CHAPTER

ONE
Consumer Behavior:
Meeting Changes and
Challenges
 Learning Objectives
1. 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.

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 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 World’s 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 Book
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 To Which Segment of
Consumers Will This Ad Appeal?

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 A Segment of Consumers Who are
Environmentally Concerned

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 Consumer Behavior

• The behavior that consumers display in

searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.

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 Two Consumer Entities

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 Development of the
Marketing Concept

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 Production Orientation

• From the 1850s to the late 1920s

• Companies focus on production capabilities
• Consumer demand exceeded supply

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 Sales Orientation

• From the 1930s to the mid 1950s

• Focus on selling
• Supply exceeded customer demand

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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

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 Discussion Questions

1. What two companies do

you believe grasp and use
the marketing concept?
2. Why do you believe this?

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 Societal Marketing Concept

• Considers consumers’
long-run best interest
• Good corporate
citizenship

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 The Marketing Concept
Embracing the Marketing
Concept
• Consumer Research • The process and tools
• Segmentation used to study consumer
• Market Targeting behavior
• Positioning

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 The Marketing Concept
Implementing the
Marketing Concept
• Consumer Research • Process of dividing the
• Segmentation market into subsets of
• Market Targeting consumers with
common needs or
• Positioning characteristics

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 Discussion Questions

1. 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?

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 The Marketing Concept
Implementing the
Marketing Concept
• Consumer Research The selection of one or
• Segmentation more of the segments
• Market Targeting identified to pursue
• Positioning

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 The Marketing Concept
Implementing the
Marketing Concept
• Consumer Research • Developing a distinct image for
the product in the mind of the
• Segmentation consumer
• Market Targeting • Successful positioning includes:
• Positioning – Communicating the benefits
of the product
– Communicating a unique
selling proposition

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 The Marketing Mix

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 Customer Value, Satisfaction, Trust,
and Retention

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 Successful Relationships
Value, Satisfaction,
• Defined as the ratio between
Trust, and Retention the customer’s perceived
• Customer Value benefits and the resources
• Customer used to obtain those
Satisfaction benefits
• Customer Trust • Perceived value is relative
and subjective
• Customer
Retention • Developing a value
proposition is critical

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 Discussion Questions

• How does McDonald’s

create value for the
consumer?
• How do they
communicate this
value?

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 Successful Relationships
Value, Satisfaction,
Trust, and Retention
• The individual's perception
• Customer of the performance of the
Value product or service in
• Customer relation to his or her
Satisfaction expectations.
• Customer Trust • Customer groups based on
• Customer loyalty include loyalists,
Retention apostles, defectors,
terrorists, hostages, and
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 Successful Relationships
Value, Satisfaction,
Trust, and Retention • Establishing and
• Customer Value maintaining trust is
• Customer essential.
Satisfaction
• Trust is the
• Customer Trust
foundation for
• Customer
Retention maintaining a long-
standing relationship
with customers.
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 Successful Relationships
Value, Satisfaction, • The objective of providing
Trust, and Retention value is to retain highly
satisfied customers.
• Customer Value
• Loyal customers are key
• Customer
– They buy more products
Satisfaction
– They are less price
• Customer Trust sensitive
• Customer – Servicing them is cheaper
Retention
– They spread positive
word 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
• Nationwide
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 Customer Profitability-Focused
Marketing
• Tracks costs and
revenues of
individual consumers
• Categorizes them
into tiers based on
consumption
behavior
• A customer pyramid
groups customers
into four tiers

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THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED
MARKETING
Make only what you can sell instead of trying Use technology that enables customers to
to sell what you make. customize what you make.

Do not focus on the product; focus on the Focus on the product’s perceived value, as well
need that it satisfies. as the need that it satisfies.

Market products and services that match Utilize an understanding of customer needs to
customers’ needs better than competitors’ develop offerings that customers perceive as
offerings. 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 to

and the influences on consumer behavior. the company’s product.

Realize that each customer transaction is a Make each customer transaction part of an
discrete sale. ongoing relationship with the customer.

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Chapter One Slide 28
 Impact of Digital Technologies

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 The Mobile Consumer
Penetration of Internet Usage Among Mobile
• Wireless Media Subscribers in 16 Countries - FIGURE 1.3
Messages will
expand as:
– Flat-rate data traffic
increases
– Screen image
quality is enhanced
– Consumer-user
experiences with
web applications
improve

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 Consumer Behavior Is
Interdisciplinary

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 A Simple Model of Consumer Decision Making - Figure 1.4

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