INTRODUCTION TO CONSUMER BEHAVIOR

Consumer Behavior:
Introduction, Overview, Trends & CBDP.
Lecture
2015 - CONSUMER BEHAVIOR DR. AHMAD FARAZ – CBA - UOD

Course Overview
• What is consumer behavior?
• Why study it?
• How does this relate to marketing?
• Some “essential tools”

What segment of the consumers will be more
attracted towards these ads

Consumer Behavior
The behavior that, consumers display in, searching
for, purchasing, using, evaluating, and disposing of products
and services that they expect will satisfy their needs.
The study of the cognitive, emotional, and physical
activities associated with the perception, evaluation,
choice, acquisition, use, and disposition of goods and
services.”

What is Consumer Behavior?
satisfy needs and the impacts that these processes have on
consumer and society.
Consumer Behavior is
the study of groups, individuals and organizations
processes they use to select, secure, and dispose of products,
services, experiences, or ideas
L1, Clip 1.

Why study Consumer Behavior?
• Our guesses about people are inaccurate.
• This is because human nature leads us to believe that other people
think like us false consensus
• People tend to perceive differences even when they don’t exist
stereotyping
• Therefore, we must strive to…
Identify customer needs and wants Engage in research
Understand how customers will respond to different messages and
environments Learn about and apply theories
Anticipate where preferences are headed Staying informed

Relevance to marketing
Success in the marketplace requires: knowing, then
attracting, satisfying, and retaining customers.
• No brand/product can appeal to all people.
Firms must segment the market into groups with
relatively homogeneous preferences and target one or
more groups.
Firms must position their offerings in the hearts and
minds of these individuals in a favorable way.
Firms must examine all of the touch points that shape
how a consumer will respond to their offering.

Customers refers to individual that purchases and
goods and services.
Very often the people using your product and
people paying for it even don’t know each other.
So who is actually your client?
Customer? Consumer?
Consumers refers to individual or
group that purchase and uses repeatedly

Two consumer units

A business genius said it.

Marketing trends from production to
value based era
Production-oriented era
Sales-oriented era
Market-oriented era
Value-based marketing era

What is value based marketing?
A set of processes for creating, communicating, and delivering value to customers,
build strong customer relationships and for managing this relationships in ways that
benefit the customers, the organization, and its stakeholders.
Values-based marketing is shifts marketing from a product-
centric approach to a customer-centric one. A company's
advertising and promotions to its customers express its values
as part of its core brand message.

How much value does add?
Cost of coffee bean when harvested = $ 0.50/ Lb.
How Starbucks create value through excellent customer services
Its their legendary customer service
An increase in value of 46,000%
L1, Clip 3.4.5.

Successful relationships

Understanding trends
for understanding consumers
• Aging population
• Health & fitness
• Cultural diversity
and
Globalization

• Natural /
Organic
Foods
• Go Green/
No-Pollution
• Eco-Friendly/ Save
the Environment

• Digital trend
Key Digital Marketing
Trends in 2014

23 AUG 2015 MRKT -305 - CONSUMER BEHAVIOR DR. AHMAD FARAZ – CBA - UOD
Consumer Information Process
Attention
=
Stimulus
Senses = Sight, Smell, Taste, Touch & Hearing.

Identify the needs this Ad may stimulate
in Consumers

 Stimulate to eat
natural/ organic.
 Reminding them to
eat pure, clean and
without additives
and preservatives.
 Health conscious
consumers who
want ice cream.
The marketers objective is to stimulate
the following needs in consumers

 Stimulate to invest
in quality camera.
 Highlighting
features like Zoom
and pics cell.
 Treasure memories
n life achievements.
 Innovation and
intelligence.

Identify the needs this Ads may stimulate
in Consumers
NO ONE GROWS KETCHUP LIKE HEINZ

 Stimulate to use
natural ingredients
 Reinforcing absence
of color , unhealthy
preservatives.
 Purity and taste
from pure
ingredients.

Business Leaders who understood
Consumer Behavior long ago
McDonald’s founded in 1937 by Dic & Mac in
California. In 1950 Ray Crock, pioneered the idea of
fast food.
In 1961 Ray opened Hamburger University as a
training center to its franchises and employees.
He pioneered the idea of centralized training is ey of delivering standardized
products across a large number of outlets with a wide geographical spread.

KFC founded in 1930 by Colonel Harland Sanders
for hungry travelers in Louisville, Kentucky.
In 1950 Sanders starting business franchising.
KFC is part of Yum! Brands, Inc., the world’s
largest restaurant company.
Yum! Ranked 201 among fortune 500, revenue
exceeding $13 billion in 2012.
KFC operates more than 40,000 locations in 130
countries.

- Founded in 1895 in Austria.
- Designs, creates, and markets high-quality crystal product
collections such as jewelry, accessories, decorative items.
- Global reach and showcasing its sparkling crystal products.
- Network of own boutiques, retail partners, Swarovski website and
Online Shops.
- Swarovski launches new collections on a quarterly
basis, offering something for every need &
taste.
- Swarovski are exceptional gift.
- Naturally brilliant and fashionable.
- Silver-tone necklaces, bracelets, earrings and cocktail rings.
- Wearers feel uniqueness, boosts creative self
expression.

Traditional Marketing Concepts
Difference of Selling Vs. Marketing
Product-centric approach to a customer-centric
approach.
Understand the difference between Selling &
Marketing
- Sell it by hook or crook - Evaluate what the customer
needs and than make an offer
- An execution concept - A planning concept
- Selling is value oriented - Mkt’g is consumer oriented
- A short-term process - A long-term process
- Only focused on the person
in front of you
- Focused on customer
retention
- Doesn’t include after sale
service
- After sale service is an
important criteria

Difference of Selling Vs. Marketing
Marketing Sales
Period A modern concept A traditional concept
Approach
Determine future needs and has a
strategy in place to meet those needs for
the long term relationship.
Makes customer demand match the
products the company currently offers.
Focus
Fulfill customer's wants and needs thru
products or services the company
can offer. Building relationship.
Fulfill sales volume objectives.
Make money.
Horizon An investment, Longer term results Looks profitable but Short term
Scope
Products are tailor made as per customer
needs (market research), products satisfy
those needs.
Promotions to advertise those products.
Customers don’t have much input,
product is created for as per company's
idea. They persuade the customer
to purchase the product to fulfill her
needs.

Vs Value & Retention Focused Marketing
- Make only what you can sell
or sell what you can make
- Use technology to make
customized products
- Do not focus on product
focus on need that satisfies
- Focus on product, value and
the need it satisfies
- Market product & services by
matching customer needs
better than competitors
- Understand customer needs,
develop offerings that customer
perceive better than competitors
- Understand purchase
behavior and influences
- Understand CB in relation to
your product and service
- Realize each transaction as
a secret deal
- Make these transactions as
part of an ongoing relationship
with the customer

Vs Value & Retention Focused Marketing
- Segment the market on
geography, demographics,
life style and usage
- Segmentation should be
based on data, on purchase
and use of the product
- Target larger population and
transmit common message
- Use technology to send one-
to-one promotional messages.
- Create loyalty programs on
volume of purchase
- Create customer levels based
on volume & consumption
- Encourage to buy more - Attract them to buy “better”
and be more profitable
- Create trust and loyalty to
customer
- Create not just satisfied but a
‘delighted’ customer.

Thank you and Good Bye, till next class.

INTRODUCTION TO CONSUMER BEHAVIOR

More Related Content

What's hot (20)

Viewers also liked (8)

Similar to INTRODUCTION TO CONSUMER BEHAVIOR (20)

Recently uploaded (20)

INTRODUCTION TO CONSUMER BEHAVIOR