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consumer behavior

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about the consumer behavior and the marketing concepts

about the consumer behavior and the marketing concepts

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  • 1. 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. • Includes all the decisions a consumer makes when spending their time and money. • What, when, where and how of consumer purchases are examined in consumer behavior. • Individuals, households, families and groups influence the decisions we make.Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 2Chapter One Slide
  • 2. Consumer Behavior • Personal consumers buy goods and services for his or her own use, for the use of household, or as a gift for a friend. • Organisational consumers include profit and not- for-profit businesses, government agencies and institutions, which buy products equipment and services in order to run their organisations. Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 3Chapter One Slide
  • 3. Two Consumer Entities Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 4 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. Chapter One Slide
  • 4. Development of the Marketing Concept Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 5 Production Orientation Sales Orientation Marketing Concept Chapter One Slide
  • 5. Production Orientation • From the 1850s to the late 1920s • Companies focus on production capabilities • Consumer demand exceeded supply Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 6 Production Orientation Sales Orientation Marketing Concept Chapter One Slide
  • 6. Sales Orientation • From the 1930s to the mid 1950s • Focus on selling • Supply exceeded customer demand Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 7 Production Orientation Sales Orientation Marketing Concept Chapter One Slide
  • 7. Marketing Concept • 1950s to current - Focus on the customer! • Determine the needs and wants of specific target markets • Deliver satisfaction better than competition Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 8 Production Orientation Sales Orientation Marketing Concept Chapter One Slide
  • 8. Societal Marketing Concept • Considers consumers’ long-run best interest • Good corporate citizenship Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 9
  • 9. The Marketing Concept • Consumer Research • Segmentation • Market Targeting • Positioning • The process and tools used to study consumer behavior Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Embracing the Marketing Concept Chapter One Slide 10
  • 10. The Marketing Concept • Consumer Research • Segmentation • Market Targeting • Positioning • Process of dividing the market into subsets of consumers with common needs or characteristics Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Implementing the Marketing Concept Chapter One Slide 11
  • 11. The Marketing Concept • Consumer Research • Segmentation • Market Targeting • Positioning The selection of one or more of the segments identified to pursue Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Implementing the Marketing Concept Chapter One Slide 12
  • 12. The Marketing Concept • Consumer Research • Segmentation • Market Targeting • Positioning • Developing a distinct image for the product in the mind of the consumer • Successful positioning includes: – Communicating the benefits of the product – Communicating a unique selling proposition Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Implementing the Marketing Concept Chapter One Slide 13
  • 13. The Marketing Mix Product Price Place Promotion Marketing Mix Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 14Chapter One Slide
  • 14. Customer Value, Satisfaction, Trust, and Retention Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 15 Successful Relationships Customer value High level of customer satisfaction Strong sense of customer trust Customer retention Chapter One Slide
  • 15. Successful Relationships • Customer Value • Customer Satisfaction • Customer Trust • Customer Retention • Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits • Perceived value is relative and subjective • Developing a value proposition is critical Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 16
  • 16. Successful Relationships • Customer 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, terrorists, hostages, and mercenariesCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 17
  • 17. Successful Relationships • Customer Value • Customer Satisfaction • Customer Trust • Customer Retention • completely satisfied customers are either loyalists who keep buying, or apostles whose experiences exceed their expectations and spread positive word of mouth • Defectors feel neutral or merely satisfied and just likely to stop buying Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 18
  • 18. Successful Relationships • Customer Value • Customer Satisfaction • Customer Trust • Customer Retention • Consumer terrorists have bad experiences and spread negative word of mouth • Unhappy customers who stay with the company just because of monopolistic environment or low prices and have frequent complaints are hostages Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 19
  • 19. Successful Relationships • Customer Value • Customer Satisfaction • Customer Trust • Customer Retention Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall • Establishing and maintaining trust is essential. • Trust is the foundation for maintaining a long- standing relationship with customers. Value, Satisfaction, Trust, and Retention Chapter One Slide 20
  • 20. Successful Relationships • Customer Value • Customer Satisfaction • Customer Trust • Customer Retention • It is an important strategy • Goal is to make customers stay with the company and generate positive word of mouth about your services and products • Internet and mobile phones have helped businesses maintain closer relations with their consumers Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 21
  • 21. Successful Relationships • Customer 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 – They spread positive word of mouth Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Value, Satisfaction, Trust, and Retention Chapter One Slide 22
  • 22. 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 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 26
  • 23. Customer Profitability-Focused Marketing • Common segmentation scheme used by marketers is to segment customers by their profitability to the firm • Marketers can offer higher-level services to their platinum customers who are more valuable to the marketer, more likely to try new offerings, and are often not price sensitive Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 24Chapter One Slide
  • 24. 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 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 25 Platinum Gold Iron Lead Chapter One Slide
  • 25. Customer Profitability-Focused Marketing • Platinum tier includes heavy users who are not price sensitive and who are willing to try new offerings • Gold tier customers are heavy users but are less profitable because they are more price sensitive, ask for more discounts and likely to buy from multiple sellers • Spending volume and profitability of customers in the iron tier do net merit special treatment Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 26Chapter One Slide
  • 26. Customer Profitability-Focused Marketing • Lead tier customers actually cost company money because they claim more attention than is merited by their spending, tie up company resources and spread negative word of mouth Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 27Chapter One Slide
  • 27. Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 28 THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED MARKETING Make only what you can sell instead of trying to sell what you make. Use technology that enables customers to customize what you make. Do not focus on the product; focus on the need that it satisfies. Focus on the product’s perceived value, as well as the need that it satisfies. Market products and services that match customers’ needs better than competitors’ offerings. Utilize an understanding of customer needs to develop offerings that customers perceive as 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 the influences on consumer behavior. Understand consumer behavior in relation to the company’s product. Realize that each customer transaction is a discrete sale. Make each customer transaction part of an ongoing relationship with the customer.
  • 28. Impact of Digital Technologies Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 29 Marketers • More products and services through customization • Instantaneous exchanges • Collect and analyze data Consumers • Power • Information • Computers, phones, PDA, GPS, smart TV Chapter One Slide
  • 29. 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 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 30Chapter One Slide Penetration of Internet Usage Among Mobile Subscribers in 16 Countries - FIGURE 1.3
  • 30. Consumer Behavior Is Interdisciplinary Psychology Sociology Social psychology Anthropology Economics Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 31Chapter One Slide
  • 31. Why Segmentation is Necessary • Consumer needs differs • Differentiation helps products compete • Segmentation helps identify media Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 32Chapter Three Slide
  • 32. Positioning The value proposition, expressed through promotion, stating the product’s or service’s capacity to deliver specific benefits. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 33Chapter Three Slide
  • 33. Criteria for Effective Targeting Identifiable Sizeable Stable Accessible Congruent with the company’s objectives and resources Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 34Chapter Three Slide
  • 34. Which Distinct Benefit Does Each of the Two Brands Shown in This Figure Deliver? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 35Chapter Three Slide
  • 35. The Dentyne Ad’s Benefit is Fresh Breath and the Nicorette Ad is Whitening and Smoking Cessation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 36Chapter Three Slide
  • 36. Bases for Segmentation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 37Chapter Three Slide
  • 37. Discussion Questions • Considering the largest bank in your college’s city or town: – How might consumers’ needs differ? – What types of products might meet their needs? – What advertising media makes sense for the different segments of consumers? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 38Chapter Three Slide
  • 38. Consumer-Rooted Segmentation Bases Demographics Geodemographic Personality Traits Lifestyles Sociocultural Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 39Chapter Three Slide
  • 39. Demographic Segmentation Age Gender Marital Status Family Life- cycle Income, Education, and Occupation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 40Chapter Three Slide
  • 40. Discussion Questions • What types of marketers might segment according to social class? • What ethical issues might marketers have when marketing to different social classes? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 41Chapter Three Slide
  • 41. Geodemographic Segmentation • Based on geography and demographics • People who live close to one another are similar • “Birds of a feather flock together” Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 42Chapter Three Slide
  • 42. One PRIZM Segment - Table 3.4 (excerpt) MOVERS & SHAKERS • 1.59 of U.S. households, Median household income: $95,372, Predominant employment: Professional • Social group: Elite suburbs, Life stage group: Midlife success, Key education level: College grad+ • Adult age range: 35–64 CHARACTERISTICS • Movers & Shakers is home to America’s up-and-coming business class: a wealthy suburban world of dual-income couples who are highly educated, typically between the ages of 35 and 54 and often with children. Given its high percentage of executives and white-collar professionals, there’s a decided business bent to this segment: Movers & Shakers rank number-one for owning a small business and having a home office. LIFESTYLE TRAITS: • Go scuba diving/snorkeling, Plan travel on the Internet • Read PC Magazine, Listen to adult contemporary radio • Drive a Porsche Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 43Chapter Three Slide
  • 43. Personality Traits • People often do not identify these traits because they are guarded or not consciously recognized • Consumer innovators – Open minded – Perceive less risk in trying new things Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 44Chapter Three Slide
  • 44. Lifestyles • Psychographics • Includes activities, interests, and opinions • They explain buyer’s purchase decisions and choices Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 45Chapter Three Slide
  • 45. Discussion Questions • How might you differ from a person with similar demographics to yourself? • How would this be important for marketers? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 46Chapter Three Slide
  • 46. Two Views of Post-Retirement Lifestyle Table 3.6 (excerpt) AS AN OPPORTUNITY TO MAKE A NEW START • This group regards retirement as an exciting time. Work will have been largely unrewarding, so the transition is seen as a freedom from the constraints of their former role. Retirement will invigorate such people and inspire them toward undertaking activities that work largely prevented them from pursuing. AS A CONTINUATION OF THEIR PRE-RETIREMENT LIFESTYLE • To such people, retirement is not perceived as signaling a drastic change. Work life has not been as unsatisfying as for others, hence its ending is not greeted with euphoria. There is, however, some satisfaction that retirement permits more opportunity to devote time to existing activities outside of their working role. The future is likely to see an increase in such activities but no real desire to engage in new ones. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 47Chapter Three Slide
  • 47. VALS – Figure 3.4 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 48Chapter Three Slide
  • 48. Socio-Cultural Values and Beliefs • Sociological = group • Anthropological = cultural • Include segments based on – Cultural values – Sub-cultural membership – Cross-cultural affiliations Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 49Chapter Three Slide
  • 49. Consumption-Specific Segmentation Bases Usage rate Usage situation Benefit segmentation Perceived brand loyalty Brand relationship Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 50Chapter Three Slide
  • 50. Consumption-Specific Segmentation Usage-Behavior • Usage rate – Awareness status – Level of involvement Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 51Chapter Three Slide
  • 51. Consumption-Specific Segmentation Usage-Behavior • Usage-situation segmentation – Segmenting on the basis of special occasions or situations – Example : When I’m away on business, I try to stay at a suites hotel. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 52Chapter Three Slide
  • 52. Which Consumption-Related Segmentation Is Featured in This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 53Chapter Three Slide
  • 53. This is an Example of a Situational Special Usage Segmentation. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 54Chapter Three Slide
  • 54. Benefits Segmentation • Benefits sought represent consumer needs • Important for positioning • Benefits of media Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Three Slide 28
  • 55. Benefits Visiting Tourists Seek in National Park – Table 3.13 (excerpt) Segment Description Environmentalists Interested in an unpolluted, un-spoilt natural environment and in conservation. Not interested in socializing, entertainment, or sports. Desire authenticity and less man-made structures and vehicles in the park. Want-it-all Tourists Value socializing and entertainment more than conservation. Interested in more activities and opportunities for meeting other tourists. Do not mind the “urbanization” of some park sections. Independent Tourists Looking for calm and unpolluted environment, exploring the park by themselves, and staying at a comfortable place to relax. Influenced by word of mouth in choosing travel destinations. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 56Chapter Three Slide
  • 56. Brand Loyalty and Relationships • Brand loyalty includes: – Behavior – Attitude • Frequency award programs are popular • Customer relationships can be active or passive • Retail customers seek: – Personal connections vs. functional features • Banking customers seek: – Special treatment – Confidence benefits – Social benefits Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 57Chapter Three Slide
  • 57. Implementing Segmentation Strategies • Micro- and behavioral targeting – Personalized advertising messages – Narrowcasting • Email • Mobile – Use of many data sources Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 58Chapter Three Slide
  • 58. Sample Acxiom Clusters - Table 3.16 (excerpt) Shooting Stars • Still relatively young at a mean age of 36, and with top rankings for income, college education, home value and net worth, these consumers have the world by the tail. Feeling financially secure with large investment portfolios, Shooting Stars spend their disposable Income making life a comfortable one, focusing on health, exercise, gourmet food, golf, and travel. Tots & Toys • Two things—work and family—consume these professional working couples. They’re putting their college degrees into action, climbing the corporate ladder for lucrative careers, while saving for their children’s education through do-it-yourself home improvements and trips to the zoo for entertainment. With time at a premium, it’s not surprising that the radio is the most relied-upon source for news and entertainment. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 59Chapter Three Slide
  • 59. Implementing Segmentation Strategies • Concentrated Marketing – One segment • Differentiated – Several segments with individual marketing mixes • Countersegmentation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 60Chapter Three Slide

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