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CHAPTER ONE

Consumer
Behavior
Consumer Behavior
and
Marketing
Strategy
and Marketing Strategy
McGraw-Hill/Irwin

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserv

Learning Objectives

1.
2.

3.
4.
5.

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Know that actual marketing managers, as well as


those who regulate marketing activities, can and do
use consumer behavior concepts.
Understand the nature of customer value, the
importance of providing superior customer value,
and the role that a knowledge of consumer behavior
plays in strategies to create customer value.
Understand the overall relationship between
marketing strategy and consumer behavior.
Understand that consumers can be viewed as
problem solvers and decision-makers seeking to
maintain or enhance their lifestyles.
Understand that a knowledge of consumer behavior
provides managers with a set of appropriate
questions and a guideline to action, not a blueprint
or prescription for success.

What is Consumer Behavior?

The study of individuals, groups, or


organizations and the processes they use
to select, secure, use, and dispose of
products, services, experiences, or ideas
to satisfy needs and the impacts that
these processes have on the consumer
and society.

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Why study consumer behavior?

Consumer behavior theory provides the

manager with the proper questions to ask


Marketing practice designed to influence
consumer behavior influences the firm,
the individual, and society
All marketing decisions and regulations
are based on assumptions about
consumer behavior
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Applications of Consumer Behavior

Marketing Strategy
To satisfy target consumer needs
Regulatory Policy
To protect consumers
Social Marketing
To help consumers
Informed Individuals
To better understand how societies function

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Marketing Strategy & Consumer Behavior

What is Customer Value?


The difference between all the benefits derived from a total
product and all the costs of acquiring those benefits.

What is required of a firm to provide superior customer value?


It must do a better job of anticipating and reacting to customer
needs than the competition does.

What role does consumer behavior play in creating superior


customer value?

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An understanding of consumer behavior is the basis for


marketing strategy formulation, and the consumers reaction to
this marketing strategy ultimately determines the firms success or
failure.

Marketing Strategy & Consumer Behavior

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Market Analysis Components

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The Consumers
The Company
The Competitors
The Conditions

Market Segmentation

Market Segment: a portion of a larger


market whose needs differ somewhat
from the larger market.
Four steps to segmentation:
Identify product-related need sets
Group customers with similar need sets
Describe each group
Select an attractive segment(s) to serve

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Market Segmentation

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What is market segmentation?


Market segmentation involves aggregating
prospective buyers into groups that:
1. have common needs
2. will respond similarly to marketing actions

Why segment the market?


Market segmentation links market needs to an
organizations marketing programs.

When does an organization segment the market?


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When the potential increase in profits as a result of


segmenting outweigh the costs of segmenting.

Market Segment Attractiveness

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Marketing Strategy

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How will we provide superior customer


value to our target market?
Marketing Mix
The Product
Communications
Price
Distribution
Service

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Outcomes

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Firm:
Product positioning
Sales
Customer Satisfaction
Individual:
Need Satisfaction
Injurious Consumption
Society:
Economic
Physical Environment
Social Welfare
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Creating Satisfied Customers

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CHAPTER

Consumer Behavior is Product Person


Situation Specific

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Personal
Characteristics

Product
Characteristics

Consumption
Situation
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Consumer
Behavior

Marketing
Strategy

Consumer Lifestyles and Consumer Decisions

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Needs/Attitudes
That Influence
Consumption Decisions
Consumer
Choices

Consumer
Lifestyle
Behavior/Experiences
That Influence
Consumption Decisions
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Overall Model Of Consumer Behavior

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CHAPTER

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