Why this course is named as consumer behavior not customer behavior

Consumer Behavior: Its Origins and

Strategic Applications

CUSTOMERS V/S CONSUMERS

Why this course is named as consumer behavior not customer behavior

TYPES OF CONSUMERS

Personal consumers

Organization consumers

PERSONAL CONSUMERS

The individual who buys goods and services for his or her own use(cigrettes and haircut), for household use(sugar,salt,furniture) for the use of a family member(a pair of shoes for the son), or for a friend(a pen set).

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.

Eg: when any manufacturing firm buys raw material to produce and sell its products

Copyright 2007 by Prentice Hall

Development of the Marketing

Production Concept

Selling Concept

Product Concept

Marketing Concept


The Production Concept

Assumes that consumers are interested primarily in product availability at low prices

Marketing objectives: Cheap, efficient production Intensive distribution Market expansion


The Product Concept

Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features

Marketing objectives: Quality improvement Addition of features

Tendency toward Marketing Myopia


The Selling Concept

Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so

Marketing objectives: Sell, sell, sell

Lack of concern for customer needs and satisfaction


The Marketing Concept

Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition

Marketing objectives: Make what you can sell Focus on buyer’s needs


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.

Buyer v/s User

A father is buying a cycle for his school going son

A man is purchasing a tooth paste for his family



Consumer Research

Segmentation

Targeting Positioning

The process and tools used to study consumer behaviour

Implementing the Marketing Concept



Consumer Research

Segmentation


Process of dividing the market into subsets of consumers with common needs or characteristics




Consumer Research

Segmentation


The selection of one or more of the segments to pursue




Consumer Research

Segmentation


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


This product is

positioned as a

solution to facial

redness.


The Marketing Mix

Product Price Place Promotion


Successful Relationships

Customer Value

Customer Satisfaction

Customer Retention



Customer Value


Customer Retention

Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits

Perceived value is relative and subjective

Developing a value proposition is critical

Value, Satisfaction, and Retention


Discussion Question

How does McDonald’s create value for the consumer?

How do they communicate this value?



Customer Value


Customer Retention

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




Customer Value


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 They pay less attention

to competitors’ advertising

Servicing them is cheaper

They spread positive word of mouth



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


Customer Profitability-Focused Marketing

Tier 1: Platinum

Tier 2: Gold

Tier 3: Iron

Tier 4: Lead


Traditional Marketing Concept Vs. Value and Retention Focused MarketingTable 1-2

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 enablescustomers to customize whatyou make

Do not focus on the product; focus on the need that it satisfies

Focus on the product’s perceived value, as well as theneed that it satisfies

Market products and services that match customers’ needs better thancompetitors’ offerings

Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors’ offerings


Impact of Digital Technologies

Consumers have more power and access to information

Marketers can gather more information about consumers

The exchange between marketer and customers is interactive and instantaneous and goes beyond the PC.

Marketers must offer more products and services


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 a whole.

Documents

Why this course is named as consumer behavior not customer behavior