Consumer Behavior

Meeting Changes &

Challenges

Learning Objectives

Understand what consumer behavior is and the

different types of consumers.
Understand the relationship between consumer
behavior and the marketing concept, the societal
marketing concept, as well as segmentation, targeting,
and positioning.
Understand the relationship between consumer
behavior and customer value, satisfaction, trust and
retention.

Customers and Consumers

Those individuals who purchase for the

purpose of individual or household
consumption are called consumers

WHAT IS CONSUMER BEHAVIOR?

The field of consumer behavior covers a lot of
ground: It is the study of the processes involved
when individuals or groups select, purchase, use
or dispose of products, services, ideas or
experiences to satisfy needs and desires.

CONSUMERS IMPACT ON MARKETING

STRATEGY

Consumer response is the ultimate test of

whether a marketing strategy will succeed.
Thus, knowledge about consumers should be
incorporated into virtually every facet of a
successful marketing plan.

Data about consumers helps organizations

define the market and identify threats and
opportunities in their own and different
countries that will affect consumers receptivity
to the product.

Different Types Of Consumers

Seasonal Consumers
Personal Consumers
Organizational Consumer
Impulse Consumers
Need Based Consumers
Discount Driven Consumers
Habitual Consumer

Seasonal Consumers

These are types of consumers who purchase and

consume products on seasonal basis. You would
most of the times not find these types of
consumers buying the goods or service in question
but rather at certain times when the need for them
arises. They buy products that are season based or
demanded at certain times and not all the times.
Examples
Purchasing umbrellas during the rainy season
Purchasing cold drinks during the hot seasons
Going out for holyday during the Christmas season

Personal Consumers
These types of consumers are individual
consumers who purchase goods for the sole
purpose of personal, family or household use.
Examples
Going to the supermarket and shopping for goods
which are to be used in the house
Purchasing a car that you intend to use personally
Purchasing clothes for personal use from a
clothing mall
Purchasing a mobile phone to communicate with
people

Organizational Consumer
Organizational consumers are consumers of goods and
services whose main intention is not for immediate use
but rather to use it for things like production, using them
to carry out the organizations activities or for resale
purposes aimed at getting profits as a result.
Example

An organization may buy raw materials that are aimed at

producing other goods which will later be offered for sale
to other consumers.

Impulse Consumers

Impulse consumers or buyers are those who

make unplanned buying decisions. Impulse
buyers make swift buying decisions in that they
encounter products which they immediately
purchase after they fall in love with the product
and its features. The products they purchase were
not initially in their plans but as a sort of
something that comes up all over sudden from
somewhere and that calls for the consumer to
make an unplanned purchase.

Need Based Consumers

Need based consumers are those types

of consumers who buy goods and
services when they need them and not
any other time. A need for a certain
product will necessitate buying it as the
consumer would find it tempting to buy
the product because it is needed
immediately for a certain purpose.

Discount Driven Consumers

Discount driven consumers are types of

consumers who are purchase goods and services
primarily for the discounts on offer. They may not
engage in any buying activity for most of the
times only to act when they hear or see large
discounts being offered on products they like.
They are price sensitive and they would rather
wait and purchase products when they come with
discounts as opposed to when they have no
discount.

Habitual Consumer

Habitual consumers are those who find it a

must or compelling to use certain type of
goods whenever they are presented with the
opportunity. It is just like a habit that they
cant do without engaging in it. E.g. the
cigarette smoker falls under this category of
consumers. The person would smoke at any
given time when he/she has a cigarette. He
may also not be able to do without smoking
because it is a habit that he has become
addicted to.

Consumer Behavior

Marketing concept
The societal marketing concept
Segmentation
Targeting
Positioning

Marketing concept

In order to be a successful, company must

determine the needs & wants of specific
target markets and deliver the desired
satisfaction better then competition

The Societal Marketing

Concept

Consumers may on occasion respond to their

immediate needs or wants, While overlooking
what is in effect in their own long-run best
interest, or in the best interest of their family &
neighbors, the best interest of their country or
region or even in the best interest of the entire
planet. Good Corporate Citizens

Segmentation
Segmenting means breaking up the market into smaller,
homogeneous segments. Within S-T-P, it is a virtual
brainstorming step whereby the business considers all
possible market segments. Segmenting strategies include
demographics, lifestyle, geographic and behavioural
approaches. Demographics segmentation means you break up
markets based on personal traits like age, race, marital status,
gender and income. Lifestyle segmenting means you divide
customers by hobbies and interests. Geographic segmentation
makes local, state, regional, national or international markets
key. Behavioural segmenting is based on such things as usage
patterns and benefits sought from the product.

Targeting

Following the brainstorming of possible

segments in step one, the next step is to pick a
select market to target or focus on. Companies
often focus on one market segment at a time
with marketing and ad campaigns. Whichever
market is the most attractive from a profit
standpoint or long-term potential is usually
selected first. Factors including size of the
market, growth potential and competitive
intensity impact the perceived opportunity in
targeting a given market.

Positioning
Positioning is how the company wants the
targeted market to perceive its brand or product.
Some companies make quality a key positioning
message and try to market their product as top
quality for the target market segment. Other
qualities commonly used to differentiate include
service, unique features, environmental
friendliness, family friendliness, safety, reliability,
durability and low cost. The key is to stand out
from competitors with a unique message that
appeals to the interests of the targeted market.

Consumer Behavior

Customer
Customer
Customer
Customer

Value
Satisfaction
Trust
Retention

Customer Value

Customer Vale can be thought of as the ratio between the

customers perceived benefits (economic, functional &
psychological) and the resources (monetary, time, effort) use to
obtain those benefits.
Examples:
1-Diner at exclusive Jasons Stake house per person Rs.3,000 may
expect unique & delicious food ,immaculate service & beautiful
decor.
2-Dells Value preposition for personal computer users consists for
customized PC Systems assembled speedily and sold at economical
prices.

Customer Satisfaction

The individual consumers perception of the

performance of the product or service in relation
to his or her expectations. If the expectations fall
below will be dissatisfied, if matches then
satisfied & if fall above then delighted

Levels of Customer
Satisfaction

Loyalist-> +ve side -> Satisfied Customers

Apostles-> + ve side -> Delighted Customers
Defectors-> Neutral side, merely satisfied
Consumer terrorists -> -ve experience with companies
product spread ve word of mouth
Hostages -> Un Happy customers who are with company
due to monopolistic environment
Mercenaries-> satisfied but dont have any loyal towards
company can defect at any point on lowing prices
Note: The companies should aim to create apostles, raise
the satisfaction of defectors and turn them into loyalists,
avoid having terrorist or hostages, and reduce the number
of mercenaries

Customer Trust

Customer trust of a range of different consumer

information sources reveals that word of mouth
communications & recommendations from other
consumers as well as consumer personal
experiences
Trust is the foundation for maintaining a long
standing relationship with the customers and it
helps to increase the chances that customers will
remain loyal

Customer Retention

Overall objective of providing value to customers

continuously & more effectively than the
competition is to have and to retain highly
satisfied & trusting customers, and from time to
time surprising them by the element of delight to
their dealings with the company. Its easy to retain
old rather then adding new

Customer Retention

Loyal customer will pay more, less price

sensitive , pay less attention to competitors
ad campaigns, spread good word of mouth
about companys offering to others.