Chapter 1

Consumer Behavior and

Marketing Strategy

HAWKINS 13TH ed.

 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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 Customer Vs Consumer
Behavior
• Customer Behavior: a broad term that
covers both individual consumers who buy
goods and services for their own use and
organizational buyers who purchase business
products

• Consumer Behavior: the process through

which the ultimate buyer makes purchase
decisions. The influence of those who use the
goods or services

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 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.

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 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.

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 Customer Value Analysis

Value, Satisfaction, and Retention

• Defined as the ratio between the
• Customer Value
customer’s perceived benefits
• Customer (economic, functional and
Satisfaction psychological) and the resources
• Customer used (monetary, time, effort
Retention and psychological) to obtain
those benefits
• Perceived value is relative and
subjective

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Marketing Strategy and Consumer Behavior

Customer Value
Marketing Strategy and Consumer Behavior

This entire set of characteristics is of referred to as the

total product.
Segmentation
Market segment is a portion of a larger market
whose needs differ somewhat from the larger
market.
Market segmentation involves four steps:
 Identifying product-related need sets.
 Grouping customers with similar need sets.
 Describing each group.
 Selecting an attractive segment(s) to serve.

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The next step is to group consumers with similar need sets.
For example, the need for moderately priced, fun, sporty
automobiles appears to exist in many young single individuals,
young couples with no children, and middle-aged couples
whose children have left home. Consumer Insight 1–1 provides
an additional example of “clustering” or grouping consumers
with similar need sets
Once consumers with similar need sets are identified, group
should be described in terms of their demographics,
lifestyles, and media usage. Designing an effective marketing
program requires having a complete understanding of the
potential customers.
Select our Target Market: the segment(s) of the larger
market on which we will focus our marketing effort. This
decision is based on our ability to provide the selected
segment(s) with superior customer value at a profit.
 Size
 Growth of the segment
 Intensity of the current and anticipated competition
 Cost of providing the superior value
 FIRMS OUTCOME
Product Positioning: an image of the product or
brand in the consumer’s mind relative to competing
products and brands. This image consists of a set of
beliefs, pictorial representations, and feelings about
the product or brand.
 • The individual's perception of the
performance of the product or
service in relation to his or her
Customer expectations.

Satisfaction Satisfaction=ƒ Expectations

• Customers identified based on
loyalty include loyalists, apostles
(Whose experience exceed their
expectations), defectors (Merely satisfied),
terrorists (Negative word of mouth),
hostages (Costly due to frequent
complaints), and mercenaries (No real
loyalty, usually impulse buyer)