Post on 29-May-2018
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Consumer Behaviour
Chapter-1 Outline
Overview of Consumer Behaviour
Role of Consumer Behaviour in MarketingPersonal Consumer Organizational consumer The Marketing Concept The Marketing Mix and Relationships Societal Marketing Concept
A Simplified Model of Consumer DecisionMaking
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Changes in the Business
EnvironmentIncreased consumer power
Access to information
More products and servicesInteractive and instant exchanges
Access to customer patterns and
preferences
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Consumer Behaviour (Definition)
The behavior that consumers display in searchingfor, purchasing, using, evaluating, and disposing ofproducts and services that they expect will satisfy
their needs. (Schiffman & Kanuk )
Consumer Behaviour is the study of individuals,groups or organizations and the processes theyuse to select, secure, use and dispose ofproducts, service, experiences or ideas to satisfyneeds and the impacts that these processes haveon the consumer and society. (Hawkins Et. al )
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Consumer behaviour Contd.
*Primarily deals with what, why, when, where,how often they buy & use, how they evaluate it
after the purchase and how they dispose of used
products.
*Draws from Psychology (Individual), sociology
(group), social psychology (how individual
operates in a group), anthropology (influence of
society on individual) and economics.
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Personal Consumer
The individual who buys goods and
services for his or her own use, for
household use, for the use of a family
member, or as a gift for a friend.
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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.
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Development of the Marketing
ConceptProduction
Concept
Selling Concept
Product Concept
Marketing
Concept
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The Production Concept
Assumes that consumers are interested
primarily in product availability at low
prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion
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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 -
Excessive focus on product, ignores
consumer needs
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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
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The Marketing Concept
Assumes that to be successful, a
company must determine the needs
and wants of specific target markets
and deliver the desired satisfactionsbetter than the competition
Marketing objectives:
Profits through customer satisfaction
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The Marketing Concept (contd.)
A consumer-oriented philosophy thatsuggests that satisfaction ofconsumer needs provides the focus
for product development andmarketing strategy to enable the firmto meet its own organizational goals.
Societal Marketing concept
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Implementing the Marketing
Concept
Strategic framework
Consumer ResearchSegmentation
Targeting
Positioning
Tactical : 4 Ps for Products and 7 Ps for services
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Consumer Research
The process and tools used to studyconsumer behavior.
Two perspectives:Positivist approach quantitative topredict consumer actions
Interpretivist approach qualitative tounderstand the act of consuming
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Segmentation, Targeting, and
Positioning
Segmentation: process of dividing
the market into subsets of
consumers with common needsor characteristics
Targeting: selecting one ore more
of the segments to pursuePositioning: developing a distinct
image for the product in the mind
of the consumer
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Successful Positioning
Communicating
the benefits of the
product, rather
than its features
Communicating a
Unique Selling
Proposition for
the product
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Successful Relationships
CustomerValue
CustomerSatisfaction
CustomerRetention
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Successful relationships
(Contd.)
Customer value ratio between the
customers perceived benefits and the
resources used to obtain those benefits.
Customer satisfaction perception ofperformance of product or service in
relation to expectations.re
Customer retention - it is more expensive
to win new customers than to keep existing
ones.
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Types of Customers
Loyalists
Apostles
Defectors
Terrorists
Hostages
Mercenaries
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What companies should do?
Create-Apostles
Raise the satisfaction of defectors
Turn them into loyalistsAvoid-terrorist or hostages
Reduce the number of mercenaries
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Customer Profitability-Focused
Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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Traditional Marketing Concept Vs. Value and
Retention Focused Marketing
Focus on need Perceived value and need
Make what you can
sell
Use tech. to customize
Research needs,char., buying process
Research levels of profittoo
Discrete sale Ongoing relationshipTraditional seg. Hybrid segmentation
Mass media One to one mktg.
Budgets vol. based Lifetime value
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Firms Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment1. Family2. Informal sources3. Other noncommercial
sources
4. Social class5. Subculture and culture
Output
Process
Input
External
Influence
ConsumerDecisionMaking
Post-Deci s
ion
Behavior
Postpurchase Evaluation
Purchase
1. Trial
2. Repeat purchase
Need
Recognition
Prepurchase
Search
Evaluation of
Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience
Figure 1-1:
A Model of
Consumer
Decision
Making