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8/8/2019 CB_Session1_PPT

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Consumer Behavior

Chapter 1

Consumer Behavior:

Its Origins and

Strategic Applications


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No matter where you are, there areconsumers.Consumers and it

doesnt matter whether they are

rich or not USAs Wal-Mart,

Britain's Tesco and Indias Big

Bazaars are grown from being

smallAt the same timeIndias

Modis are selling luxury brands to

global consumers


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Your own Behavior?


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1. Purpose of business organizations is to satisfyconsumer needs at a profit to the firm

2. This permits businesses to

1. Develop marketing strategies

2. Gain competitive advantage

Why study CB????


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Purpose of Course

Consider consumer behavior

principles that help us

understand

Consumer needs

Consumer purchasing behavior

Consumer responses to

marketing strategies

Link behavioral principles to

strategy to better meet

consumer needs


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Peter Drucker said,

"The purpose of business is

to find a customer.

However, today business is moving towards what Jason Jennings and

Laurence Houghton said, "The purpose of business is to

find, keep and grow the right customer."

Theodore Levitt elaborated thatThe purpose of business is

to create and keep a customer".


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Mrs Sharma buys the same brand of tea and shampoo month after month

out of sheer habit.

Mr Kulkarni looks for durability in a television when he buys one for hisfamily. It is a long-term asset to be replaced only when it drops dead.

Mr Venkataraman buys branded distemper when he wants to move from

chuna to a better-quality branded paint. It is his first step into brands.

Mrs Ganguly has one refrigerator in her house. And that is more than

enough for her family.


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Why does Nokia win while the cola majors struggle?

Why does Honda win while Mercedes struggles?

Why does Levi's lag behind, Nike limp along and Star

TV rethink?


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Chapter Outline

Overview of Consumer Behavior

The Marketing Concept

The Marketing Mix and

Relationships Digital Technologies

Societal Marketing Concept

A Simplified Model of Consumer

Decision Making


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Video Clip


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Consumer Behavior


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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.


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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.


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CB-Definitions

The study of individuals, groups, or organizations and theprocesses 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.

Activities people undertake

when obtaining, consuming,

and disposing of products

and services.


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Development of the Marketing

ConceptProduction

Concept

Selling Concept

Product Concept

Marketing

Concept


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ConsumerResearch

Segmentation

Targeting

Positioning

The process andtools used to study

consumer behavior

Two perspectives:

Positivist approach

Interpretivist

approach

Implementing the

Marketing Concept


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ConsumerResearch

Segmentation

Targeting

Positioning

Process of dividingthe market into

subsets of

consumers with

common needs orcharacteristics

Implementing the

Marketing Concept


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ConsumerResearch

Segmentation

Targeting

Positioning

The selection of one ormore of the segments

to pursue

Implementing the

Marketing Concept


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ConsumerResearch

Segmentation

Targeting

Positioning

Developing a distinct imagefor 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


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Successful

Relationships

Customer

Value

CustomerSatisfaction

Customer

Retention


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Successful Relationships

CustomerValue

Customer

Satisfaction

CustomerRetention

Defined as the ratio between

the customers perceivedbenefits and the resources

used to obtain those

benefits

Perceived value is relativeand subjective

Developing a value

proposition is critical

Value, Satisfaction,

and Retention


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CustomerValue

Customer

Satisfaction

CustomerRetention

The individual's perception of

the performance of the product

or service in relation to his or

her expectations.

Customers identified based on

loyalty include loyalists,apostles, defectors, terrorists,

hostages, and mercenaries


and Retention


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CustomerValue

CustomerSatisfaction

CustomerRetention

The objective of providing value

is to retain highly satisfiedcustomers.

Loyal customers are key

They buy more products

They are less price sensitive They pay less attention tocompetitors advertising

Servicing them is cheaper

They spread positive word of

mouth


and Retention


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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


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Customer Profitability-FocusedMarketing

Tier 1: Platinum

Tier 2: Gold

Tier 3: Iron

Tier 4: Lead


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Traditional Marketing Concept Vs. Value

and Retention Focused Marketing

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 whatyou make

Do not focus on the product; focus on

the need that it satisfies

Focus on the products

perceived value, as well as the

need that it satisfies

Market products and services thatmatch customers needs better than

competitors offerings

Utilize an understanding ofcustomer needs to develop

offerings that customers

perceive as more valuable than

competitors offerings


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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 awhole.


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Indian Consumers


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Need

Criteria

Info

Processing

Brand

Perceptions

Brand

Attitudes

Purchase

Behavior

1. Safety is very important to me in buying a car.

2. I think Volvo is a very safe car.

3. Therefore, I like Volvos.

4. As a result, I would consider a Volvo the next time I am in the

market for a new car.

A Simple Model of Consumer

Decision Making


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A Simplified Model of Consumer

Decision Making

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