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PART I: MARKETING CONCEPTION AND CONSUMER BEHAVIOUR

1 Strategic Marketing
Structure and Nature of Marketing Conceptions

1.1 Introduction
Definition of Marketing, Selling versus Marketing Concept
1.2 Framework of Marketing Conception
1.3 Decision-making Basis of Marketing Conceptions
1.4 Marketing Objectives
1.5 Marketing Strategies
1.6 Marketing Mix

2 Marketing Management

2.1 Product Policy

2.2 Price Policy
2.3 Distribution Policy
2.4 Communication Policy

3 Consumer and Nutritional Behaviour

3.1 Models of Consumer Behaviour

3.2 Buying Decision Process
3.3 Motives of Food Demand
3.4 Trends in Food Demand
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3 Consumer and Nutritional Behaviour

3.1 Models of Consumer Behaviour

The Basic Model is the so-called

S - O - R - Model

of buyer behaviour

S = Stimuli
O = Organism
R = Response

FIGURE 1: Model of Buyer Behaviour

Model of Buyer behaviour

Kotler 1993, p. 164.

The figure shows marketing and other stimuli entering the buyer’s “black box” and
producing the response: the buyer’s purchase decision.

The outside stimuli are of two types:

(1) Marketing stimuli consist of the 4 P’s: product, price, place and promotion
(2) Environmental stimuli consist of major forces and events in the buyer’s
environment: economic, technological, political and cultural factors
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All these stimuli (and several others more) pass through the buyer’s “black box”
(the hidden inside of the person)
and produce the buyers purchase decision:
• product choice
• brand choice
• dealer choice
• purchase timing
• purchase amount

The marketer’s task is to understand what happens in the buyer’s black box
between outside stimuli and the purchase decisions.

We distinguish two main questions concerning the hidden process inside the buyer:
(1) How does the buyer’s background - cultural, social, personal and
psychological - influence the buyer’s behaviour?
(2) How does the buyer move through a decision process to make purchasing
choice?
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3.2 Factors influencing the buyer’s behaviour

Buyer’s purchase decisions are influenced by his cultural, social, personal and
psychological factors.

FIGURE 2: Detailed Model of Factors Influencing Behaviour

Detailed Model of Factors Influencing behaviour

Kotler 1993, p. 165.

3.2.1 Cultural Factors

Cultural factors exert the broadest and deepest influence on consumer behaviour.
In general, the marketer’s distinguish three different cultural factors:
• Culture
• Subculture
• Social class (this is a social factor, too)

Culture
Culture (or civilization) is the highest entity of personal identification with the society.
These entities were in the past the nations and could be in the future the civilizations
(Western, Muslim, Hindi, Chinese).
Humane behaviour is largely learned. The growing child acquires a set of values,
perceptions, preferences and behaviours through a process of socialization involving
the family and other education institutions.

Subculture
Each culture consists of smaller subcultures that provide more specific identification
and socialization for its members.
We can distinguish several subcultures in the different countries.
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Not only in the United States, but also in European countries we can distinguish:
• National groups (immigrants, Europeans and non-Europeans)
• Religious groups (Catholics, Protestants, Orthodoxs, Muslims, Jews)
• Geographical areas (Regions, regional identy in Germany and in other
European countries)

Social Class !Social Factors

“Social classes are relatively homogeneous and enduring divisions in a society,
which are hierarchically ordered and whose members share similar values interests
and behaviour” (KOTLER, 2000, p. 161)

Social scientists have identified several social classes in a society.

An example for the United States is shown in the TABLE 3 (KOTLER, 2000, p. 164)

Characteristics of Seven Major American Social Classes

1. Upper Uppers (less than 1 percent)

2. Lower Uppers (about 2 percent)

3. Upper Middles (12 percent)

4. Middle Class (32 percent)

5. Working Class (38 percent)

6. Upper Lowers (9 percent)

7. Lower Lowers (7 percent)

Kotler 1993, p. 167.

Social classes show distinct product and brand preferences in such areas as
clothing, home furnishing, leisure activities, automobiles, and food and beverages.
3.2.2 Social Factors

The consumer’s behaviour is also influenced by (other) social factors as

• Reference groups
• Family
• Social rules and statuses
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Reference Groups
“A person’s reference groups consist of all social groups that have a direct (face to
face) or indirect influence on the person’s attitudes or behaviour” (KOTLER, 2000,
p. 163-164)
We distinguish different reference groups:
Membership groups are the groups to which the person belongs,
- family, friends, neighbours, coworkers (primary groups)
- religious, political, professional groups (secondary groups)
Non-membership groups are the groups to which a person not belongs, but which
influence the attitudes and behaviour of the person.
- Aspirational groups are groups to which a person would like to belong.
- Dissociative groups are groups whose values or behaviour are rejected.

Family
Family members constitute the most influential primary reference group shaping
the buyer’s behaviour.
We distinguish between two types of families in the consumer’s life:
- the family of orientation (family of origin) consists of one’s parents.
From parents a person acquires an orientation towards religion, ethics, politic and
economic behaviour and also food patterns.
- the family of procreation (own family) consists of one’s spouse and children.
This family is the most important consumer-buying organization in society.

Roles and Statuses

A person participates in many groups throughout life:
- family, clubs, organizations.
The person’s position in each group can be defined in terms of role and status.
A role consists of the activities that a person is expected to perform according to
the persons around him or her.
Each role carries a status reflecting the esteem accorded to it by society.
Roles and statuses are at the same time a dynamic and a static phenomena:
- they change with the economic and social progress (land owner, entrepreneur)
- people with higher status like to remain their position

People choose products that communicate their role and status in society.
But status symbols vary for social classes and also geographically.

3.2.3 Personal Factors

A buyer’s decisions are also strongly influenced by personal characteristics, so the

- Age and Life-cycle Stage,
- Occupation or Profession,
- Economic Situation,
- Lifestyle.
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Age and Life-cycle Stage

People buy different goods and services over their lifetime:
They eat baby food in the early years, most foods in the growing and maturing years,
and special diets in the later years.

Occupation
A person’s consumption pattern is also influenced by his or her occupation.
A white-collar worker will buy other clothing and food as a blue-collar worker.

Economic circumstances
People economic circumstances consist of their
- spendable income
- savings and assets
- borrowing power
- attitude toward spending and saving.

Lifestyle
People coming from the same subculture, social class, occupation but may lead
different lifestyles.
A person’s lifestyle in the person’s pattern of living in the world as expressed in
the persons activities, interests, and opinions.
Lifestyle portrays the “whole person” interacting with his or her environment.

Personality and Self-concept lead to the Psychological factors.

Personality means the person’s distinguishing psychological characteristics.
Self concept (or self image) means our image of ourselves.
We distinguish several types of Self-Concept:
- actual self concept
- ideal self concept
- others self concept.

The theory is not very clear, the relations between this theory and the buyers’
decision are vague.
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3.2.4 Psychological Factors

In our figure 2 about the factors influencing the buyer’s behaviour are listed four
major psychological factors:
• motivation
• perception
• learning
• beliefs and attitudes
(KOTLER, 2000, p. 161 and p. 171-175).

In the modern consumer behaviour research in Germany we distinguish two main

groups of psychological factor:
(1) activating factors, like
- motivation and emotion
- beliefs and attitudes
(2) conscious factors, like
- perception
- decision
- learning
(See: KROEBER-RIEL/WEINBERGER, Konsumentenverhalten, )

In this theory, the activating factors are the basic factors of consumer
behaviour.

The definitions are given in the

FIGURE 3: Activating factors of consumer behaviour
(Source: v. ALVENSLEBEN, 1993, p. 210)

Without emotional basis, there is no motive.

Without motivation there is no attitude toward a product.
The stronger (weaker) the emotion, the stronger (weaker) the motive, the more psitiv
(negative) is the attitude towards the product
And the higher (lower) is the probability of purchase.

In consumer research, motives and attitudes are usually measured by survey

methods, using interviews with a list if statements and attitude scales.
Emotional reactions to marketing stimuli are measured by psycho-biological
indicators (electro-dermal reactions or blood pressure).

Maslow’s theory of Motivation

An interesting theory has been developed by Abraham MASLOW (Motivation and
Personality. New York 1954, pp. 80-106).
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In Maslow’s hierarchy of needs, human needs arranged from the most pressing to
the least pressing

FIGURE Maslow’s Hierarchy of Needs

Maslow´s Hierarchy of Needs

Kotler 1993, p. 175.

In their order of importance, they are

- physiological needs
- safety needs
- social needs
- esteem needs
- self-actualization needs.

A person will try to satisfy the most important needs, first. After the next important
needs and so on.

Conscious factors,
like perception, decision and learning are strongly joined with the
Purchase Decision Process.
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3.3 Buying Decision Process

For analyzing the Buying Decision Process, we will regard two problems:
(1) The types of consumer decisions
(2) The steps in the buying process.

3.3.1 The types of consumer decisions

Decision processes may be classified in different ways.

One possibility is developed by ENGEL and BLACKWELL (1993), the classification
into high and low involvement products.

High involvement products

Bear a high risk of a wrong decision because of high prices, high importance for the
self image.

This leads to extended problem solving :

- active search and use of information’s,
- careful evaluation of alternatives,
- careful choice.

Low involvement products

Bear a low risk of a wrong decision because of low price, not very different product
alternatives, low importance for the self image.
This leads to simple problem solving, when the information is stored in the memory,
choice is made on the basis of existing information’s.

See FIGURE For Types of Buying Behaviour

Four types of buying behaviour

High Low
Involvement Involvement

Significant Complex buying Variety-seeking

Differences behaviour buying behaviour
between brands

Few Differences Dissonance- Habitual

between brands reducing buying buying behaviour
behaviour

Kotler 1993, p. 179:

Another common classification use the degree of cognitive control

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as a criterion for the different types of consumer decision.

(KROEBER-RIEL, Konsumentenverhalten, 5. Aufl. 1992, Franz Vahlen, München)

The result is four types of consumer decisions:

See FIGURE For Types of Consumer Decision

(v. ALVENSLEBEN, 1993, p. 222)

Decisions with strong cognitive control:

(1) Extensive decisions
(2) Limited (simplified) decisions

Decisions with weak cognitive control:

(3) Habitual (routine) decisions
(4) Impulsive decisions

Extensive decisions
are characterized by an active search and use of information and a complex
evaluation of the alternatives.
Examples are the purchases of a house ore the search for a restaurant to
celebrate a wedding.

Limited decisions
are characterized by a limited search of information, when a certain satisfaction is
reached. This lead to simplified decisions by limiting the number of alternatives and
decision criteria.

Habitual decisions
here we have no search for information and no evaluation of alternatives. The
decision relies on past experiences based on a former extended or limited decision or
on a former impulsive purchase.
Habitual decisions are the patterns of a lot daily decisions which are based not only
of own experience but of the experience of reference persons and groups, too.
The daily purchase decisions of food are a good example.

Impulsive buying decision

is a reaction to a buying stimulus - without former search of information and
evaluation of alternatives.
Impulse buying is a broad pattern of consumer behaviour in supermarkets as a result
of sales promotion and product placing.
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3.3.2 Stages in the Buying Decision Process

The Buying Decision is process rather than a single act.

(This is complete true for the extensive decision process if a consumer faces a hihgly
involving new purchase.)

To understand the buying decision process, it is common to use “stage models” that
subdivide the decision process in different stages.

Stage models are mostly relevant to complex decision making, that is to say, buying
expensive, high-involvement products.

We will use a five-stage model, developed by ENGEL et al., 1993).

This five stages are
- need recognition
- information search
- evaluation of alternatives
- purchase decision
- post-purchase behaviour.

See FIGURE Five-Stage-Model of the Buying Process

Five-Stage Model of the buying process

Need Information Evaluation of Purchase Postpurchase

recognition search alternatives decision behaviour

Kotler 1993, p. 182:

This model implies that consumers pass through all five stages in buying a product.
This may be the case in high-involving purchases. In low-involvement purchases,
consumers may skip or reverse some of these stages.
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This model shows the full range of considerations that arise when a consumer face a
highly involving new purchase.

First stage: Need recognition

The buying process starts when the buyer recognizes a problem or need.
The buyer senses a difference between her or his actual state and a desired state.

The need can be triggered by internal or external stimuli.

- In the first case, one of the person’s physical or psychological needs (hunger,
shelter, communication) rises to a threshold level and becomes a drive.
- In the second case, a need is aroused by an external stimulus. A person passes a
bakery and smells fresh baked rolls.

Second stage: Information search

An aroused consumer will be inclined to search for more information’s.
What sources of information’s are used to help arrive at a decision?

Consumer information’s sources fall into four groups:

(1) Personal sources: Family, friends, neighbors
(2) Commercial sources: Advertising, salespersons, displays
(3) Public sources: Mass-media, consumer-rating organizations
(4) Experiential sources: Handling, examining, using the product.

Normally, the amount of consumer search activity increases as the consumer moves
from situations of limited problem solving to extensive problem solving.

Third stage: Evaluation of alternatives

In the evaluation stage, the consumer forms preferences among the brands/products
in the choice set.
How does the consumer process the information about brand/product choices to
make a final choice?
We see the consumer as trying to satisfy some need. Also, the consumer is looking
for certain benefits from the product solution. The consumer see each product as a
bundle of attributes with varying capacities of satisfying this need.
There are a lot of models describing the consumer’s evaluation procedure.
This models see the consumer as forming product judgement largely on an
conscious an rational basis. All these models built different systems to evaluate the
attributes of the different brands (alternatives).
In the reality, the evaluation process is more or less complex. It’s depends of the
weight of the decision and of the personality of the consumer.

Fourth stage: Purchase decision

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As result of evaluation, the consumer has formed a purchase intention to buy the
most preferred brand/product.

However, two factors can intervene between the purchase intention and the
purchase decision:
(1) the attitudes of others
(2) (unanticipated situational factors

FIGURE Steps between Evaluation of Alternatives and Purchase Decision

Steps between evaluation of Alternatives

and a Purchase decision

Attitudes
of others

Evaluation of Purchase Purchase

Alternatives Intention decision

Unanticipated
situational
factors

Kotler 1993, p. 186:

The “others” are often the members of the family or good friends.
Unexpected situational factors are for example illness, loss of the job etc.
A consumer who decides to execute a purchase intention will be making up to five
purchase sub-decisions:

(1) brand decision (what)

(2) vender decision (where)
(3) quantity decision (how many)
(4) timing decision (when)
(5) payment decisions (how to pay)

Fifth stage: Post-purchase behaviour

After the purchasing the product, the consumer will feel some level of satisfaction or
dissatisfaction. The choice of the product can be followed by satisfaction or by doubt
that a correct decision was made.
The buyer’s satisfaction or dissatisfaction is a function of the closeness between the
buyer’s product expectations and the product’s perceived performance.
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This theory suggests that the marketer must make product claims that faithfully
represent the product’s likely performance so that buyers experience satisfaction
(Model of the “honorable salesman”).

3.4 Motives of Food Demand

The major motives for food demand are nutritional needs/ health, enjoyment (taste/
diversity/ social events)/ convenience/ safety/ transparency, compliance with the
norms of a reference group, prestige, and environmental/political motives. This list
may be extended/ reduced or modified depending on the research object and
purpose. The different motives may be ranked into an order according to Maslow's
hierarchy of needs (Foxall,1988).
The motives depend on some consumer-related variables/ which may interfere
with each other. These variables are: (i) the general norms and values of the society
and of the family/reference group; and (ii) the socioeconomic Situation of the
consumer. For example/ the age of the consumer may influence the motive (e.g. the
health motive) and this affects demand.
In many market research projects the socio-economic variables are used as
independent variables to explain consumer behaviour. In other research projects the
influence of a general value modification within the society on consumer behaviour
has been investigated. Furthermore/ the motives can be affected by the product
presentation rather than the perceived Information on the products. For instance food
scandals with a broad media emphasis may create discredit to the food supply and
may increase the desire for more food safety and more transparency in production
and distribution.
The attitudes towards a product are not only determined by the motives and the
consumption experience, but also by the consumer's perception of the product and
its properties. Perception is most likely to be distorted. The perceived world and the
real world mostly do not correspond with each other. Attitudes and the perceived
product properties are linked variables:

Perceived product properties <-> Attitudes

The more there is a positive (negative) attitude towards a product/ the consumer
prefers the selective perception of positive (negative) properties of the product -
leading to a stabilization of the attitude towards the product.
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The effect of the income on demand may be modelled in two approaches: (i) as a
demand restriction - according to the microeconomic theory of the household; and (ii)
as a factor influencing attitudes, motives and other consumer-related variables/ such
as values. Within the context of the microeconomic theory the latter case means that
income has an influence on the preference function of the consumer.

MAJOR MOTIVES OF FOOD DEMAND

The following section will give a brief survey of the major motives of food demand/
which are listed in Fig. 10.2.

Some variables influencing food demand

Alvensleben p. 212, in Padberg/Ritson/Albisu 1997: Agro-Food Marketing

Nutritional needs
Every consumer has certain requirements for energy and nutrients such as fat,
protein, carbohydrates/ minerals/ vitamins, etc. depending on his or her age, sex,
weight, working conditions, temperament and the climate. However, many people are
consuming more rather than less food than they need.
In rich societies the following development has occurred: the mean food calorie
consumption increased, while the calorie requirements decreased - resulting in a
widespread overnutrition. Many people suffer from overweight and health problems
caused by a surplus of food energy. The modern consumer did not adapt to the
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Situation of plentiful food. In contrast, the share of people with malnutrition is

estimated to be 15-40% of the population in the low-income countries. In these
segments of the population the available income is restricting the demand to satisfy
the nutritional needs.

Health motive
In high-income societies the food energy surplus has led to a widespread desire to
reduce overweight/ to control the calorie intake and to pay more attention to healthy
nutrition. The consequences are an increasing demand for 'health foods', calorie-
reduced food and dietetic food. On the other hand many consumers avoid food
containing cholesterol. This is probably the major reason for the decline in egg
consumption. The health motive differs significantly between the sexes and the age
groups. Women between 30 and 40 are much more concerned in controlling their
calorie intake than men and other female age groups. At advanced age the
consumer has to cope with growing health problems. This leads to more health
consciousness and demand for a healthy nutrition among the older people.

Desire to enjoy food

In every society we find a basic desire to enjoy food. Food consumption means much
more than the intake of nutrients according to the physiological requirements. People
prefer to consume tasteful food and diversified food. Furthermore, people like to
purchase, prepare and eat food eventfully (e.g. at barbecue parties/ in speciality
restaurants/ purchase direct at a farm). With the increasing Saturation of consumers,
the demand for quality diversity specialities and products which offer more than just
food, is going up, while the demand for inferior qualities and everyday products is
going down. The desire to enjoy food may cause some conflicts with the health
motive. This may offer good market prospects for products providing a solution to this
conflict.

Convenience motive
People like to avoid effort and inconvenience in buying, preparing and consuming
food. Products which offer solutions are called convenience goods. Examples are
canned or deep frozen foods, ready-to-cook soups, potato mash, ready dishes and
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fast food. Most of our products have convenience advantages or disadvantages. For
instance, some consumers prefer mandarins as
easy peelers to oranges for convenience reasons. The decline in the consumption of
fresh potatoes is partly due to the inconvenience of their preparation. Many children
prefer margarine because it can be spread on bread more easily than butter. The
convenience motive has gained increasing importance due to changing attitudes
towards housework/ better education of women and
changing roles of housewives/men, leading to an increasing participation of women
in out-of-home employment combined with a rising income. The consequence is an
increasing share of Services/ which are consumed together with food/ and the fast
development of time-saving shopping Systems and habits.

Safety motive
Especially in affluent societies we observe a growing concern about residues in food.
Confidence in the food supply has deteriorated. On the other hand - according to
most nutritional scientists - food safety has never been at such a high level as today.
Obviously many consumers are subject to perception distortions caused by
numerous food scandals with extensive media emphasis. This development has
been accompanied by an increasing alienation of the consumer in the mass
distribution System, leading to more distrust. Furthermore, a general deterioration of
the confidence in authorities and institutions in our society can be observed/ which
includes food inspection and food science. The result is a growing demand for
controlled food, health food and organic food, which promise more food safety, and a
desire for more transparency and personal atmosphere in the production and
distribution System. In some segments of the population we find a growing interest in
buying direct from the farmer, for home garden production and
baking in the home. The wish for more confidence is also supporting brand and
store/seller loyalty.

Compliance with the norms of a reference group

In general/ the consumer likes to live in compliance with the norms of his reference
groups. Examples are religious motives for nutrition habits, conventions and fashions.
However, we will also find the motive to escape the conformist pressure of the
society. Every society has its drop-outs/ subcultures and snobs. In the case of a snob
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effect, a good is preferred because it is consumed by only a few people. In some

cases the nonconformist behaviour of a subculture may have a pioneer function for
the change of consumer attitudes of the majority. In the early stages of the
development of the organic food market, consumers belonged to a small, not very
well accepted subculture in society. More recently, organic food has gained a positive
image within the majority of the society.

Prestige motive
The wish for compliance with the norms of a reference group is often combined with
the prestige motive. The consumer is buying certain goods to seek the recognition of
his reference group. People with low self-confidence are tending more often to
prestige consumption than people with high self-confidence, who depend less on the
opinion of other people. Prestige consumption is widespread in lower classes and in
upper classes as well. Veblen (1899) criticized a typical upper class behaviour: a
good may be preferred more, the higher the price non-buyers assume to apply. The
prestige motive is important in the market for cars, clothes and travelling. On the food
market/ certain products, such as Champagne, caviar and others have a prestige
value. The decline of butter consumption is perhaps partly due to a loss of its prestige
value compared to margarine.

Environmental/political motives
The demand for certain goods may be motivated by political issues, e.g. the demand
for products which are supposed to preserve the environment and resources (organic
food, reusable bottles, etc.). Another important factor is the widespread consumer
preference for products grown in the local region or country, which may be supported
by special campaigns (`Buy British') or by labels of origin. The driving force of these
preferences is either patriotism or the belief that these products are fresher or
cheaper or have saved resources- Furthermore/ certain products have been subject
to political boycotts ('No fruit from South Africa', or "No bananas from multinationals').
Others have been promoted with political reasons (`Buy coffee from Nicaragua', or
the Fair Trade' campaign in Germany).

3.5 Basis Trends in Food Demand

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Table 10.2 shows in a schematic way the long-term change and differentiation of
consumer preferences for food in a growing economy. The development may be
divided into three phases;

FIGURE: Change and differentiation of consumer preferences for food in

a growing economy
Change and differentiation of consumer preferences for food in a growing economy

Influence of income and prices

Strong Decreasing Small

(1st phase) (2nd phase) (3rd phase)
Get enough food (Health trend) Concern about residuals
Eat more Eat healthy Concern about the
Less calories environment
More vitamins Eat, buy and prepare
food more eventfully
(Diversification trend) More transparency
Eat better and more Less anonymous mass
diversified consumption
Enjoy food Back to nature

(Convenience trend)
Eat, buy and prepare
food with more
convienence
Alvensleben p. 216, in Padberg/Ritson/Albisu 1997: Agro-Food Marketing

1. Phase1. The Situation is characterized by a general food scarcity. For this

reason food demand is dominated by the nutritional need of getting enough food.
The income and price elasticities of demand are high. The development of the
per capita demand for food depends very much on income development.
2. Phase 2. With growing income the basic physiological needs are satisfied
resulting in a decline of the income and price elasticities of demand for basic
food. Other motives behind food demand are gaining relative importance: the
health trend, the desire to enjoy food/ the diversification trend and the
convenience trend.
3. Phase 3. The income and price elasticities of food demand are very small. The
main trends of phase 2 prevail; however, they are differentiated and partly
reversed. A growing concern about residues is promoting the demand for more
food safety. The growing concern about the environment is stimulating the
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search for problem solutions, which preserve resources. These trends are partly
accompanied by a nostalgic move 'back to nature' and by the wish
for more transparency and less anonymous mass consumption. They are
contrasted by an increasing hedonism, the desire to eat, buy and prepare food
more eventfully. For many people food consumption is becoming part of an
'adventure seeking behaviour'.