CHAPTE R Consumer ONE Behavior:

Meeting Changes and Challenges

Learning Objectives
1. To Understand What Consumer Behavior Is and the Different Types of Consumers. 2. To Understand the Relationship Between Consumer Behavior and the Marketing Concept, the Societal Marketing Concept, as Well as Segmentation, Targeting, and Positioning. 3. To Understand the Relationship Between Consumer Behavior 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.
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Learning Objectives (continued)

5. To Understand How Marketers Are Increasingly Able to Reach Consumers Wherever Consumers Wish to Be Reached. 6. To Understand How the Worlds Economic Condition Is Leading to Consumption Instability and Change. 7. To Understand the Makeup and Composition of a Model of Consumer Behavior. 8. To Understand the Structure of This
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To Which Segment of Consumers Will This Ad Appeal?

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A Segment of Consumers Who are Environmentally Concerned

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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.

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Two Consumer Entities

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Development of the Marketing Concept

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Production Orientation
From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supply

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Sales Orientation
From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demand

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Marketing Concept
1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition

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Discussion Questions
1. What two companies do you believe grasp and use the marketing concept? 2. Why do you believe this?

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Societal Marketing Concept

Considers consumers longrun best interest Good corporate citizenship

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The Marketing Concept

Embracing the Marketing Concept Consumer
Research Segmentation Market Targeting Positioning

The process and tools used to study consumer behavior

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The Marketing Concept

Implementing the Marketing Concept Consumer Process of dividing
Research Segmentation Market Targeting Positioning the market into subsets of consumers with common needs or characteristics

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Discussion Questions
1. What products that you regularly purchase are highly segmented? 2. What are the different segments? 3. Why is segmentation useful to the marketer for these products?

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The Marketing Concept

Implementing the Marketing Concept Consumer The selection of one
Research Segmentation Market Targeting Positioning or more of the segments identified to pursue

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The Marketing Concept

Implementing the Marketing Concept Developing a distinct image Consumer
Research Segmentation Market Targeting Positioning
for the product in the mind of the consumer Successful positioning includes: Communicating the benefits of the product Communicating a unique selling proposition
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The Marketing Mix

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Customer Value, Satisfaction, Trust, and Retention

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Successful Relationships
Value, Satisfaction, Trust, and Customer Retention Value
Customer Satisfaction Customer Trust Customer Retention Defined as the ratio between the customers perceived benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical
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Discussion Questions
How does McDonalds create value for the consumer? How do they communicate this value?

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Successful Relationships
Value, Satisfaction, Trust, and Customer Retention 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, Slide Chapter One 23

Successful Relationships
Value, Satisfaction, Trust, and Customer Retention Value
Customer Satisfaction Customer Trust Customer Retention

Establishing and maintaining trust is essential. Trust is the foundation for maintaining a long-standing relationship with customers.
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Successful Relationships
Value, Satisfaction, Trust, and Customer Retention Value
Customer Satisfaction Customer Trust Customer Retention The objective of providing value is to retain highly satisfied customers. Loyal customers are key They buy more products They are less price sensitive Servicing them is cheaper Chapter One Slide 25

Top 10 Ranked U.S. Companies in Terms of Consumers Trust and Respect of Privacy Table 1.2
Top 10 Companies American Express eBay IBM Amazon Johnson & Johnson Hewlett-Packard U.S. Postal Service
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Customer ProfitabilityFocused Marketing

Tracks costs and revenues of individual consumers Categorizes them into tiers based on consumption behavior A customer pyramid groups customers into four tiers

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THE TRADITIONAL MARKETING CONCEPT

VALUE- AND RETENTIONFOCUSED MARKETING

Make only what you can sell instead of Use technology that enables customers trying to sell what you make. to customize what you make. Do not focus on the product; focus on the need that it satisfies. Market products and services that match customers needs better than competitors offerings. Research consumer needs and characteristics. Focus on the products perceived value, as well as the need that it satisfies. Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors offerings. Research the levels of profit associated with various consumer needs and characteristics.

Understand the purchase behavior Understand consumer behavior in process and the influences on consumer relation to the companys product. behavior. Realize that each customer transaction Make each customer transaction part of is a discrete sale. an ongoing relationship with the customer.
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Impact of Digital Technologies

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The Mobile Consumer

Wireless Media Messages will expand as:
Flat-rate data traffic increases Screen image quality is enhanced Consumer-user experiences with web applications improve
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Penetration of Internet Usage Among Mobile Subscribers in 16 Countries FIGURE 1.3

Consumer Behavior Is Interdisciplinary

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A Simple Model of Consumer Decision Making - Figure 1.4

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