Consumer Behavior

Consumer Behavior:  Its Origins and Strategic Appliances

Why Study Consumer Behavior?

•      What consumers think of our products and those of our competitors.

•      What they think of possible improvements in our products.

•      How they use our products.

•      What attitudes they have about our products and our advertising.

•      What they feel about their roles in the family and society.

•      What their hopes and dreams are for themselves and for their families.

Digital Revolution in the Marketplace

•      Allows customization of products, services, and promotional messages like never before

•      Enhances relationships with customers more effectively and efficiently

Changes in the Business Environment

•      Increased consumer power

•      Access to information

•      More products and services

•      Interactive and instant exchanges

•      Access to customer patterns and preferences

•      Evolution to other -Web connection

–  PDAs


–  Mobile phones

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.

Broader View of Consumer Behavior

•      Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

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.

Development of the Marketing Concept

The Production Concept

•      Assumes that consumers are interested primarily in product availability at low prices

•      Marketing objectives:

–   Cheap, efficient production

–   Intensive distribution

–   Market expansion

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

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

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

The Marketing Concept

A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals.

Implementing the Marketing Concept

•      Consumer Research

•      Segmentation

•      Targeting

•      Positioning

Consumer Research

•      The process and tools used to study consumer behavior.

•      Two perspectives:

–   Positivist approach

–   Interpretivist approach

Segmentation, Targeting, and Positioning

•      Segmentation: process of dividing the market into subsets of consumers with common needs or characteristics

•      Targeting: selecting one or more of the segments to pursue

•      Positioning: developing a distinct image for the product in the mind of the consumer

Successful Positioning

•      Communicating the benefits of the product, rather than its features

•      Communicating a Unique Selling Proposition for the product

Successful Relationships

Types of Customers

•     Loyalists

•     Apostles

•     Defectors

•     Terrorists

•     Hostages

•     Mercenaries

Customer Profitability-Focused Marketing

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.