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Transcript of Chapter 1 Introduction: The Impact of the Digital Revolution on Consumer Behavior Consumer Behavior,...
Chapter 1
Introduction: The Impact of the Digital Revolution on Consumer Behavior
Consumer Behavior,Consumer Behavior,Eighth EditionEighth Edition
SCHIFFMAN & KANUK
OpeningVignette
Objectives of One-to-One Marketing
• To attain customers• Sell them more products• Make a profit
Digital Revolution in the Marketplace
• Allows customization of products, services, and promotional messages like never before
• Enhances relationships with customers more effectively and efficiently
Changes in the Business Environment
• Increased consumer power
• Access to information
• More products and services
• Interactive and instant exchanges
• Access to customer patterns and preferences
• Evolution to other -Web connection
– PDAs
– HDTV
– Mobile phones
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. It focuses on how individuals make decisions to spend their resources – time, money and effort – on consuming products and services.
Consumer Behavior
Consumer Behavior
• It includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it, and how they dispose it.
Personal ConsumerThe 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, i.e., end users or ultimate consumers.
Organizational ConsumerWhen profit & not-for-profit businesses, government agencies and institutions buy products & services in order to run their organizations, i.e., they are intermediary consumers.
Development of the Marketing Concept
Production Concept
Selling Concept
Product Concept
Marketing Concept
The Production Concept
• Assumes that consumers are interested primarily in product availability at low prices. Here demand is excessively higher than supplies.
• Marketing objectives:– Cheap, efficient production– Intensive distribution– Market expansion
The Product Concept
• Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features. Demand is still greater than supply.
• Marketing objectives:– Quality improvement– Addition of features
• Tendency toward Marketing Myopia
The Selling Concept
• Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so. Now supply is catching up with demand.
• Marketing objectives:– Sell, sell, sell
• Lack of concern for customer needs and satisfaction
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. Now, supplies are greater than demand.
• Marketing objectives:– Profits through customer satisfaction
Business Leaders Who Understood Consumer
Behavior• Alfred Sloan, General Motors
• Colonel Sanders, KFC
• Ray Kroc, McDonald’s
The Marketing ConceptA consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals.
BOC BD VIEW OF THEIR CUSTOMERSCustomers are the most important person in our business.Customer is not dependent upon us; we are dependent
upon him/her.Customer is not an interruption of work – he/she is the
purpose of it.Customer does us a favor when he/she buys from us – we
are not doing him/her a favor.Customer is part of our business – not an outsider.Customer is not a cold statistic – he is a flesh & blood
human being with feeling and emotions like our own.Customer is not someone to argue with or match wit with.Customer is one who brings us his/her wants – it is our job
to fulfill his/her need.
Implementing the Marketing Concept
• Consumer Research• Marketing Research• Segmentation• Targeting• Positioning:• Marketing Mix: Product, Price, Place,
Promotion, Packaging, People, etc• Value = Perceived Benefits / Resources
Used• Satisfaction• Retention
Consumer Research
• The process and tools used to study consumer behavior.
• Two perspectives:– Positivist approach– Interpretivist approach
Segmentation, Targeting, and Positioning
• Segmentation: process of dividing the market into subsets of consumers with common needs or characteristics
• Targeting: selecting one ore more of the segments to pursue
• Positioning: developing a distinct image for the product in the mind of the consumer
Successful Positioning
• Communicating the benefits of the product, rather than its features
• Communicating a Unique Selling Proposition for the product
The Marketing Mix• Product
• Price
• Place
• Promotion
Successful Relationships
Customer Value
Customer Satisfaction
Customer Retention
Types of Customers
• Loyalists
• Apostles
• Defectors
• Terrorists
• Hostages
• Mercenaries
Customer Profitability-Focused Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
Societal Marketing Concept
A revision of the traditional marketing concept that suggests that 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.
The Societal Marketing Concept
• All companies prosper when society prospers.
• Companies, as well as individuals, would be better off if social responsibility was an integral component of every marketing decision.
• Requires all marketers adhere to principles of social responsibility.
Firm’s Marketing Efforts1. Product2. Promotion3. Price4. Channels of distribution
Sociocultural Environment1. Family2. Informal sources3. Other noncommercial
sources4. Social class5. Subculture and culture
Output
Process
Input
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Postpurchase Evaluation
Purchase1. Trial2. Repeat purchase
Need Recognition
Prepurchase Search
Evaluation of Alternatives
Psychological Field1. Motivation2. Perception3. Learning4. Personality5. Attitudes
Experience
Figure 1-1: A Model of Consumer Decision Making