1. 1 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 1 What is CB and Why Should I Care?

2. 2 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 Learning Outcomes Understand the meaning of consumption and consumer behavior. Describe how competitive marketing environments lead to better outcomes for consumers. Explain the role of consumer behavior in business and society. Be familiar with basic approaches to studying consumer behavior. Appreciate how dynamic the field of consumer behavior continues to be. LO 1-1 LO 1-2 LO 1-3 LO 1-4 LO 1-5

3. 3 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 ▮ COMMENT: Agree or Disagree? The customer is always right. The customer is King. Customer service is essential to a company’s survival. Customers make me crazy. CB Perspectives

4. 4 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Consumer Behavior Perspectives Human thought and action Actions, reactions, consequences Decision-making and product use Actions, reactions, consequences Decision-making and product use Field of study Body of knowledge accumulated in explaining the actions, reactions, consequences LO 1-1

5. 5 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 ▮ …consumer behavior is really all about value ▮ …consumption goes on long after purchase ▮ …the consumer evaluates costs and benefits and reacts… the process results in a perception of value CB Perspectives

6. 6 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Consumer Behavior as Human Behavior ▮ Consumer behavior - Set of value- seeking activities that take place as people go about addressing and attempting to address realized needs A process kicks in as the consumer sets out to find ways to fill the need—thinking, feeling, behaving culminating in value LO 1-1

7. 7 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 1-1

8. 8 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Consumption ▮ Process by which goods, services or ideas are used and transformed into value ▮ Marketer and the consumer interact to produce value ▮ Consumption outcomes affect consumer well-being by affecting quality of life LO 1-1

9. 9 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 1-1

10. 10 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Questions to Consider LO 1-2 Q: How competitive is the marketing environment? Consider: Little competition allows for poor customer service and vice versa.

11. 11 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Questions to Consider LO 1-2 Q: How dependent is the marketer on repeat business? Consider: Repeat customers are considered less costly to serve.

12. 12 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Some Terminology LO 1-2 Consumer orientation - A business’s priority is consumer value and satisfaction Market orientation - Organizational culture emphasizing consumer value Relationship marketing - A firm’s marketing activities aim to increase repeat business Touchpoints - Direct contacts between the firm and a customer Stakeholder marketing - Recognizes that all stakeholders are involved in and/or are affected by the firm’s marketing in some way

13. 13 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Relationship Marketing - Example ▮ Online shoe retailer Zappo’s takes customer relationship building to the next level Allows customers to order multiple shoes and return those they don’t want Has a ‘no-questions-asked’ returns policy ▮ Increased customer loyalty compensates for increased costs ▮ Do you know of a company with a similar philosophy? LO 1-2

14. 14 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Why Study CB? LO 1-3 Input to making responsible decisions as a consumer Force that shapes society Input to business/marketing strategy

15. 15 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Strategy: Resource-Advantage Theory ▮ Explains why companies succeed or fail ▮ Companies succeed by acquiring more resources from consumers and in turn using those resources to gain advantages in physical and intellectual capital Why would consumers give up scarce resources? Answer: expectation of value

16. 16 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 1-3 Nothing lasts forever… Think of companies on the rise and those that appear to be declining. To what do you attribute the growth or decline?

17. 17 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 What do people buy? ▮ To buy something, a consumer gives up resources in the form of time, money, and energy in return for the product ▮ A product is a potentially valuable bundle of benefits ▮ Emphasis lies in the value the customer receives rather than the product itself LO 1-3

18. 18 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 What do people buy? - Example ▮ People dine at expensive fine dining restaurants For the well-prepared, high-quality food For the ambience, service, and overall dining experience ▮ The high prices are justified by the perceived value of the experience LO 1-3

19. 19 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 1-3

20. 20 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CB and Society ▮ Consumer behavior creates the society in which we live and serves as an important source of input to public policy in a free society ▮ “Consumption shapes society”. ▮ Society can also attempt to shape consumption. For example: social campaigns regarding tobacco, alcohol, and drug usage. LO 1-3

21. 21 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Hold the Phone! ▮ DISCUSSION: Should public restrictions on mobile phone usage be created? Pros & Cons Situation specific? Personal freedom/rights LO 1-3

22. 22 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22 CB and Personal Growth LO 1-3 Studying CB helps consumers make better decisions by understanding: Consequences of poor budgeting Role of emotions Avenues for redress Social influences Environmental effects

23. 23 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23 Different Approaches to Studying CB LO 1-4 Interpretive Research Quantitative Research Seeks to explain the inner meanings and motivations associated with specific consumption experiences Is a form of qualitative research; researcher dependent Two common orientations: Phenomenology: Represents the study of consumption as a “lived experience” (interviews- memories or experiences) Ethnography: Involves analyzing the artifacts associated with consumption (ie, trash, refrigerator). Addresses questions about consumer behavior using numerical measurement and analysis tools Is not researcher dependent Does not require deep interpretation

24. 24 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 1-4

25. 25 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer Behavior is Dynamic LO 1-5 Internationalization Technological Changes Changing Communications Changing Demographics Changing Economy