Consumer behavior involves how consumers search for, purchase, use, and dispose of products and services. It examines what, when, where, and how consumer purchases are made. Consumer behavior is influenced by individuals, households, families, and groups. There are two types of consumers - personal consumers who purchase for individual or household use, and organizational consumers like businesses and institutions that purchase goods and services to operate.

2. 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.
• Includes all the decisions a consumer makes when
spending their time and money.
• What, when, where and how of consumer
purchases are examined in consumer behavior.
• Individuals, households, families and groups
influence the decisions we make.Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 2Chapter One Slide

3. Consumer Behavior
• Personal consumers buy goods and services for
his or her own use, for the use of household, or as
a gift for a friend.
• Organisational consumers include profit and not-
for-profit businesses, government agencies and
institutions, which buy products equipment and
services in order to run their organisations.
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 3Chapter One Slide

4. Two Consumer Entities
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 4
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 for a
friend.
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.
Chapter One Slide

5. Development of the
Marketing Concept
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 5
Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

6. Production Orientation
• From the 1850s to the late 1920s
• Companies focus on production capabilities
• Consumer demand exceeded supply
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 6
Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

7. Sales Orientation
• From the 1930s to the mid 1950s
• Focus on selling
• Supply exceeded customer demand
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 7
Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

8. Marketing Concept
• 1950s to current - Focus on the customer!
• Determine the needs and wants of specific
target markets
• Deliver satisfaction better than competition
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 8
Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

9. Societal Marketing Concept
• Considers consumers’
long-run best interest
• Good corporate
citizenship
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 9

10. 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
Embracing the Marketing
Concept
Chapter One Slide 10

11. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
• Process of dividing the
market into subsets of
consumers with
common needs or
characteristics
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Implementing the
Marketing Concept
Chapter One Slide 11

12. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
The selection of one or
more of the segments
identified to pursue
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Implementing the
Marketing Concept
Chapter One Slide 12

13. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
• Developing a distinct image for
the product in the mind of the
consumer
• Successful positioning includes:
– Communicating the benefits
of the product
– Communicating a unique
selling proposition
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Implementing the
Marketing Concept
Chapter One Slide 13

14. The Marketing Mix
Product Price
Place Promotion
Marketing
Mix
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 14Chapter One Slide

15. Customer Value, Satisfaction, Trust,
and Retention
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 15
Successful Relationships
Customer
value
High level
of
customer
satisfaction
Strong
sense of
customer
trust
Customer
retention
Chapter One Slide

16. Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
• Defined as the ratio between
the customer’s 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
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 16

17. Successful Relationships
• Customer
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
mercenariesCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 17

18. Successful Relationships
• Customer
Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
• completely satisfied
customers are either
loyalists who keep buying,
or apostles whose
experiences exceed their
expectations and spread
positive word of mouth
• Defectors feel neutral or
merely satisfied and just
likely to stop buying
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 18

19. Successful Relationships
• Customer
Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
• Consumer terrorists have
bad experiences and spread
negative word of mouth
• Unhappy customers who
stay with the company just
because of monopolistic
environment or low prices
and have frequent
complaints are hostages
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 19

20. Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
• Establishing and
maintaining trust is
essential.
• Trust is the
foundation for
maintaining a long-
standing relationship
with customers.
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 20

21. Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
• It is an important strategy
• Goal is to make customers
stay with the company and
generate positive word of
mouth about your services
and products
• Internet and mobile
phones have helped
businesses maintain closer
relations with their
consumers
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 21

22. Successful Relationships
• Customer 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
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 22

23. 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
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Chapter One Slide 26

24. Customer Profitability-Focused
Marketing
• Common segmentation scheme used by
marketers is to segment customers by their
profitability to the firm
• Marketers can offer higher-level services to their
platinum customers who are more valuable to
the marketer, more likely to try new offerings,
and are often not price sensitive
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 24Chapter One Slide

25. 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
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 25
Platinum
Gold
Iron
Lead
Chapter One Slide

26. Customer Profitability-Focused
Marketing
• Platinum tier includes heavy users who are not
price sensitive and who are willing to try new
offerings
• Gold tier customers are heavy users but are less
profitable because they are more price sensitive,
ask for more discounts and likely to buy from
multiple sellers
• Spending volume and profitability of customers
in the iron tier do net merit special treatment
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 26Chapter One Slide

27. Customer Profitability-Focused
Marketing
• Lead tier customers actually cost company
money because they claim more attention than
is merited by their spending, tie up company
resources and spread negative word of mouth
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 27Chapter One Slide

28. Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Chapter One Slide 28
THE TRADITIONAL MARKETING CONCEPT VALUE- AND RETENTION-FOCUSED
MARKETING
Make only what you can sell instead of trying
to sell what you make.
Use technology that enables customers to
customize what you make.
Do not focus on the product; focus on the
need that it satisfies.
Focus on the product’s perceived value, as well
as the need that it satisfies.
Market products and services that match
customers’ needs better than competitors’
offerings.
Utilize an understanding of customer needs to
develop offerings that customers perceive as
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 and
the influences on consumer behavior.
Understand consumer behavior in relation to
the company’s product.
Realize that each customer transaction is a
discrete sale.
Make each customer transaction part of an
ongoing relationship with the customer.

29. Impact of Digital Technologies
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 29
Marketers
• More products and
services through
customization
• Instantaneous exchanges
• Collect and analyze data
Consumers
• Power
• Information
• Computers, phones, PDA,
GPS, smart TV
Chapter One Slide

30. The Mobile Consumer
• Wireless Media
Messages will
expand as:
– Flat-rate data
traffic increases
– Screen image
quality is enhanced
– Consumer-user
experiences with
web applications
improve
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 30Chapter One Slide
Penetration of Internet Usage Among Mobile
Subscribers in 16 Countries - FIGURE 1.3

31. Consumer Behavior Is
Interdisciplinary
Psychology
Sociology
Social
psychology
Anthropology
Economics
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall 31Chapter One Slide

32. Why Segmentation is Necessary
• Consumer needs
differs
• Differentiation helps
products compete
• Segmentation helps
identify media
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 32Chapter Three Slide

33. Positioning
The value
proposition,
expressed through
promotion, stating
the product’s or
service’s capacity
to deliver specific
benefits.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 33Chapter Three Slide

34. Criteria for Effective Targeting
Identifiable Sizeable
Stable Accessible
Congruent with the
company’s objectives
and resources
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 34Chapter Three Slide

35. Which Distinct Benefit Does Each of the
Two Brands Shown in This Figure Deliver?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 35Chapter Three Slide

36. The Dentyne Ad’s Benefit is Fresh Breath and the
Nicorette Ad is Whitening and Smoking Cessation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 36Chapter Three Slide

37. Bases for Segmentation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 37Chapter Three Slide

38. Discussion Questions
• Considering the largest bank in your college’s
city or town:
– How might consumers’ needs differ?
– What types of products might meet their needs?
– What advertising media makes sense for the
different segments of consumers?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 38Chapter Three Slide

39. Consumer-Rooted Segmentation Bases
Demographics
Geodemographic
Personality Traits
Lifestyles
Sociocultural
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 39Chapter Three Slide

40. Demographic Segmentation
Age Gender
Marital Status
Family Life-
cycle
Income,
Education, and
Occupation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 40Chapter Three Slide

41. Discussion Questions
• What types of marketers might segment
according to social class?
• What ethical issues might marketers have
when marketing to different social classes?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 41Chapter Three Slide

42. Geodemographic Segmentation
• Based on geography and demographics
• People who live close to one another are
similar
• “Birds of a feather flock together”
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 42Chapter Three Slide

43. One PRIZM Segment - Table 3.4 (excerpt)
MOVERS & SHAKERS
• 1.59 of U.S. households, Median household income: $95,372, Predominant employment:
Professional
• Social group: Elite suburbs, Life stage group: Midlife success, Key education level: College
grad+
• Adult age range: 35–64
CHARACTERISTICS
• Movers & Shakers is home to America’s up-and-coming business class: a wealthy suburban
world of dual-income couples who are highly educated, typically between the ages of 35
and 54 and often with children. Given its high percentage of executives and white-collar
professionals, there’s a decided business bent to this segment: Movers & Shakers rank
number-one for owning a small business and having a home office.
LIFESTYLE TRAITS:
• Go scuba diving/snorkeling, Plan travel on the Internet
• Read PC Magazine, Listen to adult contemporary radio
• Drive a Porsche
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 43Chapter Three Slide

44. Personality Traits
• People often do not identify these traits
because they are guarded or not consciously
recognized
• Consumer innovators
– Open minded
– Perceive less risk in trying new things
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 44Chapter Three Slide

45. Lifestyles
• Psychographics
• Includes activities,
interests, and
opinions
• They explain buyer’s
purchase decisions
and choices
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 45Chapter Three Slide

46. Discussion Questions
• How might you differ from a person with
similar demographics to yourself?
• How would this be important for marketers?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 46Chapter Three Slide

47. Two Views of Post-Retirement Lifestyle
Table 3.6 (excerpt)
AS AN OPPORTUNITY TO MAKE A NEW START
• This group regards retirement as an exciting time. Work will have been
largely unrewarding, so the transition is seen as a freedom from the
constraints of their former role. Retirement will invigorate such people
and inspire them toward undertaking activities that work largely
prevented them from pursuing.
AS A CONTINUATION OF THEIR PRE-RETIREMENT LIFESTYLE
• To such people, retirement is not perceived as signaling a drastic change.
Work life has not been as unsatisfying as for others, hence its ending is
not greeted with euphoria. There is, however, some satisfaction that
retirement permits more opportunity to devote time to existing activities
outside of their working role. The future is likely to see an increase in
such activities but no real desire to engage in new ones.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 47Chapter Three Slide

48. VALS – Figure 3.4
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 48Chapter Three Slide

49. Socio-Cultural Values and Beliefs
• Sociological = group
• Anthropological = cultural
• Include segments based on
– Cultural values
– Sub-cultural membership
– Cross-cultural affiliations
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 49Chapter Three Slide

50. Consumption-Specific
Segmentation Bases
Usage rate
Usage situation
Benefit segmentation
Perceived brand
loyalty
Brand relationship
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 50Chapter Three Slide

51. Consumption-Specific Segmentation
Usage-Behavior
• Usage rate
– Awareness status
– Level of involvement
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 51Chapter Three Slide

52. Consumption-Specific Segmentation
Usage-Behavior
• Usage-situation segmentation
– Segmenting on the basis of special occasions or
situations
– Example : When I’m away on business, I try to
stay at a suites hotel.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 52Chapter Three Slide

53. Which Consumption-Related
Segmentation Is Featured in This Ad?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 53Chapter Three Slide

54. This is an Example of a Situational
Special Usage Segmentation.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 54Chapter Three Slide

55. Benefits Segmentation
• Benefits sought represent consumer needs
• Important for positioning
• Benefits of media
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Three Slide 28

56. Benefits Visiting Tourists Seek in
National Park – Table 3.13 (excerpt)
Segment Description
Environmentalists Interested in an unpolluted, un-spoilt natural environment
and in conservation. Not interested in socializing,
entertainment, or sports. Desire authenticity
and less man-made structures and vehicles
in the park.
Want-it-all Tourists Value socializing and entertainment more than
conservation. Interested in more activities and
opportunities for meeting other tourists. Do not
mind the “urbanization” of some park sections.
Independent Tourists Looking for calm and unpolluted environment,
exploring the park by themselves, and staying at
a comfortable place to relax. Influenced by word
of mouth in choosing travel destinations.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 56Chapter Three Slide

57. Brand Loyalty and Relationships
• Brand loyalty includes:
– Behavior
– Attitude
• Frequency award programs are popular
• Customer relationships can be active or passive
• Retail customers seek:
– Personal connections vs. functional features
• Banking customers seek:
– Special treatment
– Confidence benefits
– Social benefits
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 57Chapter Three Slide

58. Implementing Segmentation Strategies
• Micro- and behavioral targeting
– Personalized advertising messages
– Narrowcasting
• Email
• Mobile
– Use of many data sources
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 58Chapter Three Slide

59. Sample Acxiom Clusters - Table 3.16 (excerpt)
Shooting Stars
• Still relatively young at a mean age of 36, and with top rankings for
income, college education, home value and net worth, these
consumers have the world by the tail. Feeling financially secure with
large investment portfolios, Shooting Stars spend their disposable
Income making life a comfortable one, focusing on health, exercise,
gourmet food, golf, and travel.
Tots & Toys
• Two things—work and family—consume these professional working
couples. They’re putting their college degrees into action, climbing
the corporate ladder for lucrative careers, while saving for their
children’s education through do-it-yourself home improvements and
trips to the zoo for entertainment. With time at a premium, it’s not
surprising that the radio is the most relied-upon source for news and
entertainment.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 59Chapter Three Slide

60. Implementing Segmentation Strategies
• Concentrated Marketing
– One segment
• Differentiated
– Several segments with individual marketing mixes
• Countersegmentation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 60Chapter Three Slide