Consumer Behavior: Meeting Changes and Challenges

To Which Segment of Consumers Will This Ad Appeal?

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Chapter One Slide 4

A Segment of Consumers Who are Environmentally Concerned

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Chapter One Slide 5

Consumer Behavior
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

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Chapter One Slide 4

Two Consumer Entities

Personal Consumer The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend.
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Organizational Consumer A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.
Chapter One Slide 5

Development of the Marketing Concept

Production Orientation

Sales Orientation

Marketing Concept

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Chapter One Slide 6

Production Orientation
From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supply
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 7

Sales Orientation
From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demand
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 8

Marketing Concept
1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 9

Discussion Questions
1. What two companies do you believe grasp and use the marketing concept? 2. Why do you believe this?

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Chapter One Slide 10

Societal Marketing Concept

Considers consumers long-run best interest Good corporate citizenship

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Chapter One Slide 11

The Marketing Concept

Embracing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The process and tools used to study consumer behavior

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Chapter One Slide 12

The Marketing Concept

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning Process of dividing the market into subsets of consumers with common needs or characteristics

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Chapter One Slide 13

Discussion Questions
1. What products that you regularly purchase are highly segmented? 2. What are the different segments? 3. Why is segmentation useful to the marketer for these products?

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Chapter One Slide 14

The Marketing Concept

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The selection of one or more of the segments identified to pursue

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Chapter One Slide 15

The Marketing Concept

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning
Developing a distinct image for the product in the mind of the consumer Successful positioning includes: Communicating the benefits of the product Communicating a unique selling proposition
Chapter One Slide 16

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The Marketing Mix

Product
Marketing Mix

Price

Place
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Promotion
Chapter One Slide 17

Customer Value, Satisfaction, Trust, and Retention

Successful Relationships
Customer value High level of customer satisfaction Strong sense of customer trust Customer retention

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Chapter One Slide 18

Successful Relationships
Value, Satisfaction, Defined as the ratio between Trust, and Retention the customers perceived
Customer Value Customer Satisfaction Customer Trust Customer Retention benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical
Chapter One Slide 19

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Discussion Questions
How does McDonalds create value for the consumer? How do they communicate this value?

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Chapter One Slide 20

Successful Relationships
Value, Satisfaction, Trust, and Retention
The individual's perception Customer of the performance of the Value product or service in relation to his or her Customer expectations. Satisfaction Customer groups based on Customer Trust loyalty include loyalists, Customer apostles, defectors, Retention terrorists, hostages, and Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall mercenaries Chapter One Slide 21

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention

Establishing and maintaining trust is essential. Trust is the foundation for maintaining a longstanding relationship with customers.
Chapter One Slide 22

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention The objective of providing value is to retain highly satisfied customers. Loyal customers are key They buy more products They are less price sensitive Servicing them is cheaper They spread positive word of mouth
Chapter One Slide 23

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

THE TRADITIONAL MARKETING CONCEPT

Make only what you can sell instead of trying to sell what you make. Do not focus on the product; focus on the need that it satisfies. Market products and services that match customers needs better than competitors offerings. Research consumer needs and characteristics.

VALUE- AND RETENTION-FOCUSED MARKETING

Use technology that enables customers to customize what you make. Focus on the products perceived value, as well as the need that it satisfies. Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors offerings. Research the levels of profit associated with various consumer needs and characteristics.

Understand the purchase behavior process and Understand consumer behavior in relation to the influences on consumer behavior. the companys product. Realize that each customer transaction is a discrete sale. Make each customer transaction part of an ongoing relationship with the customer.
Chapter One Slide 24

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Consumer Behavior Is Interdisciplinary

Psychology

Economics

Sociology

Anthropology

Social psychology

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Chapter One Slide 25

A Simple Model of Consumer Decision Making - Figure 1.4

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Chapter One Slide 26

Consumer Behavior

Cons. Beh.

Psyc. Factor

CDM

Mktg Mix

GGru.

Factor
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Exploring Product Line Propositions With Consumer Behavior

Brand dimensions Choice set Functional Symbolic Hedonic

Product Levels Core Generic Expected Augmented Potential Product Line Propositions Competitive Brands
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BEHAVIOURAL MEHANISM USED

A. Gratification through Brand Imagery Changing Environment

Need for social identification / differentiation

Special product categories which are of interest To the consumer

A category with an overwhelming symbolic Imagery

Identification with Brand Personality

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B. Gratification through Benefit Experience Tangible Benefit Category

Brand Benefit

Creation of Awareness

Trial Purchase

Experiencing the Benefit

Loyalty

+ ve Word of mouth
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