1. CHAPTER ONE Consumer Behavior and Marketing Strategy McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 2 CHAPTER 1 What is Consumer Behavior? The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

3. 3 CHAPTER 1 Why study consumer behavior? Consumer behavior theory provides the manager with the proper questions to ask Marketing practice designed to influence consumer behavior influences the firm, the individual, and society All marketing decisions and regulations are based on assumptions about consumer behavior

4. 4 CHAPTER 1 Applications of Consumer Behavior Marketing Strategy Regulatory Policy Social Marketing Informed Individuals

5. 5 CHAPTER 1 Marketing Strategy & Consumer Behavior Creating Customer Value: The difference between all the benefits derived from a total product and all the costs of acquiring those benefits.

6. 6 CHAPTER 1 Marketing Strategy & Consumer Behavior

7. 7 CHAPTER 1 Consumer Insight 1-1 What services could become experience- provoking events? How would they do this? How can retailers, including Internet outlets, provide their customers experiences? What would a store like Niketown (or a local shopping mall in your area) have to do to charge admission for customers to enter?

8. 8 CHAPTER 1 Market Analysis Components The Consumers The Company The Competitors The Conditions

9. 9 CHAPTER 1 Market Segmentation Market Segment: a portion of a larger market whose needs differ somewhat from the larger market. Four steps to segmentation: Identify product-related need sets Group customers with similar need sets Describe each group Select an attractive segment(s) to serve

10. 10 CHAPTER 1 Market Segment Attractiveness

11. 11 CHAPTER 1 Marketing Strategy How will we provide superior customer value to our target market? Marketing Mix The Product Communications Price Distribution Service

12. 12 CHAPTER 1 Outcomes Firm: Product positioning Sales Customer Satisfaction Individual: Need Satisfaction Injurious Consumption Society: Economic Physical Environment Social Welfare

13. 13 CHAPTER 1 Creating Satisfied Customers

14. 14 CHAPTER 1 Overall Model Of Consumer Behavior

15. 15 CHAPTER 1 Consumer Insight 1-2 What does the consumption of a product like Nikes mean to Andre? What does this story say about our society and the impact and role of marketing?