Consumer Behavior and Technology

Learning Objectives

• Understand the evolution of the marketing concept and consumer behavior.
• Components of strategic marketing.
• Impact of technology on marketers and consumers, enhancing value and satisfaction.
• Marketers' social and ethical responsibilities.
• Foundation of consumer decision-making.

Marketing Concepts

• Marketing Concept: Focus on satisfying consumers’ needs, creating value, retaining customers; emerged in the 1960s, replacing older production concepts.
• Production Concept: Introduced by Henry Ford; emphasized low-cost, uniform production. Ford’s market dominance was temporary due to changing consumer needs.
• Selling Concept: Focuses on selling pre-made products rather than understanding consumer needs; relies on aggressive persuasion.

Consumer Behavior

• Consumer Behavior: Process through which individuals make decisions to spend their resources on consumption-related items; crucial for marketers.
• Marketing Myopia: A focus on products instead of consumer needs, leading to short-sighted decision making.
• Market Segmentation: Divides a market into subsets of consumers with common characteristics, allowing tailored marketing strategies.

Targeting and Positioning

• Targeting: Selecting market segments viewed as potential customers for focused marketing efforts.
• Positioning: Creating a distinct image for products in consumers’ minds to differentiate from competitors.

Marketing Mix (4Ps)

1. Product: Features, designs, brands, packaging, and post-purchase benefits like returns/warranties.
2. Price: List prices, discounts, and payment methods.
3. Place: Distribution channels and logistics.
4. Promotion: Strategies for creating awareness (advertising, PR, sales promotions).

Technology in Marketing

• Technological advances have shifted from a one-way communication model to a two-way interactive model, allowing real-time assessment of marketing effectiveness.
• Marketers focus on digital strategies, leveraging data collected through user interactions for targeted offerings.

Value Exchange and Consumer Information

• Technology enhances value exchange; consumers provide data in return for better shopping experiences.
• Online shopping influences consumer decision making, leading to informed choices and price scrutiny.

Customer Value and Satisfaction

• Customer Value: The perceived benefits versus the resources used for acquisition (money, time, effort).
• Customer Satisfaction: A consumer’s perception of product performance versus expectations.
• Customer Retention: Building long-term relationships that encourage repeat purchases; it costs less to keep existing customers than to acquire new ones.

Customer Engagement

• Emotional Bonds: Deep attachments that drive customer loyalty.
• Transactional Bonds: Basic exchanges that facilitate purchases.

Satisfaction and Loyalty

• Happy customers can lead to positive word-of-mouth and repeat purchases, while dissatisfied customers tend to switch brands and spread negative feedback.
• Identifying customer types (Loyalists, Apostles, Defectors, Terrorists, etc.) helps in strategizing retention efforts.

Measuring Customer Retention

• Techniques include customer valuation, analyzing retention rates, and investigating defection causes.
• Effective strategies involve improving employee practices and addressing service issues.

Social Responsibility in Marketing

• Marketers face ethical challenges and must avoid exploiting consumer vulnerabilities.
• Social marketing focuses on fulfilling consumer needs while also benefiting society.

Consumer Decision-Making Process

1. Need Recognition: Identifying a problem requiring a solution; can be based on actual or desired states.
2. Information Search: Gathering information to make informed decisions; can involve both prior experiences and extensive research.
3. Evaluation of Alternatives: Considering specific brands (evoked set), excluding others (inept set), or being indifferent (inert set).

Research Techniques in Consumer Behavior

• Qualitative Research: Explores hidden motivations; includes methods like focus groups and projective techniques.
• Quantitative Research: Uses statistical methods for broader insights and is more generalizable.
• Data Collection Methods: Surveys (in-person, online), observational research, and causal experiments.

Effective Survey Design

• Effective questionnaires must be clear, unbiased, and engaging to elicit accurate responses.
• Use of various scales (Likert, semantic differential) to gauge consumer perceptions and satisfaction.

Conclusion

• Understanding consumer behavior is vital for developing effective marketing strategies that align with both consumer needs and organizational goals, ultimately leading to sustainable business practices.