PRIST 3 SEM Consumer Behavior Unit-1

8/9/2019 PRIST 3 SEM Consumer Behavior Unit-1

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Prof. Meghna Verma 2

Consumer Behaviour

Chapter-1 Outline

Overview of Consumer Behaviour

Role of Consumer Behaviour in MarketingPersonal Consumer Organizational consumer The Marketing Concept The Marketing Mix and Relationships Societal Marketing Concept

A Simplified Model of Consumer DecisionMaking


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Changes in the Business

EnvironmentIncreased consumer power

Access to information

More products and servicesInteractive and instant exchanges

Access to customer patterns and

preferences


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Consumer Behaviour (Definition)

The behavior that consumers display in searchingfor, purchasing, using, evaluating, and disposing ofproducts and services that they expect will satisfy

their needs. (Schiffman & Kanuk )

Consumer Behaviour is the study of individuals,groups or organizations and the processes theyuse to select, secure, use and dispose ofproducts, service, experiences or ideas to satisfyneeds and the impacts that these processes haveon the consumer and society. (Hawkins Et. al )


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Consumer behaviour Contd.

*Primarily deals with what, why, when, where,how often they buy & use, how they evaluate it

after the purchase and how they dispose of used

products.

*Draws from Psychology (Individual), sociology

(group), social psychology (how individual

operates in a group), anthropology (influence of

society on individual) and economics.


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Personal Consumer

The individual who buys goods and

services for his or her own use, for

household use, for the use of a family

member, or as a gift for a friend.


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Organizational Consumer

A business, government agency, or

other institution (profit or nonprofit)

that buys the goods, services, and/or

equipment necessary for the

organization to function.


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Development of the Marketing

ConceptProduction

Concept

Selling Concept

Product Concept

Marketing

Concept


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The Production Concept

Assumes that consumers are interested

primarily in product availability at low

prices

Marketing objectives:

Cheap, efficient production

Intensive distribution

Market expansion


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The Product Concept

Assumes that consumers will buy the product

that offers them the highest quality, the best

performance, and the most features

Marketing objectives:Quality improvement

Addition of features

Tendency toward Marketing Myopia -

Excessive focus on product, ignores

consumer needs


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The Selling Concept

Assumes that consumers are unlikely

to buy a product unless they are

aggressively persuaded to do so


Sell, sell, sell

Lack of concern for customer needs

and satisfaction


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The Marketing Concept

Assumes that to be successful, a

company must determine the needs

and wants of specific target markets

and deliver the desired satisfactionsbetter than the competition


Profits through customer satisfaction


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The Marketing Concept (contd.)

A consumer-oriented philosophy thatsuggests that satisfaction ofconsumer needs provides the focus

for product development andmarketing strategy to enable the firmto meet its own organizational goals.

Societal Marketing concept


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Implementing the Marketing

Concept

Strategic framework

Consumer ResearchSegmentation

Targeting

Positioning

Tactical : 4 Ps for Products and 7 Ps for services


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Consumer Research

The process and tools used to studyconsumer behavior.

Two perspectives:Positivist approach quantitative topredict consumer actions

Interpretivist approach qualitative tounderstand the act of consuming


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Segmentation, Targeting, and

Positioning

Segmentation: process of dividing

the market into subsets of

consumers with common needsor characteristics

Targeting: selecting one ore more

of the segments to pursuePositioning: developing a distinct

image for the product in the mind

of the consumer


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Successful Positioning

Communicating

the benefits of the

product, rather

than its features

Communicating a

Unique Selling

Proposition for

the product


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Successful Relationships

CustomerValue

CustomerSatisfaction

CustomerRetention


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Successful relationships

(Contd.)

Customer value ratio between the

customers perceived benefits and the

resources used to obtain those benefits.

Customer satisfaction perception ofperformance of product or service in

relation to expectations.re

Customer retention - it is more expensive

to win new customers than to keep existing

ones.


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Types of Customers

Loyalists

Apostles

Defectors

Terrorists

Hostages

Mercenaries


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What companies should do?

Create-Apostles

Raise the satisfaction of defectors

Turn them into loyalistsAvoid-terrorist or hostages

Reduce the number of mercenaries


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Customer Profitability-Focused

Marketing

Tier 1: Platinum

Tier 2: Gold

Tier 3: Iron

Tier 4: Lead


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Traditional Marketing Concept Vs. Value and

Retention Focused Marketing

Focus on need Perceived value and need

Make what you can

sell

Use tech. to customize

Research needs,char., buying process

Research levels of profittoo

Discrete sale Ongoing relationshipTraditional seg. Hybrid segmentation

Mass media One to one mktg.

Budgets vol. based Lifetime value


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Firms Marketing Efforts

1. Product

2. Promotion

3. Price

4. Channels of distribution

Sociocultural Environment1. Family2. Informal sources3. Other noncommercial

sources

4. Social class5. Subculture and culture

Output

Process

Input

External

Influence

ConsumerDecisionMaking

Post-Deci s

ion

Behavior

Postpurchase Evaluation

Purchase

1. Trial

2. Repeat purchase

Need

Recognition

Prepurchase

Search

Evaluation of

Alternatives

Psychological Field

1. Motivation

2. Perception

3. Learning

4. Personality

5. Attitudes

Experience

Figure 1-1:

A Model of

Consumer

Decision

Making

Documents

PRIST 3 SEM Consumer Behavior Unit-1