Summary chapter 1 : Understanding consumer behavior

What is marke,ng

Is the ac)vity, set of ins)tu)ons, and processes for crea)ng, communica)ng, and delivering offers that have
value for customers, clients, partners, and society:
Organiza(ons, then, need to research about the needs, desires, expecta)ons of their customers through
different methodologies → Consumer behavior.

What is consumer behavior

Is the study of consumer's choices during searching, evalua)ng, purchasing, and using products and services
that they believe would sa)sfy their needs.

The marke,ng concept

You need to research what people think about it, and if they do not like it you must change it. Listen to the
customer but also you have to be very clear about what you are offering. Long term rela)onship with the
customers. Get closer to customers by mee)ng them or allowing them to customize.

Marke,ng Myopia

Companies focus on the product itself rather than those consumers' needs it presumes to sa)sfy.
Careful: most unhappy buyers share their dissa)sfac)on with other consumers

Segmenta,on, targe,ng and posi,oning

Marke(ng Segmenta(on
§ The process of dividing a market into subsets of consumers with common needs or characteris)cs.

Targe(ng
§ Targe)ng is selec)ng the segments that the company views as prospec)ve customers and pursuing
them with different offerings. You have to find a specific type of addressing to get to those people
(music, web, pictures, videos...). Different types of media depending of the kind of people you want to
get to.

Posi(oning
§ The process by which a company creates a dis)nct image and iden)ty for its products, services, and
brands in consumers' minds.
§ The image differen)ates the company's offering from compe)tors by communica)ng to the target
audience that the product fulfills the target consumers' needs beKer than alterna)ves.
§ Brand posi)oning is the space your brand and products hold in the market and in the minds of your
customers.

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Technology, consumer and marketers

Value exchange: Consumers provide marketers with detailed personal informa)on to become beKer informed,
buy customized products and shop more efficiently.

New Trends in Marke)ng and Consumer Behavior

§ Transforma(on through innova(on: Machine learning, big data, Big Data Marke)ng & Hyper-
segmenta)on
§ Sharing: personal informa)on for more personalized offers

MACHINE LEARNING

Machine learning is a branch of ar)ficial intelligence (AI) and computer science which focuses on the use of
data and algorithms to imitate the way that humans learn, gradually improving its accuracy.

New consumer: hard to a>ract, sa(sfy and retain.

Look for informa)on they rely on the web.
New marketers use the web and social media:
1. Customize their offerings and promo)onal messages.
2. Can offer effec)ve pricing strategies.
3. Shorten distribu)on channels.
4. But most important: Design campaigns based on their customer's experiences, desires, expecta)ons...
And build long-term rela(onships with customers.

New consumer: difficult to surprise, a>ract, sa(sfy, and retain.

Tendency towards integrated campaigns
Web and social media:
1. Customize the approach to each type of consumer.
2. Compe))ve prices with more direct impact
3. Cancela)on of distribu)on channels
4. Design of campaigns based on consume tastes, expecta)ons, opinions, wishes...

Technology → The internet dras)cally improved consumers' access to the informa)on they need... But it also
enables marketers to gather more precise data about consumers.

Cookies → webpages store code leZ by users about the informa)on they search.
Online data enables data brokers and marketers to exchange informa)on and allows data aggregators to track
who is interested in the informa)on 'cookies' store.

BIG DATA

Big data is data that contains greater variety, arriving in increasing volumes and with more velocity.

Big Data Marke(ng: Micro marke)ng that analyzes the consump)on paKerns, preferences, and informa)on of
customers and offers customized benefit to person who is likely to buy the products.
§ To research their customers brands, use digital technology.
§ Big Data Marke)ng helps organiza)ons to make decisions related to the company.

HYPER-SEGMENTATION

Hyper segmenta(on is the prac)ce of breaking down targeted audiences to a very granular level.

Classifying consumers
Demographic items: Age, Gender, Marital Status, Social class/incomes, Race/ethnicity, Geography, Lifestyle.

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Interac,ve Communica,ons

Tradi(onal Adver(sing
§ Looking at sales post-purchase marke)ng
§ Research studies

Electronic Communica(ons
§ Two-way communica)ons
§ Interac)ve exchange instant reac)on to messages by consumers

Technology and consumer rela,onship

There are two forms of customer engagement:

1. Emo(onal Bonds: They represent a customer's high level of personal commitment and aKachment to
the company.
2. Transac(onal Bonds: Those are the mechanics and structures that facilitate exchanges between
consumers and sellers.
→ Marketers use technology to build emo5onal bonds through social media.

Emo(onal Bonds VS Transac(ons

The objec)ve of discerning customers' emo)onal and transac)onal mo)ves when buying from a company is to
understand the drivers of customer sa)sfac)on, which lead to customer reten)on and long-term rela)onships.

Determinants of customer sa)sfac)on:

Adapta)on, Interac)vity, Nurturing, Commitment, Network, Assortment, Transac)on ease, Engagement,
Loyalty, Iner)a, Trust.

Kind of rela(onship with a product or a service

§ Self-concept a>achment: Establishes user's iden)ty.

§ Nostalgic a>achment: It links the user with a previous experience or memory.

§ Interdependence: The product is part of the daily rou)ne of the user.

§ Love: The product establishes emo)onal links with the user.

Technology and Customer Rela(onship

Social Media: Means of interac)ons among people in which they create, share and exchange informa)on and
ideas in virtual communi)es and networks.
§ Marketers use social media to create, co-create and share content with their fans and followers.

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Toward new tendencies

Towards New Tendencies

• Current environment implies changes. Companies must adapt in a very short )me and with liKle
investment to the rapid changes in consumers, buyers, and channels.
o New COVID situa)on:
§ Less willingness to pay
§ Growing concern for health
§ Wish for liKle indulgences
§ Explosion of online channels
§ Bet on proximity stores
§ Very limited resources from companies

• Growth Hacking: Applica)on of techniques and get new consumers or increase the number of current
purchases with very limited investments.

Growth Hacking and OBPPC (Offer, Brand, Pack, Price, Channel).

OBPPC: To offer the most appropriate brand for each consump)on occasion, with the right pack and price,
ac)va)ng each channel in a specific way.

Objec)ve: to adapt and differen)ate the porbolio, responding to each consump)on occasion with a set of pack-
price combina)ons that cover the different provisions to pay of buyers.

Social responsibility and ethics

The societal marke)ng concept requires marketers to fulfil the needs of the target audience in ways that
improve, preserve, and enhance society's well-being while simultaneously mee)ng their business objec)ves.
Many companies have incorporated social goals into their mission statements and believe that marke)ng ethics
and social responsibility are important components of organiza)onal effec)veness.
Percep)ons of a company's lack of social responsibility or unethical marke)ng strategies nega)vely affect
consumer purchase decisions.