Introduction to Consumers

Defining Consumers

A consumer is a person (or group) who pays to consume the goods and/or services produced by a seller (i.e., company, organization).

Learning Objectives

Define the characteristics of a consumer

Key Takeaways

Key Points

  • Any product, good, or service that is developed must have a target market in mind in order to be effectively marketed and sold.
  • There are six types of target markets: a) Consumer Markets; b) Industrial Markets (made up of industrial companies); c) Commercial Markets; d) Government Markets; e) International and Global Markets and f) Markets segmented for strategic targets.
  • Some may find the term or label “consumer” somewhat offensive as it is considered to be more descriptive of plain consumption rather than recognizing the person behind the purchase.
  • It is important to note that consumers (or customers) play a vital role in the economic system of a nation.
  • Marketers are now starting to work on individualizing the concept of “A Consumer,” by engaging in personalized marketing, permission marketing, and mass customization.

Key Terms

  • Consumer: The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce, which is to sell to consumers.

In the fields of economics, marketing and advertising, a consumer is generally defined as the one who pays to consume the goods and services produced by a seller (i.e., company, organization). A consumer can be a person (or group of people), generally categorized as an end user or target demographic for a product, good, or service.

Any product, good, or service that is developed must have a target market in mind, in order to be effectively marketed and sold. In marketing, there are six types of target markets:

  1. Consumer Markets
  2. Industrial Markets (made up of industrial companies)
  3. Commercial Markets (consisting of service companies, non-manufacturing companies, and not-for-profit organizations)
  4. Government Markets (made up of government agencies)
  5. International and Global Markets (several markets distinguished by different needs and different cultures)
  6. Markets segmented for strategic targets (markets segmented by strategy and product characteristics, and hence by characteristics of the buyer)

Some may find the term or label “consumer” somewhat offensive because it can be construed as being more descriptive of plain consumption (black and white purchase), rather than recognizing the person behind the purchase, who typically has feelings, needs and overall importance. It is important to note that consumers (or customers) play a vital role in the economic system of a nation. Typically when business people and economists talk of consumers they are talking about an individual person, an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. Now, there is a trend in marketing to individualize the concept of “A Consumer.” Rather than generating broad demographic profiles and psycho-graphic profiles of market segments (which has been the norm), marketers are now starting to engage in personalized marketing, permission marketing, and mass customization. Marketers are paying close attention to consumer behavior or how potential buyers act when purchasing goods or services for personal consumption.

an open market in Vienna with many people crowding the streets.

Open Food Market in Vienna: An open food market shows how consumers play an important role in a nation’s economy.

Goals of Consumer Market Research

Consumer market research is the systematic collection of data regrading customers’ preferences for actual and potential products / services.

Learning Objectives

Discuss the various purposes of consumer market research

Key Takeaways

Key Points

  • The ultimate goal of consumer research is to serve as the voice of the consumer.
  • Marketing research focuses on understanding the consumer as a person by focusing on exploring his or her attitudes, needs, motivations, and behavior as it relates to a product or service.
  • More broadly, consumer research helps to provide a company with relevant, reliable, valid, and current information or their target buyer.
  • The primary goal of consumer market research is to identify, understand, and analyze customers and their needs.

Key Terms

  • Market Research: The systematic collection and evaluation of data regarding customers’ preferences for actual and potential products and services.
  • Marketing Research: The function that links the consumers, customers, and public to the marketer through information. This information is used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

In the field of marketing, consumer market research can be generally defined as the systematic collection and evaluation of data regrading customers’ preferences for actual and potential products and services. It is also important to note that consumer market research is not directly synonymous with marketing research. Marketing research is actually comprised of both consumer and business-to-business research and examines all aspects of a business environment.

The ultimate goal of consumer research is to serve as the voice of the consumer. This type of research focuses on understanding the consumer as a person by focusing on exploring his or her attitudes, needs, motivations, and behavior as it relates to a product or service. More broadly, consumer research helps provide a company with relevant, reliable, valid, and current information about their target buyer.

A group of soliders sits around a table while a woman discusses a PowerPoint presentation at the front of the room.

Focus Group: Soldiers and family members participate in focus groups.

Consumer market research can serve a variety of purposes including:

  • Help companies make better business decisions and gain advantages against the competition
  • Help marketing managers or executives make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs
  • Remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, the consumer response to marketing programs cannot be predicted reliably or accurately
  • Provide insights that help guide the creation of a business plan, launch a new product or service, optimize existing products and services, and guide expansion into new markets
  • Determine which portion of the population will be most likely to purchase a product or service, based on variables such as age, gender, location, and income level
  • Reveal characteristics of a target market
  • Understand how consumers talk about the products in the market
  • Identify which consumer needs are important and whether the needs are being met by current products

For instance, a consumer goods company that wants to develop a new cheese product for the growing Hispanic demographic can use market research. If the consumer market research demonstrates that consumers do in fact have an unsatisfied need for a cheese that could replace the product they are currently consuming in Latin America, the company could go ahead and develop the cheese product.

Quantitative vs. Qualitative Research

Both quantitative and qualitative models seek to explain patterns in behavior, but the former is mathematical and the latter is more descriptive.

Learning Objectives

Distinguish between quantitative and qualitative research methods

Key Takeaways

Key Points

  • Quantitative Research is defined as the systematic empirical investigation of social phenomena via statistical, mathematical or computational techniques, to develop and employ mathematical models, theories and/or hypotheses pertaining to phenomena.
  • Quantitative research is conducted using scientific methods such as: the generation of models, theories and hypothses; the development of instruments and methods for measurement; experimental control and manipulation of variables; collection of empirical data; and modeling and analysis of data.
  • Qualitative Research is the examination, analysis and interpretation of observations for the purpose of discovering underlying meanings and patterns of relationships, including classifications of types of phenomena and entities, in a manner that does not involve mathematical models.
  • A Qualitative researcher helps obtain in-depth understanding of human behavior and the reasons that govern such behavior (why and how, not just what, where, when). Smaller, more focused samples are required than with quantitative research methods.
  • Examples of Qualitative Approaches used in collecting data Include: storytelling, classical ethnography, interviews (via phone or in-person), and focus group discussions.

Key Terms

  • ethnography: The branch of anthropology that scientifically describes specific human cultures and societies.
  • Focus Group: A group of people, sampled from a larger population, interviewed in open session for market research or political analysis.
  • Empirical Data: Data derived from reliable measurement or observation.

What is Quantitative Research?

Quantitative Research is defined as the systematic empirical investigation of social phenomena via statistical, mathematical or computational techniques. Its objective is to develop and employ mathematical models, theories and/or hypotheses pertaining to phenomena. At its core, quantitative research is used to identify patterns and predict behavior. This type of research is used in business, marketing and in social sciences such as psychology, economics, sociology, and political science, and, less frequently, in anthropology and history.

Quantitative research is generally conducted using scientific methods, which can include:

  • The generation of models, theories and hypothses
  • The development of instruments and methods for measurement
  • Experimental control and manipulation of variables
  • Collection of empirical data
  • Modeling and analysis of data

What is Qualitative Research?

Qualitative Research is the examination, analysis and interpretation of observations for the purpose of discovering underlying meanings and patterns of relationships, including classifications of types of phenomena and entities, in a manner that does not involve mathematical models. For example, in the social sciences, qualitative research methods are often used to gain better understanding of such things as intentionality (from the speech response of the researchee) and meaning (why did this person/group say something and what did it mean to them?).

This research asks broad questions and collects word data from participants. Qualitative methods produce information only on the particular cases studied, and any more general conclusions are only hypotheses. Unlike quantitative methods which are used to identify patterns and make predictions, qualitative research aims to explain behavior.

four men sit around a table to discuss and take notes.

Qualitative Research: In qualitative research, a moderator asks questions about a specific topic and gathers insights from group members.

Qualitative researchers aim to gather an in-depth understanding of human behavior and the reasons that govern it. The qualitative method investigates the why and how of consumer behavior, not just what, where, when. Hence, smaller but focused samples are more often needed than the large samples required of quantitative methods.

Qualitative researchers typically rely on the following methods for gathering information: Participant Observation, Non-participant Observation, Field Notes, Reflexive Journals, Structured Interview, Semi-structured Interview, Unstructured Interview, and Analysis of documents and materials.

The Following Are Some Examples of Qualitative Approaches Used in Collecting Data:

  • Storytelling
  • Classical Ethnography
  • Interviews (phone or in-person)
  • Focus Group discussions

In a focus group, a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a specific product, service, concept, advertisement, idea or packaging. It is conducted in an interactive group setting where participants are free to talk with each other.

a man looks in the video of a interview.

Qualitative Interview: During a qualitative research interview at some facilities, the respondents and interviewer can be seen from a two-way mirror.