Transcript Consumer Behavior: Its Origins and Strategic Applications


Why this course is named as consumer
behavior not customer behavior

Personal consumers

Organization consumers

The individual who buys goods and services
for his or her own use(cigrettes and haircut),
for household use(sugar,salt,furniture) for the
use of a family member(a pair of shoes for
the son), or for a friend(a pen set).
A business, government agency, or other
institution (profit or nonprofit) that buys the
goods, services, and/or equipment necessary for
the organization to function.
Eg: when any manufacturing firm buys raw
material to produce and sell its products
Production
Concept
Product Concept
Selling Concept
Marketing
Concept
Copyright 2007 by Prentice Hall


Assumes that consumers are interested
primarily in product availability at low prices
Marketing objectives:
 Cheap, efficient production
 Intensive distribution
 Market expansion
Copyright 2007 by Prentice Hall


Assumes that consumers will buy the product
that offers them the highest quality, the best
performance, and the most features
Marketing objectives:
 Quality improvement
 Addition of features

Tendency toward Marketing Myopia
Copyright 2007 by Prentice Hall


Assumes that consumers are unlikely to buy a
product unless they are aggressively
persuaded to do so
Marketing objectives:
 Sell, sell, sell

Lack of concern for customer needs and
satisfaction
Copyright 2007 by Prentice Hall


Assumes that to be successful, a company
must determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition
Marketing objectives:
 Make what you can sell
 Focus on buyer’s needs
Copyright 2007 by Prentice Hall
The behavior that consumers display in
searching for, purchasing, using, evaluating, and
disposing of products and services that they
expect will satisfy their needs.
Copyright 2007 by Prentice Hall

A father is buying a cycle for his school going
son

A man is purchasing a tooth paste for his
family
Implementing the
Marketing Concept
Consumer
Research
 Segmentation
 Targeting
 Positioning

Copyright 2007 by Prentice Hall

The process and tools
used to study
consumer behaviour
Implementing the
Marketing Concept
Consumer
Research
 Segmentation
 Targeting
 Positioning

Copyright 2007 by Prentice Hall

Process of dividing the
market into subsets of
consumers with
common needs or
characteristics
Implementing the
Marketing Concept
Consumer
Research
 Segmentation
 Targeting
 Positioning

Copyright 2007 by Prentice Hall
The selection of one or
more of the segments to
pursue
Implementing the
Marketing Concept
Consumer
Research
 Segmentation
 Targeting
 Positioning

Copyright 2007 by Prentice Hall


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
This product is
positioned as a
solution to facial
redness.




Product
Price
Place
Promotion
Copyright 2007 by Prentice Hall
Customer
Value
Customer
Satisfaction
Copyright 2007 by Prentice Hall
Customer
Retention
Value, Satisfaction, and
Retention
Customer
Value
 Customer
Satisfaction
 Customer
Retention

Copyright 2007 by Prentice Hall



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


How does McDonald’s create value for the
consumer?
How do they communicate this value?
Copyright 2007 by Prentice Hall
Value, Satisfaction, and
Retention
Customer
Value
 Customer
Satisfaction
 Customer
Retention

Copyright 2007 by Prentice Hall


The individual's perception of the
performance of the product or
service in relation to his or her
expectations.
Customers identified based on
loyalty include loyalists, apostles,
defectors, terrorists, hostages, and
mercenaries
Value, Satisfaction, and
Retention
Customer Value
Customer
Satisfaction
 Customer
Retention


Copyright 2007 by Prentice Hall


The objective of providing value is to
retain highly satisfied customers.
Loyal customers are key
 They buy more products
 They are less price sensitive
 They pay less attention to
competitors’ advertising
 Servicing them is cheaper
 They spread positive word of
mouth



Tracks costs and revenues of individual
consumers
Categorizes them into tiers based on
consumption behavior
A customer pyramid groups customers into
four tiers
Copyright 2007 by Prentice Hall
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
Copyright 2007 by Prentice Hall
Traditional Marketing
Concept
Make only what you can sell instead
of trying to sell what you make
Value and Retention
Focused Marketing
Use technology that enables
customers to customize what
you make
Do not focus on the product; focus on Focus on the product’s
the need that it satisfies
perceived value, as well as the
need that it satisfies
Market products and services that
match customers’ needs better than
competitors’ offerings
Copyright 2007 by Prentice Hall
Utilize an understanding of
customer needs to develop
offerings that customers
perceive as more valuable than
competitors’ offerings
Consumers have more power and access to
information
 Marketers can gather more information about
consumers
 The exchange between marketer and customers is
interactive and instantaneous and goes beyond the
PC.
 Marketers must offer more products and services

Copyright 2007 by Prentice Hall
Marketers adhere to principles of social
responsibility in the marketing of their goods
and services; that is, they must endeavor to
satisfy the needs and wants of their target
markets in ways that preserve and enhance
the well-being of consumers and society as a
whole.
Copyright 2007 by Prentice Hall