consumer behavior chapter 1
DESCRIPTION
Consumer Behavior Chapter OneTRANSCRIPT
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Consumer Behavior: Meeting Changes and
Challenges
CHAPTERONE
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What is Consumer Behavior?
• The behavior that consumers display in – searching for– purchasing– using– evaluating, and – disposing of products(consuming ideas; e.g. green
consumption) and services that they expect will satisfy their needs.
2Chapter One Slide
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Two Consumer Entities
3Chapter One Slide
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Development of the Marketing Concept
4Chapter One Slide
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1. Production Orientation
• From the 1850s to the late 1920s• Companies focus on production/manufacturing
capabilities in order to expand production• No product variation• Consumer demand exceeded supply
5Chapter One Slide
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2. Sales Orientation
• From the 1930s to the mid 1950s• Too many products: from production to selling• Focus on selling: sell more of what the
manufacturing department was able to produce• Supply exceeded customer demand
6Chapter One Slide
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3. Marketing Concept
• 1950s to current - Focus on the customer!• Determine the needs and wants of specific target
markets• Deliver satisfaction better than competition
7Chapter One Slide
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The Marketing Concept
• Consumer Research
• Segmentation• Market Targeting• Positioning
• Consumers are highly complex• Subject to a variety of social and
psychological needs quite apart from their basic functional needs
• The process and tools used to study consumer behavior
Embracing the Marketing Concept
Chapter One Slide 8
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The Marketing Concept
• Consumer Research
• Segmentation• Market Targeting• Positioning
• Many people develop the same needs. • This commonality of needs constitutes
many of the “ingredients” of a consumer market segment
• Process of dividing the market into subsets of consumers with common needs or characteristics
Implementing the Marketing Concept
Chapter One Slide 9
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The Marketing Concept
• Consumer Research• Segmentation
• Market Targeting• Positioning
• The selection of one or more of the segments identified to pursue
• Low calories drink as a criteria for selecting targeting markets
Implementing the Marketing Concept
Chapter One Slide 10
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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 rather than the product features
– Communicating a unique selling proposition-that is a distinctive benefit or point of difference for the product or service
Implementing the Marketing Concept
Chapter One Slide 11
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The Marketing Mix
12Chapter One Slide
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Customer Value, Satisfaction, Trust, and Retention
13Chapter One Slide
• Good marketers today realize that in order to outperform competitors they must achieve the full potential from each and every customer.
• Employees should view any exchange with a as part of a customer relationship and not a transaction.
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Successful Relationships
• Customer Value• Customer
Satisfaction• Customer Trust• Customer
Retention
• Defined as the ratio between the customer’s perceived benefits (economic, functional, psychological) and the resources (monetary, time, effort used to obtain those benefits, psychological)
• Perceived value is relative and subjective
• Developing a value proposition is critical (a unique selling proposition)
Value, Satisfaction, Trust, and Retention
Chapter One Slide 14
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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. (function of customer expectation)
Expectations=Experience SatisfiedExpectations>Experience delightedExpectations<Experience dissatisfied
• Customer groups based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
Value, Satisfaction, Trust, and Retention
Chapter One Slide 15
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• Loyalist: Keep purchasing• Apostles: Experiences exceed expectations, provide positive word of
mouth • Defectors: feel neutral or merely satisfied• Terrorists: had bad experience, spread negative word of mouth• Hostages: unhappy customers, stay with the company only because of
monopolistic environment/frequent complains• Mercenaries: being satisfied but do not have any real loyalty
Companies should strive to create apostles, raise the satisfaction of defectors loyalists and avoid having terrorists/hostages and reduce the number of mercenaries
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Successful Relationships
• Customer Trust• Customer
• Establishing and maintaining trust is essential to online and off-lien retailers
• Trust is the foundation for maintaining a long-standing relationship with customers; increases the chance of customer loyalty (Trust)
Value, Satisfaction, Trust, and Retention
Chapter One Slide 17
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Successful Relationships
• 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; pay less
attention to competitor’s ads – Servicing them is cheaper– They spread positive word of mouth
• Marketing aimed to attract new customers is expensive
Value, Satisfaction, Trust, and Retention
Chapter One Slide 18
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Impact of Digital Technologies
19Chapter One Slide
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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
20Chapter One Slide
Penetration of Internet Usage Among Mobile Subscribers in 16 Countries - FIGURE 1.3
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Consumer Behavior Is Interdisciplinary
21Chapter One Slide
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A Simple Model of Consumer Decision Making
Chapter One Slide 22