Lec # 01 Consumer Behavior

CHAPTER
ONE
Consumer Behavior:
Meeting Changes and
Challenges
To Which Segment of
Consumers Will This Ad Appeal?
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 4
A Segment of Consumers Who are
Environmentally Concerned
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.
Two Consumer Entities
Organizational
Personal Consumer
Consumer
• The individual who • A business,
buys goods and government agency,
services for his or her or other institution
own use, for (profit or nonprofit)
household use, for that buys the goods,
the use of a family services, and/or
member, or for a equipment necessary
friend. for the organization to
function.
Development of the
Marketing Concept
Production Sales Marketing

Orientation Orientation Concept
Production Orientation
• From the 1850s to the late 1920s

• Companies focus on production capabilities
• Consumer demand exceeded supply

Sales Orientation
• From the 1930s to the mid 1950s

• Focus on selling
• Supply exceeded customer demand

Marketing Concept
• 1950s to current - Focus on the customer!

• Determine the needs and wants of specific
target markets
• Deliver satisfaction better than competition

Discussion Questions
1. What two companies do

you believe grasp and use
the marketing concept?
2. Why do you believe this?
Societal Marketing Concept
• Considers consumers’
long-run best interest
• Good corporate
citizenship
The Marketing Concept
Embracing the Marketing
Concept
• Consumer Research • The process and tools
• Segmentation used to study consumer
• Market Targeting behavior
• Positioning
Implementing the
Marketing Concept
• Consumer Research • Process of dividing the
• Segmentation market into subsets of
• Market Targeting consumers with
common needs or
• Positioning characteristics
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?
Implementing the
Marketing Concept
• Consumer Research The selection of one or
• Segmentation more of the segments
• Market Targeting identified to pursue
• Positioning
Implementing the
Marketing Concept
• Consumer Research • Developing a distinct image for
the product in the mind of the
• Segmentation consumer
• Market Targeting • Successful positioning includes:
• Positioning – Communicating the benefits
of the product
– Communicating a unique
selling proposition
The Marketing Mix
Product Price
Marketing
Mix
Place Promotion
Customer Value, Satisfaction, Trust,
and Retention
Successful Relationships
High level Strong
Customer of sense of Customer
value customer customer retention
satisfaction trust
Value, Satisfaction,
• Defined as the ratio between
Trust, and Retention the customer’s perceived
• Customer Value benefits and the resources
• Customer used to obtain those
Satisfaction benefits
• Customer Trust • Perceived value is relative
and subjective
• Customer
Retention • Developing a value
proposition is critical
• How does McDonald’s

create value for the
consumer?
• How do they
communicate this
value?
Trust, and Retention
• The individual's perception
• Customer of the performance of the
Value product or service in
• Customer relation to his or her
Satisfaction expectations.
• Customer Trust • Customer groups based on
• Customer loyalty include loyalists,
Retention apostles, defectors,
terrorists, hostages, and
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall mercenaries Chapter One Slide 21
Trust, and Retention • Establishing and
• Customer Value maintaining trust is
• Customer essential.
Satisfaction
• Trust is the
• Customer Trust
foundation for
• Customer
Retention maintaining a long-
standing relationship
with customers.
Value, Satisfaction, • The objective of providing
Trust, and Retention value is to retain highly
satisfied customers.
• Customer Value
• Loyal customers are key
• Customer
Satisfaction – They buy more products
• Customer Trust – They are less price
sensitive
• Customer
Retention – Servicing them is
cheaper
– They spread positive
word of mouth
Top 10 Multinational Companies in Pakistan
(Terms of Consumers’ Trust and Respect of Privacy)
MULTINATIONAL COMPANIES
UNILEVER
PROCTER & GAMBLE
NESTLE
STANDARD CHARTERED BANK
SIEMENS
KFC
TOYOTA
PEPSI-COLA INTERNATIONAL
MOBILINK
IMPERIAL CHEMICAL INDUSTRIES
THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED
MARKETING
Make only what you can sell instead of trying Use technology that enables customers to
to sell what you make. customize what you make.
Do not focus on the product; focus on the Focus on the product’s perceived value, as well
need that it satisfies. as the need that it satisfies.
Market products and services that match Utilize an understanding of customer needs to
customers’ needs better than competitors’ develop offerings that customers perceive as
offerings. more valuable than competitors’ offerings.
Research consumer needs and characteristics. Research the levels of profit associated with
various consumer needs and characteristics.
Understand the purchase behavior process and Understand consumer behavior in relation to
the influences on consumer behavior. the company’s product.
Realize that each customer transaction is a Make each customer transaction part of an
discrete sale. ongoing relationship with the customer.
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide 25
Impact of Digital Technologies
Marketers Consumers
• More products and • Power

services through • Information
customization • Computers, phones, PDA,
• Instantaneous exchanges GPS, smart TV
• Collect and analyze data
Consumer Behavior Is
Interdisciplinary
Psychology
Economics Sociology
Social
Anthropology
psychology
Anthropology
• The science that deals with the origins,

physical and cultural development, biological
characteristics, and social customs and beliefs
of humankind.
28
A Simple Model of Consumer Decision Making - Figure 1.4

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CHAPTER

• The behavior that consumers display in

Production Sales Marketing

• From the 1850s to the late 1920s

Production Sales Marketing

• From the 1930s to the mid 1950s

Production Sales Marketing

• 1950s to current - Focus on the customer!

Production Sales Marketing

1. What two companies do

1. What products that you regularly purchase

• How does McDonald’s

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

• More products and • Power

• The science that deals with the origins,

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