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Discuss the impact of consumer behavior on marketing decisions
Consumer behavior is the study of how people behave when purchasing and disposing of products. This essay aims to give a description of consumer behavior, its segmentation and the ways in which marketing decisions are influenced by it.
"Consumer behavior is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires." (Solomon et al, 1999, p.8)
There are many types of consumers such as young, old, rich and poor. Products include a wide range of tangible items such as automobiles and electronic goods. Services incorporate intangibles such as brokerage services and financial advisors. People can have needs for survival basics such as McDonalds for hunger, Coke for thirst and desires like Levis for fashion.
Markers cannot develop marketing strategies based upon the behavior of any single consumer, this could not be profitable. Therefore they must group consumers together by common behaviors. An example of this may be university student whom many have the similar interest of cheap groceries and cheap drink deals.
Segmentation allows for greater profits. Marketing and the tailoring of products and services costs money, the less of this that needs to be done the more profits can be made. An example of this is clothes sizes, by making standardized sizes producers can mass produce articles of clothing. If standardized sizing did not exist the manufacturers would have to produce a unique article to the individual consumers exact measurements. The cost of this would make clothes prohibitively expensive.
"Market segmentation is the process of so designing or featuring a product or service that it will make a particularly strong appeal to some identifiable subpart of a total market" (Engel et al, 1995, p.39)
Consumers and their behavior can be split up into various segments such as demographic, geographic, psychographic and behavioral.
Demographics include such factors as age, gender, social class and ethnicity. Geographic factors include region and country. Psychographic areas are comprised of personality and lifestyle. Lastly, behavioral differences include brand loyalty, usage situations and benefits desired.
Different races and ethnicities have demands for goods and services that may not exist in other ethnic segments. An example of this could be South Africans wanting dried meats such as Biltong. If this consumer segment creates enough demand then a supplier will respond to fill the market gap and create marketing strategies for it.
Geography does not simply consist of different land masses and borders. Geographic differences can also dictate diversity in cultures, beliefs and languages; one such...