CHAPTE

R
Consumer
ONE
Behavior:
Meeting
Changes and
Challenges

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.

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

consumer purchases are examined in consumer
behavior.
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Chapter One Slide

2

Two Consumer Entities

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Chapter One Slide

3

Development of the
Marketing Concept

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Chapter One Slide

4

Production Orientation
From the 1850s to the late 1920s
Companies focus on production
capabilities
Consumer demand exceeded supply

This was the time that the control was in

the hands of the producers who said, if
we make it they will buy it.
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

5

Sales Orientation
From the 1930s to the mid 1950s
Focus on selling
Supply exceeded customer demand

the manufacturers focused on selling the

product which they had overproduced

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

6

Marketing Concept
1950s to current - Focus on the
customer!
Determine the needs and wants of
specific target markets
Deliver satisfaction better than
competition
Understanding the consumer and in
delivering products that meet their needs
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Chapter One Slide

7

Societal Marketing Concept

Considers
consumers longrun best interest
Good corporate
citizenship

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8
Chapter One Slide

The Marketing Concept

Embracing 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

Chapter One Slide

9

The Marketing Concept

Implementing the
Marketing
Concept
Consumer
Process of dividing
Research
Segmentation
Market
Targeting
Positioning

the market into

subsets of
consumers with
common needs or
characteristics

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

10

The Marketing Concept

Implementing the
Marketing
Concept
Consumer
The selection of one
Research
Segmentation
Market
Targeting
Positioning

or more of the
segments identified
to pursue

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

11

The Marketing Concept

Implementing the
Marketing
Concept
Developing a distinct
Consumer

image for the product in

the mind of the consumer
Successful positioning
includes:
Communicating the
benefits of the product
Communicating a
unique selling
Copyright 2010 Pearson Education, Inc. publishing as Prenticeproposition
Hall
Chapter One Slide
12

Research
Segmentation
Market
Targeting
Positioning

The Marketing Mix

Four Ps
McCarthy

Product

Four Cs
-Robert Lauterborn

Customer

Four As
-Jogodish Sheth

Acceptabilit
solution
Price
y
Customer cost
Place
Affordabilit
Convenience
Promotio
y
Communicati
n
Accessibilit
on
y

Customer Value,
Satisfaction, Trust, and
Retention

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

14

Successful Relationships
Value,
Satisfaction,
Trust,
and
Customer
Retention
Value
Customer
Satisfaction
Customer
Trust
Customer
Retention

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

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

15

Successful Relationships
Value,
Satisfaction,
Trust,
and
Customer
Retention
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 on
loyalty include loyalists,
apostles, defectors,
terrorists, hostages, and
mercenaries

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

16

Customer Satisfaction
Loyalists When customers are highly
Apostles

Defectors

Terrorists

Hostages

Mercenarie
s

satisfied, they continue to purchase

Provide very positive word-of-mouth
When customers are disappointed,
they move to the competition
Who spread negative word-of-mouth
Dissatisfied customers and they
stay with the company but are very
unhappy
Satisfied but are not really
considered loyal and will move from
company to company
17

The Customer Satisfaction

Loyalty Relationship

Loyalty (Retention)

100

Apostle

Zone of Affection

80
60
40

Near Apostle

Zone of Indifference

Zone of Defection

20

Terrorist

0
1

Very
Dissatisfied
Dissatisfied

Neither

Satisfied

Satisfaction

Very
Satisfied

Source: Adapted from Thomas O. Jones and W. Earl Sasser, Jr., Why Satisfied Customers Defect,
Harvard Business Review, November-December 1995, p. 91.

Successful Relationships
Value,
Satisfaction,
Trust,
and
Customer
Retention
Value
Customer
Satisfaction
Customer
Trust
Customer
Retention

Establishing and
maintaining trust
is essential.
Trust is the
foundation for
maintaining a
long-standing
relationship with
customers.

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

19

Successful Relationships
Value,
Satisfaction,
Trust,
and
Customer
Retention
Value
Customer
Satisfaction
Customer
Trust
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
Servicing them is
cheaper
They spread positive
word of mouth

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

20

Customer ProfitabilityFocused Marketing

Tracks costs and
revenues of
individual
consumers
Categorizes them
into tiers based on
consumption
behavior
A customer
pyramid groups
customers into
four tiers

Segmentation scheme used by

marketers is to segment customers by
their profitability to the firm

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

21

Effective Tiering of Service

The Customer Pyramid
Good Relationship
Customers

Which segment sees high value in

our offer, spends more with us over
time, costs less to maintain, and
spreads positive word-of-mouth?

Platinum
Gold
Iron
Lead
Poor Relationship
Customers

Which segment costs us time,

effort, and money, yet does not
provide return we want? Which
segment is difficult to do
business with?

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.118
142.

Impact of Digital
Technologies

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23
Chapter One Slide

The Mobile Consumer

Wireless Media
Messages will
expand as:

Penetration of Internet Usage Among

Mobile Subscribers in 16 Countries FIGURE 1.3

Flat-rate data
traffic increases
Screen image
quality is
enhanced
Consumer-user
experiences with
web applications
improve
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24
Chapter One Slide

Consumer Behavior Is
Interdisciplinary

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Chapter One Slide

25

A Simple Model of Consumer Decision

Making - Figure 1.4

This model will

guide our studies
of consumer
behavior

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter One Slide

26