1-CB & Strategy

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CHAPTER ONECHAPTER ONE

Consumer Behavior and

Marketing Strategy

Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.


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Consumer BehaviorConsumer Behavior

Consumer behavior is the study of individuals,

groups, or organizations and the processes they

use to select, use, and dispose of products, services,

experiences, or ideas to satisfy needs and theimpacts that these processes have on the consumer

and society.

Sheth, Mittal, and Newman (1999) define

customer behavior as the mental and physicalactivities undertaken by household and business

customers that result in decisions and actions to

pay for, purchase, and use products and services.


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CB ActivitiesCB Activities

Mental activities include such things as:

assessing the suitability of a product or service brand

making inferences about a product or servicesqualities from advertising information

evaluating actual experiences with the product

Physical activities include such things as:

visiting stores reading Consumer Reports

talking to salespeople

issuing a purchase order


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Applications of CBApplications of CB

Marketing Strategy

Regulatory Policy

Social Marketing

Informed Individuals


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Marketing Strategy and ConsumerMarketing Strategy and Consumer

BehaviorBehaviorOutcomesIndividual

FirmSociety

Consumer decision processProblem RecognitionInformation Search

Alternative Evaluation

PurchaseUse

Evaluation

Marketing strategyProduct, Price, Distribution,

Promotion, Service

Marketing segmentation

Identify product-related need setsGroup Customers with similar need setsDescribe each group

Select attractive segment(s) to target

Marketing analysisCompany

CompetitorsConditionsConsumers

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Copyright 2001 by The McGraw-Hill Companies, Inc. All rightsreserved.


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Marketing Strategy and CBMarketing Strategy and CB

Customer value is the difference between all

benefits derived from a total product and all

the costs of acquiring those benefits.A firms marketing strategy involves

selection of target market(s) and the

marketing mix elements designed to satisfythose customers.

Total Product


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Market Analysis ComponentsMarket Analysis Components

Customers

CompanyCompetition

Conditions


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Market SegmentationMarket Segmentation

Identify product-related need sets

Group customers with similar need sets

Describe each customer set

Select attractive segment(s) to target


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Marketing Mix ElementsMarketing Mix Elements

Product - anything that is offered to a market to

meet a need or want.

Service - auxiliary or peripheral activities that areperformed to enhance the primary product.

Price - the value exchanged for the product.

Distribution (Place) - movement of a product from

point of production to the customer.

Promotion - marketing communications.


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Consumer Decision ProcessConsumer Decision Process

High Involvement

Low Involvement

No Decision Making

Brand-Loyal

Inertia


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Decision Making ProcessDecision Making Process

Problem Recognition

Information Search

Alternative Evaluation

Purchase

UsePost-purchase Evaluation


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Influence on ConsumersInfluence on Consumers

Influence on consumers purchasing

External Influences

Advertising

Friends

Internal Influences

Personal experiences

Beliefs

Situational Influences

Store atmosphere


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Outcomes of CBOutcomes of CB

Individual Outcomes

Need Satisfaction

InjuriousConsumption

Firm Outcomes

Product PositionSales

Customer

Satisfaction

Societal Outcomes

Economic Impact

PhysicalEnvironment

Social Welfare

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1-CB & Strategy