CONSUMER

BEHAVIOR

Consumer behavior
The

term consumer behavior is defined as

the behavior that consumers display in
searching for, purchasing, using, evaluating
and disposing of products and services that
they expect will satisfy their needs.

Difference between customers and

consumers

Every customer is a consumer but not every

consumer a customer. Customer is one who is
brand loyal, who has made a custom to purchase a
particular company's product/services. thus
customer is a sub set of consumer.
One that consumes, especially one that acquires
goods or services for direct use or ownership rather
than for resale or use in production and
manufacturing. A consumer is an end user.
A customer: One that buys goods or services. A
customer can in turn resell to a consumer.

The central premise to understand consumer

behavior People do not buy products or services,
they buy benefits.
Purchases are made not for the products
themselves but for the problems they solve or the
opportunities they create
Consumer benefits are those positive factors that
the consumer obtains as a result of the possession
and/or use of a product or service

Why We Study CB?

Diverse Reasons As Consumers
As Marketers & future Marketers
As Students of Human Behavior

Consumer Benefits
Tangible

Benefits measurable
Intangible benefits associated with the
feelings that you experience

 Two

different kinds of consuming entities

Personal consumer

Organizational consumer

Personal 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.

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

Development of the Marketing Concept

Production
Concept
Product Concept
Selling Concept
Marketing
Concept

The Production Concept

Assumes

that consumers are interested

primarily in product availability at low
prices
Marketing objectives:

Cheap, efficient production

Intensive distribution
Market expansion

The Product Concept

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

The Selling Concept

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

The Marketing Concept

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:
Profits through customer satisfaction

The Marketing Concept

A consumer-oriented philosophy that
suggests that satisfaction of consumer
needs provides the focus for product
development and marketing strategy to
enable the firm to meet its own
organizational goals.

Marketing

Concept is based on the

premise that a marketer should
make what it can sell, instead of
trying to sell what it has made

Implementing the Marketing Concept

Consumer

Research
Segmentation
Targeting
Positioning

Consumer Research
The

process and tools used to study

consumer behavior.
Two perspectives:

Positivist approach
Interpretivist approach

Segmentation, Targeting, and

Positioning
Segmentation:

process of dividing the

market into subsets of consumers with
common needs or characteristics
Targeting: selecting one ore more of the
segments to pursue
Positioning: developing a distinct image for
the product in the mind of the consumer

Successful Positioning

Communicating the
benefits of the
product, rather than
its features

Communicating a
Unique Selling
Proposition for the
product

The Marketing Mix

Product
Price
Place
Promotion

Successful Relationships

Customer
Value
Customer
Satisfaction

Customer
Retention

Types of Customers
Loyalists

Terrorists

Apostles

Hostages

Defectors

Mercenaries

Customer retention

Makes it in the best interest of customers to stay

with the company rather than switch to another firm
Customers are grouped into four tiers:
The platinum tier: heavy users, not price sensitive
The gold tier: Heavy users, not profitable, price
sensitive
The iron tier: spending volume and profitability do
not merit special treatment form the company
The lead tier: customers who actually cost the
company by spreading negative word of mouth

Ethics & social responsibility

All

companies prosper when society

prospers, many people believe that all of us,
companies as well as individuals, would be
better off if social responsibility were an
integral part of every marketing decision.

Societal Marketing Concept

A revision of the traditional marketing concept
that suggests that 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.

The Societal Marketing Concept

The

societal marketing concept, advocates

a long term perspective.
It recognize that all companies would be
better off in a stronger, healthier society,
and that companies that incorporate
ethical behavior and social responsibility in
all of their business dealings and maintain
loyal consumer support over the long run.

Nature and characteristics of

Indian consumer
The

Indian consumption patterns are slowly

converging with global norms.
The Indian consumer is now spending more
on consumer durables, apparel,
entertainment, vacations and lifestyle related
activities.
Entertainment, clothing and restaurant dining
are categories that have been witnessing a
maximum rise in consumer spending since
2002.

 The

rate of growth of spending on

discretionary items (unlike basic necessities
like food) has been growing at an average of
9 per cent per year over the past five years. A
nation of savers, India, has now altered into a
nation of spenders.

Consumerism
The

movement seeking to protect and inform

consumers by requiring such practices as
honest packaging and advertising, product
guarantees, and improved safety standards.
Movement or policies aimed at regulating the
products, services, methods, and standards
of manufacturers, sellers, and advertisers in
the interests of the buyer.

Rights of consumers
Right

to safety
Right to be informed
Right to choose
Right to be heard
Right to seek redressal
Right to consumer education

Responsibilities of Consumers
Responsibility

of self-help
Proof of Transactions
Proper claim
Proper use of Product/services