Basically, a marketing theory is a set of principles that explain how consumers make decisions in the market place. It is based on the concept of the hierarchy of needs, as defined by Maslow. There are also other theories on consumer behavior, such as the Expectancy Dissonance Theory, the EKB Model, and Porter’s Five Forces.
Maslow’s hierarchy of needs
Using Maslow’s Hierarchy of Needs in marketing theory can be useful to understand the needs of your customers. It provides a framework for organizing your promotional efforts and appealing to your customers.
The theory is often depicted as a pyramid, with the higher levels of the pyramid focusing on needs that are psychological. These are needs for self-esteem, love, and belonging. The lower levels of the pyramid focus on needs that are physiological, such as food, shelter, and security.
People move on to the next level of the pyramid when the lower level needs are fulfilled. This means that if a person is extremely hungry, for instance, they will not be able to concentrate on other needs.
In more recent studies, the hierarchy has been further restructured. The five basic needs were initially classified as safety, love, and belonging, but a few more categories have been added. In addition to these, Maslow included other types of needs, such as psychological and cognitive needs.
A good marketer will understand the needs of his or her customers. Knowing these needs can help them find creative ways to connect with them. They will know that the most direct path to selling is to fulfill the consumer’s needs.
Marketing schools use Maslow’s hierarchy of needs as a reasonable focus for modern marketing efforts. They teach that a product may be great, but if pitched to the wrong audience, it will not meet a consumer’s needs. It is important to identify your target audience and tailor your marketing techniques to them.
The theory of Maslow’s Hierarchy of Needs is helpful to marketers because it identifies the five primary human needs. It also provides a compass for understanding the motivation of consumers.
Engel Kollat Blackwell (EKB) Model
Developed by Engel, Kollat, and Blackwell in the late sixties, the EKB model of marketing theory was a big jump forward from the earlier versions. It is now widely accepted that consumer decision making is complex and involves several interrelated factors. Among them are internal and external influences.
The EKB model has been tweaked and improved upon several times over the years. It is a useful tool for analyzing a customer’s experience after purchasing a product or service. It helps to quantify the benefits and pitfalls of a given product or service, and to tailor it to the whims of the individual customer.
In a nutshell, the EKB model of marketing theory is a synthesis of the many elements that make up the decision making process. It includes the main axes of the triangle: information input, information processing, and information output. Aside from examining the main axes, the model also considers the most important influencing factor, which in this case is the customer. The key to successful application of the EKB model is to identify the relevant factors. Then, it is a matter of utilizing these elements to build a marketing plan that would make a customer’s life easier and more enjoyable.
The EKB model of marketing theory is one of the most valuable tools in an organization’s arsenal. It enables you to devise a bespoke marketing strategy for your product or service, and ensure that your customer is happy with your offerings. Its most important function is to inform you of the key factors that determine your customers’ purchase decisions, and to advise you of how to improve the likelihood that your customers will become repeat purchasers.
Hawkins Stern’s theory of consumer behavior
Founded in 1962, Hawkins Stern’s theory of consumer behavior was a breath of fresh air. His theory challenged the dominant theory of the day, which was the Need Hierarchy Theory of Motivation (NHTM) of Abraham Maslow. He argued that impulse buying was only one half of the average consumer’s buying habits.
The theory is based on four major categories of impulse buying. The first, pure impulse, is also the least significant. The second, habitual, is the most common. The third, reminder, is the most impressive.
The most important category, which is not limited to one product type, is the “reminded” impulse. The impulse is driven by a series of small events, which make associations between products. This is most evident when an item is new, or the buyer hasn’t previously seen it.
The best part about the Stern’s theory of consumer behavior is that it applies to virtually all businesses. The main takeaway from the study was that the number one reason consumers purchase something is because it is in their “need list.”
It’s also a good idea to consider the role that external factors play in impulse purchases. For instance, an unexpected price drop can trigger an impulse buy. Similarly, heavyweight items require special transportation arrangements, while easy to store items are more likely to be purchased impulsively.
The “shelf life” of a product, or its shelf life, is also an important factor. For example, if the shelf life of a certain food is short, the consumer will likely purchase more than he needs, thereby reducing his likelihood of returning the product.
The other major takeaway from the study was that a lot of marketers use mass advertising to trigger impulse buying decisions. The best way to combat this is to provide a tailored customer experience.
Expectancy disconfirmation theory
Among the many theories pertaining to customer satisfaction, expectancy disconfirmation theory posits that expectations are an important determinant of consumer satisfaction. According to this model, consumers compare their prior expectations of a product with its actual performance. This cognitive process can result in three possible outcomes: satisfaction, dissatisfaction, and the assimilation effect. In this paper, we investigate the relationship between performance and expectations on satisfaction.
We test the efficacy of three different methods of measuring disconfirmation. The results show that the difference scale is the best measure of disconfirmation. This measure has higher coefficients than the Attitude-Specific Scale. The Better Than-Worse Than Scale has a parallel effect on satisfaction.
We also look at a more traditional regression analysis to determine how the two variables interact. The results show that performance is a more important predictor of satisfaction than expectations. This is a good thing because the expected result is that a higher level of performance will boost satisfaction. However, the relationship between performance and expectations has not been proven to be as strong as the results of the study suggest.
As we can see from the results, the EDM model has some problems. There are differences in the effect sizes, which may be a result of the construction of the model. Moreover, it is difficult to distinguish between the causality of the variables. This makes it challenging to come up with effective methods for manipulating disconfirmation.
We conclude that the EDM model can be improved upon by using more realistic measures of disconfirmation. It is also noteworthy that some studies used a subset of the model, which is not a good idea because it may reduce the explanatory power of the model.
Porter’s Five Forces
Using Porter’s Five Forces in marketing theory can help businesses identify and outmaneuver competition. The model was developed in the 1970s by Michael E. Porter, a professor at Harvard Business School. It helps businesses determine the competitive forces within an industry and how these forces affect profitability.
This analysis can be used to analyze industries in order to make better business decisions. It also helps companies develop a competitive strategy. By evaluating the forces that drive an industry, businesses can learn how to increase their capacity and generate higher earnings.
The Porter five forces framework is based on industrial organization economics. It accounts for the relative power of suppliers and buyers, as well as the bargaining power of customers. The model also assesses the overall competitive intensity of a market. The higher the attractiveness of an industry, the more profit it can yield for existing firms and attract new ones.
When companies are trying to get into an industry, there are a number of barriers to entry. These may include economies of scale, government policies, and patents. By predicting the threats, businesses can develop a strategy to counter them.
Knowing the competitive pressure of an industry is critical to the survival of a company. It can also help businesses stay on top of changes that occur in the industry. By understanding the forces that influence the industry, companies can be positioned to avoid making mistakes and maximize profitability.
The Porter five forces framework is one of the most useful situational analysis tools. It can be used in conjunction with Value Chain Analysis and VRIO. It helps businesses determine the market size, the competition, and the competitive edge of their industry.