Transcript 301_01

CHAPTER
ONE
Consumer Behavior:
Meeting Changes and
Challenges
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”.
• The what, why, when, where, and how of
consumer purchases.
• It is not just individuals, but households,
families, and groups that influence the
decisions we make.
Chapter One Slide 2
Two Consumer Entities
Personal
Consumer
Organizational
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.
• 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 3
Development of the Marketing Concept
The marketing concept was developed over time through two other important
business orientations called the production and the sales orientation
Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide 4
Production Orientation
• From the 1850s to the late 1920s
• Consumer demand exceeded supply (consumers
were content (happy) to get a product and were
not focused on product variation).
• Companies focus on production capabilities to
mass produce the product for the consumers and
reduce the cost.
• No need for selling efforts “if we make it they
will buy it.”
Chapter One Slide 5
Sales Orientation
• From the 1930s to the mid 1950s
• Supply exceeded customer demand
(overproduction).
• Producers produce similar products (no
variation).
• Focus on selling.
• The aggressive selling problems.
Copyright 2010 Pearson Education, Inc.
Chapter One Slide 6
Marketing Concept
• 1950s to current - Focus on the customer!
• Determine the needs and wants of specific
target markets (customer is a king).
• Deliver satisfaction better than competition,
delivering the customers with products that
meet their needs and what they prefer.
• We are remaining focused on the marketing
concept today.
Chapter One Slide 7
Societal Marketing Concept
• The societal marketing concept was
developed from the marketing concept. It
Considers consumers’ long-run best interest.
• Marketers and consumers are increasingly
focusing on what is good for themselves,
their family, their country, and the planet.
• Marketing looks for opportunities to provide
products and services to help consumers
reach their goals while also making profitable
decisions for their companies.
Chapter One Slide 8
Societal Marketing Concept
• The image in this slide of
a Siemens ad suggests
the company is
committed to developing
products that are safe for
customers and the
environment.
• Products that provide
effecient energy supply.
Chapter One Slide 9
The Marketing Concept
implementing the Marketing Concept
•
•
•
•
Consumer Research
Market Segmentation
Market Targeting
Positioning
Copyright 2010 Pearson Education, Inc.
• The process and tools
used to study consumer
behavior to understand
his need preferences
and priorities.
Chapter One Slide 10
The Marketing Concept
Implementing the Marketing Concept
•
•
•
•
Consumer Research
Market Segmentation
Market Targeting
Positioning
• Process of dividing the
market into subsets of
consumers with common
needs or characteristics
• Market Segmentation can
be based on consumers’
demographics, product
usage, geography, lifestyle
social classes … etc.
Chapter One Slide 11
The Marketing Concept
Implementing the Marketing Concept
•
•
•
•
Consumer Research
Market Segmentation
Market Targeting
Positioning
• The selection of one or more
of the segments identified to
pursue.
• Selection of the correct
target market is critical to
success of the product since
it is assumed that consumers
have need with respect to
the product or service.
Chapter One Slide 12
The Marketing Concept
Implementing the Marketing Concept
•
•
•
•
Consumer Research
Segmentation
Market Targeting
Positioning
Copyright 2010 Pearson Education, Inc.
• Developing a distinct image for
the product in the mind of the
consumer versus the
competitors’ products.
• Successful positioning includes:
– Communicating the benefits
of the product.
– Communicating a unique
selling proposition.
Chapter One Slide 13
Marketer’s main benefit of studying
consumer behavior
• Producing the right product
• Selling the product with a right price
• Making the products available At a
the right time and in the right place
• Providing consumers with product
information and where to buy +
encouraging consumers to by the
products (promotion)
Chapter One Slide 14
The Marketing Mix
Product
Price
Marketing
Mix
Place
Promotion
Chapter One Slide 15
successful customer relationship
• The right marketing mix to a potential
consumers leads to successful
customer relationship:
- Customer value
- Customer satisfaction
- Customer trust
- Customer retention (loyalty)
Chapter One Slide 16
Customer Value, Satisfaction, Trust,
and Retention
Successful Relationships
Customer
value
High level
of
customer
satisfaction
Copyright 2010 Pearson Education, Inc.
Strong
sense of
customer
trust
Customer
retention
Chapter One Slide 17
Successful customer Relationships
• 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 to communicate
value the product offers to
consumers.
Chapter One Slide 18
Successful customer Relationships
• 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.
Chapter One Slide 19
Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
Copyright 2010 Pearson Education, Inc.
• Establishing and
maintaining trust is
essential to build loyalty.
• When you are satisfied
you trust, and when you
trust, you become loyal
• Trust is the foundation
for maintaining a longstanding relationship
with customers.
Chapter One Slide 20
Top 10 Ranked U.S. Companies in Terms
of Consumers’ Trust
Top 10 Companies
•
•
•
•
American Express
eBay
IBM
Amazon
• Johnson & Johnson
• Hewlett-Packard
• U.S. Postal Service
• Procter and Gamble
• Apple
• Nationwide
Chapter One Slide 26
Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
• The objective of providing value
is to retain highly satisfied
customers (loyal customers).
• Loyal customers are key:
–
–
–
–
They buy more products
They are less price sensitive
Servicing them is cheaper
They spread positive word of
mouth
• Customer groups based on
loyalty include loyalists,
apostles, defectors, terrorists,
hostages, and mercenaries.
Chapter One Slide 22
Customer loyalty groups
Loyalists: who continue to purchase
Apostles: who provide very positive word-ofmouth.
Mercenaries: are satisfied but are not really
considered loyal and will move from company to
company.
Hostages: Some dissatisfied customers who stay
with the company but are very unhappy.
Terrorists: who spread negative word-of-mouth.
Defectors: disappointed customers who move to
the competitors.
Chapter One Slide 23
Consumer Behavior Is
Interdisciplinary
Psychology
Economics
Anthropology
Copyright 2010 Pearson Education, Inc.
Sociology
Social
psychology
Chapter One Slide 24
A Simple Model of Consumer Decision Making
Copyright 2010 Pearson Education, Inc.
Chapter One Slide 25
Components of consumer decision
making model
• Input stage includes sources of information to the
consumer – how they learn and are influenced by the
marketer and their environment.
• Process stage ties to the decision-making process the
consumer undergoes when considering a purchase. It
moves from the inputs to the psychological factors
involved in recognizing a need, searching for information,
and evaluating alternatives.
• Output stage involves the actual purchase and the postpurchase evaluation. This post-purchase evaluation ties
to the satisfaction topics discussed earlier in this
presentation and the importance of customer loyalty to
marketing’s profitability.
Chapter One Slide 26