8.1: Marketing and Consumer Behaviour

What Is Marketing?

When you consider the functional areas of business—accounting, finance, management, marketing, and operations—marketing is the one you probably know the most about. After all, as a consumer and target of all sorts of advertising messages, you’ve been on the receiving end of marketing initiatives for most of your life. What you probably don’t appreciate, however, is the extent to which marketing focuses on providing value to the customer. According to the American Marketing Association, “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”^[1]

In other words, marketing isn’t just advertising and selling. Marketing encompasses every part of a plan to turn a prospective consumer into a happy and satisfied customer. It includes everything from market research to advertising. The goal of marketing is to convince a person that your product is worth investing in, establish brand loyalty and increase overall sales. It includes everything that organizations do to satisfy customer needs, including:

• Coming up with a product and defining its features and benefits
• Setting its price
• Identifying its target market
• Making potential customers aware of it
• Getting people to buy it
• Delivering it to people who buy it
• Managing relationships with customers after it has been delivered

Think about a typical business—a local movie theatre, for example. It’s easy to see how the person who decides what movies to show is involved in marketing; they select the product to be sold. It’s even easier to see how the person who puts ads in the newspaper works in marketing; they are in charge of advertising, making people aware of the product and getting them to buy it. What about the ticket seller and the person behind the counter who gets the popcorn and soda, or the projectionist? Are they marketing the business? Absolutely. The purpose of every job in the theatre is satisfying customer needs, and as we’ve seen, identifying and satisfying customer needs is what marketing is all about. Marketing is a team effort involving everyone in the organization.

If everyone is responsible for marketing, can the average organization do without an official marketing department? Not necessarily: most organizations have marketing departments in which individuals are actively involved in some marketing-related activity—product design and development, pricing, promotion, sales, and distribution. As specialists in identifying and satisfying customer needs, members of the marketing department manage, plan, organize, lead, and control the organization’s overall marketing efforts.

Consumer Behaviour and Decision-Making

Knowledge of consumer buying behaviour and the influences on the consumer’s buying decision are critical to effective marketing.

The consumer buying process involves five steps:

1. Need recognition (first, you realize you need or want something)
2. Information search (depending on the item, you may do a short search or an extensive search)
3. Evaluation of alternatives (you consider where you will buy the item, getting the best deal, best quality, meeting your needs, etc.)
4. Purchase or no-purchase decision (maybe you buy, maybe you don’t at this time)
5. Post-purchase evaluation (you consider whether you enjoy the product, if it works as advertised, or if you will return it, telling others about your experience, etc.)

The five-step consumer decision-making process is part of a broader environmental context that influences each step. Effective marketing attempts to help consumers with their information search and the evaluation of alternatives, but there are other major influences on a consumer’s buying decision. These influences are listed below:

• Socio-cultural influences: Culture, subculture, social class, family, and peers.
• Psychological influences: Motivation, perception, attitudes, and learning.
• Situational influences: Physical and social surroundings, type of product purchased.
• Personal influences: Age, economic situation, lifestyle, and personality.
• Marketing mix influences: Product, price, place, and promotion.

Media Attributions

“Marketing, Customer, Woman image” by geralt, used under the Pixabay license.