5 Ways Consumer Behaviour Shapes Business Strategies

19 October 2023

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Type: Text
Category: Industry insights

In this piece, Dr Pedro Longart – Course Leader for our new MSc Marketing - examines five critical dimensions of consumer behaviour, a cornerstone of effective business strategy. We illustrate how our MSc Marketing course harmonises cognitive and behavioural paradigms, augments them with practical case studies, and emphasises ethical considerations. Specifically, we explore the underlying motivations for consumer decisions, the pivotal role of contextual adaptations, disruptive innovations that alter market landscapes, and the nuanced interplay between cognitivism and behaviouralism. 

1. Motivations Matter: Beyond Surface-Level Choices 

Companies such as Tesla, Amazon, and McDonald's have achieved remarkable success by adopting a dual approach that marries both cognitive motivations and observable behaviours. Tesla's market penetration, for instance, aligns neatly with Rogers' ‘Diffusion of Innovations’ theory, where the brand first captivated 'Innovators' concerned about environmental sustainability. Amazon on the other hand, has successfully moved its Prime product from 'Early Adopters' to the 'Early Majority' by tapping into a desire for convenience, and this aligns with Geoffrey Moore's 'Crossing the Chasm' theory. McDonald's recognised a gap in quick yet satisfying breakfast solutions, particularly for morning commuters, a strategy that resonates with traditional Product Life Cycle models. 

2. Context is King: Tailoring Strategies 

The importance of context cannot be overstated. Luxury car brands in emerging markets may adopt advertising campaigns that emphasise the gains of owning a status symbol. This approach resonates with Kahneman and Tversky's ‘Prospect Theory’, which posits that people are more willing to take risks when contemplating potential gains. Conversely, health insurance companies might stress the losses that could be incurred through high medical bills, aiming to inspire a fear that motivates people to mitigate those potential losses. 

3. The Role of Innovation: Meeting Unarticulated Needs 

The genius of disruptive innovation lies in offering something consumers didn't even know they needed. Apple did this brilliantly with the iPhone. Before its launch, mobile phones were largely utilitarian devices, but the iPhone amalgamated various functionalities into a single device, redefining what consumers expect from a phone. Similarly, Spotify's subscription-based model responded to an unvoiced consumer desire for unlimited access to a broad range of music on-demand, shifting the music industry paradigm completely. 

4. Cognitivism vs Behaviouralism: A Balanced Approach 

Cognitivism and behaviouralism often appear to be at odds but can offer complementary insights. Herbert Simon's 'bounded rationality' theory provides a useful framework for integrating both. In the field of impulse buying for example, shoppers might be influenced by store layouts, eye-catching displays, and time-limited offers. These behavioural cues trigger emotional responses, leading to spontaneous purchases. On the other end, high-involvement purchases like houses or cars require detailed cognitive evaluation. Here, consumers are likely to compare brands, read reviews, and contemplate long-term implications such as mortgage rates or fuel efficiency. 

5. The Consumer-Centric Future: Where We're Heading  

Looking forward, technological advancements in AI and big data analytics will likely herald a new era of consumer understanding. Amazon's algorithms don't just track what you buy, but also what you almost bought, what you clicked on, and what you ignored. These data points provide rich cognitive and behavioural insights, enabling highly personalised user experiences. Fashion brands like Zara are already employing virtual try-on services; satisfying the behavioural urge for quick trial while also offering a platform for cognitive assessment. 

Ethical considerations are also gaining prominence, especially as younger generations display heightened sensitivity to issues like sustainability, social justice, and data privacy. Brands that recognise these concerns and align their practices accordingly are likely to enjoy stronger customer loyalty and engagement in future. 


The modern consumer landscape is a complex tapestry of cognitive and behavioural elements. It is for this reason that our MSc Marketing programme incorporates a dual focus: blending cognitive theories that examine internal mental processes, with behavioural theories that explore external influences. However, the course's ambition goes beyond mere academic or practical understanding of consumer behaviour; it strives for relevance in a dynamic business environment. In addition to cognitive and behavioural factors, we also recognise the increasing importance of sustainability in shaping consumer choices. Our commitment to sustainability is not merely a trend or a buzzword; it is an integral part of the programme's ethos. 

In summary, our MSc Marketing programme aims to produce not just graduates but thought leaders who are equipped to understand, adapt, and shape consumer behaviour in a multifaceted business context, one that is increasingly being defined by sustainability considerations as much as by cognitive and behavioural factors. 

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