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1. Consumer Behavior:
Meeting Changes and
Challenges
CHAPTER
ONE

2. Learning Objectives
1. To Understand What Consumer Behavior Is and the
Different Types of Consumers.
2. To Understand the Relationship Between Consumer
Behavior and the Marketing Concept, the Societal
Marketing Concept, as Well as Segmentation, Targeting,
and Positioning.
3. To Understand the Relationship Between Consumer
Behavior and Customer Value, Satisfaction, Trust, and
Retention.
4. To Understand How New Technologies Are Enabling
Marketers to Better Satisfy the Needs and Wants of
Consumers.
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Chapter One Slide

3. Learning Objectives (continued)
5. To Understand How Marketers Are Increasingly
Able to Reach Consumers Wherever Consumers
Wish to Be Reached.
6. To Understand How the World’s Economic
Condition Is Leading to Consumption Instability
and Change.
7. To Understand the Makeup and Composition of
a Model of Consumer Behavior.
8. To Understand the Structure of This Book
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Chapter One Slide

4. To Which Segment of
Consumers Will This Ad Appeal?
Chapter One Slide 4
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5. A Segment of Consumers Who are
Environmentally Concerned
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6. 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.
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Chapter One Slide

7. Two Consumer Entities
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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 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

8. Development of the
Marketing Concept
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Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

9. Production Orientation
• From the 1850s to the late 1920s
• Companies focus on production capabilities
• Consumer demand exceeded supply
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Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

10. Sales Orientation
• From the 1930s to the mid 1950s
• Focus on selling
• Supply exceeded customer demand
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Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

11. Marketing Concept
• 1950s to current - Focus on the customer!
• Determine the needs and wants of specific
target markets
• Deliver satisfaction better than competition
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Production
Orientation
Sales
Orientation
Marketing
Concept
Chapter One Slide

12. Discussion Questions
1. What two companies do
you believe grasp and use
the marketing concept?
2. Why do you believe this?
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13. Societal Marketing Concept
• Considers consumers’
long-run best interest
• Good corporate
citizenship
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14. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
• The process and tools
used to study consumer
behavior
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Embracing the Marketing
Concept
Chapter One Slide 14

15. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
• Process of dividing the
market into subsets of
consumers with
common needs or
characteristics
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Implementing the
Marketing Concept
Chapter One Slide 15

16. Discussion Questions
1. What products that you regularly purchase
are highly segmented?
2. What are the different segments?
3. Why is segmentation useful to the marketer
for these products?
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Chapter One Slide

17. The Marketing Concept
• Consumer Research
• Segmentation
• Market Targeting
• Positioning
The selection of one or
more of the segments
identified to pursue
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Implementing the
Marketing Concept
Chapter One Slide 17

18. 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
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Implementing the
Marketing Concept
Chapter One Slide 18

19. The Marketing Mix
Product Price
Place Promotion
Marketing
Mix
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Chapter One Slide

20. Customer Value, Satisfaction, Trust,
and Retention
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Successful Relationships
Customer
value
High level
of
customer
satisfaction
Strong
sense of
customer
trust
Customer
retention
Chapter One Slide

21. 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 21

22. Discussion Questions
• How does McDonald’s
create value for the
consumer?
• How do they
communicate this
value?
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Chapter One Slide

23. 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
mercenaries
Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
Value, Satisfaction,
Trust, and Retention
Chapter One Slide 23

24. Successful Relationships
• Customer Value
• Customer
Satisfaction
• Customer Trust
• Customer
Retention
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• 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 24

25. 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
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Value, Satisfaction,
Trust, and Retention
Chapter One Slide 25

26. 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

27. 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
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Platinum
Gold
Iron
Lead
Chapter 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
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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
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Chapter 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
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Chapter One Slide

32. A Simple Model of Consumer Decision Making - Figure 1.4
Chapter One Slide 32
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33. All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
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Prentice Hall
33
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Seven Slide