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Lesson 1: Consumer Behavior

The Meaning of Consumption and Consumer Behavior

We will be exploring two perspectives of consumer behavior: human thought and action, and consumer behavior as a field of study.

Let’s get started with a question:

What links are there between an economic downturn and consumption?

Click on the Show Answer link below to check your answer.

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Answer: You might have included some of the following: fewer requests for services, people taking fewer vacations, loss of jobs, more expensive education, housing market being in trouble, and people buying more used items.

Consumer behavior: The study of consumers as they go about the consumption process. (Babin & Harris, 2015)

Your textbook defines the following basic concepts related to consumer behavior: 

  • Consumer behavior is the set of value-seeking activities that take place as people go about addressing realized needs. 
  • Consumption represents the process by which goods, services, or ideas are used and transformed into value.
  • Economics is the study of production and consumption. (Babin & Harris, 2015)

Next we will examine the process, field, treatment of customers, and importance of relationships and competition.

The Basic CB Process

Let’s examine the basic CB process with this example: Ahmed wanted a new car.

  • Need: In the first step, the consumer determines a need for a new car that has good gas mileage, which would help with his commute to college.
  • Want: The want is to have better mobility and access to friends, family, school, and fun; therefore, Ahmed (the consumer) visits a car lot and speaks with a sales person.
  • Exchange: The exchange occurs when money is exchanged for the chosen car.
  • Costs and benefits: The costs involve the actual financial price (with interest) of the product, as well as the time and physical effort to visit the retailer. The benefits are the positive results of the purchase, such as a feeling of independence and freedom, and getting to class on time.
  • Reaction: The reaction follows the purchase when the consumer evaluates the effectiveness of the car.
  • Value: Ultimately, the process results in a perception of value. It is likely that Ahmed will spread the news via word of mouth (WOM), and may post a review online or on Twitter or Facebook.

The figure below shows the steps of the CB process, as well as Ahmed's thoughts during each phase.

Source:  The Pennsylvania State University and ThinkStock / iStock / Yuri Arcurs

Figure 1.1. Steps in the CB Process


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