Consumer Behavior and Marketing Strategy 01 CHAPTER Consumer Behavior and Marketing Strategy McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

PART I: INTRODUCTION 1-2

Learning Objectives L01 L02 L03 L04 L05 Define consumer behavior Summarize the applications of consumer behavior Explain how consumer behavior can be used to develop marketing strategy Explain the components that constitute a conceptual model of consumer behavior Discuss issues involving consumption meanings and firm attempts to influence them 1-3

Consumer Behavior In The News… Target Marketing. Just Your Average Triathlete? Can you predict the demographics of the average triathlete? Income: Age: Gender: Marital Status: Source: N. Zmuda, “Forget Golf,” Advertising Age, October 10, 2011, p. 8. 1-4

Consumer Behavior In The News… Target Marketing. Just Your AverageTriathlete? Demographics of the average triathlete? Income: $126,000 Age: 38 Years Old Gender: 60% Male Marital Status: 63% Married Key Target Market: Higher income corporate executives who spend heavily on the sport. Source: N. Zmuda, “Forget Golf,” Advertising Age, October 10, 2011, p. 8. 1-5

Consumer Behavior and Marketing Strategy Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. 1-6

Applications of Consumer Behavior Marketing Strategy Regulatory Policy Social Marketing Informed Individuals 1-7

Applications of Consumer Behavior United Way Campaign Provides an Example of Social Marketing Courtesy United Way of Metropolitan Chicago 1-8

Marketing Strategy and Consumer Behavior 1-9

Market Analysis Components The Consumers The Company The Competitors The Conditions 1-10

Market Segmentation Market segmentation is a portion of a larger market whose needs differ from the larger market. 1-11

Market Segmentation Market Segmentation Involves Four Steps: Identifying Product-Related Need Sets Grouping Customers with Similar Need Sets Describing Each Group Selecting an Attractive Segment(s) to Serve 1-12

Market Segmentation 1-13

Marketing Strategy Marketing Strategy is the answer to the question: How will we provide superior customer value to our target market? This requires the formulation of a consistent marketing mix, which includes the Product Communications Price Distribution, and Services 1-14

Video Application The following Video Clip shows how digital signage (the communications element) keeps the marketing message fresh! 1-15

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Consumer Decisions The consumer decision process intervenes between the marketing strategy, as implemented in the marketing mix, and the outcomes. The firm can succeed only if consumers see a need that its product can solve, become aware of the product and its capabilities, decide that it is the best available solution, proceed to buy it, and become satisfied with the result of the purchase. 1-17

Outcomes Firm Outcomes Individual Outcomes Society Outcomes 1-18

Pella Windows on Creating Satisfied Customers through Quality Outcomes Creating Satisfied Customers YouTube Spotlight Pella Windows on Creating Satisfied Customers through Quality 1-19 19

The Nature of Consumer Behavior Overall Conceptual Model of Consumer Behavior 1-20

The Nature of Consumer Behavior External Influences Culture Demographics and social stratification Ethnic, religious, and regional subcultures Families and households Groups 1-21

The Nature of Consumer Behavior Perception Learning Memory Motives Personality Emotions Attitudes Internal Influences 1-22

The Nature of Consumer Behavior Self-Concept and Lifestyle Self-concept is the totality of an individual’s thoughts and feelings about oneself. Lifestyle is how one lives, including the products one buys, how one uses them, what one thinks about them, and how one feels about them. 1-23

The Nature of Consumer Behavior Situations and Consumer Decisions Consumer decisions result from perceived problems and opportunities. Consumer problems arise in specific situations and the nature of the situation influences the resulting consumer behavior. Using Outdoor Media to Trigger Problem Recognition 1-24

The Meaning of Consumption Consumption has meaning beyond satisfaction of minimum or basic consumer needs Symbolic needs Status Identity Group acceptance Cf. Consumer Insight 1-2 (p.28) 1-25