Consumer Behavior: Meeting Changes and Challenges840145.72116.30la.com.cn/wenjian/Chapter 1 for CB... · To Understand the Relationship Between Consumer Behavior and the Marketing

Consumer Behavior: Meeting Changes and

Challenges

CHAPTERONE

Course Schedule & Chapter Allocation

2 mths 8 weeks 16 chap

1 week 2 chap

week 1 week 2 week 3 week 4 week 5 week 6 week 7 week 8 week 9

23 Mar 30 Mar 6-apr 13 apr 20-apr 4-May 11-May 18-May 25-May

1.00pm 1.45pm C1-1 C3-1 C5-1 C7-1 C9-1 C11-1 C13-1 C15-1 Examinations

10 mins break

1.55pm 2.40pm C1-2 C3-2 C5-2 C7-2 C9-1 C11-2 C13-2 C15-2

10mins break

2.50pm 3.35pm C2-1 C4-1 C6-1 C8-1 C10-1 C12-1 C14-1 C16-1

10 mins break

3.45pm 4.30pm C2-2 C4-2 C6-2 C8-2 C10-2 C12-2 C14-2 C16-2

27th April. Fridays

Text Book & Grading

Assignment – Case study (individual) ‐ 30% Examinations ‐ 65%Class Participation & Attendance ‐ 5%

Overall score : ‐ 100%

Final Examination– Open Book Concept

• True or False• Multiple choice questions• 3 short essay questions

Consume Behavior 10th EditionLeon G. Schiffman & Leslie Lazar Kanuk in collaboration with Joseph Wisenblit

Publisher Pearson –Prentice Hall

You Might have Known…………………..

Put Yourself Put Yourself in the shoes in the shoes

of your customers !of your customers !

• What are their needs and wants?

• What are their Goals & Objectives?

• What are their perceptions?

• What motivates them?

• What satisfies them?

• How do I tweak my marketing strategies to satisfy those needs?

• What other impending factors affect their decisions……………………………….

Learning Objectives

1. To Understand What Consumer Behavior Is and the Different Types of Consumers.

2. To Understand the Relationship Between Consumer Behavior and theMarketing Concept, the Societal Marketing Concept, as Well as Segmentation, Targeting, and Positioning.

3. To Understand the Relationship Between Consumer Behavior and Customer Value, Satisfaction, Trust, and Retention.

4. To Understand How New Technologies Are Enabling Marketers to Better Satisfy the Needs and Wants of Consumers.

5Chapter One Slide

Learning Objectives (continued)

5. To Understand How Marketers Are Increasingly Able to Reach Consumers Wherever Consumers Wish to Be Reached.

6. To Understand How the World’s Economic Condition Is Leading to Consumption Instability and Change.

7. To Understand the Makeup and Composition of a Model of Consumer Behavior.

6Chapter One Slide

To Which Segment ofConsumers Will This Ad Appeal?

Chapter One Slide 4

A Segment of Consumers Who are Environmentally Concerned

Chapter One Slide 5

To Which Segment ofConsumers Will This Ad Appeal?

Chapter One Slide 4

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.

10Chapter One Slide

www.froogle.com – web link

http://www.froogle.com/

Two Consumer Entities

11Chapter One Slide

Development of the Marketing Concept

12Chapter One Slide

Production

Orientation

Sales

Orientation

Marketing

Concept

Production Orientation

• From the 1850s to the late 1920s

• Companies focus on production capabilities

• Consumer demand exceeded supply

13Chapter One Slide

Sales Orientation

• From the 1930s to the mid 1950s

• Focus on selling

• Supply exceeded customer demand

14Chapter One Slide

Marketing Concept

• 1950s to current ‐ Focus on the customer!

• Determine the needs and wants of specific target markets

• Deliver satisfaction better than competition

15Chapter One Slide

Discussion Questions

1. What two companies do you believe grasp and use the marketing concept?

2. Why do you believe this?

Chapter One Slide 16

Societal Marketing Concept

• Considers consumers’long‐run best interest

• Good corporate citizenship


The Marketing Concept

• Consumer Research

• Segmentation

• Market Targeting

• Positioning

• The process and tools used to study consumer behavior/

• (Quanti & Quali methods/ U & A)

Embracing the Marketing Concept


The purpose of market segmentation

To identify groups of customers who have like needs (which are distinct from the needs of other groups) to ascertain whether they will require different different

products and different marketing mixes.products and different marketing mixes.

Different Buyers have different Needs



• Segmentation


• Positioning

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

Implementing the Marketing Concept



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?

21Chapter One SlideExercise on cars , shampoo etc..Exercise on cars , shampoo etc..



• Segmentation


• Positioning

The selection of one or more of the segments identified to pursue



Patterns of target market selection

Single-segmentconcentration

Product specialization in several segments

e.g. bearings

Selectivespecialization

Virgin group

M1 M2 M3

P1

P2

P3

Vertical = ProductVertical = Product

Horizontal = Market Segments Horizontal = Market Segments

M1 M2 M3 M1 M2 M3

P1

P2

P3

P1

P2

P3

Full marketcoverage

Market specialization with several productse.g. hospital supplies

Patterns of target market selection

P1

P2

P3

P1

P2

P3

M1 M2 M3

M1 M2 M3



• Segmentation


• 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 (USP)



The Marketing Mix

27Chapter One Slide

Customer Value, Satisfaction, Trust, and Retention

28Chapter One Slide

Successful Relationships

• Customer Value

• Customer Satisfaction

• Customer Trust

• 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, Trust, and Retention


=

(especially important in pricing decisions)(especially important in pricing decisions)

Customer Customer ValueValue creates valued Customerscreates valued Customers

Value Ratio: Customer Gets and Gives

Functional benefits + emotional benefits

Monetary costs + time costs + energy costs + psychic costs


• How does McDonald’s create value for the consumer?

• How do they communicate this value?

32Chapter One Slide


• Customer Value


• Customer Trust


• The individual's perception of the performance of the product or service in relation to his or her expectations.

Copyright 2010 Pearson Education, Inc.



Customer Satisfaction Customer Satisfaction creates satisfied Customerscreates satisfied Customers


• Customer Value


• Customer Trust


• Customer groups based on loyalty include

– Loyalists: continues to buy

– Apostles: Good WOM

• Customers who are dissatisfied

– Defectors : move to competitors

– Terrorists: Bad WOM

– Hostages: stayed on but unhappy

– Mercenaries: easily swayed




• Customer Value• Customer

Satisfaction• Customer Trust• Customer

Retention

• Establishing and maintaining trust is essential.

• Trust is the foundation for maintaining a long‐standing relationship with customers.

(KOL opinions works better than

advertorials)




• 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



The relationship between customer satisfaction and customer loyalty

• Reasons why not all satisfied customers are loyal customers include….– Variety seeking customers.. Prefer variety

– Blind commitment to the ‘big brands’ (brand conscious customer)… status symbols

– Price conscious/budget focussed

– Change in lifestyle, values (maturity of customer)

Activity

• What types of things will customers of your product/service consider when deciding if they are satisfied with it or not?

• What will determine if they re‐purchase your product a 2nd or 3rd time.. or.. ideally.. If they become a ‘loyal’ customer or not?

How to BuildCustomer Loyalty?

• Stay in regular contact with customers• Encourage customers to contact the company• Listen to customers’ concerns carefully and ask

‘the right questions’• Respect customers … be honest with them• Resolve problems encountered by customers

quickly, efficiently and tell them how you plan to resolve them

• Collect ongoing feedback from your customers• Always ‘back up promises’• Whenever possible, provide ‘one stop service’• Provide a ‘loyalty’ program

Source: Reading 4.2 - Anonymous (2005). Turn Customer Satisfaction into Customer Loyalty. Selling, 1 May: p4.

Need to add:

Financial Benefits

Social Benefits

Structural Ties

As well as providing an excellent product and service and giving them special financial incentives (e.g. discounts, deals etc)

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

Table 1.2Top 10 Companies

• American Express

• eBay

• IBM

• Amazon

• Johnson & Johnson

• Hewlett‐Packard

• U.S. Postal Service

• Procter and Gamble

• Apple

• NationwideChapter One Slide 26

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

42Chapter One Slide


THE 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 enables customers to customize what you make.

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

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

Market products and services that match customers’needs better than competitors’ offerings.

Utilize an understanding of customer needs to develop offerings that customers perceive as 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 the influences on consumer behavior.

Understand consumer behavior in relation to the company’s product.

Realize that each customer transaction is a discrete sale.

Make each customer transaction part of an ongoing relationship with the customer.

Impact of Digital Technologies

44Chapter One Slide

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

45Chapter One Slide

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

Consumer Behavior Is Interdisciplinary

46Chapter One Slide

A Simple Model of Consumer Decision Making ‐ Figure 1.4


Documents

Consumer Behavior: Meeting Changes and Challenges840145.72116.30la.com.cn/wenjian/Chapter 1 for CB... · To Understand the Relationship Between Consumer Behavior and the Marketing