2. The changing equation
Out of 11000 products launched by 77
companies, only 56% are present five years
later – Kuczmaski & Associates
Only 8% of new product concepts offered
by 112 leading companies reached the
market. Out of this 83% failed to reach
marketing objectives – Group EFO Ltd.,
Marketing News, Feb 1, 1993, Pg 2
3. Development of the Marketing
Concept
Production
Concept
Selling Concept
Product Concept
Marketing
Concept
4. The Production Concept
Assumes that consumers are interested
primarily in product availability at
low prices
Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market expansion
5. 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
6. 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
7. 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:
–Profits through customer satisfaction
9. Segmentation, Targeting, and
Positioning
Segmentation: process of dividing the
market into subsets of consumers with
common needs or characteristics
Targeting: selecting one ore more of
the segments to pursue
Positioning: developing a distinct
image for the product in the mind of
the consumer
12. The Societal Marketing Concept
All companies prosper when society
prospers.
Companies, as well as individuals,
would be better off if social
responsibility was an integral
component of every marketing decision.
Requires all marketers adhere to
principles of social responsibility.
13. Digital Revolution in the
Marketplace
Allows customization of products,
services, and promotional messages
like never before
Enhances relationships with customers
more effectively and efficiently
Has increased the power of customers
and given them access to more
information
14. Digital Revolution in the
Marketplace - Continued
The exchange between consumers
and marketers has become more
interactive
May affect the way marketing is
done
15. Changes brought on by the
digital revolution
Changes in segmentation strategies
Re-evaluation of promotional budgets
– reduced impact of television?
– More internet-based promotion?
Integrated marketing becomes critical
– Using off-line promotions to drive
consumers to company’s website (and
vice-a-versa)
» Continued
16. Environmental factors that affect the
marketing challenge
Extent to which the supply of valid products and
services exceed consumer demand
Ability to communicate with customers quickly
and accurately
Existence of multiple avenues of distribution
quickly and economically
Extent to which marketers can influence to induce
distributors to comply with overall marketing
strategy
Economic growth, both nationally and globally
17. Changes brought on by the digital
revolution - continued
Revamping distribution systems
– Direct distribution becomes more of an option
Pricing methods may need to be re-
evaluated
– Comparison shopping made easier
Consumer research methods may
change
– How do you measure web-based promotions?
18. “Remember Me?”
I'm the fellow who goes into a restaurant, sits down and patiently
waits while the waitresses do everything but take my order. I'm
the fellow who goes into a department store and stands quietly
while the sales clerks finish their little chitchat. I'm the man
who drives into a gasoline station and never blows his horn, but
waits patiently while the attendant finishes reading his comic
book.
"Yes, you might say, I'm a good guy. But do you know who else I
am? I am the fellow who never comes back, and it amuses me
to see you spending thousands of dollars every year to get me
back into your store, when I was there in the first place, and all
you had to do to keep me was to give me a little service; show
me a little courtesy."
Source: From a Better Business Bureau bulletin submitted by An
Arkansas Reader to Dear Abby
19. THE NEW CONSUMER
“Meet the new customer and smile when
you do because she is your boss. It may
not be the person you thought you knew.
Instead of choosing from what you have to
offer, she tells you what she wants. You
figure it out how to give it to her.”
-Fortune Editor
20. A new product must satisfy
consumer needs, not the needs
and expectations of management.
Understanding and adapting to
consumer motivation and
behaviour is not an option – it
becomes a necessity for
competitive survival
21. All managers must become astute
analysts of Consumer motivation
and Behaviour
Three foundations for marketing
decisions
Experience
Intuition
Research
22. Dominant forces shaping Consumer
Research
Factors that move an economy
from Production-driven to Market-
driven
Level of sophistication with which
human behaviour is understood in
psychology and other behavioural
sciences
23. Motivational Research
It seeks to learn what motivates
people in making choices. The
techniques are such as to delve into
the conscious, subconscious and
the unconscious.
‘women don’t buy cosmetics, they
buy hope.’
‘women bake cakes out of the
unconscious desire to give birth’
24. The advice to footwear salesmen
should be ‘Don’t sell shoes – sell
lovely feet’
Marketers must contend with small
changing segments of highly selective
buyers intent on receiving genuine value at
the lowest price
25. Enhancing Consumer Value-added
Marketers have to constantly innovate after
understanding their consumers to strip out
costs permanently by focusing on what
adds value for the customer and
eliminating what doesn’t.
26. Individualised Marketing
A very personal form of marketing
that recognises, acknowledges,
appreciates and serves individuals
who become or are known to the
marketer.
Data – based marketing; DM
Customized marketing
27.
28. Consumer Behaviour
The behaviour that consumers
display in searching for,
purchasing, using, evaluating,
and disposing of products and
services that they expect will
satisfy their needs.
29. This study draws on concepts
from various other disciplines
Psychology
Sociology
Anthropology
Economics
Marketing
30. Anthropology
The study of people
within and across
cultures
Emphasis on cross-
cultural differences
Questioning of
assumptions within own
culture
31. Economics
Basic economic issues
– Supply and demand
– Rational decision making
– Perfect information
Emphasis on predicting
behavior
Complications in real life
Behavioral economics—
e.g., “mental accounting”
32. History and Geography
Origins of behavior,
perspectives, and
traditions
Impact of geography on
individuals
– Isolation
– Language development
– Climate
Geographic determinism
33. Psychology
Study of human
thinking and behavior
Some issues
– Personality
– Personal development
– Cognition (thinking),
perception
– Attention and its
limitations
– “Learning”—e.g.,
acquired tastes
39. Situational Factors
Physical and social surroundings (i.e.
the actual environment within which a
person lives.
Timing (i.e. the propensity/opportunity
to purchase).
Type of purchase.
Prior experience.
41. Need to study ?
‘You cannot take the consumer for granted any more’
Therefore a sound understanding of consumer behaviour
is essential for the long run success of any marketing
program
43. Applications of Consumer
Behavior…
Understanding consumer behavior is good
business.
– Firms exist to satisfy consumers’ needs, so
– Firms must understand consumers needs to satisfy
them.
The Process of Marketing Segmentation:
– Identifies Groups of Consumers Who are Similar
to One Another in One or More Ways, and
– Devises Marketing Strategies that Appeal to
One or More of These Groups.
44. Why study consumer behaviour?
Understanding consumer behaviour
will help you become better marketers
as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing
continued
45. Why study consumer behaviour?
Knowledge of consumer behaviour is
essential for non-profit organizations
– Non profits have different customers to
please
– Donors, users, volunteers, general public,
government
» continued
46. Why study consumer behaviour?
Public service initiatives have to be
based on an understanding of
consumer behaviour
– Canada’s largest advertiser is the federal
government
– Most government initiatives (e.g.,
antismoking campaigns) need a
knowledge of consumer behaviour to
succeed
» continued
47. Why study consumer behaviour?
Better understanding of our own
consumption behaviour
49. The Dark Side of Consumer
Behavior
Compulsive Consumption
>Behavior is Not Done by
Choice
>Gratification is Short-Lived
>Strong Feelings of Regret or
Guilt Afterwards
Illegal Activities
> Consumer Theft (Shrinkage)
>Anti-consumption
– Culture Jamming
– Cultural Resistance
Consumed Consumers
> People Who Are Exploited for
Commercial Gain in the
Marketplace.
Addictive Consumption
> Gambling
50.
51. Business Leaders Who Understood
Consumer Behaviour
Alfred Sloan, General Motors
Colonel Sanders, KFC
Ray Kroc, McDonald’s