What is CB, and Why Should I Care? BABIN / HARRIS CB PART 1 CHAPTER 1 What is CB, and Why Should I Care? ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes Understand the meaning of consumption and consumer behavior. Describe how consumers get treated differently in different types of exchange environments. Explain the role of consumer behavior in business and society. Be familiar with basic approaches to studying consumer behavior. Describe why consumer behavior is so dynamic and how recent trends affect consumers. 1-2 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Human thoughts and actions Field of study CB Perspectives Human thoughts and actions Field of study LO1 1-3 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Behavior as Human Behavior Consumer behavior is the set of value seeking activities that take place as people go about addressing realized needs. LO1 1-4 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Basic Consumption Process Need Want Exchange Costs and Benefits Reaction Value LO1 1-5 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumption The process by which goods, services, or ideas are used and transformed into value. LO1 1-6 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

CB as a Field of Study Economics Psychology Marketing Social psychology Cognitive psychology Marketing Social Psychology Anthropology LO1 1-7 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Why Are Consumers Treated Differently? How competitive is the marketing environment? How dependent is the marketer on repeat business? LO2 1-8 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Some Terminology Consumer (customer) orientation Marketing orientation Relationship marketing Touchpoints LO2 1-9 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Why Study CB? Input to business/marketing strategy Force that shapes society Input to making responsible decisions as a consumer LO3 1-10 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Resource-Advantage Theory This theory explains why companies succeed or fail. Companies that do survive long-term do so by obtaining resources from consumers in return for the value the companies create. LO3 1-11 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business Orientations Undifferentiated marketing Product orientation Same basic product offered to all customers Differentiated marketing One-to-one marketing Serves multiple market segments each with a unique offering Niche marketing Specialize in serving one market segment with particularly unique demand characteristics LO3 1-12 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

CB and Personal Growth Studying CB helps consumers make better decisions by understanding: Consequences associated with poor budget allocation. The role of emotions in consumer decision making. Avenues for seeking redress for unsatisfactory purchases. Social influences on decision making, including peer pressure. The effect of the environment on consumer behavior. LO3 1-13 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Approaches to Studying CB Interpretive Research Seeks to explain the inner meanings and motivations associated with specific consumption experiences. Qualitative Researcher-dependent LO4 1-14 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Approaches to Studying CB Quantitative Research Addresses questions about CB using numerical measurement and analysis tools. Not researcher-dependent LO4 1-15 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Behavior Is Dynamic Consumer behavior changes over time Consumers are never completely satisfied Consumer demands lead to innovation Consumer sales lead to company growth, which can in turn positively affect the environment LO5 1-16 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Trends Internationalization Technological changes Chains can be found worldwide, but are customized to the local consumer. This requires considerable consumer behavior research. Technological changes Due to the Internet and mobile communications, consumers can shop 24/7 and geographical distance is often a non-issue. LO5 1-17 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Trends Changing communications Changing demographics Changing economy Preference has switched from face-to-face to email, web chats, and texting. Changing demographics Households often have two primary earners. China and India are huge emerging markets. Changing economy Consumer spending has changed due to an economic downturn in most of the developed world. LO5 1-18 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.