CHAPTER ONE

Consumer Behavior: Meeting Changes and Challenges

Learning Objectives
To Understand What Consumer Behavior Is
Role of Marketing:
Satisfy customers needs and wants
Different marketing orientations STP framework

Build long-term relationship with consumers

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Chapter One Slide 2

To Which Segment of Consumers Will This Ad Appeal?

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Chapter One Slide 4

A Segment of Consumers Who are Environmentally Concerned

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Chapter One Slide 5

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.

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Chapter One Slide 5

Development of the Marketing Concept

Production Orientation

Sales Orientation

Marketing Concept

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Chapter One Slide 6

Production Orientation
From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supply
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 7

Sales Orientation
From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demand
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 8

Marketing Concept
1950s to current - Focus on the customer! Determine the needs and wants of specific target markets Deliver satisfaction better than competition
Production Orientation Sales Orientation Marketing Concept

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Chapter One Slide 9

Societal Marketing Concept

Considers consumers long-run best interest Good corporate citizenship

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Chapter One Slide 10

Discussion Questions
1. What two companies do you believe grasp and use the societal marketing concept? 2. Why do you believe this?

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Chapter One Slide 11

The Marketing Concept

Embracing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The process and tools used to study consumer behavior

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Chapter One Slide 12

The Marketing Concept

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

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Chapter One Slide 13

Discussion Questions
1. What products that you regularly purchase are highly segmented? 2. What are the different segments? 3. Why is segmentation useful to the marketer for these products?

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Chapter One Slide 14

The Marketing Concept

Implementing the Marketing Concept
Consumer Research Segmentation Market Targeting Positioning The selection of one or more of the segments identified to pursue

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Chapter One Slide 15

The Marketing Concept

Implementing 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 Communicating a unique selling proposition

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Chapter One Slide 16

The Marketing Mix

Product
Marketing Mix

Price

Place
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Promotion
Chapter One Slide 17

Customer Value, Satisfaction, Trust, and Retention

Successful Relationships
Customer value High level of customer satisfaction Strong sense of customer trust Customer retention

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Chapter One Slide 18

Successful Relationships
Value, Satisfaction, Defined as the ratio between Trust, and Retention the customers perceived
Customer Value Customer Satisfaction Customer Trust Customer Retention benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical
Chapter One Slide 19

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Discussion Questions
How does McDonalds create value for the consumer? How do they communicate this value?

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Chapter One Slide 20

Successful Relationships
Value, Satisfaction, Trust, and Retention
The individual's perception Customer of the performance of the Value product or service in relation to his or her Customer expectations. Satisfaction Customer groups based on Customer Trust loyalty include loyalists, Customer apostles, defectors, Retention terrorists, hostages, and Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall mercenaries Chapter One Slide 21

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust Customer Retention

Establishing and maintaining trust is essential. Trust is the foundation for maintaining a longstanding relationship with customers.
Chapter One Slide 22

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Successful Relationships
Value, Satisfaction, Trust, and Retention
Customer Value Customer Satisfaction Customer Trust 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 Servicing them is cheaper They spread positive word of mouth
Chapter One Slide 23

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Top 10 Ranked U.S. Companies in Terms of Consumers Trust and Respect of Privacy Table 1.2
Top 10 Companies

American Express eBay IBM Amazon Johnson & Johnson Hewlett-Packard U.S. Postal Service Procter and Gamble Apple Nationwide
Chapter One Slide 26

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Discussion: American Express Card

What is your impression of American Express According to the video, what does American Express do to improve the usage rate? How do they reach the young segment?
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Impact of Digital Technologies

Marketers Consumers

More products and services through customization Instantaneous exchanges Collect and analyze data

Power Information Computers, phones, PDA, GPS, smart TV

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Chapter One Slide 26

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
Penetration of Internet Usage Among Mobile Subscribers in 16 Countries - FIGURE 1.3

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Chapter One Slide 27

Consumer Behavior Is Interdisciplinary

Psychology

Economics

Sociology

Anthropology

Social psychology

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Chapter One Slide 28

Outlook of this course

Part one: introduction of consumer behavior (chp1, chp2) Part two: psychological characteristics of consumer (chp4, chp5, chp6, chp7 & chp8) Part three: social and culture influences on consumer behavior (chp7, chp8, chp10, chp11 and chp 13) Consumer decision making process: chp 14
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Summary
To Understand What Consumer Behavior Is
Role of Marketing:
Satisfy customers needs and wants
Different marketing orientations STP framework

Build long-term relationship with consumers

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide 30

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Seven Slide 31