Global Consumer Behavior

What is Consumer Behavior and its Relevance in Marketing

What is Consumer Behavior?

The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires

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Consumer Behavior is a Process

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Actors in Consumer Behavior

Consumer: A person who identifies a need or desire, makes a purchase, and then disposes of the product
Purchaser vs. user vs. influencer Organization/group as consumer

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Discussion

People play different roles and their consumption behaviors may differ, depending on the particular role they are playing. State whether you agree or disagree with this perspective, giving examples from your personal life.

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Consumers Impact on Marketing

Understanding consumer behavior is good business
Understanding people/organizations to satisfy consumers needs Knowledge and data about customers
Help to define the market Identify threats/opportunities to a brand

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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: + Make what you can sell + Focus on buyers needs

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GCB

Implementing the Marketing Concept

The process and tools used to study consumer behavior Two perspectives:
Positivist approach Interpretivist approach

Consumer Research

Segmentation

Process of dividing the market into subsets of consumers with common needs or characteristics The selection of one or more of the segments to pursue 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

Targeting

Positioning

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Segmenting Consumers: Demographics

Statistics that measure observable aspects of a population, such as Age Gender Family structure Social class/income Race/ethnicity Geography

Segmenting Consumers: Lifestyles

Psychographics The way we feel about ourselves The things we value The things we do in our spare time

Tapping into Consumer Lifestyles Relationship marketing: interact with customers regularly; give them reasons to maintain a bond with the company Database marketing: tracking specific consumers buying habits and crafting products and messages tailored precisely to peoples wants

Successful Relationships
Defined as the ratio between the customers perceived benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical

The objective of providing value is to retain highly satisfied customers. Loyal customers are key

Customer Value
The individual's perception of the performance of the product or service in relation to his or her expectations. Customers identified based on loyalty include loyalists, apostles, defectors, terrorists, Slide 13 hostages, and mercenaries

Customer Retention

They buy more products They are less price sensitive They pay less attention to competitors advertising Servicing them is cheaper They spread positive word of mouth

Customer Satisfaction

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

Tier 1: Platinum Tier 2: Gold Tier 3: Iron Tier 4: Lead

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Traditional Marketing Concept vs. Value and Retention Focused Marketing

Traditional Marketing Concept
Make only what you can sell instead of trying to sell what you make Do not focus on the product; focus on the need that it satisfies

Value and Retention Focused Marketing

Use technology that enables customers to customize what you make Focus on the products perceived value, as well as the need that it satisfies Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors offerings

Market products and services that match customers needs better than competitors offerings

The Global Consumer

People united by common devotion to:

Brand name consumer goods Movie stars Celebrities Leisure activities

Pressure to understand similarities and differences of customers in various countries

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Popular Culture Music Movies Sports Books Celebrities Entertainment Marketers influence preferences for movie and music heroes, fashions, food, and decorating choices.

Consumer-Generated Content
When everyday people voice their opinions about products, brands, and companies on blogs, podcasts, and social networking sites such as Facebook

Virtual Consumption
Impact of the Web on consumer behavior
24/7 shopping without leaving home Instantaneous access to news Handheld devices & wireless communications

C2C e-commerce
Virtual brand communities. Consumer chat rooms

Wired Americans spend

Less time with friends/family Less time shopping in stores More time working at home after hours

But, many report that e-mail strengthens family ties

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The Meaning of Consumption

People often buy products not for what they do, but for what they mean Consumers can develop relationships with brands:
Self-Concept Attachment Nostalgic Attachment

Interdependence

Love

Do Marketers Create Artificial Needs?

Objective of marketing: create awareness that needs exist, not to create needs
Need: a basic biological motive

versus

Want: one way that society has taught us that the need can be satisfied

Specific Needs and Buying Behavior

NEED FOR ACHIEVEMENT
Value personal accomplishment Place a premium on products that signify success (luxury brands, technology products)

NEED FOR AFFILIATION Want to be with other people Focus on products that are used in groups (alcoholic beverages, sports bars) NEED FOR UNIQUENESS Assert ones individual identity Enjoy products that focus on their unique character (perfumes, clothing)

NEED FOR POWER Control ones environment Focus on products that allow them to have mastery over surroundings (muscle cars, loud boom-boxes)

An Appeal to Ones Need for Safety