01 meeting changes and challenges

8/10/2019 01 Meeting Changes and Challenges

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Consumer Behavior:Meeting Changes and

Challenges

CHAPTER

ONE


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Consumer Behavior

The behavior that consumers display in

searching for, purchasing, using, evaluating,

and disposing of products and services thatthey expect will satisfy their needs.

The what, why, when, where, and how of consumer

purchases are examined in consumer behavior.

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 2Chapter One Slide
http://www.google.com/prdhp?hl=en&tab=wf


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Two Consumer Entities

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 3

Personal Consumer

The individual whobuys goods andservices for his or herown use, forhousehold use, forthe use of a familymember, or for afriend.

Organizational

Consumer

A business,government agency,or other institution(profit or nonprofit)that buys the goods,services, and/orequipment necessaryfor the organization tofunction.

Chapter One Slide


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Development of the

Marketing Concept


ProductionOrientation

SalesOrientation

MarketingConcept

Chapter One Slide


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Production Orientation

From the 1850s to the late 1920s

Companies focus on production capabilities

Consumer demand exceeded supply


Production

Orientation

Sales

Orientation

Marketing

Concept

Chapter One Slide

This was the t ime that the contro l was in

the hands of the producers who said, if

we make it they will buy it.


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Sales Orientation

From the 1930s to the mid 1950s

Focus on selling

Supply exceeded customer demand


Production

Orientation

Sales

Orientation

Marketing

Concept

Chapter One Slide

the manufacturers focus ed on sell ing the

produ ct which they had overproduced


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Marketing Concept

1950s to current - Focus on the customer!

Determine the needs and wants of specific

target markets Deliver satisfaction better than competition


ProductionOrientation

SalesOrientation

MarketingConcept

Chapter One Slide

Understanding the consum er and in

del iver ing produ cts that meet their needs


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Societal Marketing Concept

Considers consumers

long-run best interest

Good corporatecitizenship

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 8
http://promomagazine.com/othertactics/causecht08.3.pdf


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The Marketing Concept

Consumer Research

Segmentation

Market Targeting

Positioning

The process and tools

used to study consumer

behavior

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Embracing the Marketing

Concept

Chapter One Slide 9
http://www.acrwebsite.org/index.asp


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Consumer Research

Segmentation

Market Targeting

Positioning

Process of dividing the

market into subsets of

consumers with

common needs or

characteristics


Implementing the

Marketing Concept

Chapter One Slide 10


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Consumer Research

Segmentation

Market Targeting

Positioning

The selection of one or

more of the segments

identified to pursue


Implementing the

Marketing Concept



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Consumer Research

Segmentation

Market 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



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The Marketing Mix

Product Price

Place Promotion

MarketingMix



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Customer Value, Satisfaction, Trust,

and Retention


Successful Relationships

Customer

value

High levelof

customersatisfaction

Strongsense of

customertrust

Customer

retention

Chapter One Slide


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Customer Value

Customer

Satisfaction

Customer Trust

CustomerRetention

Defined as the ratio between

the customers perceived

benefits and the resources

used to obtain those

benefits

Perceived value is relative

and subjective Developing a value

proposition is critical


Value, Satisfaction,

Trust, and Retention



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Customer

Value

Customer

Satisfaction

Customer Trust Customer

Retention

The individual's perception

of the performance of the

product or service in

relation to his or her

expectations.

Customer groups based onloyalty include loyalists,

apostles, defectors,

terrorists, hostages, and

mercenariesCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall





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Customer Satisfaction

Loyalists

Apostles

Defectors

Terrorists

Hostages

Mercenaries

When customers are highly satisfied,

they continue to purchase

Provide very positive word-of-mouth

When customers are disappointed, theymove to the competition

Who spread negative word-of-mouth

Dissatisfied customers and they staywith the company but are very unhappy

Satisfied but are not really considered

loyal and will move from company to

company 17


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The Customer Satisfaction

Loyalty Relationship

0

20

40

60

80

100

1 2 3 4 5

Loyalty(Retention)

Very

Dissatisfied

Dissatisfied Neither Satisfied Very

SatisfiedSatisfaction

Near Apo st le

Zone of Defect ion

Zone o f Indif ference

Zone of Affect ion

Terrorist

Apost le

Source: Adapted from Thomas O. Jones and W. Earl Sasser, Jr., Why Satisfied Customers Defect,

Harvard Business Review,November-December 1995, p. 91.


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Customer Value

CustomerSatisfaction

Customer Trust

CustomerRetention


Establishing and

maintaining trust is

essential.

Trust is the

foundation for

maintaining a long-standing relationship

with customers.





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Customer Value

CustomerSatisfaction

Customer Trust

CustomerRetention

The objective of providingvalue is to retain highlysatisfied customers.

Loyal customers are key They buy more products

They are less pricesensitive

Servicing them ischeaper

They spread positiveword of mouth






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Top 10 Ranked U.S. Companies in Terms of Consumers

Trust and Respect of Privacy

Table 1.2

Top 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


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Customer Profitability-Focused

Marketing

Tracks costs andrevenues ofindividual consumers

Categorizes theminto tiers based onconsumptionbehavior

A customer pyramidgroups customersinto four tiers


Platinum

Gold

Iron

Lead

Chapter One Slide

Segmentat ion scheme used by

marketers is to s egment custom ers by

their prof i tabi l i ty to the f irm


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Effective Tiering of Service

The Customer Pyramid

Which segment sees high value in

our offer, spends more with us over

time, costs less to maintain, and

spreads positive word-of-mouth?

Which segment costs us time,

effort, and money, yet does not

provide return we want? Which

segment is difficult to dobusiness with?Lead

Iron

Gold

Plat inum

Good Relationship

Customers

Poor Relationship

Customers Source: Valarie A Zeithaml, Roland T Rust, and Katharine N. Lemon, The Customer Pyramid:Creating and Serving Profitable Customers,California Management Review 43, no. 4, Summer 2001,

pp.118142.

THE TRADITIONAL MARKETING CONCEPT VALUE AND RETENTION FOCUSED


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Copyright 2010 Pearson Education, Inc. publishing as Prentice HallChapter One Slide 24

THE 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 products 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.

Research consumer needs and characteristics. Research the levels of profit associated with

various consumer needs and characteristics.

Understand the purchase behavior process andthe influences on consumer behavior.

Understand consumer behavior in relation tothe companys product.

Realize that each customer transaction is a

discrete sale.

Make each customer transaction part of an

ongoing relationship with the customer.


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Impact of Digital Technologies


Marketers

More products and

services throughcustomization

Instantaneous exchanges

Collect and analyze data

Consumers

Power

Information

Computers, phones, PDA,GPS, smart TV

Chapter One Slide


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The Mobile Consumer

Wireless MediaMessages willexpand as:

Flat-rate datatraffic increases

Screen imagequality is enhanced

Consumer-user

experiences withweb applicationsimprove


Penetration of Internet Usage Among Mobile

Subscribers in 16 Countries - FIGURE 1.3
http://www.marketingcharts.com/


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Consumer Behavior Is

Interdisciplinary

Psychology

Sociology

Socialpsychology

Anthropology

Economics



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A Simple Model of Consumer Decision Making - Figure 1.4

Copyright 2010 Pearson Education Inc publishing as Prentice Hall

This mod el wi l l

gu ide our stud ies

of consum er

behavior

01 meeting changes and challenges

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