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Consumer Behavior

Meeting Changes &Challenges

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Learning Objectives

Understand what consumer behavior is and thediferent types o consumers.

Understand the relationship between consumerbehavior and the marketing concept, the societal

marketing concept, as well as segmentation, targeting,and positioning.

Understand the relationship between consumer

behavior and customer value, satisaction, trust andretention.

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Customers and Consumers

Those individuals who purchase or thepurpose o individual or householdconsumption are called consumers

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WHAT IS CONSUMER BEHAVIOR?WHAT IS CONSUMER BEHAVIOR?

The eld o consumer behavior covers a lot oThe eld o consumer behavior covers a lot o

ground! "t is the study o the processes involvedground! "t is the study o the processes involved

when individuals or groups select, purchase, usewhen individuals or groups select, purchase, use

or dispose o products, services, ideas oror dispose o products, services, ideas or

e#periences to satisy needs and desires.e#periences to satisy needs and desires.

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CONSUMERS IMPACT ON MARKETING

STRATEGY Consumer response is the ultimate test owhether a marketing strategy will succeed.Thus, knowledge about consumers should beincorporated into virtually every acet o asuccessul marketing plan.

$ata about consumers helps organi%ations

dene the market and identiy threats andopportunities in their own and diferentcountries that will afect consumers receptivityto the product.

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Diferent Types O C!ns"#ers

Seasonal Consumers

Personal Consumers

Organizational Consumer

Impulse Consumers

Need Based Consumers

Discount Driven Consumers Habitual Consumer

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Seasonal Consumers

These are types o consumers who purchase andconsume products on seasonal basis. 'ou wouldmost o the times not nd these types oconsumers buying the goods or service in (uestion

but rather at certain times when the need or themarises. They buy products that are season based ordemanded at certain times and not all the times.

)#amples *urchasing umbrellas during the rainy season *urchasing cold drinks during the hot seasons +oing out or holyday during the Christmas season

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Pers!n$% C!ns"#ers

These types o consumers are individualconsumers who purchase goods or the solepurpose o personal, amily or household use.

Examples

+oing to the supermarket and shopping or goodswhich are to be used in the house *urchasing a car that you intend to use personally *urchasing clothes or personal use rom a

clothing mall *urchasing a mobile phone to communicate with

people

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Organizational Consumer

rgani%ational consumers are consumers o goods andservices whose main intention is not or immediate usebut rather to use it or things like production, using themto carry out the organi%ations activities or or resale

purposes aimed at getting prots as a result.

)#ample

-n organi%ation may buy raw materials that are aimed atproducing other goods which will later be ofered or sale

to other consumers.

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Impulse Consumers

"mpulse consumers or buyers are those whomake unplanned buying decisions. "mpulsebuyers make swit buying decisions in that theyencounter products which they immediately

purchase ater they all in love with the productand its eatures. The products they purchase werenot initially in their plans but as a sort osomething that comes up all over sudden rom

somewhere and that calls or the consumer tomake an unplanned purchase.

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Need Based Consumers

eed based consumers are those typeso consumers who buy goods andservices when they need them and not

any other time. - need or a certainproduct will necessitate buying it as theconsumer would nd it tempting to buy

the product because it is neededimmediately or a certain purpose.

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Discount Driven Consumers $iscount driven consumers are types o

consumers who are purchase goods and servicesprimarily or the discounts on ofer. They may notengage in any buying activity or most o thetimes only to act when they hear or see large

discounts being ofered on products they like.They are price sensitive and they would ratherwait and purchase products when they come withdiscounts as opposed to when they have nodiscount.

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Habitual Consumer

/abitual consumers are those who nd it amust or compelling to use certain type ogoods whenever they are presented with theopportunity. "t is 0ust like a habit that theycant do without engaging in it. ).g. thecigarette smoker alls under this category oconsumers. The person would smoke at anygiven time when he1she has a cigarette. /emay also not be able to do without smokingbecause it is a habit that he has becomeaddicted to.

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Consumer Behavior

Marketing concept

The societal marketing concept

Segmentation

Targeting

Positioning

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Marketing concept

In order to be a successful, company must

determine the needs & wants of specific

target markets and deliver the desired

satisfaction better then competition

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The Societal MarketingConcept Consumers may on occasion respond to their

immediate needs or wants, 2hile overlookingwhat is in efect in their own long3run bestinterest, or in the best interest o their amily &

neighbors, the best interest o their country orregion or even in the best interest o the entire

planet. 4+ood Corporate Citi%ens

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5egmentation5egmenting means breaking up the market into smaller,homogeneous segments. 2ithin 53T3*, it is a virtual

brainstorming step whereby the business considers allpossible market segments. 5egmenting strategies includedemographics, liestyle, geographic and behaviouralapproaches. $emographics segmentation means you break upmarkets based on personal traits like age, race, marital status,gender and income. 6iestyle segmenting means you dividecustomers by hobbies and interests. +eographic segmentationmakes local, state, regional, national or international marketskey. 7ehavioural segmenting is based on such things as usagepatterns and benets sought rom the product.

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Targeting

8ollowing the brainstorming o possiblesegments in step one, the ne#t step is to pick aselect market to target or ocus on. Companiesoten ocus on one market segment at a timewith marketing and ad campaigns. 2hichevermarket is the most attractive rom a protstandpoint or long3term potential is usuallyselected rst. 8actors including si%e o the

market, growth potential and competitiveintensity impact the perceived opportunity intargeting a given market.

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Positioning

*ositioning is how the company wants thetargeted market to perceive its brand or product.5ome companies make (uality a key positioning

message and try to market their product as top(uality or the target market segment. ther(ualities commonly used to diferentiate includeservice, uni(ue eatures, environmental

riendliness, amily riendliness, saety, reliability,durability and low cost. The key is to stand outrom competitors with a uni(ue message thatappeals to the interests o the targeted market.

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Consumer Behavior

Customer 9alue

Customer 5atisaction

Customer Trust

Customer :etention

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Customer Value

Customer 9ale can be thought o as the ratio between the

customers perceived benets ;economic, unctional &psychological< and the resources ;monetary, time, efort< use to

obtain those benets.

)#amples!

=3$iner at e#clusive >asons 5take house per person :s.?,@@@ maye#pect uni(ue & delicious ood ,immaculate service & beautiul

decor.

A3$ells 9alue preposition or personal computer users consists orcustomi%ed *C 5ystems assembled speedily and sold at economicalprices.

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Customer Satisfaction

The individual consumers perception o theperormance o the product or service in relationto his or her e#pectations. " the e#pectations allbelow will be dissatised, i matches then

satised & i all above then delighted

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Levels of CustomerSatisfaction 6oyalist3B ve side 3B 5atised Customers -postles3B ve side 3B $elighted Customers $eectors3B eutral side, merely satised Consumer terrorists 3B 3ve e#perience with companies

product spread Dve word o mouth /ostages 3B Un /appy customers who are with company

due to monopolistic environment Mercenaries3B satised but dont have any loyal towards

company can deect at any point on lowing prices

ote! The companies should aim to create apostles, raisethe satisaction o deectors and turn them into loyalists,avoid having terrorist or hostages, and reduce the numbero mercenaries

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Customer Trust

Customer trust o a range o diferent consumerinormation sources reveals that word o mouthcommunications & recommendations rom other

consumers as well as consumer personale#periences

Trust is the oundation or maintaining a longstanding relationship with the customers and it

helps to increase the chances that customers willremain loyal

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Customer Retention

verall ob0ective o providing value to customerscontinuously & more efectively than thecompetition is to have and to retain highly

satised & trusting customers, and rom time totime surprising them by the element o delight totheir dealings with the company. "ts easy to retainold rather then adding new

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Customer Retention

oyal customer will pay more, less price

sensitive , pay less attention to competitors

ad campaigns, spread good word of mouth

about company!s offering to others.

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