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Lesson 1: Consumer Behavior

Consumer Behavior and Marketing Strategy

Consumer behavior is not only an interesting subject but also an important topic to understand from multiple perspectives. There are three key reasons for studying CB:

  1. Consumer behavior is the basis for strategic and tactical marketing decisions about the marketing mix (also known as the four Ps: product, pricing, place, and promotion).
  2. Consumer trends are both a reflection of and a driving force of societies.
  3. Understanding why and how you make purchasing decisions can help you make responsible ones.
The resource-advantage theory explains why companies succeed or fail; the company goes about obtaining resources from consumers in return for the value the company's resources create (Babin & Harris, 2015).


Resource-advantage theory is a general theory of competition that describes the process of competition (Babin & Harris, 2015). At its core, it involves in-depth analysis of a business’ resource availability and—in conjunction with the implementation of the market-orientation concept—identifies and fills gaps in resources needed to identify, anticipate, and satisfy consumer needs.

Doing so effectively determines competitive advantage; doing so efficiently determines financial success. Thus, resource-advantage theory explains why companies succeed or fail. Businesses have a goal of achieving long-term survival. Companies that achieve that goal do so by obtaining resources from consumers in return for the value they create. Businesses that create more value for consumers, and those that can continue to do so over time, are more likely to experience success. This exchange helps to explain resource-advantage theory.


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