Becamex Business School

Chapter 1
Technology-Driven Consumer
Behavior
Chapter 1 Learning Objectives
1.1 To understand the evolution of the marketing concept, the most prominent tools used to
implement marketing strategies, the relationship between value and customer retention, and
the objectives of socially responsible marketing.
1.2 To understand how the Internet and related technologies improve marketing transactions by
adding value that benefits both marketers and customers.
1.3 To understand the interrelationships among customer value, satisfaction, and retention, and
technology’s revolutionary role in designing effective retention measures and strategies.
1.4 To understand consumer behavior as an interdisciplinary area, consumer decision-making,
and the structure of this book.
Marketing ?

Consumer Behavior ?
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How can a car help express its owners’ characteristics?
- Personal transportation
- Needs
- Express characteristics
 Appeal to buyers’ psychology

“fulfill their dreams rather than deny them.”

“It is expensive to fulfill one’s dreams, but it

is worth the expense.”

Porsche’s classic tagline:

“Porsche. There is no
substitute.”
- Egotism and power
- Face challenges, and feel powerful
and in control of their environment
Not a “me too” item

Porsche and Scion target contrasting

groups of people because their
prices are very far apart

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Learning Objective 1.1

1.1 To understand the evolution of the marketing concept, the most

prominent tools used to implement marketing strategies, the
relationship between value and customer retention, and the objectives
of socially responsible marketing.
Marketing Concept

• The essence of marketing consists of satisfying

consumers’ needs, creating value, and retaining
customers.
Marketing Concept Application

How does Classico’s ad relate to the

marketing concept?

 Satisfy and turn them into loyal

customers
Development of the Marketing Concept

Production Product Selling Marketing

Concept Concept Concept Concept
Marketing Concept Requirements
• Consumer Research  Consumer behavior (Chapter 16)
• Market Segmentation, Targeting and Positioning (STP)
• The Marketing Mix (4 Ps)
• Product or service
• Price
• Place
• Promotion
Socially Responsible Marketing

What is the societal marketing concept?

“fulfill the needs of the target audience in ways

that improve, preserve, and enhance society’s
well-being while simultaneously meeting their
business objectives”
Learning Objective 1.2

1.2 To understand how the Internet and related technologies improve

marketing transactions by adding value that benefits both marketers
and customers.
 Find a hotel room in a strange city?
• so-called “click-to-call ad”

• online technologies create a “value exchange”

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Consumers Have Embraced Technology
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Behavior Information and Targeting
• Specialized information exchanges
• Cookies
• Consumer access to information
• Consumer’s benefit
• Marketer’s benefit
• Product comparisons
• Comparable brands in a single screen
• One-click access to more tech-information
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Discussion Question

How does technology affect the Marketing Mix?

Provide examples:
• Interactive and novel communication channels
• Customizing products and promotional messages
• Better prices and distribution
Learning Objective 1.3
1.3 To understand the interrelationships among customer value,
satisfaction, and retention, and technology’s revolutionary role in
designing effective retention measures and strategies.

Successful Relationships

High level of customer

Customer value Customer retention
satisfaction
Value, Satisfaction, and
Retention
• The ratio between customers’ perceived benefits
(economic, functional, and psychological) and the
resources (monetary, time, effort, psychological)
• Customer Value they use to obtain those benefits
• Customer Satisfaction • Dinner at expensive French restaurants

• Customer Retention • Visit thousands of McDonalds restaurants (core

standards)

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Discussion Questions
• How does McDonald’s create value for the consumer?
• How do they communicate this value?
Value, Satisfaction, and
Retention
• Customers’ perceptions of the performance of
the product or service in relation to their

• Customer Value expectations

• Different expectation of expensive French
• Customer Satisfaction
restaurant or McDonalds
• Customer Retention
• Dissatisfied and satisfied

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Value, Satisfaction, and
Retention
• Turning individual consumer transactions into
long-term customer relationships by making it
in the best interests of customers
• Customer Value
• Stay with the company rather than switch to
• Customer Satisfaction
another firm
• Customer Retention
• More expensive to win new customers than to
retain existing ones

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Technology and Customer Relationships

For Discussion:
• Provide two examples where brands used technology to engage
consumers/enhance customer relationships.
• Provide two examples where technology was used to add value to the
consumer.
Customer Profitability-Focused Marketing

• Tracks costs and revenues of individual Platinum

consumers
• Categorizes them into tiers based on Gold
consumption behavior
• A customer pyramid groups customers Iron
into four tiers
Lead
Measures of customer retention
• Customer Valuation
• Value and categorize customers by financial strategic worth

• Retention Rates (%)

• At the beginning – the end of the year

• Analyzing defections
• Talking to former customers
• Analysis customer’s complain
• Benchmarking against customer’s defection rate
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Profitability-Focused Segmentation
Discussion Questions

• What is the difference between emotional and transactional bonds?

• Identify and describe four of the eleven determinants of customer
satisfaction with online merchants. Characterize each selected
determinant as primarily driven by emotion or stemming from the
mechanics of the transaction.
Why is Internal Marketing Important?
Learning Objective 1.4
1.4 To understand consumer behavior as an interdisciplinary area,
consumer decision-making, and the structure of this book.

Psychology

Commun
Sociology
ication

Anthropology
Consumer Decision Making
• Inputs
• Firm marketing efforts
• Sociocultural influences
• Process
• Psychological factors
• Need Recognition, Decision Type, Prepurchase Search, Evaluation of Alternatives
• Learning
• Outputs
• Purchase
• Post-purchase evaluation
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