Consumer Behaviour

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Chapter 1

Click to edit Master subtitle style Customer Behaviour:

Its origins and Strategic Applications

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Consumer Behaviour
The mental, emotional and physical activities that

people engage in when selection, purchasing, using, disposing of products and services so as to satisfy needs and desires.

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Two Consumer Entities

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Development of the Marketing Concept

The production concept assumes that consumers

are mostly interested in product availability at low prices; so the marketing objectives are cheap, efficient production and intensive distribution. And because the demand was higher than the supply, consumers were content to get a product and were not focused on product variation. This was the time that the control was in the hands of the producers who said, if we make it they will buy it. favor products that offer the most quality, performance, and features for which the organization 5/15/12 should therefore devote its energy to making

Product concept is the idea that consumers will

Selling concept is the idea that consumers will not

buy enough of the firms products unless it undertakes a large scale selling and promotion effort. The problem with this approach is that it fails to consider consumer satisfaction. Today the selling concept is used by insurance companies and political parties. organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do.
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Marketing concept is the idea that achieving

Discussion Questions
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1.

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

2. Why do you believe this?

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The Marketing Concept

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Embracing the Marketing Concept

Consumer Research
Segmentation Market Targeting Positioning

The process and tools

used to study consumer behavior

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Implementing the Market Concept

Consumer Research: All companies must continually conduct research to understand the needs and priorities of their market segments. Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs. Market Targeting is the selection of one or more of the segments identified by the company to pursue.
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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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Product position is the way the product is defined

by consumers on important attributesthe place the product occupies in consumers minds relative to competing products.

Successful positioning includes:

Communicating the benefits of the product Communicating a unique selling proposition

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Societal Marketing Concept

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Considers consumers

long-run best interest citizenship

Good corporate

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Chapter One Slide

The societal marketing concept was developed

from the marketing concept. Marketers and consumers are increasingly taking stock of what is good for themselves, their family, their country, and the planet. Marketing looks for opportunities to provide products and services to help consumers reach their goals while also making profitable decisions for their companies. The image in this slide of a Siemens ad suggests the company is committed to developing products that are safe for customers and the environment.
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The Marketing Mix

The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy

Product Price Promotion Place

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Customer Value, Satisfaction, Trust, and Retention

Customer perceived value is the difference between total customer value and total customer cost Customer satisfaction is the extent to which a products perceived performance matches a buyers expectations. They will trust the marketer and continue to purchase the product. In addition, they will tell others about the product and speak highly of it 5/15/12 when asked or when reviewing the product

Discussion Questions
How does McDonalds

create value for the consumer?

How do they

communicate this value?

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Chapter One Slide

Customer Retention The objective of providing value is to retain highly

satisfied customers. Makes it the best of inertest to stay with the company rather than to switch to another company Small reductions in customer detections produce significant increases in profits because :
1.

Loyal customers buy more products attention to competitors advertising

2. Loyal customers are less price sensitive and pay less 3. Servicing existing customers are more cheaper
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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 need that it satisfies. Market products and services that match customers needs better than competitors offerings. Focus on the products perceived value, as well as the need that it satisfies. 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. Realize that each customer transaction is a separate sale. Understand consumer behavior in relation to the companys product. Make each customer transaction part of an ongoing relationship with the customer.
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Impact of Digital Technologies

Digital technologies allow much greater customization

of products, services and promotional messages than do older marketing tools.

They enable marketers to adapt the elements of the

marketing mix to consumers needs more quickly and efficiently and to build and maintain relationships with customers on a much grater scale. markets and to business models that have been used for decades.
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These technologies represent significant challenges to

Impact of Digital Technologies

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Consumer Behavior Is Interdisciplinary

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A Simple Model of Consumer Decision Making - Figure 1.1

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