CHAPTER

ONE
Consumer Behavior:
Meeting Changes and
Challenges

Chapter One Slide 1

Chapter One Slide 2
Chapter One Slide 3
A Segment of Consumers Who are
Environmentally Concerned

Chapter One Slide 4

 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.

Chapter One Slide 5

Two Consumer Entities

Chapter One Slide 6

Development of the
Marketing Concept

Chapter One Slide 7

 Production Orientation

• From the 1850s to the late 1920s

• Companies focus on production capabilities
• Consumer demand exceeded supply

Chapter One Slide 8

 Sales Orientation

• From the 1930s to the mid 1950s

• Focus on selling
• Supply exceeded customer demand

Chapter One Slide 9

 Marketing Concept

• 1950s to current - Focus on the customer!

• Determine the needs and wants of specific
target markets
• Deliver satisfaction better than
competition

Chapter One Slide 10

Chapter One Slide 11
 Discussion Questions

1. What two companies do

you believe grasp and use
the marketing concept?
2. Why do you believe this?

Chapter One Slide 12

Societal Marketing Concept

• Considers consumers’
long-run best
interest
• Good corporate
citizenship

Chapter One Slide 13

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

Chapter One Slide 14

 The Marketing Concept
Implementing the
Marketing Concept
• Consumer Research • Process of dividing the
• Segmentation market into subsets
• Market Targeting of 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
• Positioning includes:
– Communicating the benefits
of the product
– Communicating a unique
selling proposition
Chapter One Slide 18
The Marketing Mix

Chapter One Slide 19

Customer Value, Satisfaction, Trust,
and Retention

Chapter One Slide 20

 Successful Relationships
Value, Satisfaction,
• Defined as the ratio
Trust, and Retention between the customer’s
• Customer Value perceived benefits and the
• Customer resources used to obtain
Satisfaction those benefits
• Customer • Perceived value is relative
and subjective
• Trust
Customer • Developing a value
proposition is critical
Retention
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 • Customer groups based on
Trust loyalty include loyalists,
• Customer apostles, defectors,
Retention terrorists, hostages, and
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
foundation for
• Trust
maintaining a long-
Customer
standing relationship
Retention 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
Satisfaction – They buy more
• Customer products
• Trust – They are less price
sensitive
Customer
– Servicing them is
Retention cheaper
– 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 consumers
• Categorizes them
into tiers based on
consumption
behavior
• A customer pyramid
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 Understand consumer behavior in relation to

and 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.

28
Impact of Digital Technologies

Chapter One Slide 29

From 3:08- 4-19
Chapter One Slide 30
 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 31

Consumer Theory Is
Interdisciplinary

Chapter One Slide 32

A Simple Model of Consumer Decision Making - Figure 1.4

Chapter One Slide 33