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publishing as Prentice Hall

How can a car help express its owners characteristics?

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Learning Objective 1.1

1.1 To understand
a) the evolution of the marketing concept,
b) the most prominent tools used to implement
marketing strategies,
c) the relationship between value and customer
retention, and
d) the objectives of socially responsible marketing.

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Development of the Marketing Concept

Production Product Selling Marketing

Concept Concept Concept 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
Says Law which stated that Supply creates its
own demand (from the French economist Jean
Baptiste Say.)
Ex: Lenovo Computers in China

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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
(better mousetrap fallacy)
Example: Ambassador Car, Digital Camera, Apple
Computers

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 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
Example: LIC Agents

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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 satisfactions
better than the competition
Marketing objectives:
Profits through customer satisfaction
Key to success: Understand what customers want
Example: Dell, Coca Cola

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 Marketing Concept

The essence of marketing consists

of satisfying consumers needs,
creating value, and retaining
customers.

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Marketing Concept Requirements

Consumer Research
Market Segmentation, Targeting and
Positioning
The Marketing Mix (4 Ps)
Product or service
Price
Place
Promotion

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 What is Consumer Behaviour?

The behavior that consumers display in

searching for, purchasing, using, evaluating,
and disposing of products and services that
they expect will satisfy their needs.
Consumers emotional (affective), mental
(cognitive), and behavioral responses to
marketing activities.

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 CONSUMER BEHAVIOR DEFINED
Consumer Behavior

Consumer Activities Consumer Responses

Purchase Affect
Use Cognition
Disposal Behavior

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INDIVIDUAL vs. ORGANIZATIONAL
Individual consumers purchase goods and services to:
Satisfy their own personal needs and wants.
Satisfy the needs and wants of other individuals.

Organizational consumers purchase goods and services to:

Produce other good or services.
Resell goods and services.
Help manage their organizations.

Focus of the course

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 Why study consumer behaviour?
Understanding consumer behaviour will help you become
better marketers as it is the foundation for
Segmenting markets
Positioning products
Developing an appropriate marketing strategy

To improve business performance

anticipate and satisfy customer needs

To influence public policy

anticipate and satisfy public needs

To help consumers (including yourself) make better decisions

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Learning Objective 1.2

1.2 To understand how the Internet and

related technologies improve marketing
transactions by adding value that benefits
both marketers and customers.

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Consumers Have Embraced Technology

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Discussion Question

How does technology affect the Marketing Mix?

Examples:
Interactive and novel communication channels
Customizing products and promotional
messages
Better prices and distribution

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Learning Objective 1.3
1.3 To understand the interrelationships among
customer value, satisfaction, and retention, and
technologys revolutionary role in designing effective
retention measures and strategies.

Successful Relationships
High level of
Customer
Customer value customer
retention
satisfaction

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Successful Relationships

Value, Satisfaction,
Defined as the ratio
and Retention between the customers
Customer Value perceived benefits and the
Customer resources used to obtain
Satisfaction those benefits
Customer Perceived value is relative
Retention and subjective
Developing a value
proposition is critical

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Discussion Questions

How does
McDonalds create
value for the
consumer?
How do they
communicate this
value?

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Successful Relationships

Value, Satisfaction,
The individual's perception
and Retention
of the performance of the
Customer product or service in
Value relation to his or her
Customer expectations.
Satisfaction Customer groups based on
Customer loyalty include loyalists,
Retention apostles, defectors,
terrorists, hostages, and
mercenaries
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Successful Relationships

Value, Satisfaction, The objective of providing

and Retention value is to retain highly
satisfied customers.
Customer Value
Loyal customers are key
Customer
They buy more products
Satisfaction
They are less price sensitive
Customer Servicing them is cheaper
Retention They spread positive word
of mouth

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Technology and Customer Relationships

For Discussion:
Examples where brands used technology to
engage consumers/enhance customer
relationships.
Examples where technology was used to
add value to the consumer.

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 Customer Profitability-Focused Marketing

Tracks costs and

revenues of Platinum
individual
consumers Gold
Categorizes them
into tiers based on Iron
consumption
behavior Lead
A customer pyramid
groups customers
into four tiers

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Profitability-Focused Segmentation

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Why is Internal Marketing Important?

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Learning Objective 1.4

1.4 To understand consumer behavior as an

interdisciplinary area, consumer decision-
making, and the structure of this book.

Psychology

Sociology Communication

Anthropology

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 CONSUMER BEHAVIOR AS A FIELD OF STUDY

Psychology
Motivation Research

Sociology
Consumer
Economics Behavior
as a Behavioral Science
Field of Study
Anthropology

Medicine
Interpretivism
History

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Consumer Decision Making
Inputs
Firm marketing efforts
Sociocultural influences
Process
Psychological factors
Need Recognition, Decision Type, Prepurchase Search,
Evaluation of Alternatives
Learning
Outputs
Purchase
Post-purchase evaluation

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Consumer Decision Making

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 The Societal Marketing Concept

All companies prosper when society prospers.

Companies, as well as individuals, would be
better off if social responsibility was an integral
component of every marketing decision.
Requires all marketers adhere to principles of
social responsibility.

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 The Societal Marketing Concept

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Socially Responsible Marketing

What is the societal

marketing concept?

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 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.

Copyright 2015 Pearson Education, Inc.

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