1. CHAPTERONEConsumer Behavior:Meeting Changes andChallenges

2. Learning Objectives1. To Understand What Consumer Behavior Is and the Different Types of Consumers.2. To Understand the Relationship Between Consumer Behavior and the Marketing 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.Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 2 3. 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 Worlds Economic Condition Is Leading to Consumption Instability and Change.7. To Understand the Makeup and Composition of a Model of Consumer Behavior.8. To Understand the Structure of This BookCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 3 4. To Which Segment ofConsumers Will This Ad Appeal?Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 4 5. A Segment of Consumers Who are Environmentally ConcernedCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 5 6. Consumer Behavior The behavior that consumers display insearching for, purchasing, using, evaluating,and disposing of products and services thatthey expect will satisfy their needs.Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 6 7. Two Consumer EntitiesCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 7 8. Development of the Marketing ConceptCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 8 9. Production Orientation From the 1850s to the late 1920s Companies focus on production capabilities Consumer demand exceeded supplyCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 9 10. Sales Orientation From the 1930s to the mid 1950s Focus on selling Supply exceeded customer demandCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 10 11. Marketing Concept 1950s to current - Focus on the customer! Determine the needs and wants of specifictarget markets Deliver satisfaction better than competitionCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 11 12. Discussion Questions1. What two companies do you believe grasp and use the marketing concept?2. Why do you believe this?Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 12 13. Societal Marketing Concept Considers consumers long-run best interest Good corporate citizenshipCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 13 14. The Marketing ConceptEmbracing the MarketingConcept Consumer Research The process and tools Segmentationused to study consumer Market Targetingbehavior PositioningCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 14 15. The Marketing ConceptImplementing theMarketing Concept Consumer Research Process of dividing the Segmentationmarket into subsets of Market Targetingconsumers with common needs or Positioning characteristicsCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 15 16. Discussion Questions1. 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?Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 16 17. The Marketing ConceptImplementing theMarketing Concept Consumer Research The selection of one or Segmentationmore of the segments Market Targetingidentified to pursue PositioningCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 17 18. The Marketing ConceptImplementing theMarketing Concept Consumer Research Developing a distinct image for the product in the mind of the Segmentationconsumer Market Targeting Successful positioning includes: Positioning Communicating the benefitsof the product Communicating a uniqueselling propositionCopyright 2010 Pearson Education, Inc. publishing as Prentice HallChapter One Slide 18 19. The Marketing MixCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 19 20. Customer Value, Satisfaction, Trust, and RetentionCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 20 21. Successful RelationshipsValue, Satisfaction, Defined as the ratioTrust, and Retention between the customers Customer Valueperceived benefits and the Customerresources used to obtain Satisfactionthose benefits Customer Trust Perceived value is relative and subjective Customer Retention Developing a value proposition is criticalCopyright 2010 Pearson Education, Inc. publishing as Prentice HallChapter One Slide 21 22. Discussion Questions How does McDonaldscreate value for theconsumer? How do theycommunicate thisvalue?Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 22 23. Successful RelationshipsValue, Satisfaction,Trust, and Retention The individuals perception Customerof the performance of theValueproduct or service in Customerrelation to his or herSatisfaction expectations. Customer Customer groups based onTrustloyalty include loyalists, Customerapostles, defectors,Retentionterrorists, hostages, andCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall mercenariesChapter One Slide 23 24. Successful RelationshipsValue, Satisfaction,Trust, and Retention Establishing and Customer Valuemaintaining trust is Customeressential. Satisfaction Trust is the Customer Trust foundation for Customer Retention maintaining a long- standing relationship with customers.Copyright 2010 Pearson Education, Inc. publishing as Prentice HallChapter One Slide 24 25. Successful RelationshipsValue, Satisfaction, The objective of providingTrust, 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 pricesensitive Customer Retention Servicing them ischeaper They spread positiveword of mouthCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 25 26. 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 NationwideCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 26 27. Customer Profitability-FocusedMarketing Tracks costs andrevenues ofindividual consumers Categorizes theminto tiers based onconsumptionbehavior A customer pyramidgroups customersinto four tiers Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 27 28. THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED MARKETINGMake only what you can sell instead of tryingUse technology that enables customers toto sell what you make. customize what you make.Do not focus on the product; focus on theFocus on the products perceived value, as wellneed that it satisfies.as the need that it satisfies.Market products and services that matchUtilize an understanding of customer needs tocustomers needs better than competitorsdevelop offerings that customers perceive asofferings. 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 Understand consumer behavior in relation toand the influences on consumer behavior. the companys product.Realize that each customer transaction is aMake each customer transaction part of andiscrete sale. ongoing relationship with the customer. Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 28 29. Impact of Digital TechnologiesCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 29 30. The Mobile Consumer Penetration of Internet Usage Among Mobile Wireless Media Subscribers in 16 Countries - FIGURE 1.3Messages willexpand as: Flat-rate datatraffic increases Screen imagequality is enhanced Consumer-userexperiences withweb applicationsimproveCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 30 31. Consumer Behavior Is InterdisciplinaryCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 31 32. A Simple Model of Consumer Decision Making - Figure 1.4Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 32 33. All rights reserved. No part of this publication may be reproduced, stored in aretrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise, without the prior writtenpermission of the publisher. Printed in the United States of America. Copyright 2010 Pearson Education, Inc. Publishing asPrentice HallCopyright 2010 Pearson Education, Inc. Publishing as Prentice HallChapter Seven Slide 33