Chapter 1 - Introduction to Consumer Behaviour

8/3/2019 Chapter 1 - Introduction to Consumer Behaviour

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Consumer Behavior:Meeting Changes and

Challenges

CHAPTER

ONE



Learning Objectives

1. To Understand What Consumer Behavior Is and theDifferent Types of Consumers.

2. To Understand the Relationship Between ConsumerBehavior and the Marketing Concept, the SocietalMarketing Concept, as Well as Segmentation, Targeting,and Positioning.

3. To Understand the Relationship Between ConsumerBehavior and Customer Value, Satisfaction, Trust, and

Retention.4. To Understand How New Technologies Are Enabling

Marketers to Better Satisfy the Needs and Wants of Consumers.

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 2Chapter One Slide



Learning Objectives (continued)

5. To Understand How Marketers Are IncreasinglyAble to Reach Consumers Wherever ConsumersWish to Be Reached.

6. To Understand the Makeup and Composition of a Model of Consumer Behavior.




Consumer Behavior

• The behavior that consumers display in

searching for, purchasing, using, evaluating,

and disposing of products and services thatthey expect will satisfy their needs.


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Two Consumer Entities

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Personal Consumer

• The individual whobuys goods andservices for his or herown use, forhousehold use, forthe use of a familymember, or for afriend.

OrganizationalConsumer

• A business,government agency,or other institution(profit or nonprofit)that buys the goods,services, and/orequipment necessaryfor the organization tofunction.

Chapter One Slide



Development of the

Marketing Concept


ProductionOrientation

SalesOrientation

MarketingConcept

Chapter One Slide



Production Orientation

• From the 1850s to the late 1920s

• Companies focus on production capabilities

• Consumer demand exceeded supply


Production

Orientation

Sales

Orientation

Marketing

Concept

Chapter One Slide



Sales Orientation

• From the 1930s to the mid 1950s

• Focus on selling

• Supply exceeded customer demand


Production

Orientation

Sales

Orientation

Marketing

Concept

Chapter One Slide



Marketing Concept

• 1950s to current - Focus on the customer!

• Determine the needs and wants of specific

target markets• Deliver satisfaction better than competition


ProductionOrientation

SalesOrientation

MarketingConcept

Chapter One Slide



Societal Marketing Concept

• Considers consumers’

long-run best interest

•

Good corporatecitizenship

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 10

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The Marketing Concept

• Consumer Research

• Segmentation

• Market Targeting

• Positioning

• The process and tools

used to study consumer

behavior

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Embracing the Marketing

Concept

Chapter One Slide 11

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• Segmentation


• Positioning

• Process of dividing the

market into subsets of

consumers with

common needs or

characteristics


Implementing the

Marketing Concept






• Segmentation


• Positioning

The selection of one or

more of the segments

identified to pursue


Implementing the

Marketing Concept






• Segmentation


• 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 uniqueselling proposition


Implementing the

Marketing Concept




The Marketing Mix

Product Price

Place Promotion

MarketingMix




Customer Value, Satisfaction, Trust,

and Retention


Successful Relationships

Customer

value

High levelof

customersatisfaction

Strongsense of

customertrust

Customer

retention

Chapter One Slide




• Customer Value

• Customer

Satisfaction

• Customer Trust

• Customer

Retention

• Defined as the ratio between

the customer’s perceived

benefits and the resources

used to obtain those

benefits

• Perceived value is relative

and subjective• Developing a value

proposition is critical


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.• Customer groups based on

loyalty include loyalists,

apostles, defectors,

terrorists, hostages, andmercenaries








• Customer Value

• CustomerSatisfaction

• Customer Trust

•

CustomerRetention


• Establishing and

maintaining trust is

essential.

• Trust is the

foundation for

maintaining a long-

standing relationship

with customers.







• Customer Value

• CustomerSatisfaction

• Customer Trust

•

CustomerRetention

• The objective of providingvalue is to retain highlysatisfied customers.

• Loyal customers are key

– They buy more products

– They are less pricesensitive

–

Servicing them ischeaper

– They spread positiveword of mouth







Customer Profitability-Focused

Marketing

• Tracks costs andrevenues of individual consumers

•

Categorizes theminto tiers based onconsumptionbehavior

•

A customer pyramidgroups customersinto four tiers


Platinum

Gold

Iron

Lead

Chapter One Slide

THE TRADITIONAL MARKETING CONCEPT VALUE AND RETENTION FOCUSED



Copyright 2010 Pearson Education, Inc. publishing as Prentice HallChapter One Slide 22

THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED

MARKETING

Make only what you can sell instead of trying

to sell what you make.

Use technology that enables customers to

customize what you make.

Do not focus on the product; focus on the

need that it satisfies.

Focus on the product’s perceived value, as well

as the need that it satisfies.

Market products and services that match

customers’ needs better than competitors’

offerings.

Utilize an understanding of customer needs to

develop offerings that customers perceive as

more valuable than competitors’ offerings.

Research consumer needs and characteristics. Research the levels of profit associated with

various consumer needs and characteristics.

Understand the purchase behavior process andthe influences on consumer behavior.

Understand consumer behavior in relation tothe company’s product.

Realize that each customer transaction is a

discrete sale.

Make each customer transaction part of an

ongoing relationship with the customer.



Impact of Digital Technologies


Marketers

• More products and

services throughcustomization

• Instantaneous exchanges

• Collect and analyze data

Consumers

• Power

• Information

• Computers, phones, PDA,GPS, smart TV

Chapter One Slide



The Mobile Consumer

• Wireless MediaMessages willexpand as: –

Flat-rate datatraffic increases

– Screen imagequality is enhanced

– Consumer-user

experiences withweb applicationsimprove


Penetration of Internet Usage Among Mobile

Subscribers in 16 Countries - FIGURE 1.3

http://www.marketingcharts.com/



Consumer Behavior Is

Interdisciplinary

Psychology

Sociology

Socialpsychology

Anthropology

Economics




A Simple Model of Consumer Decision Making

Ch O Slid 26Copyright 2010 Pearson Education Inc publishing as Prentice Hall

Chapter 1 - Introduction to Consumer Behaviour

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