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Consumer Behavior Chapter 1

Consumer behavior involves how consumers search for, purchase, use, and dispose of products and services. There are two types of consumers - organizational consumers that purchase goods for businesses, and personal consumers that purchase for individual use. Marketing evolved from a production orientation in the 1850s focused on manufacturing capabilities, to a sales orientation in the 1930s focused on selling excess inventory, to today's marketing concept focused on determining customer needs. The marketing concept involves consumer research, market segmentation, targeting specific segments, and positioning products with unique benefits in customers' minds.

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Mai El Ordy
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141 views

Consumer Behavior Chapter 1

Consumer behavior involves how consumers search for, purchase, use, and dispose of products and services. There are two types of consumers - organizational consumers that purchase goods for businesses, and personal consumers that purchase for individual use. Marketing evolved from a production orientation in the 1850s focused on manufacturing capabilities, to a sales orientation in the 1930s focused on selling excess inventory, to today's marketing concept focused on determining customer needs. The marketing concept involves consumer research, market segmentation, targeting specific segments, and positioning products with unique benefits in customers' minds.

Uploaded by

Mai El Ordy
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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CHAPTER ONE

Consumer Behavior: Meeting Changes and Challenges

What is Consumer Behavior?


The behavior that consumers display in
searching for purchasing using evaluating, and disposing of products(consuming ideas; e.g. green consumption) and services that they expect will satisfy their needs.

Chapter One Slide 2

Two Consumer Entities


Organizational Consumer
A business, government agency, or other institution (profit or nonprofit) organizations that buys the goods, services, and/or equipment necessary for the organization to function. Need to run organizations

Personal Consumer
End user = 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.

Chapter One Slide 3

Development of the Marketing Concept

Production Orientation

Sales Orientation

Marketing Concept

Chapter One Slide 4

1. Production Orientation
From the 1850s to the late 1920s Companies focus on production/manufacturing capabilities in order to expand production No product variation Consumer demand exceeded supply

Chapter One Slide 5

2. Sales Orientation
From the 1930s to the mid 1950s Too many products: from production to selling Focus on selling: sell more of what the manufacturing department was able to produce Supply exceeded customer demand

Chapter One Slide 6

3. 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

Chapter One Slide 7

The Marketing Concept


Embracing the Marketing Concept
Consumer Research
Segmentation Market Targeting Positioning

Consumers are highly complex Subject to a variety of social and psychological needs quite apart from their basic functional needs The process and tools used to study consumer behavior

Chapter One Slide

The Marketing Concept


Implementing the Marketing Concept
Consumer Research

Segmentation
Market Targeting Positioning

Many people develop the same needs. This commonality of needs constitutes many of the ingredients of a consumer market segment

Process of dividing the market into subsets of consumers with common needs or characteristics
Chapter One Slide 9

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 Low calories drink as a criteria for selecting targeting markets

Chapter One Slide 10

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 rather than the product features Communicating a unique selling proposition-that is a distinctive benefit or point of difference for the product or service
Chapter One Slide 11

The Marketing Mix


Product
Features Design Brand Packaging Warranties & Return Policies

Price
List price Discounts, Allowances Payment methods Marketing Mix

Place
Distribution of the product Store or nonstore outlets

Promotion
Advertising Sales promotion Public relations Personal Selling

Chapter One Slide 12

Customer Value, Satisfaction, Trust, and Retention


Successful Relationships
Customer value High level of customer satisfaction Strong sense of customer trust Building a structure that ensures customer retention

Good marketers today realize that in order to outperform competitors they must achieve the full potential from each and every customer. Employees should view any exchange with a as part of a customer relationship and not a transaction.
Chapter One Slide 13

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention
Defined as the ratio between the customers perceived benefits
(economic, functional, psychological) and the resources (monetary, time, effort used to obtain those benefits, psychological)

Perceived value is relative and subjective Developing a value proposition is critical (a unique selling proposition)
Chapter One Slide 14

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention
The individual's perception of the performance of the product or service in relation to his or her expectations. (function of customer expectation)
Expectations=Experience Satisfied Expectations>Experience delighted Expectations<Experience dissatisfied

Customer groups based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
Chapter One Slide 15

Loyalist: Keep purchasing Apostles: Experiences exceed expectations, provide positive word of mouth Defectors: feel neutral or merely satisfied Terrorists: had bad experience, spread negative word of mouth Hostages: unhappy customers, stay with the company only because of monopolistic environment/frequent complains Mercenaries: being satisfied but do not have any real loyalty Companies should strive to create apostles, raise the satisfaction of defectors loyalists and avoid having terrorists/hostages and reduce the number of mercenaries

16

Successful Relationships
Value, Satisfaction, Trust, and Retention
Establishing and maintaining trust is essential to online and off-lien retailers Trust is the foundation for maintaining a long-standing relationship with customers; increases the chance of customer loyalty (Trust)
Chapter One Slide 17

Customer Trust Customer

Successful Relationships
Value, Satisfaction, Trust, and 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; pay less attention to competitors ads Servicing them is cheaper They spread positive word of mouth

Customer Retention

Marketing aimed to attract new customers is expensive


Chapter One Slide 18

Impact of Digital Technologies


Marketers Consumers

More products and services through customization Instantaneous exchanges Collect and analyze data

Power Information: reviews Computers, phones, PDA, GPS, smart TV

Chapter One Slide 19

The Mobile Consumer


Wireless Media Messages will expand as:
Flat-rate data traffic increases Screen image quality is enhanced Consumer-user experiences with web applications improve
Penetration of Internet Usage Among Mobile Subscribers in 16 Countries - FIGURE 1.3

Chapter One Slide 20

Consumer Behavior Is Interdisciplinary


Psychology Study of individuals

Economics (rational human being-try to maximize benefits)

Sociology Study of groups

Anthropology The influence of society on the individual

Social psychology Study of how an individual operates in groups

Chapter One Slide 21

A Simple Model of Consumer Decision Making

Chapter One Slide 22

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