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Consumer behaviour is the study of when, why, how, and where people do or do not buy a product.

It blends elements from psychology, sociology, social

anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual
consumers such as demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from
groups such as family, friends, reference groups, and society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Relationship
marketing is an influential asset for customer behaviour analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-
affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management,
personalisation, customisation and one-to-one marketing. Social functions can be categorized into social choice and welfare functions.

Black box model

Marketing Stimuli Environmental Stimuli Buyer Characteristics Decision Process
Economic Attitudes
Problem recognition Product choice
Product Technological Motivation
Information search Brand choice
Price Political Perceptions
Alternative evaluation Dealer choice
Place Cultural Personality
Purchase decision Purchase timing
Promotion Demographic Lifestyle
Post-purchase behaviour Purchase amount
Natural Knowledge

The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses.[1] It can be distinguished between
interpersonal stimuli (between people) or intrapersonal stimuli (within people).[2] The black box model is related to the black box theory of behaviourism, where
the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned
and processed by the companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a
society. The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response.

The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized the
problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.

Information search
Once the consumer has recognised a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain
that consumers undertake both an internal (memory) and an external search.

Sources of information include:

• Personal sources .
• Commercial sources
• Public sources
• Personal experience

The relevant internal psychological process that is associated with information search is perception. Perception is defined as "the process by which an individual
receives, selects, organises, and interprets information to create a meaningful picture of the world".

The selective perception process

Stage Description

• Selective exposure consumers select which promotional messages they will expose themselves to.
• Selective attention consumers select which promotional messages they will pay attention to.
• Selective comprehension consumer interpret messages in line with their beliefs, attitudes, motives and experiences.
• Selective retention consumers remember messages that are more meaningful or important to them.

The implications of this process help develop an effective promotional strategy, and select which sources of information are more effective for the brand.

[edit] Information evaluation

At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organization increase the likelihood that their
brand is part of the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer.
The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a

[edit] Purchase decision

Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase.
The marketing organization must facilitate the consumer to act on their purchase intention. The organisation can use variety of techniques to achieve this. The
provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may
provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration.Once the integration is
achieved, the organisation can influence the purchase decisions much more easily.

Post purchase evaluation

The EKB model was further developed by Rice (1993) which suggested there should be a feedback loop, Foxall (2005) further suggests the importance of the post
purchase evaluation and that the post purchase evaluation is key due to its influences on future purchase patterns.

Internal influences
Consumer behaviour is influenced by: demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings. Consumer
behaviour concern with consumer need consumer actions in the direction of satisfying needs leads to his behaviour of every individuals depend on thinking

External influences
Consumer behaviour is influenced by: culture, sub-culture, locality, royalty, ethnicity, family, social class, past experience reference groups, lifestyle, market mix

Buying Behavior: Understanding Five Stages Of The Buying Process

if you can't identify what stage of the buying process potential customers are in, you might as well be flying blindfolded. Consumer buying behavior is a complex
mix of emotional reasons for buying and psychological and social imprints. But there is a set pattern to the buying process – whether the purchase is something
simple like an apple, or complex like a car. The better you understand consumer buying behavior, the more effectively you can leverage your small business
marketing in all stages of the buying process.

What Is The Buying Process?

Let's examine consumer buying behavior and break down the buying process. I'll also identify important information and marketing materials consumers are
searching for in each stage.

1) Identifying A Need Or Problem

At the first stage in consumer buying behavior, a person begins to recognize a problem or desire. If the problem or desire is complex, such as a losing weight, most
of the person's focus will be on understanding their situation. Using weight loss as an example, your marketing materials at this stage would need to focus on
answering very general questions, such as "how to determine healthy weight?"

2) Searching For A Solution To The Problem

After a problem or desire has been identified, the consumer begins searching for a solution. At this stage of consumer buying behavior, there may not be a past
experience to guide their information gathering. So, again, using personal weight loss as an example, multiple solutions may be identified at this time such as
buying the latest diet plan book, purchasing a new treadmill, or joining the local gym. Your goal at this point in the buying process is to get your product or service
in front of the consumer. Make them aware of your solution.
3) Evaluating Options
Once the consumer understands his or her situation and has gathered research on possible solutions, the buying process enters an evaluation period. The consumer
now starts to take a close look at specifics, such as the company providing the solution, the brand name of the product, and the features and benefits of each
solution. Branding and product differentiation are extremely important tools of persuasion during the evaluation stage.

4) Purchase
After a comprehensive review of solutions and specific products and services, the consumer makes a purchase decision. At this point in the buying process,
supporting information needs to be provided to reinforce the decision to buy. Depending on your product or service, you may need to provide different payment
options or billing terms.

5) Evaluation Of The Purchase

We're all familiar with buyer's remorse. It is crucial to building strong relationships with customers and encouraging repeat purchases that you not only provide a
positive purchase experience and after sale support, but that you strengthen the buyer's perception that they made the right purchase decision. After sale customer
support and follow-up is vital at this stage in consumer buying behavior as is continuation of your small business marketing for cross-selling and strengthening
your brand image and online branding.

Marketing To Each Stage Of The Buying Process

Consumer buying behavior is a complex beast. But, no matter what the purchase, every consumer follows the above buying process when making a purchase. As a
small business owner, you need to become skilled at identifying which stage a potential customer is in, and then providing relevant marketing materials to bring
them one step closer to purchasing from you. And just as important to successful sales, start analyzing where and when potential customers drop off your radar.
Knowing when prospects leave your buying process will help you pinpoint what marketing materials you need to improve.
 Consumer behavior
 The actions a person takes in purchasing and using products and services,
including the mental and social processes that precede and follow these actions.
The behavioral sciences help answer questions such as :
Why people choose one product or brand over another,
How they make these choices, and
How companies use this knowledge to provide value to consumers
• Behind the visible act of making a purchase lies a decision process that must be investigated.

• The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. :
1. problem recognition,
2. information search,
Five Stages
3. alternative evaluation,
4. purchase decision, and
Consumer Behavior
5. post-purchase behavior.

A. Problem Recognition: Perceiving a Need

• Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision.

• Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts.
B. Information Search: Seeking Value
The information search stage clarifies the options open to the consumer and may involve
two steps of information Internal search • Scanning one’s memory to recall previous experiences with products or brands.
• Often sufficient for frequently purchased products.
• When past experience or knowledge is insufficient
• The risk of making a wrong purchase decision is high

• The cost of gathering information is low.

The primary sources of external information are:
search 1. Personal sources, such as friends and family.
2. Public sources, including various product-rating organizations such as Consumer

3. Marketer-dominated sources, such as advertising, company websites, and

External Search
C. Alternative Evaluation: Assessing Value
The information search clarifies the problem for the consumer by
(1) Suggesting criteria to use for the purchase.
(2) Yielding brand names that might meet the criteria.
(3) Developing consumer value perception.
• A consumer's evaluative criteria represent both
o the objective attributes of a brand (such as locate speed on a portable CD player)
o the subjective factors (such as prestige).
• These criteria establish a consumer's evoked set

o the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or
she is aware
D. Purchase Decision: Buying Value
Three possibilities • which depends on such considerations
o Terms of sale
From whom to buy o Past experience buying from the seller

o Return policy.
When to buy • which can be influenced by
o store atmosphere
o time pressure
o a sale

o pleasantness of the shopping experience.

Do not buy
E. Postpurchase Behavior: Value in Consumption or Use
• After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied.
• Satisfaction or dissatisfaction affects
o consumer value perceptions
o consumer communications
o repeat-purchase behavior.
• Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building
between sellers and buyers.

• Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consumer often experiences

• Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to convince buyers that they made the right
F. Involvement and Problem-Solving Variations
• Consumers may skip or minimize one or more steps in the purchase decision process depending on
o the level of involvement
o the personal, social, and economic significance of the purchase
• Three characteristics of high-involvement purchase

1. is expensive,
2. can have serious personal consequences, or

3. could reflect on one’s social image.

Three general problem-solving variations exist in the consumer purchase decision process:
• Virtually a habit
• involves little effort seeking external information and evaluating alternatives.
Routine Problem Solving
• Typically used for low-priced, frequently purchased products.
• Involves the use of moderate information-seeking efforts.
Limited Problem Solving
• Often used when the buyer has little time or effort to spend.
• Each stage of the consumer purchase decision process is used
• Considerable time and effort on
Extended Problem o external information search and in identifying
Solving o evaluating alternatives.

• Used in high-involvement purchase situations.

Involvement and Marketing • Low and high consumer involvement has important implications for marketing strategy, which
Strategy differs for products that are market leaders from their challengers.
G. Situational Influences
The purchase task The reason for engaging in the decision.
Five Social surroundings Including others present when a purchase decision is made.
situational Physical surroundings Such as decor, music, and crowding in retail stores.
influences Temporal effects Such as time of day or the amount of time available.
Antecedent states Which include the consumer’s mood or amount of cash on hand
Concepts such as motivation and personality; perception; learning; values, beliefs and attitudes; and lifestyle are useful for interpreting
buying processes and directing marketing efforts.
A. Motivation and Personality
1. Motivation
• is the energizing force that causes behavior that satisfies a need.
• Needs are hierarchical

• Once basic physiological needs are met, people seek to satisfy learned needs.
Physiological needs • basic to survival.
• self-preservation
Safety needs
• physical well-being.
• love
• friendship.
From lowest to highest, the hierarchy is:
• achievement
Social needs • status
• prestige

• self-respect.
Self-actualization needs • personal fulfillment.
2. Personality
• A person's consistent behavior or responses to recurring situations.

• Research suggests that key traits affect brand and product-type preferences.
• Cross-cultural analysis also suggests that residents of different countries have a national character, or a distinct set of personality
characteristics common among people of a country or society.
• Personality characteristics are often revealed in a person’s self-concept, which is the way people see themselves and the way they
believe others see them.
B. Perception
• The process by which an individual uses information to create a meaningful picture of the world by
o selecting,
o organizing
o interpreting

• Perception is important because people selectively perceive what they want and it affects how people see risks in a purchase.
1. Selective Perception
• Filtering
o exposure,
o comprehension, and
Selective perception
o retention

• in the human brain’s attempt to organize and interpret information.

• Consumers can pay attention to messages that are consistent with their own attitudes and beliefs
Selective exposure
• Consumers can ignore messages that are inconsistent.
Selective comprehension • Involves interpreting (distorting?) information so that it is consistent with a person's attitudes and beliefs.
Selective retention • Consumers do not remember all the information they see, read, or hear.
• Consumers see or hear messages without being aware of them.
• This is a hotly debated issue with more popular appeal than scientific support.
Subliminal perception
• Research suggests that such messages have limited effects on behavior
2. Perceived Risk
• Anxieties felt
o Consumes cannot anticipate the outcomes of a purchase
o Believe that there may be negative consequences.
• Marketers try to reduce a consumer's perceived risk and encourage purchases by strategies such as providing
o Free trial of a product
o Securing endorsements from influential people

o Providing warranties and guarantees.

C. Learning
• Those behaviors that result from
o Repeated experience

o Thinking.
1. Behavioral Learning
• The process of developing automatic responses to a situation built up

• through repeated exposure to it.

Four variables central to how consumers
learn from repeated experience are:
drive A need that moves an individual to action
cue A stimulus or symbol perceived by consumers
response The action taken by a consumer to satisfy the drive.
reinforcement The reward.
Marketers use two concepts from behavioral learning theory:
• Occurs when a response elicited by one stimulus (cue) is generalized to another.
Stimulus generalization
• Using the same brand name for different products is an application of this concept
• Refers to a person's ability to perceive differences in stimuli.
Stimulus discrimination
• The advertising for Bud Light beer is an example of this concept.
2. Cognitive learning
• Involves making connections between two or more ideas
• or simply observing the outcomes of others’ behaviors

• and adjusting one's accordingly.

3. Brand loyalty
• Is a favorable attitude and consistent purchase of a single brand over time.

• Brand loyalty differs across countries

D. Values, Beliefs, and Attitudes
1. Attitude Formation
• A learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.
• Shaped by our values and beliefs, which are learned.
Values • personally or socially preferable modes of conduct or states of existence that are enduring.
Beliefs • consumer's subjective perception of how well a product or brand performs on different attributes.
2. Attitude Change
Approaches • Changing beliefs about the extent to which a brand has certain attributes.
to try to • Changing the perceived importance of attributes.
change consumer
attitudes • Adding new attributes to the product.
E. Lifestyle
Lifestyle is a mode of living that is identified by
activities How a person spends time and resources
interests What a person considers important in the environment
opinions what a person thinks of self and the world
• Psychographics
o The analysis of consumer lifestyle

o helps to segment and target consumers for new and existing products.
Values and Lifestyles (VALS) Program
• Developed by SRI International
• Identified eight interconnected categories of adult lifestyles

• based on a person’s self-orientation and resources.

Self-orientation Resources
• Three patterns of attitudes and activities that help people reinforce their social self-image. • income
• The three patterns are oriented toward • education
o principles, • self-confidence
o status, • health
• eagerness to buy
• intelligence
o action.
• energy level.
• Sociocultural influences evolve from a formal and informal relationships with other people.
• Influences Include
o Personal influence
o Reference groups
o The family
o Social class
o Culture

o Subculture.
A. Personal Influence
• individuals who exert direct or indirect social influence over
Opinion leaders
Aspects of personal influence important to • People influencing each other during face-to-face conversations.
Word of mouth
• Power of word of mouth has been magnified by the Internet and
B. Reference Groups
Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. Reference
groups have an important influence on the purchase of luxury products but not of necessities. :
• one to which a person actually belongs
Three groups have clear marketing
Aspiration group • one with which a person wishes to be identified.
Dissociative • one from which a person wants to maintain a distance because of
group differences in values or behaviors
C. Family Influence
• Family influences on consumer behavior result from three sources:
o consumer socialization
o passage through the family life cycle

o decision making within the family.

Consumer Consumer socialization is the process by which people acquire the skills, knowledge, and attitudes necessary to function
Socialization as consumers
• young singles
• The distinct phases that a family progresses through from formation to • Young marrieds without children
retirement • Young marrieds with children
Family Life Cycle
• The older married
• Each phase bringing with it identifiable purchasing behaviors.
• older unmarried
• Two decision-making styles exist: Five roles of individual family members
o spouse-dominant (either wife or husband is responsible) in the purchase process exist
o joint decision making (most decisions are made by both • information gatherer
Family Decision husband and wife). • influencer
Making • decision maker
• Increasingly, preteens and teenagers are assuming these roles for the • purchaser
family, given the prevalence of working parents and single-parent
households. • user
D. Social Class
• The relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior are
• Determinants of social class include
o occupation,
o source of income (not level of income)

o education.
• Social class is a basis for identifying and reaching particularly good prospects for products and services.
o Upper classes are targeted by companies for items such as financial investments, expensive cars, and evening wear.
o Middle classes represent a target market for home improvement centers and automobile parts stores.

o Lower classes are targeted for products such as sports and scandal magazines.
E. Culture and Subculture
Culture refers to the set of values, ideas and attitudes that are accepted by a homogeneous group of people and transmitted to the next
• Subcultures - groups within the larger, or national, culture with unique values, ideas, and attitudes.
• three largest racial/ethnic subcultures in the U.S
o Hispanics,
o African-Americans
o Asians .

• Each of these groups exhibits sophisticated social and cultural behaviors that affect their buying patterns.
1. African-American Buying Patterns
• African-Americans have the largest spending power of the three subcultures
• While price conscious, they are motivated by product quality and choice.

• Respond to products and advertising that appeal to their African-American pride and heritage as well as address their ethnic features
and needs.
2. Hispanic Buying Patterns
• Hispanics represent the largest subculture
• About 50% are immigrants
• The majority are under the age of 25.
• Marketing to Hispanics has proven to be a challenge because
o The diversity of this subculture
o The language barrier.

• Sensitivity to the unique needs of Hispanics by firms has paid huge dividends.
3. Asian Buying Patterns
• The Asian is the fastest growing subculture.
• About 70% of Asians are immigrants
• Most are under the age of 30.
• Asians represent a diverse subculture, including Chinese, Japanese, Filipinos, Koreans, Asian-Indians, people from Southeast Asia,
and Pacific Islanders.
• Two groups of Asian-Americans have been identified:
o Assimilated Asians are
 conversant in English
 highly educated
 exhibit buying patterns very much like "typical" American consumers.
o Nonassimilated Asians

 recent immigrants who cling to their native languages and customs.

A Johari window is a cognitive psychological tool created by Joseph Luft and Harry Ingham in 1955[1] in the United States, used to help people better understand
their interpersonal communication and relationships. It is used primarily in self-help groups and corporate settings as a heuristic exercise.
When performing the exercise, subjects are given a list of 56 adjectives and picks five or six that they feel describe their own personality. Peers of the subject are
then given the same list, and each picks five or six adjectives that describe the subject. These adjectives are then mapped onto a grid.[2]

Charles Handy calls this concept the Johari House with four rooms. Room 1 is the part of ourselves that we see and others see. Room 2 is the aspects that others
see but we are not aware of. Room 3 is the most mysterious room in that the unconscious or subconscious part of us is seen by neither ourselves nor others. Room
4 is our private space, which we know but keep from others.

The concept is clearly related to the ideas propounded in the Myers-Briggs Type Indicator program, which in turn derive from theories about the personality first
explored by psychologist Carl Jung.

How to create customer satisfaction?

It's a well known fact that no business can exist without customers. In the business of Website design, it's important to work closely with your customers
to make sure the site or system you create for them is as close to their requirements as you can manage. Because it's critical that you form a close
working relationship with your client, customer service is of vital importance. What follows are a selection of tips that will make your clients feel valued,
wanted and loved.
1. Encourage Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a customer. If you're not used to this sort of thing it can be a pretty nerve-wracking
experience. Rest assured, though, it does get easier over time. It's important to meet your customers face to face at least once or even twice during the course of a

My experience has shown that a client finds it easier to relate to and work with someone they've actually met in person, rather than a voice on the phone or
someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe
that if a potential client spends over half the meeting doing the talking, you're well on your way to a sale.

2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with
all customers' queries within the space of a few hours, but at least email or call them back and let them know you've received their message and you'll contact them
about it as soon as possible. Even if you're not able to solve a problem right away, let the customer know you're working on it.

A good example of this is my Web host. They've had some trouble with server hardware which has caused a fair bit of downtime lately. At every step along the
way I was emailed and told exactly what was going on, why things were going wrong, and how long it would be before they were working again. They also
apologised repeatedly, which was nice. Now if they server had just gone down with no explanation I think I'd have been pretty annoyed and may have moved my
business elsewhere. But because they took time to keep me informed, it didn't seem so bad, and I at least knew they were doing something about the problems.
That to me is a prime example of customer service.

3. Be Friendly and Approachable

A fellow SitePointer once told me that you can hear a smile through the phone. This is very true. It's very important to be friendly, courteous and to make your
clients feel like you're their friend and you're there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt
object - it happens to all of us. It's vital that you keep a clear head, respond to your clients' wishes as best you can, and at all times remain polite and courteous.

4. Have a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long
run. If a customer has a problem, what should they do? If the first option doesn't work, then what? Should they contact different people for billing and technical
enquiries? If they're not satisfied with any aspect of your customer service, who should they tell?

There's nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at
each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site -- and anywhere else it may be
5. Attention to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalised sign-up confirmation email for a
service that you could tell was typed from scratch? These little niceties can be time consuming and aren't always cost effective, but remember to do them.

Even if it's as small as sending a Happy Holidays email to all your customers, it's something. It shows you care; it shows there are real people on the other end of
that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued.

6. Anticipate Your Client's Needs & Go Out Of Your Way to Help Them Out

Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship.

Take this as an example: you're working on the front-end for your client's exciting new ecommerce endeavour. You have all the images, originals and files backed
up on your desktop computer and the site is going really well. During a meeting with your client he/she happens to mention a hard-copy brochure their internal
marketing people are developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep complete with high resolution versions of all the
images you've used on the site. A note accompanies it which reads:

"Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide you with large-scale copies of the graphics I've used on the site. Hopefully
you'll be able to make use of some in your brochure."

Your client is heartily impressed, and remarks to his colleagues and friends how very helpful and considerate his Web designers are. Meanwhile, in your office,
you lay back in your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy customer will send several referrals your way.

7. Honour Your Promises

It's possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project
delivery dates.

Clients don't like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late,
technology can fail and sub-contractors don't always deliver on time. In this case a quick apology and assurance it'll be ready ASAP wouldn't go amiss.


Customer service, like any aspect of business, is a practiced art that takes time and effort to master. All you need to do to achieve this is to stop and switch roles
with the customer. What would you want from your business if you were the client? How would you want to be treated? Treat your customers like your friends
and they'll always come back.

consumer behiviour application in marketing

Consumer Behavior and Marketing Strategy
A sound understanding of consumer behavior is essential to the long-run success of any marketing program. In fact, it is seen as a cornerstone of the marketing
concept, an important orientation or philosophy of many marketing managers.

The following descriptions explore the role of consumer behavior in designing and deploying three major marketing activities.

Market-Opportunity Analysis
This activity involves examining trends and conditions in the marketplace to identify consumers' needs and wants that are not being fully satisfied. The analysis
begins with a study of general market trends, such as consumers' lifestyles and income levels, which may suggest unsatisfied wants and needs. More specific
examination involves assessing any unique abilities the company might have in satisfying identified consumer desires.

A variety of recent trends have resulted in many new product offerings for consumer satisfaction. For example, companies attuned to the fitness interests of
Americans have been quick to offer such new products as exercise bicycles, weight training books, and clothing. In the health care field, companies sensing
consumers' unmet medical needs have offered coin-operated blood pressure testing machines at shopping centers and other convenient locations.

Target-Market Selection
The process of reviewing market opportunities often results in identifying distinct groupings of consumers who have unique wants and needs. This can result in a
decision to approach each market segment with a unique marketing offering. Consider the soft drink market. Here, major segments of ultimate consumers are
distinguished by the type of purchase situation: (1) the food store segment, (2) the "cold bottle" or vending machine segment, and (3) the fountain market, which
includes fast-food outlets. Unique packaging arrangements (container type and size), point of purchase promotions, and other variations are made for each

In other cases, the marketer may decide to concentrate company efforts on serving only one or a few of the identified target markets. An excellent example of this
occurred in the bath soap market. By segmenting consumers according to their lifestyle patterns and personalities, the Colgate-Palmolive company was able to
identify a unique group of consumers in need of a certain type of deodorant soap. Development of Irish Spring for this target group led to the capturing of 15
percent of the deodorant soap market within three years of introduction.

Marketing-Mix Determination
This stage involves developing and implementing a strategy for delivering an effective combination of want-satisfying features to consumers within target markets.
A series of decisions are made on four major ingredients frequently referred to as the marketing mix-variables: product, price, place, and promotion.

Maslow's Hierarchy of Needs

If motivation is driven by the existence of unsatisfied needs, then it is worthwhile for a manager to understand which needs are the more important for individual
employees. In this regard, Abraham Maslow developed a model in which basic, low-level needs such as physiological requirements and safety must be satisfied
before higher-level needs such as self-fulfillment are pursued. In this hierarchical model, when a need is mostly satisfied it no longer motivates and the next higher
need takes its place. Maslow's hierarchy of needs is shown in the following diagram:

Maslow's Hierarchy of Needs

Esteem Needs
Social Needs
Safety Needs
Physiological Needs

Physiological Needs

Physiological needs are those required to sustain life, such as:

• air
• water
• nourishment
• sleep

According to Maslow's theory, if such needs are not satisfied then one's motivation will arise from the quest to satisfy them. Higher needs such as social needs and
esteem are not felt until one has met the needs basic to one's bodily functioning.


Once physiological needs are met, one's attention turns to safety and security in order to be free from the threat of physical and emotional harm. Such needs might
be fulfilled by:

• Living in a safe area

• Medical insurance
• Job security
• Financial reserves
According to Maslow's hierarchy, if a person feels that he or she is in harm's way, higher needs will not receive much attention.

Social Needs

Once a person has met the lower level physiological and safety needs, higher level needs become important, the first of which are social needs. Social needs are
those related to interaction with other people and may include:

• Need for friends

• Need for belonging
• Need to give and receive love


Once a person feels a sense of "belonging", the need to feel important arises. Esteem needs may be classified as internal or external. Internal esteem needs are
those related to self-esteem such as self respect and achievement. External esteem needs are those such as social status and recognition. Some esteem needs are:

• Self-respect
• Achievement
• Attention
• Recognition
• Reputation

Maslow later refined his model to include a level between esteem needs and self-actualization: the need for knowledge and aesthetics.


Self-actualization is the summit of Maslow's hierarchy of needs. It is the quest of reaching one's full potential as a person. Unlike lower level needs, this need is
never fully satisfied; as one grows psychologically there are always new opportunities to continue to grow.

Self-actualized people tend to have needs such as:

• Truth
• Justice
• Wisdom
• Meaning

Self-actualized persons have frequent occurrences of peak experiences, which are energized moments of profound happiness and harmony. According to Maslow,
only a small percentage of the population reaches the level of self-actualization.
Implications for Management

If Maslow's theory holds, there are some important implications for management. There are opportunities to motivate employees through management style, job
design, company events, and compensation packages, some examples of which follow:

• Physiological needs: Provide lunch breaks, rest breaks, and wages that are sufficient to purchase the essentials of life.
• Safety Needs: Provide a safe working environment, retirement benefits, and job security.
• Social Needs: Create a sense of community via team-based projects and social events.
• Esteem Needs: Recognize achievements to make employees feel appreciated and valued. Offer job titles that convey the importance of the position.
• Self-Actualization: Provide employees a challenge and the opportunity to reach their full career potential.

However, not all people are driven by the same needs - at any time different people may be motivated by entirely different factors. It is important to understand the
needs being pursued by each employee. To motivate an employee, the manager must be able to recognize the needs level at which the employee is operating, and
use those needs as levers of motivation.

Limitations of Maslow's Hierarchy

While Maslow's hierarchy makes sense from an intuitive standpoint, there is little evidence to support its hierarchical aspect. In fact, there is evidence that
contradicts the order of needs specified by the model. For example, some cultures appear to place social needs before any others. Maslow's hierarchy also has
difficulty explaining cases such as the "starving artist" in which a person neglects lower needs in pursuit of higher ones. Finally, there is little evidence to suggest
that people are motivated to satisfy only one need level at a time, except in situations where there is a conflict between needs.

Even though Maslow's hierarchy lacks scientific support, it is quite well-known and is the first theory of motivation to which many people they are exposed. To
address some of the issues of Maslow's theory, Clayton Alderfer developed the ERG theory, a needs-based model that is more consistent with empirical findings.

david mcclelland
david c mcclelland's motivational needs theory

American David Clarence McClelland (1917-98) achieved his doctorate in psychology at Yale in 1941 and became professor at
Wesleyan University. He then taught and lectured, including a spell at Harvard from 1956, where with colleagues for twenty years
he studied particularly motivation and the achievement need. He began his McBer consultancy in 1963, helping industry assess
and train staff, and later taught at Boston University, from 1987 until his death. McClelland is chiefly known for his work on
achievement motivation, but his research interests extended to personality and consciousness. David McClelland pioneered
workplace motivational thinking, developing achievement-based motivational theory and models, and promoted improvements in
employee assessment methods, advocating competency-based assessments and tests, arguing them to be better than traditional
IQ and personality-based tests. His ideas have since been widely adopted in many organisations, and relate closely to the theory
of Frederick Herzberg.

David McClelland is most noted for describing three types of motivational need, which he identified in his 1961 book, The
Achieving Society:

• achievement motivation (n-ach)

• authority/power motivation (n-pow)
• affiliation motivation (n-affil)

david mcclelland's needs-based motivational model

These needs are found to varying degrees in all workers and managers, and this mix of motivational needs characterises a person's or manager's style and
behaviour, both in terms of being motivated, and in the management and motivation others.

the need for achievement (n-ach)

The n-ach person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a
strong need for feedback as to achievement and progress, and a need for a sense of accomplishment.

the need for authority and power (n-pow)

The n-pow person is 'authority motivated'. This driver produces a need to be influential, effective and to make an impact. There is a strong need to lead and for
their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

the need for affiliation (n-affil)

The n-affil person is 'affiliation motivated', and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation driver
produces motivation and need to be liked and held in popular regard. These people are team players.
McClelland said that most people possess and exhibit a combination of these characteristics. Some people exhibit a strong bias to a particular motivational need,
and this motivational or needs 'mix' consequently affects their behaviour and working/managing style. Mcclelland suggested that a strong n-affil 'affiliation-
motivation' undermines a manager's objectivity, because of their need to be liked, and that this affects a manager's decision-making capability. A strong n-pow
'authority-motivation' will produce a determined work ethic and commitment to the organisation, and while n-pow people are attracted to the leadership role, they
may not possess the required flexibility and people-centred skills. McClelland argues that n-ach people with strong 'achievement motivation' make the best leaders,
although there can be a tendency to demand too much of their staff in the belief that they are all similarly and highly achievement-focused and results driven,
which of course most people are not.

McClelland's particular fascination was for achievement motivation, and this laboratory experiment illustrates one aspect of his theory about the affect of
achievement on people's motivation. McClelland asserted via this experiment that while most people do not possess a strong achievement-based motivation, those
who do, display a consistent behaviour in setting goals:

Volunteers were asked to throw rings over pegs rather like the fairground game; no distance was stipulated, and most people seemed to throw from arbitrary,
random distances, sometimes close, sometimes farther away. However a small group of volunteers, whom McClelland suggested were strongly achievement-
motivated, took some care to measure and test distances to produce an ideal challenge - not too easy, and not impossible. Interestingly a parallel exists in biology,
known as the 'overload principle', which is commonly applied to fitness and exercising, ie., in order to develop fitness and/or strength the exercise must be
sufficiently demanding to increase existing levels, but not so demanding as to cause damage or strain. McClelland identified the same need for a 'balanced
challenge' in the approach of achievement-motivated people.

McClelland contrasted achievement-motivated people with gamblers, and dispelled a common pre-conception that n-ach 'achievement-motivated' people are big
risk takers. On the contrary - typically, achievement-motivated individuals set goals which they can influence with their effort and ability, and as such the goal is
considered to be achievable. This determined results-driven approach is almost invariably present in the character make-up of all successful business people and

McClelland suggested other characteristics and attitudes of achievement-motivated people:

• achievement is more important than material or financial reward.

• achieving the aim or task gives greater personal satisfaction than receiving praise or recognition.
• financial reward is regarded as a measurement of success, not an end in itself.
• security is not prime motivator, nor is status.
• feedback is essential, because it enables measurement of success, not for reasons of praise or recognition (the implication here is that feedback must be
reliable, quantifiable and factual).
• achievement-motivated people constantly seek improvements and ways of doing things better.
• achievement-motivated people will logically favour jobs and responsibilities that naturally satisfy their needs, ie offer flexibility and opportunity to set and
achieve goals, eg., sales and business management, and entrepreneurial roles.
McClelland firmly believed that achievement-motivated people are generally the ones who make things happen and get results, and that this extends to getting
results through the organisation of other people and resources, although as stated earlier, they often demand too much of their staff because they prioritise
achieving the goal above the many varied interests and needs of their people.

Interesting comparisons and relationships can be drawn between McClelland's motivation types, and the characteristics defined in other behavioural models, eg:

John Adair's Action-Centred Leadership model: Achievement-motivated managers are firmly focused on the Task, often to the detriment of the Individual and the
Team. Affiliation-motivation people are Team and Individual centred. (Note that John Adair's Action-Centred leadership model is ©John Adair.)

Katherine Benziger'sThinking Styles model: Achievement-motivation is a double-frontal brain mode style; affiliation-motivation is right basal (rear); authority-
motivation is arguably left basal (rear).

DISC (Inscape, Thomas International, etc) system: Achievement-motivated people are 'D' profiles - results-driven, decisive, dominant, etc. Affiliation-motivated
people are I (proactive) and S (reactive) profiles. Authority-motivated people are S and C profiles.

Hersey/Blanchard's Situational Leadership® model: Achievement-motivated people tend to favour the styles of the first and second modes ('telling' and 'selling');
affiliation-motivated people tend to favour the third mode ('participating'); and the authority-motivated people tend to favour the style of mode four ('delegating').
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