Lesson 01
What is consumer behavior?
Consumer behavior focuses on how individuals
make decisions to spend their available
resources(time, money, effort) on consumption
related items.
The behavior that consumers display in
searching for, purchasing , using , evaluating
and disposing of products and services that
they expect will satisfy their needs.
That is including ,
What they buy?
Why they buy?
When they buy it?
Where they buy it?
How often they buy it?
How often they use it?
How they evaluate it after the purchase?
How they dispose it?
Important…..
 All human beings are consumers
 Consumers play a vital role role in the health
of the economy
 All the business activities are depend on the
consumers.
 So, business organizations are need to
understand personal and group influences
that affect consumer decisions and how
these decisions are made.
Types of Consumers
Personal Consumer
Personal consumer who buys goods and services
for his or her own use , for the use of the
household or as a gift for a friend.
Organization consumer
this includes profit or non profit businesses
,government agencies and institutions buy
products ,equipments and services in order to
run their organization.
Development of marketing
concepts
The field of consumer behavior is rooted
in the marketing concept, a business
organization that evolved in the 1950s
through several alternative approaches
toward doing business referred to,
respectively , as the production concept,
the product concept , selling concept.
The Production Concept
 The oldest Concept in business
 It holds that consumers will prefer products
that are widely available and inexpensive.
 Managers of production oriented businesses
concentrate on achieving high production
efficiency, low costs and mass distribution.
The product Concept
 The product concept proposes that
consumers favor product s that offer that
the most quality, performance, or
innovative features.
 Managers in these organizations focus on
making superior products and improving
them overtime.
The Selling Concept
The selling concept propose that
consumers and businesses , if left alone,
won’t buy enough of the organization
products.
The organization must therefore undertake
an aggressive selling and promotion effort.
The Marketing concept
The marketing concept holds that the key to
achieving organizational goals is being more
effective than competitors in creation ,
delivering , and communicating superior
customer value to marketer chosen target
markets.
According to this concept marketer always
try to understand and meeting customer
expressed needs.
 To implement marketing concept, organization
wants to identify consumer unsatisfied needs.
 To identify unsatisfied consumer needs ,
companies had to engage in Consumer
research.
 Consumers are highly complex, their needs
and priorities of different consumer groups are
different dramatically.
 Hence , to implement the marketing concept
organizations have to follow some key strategic
tools.
Key strategic tools
Segmentation
Targeting
Positioning
Marketing Mix
Steps in market segmentation, targeting and positioning
Select Customer to
serve
Decide on a value
proposition
Segmentation
Divide the total market
into smaller segments
Differentiation
Differentiate the market
offering to create superior
customer value.
Targeting
Select the segment or
segments to enter
Positioning
Position the market
offering in the minds of
target customers.
Market Segmentation
Dividing a market into small groups
with distinct needs ,characteristics,
or behaviors
who might require
separate product or marketing mix.
MARKET TARGETING
Market segmentation reveals the firms
market segment opportunities. The firm
now must evaluate the various
segments and decide how many and
which segments it can serve best.
Definition
Positioning is the act of designing
the company’s offer and image , so
that it occupies a distinct and
valued place in the target customers
mind.
Marketing Mix
Marketing Mix is the set of
marketing tools that the firm uses
to pursue its marketing objectives
in the target market.
Product
Varity
Quality
Design
Features
Brand Name
Packaging
Services
Price
List Price
Discounts
Allowances
Payment Period
Credit terms
Target Customers
Intended
Positioning
Promotion
Advertising
Personal selling
Sales promotion
Public relations
Place
Channels
Coverage
Locations
Inventory
Transportation
Logistics
Marketing mix in Customer Point of view
4 Ps
4 Cs
Product
Customer Solution
Price
Customer Cost
Place/Distribution
Convenience
Promotion
Communication
Customer Value, Satisfaction and
Retention
 Today market is very competitive. There are lot
of alternative brands available in the market to
satisfy one product requirement.
 To outperform this competitors organization
must achieve the full profit potential from each
and every customer.
 Hence ,organizations trying to buildup ,
maintain and improve long term relationship
with the customers.
Cont….
The three drivers of successful
relationships between marketers and
customers are customer value, high
level of satisfaction, and building a
structure for customer retention.
Customer value
The customer’s evaluation of the
difference between all the benefits
and all the costs of a market
offering relative to those of
competing offers.
Customer satisfaction
Customer satisfaction is the extent to which a
products perceived performance matches a buyers
expectations.
 If the product ‘s performance falls short of
expectations , the customer is dissatisfied.
 If performance matches expectations, the
customer is satisfied.
 If performance exceeds expectations , the
customer is highly satisfied or delighted.
Customer Retention
The higher level of customer satisfaction
lead to greater customer retention.
Loyal customer are happy customers who
will return to purchase again and persuade
others to use that company's products or
services. This equates to profitability, as well
as happy stakeholders.