 Why this course is named as consumer behavior not customer behavior

 Personal consumers  Organization consumers

 The individual who buys goods and services for his or her own use(cigrettes and haircut), for household use(sugar,salt,furniture) for the use of a family member(a pair of shoes for the son), or for a friend(a pen set).

A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function. Eg: when any manufacturing firm buys raw material to produce and sell its products

Copyright 2007 by Prentice Hall Production Concept Selling Concept Product Concept Marketing Concept

Copyright 2007 by Prentice Hall  Assumes that consumers are interested primarily in product availability at low prices  Marketing objectives:  Cheap, efficient production  Intensive distribution  Market expansion

Copyright 2007 by Prentice Hall  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

Copyright 2007 by Prentice Hall  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

Copyright 2007 by Prentice Hall  Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition  Marketing objectives:  Make what you can sell  Focus on buyer’s needs

Copyright 2007 by Prentice Hall The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

 A father is buying a cycle for his school going son  A man is purchasing a tooth paste for his family

Copyright 2007 by Prentice Hall  Consumer Research  Segmentation  Targeting  Positioning  The process and tools used to study consumer behaviour Implementing the Marketing Concept

Copyright 2007 by Prentice Hall  Consumer Research  Segmentation  Targeting  Positioning  Process of dividing the market into subsets of consumers with common needs or characteristics Implementing the Marketing Concept

Copyright 2007 by Prentice Hall  Consumer Research  Segmentation  Targeting  Positioning The selection of one or more of the segments to pursue Implementing the Marketing Concept

Copyright 2007 by Prentice Hall  Consumer Research  Segmentation  Targeting  Positioning  Developing a distinct image for the product in the mind of the consumer  Successful positioning includes:  Communicating the benefits of the product  Communicating a unique selling proposition Implementing the Marketing Concept

This product is positioned as a solution to facial redness.

Copyright 2007 by Prentice Hall  Product  Price  Place  Promotion

Copyright 2007 by Prentice Hall Customer Value Customer Satisfaction Customer Retention

Copyright 2007 by Prentice Hall  Customer Value  Customer Satisfaction  Customer Retention  Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits  Perceived value is relative and subjective  Developing a value proposition is critical Value, Satisfaction, and Retention

Copyright 2007 by Prentice Hall  How does McDonald’s create value for the consumer?  How do they communicate this value?

Copyright 2007 by Prentice Hall  Customer Value  Customer Satisfaction  Customer Retention  The individual's perception of the performance of the product or service in relation to his or her expectations.  Customers identified based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries Value, Satisfaction, and Retention

Copyright 2007 by Prentice Hall  Customer Value  Customer Satisfaction  Customer Retention  The objective of providing value is to retain highly satisfied customers.  Loyal customers are key  They buy more products  They are less price sensitive  They pay less attention to competitors’ advertising  Servicing them is cheaper  They spread positive word of mouth Value, Satisfaction, and Retention

Copyright 2007 by Prentice Hall  Tracks costs and revenues of individual consumers  Categorizes them into tiers based on consumption behavior  A customer pyramid groups customers into four tiers

Copyright 2007 by Prentice Hall Tier 1: Platinum Tier 2: Gold Tier 3: Iron Tier 4: Lead

Copyright 2007 by Prentice Hall Traditional Marketing Concept Value and Retention Focused Marketing Make only what you can sell instead of trying to sell what you make Use technology that enables customers to customize what you make Do not focus on the product; focus on the need that it satisfies Focus on the product’s perceived value, as well as the need that it satisfies Market products and services that match customers’ needs better than competitors’ offerings Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors’ offerings

Copyright 2007 by Prentice Hall  Consumers have more power and access to information  Marketers can gather more information about consumers  The exchange between marketer and customers is interactive and instantaneous and goes beyond the PC.  Marketers must offer more products and services

Copyright 2007 by Prentice Hall Marketers adhere to principles of social responsibility in the marketing of their goods and services; that is, they must endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a whole.