This document provides an overview of key topics in consumer behavior, including: 1. It defines consumer behavior as how individuals search for, purchase, use, and dispose of goods and services. 2. Emerging challenges to marketing like technological changes and shifting consumer preferences are discussed. 3. A simplified model of consumer decision making is presented, involving inputs, a decision process, and outputs. 4. The evolution of marketing concepts from production to relationship marketing is outlined, emphasizing a shift to customer-centric approaches.

1. Consumer Behavior (MKT 611)
Module 01: Introduction

2. Outline
• Overview of Consumer Behavior
• Emerging Challenges
• Review of Basic Marketing Terms
• Impact of Technologies
• A Simplified Model of Consumer
Decision Making

3. Consumer Behavior
The behavior that consumers display in
searching for, purchasing, using,
evaluating, and disposing of goods &
services that they expect will satisfy their
needs.

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.

5. 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.

6. Why do we need to study Consumer Behavior?
• Consumers are at the center of attention
• External factors influence consumers’ decisions
• Internal factors influence consumers’ decisions
• Consumer minds are dynamic
• Marketing programs need to adapt to changing
consumers’ tastes and preferences
• Customer knowledge and insight is necessary for
market competitiveness

7. Emerging Challenges
• Tech innovation
• Increase in competition
• Shift in consumers’ taste and preferences
• Shifting demographics and consumer needs
• Shift in consumers’ concerns (Environmental and
Social)
• Access to information and consumer choices

8. Development of the Marketing Thoughts
Production
Concept Selling Concept
Product Concept
Marketing
Concept
Relationship Marketing
Concept Societal Marketing
Concept
Holistic Marketing
Concept

9. The Production Concept
• Assumes that consumers are interested
primarily in product availability at low prices
• Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market expansion

10. The Product Concept
• Assumes that consumers will buy the
product that offers them the highest quality,
the best performance, and the most features
• Marketing objectives:
– Quality improvement
– Addition of features
• Tendency toward Marketing Myopia

11. The Selling Concept
• Assumes that consumers are unlikely to buy
a product unless they are aggressively
persuaded to do so
• Marketing objectives:
– Sell, sell, sell
• Lack of concern for customer needs and
satisfaction

12. The Marketing Concept
• Assumes that to be successful, a company
must determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition
• Marketing objectives:
– Make what you can sell
– Focus on buyer’s needs

13. Societal Marketing Concept
Marketers adhere to principles of social responsibility
in the marketing of their goods and services; that is,
they must endeavor to satisfy the needs and wants
of their target markets in ways that preserve and
enhance the well-being of consumers and society as
a whole.

15. From Marketing Concept and onwards
• Consumer
Research
• Segmentation
• Targeting
• Positioning
• The process and
tools used to study
consumer behavior
Implementing the
Marketing Concept

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

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

18. The Marketing Concept
• Consumer
Research
• Segmentation
• 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
Implementing the
Marketing Concept

19. Secret to Positioning!

20. The Marketing Mix
• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence
Combination of Marketing Mix must result in “Value” for customers

21. Successful Relationships
• Customer
Value
• Customer
Satisfaction
• 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
Value, Satisfaction,
and Retention

22. Successful Relationships
• Customer
Value
• Customer
Satisfaction
• Customer
Retention
• The individual's perception of
the performance of the product
or service in relation to his or
her expectations.
Value, Satisfaction,
and Retention

23. Successful Relationships
• Customer
Value
• Customer
Satisfaction
• 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
– They pay less attention to
competitors’ advertising
– Servicing them is cheaper
– They spread positive word of
mouth
Value, Satisfaction,
and Retention

24. Successful Relationships
Customer
Value
Customer
Satisfaction
Customer
Retention

25. Visualizing Consumers’ Decision Flow
• What are the inputs to consumers’ decision-
making?
• What is the process that he/she goes through?
• What is the output?

26. A
Simplified
Model
of
Consumer
Decision
Making