Class Reminders

• If you miss class, be sure to get the notes from a classmate.

• Upcoming assignments and quizzes:

  • Finish reading chapter 2 for Thursday.

  • Quiz next Tuesday: Syllabus + Chapters 1 & 2.

  • SoA form due at the start of class on Thursday.

Understanding Consumer Behavior: An Introduction

• Focus on Chapters 1 & 2 to understand the market's landscape better.

Current AMA Definition of Marketing

• "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

• Simplified Definition: Value-producing activities that facilitate exchange, illustrating the fundamental role of marketing in meeting customer needs and fostering societal relationships.

Importance of Customer-Centric Marketing and Consumer Primacy

• Customer-centric marketing recognizes the importance of the customer at the center of marketing strategies, enhancing customer satisfaction and loyalty, and ultimately driving business performance.

Types of Marketing

• Transactional Marketing:

  • Focuses on single sales and acquiring new customers.

  • Examples: Infomercials, cell phone companies, where the primary aim is to make one-time sales rather than building ongoing relationships.

• Relationship Marketing:

  • Emphasizes customer retention and loyalty.

  • Key Touchpoints include in-store interactions, phone conversations, email, and social media engagements that build long-term customer relationships.

  • Highlights the social and emotional elements essential to sustaining long-term customer loyalty and engagement.

Consumer Behavior Definition

• A set of value-seeking activities addressing realized needs that influence consumer choices and purchasing decisions.

Common Misconceptions

• The transition from transactional to relationship marketing is often misinterpreted as avoiding the necessity of acquiring new customers, while in fact, both aspects are vital.

The Consumption Process

• Beyond buying: Creating value for the consumer through enhanced experiences and satisfaction.

• Involves deliberate steps: recognizing a need, seeking information, evaluating alternatives, purchasing, and post-purchase evaluation.

Contribution from Various Disciplines

• Psychology: Understanding consumer motivation and perception.

• Sociology: Studying consumer behavior in social contexts.

• Economics: Analyzing market dynamics and consumer choice.

• Anthropology: Exploring cultural influences on consumer habits.

Key Components of Consumer Behavior

• Involves both psychological (internal factors) and sociological processes (external factors).

• Impacted by external factors: demographics, psychographics, lifestyle, culture, and group membership, which define consumer identities and influence purchasing behaviors.

Consumer Behavior Process

• Starts with a recognized need leading to an exchange, assessing costs versus benefits to reach an ultimate value through consumption.

Consumer Behavior Dynamics

• Subject to constant changes in:

  • Consumer needs/wants, beliefs, feelings, and behaviors.

  • Marketplace conditions including technology advancements, changes in costs, and product availability.

• Importance of ongoing consumer behavior research to challenge assumptions, adapting marketing strategies to meet evolving consumer preferences.

Consumer Value

• Utilitarian Value vs. Hedonic Value:

  • Utilitarian value is derived from functional benefits; hedonic value comes from emotional experiences.

  • Examples illustrate the differences: a practical car (utilitarian) versus a luxury sports car (hedonic).

Total Value Concept

• Discusses how innovation plays a pivotal role in value creation and enhances overall consumer satisfaction.

Value Co-creation

• Engagement between consumers and companies that enhances the overall value offered, particularly the Importance of Customer Lifetime Value (CLV) in developing ongoing relationships.

Marketing Strategy

• Key Differences Between Strategy and Tactics:

  • Strategy encompasses broad plans for reaching long-term goals; tactics are the specific actions taken to achieve those goals.

• Challenges of Marketing Myopia:

  • The tendency to focus solely on selling products rather than addressing customer needs can limit growth and innovation.

Target Marketing

• Importance of segmentation in identifying and targeting distinct customer segments.

• Examples include demographic segmentation (age, gender), psychographic segmentation (lifestyle, values), and behavioral segmentation (purchase behavior).

• Differentiation & Positioning:

  • Concepts like perceptual mapping help visualize consumer perceptions of brands in relation to competitors, aiding in strategic marketing decisions and positioning initiatives.