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CONSUMER

BEHAVIOR

C ONSUMER B EHAVIOR

INTRODUCTION

  • Its defined as activities people undertake when obtaining, consuming , and disposing of products and service.

  • Obtaining:

    • The activities leading up to and including the purchase or receipt of a product

    • How consumer buy product

    • How consumer pay for product

I NTRODUCTION  Its defined as activities people undertake when obtaining, consuming , and disposing of
  • Consuming:

 Consuming:  consuming refer to how , where when ,ad under what circumstances consumer use
  • consuming refer to how , where when ,ad under what circumstances consumer use product.

  • Ex: whether consumer use product at home or office

  • Disposing:

    • Includes how consumer get rid of products and packaging

    • Consumers dispose of product packing or product remaining

    • Might choose to reuse

    • May resell or swap.

 Consuming:  consuming refer to how , where when ,ad under what circumstances consumer use
  • The term consumer behavior describes two different kinds of consuming entities:

  • The Personal consumer and organizational consumer

  • Personal consumer:

The term consumer behavior describes two different kinds of consuming entities: The Personal consumer and

Buys goods and services for own, household, gifts.

The term consumer behavior describes two different kinds of consuming entities: The Personal consumer and
  • Organizational consumer

  • It includes profit and not for profit business , govt agencies and institutions all of which buy product and equipment & services.

Organizational consumer It includes profit and not for profit business , govt agencies and institutions

CONCEPT

C ONCEPT There were three important business orientation known as the marketing concept. Production orientation 

There were three important business orientation known

as the marketing concept.

  • Production orientation

    • During 1850s -1920s the focus was gearing to expand production to make more product.

  • Sales orientation

    • The focus of sell more what manufacturing dept able to produce.

    • In short the additional product being produced needed to be sold.

    • So the orientation shifted production to sales.

  • Marketing orientation

    • Mid 1950s gradually shift away from sales orientation to marketing orientation.

    • The business focus more attention on consumer and their preferences

    • That’s y the customer is the first priority In business thinking and

  • planning

    C ONCEPT There were three important business orientation known as the marketing concept. Production orientation 

    MARKETING CONCEPT

    • Marketing concept is that mid 1950s , in order to be successful , a company must determine the needs and wants of specific target markets and deliver then desired satisfaction better than the competition.

    • For Example: in 1930s colonel sanders started road side restaurant.

    • Sanders success for - Repositioning

    • Marketing concept highly useful guideline and philosophy for managing a business, becz its effectively served to remind the business to keep the customer needs up front when contemplating new product ,service, crafting , planning other strategies.

    • Nevertheless , that is called the “societal marketing concept”.

    M ARKETING CONCEPT  Marketing concept is that mid 1950s , in order to be successful
    • Societal marketing concept suggest that consumer may on occasion respond to their immediate needs and wants.

    • While over looking what is in effect in their own long run best interest or the best interest of their families & neighbors.

    • Best interest of their country or region

    • When we think of “societal marketing” we are thinking of enlightened marketers and “what is customer” long run best interest.

     Societal marketing concept suggest that consumer may on occasion respond to their immediate needs and

    EMBRACING MARKETING CONCEPT

    • To identify both consumers unsatisfied as well as unrecognized needs, its often important for companies to continuously conduct marketing research.

    • To monitor customer „s needs and preferences to the product and service in the current market, those possible to develop in the future.

    • Marketers have to discover that consumers highly complex individual, in variety of psychological and social needs.

    E MBRACING MARKETING CONCEPT  To identify both consumers unsatisfied as well as unrecognized needs, its
    • Discovered needs & priorities of:

      • Different consumer segments differ dramatically.

    • Object of the company:

      • Different product and service to different market segments to satisfy the different needs.

    • To study the consumers consumption behavior in depth , the term consumer research represents the process and tools used to study consumer behavior.

     Discovered needs & priorities of:  Different consumer segments differ dramatically.  Object of the

    SEGMENTATION, TARGETING, AND POSITIONING

    • Focus of the marketing concept is for marketer know consumers current needs and as accurately as possible future needs.

    • Consumer research seek to identify the many similarities and difference the exist among the peoples of the world.

    • For example: same kinds of biological needs

    • The marketer must also adapt the image of its product (position).

    • Market segment perceives the product as better fulfilling its specific needs than competitive products.

    • The three elements strategic are

    i) Market segmentation

    ii) Targeting iii) positioning

    S EGMENTATION , T ARGETING , AND POSITIONING  Focus of the marketing concept is for

    Market segmentation :

    • Is the process of dividing a market into subsets of

    consumers with common needs or characteristics. Market targeting:

    • Is the selection of one or more of the segments identified for the company to pursue. Ex: coca cola company

    Positioning:

    • Its refer to the development of image of the product or service in the mind of the consumer.

    • Image that will differentiate the offering from competing ones and fulfilling their needs better than competing brands.

    Market segmentation :  Is the process of dividing a market into subsets of consumers with
    • Successful positioning centers around two keys:

      • Benefits- that the product will provide rather than the product features

      • USP (Unique selling proposition) distinctive benefit or point of difference for product and service.

    THE MARKETING MIX;

    • The marketing mix consists of a company „s service or product offering to the consumer and the methods and tools.

    • The marketing mix consist of 4 elements:

      • Product the feature , design , brand , packing and service offering along post purchase benefits

      • Price the of price , discount , allowance , and payment method

      • Place- the distribution of the product and service, specific store

      • Promotion- the advertisement , sales , public relations and personal selling build awareness

     Successful positioning centers around two keys:  Benefits- that the product will provide rather than

    CONSUMER BEHAVIOR AND BRAND SUCCESS

    • There may be need to analyze consumer behavior strategies in combination with marketing mix elements of specific brand to obtain into success or failure of brand.

    • This kind of analysis may involve more than one concept of consumer behavior and cover a combination of concept.

    • This will explain from one product category to another

    • Marketer will benefit if they understand the interrelations between concept in a given product.

    C ONSUMER BEHAVIOR AND BRAND SUCCESS  There may be need to analyze consumer behavior strategies

    CONT……….

    • This kind of analysis will result in the following advantage:

      • A marketer can formulate a brand strategy after considering a number of concept associated with a competitive situation.

      • A pioneering brand will have followed a specific strategy for success and it will have to combine a few strategies to sustain the success achieved.

      • The follower brand will be interested in identifying the “gap” in strategies devised by the pioneering brand and a combination of concept are likely to be helpful.

      • Ex: Britannia biscuits tiger brand to signify the new offering

    C ONT ……….  This kind of analysis will result in the following advantage:  A

    THE IMPORTANT OF MARKETING MIX

    • Marketing mix elements are not important but also in the timing of such combination.

    • Ex: Kores was well know brand- office equipment

    • Rajdoot -is consider in brand equity

    • HMT time keeper in the country

    • Zodiac- ready made shirt brand for men

    • These players are a greater role in sustaining the brand equity, which was created because they were

    the pioneers in their respected area.

    T HE IMPORTANT OF MARKETING MIX  Marketing mix elements are not important but also in

    PROVIDING CUSTOMER WITH VALUE

    • Customer value: the ratio between the customer perceived benefits and the resources used to obtain those benefit.

    • Ex; high expectation - low or high service /product low expectation low or high service. Ex: McDonald‟s four core standards: quality , service,

    cleanliness, and value

    • Developing Value proposition: a term rapidly replacing the popular business term USP . Ex: Dell‟s value proposition for personal computer users consists of customized PC system assembled speedily and sold at economic prices

    • Customer satisfaction: is the individual consumer‟s perception of the performance of the product or service in relation to his or her expectations.

    P ROVIDING CUSTOMER WITH VALUE  Customer value : the ratio between the customer perceived benefits

    BUILDING CUSTOMER TRUST

    • Closely related to the challenge of satisfying consumer is the challenge of establishing and maintaining consumer trust in a company and its product.

    SECURING CUSTOMER RETENTION

    • A strategy of customer retention is designed to make it in the best interest of customers to stay with a company rather than switch to another company.

      • Loyal customer buy more products

      • Loyal customer are less price sensitive and pay less attention to competitor‟s advertising

      • Service existing customers, who are familiar with the company‟s offerings and processes, is cheaper .

      • Loyal customers spread positive word of mouth and refer other customer

    B UILDING CUSTOMER TRUST  Closely related to the challenge of satisfying consumer is the challenge
    • Marketers who designate customer retention as a strategic corporate goal must also recognize that all customers are not equal.

    • Classification of customer according to profitability level .

    • where customers are grouped into 4 level:

      • The platinum tier: heavy user, not price sensitive , willing to try new offering.

      • The gold tier : heavy user, more price sensitive, ask more discount, buy from several providers.

      • The iron tier: customer whose spending volume and profitability do not merit special from treatment from the company.

      • The lead tier: who actually cost the company money because they claim more attention then is merited by their spending, tie up company sources , and spread negative word of mouth.

     Marketers who designate customer retention as a strategic corporate goal must also recognize that all

    THE IMPACT OF MARKETING STRATEGIES

    • New technology have enabled marketers to greatly customized their product, service ,and promotional message

    • New technology made easier for marketer to adapt the element of MM specific customer efficiently build & maintain relationships with customers.

    • Marketers collecting & analyzing data's on customer buying pattern and personal characteristics and quickly analyzing by using this information.

    T HE IMPACT OF MARKETING STRATEGIES  New technology have enabled marketers to greatly customized their

    CONSUMER HAVE MORE POWER THEN EVER BEFORE

    • They can use intelligent agent to locate the best

    prices for product or services bid on various

    marketing offerings (e-buying all the way)bypass distribution outlets and middlemen and shop for good around the world.

    CONSUMER HAVE MORE ACCESS TO

    INFORMATION THAN EVER BEFORE:

    • They can easily find review for product

    • Click a button to compare the features of different product models in the sites(online retailing)

    • Virtual communication

    C ONSUMER HAVE MORE POWER THEN EVER BEFORE  They can use intelligent agent to locate

    MARKETERS CAN AND MUST OFFER MORE SERVICE AND PRODUCTS THAN EVER BEFORE

    • The digitization of information enables sellers to customize the product and services they are selling

    and still sell them at reasonable prices. Ex: Amozon.com regularly sending mails to past customer to know about new arrival books.

    INCREASING INSTANTANEOUS EXCHANGES

    BETWEEN MARKETERS AND CUSTOMER

    • Traditional advertising is a one way street

    • New media communication enables a two way interaction exchange in which consumer can react by ,say, clicking on the link.

    M ARKETERS CAN AND MUST OFFER MORE SERVICE AND PRODUCTS THAN EVER BEFORE  The digitization

    MARKETER CAN GATHER MORE INFORMATION ABOUT CONSUMER MORE QUICKLY AND EASILY

    • Market can track consumer online behavior and gather information by requiring vistors to the web sites to register and provide some background information before they get access to the site.

    • Due to this information they can update their customer

    • Narrowcasting method - that enables them to develop and deliver more customized message.

    M ARKETER CAN GATHER MORE INFORMATION ABOUT CONSUMER MORE QUICKLY AND EASILY  Market can track

    CONSUMER BEHAVIOR IN A WORLD OF ECONOMIC INSTABILITY

    • Economic downturn in consumer confidence.

    • Like: decline of stock price, value of stock, lay offs and cut back.

    • Many investor found that a significant portion of their financial holdings , retirement, children's education and in front of eyes as bank were failing.

    • There all occurrence happened in a significant negative impact on consumer with respect to a wide range of purchasing.(US economic suffered)

    • Then marketer understand such economic events ll impact what and how much consumers are able to purchase , and that some consumer will really suffering.

    C ONSUMER BEHAVIOR IN A WORLD OF ECONOMIC INSTABILITY  Economic downturn in consumer confidence. 

    CONSUMER BEHAVIOR & DECISION MAKING ARE INTERDISCIPLINARY

    • Psychology (the study of individual)

    • Sociology (study of group)

    • Social psychology (how individual operates in group)

    • Anthropology (the influence of society on the individual)

    • Economics

    C ONSUMER BEHAVIOR & DECISION MAKING ARE INTERDISCIPLINARY  Psychology (the study of individual)  Sociology
    Firm’s marketing efforts: Socioculture Environment: 1.Product 1.Family 2.Promotion 2.Reference group 3.Non 3.Price 4.Channels of disistribution Psychological
    Firm’s marketing efforts:
    Socioculture Environment:
    1.Product
    1.Family
    2.Promotion
    2.Reference group 3.Non
    3.Price
    4.Channels of disistribution
    Psychological field:
    1.Need
    1.Motivation
    2.Perception
    recognition
    3.Learning
    2.Prepurchase
    4.Personality
    5.attitudes
    search
    3.Evaluation of
    alternatives
    Experience
    Purchase
    1.Trial
    2.Repeat purchase
    Post purchase
    Evaluation
    Out put
    Process
    Input
    Consumer
    External
    Post decision
    Behavior
    Decision
    Influences
    Making

    CONSUMER MOTIVATION

    • Motivation is the driving force within individuals that impels them to action.

    Dynamics of Motivation:

    • Motivation is a highly dynamic construct that is constantly changing in reaction to life experiences. Needs and goals change and grow in response to an individual’s physical condition.

    • Needs Are Never Fully Satisfied:

      • Most human needs are never fully or permanently satisfied.

    • New Needs Emerge As Old Needs Are Satisfied:

      • Higher order needs emerge as lower order needs are fulfilled

    • Success And Failure Influence Goals:

    C ONSUMER MOTIVATION  Motivation is the driving force within individuals that impels them to action.