At present, project management is facing a lot of contextual changes, such as rapid changes in the modern consumer’s desires, inflation in world economies, growing consumer awareness and consumer protection movements. The changes require proper solutions, which care for consumer needs and the public interest while achieving the business aim of profit-making.
Seeking easy solutions for marketing problems aggravates matters due to the complexity of consumer behavior and the intricacy of related factors. In addition, management often suffers from lack of relevant information necessary for proper decision-making. Therefore, it is imperative to understand the intricacies of behavior motives, calculate the costs of alternative marketing strategies and gather the information needed for competent decision-making. These requirements are considered essential for modern management.
The present book deals with various aspects of consumer behavior, in addition to the study of consumer purchase decision and its major determinants. It is methodologically based on a practical application approach. A unique feature of this book is its adoption of a methodological framework integrating all marketing dimensions with consumer behavior, theoretically and practically.
The book contains nine chapters, discussing the basic principles of marketing, the marketing environment and consumer behavior. As the cornerstone of marketing activities, consumer behavior is discussed in terms of the following: behavior patterns and major determinants; purchase decision process and stages; purchase decision patterns; various roles in purchase decision-making; the psychological, social, economic and marketing factors related to the purchase decision; and the purchase decision interaction within the family, with special reference to the Saudi family.
A major reason for writing this book is the author’s desire to provide students with up-to-date vital material related to untraditional, varied and intensive research areas in the field of marketing. Another major reason is his desire, as a practitioner of marketing, to contribute to the advancement of the management and practice of the marketing process in our developing environment in order to attain the required effectiveness and competence.
In conclusion, the author prays that Allah, the Almighty, may make his effort, though humble, contribute to the fulfillment of felt needs and achieve its desired benefits.
It is only Allah that grants success.
Dr. Khaled Ibn Abdul-Rahman Ibn Ali Al-Jeraisy
Chapter 1: Marketing Activity Management
The economies of contemporary societies, the lifestyles of their members, and the achievement of their prosperity are directly and indirectly affected by marketing activities. In order to survive and grow, an organization has to sell its products. So, it must decide what it sells and to whom it sells it. Under current market conditions, the marketing role is no longer a limited one. In fact, marketing plays a strategic role, crucial to the future of an organization. All types of plans in a contemporary organization rely on the expected volume of sales. This requires conducting scientific marketing studies in order to determine all of the organization’s future activities.
Movement of products to the consumer market and the reality of excess supply over demand urgently and continuously require accurate estimation of the quantity and quality of demand. The study of consumers’ needs and the quality of products to be supplied is the starting point for all of the organization’s activities.
Now, let’s discuss what is meant by marketing.
1.1 The Marketing Concept
Even though great attention is being given to marketing as a major practical determinant of an organization’s success, and a great number of managers are aware of the role of marketing in achieving its objectives, the marketing concept and dimensions are still unclear to many individuals, businesses, organizations and government agencies. They still think of marketing as only selling, promotion and other trade-related activities. These activities are not to be underestimated as part of marketing. However, marketing is an organized and comprehensive activity that includes various integrated tasks and functions much wider than mere selling and promotion. From a modern management perspective, the marketing concept goes beyond promoting and selling products, using all means possible to maximize sales and profits.
There is no agreement on the definition of marketing. Some writers limit it to the distribution of products. Others define it as a set of relationships. While some deal with it from an integration point of view, others deal with it from a flow angle. Thus, it is necessary to shed light on the different definitions of marketing in order to demonstrate its truly comprehensive nature.
The American Marketing Association defines marketing as “all activities performed to allow the flow of goods and services from the producer or the importer to the final consumer or industrial buyer.”(1) This definition implies that marketing performs a basic task, namely making goods and services available at a particular time and a particular place, where the consumer is. The definition seems to limit marketing to distribution and selling. Similarly, Glutenberg defines marketing as “the process of moving the product from the producer to the consumer.
Stanton criticizes the American Marketing Association’s definition of marketing for being narrow. Seeking a broader definition, he puts forward this one: “Marketing is a total system of interacting business activities designed to plan, price, promote, and distribute want-satisfying products and services to present and potential customers.
Erickson and Richard define marketing as “a set of integrated activities performed by an organization in order to facilitate exchange processes.” For that purpose, the marketing department has to perform two essential functions: (a) encouraging demand for its products; and (b) servicing demand. The former function is to be achieved through the following: determination of market opportunity, research, product planning, advertising, personal selling and sales promotion, pricing, and branding. The latter function is to be achieved through actual exchange implementation. It involves storage and transportation, filling orders and exchange, technical service, warranty, distribution outlets, selecting market segments, and financing the marketing activity.
Kotler, the pioneer of the new school of marketing, considers marketing as “a social and managerial process whereby individuals and groups satisfy their needs and wants through making and exchanging products and values… with others.”(5) This definition considers marketing as a mix of these particular elements: a human activity element; a satisfaction element; and an exchange element
The human activity element is concerned with individuals and their behavior. The marketer is to identify their needs and wants in order to satisfy them. The satisfaction element is to be accomplished through the products supplied by the firm to the market. Satisfaction is to be accomplished through exchange. The exchange element is to be implemented within a spacio-temporal dimension representing the market. (6).
In spite of the comprehensiveness of Kotler’s definition, there are other practical considerations that require researchers to deal with the marketing concept from other perspectives in order to reach a thorough understanding of the value and importance of marketing; a lot of organizations consider marketing the backbone of their activities, survival and growth.
Ferrel and Pride agree that these definitions and others may be acceptable to some academicians and practitioners, but they have some defects for one or more of the following reasons:
1. One definition limits marketing to business enterprises even though it is practiced by non-profit and service organizations.
2. The definitions seem to be too general to determine the marketing scope.
3. Marketing does not only deal with goods and services but also with ideas.
4. The definitions do not recognize that marketing decisions are activities that take place in a dynamic environment.
In light of these criticisms, Pride and Ferrell give the following definition: “Marketing consists of various activities of individuals and organizations that facilitate exchange in a dynamic environment by producing, distributing, promoting, and pricing goods, services, and ideas.”(7)
Obviously, the definitions mentioned so far do not give an accurate or comprehensive picture of marketing, probably because marketing, as a science, is still undergoing fast and continuous development. Thus, attempting to define marketing, each researcher has dealt with a particular aspect of marketing.
The following definition attempts to give a more comprehensive picture: “Marketing is all the activities that are designed to make and facilitate any exchange process aiming at satisfying human needs and wants. “(8) According to this definition, both the consumer and the society are considered the starting point in planning an organization’s activities, which aim basically at satisfying human needs and wants. In addition, the definition refers to the basic marketing elements (product, price, distribution, and promotion) as an integrated system. It also implies that marketing facilitates various exchange processes of ideas, goods and services among individuals on the one hand, and among organizations and individuals on the other.
One of the salient points in this definition that relates to this study is the significance of the exchange concept. Marketing does not exist when one decides to satisfy his needs and wants, but when exchange is involved.
By exchange we mean obtaining something wanted from a person or an organization in exchange for something else wanted. Exchange takes place through marketing processes, which is a transaction between two parties and comprises two things of value. A transaction may be monetary, when goods, services, and ideas are exchanged for money. It may take place in the form of barter, when products are exchanged for products. Exchange is the essence of marketing, and for it to take place, it must meet the following conditions:
1. At least two parties have to be involved in the exchange.
2. Each party must have something of value for the other party.
3. Each party must have the ability to communicate, deal and deliver.
4. Each party must have the freedom to accept or reject the offer of the other party.
5. Surrounding circumstances must be appropriate for completing the exchange.
In general, exchange implies utility, symbolism or both, hence the marketing terms “utilitarian exchange”, “symbolic exchange” and “mixed exchange”.
This type of exchange is often associated with economic utility where the motive is to benefit from the expected use of the product or its tangible attributes. In general, the theory of utilitarian exchange is founded on the concept of the “economic man”, which is, in turn, based on the following assumptions:
• Individuals are rational in their behavior.
• Individuals try to maximize their satisfaction through exchange.
• Individuals have complete information on the available alternatives.
This is the exchange of psychological and social values and other intangibles between two or more parties. According to Levy, who first introduced this behavioral aspect to the exchange process in marketing, a consumer often purchases goods and services not because of what they directly offer, but because of their social and psychological symbolism. So, when a lady purchases a fur, it does not only mean the great warmth the fur provides, but also the high social status it symbolizes for the lady as well as her feeling of pride and elegance.
An exchange process in marketing may be both utilitarian and symbolic. Underlying this mixed exchange is the new concept of the “marketing man,” who simultaneously seeks material and symbolic utilities from the exchange process. The “marketing man” concept is based on the following assumptions:
a. Some aspects of a person’s behavior are rational, while others are emotional.
b. A person is motivated by material and non-material stimuli, and by internal and external forces.
C. A person participates in utilitarian and symbolic exchanges, which have psychological and social dimensions.
d. Although one is exposed to incomplete information, one benefits from it in the best way possible, and simply calculates the costs and social and economic advantages associated with exchange. Exchange does not take place in isolation, but it is subjugated to a large number of economic, social, legal, and ethical limitations, etc.(9)
In light of the mixed exchange concept and the previous discussion on marketing definitions, the researcher adopts a definition that is best suited to the present study: “Marketing is a set of integrated activities that take place within a specific managerial activity framework and guide the flow of goods, services, and ideas in order to achieve satisfaction through an exchange process and achieve the objectives of producers, distributors, or importers within the constraints of the surrounding environment.”(10)