Ch 1- Introduction
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Transcript of Ch 1- Introduction
Consumer Behavior,Ninth Edition
Schiffman & Kanuk
Copyright 2007 by Prentice Hall
Chapter 1 Consumer Behavior:
Its Origins and Strategic Applications
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Chapter Outline
• Overview of Consumer Behavior
• The Marketing Concept
• The Marketing Mix and Relationships
• Digital Technologies
• Societal Marketing Concept
• A Simplified Model of Consumer Decision Making
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Consumer Behavior
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.
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Customers Search for Products
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Personal Consumer
The individual who buys goods and services for his or her own use, for household use, for the use of a family member, or for a friend.
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Organizational Consumer
A business, government agency, or other institution (profit or nonprofit) that buys the goods, services, and/or equipment necessary for the organization to function.
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Government Buying
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Development of the Marketing Concept
Production Concept
Selling Concept
Product Concept
Marketing Concept
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The Production Concept
• Assumes that consumers are interested primarily in product availability at low prices
• Marketing objectives:– Cheap, efficient production– Intensive distribution– Market expansion
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The Product Concept
• Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features
• Marketing objectives:– Quality improvement– Addition of features
• Tendency toward Marketing Myopia
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The Selling Concept
• Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so
• Marketing objectives:– Sell, sell, sell
• Lack of concern for customer needs and satisfaction
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The Marketing Concept
• Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition
• Marketing objectives:– Make what you can sell– Focus on buyer’s needs
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Discussion Question
• What two companies do you believe grasp and use the marketing concept?
• Why do you believe this?
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The Marketing Concept
• Consumer Research
• Segmentation• Targeting• Positioning
• The process and tools used to study consumer behavior
• Two perspectives:– Positivist approach– Interpretivist
approach
Implementing the Marketing Concept
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weblink
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The Marketing Concept
• Consumer Research
• Segmentation• Targeting• Positioning
• Process of dividing the market into subsets of consumers with common needs or characteristics
Implementing the Marketing Concept
Segmentation Used by Sports Illustrated
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Discussion Question
• What products that you regularly purchase are highly segmented?
• What are the different segments?
• Why is segmentation useful to the marketer for these products?
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The Marketing Concept
• Consumer Research
• Segmentation• Targeting• Positioning
The selection of one or more of the segments to pursue
Implementing the Marketing Concept
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The Marketing Concept
• Consumer Research
• Segmentation• Targeting• Positioning
• Developing a distinct image for the product in the mind of the consumer
• Successful positioning includes:– Communicating the
benefits of the product– Communicating a unique
selling proposition
Implementing the Marketing Concept
This product is positioned as a solution to
facial redness.
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The Marketing Mix
• Product
• Price
• Place
• Promotion
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Successful Relationships
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Successful Relationships
• Customer Value
• Customer Satisfaction
• Customer Retention
• Defined as the ratio between the customer’s perceived benefits and the resources used to obtain those benefits
• Perceived value is relative and subjective
• Developing a value proposition is critical
Value, Satisfaction, and Retention
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Discussion Question
• How does McDonald’s create value for the consumer?
• How do they communicate this value?
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Successful Relationships
• Customer Value
• Customer Satisfaction
• Customer Retention
• The individual's perception of the performance of the product or service in relation to his or her expectations.
• Customers identified based on loyalty include loyalists, apostles, defectors, terrorists, hostages, and mercenaries
Value, Satisfaction, and Retention
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Successful Relationships
• Customer Value
• Customer Satisfaction
• Customer Retention
• The objective of providing value is to retain highly satisfied customers.
• Loyal customers are key– They buy more products– They are less price sensitive– They pay less attention to
competitors’ advertising– Servicing them is cheaper– They spread positive word of
mouth
Value, Satisfaction, and Retention
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Customer Profitability-Focused Marketing
• Tracks costs and revenues of individual consumers
• Categorizes them into tiers based on consumption behavior
• A customer pyramid groups customers into four tiers
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Customer Profitability-Focused Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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Traditional Marketing Concept Vs. Value and Retention Focused Marketing
Table 1-2Traditional Marketing
ConceptValue and Retention Focused Marketing
Make only what you can sell instead
of trying to sell what you make
Use technology that enables
customers to customize what
you make
Do not focus on the product; focus on
the need that it satisfies
Focus on the product’s
perceived value, as well as the
need that it satisfies
Market products and services that
match customers’ needs better than
competitors’ offerings
Utilize an understanding of
customer needs to develop
offerings that customers perceive as more valuable than
competitors’ offerings
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Impact of Digital Technologies
• Consumers have more power and access to information
• Marketers can gather more information about consumers
• The exchange between marketer and customers is interactive and instantaneous and goes beyond the PC.
• Marketers must offer more products and services
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Societal Marketing Concept
Marketers adhere to principles of social responsibility in the marketing of their goods and services; that is, they must
endeavor to satisfy the needs and wants of their target markets in ways that preserve and enhance the well-being of consumers and society as a
whole.
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Consumer Behavior Is Interdisciplinary
• Psychology
• Sociology
• Social psychology
• Anthropology
• Economics
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A Simplified Model of Consumer Decision Making – Figure 1-1