consumption of the goods or service.
Moreover, quality has both cognitive (thinking) and affective (emotional) aspects.

Perceived quality is an important predictor of customer satisfaction. It is suggested that quality –

satisfaction – purchase intention. Although not absolute, research revealed a significant
relationship between quality (product performance) and customer satisfaction.

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Relationship between Employee and Customer Satisfaction

Corporate slogans and mission statements sometimes link customer satisfaction to employee
satisfaction. The effect may be most pronounced in the service industry where satisfaction with
contact employees is vital to overall customer satisfaction. Although it seems simple and obvious
to say employee satisfaction is linked to customer satisfaction, translating knowledge of that link
into managerial action is not so easy.

The critical incident technique is a systematic procedure for recording events and behaviours
observed to lead to success or failure on specific tasks. This technique found out that employees
and customers mostly had shared notions of the sources of customer satisfaction and
dissatisfaction. One implication is that the customer is not always right and does not always behave
in acceptable ways and a second implication is that contact employees generally want to provide
good service and are proud of their ability to do so.

Relationship between Choice and Satisfaction

In most situations, consumers use features of product or service choice to form satisfaction
judgments. In other cases however, the features that drive choice and satisfaction may differ, or
they may differ in importance to consumers. Satisfaction instead is driven by feelings of harmony
with nature, connection to a community of adventurers, and personal growth experiences that result
from the consumption experience, not the pre-purchase choice process.

There are a lot of reasons why choice criterion may differ from satisfaction drivers. One is that
consumers have trouble foreseeing the possible problems and benefits of consumption. A related
reason for differences between choice and satisfaction drivers might be that aspects of the
consumption situation that directly affect satisfaction and dissatisfaction are unpredictable and
hence cannot be used as choice criterion.

Another related issue is that consumers’ satisfaction judgments focus on purchase outcomes,
whereas firms emphasize differences between products or brand attributes in their marketing
communications. If a company can distinguish itself from competitors in terms of consumer
outcomes, it may be able to more closely align choice criteria and satisfaction drivers.

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Consequences of Satisfaction and Dissatisfaction

In response to satisfying or dissatisfying purchase and consumption experiences consumers may

opt to exercise one or more of four behavioural responses as follows: exit, voice, continued
patronage or twist.

Exit – A consumer will exit when there is a dissatisfying purchase and consumption experience.
At a minimum, the dissatisfied consumer may attempt to avoid that product or service, selecting
other alternatives whenever they are accessible and feasible. It should be noted however, that not
all decisions to exit are based on dissatisfaction, and not all dissatisfied consumers exit.

Voice – Voice can take several different forms including compliments an organization may receive
when it delivers an especially satisfying outcome, complaints to the company about performance
failure, negative and positive word-of-mouth with other consumers, or third-party complaints or
compliments. Consumers’ complaints and compliments to firms provide valuable feedback, and
their interpersonal communications, both positive and negative; strongly influence other
consumers’ purchases.

Continued Patronage – Satisfaction is a relatively temporary post-purchase state that reflects how
the product or service has fulfilled its purpose. Customer loyalty is a deeply held commitment to
re buy or re- patronise a preferred product or service consistently in the future, despite situational
influences and marketing efforts having the potential to cause switching behavior. Thus, continued
patronage includes both readiness to act (repeat purchase) and resistance to alternatives.

Twist – This refers to a situation where consumers express themselves through actions other than
switching, voice, or loyalty. Twist refers to positive and negative ways in which consumers
restructure meanings, roles, and objects in the marketplace. That is, the consumer reacts to
consumer satisfaction or dissatisfaction with novel behaviours anticipated by the offering
organization. An example of a positive twist is where loyal customers to a book store helped in the
relocation of the store from one location to another.

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 CUSTOMER SATISFACTION AND ORIENTATION IN
MARKETING INSIGHT
High involvement and low involvement affect attention, information search, purchase, and
consumption satisfaction differently. Thus, the marketing strategies used vary with level of
involvement, and marketers use involvement to identify segments in the market.

High-Involvement Purchase and Consumption

When consumers are highly involved with a purchase, they are willing to expend greater levels of
shopping effort. The higher the level of involvement, the greater the amount of time and money
that consumers are willing to spend and the greater number of stores they will visit. High
involvement increases attention and more importance is attached to the stimulus object. The
purchase process is more complex for highly involved consumers, and they are motivated to make
a careful purchase decision. They search extensively for relevant information about products or
brands that are personally relevant. They consciously evaluate alternatives and make detailed
comparisons before making a final selection.

Purchase involvement is positively related to search activities. That is, consumers with high
involvement place greater importance on major information sources and engage in an active search
process. However, they are more likely to generate negative cognitive responses to product-related
messages. They are more likely to value purchasing and shopping activities than consumers of low
involvement.

Highly involved consumers often show more satisfaction with products. Since high involvement
motivates consumers to spend time and effort to avoid post-purchase dissatisfaction, these
consumers generally report higher satisfaction and less negative disconfirmation with the product
they purchase. As in many areas of consumer behavior, it is hardly known how involvement levels
ebb and flow over time and how the relationship between involvement and other variables, such
as satisfaction, may vary over time.

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Low-Involvement Purchase and Consumption

In many purchase situations, the consumer rarely cares, hence a low involvement. Low-
involvement consumers are not active information seekers or active information processors. They
tend to make little comparison among brands or among product attributes. Low-involvement
consumers do not see a lot of differences between brands and view them as reasonable substitutes
for one another. The purchase decision may result from simple recognition of the product on the
shelf. Since low-involvement purchasers are not paying much attention, they may get easily
confused, or they may make mistakes. In many instances, however, the low involvement purchaser
may not really care too much about the mistakes. If a purchase error is made, the consumer might
not even notice. Consumption experiences may not involve much arousal or involvement.

Low-Involvement Marketing Strategies

Marketers of a product that evokes low involvement may consider strategies that will increase
consumers’ involvement with a product or brand over a short period or for longer periods. The
level of involvement consumers have with a certain product can be influenced over long periods
of time by creative marketing strategies, such as effective advertising or product usage campaigns.

Also, marketers may link low-involvement products with high-involvement issues, such as health.
For instance, marketers may link low-involvement food products with a high-involvement health
attribute such as cancer prevention. Another way to raise involvement levels is to adopt the
advertising medium to the product category. Thus, marketers can raise the involvement level of
the situation by promoting their product in a high-involvement medium (the Web) instead of a
low-involvement medium (the radio).

Though, brand managers of low-involvement products may not be thrilled with the idea that
consumers do not really care about their products. On the other hand, consumers in a low-
involvement situation are willing to try unfamiliar brands without a full search for information and
without forming a strong preference first. Complete evaluation of the brand comes after the brand
has been purchased and used. Thus, marketers can appeal to low-involvement consumers through
extensive distribution networks or through clever in-store displays.

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Involvement as a Segmentation Variable

Involvement can be a useful segmentation variable. For instance, consumers can be segmented
into the following four groups based around their involvement with a product category and with
particular brands:

 Brand loyalists – those who are highly involved both with the product category and with
particular brands
 Information seekers – those that are highly involved with a product category but who do
not have a preferred brand.
 Routine brand buyers – those who are not highly involved with the product category but
are involved with a particular brand in that category.
 Brand switchers – those who are not involved with the product category or with particular
brands.

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 ISSUES IN CONSUMERISM
The worldwide drive toward market-directed economies is evidence that consumers want freedom
and choices in markets. Command economies are simply not able to meet needs as observed in
China. Although there is much talk about the world as a global village, but the world has surely
not gotten there yet. The disparity in the quality of life between an individual in the suburbs of an
African country is still so enormous from that of his Western counterpart. Even in the face of a
serious global economic downturn, the challenges faced by consumers, and marketing managers,
in the advanced economies seem minor by contrast. Hence, this section intends to discuss the
potential issues relating to marketing evaluation alongside consumer satisfaction measurements.

Can Consumer Satisfaction be measured?

There are limits to interpreting any measure of consumer satisfaction when trying to evaluate
macro-marketing effectiveness. One basic issue is that satisfaction depends on and is relative to
your level of aspiration or expectation. Less prosperous consumers begin to expect more out of an
economy as they see the higher living standards of others. Also, aspirations levels tend to rise with
repeated successes and fall with failures. Products considered satisfactory today may not be
satisfactory the next day, or vice versa. Similarly, consumer satisfaction is a highly personal
concept. Thus, looking at the “average” satisfaction of a whole society does not provide a complete
picture for evaluating macro-marketing effectiveness. Although, efforts to measure satisfaction are
useful, any evaluation of macro-marketing effectiveness has to be in part subjective.

Measuring the marketing effectiveness of an individual firm is also difficult, but it can be done.
Expectations may change just as other aspects of the market environment change; hence, firms
have to do a good job of coping with the change. Individual business firms can and should try to
measure how well their marketing mixes satisfy their customers.

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How should Marketing be Evaluated?

There is a need for marketing to satisfy consumers at a cost that consumers consider a good value.
Therefore, it is useful to distinguish between two levels of marketing. Managerial (micro)
marketing concerns the marketing activities of an individual firm, whereas macro-marketing
concerns how the whole marketing system works. Some complaints against marketing are aimed
at only one of these levels at a time. Also, different nations have varied social and economic
objectives. Since consumer satisfaction is our objective, marketing’s effectiveness must be
measured by how well it satisfies consumers.

Micro-marketing Cost is too Much

Many firms implement highly successful marketing programmes, while others are still too
production-oriented and inefficient. For customers of the latter firms, micromarketing is often
costly. Therefore, many consumers are not satisfied. The situation is further compounded because
majority of consumer complaints are never reported. In cases where they are reported, most of
these cases never get fully resolved. Further evidence shows that too many firms are too production
oriented and that is the reason why many new products fail. Generally speaking, marketing
inefficiencies are due to one or more of three reasons:

 Lack of interest in or understanding of the sometimes fickle customer.

 Improper blending of the four P’s – caused in part by over-emphasis on internal problems
as contrasted with a customer orientation.
 Lack of understanding of or adjustment to the market environment.

Any of these problems can easily lead to business failures. A firm cannot create value if it does
not have a clue about what customers think or say. Another sign of failure is the inability of firms
to identify new target markets and new opportunities. A new marketing mix that is not offered
does not fail, but the lost opportunity can be significant for both a firm and society. Too many
managers focus on whatever strategy seems easiest rather than seeking really new ways to satisfy
customers. For reasons like these, marketing does cost too much in many firms.

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Macro-Marketing does not Cost too Much

Some will argue that the macro-marketing system causes a poor use of resources and lead to an
unfair distribution of income. This implies that some marketing activities by individual firms
should not be permitted- and because they are, our macro-marketing system does a less-than-
satisfactory job. It is true that firms in a market-directed economy try to carve out separate
monopolistic markets for themselves with new products. But consumers do not have to buy the
new product unless they think it is of better value.

The idea that firms can manipulate consumers to buy anything the company chooses to produce is
simply not true. A consumer who buys a soft drink that tastes terrible would not buy another bottle
of that brand, regardless of how many times it is advertised. Consumer needs and wants change
constantly. Marketing’s job is not just to satisfy consumer wants as they exist at any particular
point in time. Rather, marketing must keep looking for new and better ways to create value and
serve consumers. There is no doubt that marketing caters to materialistic values. Though some
people may disagree as to whether marketing creates these values or simply appeals to values
already there.

Some critics argue that macro-marketing system is flawed because it does not provide solutions to
important problems, such as questions about how to help the homeless or minorities who have
suffered discrimination. Many of these people do live in dire circumstances but is it as a result of
a market-directed system? There is no doubt that many firms focus their effort on people who can
pay for what they have to offer. But, as the forces of competition drive down prices, more people
are able to afford more of what they need. Therefore, the matching of supply and demand
stimulates economic growth, creates jobs, and spreads income among more people. In other words,
a market-directed economy makes efficient use of resources.

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 PSYCHOLOGY IN MARKETING
The study of consumers helps firms and organizations to improve their marketing strategies. The
way people respond to marketing can be better understood when marketers apply common
psychological principles to their strategies. The psychology of marketing gives marketers an
understanding of human to help influence consumer behavior to make purchase or take action in a
specific manner.

The inter-relationship between Psychology and Marketing

Psychology as an academic and applied discipline involves the scientific study of mental functions
and its role in social behaviours. It has the immediate goal of understanding individuals and groups
by both establishing general principles and researching specific cases and by many accounts aims
to benefit society.

Marketing on the other hand is the process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods and services to create exchanges that satisfy individual
and organizational objectives. This definition stresses the importance of beneficial exchanges that
satisfy the objectives of both those who buy and those who sell. To satisfy both buyers and sellers,
Marketing seeks.

 To discover the needs and wants of prospective customers and

 To satisfy these needs

These prospective customers include both individuals buying for themselves and their households
and organizations that buy for their own use such as manufacturers or for resale such as wholesalers
and retailers. Before a marketer or any business person can get a customer to buy his/her product,
the marketer has to understand the way the prospective customer thinks to be able to influence
him/her to buy the product being presented and this is where Social Psychology comes in. Social
Psychology is the study of how humans think about each other and things in the society and how
they relate with them. Social Psychologists study such topics as the influence of others on
individual’s behaviour and the formation of beliefs and attitudes. An organisation’s marketing
activity focuses on assessing and satisfying consumer needs and this is where Consumer

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Psychology comes in. Consumer Psychology is a specialty area that studies how our thoughts,
beliefs, feeling and perception influence how people buy and relate to goods and services.
Consumer Psychology employs theoretical psychological approaches to the understanding of
consumers. This field is a sub-specialty of Industrial –Organizational Psychology and is also
known as the Psychology of Consumer Behaviour or the Psychology of Marketing. According to
Perner (2008), a Professor of Consumer buying and Decision Making,” memorizing the definition
of Consumer Psychology may not be necessary”, rather he stressed the importance of the following
useful points from the definition and these are:

i. Behaviour occurs either for the individual or in the context of a group (for example,
friends can influence what kind of clothes a person wears) or an organization (example,
people on the job make decisions as which product the firm should use).
ii. Consumer behaviour involves the use and disposal of products as well as the study of
how they are purchased. Marketers are interested on how a product is used as it
influences how a product is best positioned (since many environmental problems result
from product disposal (e.g. garbage piling up at landfills)
iii. Consumer behaviour involves services and ideas as well as tangible product.
iv. The impact of consumer behaviour on society is also of relevance as aggressive
marketing of high fat foods may have serious effect on the national health and
economy.

It is also important to note that Consumer psychologists study a variety of topics which includes:

 How consumers choose businesses, products and services

 The thought processes and emotions behind consumer decisions
 How environmental variables such as friends, family, media and culture influence buying
decisions
 What motivates people to choose one product over another?
 How personal factors and individual difference affect people's buying choices
What marketers can do to effectively reach out to their target customers.

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The Importance of the Study of Consumer

The study of consumers helps firms and organizations improve their marketing strategies by
understanding such issues as:

i. The psychologies of how consumers think, feel, reason and select between different
alternatives like in brands, products and retailers.
ii. The behaviour of consumers while shopping or making their marketing decisions.
iii. How limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome
iv. The psychology of how the consumer is influenced by his or her environment for
example, culture, family, media, etc.
v. 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
vi. How marketers can adapt and improve their marketing campaigns and marketing
strategies to effectively reach the consumer.

The Application of Consumer Behaviour

There is the tendency for one to think of a consumer as just one person who identifies a need and
makes a purchase and then disposes of the product during the three stages involved in the
consumption process. In many cases, different people play a role in this sequence of events. This
brings us to the application of Consumer Behaviour. There are four major applications of
Consumer Behaviour and these are:

1. Marketing Strategy: Managers, advertisers and marketing professionals take time to study
consumer behaviour because understanding consumer behaviour is good business. The basic
marketing concepts states that firms exist to satisfy needs and marketers can only satisfy these
needs to the extent that they understand the people or organizations who will use the products and
services they are trying to sell. For a marketing strategy to be successful or in order to make a
better marketing plan there is need for the marketer to incorporate knowledge about consumers
into every aspect of a successful marketing plan.

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2. Marketing Ethics and Public Policy: In business, conflicts often arise between the goal
to succeed in the market placed and the desire to maximize the well-being of consumers by
providing them with safe and effective products and services. However, sometimes, consumers
take advantage of these obligations and try to exploit them through propaganda about the products
or services of an organization and this may lead drop in sales, forced layoffs and reduced hours for
many employees. In order to get the customers’ and the general public’s attention on the true
situation of the products, the National Food and Drug Agency usually steps in.

Business Ethics are rules of conduct that guide action in the market place i.e. the standards against
which most people in a culture judge what is right and what is wrong, good or bad. These universal
values include honesty, trustworthiness, fairness, respect, justice, integrity, concern for others,
accountability and loyalty. Ethical business is good business. Consumers will naturally think better
of products made by organizations or firms they feel behave ethically.

3. Social Marketing: Social Marketing involves getting ideas across to consumers rather than
selling something. Marketers filter much of what we learn about the world whether through the
affluence they depict in glamorous magazines or the roles actors play in the commercials.
Advertisements show us how we should act with regard to recycling, alcohol consumption, the
types of houses and cars we might wish to own and even how to evaluate others based on the
products they buy or don’t buy. Social Marketing generally involves using knowledge of customer
attitudes to make an impact on consumers.

4. A Better Consumer: People often buy products not for what they do but for what they
mean. This principle does not imply that a product’s basic function is not important but rather that
the roles products play in our lives extend well beyond the tasks they perform. The deeper meaning
of a product may help it to stand out from other similar goods and servicesall things being equal.
We tend to choose the brand that has an image or even a personality consistent with ours.

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NATURE OF COMMUNICATION IN CONSUMER BEHAVIOUR
Communication can be defined in many ways; however, most marketers agree that communication
is the transmission of a message from a sender to a receiver through a medium or channel of
transmission. The components of communication - sender, receiver, medium, message, and the
fifth essential component of communication is feedback.

1. The Sender

The Sender as the initiator of the communication can be a formal or an informal source. A formal
communicator source is likely to represent either for a profit or nonprofit organization, while an
informal source can be a parent or a friend who gives product information or advice. Consumers
often rely on informal communication sources in making purchase decisions because unlike formal
sources, the sender is perceived as having nothing to gain from the receiver’s subsequent actions.
For that reason, marketers must always encourage and even initiate positive word-of-mouth
communications about their products and services.

2. The Receiver

The Receiver of formal marketing communication is likely to be a targeted prospect or a customer

for example, a member of the marketer’s target audience. Intermediary and unintended audiences
are also likely to receive marketers’ communications. Examples of intermediary audiences are
wholesalers, distributors, and retailers who receive trade advertising from marketers designed to
persuade them to order and stock merchandise and relevant professionals such as Doctors and
Lawyers who are sent professional advertising in the hopes that they will specify or prescribe the
marketer’s products.

Unintended audiences include everyone who is exposed to the message who is not specifically
targeted by the sender for example, shareholders, creditors, suppliers, employees, bankers and the
local community (publics that are important to the marketer).

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 3. The Medium

The medium or communications channel can be impersonal for example mass media or
interpersonal, for example a formal conversation between a sales person and a customer or an
informal conversation that takes place between two or more people that takes place, face to face,
by telephone, mail or online.

Mass Media are generally classified as:

i. Print – newspapers, magazines, billboards

ii. Broadcast – radio, television
iii. Electronic – internet

These classifications notwithstanding, new modes of interactive communication that permit the
receivers of communication messages to provide feedback are beginning to blur the distinction
between interpersonal and impersonal communications. For example, these days, most companies
encourage consumers to visit their websites to find out more about the product or service being
advertised or to order online.

4. The Message

The message can be verbal, (spoken or written) or nonverbal (photograph, an illustration or a

symbol) or a combination of the two. A verbal message whether it is spoken or written can usually
contain more specific product or service information than a nonverbal message, nevertheless, a
combination of verbal and nonverbal message is often more persuasive than either would be alone.
Nonverbal information takes place in both interpersonal and impersonal channels and often takes
the form of symbolic communication. Marketers often try to develop logos or symbols that are
associated exclusively with their products and that achieve high recognition. For example, the
Coco-Cola Company has trademarked both the word Coke in a specific typographic style and the
shape of the traditional Coke bottle and both are instantly recognizable to consumers as symbols
of the company’s best-selling soft drink.

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 5. Feedback

This is an essential component of both interpersonal and impersonal communications. Prompt

feedback permits the sender to reinforce, to change, or to modify the message to ensure that it is
understood in the intended way. It is a lot easier to obtain feedback both verbal and nonverbal from
interpersonal communications than impersonal communications. For example, a good sales person
usually is alert to nonverbal feedback provided by the prospective customer. Such feedback may
take the form of facial expression for example, an expression of belief, smile, unbelief, a frown or
total boredom. It may also be in the form of body movements like head nodding, head shaking,
finger tapping, etc. Because of the high cost of space and time in impersonal media, it is very
important for sponsors of impersonal communications to devise methods to obtain feedback as
promptly as possible so that they may revise a message if its meaning is not being received as
intended.

The Communication Process

There are different phases involved in the communication process. By and large, a company’s
marketing communications are designed to make the consumer aware of the product or service,
induce purchase or commitment, create a positive attitude toward the product, give the product a
symbolic meaning or show how it can solve the consumer’s problem better than a competitive
product or service. The communication process involves the following stages:

A. The Message Initiator or the Source

The sponsor or the initiator of the message first must decide to whom the message should be sent
and what meaning it should convey. Then the sponsor must encode the message in such a way that
its meaning is interpreted by the targeted audience in precisely the intended way.

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The sources of impersonal communications usually are organizations (either profit or non-profit
organization) that develop and transmit appropriate messages through special departments (for
example marketing or public relations) or spokespersons. The target or receivers of such messages
are a specific audience or several audiences that the organization is trying to inform, influence or
persuade, for example, a museum (non-profit organization) may wish to target both donors and
visitors and on the other hand, a mail-order company (for-profit organization) may want to
persuade consumers to call a toll-free number for a copy of its catalog.

Marketers have several means of encoding their messages for example; they can use words,
pictures, symbols, spokespersons and special channels. They can buy space or time in carefully
selected media like daily newspapers or television /radio station to advertise or broadcast their
messages.

In the context of the message, there is one major factor that cannot be overlooked and that is
Credibility.

Credibility: One major factor that affects the decoding of the message is the credibility of the
source. The initiator or the sponsor of the communication and his or her perceived honesty and
objectivity has an enormous influence on how the communication is accepted by the receiver(s).
When the source is well respected and highly thought of by the intended audience, the message is
much more likely to be believed. On the other hand, a message from a source considered unreliable
or untrustworthy is likely to be received with skepticism and may be rejected.

Credibility is built on a number of factors and the most important of these factors are the perceived
intentions of the source. Where the receivers perceive any type of personal gain for the sponsor of
the message as a result of proposed action or advice, the message itself becomes suspect.

Credibility could be that of (i) credibility of Informal Sources (ii) Credibility of Formal Sources
and (iii) Credibility of Spokespersons and Endorsers and (iv) Message Credibility

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 B. The Target Audience

Receivers decode the message they receive based on their personal characteristics and personal
experiences. For example, assuming you are trying to purchase a product online and you receive a
substandard service and also a delayed delivery from the online retailer, you will be reluctant to
use this outlet again. You would rather go to reputable outlet that is known for excellent service
delivery.

There are a number of factors that affect the decoding and the comprehension of persuasive
messages and these include the following;

i. Personal Characteristics and Comprehension: A person’s demographics (such as

age, gender, and marital status), socio-cultural memberships (like social class, race, and
religion) and lifestyle are the key determinants in how a message is interpreted. For
example, a student may interpret a Professor’s easygoing manner as an indication of a
relaxed grading meticulousness. Personality, attitudes, and prior learning all affect how
a message is decoded. Perception which is based on expectations, motivation, and past
experience certainly influences message interpretation. It is not everyone that reads and
understands the marketing communications they receive in the same way that the
sender intended.
ii. Involvement and Congruency: A target audience‘s level of involvement is an
important consideration in the design and content of persuasive communication as it
determines how much attention is paid to the message and how carefully it is decoded.
iii. Mood plays a significant role in how a message is decoded. A consumer’s mood such
as feelings of cheerfulness or unhappiness affects the way in which an advertisement
is perceived, recalled and acted upon. Marketers of many image-centered products such
as cosmetics and fashion found that appeals focused on emotions and feelings
associated with these products are more effective than rational appeals describing the
product’s benefits. Nevertheless, some advertisers have used emotional appeals
effectively for technologically complex products. For example, Apple Computers
encourages consumers to “Think Different”.

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Many Studies have shown that positive mood generally enhanced the learning of brand names and
the product category to which they belonged.

C. The Feedback (The Receiver’s Response)

Marketing communications are generally designed to persuade a target audience to act in a desired
way i.e. to purchase a specific brand or product or it may be to vote for a presidential association
for the marketers association as the case may be. Therefore the ultimate test of marketing
communications is the receiver’s response. It is important for the sender to obtain prompt and
accurate feedback as quick as possible because it is only through feedback can the sender
determine whether and how well the message has been received.

Obtaining feedback is as important in impersonal or mass communication as it is in interpersonal

communication. Because of the high cost of advertising space and time in mass media, many
marketers consider impersonal communication feedback to be even more essential.

Barriers to Communication
There are various barriers to communication which may affect the accuracy with which consumers
interpret messages and these barriers include:

i. Selective Perception
ii. Psychological Noise

i. Selective Perception

Consumers selectively perceive advertising messages. They read carefully adverts for products
they are interested in and tend to ignore advertisements that have no special interest or relevance
to them. Furthermore, technology provides consumers with increasing` sophisticated means to
control their exposure to media. For example, TV remote controls offer viewers the ability to

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“wander” among programme offering with ease-this is referred grazing .TV remote controls also
enables viewers to zap commercials by muting the audio and also channel surf or switch channels
to check out other programme offerings during commercial breaks.

The Video Cassette Recorder on the other hand enables viewers to fast forward or zip through
commercials of prerecorded programmes. The majority of consumers zip indiscriminately through
videotapes to avoid all commercials without first evaluating the commercials they zap. Recent
development in technology has in fact introduced new appliances for example digital video
recorders and services which allows consumers not only to watch programmes whenever they
want, but also to skip commercials easily. Therefore there are indeed several that consumers can
pick out messages they have interest for.

ii. Psychological Noise

Psychological noise may be in the form of competing advertising messages or distracting thoughts.
For example, a viewer faced with the clutter of eight or nine successive commercial messages
during a program break may actually receive and retain almost nothing of what he has seen. Also
a business executive planning a departmental meeting while driving to work may too engross in
his/her thoughts to hear a radio commercial. Another familiar example is that of a student
daydreaming about his/her Saturday night dates while lectures are going on and may not hear a
direct question by the lecturer. There are different forms of distraction that tend to impair the
reception of a message.

These psychological noises notwithstanding, there are various strategies that marketers use to
overcome them and these are:

 Repeated exposure to an advertising message – Psychological noise can be surmounted

through repetition or redundancy of the advertising appeal, thereby facilitating message
reception. Therefore, repeating an advertisement several times is a must.
 The use of Contrast – Copy writers often use contrast to break through the psychological
noise and advertising clutter. Contrast involves features within the message itself to attract
additional attention for example, featuring an unexpected outcome such as colour or sound,
or using tested message appeals that tend to attract attention.
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 The use of Teasers – Broadcasters and Marketers also use teasers to overcome noise, for
example informative quizzes shown at the beginning of a commercial break are designed
to engage viewers in sticking with the channel in order to find out at the end of the break
whether their own answers were right.
 The introduction of new technologies – With the introduction of new technologies,
marketers can now place customized advertisements on such devices as cell phones and
addressable cable TV boxes; they can get consumers to register for promotional messages
and giveaways more easily and engage consumers with the product before the actual sales.
 The Web – the web provides marketers with more options and many advertisers have
shifted considerable sums from the TV to internet advertising. Online marketers can place
adverts that consumers’ Personal Computers will automatically retrieve from the internet
in such formats as floater adverts.

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