COUSUMER BEHAVIOUR

- Dr. Satya Prasad VK

 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 World’s 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 Book
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 To Which Segment of
Consumers Will This Ad Appeal?

Chapter One Slide 4

A Segment of Consumers Who are
Environmentally Concerned

Chapter One Slide 5

 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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Chapter One Slide
 Two Consumer Entities

Personal Organizationa
Consumer l Consumer
The individual who buys
● A business, government
●

goods and services for agency, or other institution

(profit or nonprofit) that
his or her own use, for
buys the goods, services,
household use, for the and/or equipment
use of a family member, necessary for the
or for a friend. organization to function.
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Chapter One Slide
 Development of the
Marketing Concept

Production Sales Marketing

Orientation Orientation Concept

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

Production Sales Marketing

Orientation Orientation Concept

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

Production Sales Marketing

Orientation Orientation Concept

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

Production Sales Marketing

Orientation Orientation Concept

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Chapter One Slide
 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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Chapter One Slide
Societal Marketing Concept
• Considers consumers’
long-run best interest
• Good corporate
citizenship

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Chapter One Slide
 The Marketing Concept
Embracing the Marketing
Concept
• Consumer Research • The process and tools
• Segmentation used to study consumer
• Market Targeting behavior
• Positioning

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

Chapter One Slide 15

 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?

Chapter One Slide 16

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

Chapter One Slide 17

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

Chapter One Slide 18

 The Marketing Mix
Product

Price

Marketing Mix

Promotion
Place

Chapter One Slide 19

Customer Value, Satisfaction, Trust,
and Retention

Successful Relationships

High level of
Strong sense of
Customer value customer Customer retention
customer trust
satisfaction

Chapter One Slide 20

 Successful Relationships
Value, Satisfaction,
• Defined as the ratio between
Trust, and Retention the customer’s perceived
• Customer Value benefits and the resources
• Customer used to obtain those
Satisfaction benefits
• Customer Trust • Perceived value is relative
and subjective
• Customer
Retention • Developing a value
proposition is critical

Chapter One Slide 21

 Discussion Questions
• How does McDonald’s
create value for the
consumer?
• How do they
communicate this
value?

Chapter One Slide 22

 Successful Relationships
Value, Satisfaction,
Trust, and Retention
• The individual's perception
• Customer of the performance of the
Value product or service in
• Customer relation to his or her
Satisfaction expectations.
• Customer Trust • Customer groups based on
• Customer loyalty include loyalists,
Retention apostles, defectors,
terrorists, hostages, and
mercenaries Chapter One Slide 23
 Successful Relationships
Value, Satisfaction,
Trust, and Retention • Establishing and
• Customer Value maintaining trust is
• Customer essential.
Satisfaction • Trust is the
• Customer Trust
foundation for
• Customer
Retention maintaining a long-
standing relationship
with customers.
Chapter One Slide 24
 Successful Relationships
Value, Satisfaction, • The objective of providing
Trust, and Retention value is to retain highly
satisfied customers.
• Customer Value
• Loyal customers are key
• Customer – They buy more products
Satisfaction
– They are less price
• Customer Trust sensitive
• Customer – Servicing them is cheaper
Retention – They spread positive
word of mouth

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
• Procter and Gamble
• Apple
• Nationwide

Chapter One Slide 26

 Customer Profitability-Focused
Marketing
• Tracks costs and
revenues of individual Platinum

consumers
Gold
• Categorizes them into
tiers based on
Iron
consumption behavior
• A customer pyramid Lead
groups customers into
four tiers

Chapter One Slide 27

THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED
MARKETING
Make only what you can sell instead of trying Use technology that enables customers to
to sell what you make. customize what you make.

Do not focus on the product; focus on the Focus on the product’s perceived value, as well
need that it satisfies. as the need that it satisfies.

Market products and services that match Utilize an understanding of customer needs to
customers’ needs better than competitors’ develop offerings that customers perceive as
offerings. more valuable than competitors’ offerings.

Research consumer needs and characteristics. Research the levels of profit associated with
various consumer needs and characteristics.

Understand the purchase behavior process and Understand consumer behavior in relation to
the influences on consumer behavior. the company’s product.

Realize that each customer transaction is a Make each customer transaction part of an
discrete sale. ongoing relationship with the customer.

Chapter One Slide 28

 Impact of Digital Technologies

Marketers Consumers
●
More products and ●
Power
services through ●
Information
customization
●
Instantaneous exchanges
●
Computers, phones,
●
Collect and analyze data PDA, GPS, smart TV
Chapter One Slide 29
 The Mobile Consumer
Penetration of Internet Usage Among Mobile
• Wireless Media Subscribers in 16 Countries - FIGURE 1.3
Messages will expand
as:
– Flat-rate data traffic
increases
– Screen image quality
is enhanced
– Consumer-user
experiences with web
applications improve

Chapter One Slide 30

 Consumer Behavior Is
Interdisciplinary
Psychology

Economics Sociology

Anthropology Social psychology

Chapter One Slide 31

A Simple Model of Consumer Decision Making - Figure 1.4

Chapter One Slide 32