The Application of Consumer Behaviour Theory in the Practice of Marketing - Essay Example

?The application of consumer behaviour theory in the practice of marketing Introduction Consumer behaviour is a broad management concept that addresses various stages a consumer goes through before they make a product/service purchase for their end use. The concept of consumer behaviour is influenced by the elements of psychology, sociology, and economics. According to one definition, “consumer behaviour is the study of individuals, groups, or organisations and the processes they use to select, secure, use, and dispose of products and services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society” (Hawkins et al 1998, p.6). Consumer behaviour is an effective approach to analyse the decision making process of consumers individually and in groups. This concept gives particular focus to individual consumer characteristics including demographics and behavioural variables in order to identify consumers’ needs. This paper will discuss the application of consumer behaviour theories in the practice of marketing. For this purpose, the paper will consider two theories including Maslow’s hierarchy of needs and Noel’s consumer behaviour model. Maslow’s Hierarchy of Needs Maslow’s hierarchy of needs is a psychological approach developed by Abraham Maslow in his paper ‘A Theory of Human Motivation’ published in 1943. When human behaviour is influenced by culture, family background, and other relationships, consumer behaviour is shaped by different needs. Maslow’s hierarchy of needs gives a basic framework to evaluate why a consumer makes a particular purchase decision. The visual representation of the Maslow’s model is given below. (Source: Sorensen, n.d.) The Maslow’s model suggests that unmet need is the fundamental motivation for people’s every action. In addition, individuals try to meet their needs and desires in a particular hierarchy. According to the Maslow’s model, people should seek to meet their most fundamental needs before they can find solutions for their more sophisticated needs. In the pyramid above, most fundamental needs are portrayed at the bottom whereas the top part represents the need for self actualisation. Other layers reflect the need for security, love and belonging, and esteem. Maslow collectively calls the basic four layers of the pyramid as deficiency needs. Here, psychological needs represent basic physical requirements (air, food, and water) necessary for the human survival. Security needs may include personal security, financial security, health safety, security against unforeseen events like accidents (Koontz & Weihrich 2006). Likewise, the love and belonging needs represent relationships like friendship, intimacy, and family. The esteems needs indicate the human desire to feel respected. In the view of Maslow, self actualisation reflects the human desire to know what his full potential is and to achieve everything that he can (ibid). Referring to this model, psychological needs have the prime priority in an individual’s life. If an individual’s psychological needs are not met properly, he would de-prioritise all other needs and desires until these fundamental needs are met (ibid). For instance, breathing is more important for an individual to survive than financial security and friendship. If this highly prioritised need is not met, the individual’s physical condition will become worse and he will die eventually. In other words, an individual cannot try to satisfy needs like security and love and belonging unless his most fundamental need (here breathing) is not met. Maslow’s hierarchy of needs can be used to explain consumer behaviour and hence it has greater applicability in the practice of marketing. This model is greatly assistable for marketers to determine what kinds of marketing efforts have to be taken to promote various products and services. Maslow claims that consumer behaviour and decision making are driven by any of the five levels of need in the hierarchy. Therefore, a marketer must identify where his target groups fall in the Maslow’s hierarchy regardless of whether the marketer is selling to an individual person or a large group of people over a wide geographical region. It is clear that a marketer sells good to human beings who are definitely influenced by the hierarchy of needs. Such an evaluation would greatly assist the marketer to identify prospective customers and to focus on them specifically. When a marketer identifies the customers’ accurate level of need, he can easily market his products/services convincing customers that those products/services may fulfil their need. To illustrate, a prospective customer influenced by Maslow’s second level of need (security) may be willing to purchase a new car if the marketer can convince him that the car would increase the safety of his family and is well rated in consumer surveys. Similarly, a prospective customer driven by the need of self-esteem is likely to purchase new accounting software if he is convinced that the innovation would improve the accuracy and reliability of accounting practices. Anyhow, the marketer must perform periodic evaluations of his marketing techniques because customers would not remain in the same hierarchy level forever. It is better to examine some real life examples of how Maslow’s hierarchy of needs works in the field of marketing. American International Group (AIG), the world’s leading insurance company, does not have strong presence in poorly developed economies like Zimbabwe. It is clear that Zimbabwe is extremely struggling with poverty. According to statistical reports, poverty rate has almost reached 80% in Zimbabwe (Central Intelligence Agency, n.d.). It indicates that nearly 80% of Zimbabweans live in poverty or they cannot satisfy even their fundamental needs (psychological needs like water and food) in the Maslow’s hierarchy. Referring to the Maslow’s model, the Zimbabwean population is not likely to purchase insurance policies (security need) until their physiological needs (water and food) are properly met. Similarly, the luxury car manufactures like BMW and Mercedes Benz focus less on African countries and other struggling economies. It is obvious that people purchase luxury cars with intent to boost their self-esteem. As most of the African people struggle to satisfy their basic level needs like food, water, and security, luxury cars may not obtain market in those countries. Therefore, products/services that would meet basic level needs in the Maslow’s hierarchy are likely to be accepted well in the African market. The US Army’s advertising campaign “Be All That You Can Be, In The Army” has been designed to influence people who desire to achieve self actualization. In addition, advertising programs for higher studies would assist the marketer to take advantages of individuals who are striving for self actualisation. Noel’s consumer behaviour model Hayden Noel has proposed a model to explain consumer behaviour more accurately. The way a product is consumed can be entirely different from the way another is used. To illustrate, products like a tin of Pepsi is consumed in single use whereas some other products like mobile phone is consumed over a period of time. Noel posits that usage of a product/service is of a significant influence on consumer behaviour. He also says that a satisfied customer may continue to use the firm’s product and encourage others to buy the product whereas dissatisfied customer may boycott the company’s whole product lines and persuade others not to buy the company’s offerings. The theorist also opines that post-consumptions experiences will also affect the consumer behaviour. For instance, today many companies invest hugely for recycling their products in order to meet customers’ growing concerns over the environment. When consumers identify that the product is recyclable and would not hurt environmental sustainability, they may continue to purchase the product. The consumer behaviour model proposed by Hayden Noel is illustrated below. (Source: Noel 2009, p.14) The above chart shows different influences and processes that can have a notable impact on an individual consumer’s decision making process. As per Noel’s consumer behaviour model, the major three factors affecting consumer behaviour are external influences, internal processes, and post-decision processes (ibid). External influences may include the firm’s marketing efforts and the consumer’s culture. The marketing efforts the firm represents the 4P’s of marketing mix such as price, place, product, and promotion (ibid p.15). As many other scholars point out, a product’s marketing mix plays a crucial role in determining its success. Here, price is utmost importance because this element is a paramount in the today’s competitive world. Similarly, culture can have a great influence on consumer behaviour. Noel argues that customers have some particular beliefs and attitudes because of the peculiarity of the culture they belong to (ibid, p16). He also says that an individual consumer’s culture is shaped by different elements including religion, ethnicity, social class, and reference groups (ibid). According this model, internal processes include psychological processes and decision making. Psychological processes like motivation, perception, attitudes, and knowledge can influence consumer behaviour to a great extent. Under the decision making process, the consumer gathers a range of product information and integrate them with what he already knows about the product. Then, he evaluates the pros and cons of each alternative and finally arrives at a decision. The major four stages of consumer decision making are problem recognition, information search, judgement, and decision making. Finally, the post decision-processes including and purchase and post-purchase experiences also affect consumer behaviour (ibid, pp.15-22). Evidently, the concept of marketing mix is the core of any marketing strategy. Every marketer gives specific focus to marketing mix in order to achieve better operational outcomes. For instance, the well designed marketing mix of Nokia has assisted the company to spread its business all across the world and to become one of the leading manufacturers/distributors of mobile phones. The company specifically focuses on variety, quality, design, and features while developing each handset. The company’s product prices have been set to meet the interests of every income class. Nokia uses techniques like advertising, personal selling, sales promotion, public relation, and road shows to promote its products. The company offers its products and services all over the world. The comprehensive marketing mix package has significantly benefited the company to achieve the status of global leader in the cell phone industry. Similarly, companies like Coca Cola and Pepsi give particular attention to consumers’ culture in the Indian market context. It seems that those companies use celebrities from Bollywood and Cricket to advertise their products in India because Indian culture is greatly related to Cricket and cinema. Similarly, companies specifically consider consumer’s culture while doing business in Islamic countries. It is obvious that Islamic communities have banned products like alcohol and bacon on the base of their religious beliefs. Therefore, companies would lose money if they try to market religiously banned products in those communities. Likewise, it is clear that some customers have certain perceptions and attitudes toward a particular product category. For instance, many people believe that Sony television sets have supreme quality and the company promises more efficiency and longer life as compared to its competitors. Even though many other companies are performing better than Sony now, those customer groups would not be ready to change their perceptions and attitudes toward Sony TV. Similarly, Apple maintains a huge and potential group of insanely loyal customers who are willing to book Apple products even before the product launch. Those consumers blindly believe that Apple’s each new product will be capable of meeting their needs accurately. In addition, those customers fight for Apple in social media networks and other product discussion forums. Companies like Toyota offer better post-purchase experiences to their customer in order to achieve more sales through them. As discussed already, when consumers obtain better post-purchase services, they are likely to remain with the company and to recommend the product to their friends and relatives. Conclusion From the above discussion, it is clear that the concept of consumer behaviour has a wide range of applications in the marketing field. The Maslow’s hierarchy of needs suggest that consumers seek to satisfy their most fundamental needs before they find solutions for more sophisticated needs. Hence, marketers may successfully promote their products/services if they can identify the need level to which their target customers fall. The Noel’s consumer behaviour model says that external influences, internal processes, and post-decision processes can impact consumer behaviour. Referring to this model, a marketer has to address different factors influencing consumer behaviour before framing marketing strategies. In short, consumer behaviour theories can greatly assist a firm to achieve its long term marketing objectives. References Central Intelligence Agency. The World Factbook. [online] available at https://www.cia.gov/library/publications/the-world-factbook/geos/zi.html [accessed 5 Feb 2013]. Hawkins, D. I et al. (1998) Consumer behaviour. Tata McGraw-Hill Education. Koontz, H & Weihrich, H. (2006) Essentials Of Management. Tata McGraw-Hill Education. New Delhi. Noel, H. (2009) Basics Marketing 01: Consumer Behaviour. AVA Publishing. Switzerland. Sorensen, K. ‘Maslow's hierarchy of needs and subpersonality work’. Psychosynthesis. [online] available at http://two.not2.org/psychosynthesis/articles/maslow.htm [accessed 5 Feb 2013]. Read More