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Chapter 1

MKT 400 Chapter Notes - Chapter 1: Brand Equity, Social Marketing, Paradigm Shift


Department
Marketing
Course Code
MKT 400
Professor
Melanie Dempsey
Chapter
1

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MKT400 Understanding Customers and the New Media
CHAPTER 1 An Introduction to Customer Behaviour
INTRODUCTION
WHAT IS CUSTOMER BEHAVIOUR
Customer behaviour: study of the processes involved when individuals or groups select, purchase, use, or dispose of
products, services, ideas, or experiences, to satisfy needs and desires
o Ongoing process emphasizing on the interaction between consumers and producers
Exchange: two or more organizations or people give and receive something of value
CONSUMERS’ IMPACT ON MARKETING STRATEGY
Basic marketing concept states that firms exist to satisfy consumers’ needs
Marketing segmentation: identifies groups of consumers who are similar to one another in one or more ways and then
devises marketing strategies that appeal to one or more groups
Demographics: statistics that measure observable aspects of a population
o Age people who belong to the same age group tend to share a set of values and common cultural experiences
that they carry throughout life
o Gender products are targeted either at men or women
o Family structure family and marital status has a big effect on a consumer’s spending priorities
o Social class and income people grouped within the same social class are approximately equal in terms of their
incomes and social standings in the community
It determines which groups have the greatest buying power and market potential
o Ethnicity diverse in languages and in cultural consumption that stems from different ethnicities
o Geography climate changes drastically from region to region, which makes segmenting some products by region
obvious
Relationship marketing: interaction with customers on a regular basis, giving them reasons to maintain a bond with the
company over time
Database marketing: tracking consumers’ buying habits very closely and crafting products and messages tailored precisely
to people’s wants and needs based on this information
MARKETING’S IMPACT ON CONSUMERS
What we learn about the world is filtered by marketers; we rely on them to sell us products that are safe and that perform
as promised, to tell us the truth about what they are selling, and to price and distribute these products fairly
Popular culture: forms of entertainment consumed by the mass market, is both a product of and an inspiration for
marketing
Consumer-generated content: people voice opinions about products, brands, and companies on blogs, podcasts, and social
networking sites
Web 2.0: rebirth of the Internet as an interactive medium from its original roots as a one-way transmission from producers
to consumers
THE MEANING OF CONSUMPTION
Fundamental premises of midterm field of consumer behaviour is that people buy products not for what they do but for
what they mean
o All things being equal, a person will choose the brand that has an image consistent with his or her underlying
needs
Types of relationships consumers can have with a product:
o Self-concept attachment the product helps to establish the user’s identity
o Nostalgic attachment the product serves as a link with a past self
o Interdependence the product is a part of the user’s daily routine
o Love the product elicits emotional bonds of warmth, passion, and other strong emotions
THE GLOBAL CONSUMER
One by-product of sophisticated marketing strategies is the movement towards a global consumer culture, where people
around the world are united by their common devotion to brand-name consumer goods, movie stars, and celebrities
U-commerce: use of ubiquitous networks that will slowly but surely become part of us, whether in the form of wearable
computers or customized advertisements beamed to us on our cell phones
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