Understanding consumer behavior and marketing strategy

Consumer behavior can be described as the study of who, where, when, how and why of consumers’ buying behavior. Loudon (2001) defines consumer behavior as “the decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services.  Hoyer et al. (2009) define consumer behavior as “the reflection of the totality of consumers’ decisions with respect to the acquisition, consumption and disposition of goods, services and activities, experiences, people and ideas by human decision making units”.

Importance of consumer behavior

The concept of consumer behavior can be described as a blend of sociology, psychology, economics and social anthropology. The subject aims to understand the consumers’ decision-making process and terminology, collectively as well as in isolation. It also attempts to understand other characteristics of the buyer such as the social behavior, their demographic profiles, etc. because it helps them identify their needs better. Consumer behavior also establishes the control of the buyer’s family, peers and friends on their buying decisions. This can be seen in Mooij’s (2009) definition of consumer behavior: it is the study of the processes involved when people select, purchase, use or dispose of products, services, ideas or experiences to satisfy their needs and desires.

In the concept of consumer behavior, consumer plays three significant roles: a payer, user and a buyer. It is important to study the concept as it emphasizes on understanding customer relationship management (CRM), categorization and retention of customers, personalization, etc. In order to do so, it is also important to understand how consumers decide on a particular product, spend their effort and money on the goods (Schiffman and Kanuk, 1997). Similarly, Belch (1998) defines the term as a process involving activities that consumers engage in while searching for, evaluating and selecting, using and disposing of the products/ services in order to satisfy their desires. Behavior here was referred to as an individual’s, a group’s, or an organisation’s.

Consumer behavior reflects several elements, shown as under:

Elements of Consumer behavior

Elements of Consumer behavior (Source: ‘Consumer Behavior’, Hoyer & Macinnis, 2008)

Stralser (2004, p. 153) defines strategy as a ‘bridge that connects the firm’s internal environment with its external environment, leveraging its resources to adapt to, and benefit from, changes occurring in its external environment’. Thus, strategy can be referred to as a decision-making process that transforms a long-term objective into daily activities that help achieving the long-term goal. It is a rather continual process of valuation, revaluation and analysis which acts as a constant guide to the organization.

Importance of marketing strategy

No organization can dream of surviving without making profit. Businesses are started with profit making as the ultimate objective in mind. It is not only enough for a business to flourish successfully by making enormous profit but also sustain successfully by creating competitive advantage. Competitive advantage is nothing but the process of creating a value for the company such that the company sets a benchmark for other competitors and stand as a leader in the market [Ferrel O, 2008]. Competitive advantage could be obtained only with the help of a well-defined marketing strategy. For a company to survive across several decades in the market, a marketing strategy is a must. Marketing strategy is thus mandate for any business enterprise or organization.

A marketing strategy is be a road map to sketch a marketing plan. A marketing strategy must keep in mind the following factors:

  • Uniqueness of the product.
  • Key clients of the product.
  • Distribution channels.
  • Logistics of supply chain.
  • Market competitors.
  • Pricing of the product.
  • Research and development.
  • Positioning of the product.
  • Cost Incurred in marketing the product.


  • Loudon (2001). Consumer Behavior: Concepts And Applications. Tata McGraw Hill, New Delhi.
  • Hoyer, W.; Macinnis, D. (2009). Consumer Behavior. South Western, USA.
  • Mooij, M. (2009). Global Marketing and Advertising: Understanding Cultural Paradoxes. Sage Publications, USA.
  • Belch (2003): “Advertising and promotion: an integrated marketing communications perspective” New Delhi: Tata McGraw Hill.

Abhinash Jena

Partner at Project Guru
Abhinash has worked in sales, branding, and marketing functions for GPS companies including MapmyIndia Navigators (www.MapmyIndia.com). In addition to writing for Knowledge Tank articles, he also writes the expert's advice for Thesis & Dissertations and Power Designs.

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