CONSUMER

BEHAVIOR
Consumer behavior
 The term consumer behavior is defined as
the behavior that consumers display in
searching for, purchasing, using, evaluating
and disposing of products and services that
they expect will satisfy their needs.
Difference between customers and
consumers
 Every customer is a consumer but not every
consumer a customer. Customer is one who is
brand loyal, who has made a custom to purchase a
particular company's product/services. thus
customer is a sub set of consumer.
 One that consumes, especially one that acquires
goods or services for direct use or ownership rather
than for resale or use in production and
manufacturing. A consumer is an end user.
 A customer: One that buys goods or services. A
customer can in turn resell to a consumer.
 The central premise to understand consumer
behavior – “People do not buy products or services,
they buy benefits.”
 Purchases are made not for the products
themselves but for the problems they solve or the
opportunities they create
  Consumer benefits are those positive factors that
the consumer obtains as a result of the possession
and/or use of a product or service
Why We Study CB?
Diverse Reasons -
 As Consumers
 As Marketers & future Marketers
 As Students of Human Behavior
Consumer Benefits
 Tangible Benefits – measurable
 Intangible benefits – associated with the
feelings that you experience
 Two different kinds of consuming entities
 Personal consumer

 Organizational consumer
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.
Development of the Marketing Concept
Production
Concept

Product Concept

Selling Concept

Marketing
Concept
The Production Concept

 Assumes that consumers are interested

primarily in product availability at low
prices
 Marketing objectives:
 Cheap, efficient production
 Intensive distribution
 Market expansion
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
The Selling Concept

 Assumes that consumers are unlikely to

buy a product unless they are aggressively
persuaded to do so
 Marketing objectives:
 Sell, sell, sell
 Lack of concern for customer needs and
satisfaction
The Marketing Concept
 Assumes that to be successful, a company
must determine the needs and wants of
specific target markets and deliver the
desired satisfactions better than the
competition
 Marketing objectives:
 Profits through customer satisfaction
The Marketing Concept
A consumer-oriented philosophy that
suggests that satisfaction of consumer
needs provides the focus for product
development and marketing strategy to
enable the firm to meet its own
organizational goals.
 Marketing Concept is based on the
premise that a marketer should
make what it can sell, instead of
trying to sell what it has made…
Implementing the Marketing Concept
 Consumer Research
 Segmentation
 Targeting
 Positioning
Consumer Research
 The process and tools used to study
consumer behavior.
 Two perspectives:
 Positivist approach
 Interpretivist approach
Segmentation, Targeting, and
Positioning

 Segmentation: process of dividing the

market into subsets of consumers with
common needs or characteristics
 Targeting: selecting one ore more of the
segments to pursue
 Positioning: developing a distinct image for
the product in the mind of the consumer
Successful Positioning
 Communicating the  Communicating a
benefits of the Unique Selling
product, rather than Proposition for the
its features product
 The Marketing Mix
 Product
 Price
 Place
 Promotion
Successful Relationships

Customer Customer
Value Retention

Customer
Satisfaction
 Types of Customers
 Loyalists  Terrorists
 Apostles  Hostages

 Defectors  Mercenaries
Customer retention
 Makes it in the best interest of customers to stay
with the company rather than switch to another firm
 Customers are grouped into four tiers:
 The platinum tier: heavy users, not price sensitive
 The gold tier: Heavy users, not profitable, price
sensitive
 The iron tier: spending volume and profitability do
not merit special treatment form the company
 The lead tier: customers who actually cost the
company by spreading negative word of mouth
Ethics & social responsibility
 All companies prosper when society
prospers, many people believe that all of us,
companies as well as individuals, would be
better off if social responsibility were an
integral part of every marketing decision.
Societal Marketing Concept

A revision of the traditional marketing concept

that suggests that marketers adhere to
principles of social responsibility in the
marketing of their goods and services; that is,
they must endeavor to satisfy the needs and
wants of their target markets in ways that
preserve and enhance the well-being of
consumers and society as a whole.
The Societal Marketing Concept

 The societal marketing concept, advocates

a long term perspective.
 It recognize that all companies would be
better off in a stronger, healthier society,
and that companies that incorporate
ethical behavior and social responsibility in
all of their business dealings and maintain
loyal consumer support over the long run.
Nature and characteristics of
Indian consumer
 The Indian consumption patterns are slowly
converging with global norms.
 The Indian consumer is now spending more
on consumer durables, apparel,
entertainment, vacations and lifestyle related
activities.
 Entertainment, clothing and restaurant dining
are categories that have been witnessing a
maximum rise in consumer spending since
2002.
 The rate of growth of spending on
discretionary items (unlike basic necessities
like food) has been growing at an average of
9 per cent per year over the past five years. A
nation of savers, India, has now altered into a
nation of spenders.
Consumerism
 The movement seeking to protect and inform
consumers by requiring such practices as
honest packaging and advertising, product
guarantees, and improved safety standards.
 Movement or policies aimed at regulating the
products, services, methods, and standards
of manufacturers, sellers, and advertisers in
the interests of the buyer.
Rights of consumers
 Right to safety
 Right to be informed
 Right to choose
 Right to be heard
 Right to seek redressal
 Right to consumer education
Responsibilities of Consumers
 Responsibility of self-help
 Proof of Transactions
 Proper claim
 Proper use of Product/services