Consumer Behavior, Ninth Edition Schiffman & Kanuk MKT 344 Chapter 1 Consumer Behavior: Meeting...

Consumer Behavior,Ninth Edition

Schiffman & Kanuk

MKT 344 Chapter 1 Consumer Behavior: Meeting Changes and Challenges

Chapter Outline

Overview of Consumer BehaviorThe Marketing ConceptThe Marketing Mix and RelationshipsDigital TechnologiesSocietal Marketing ConceptA Simplified Model of Consumer

Decision Making

Copyright 2007 by Prentice Hall

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.


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.


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.

SchoolsUniversitiesPrisons


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

Marketing objectives of the companies: Cheap, efficient production Intensive distribution Market expansion (don’t focus on

product innovation or product expansion)


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: A short-sighted and inward looking approach to

marketing that focuses on the needs of the company instead of defining the company and its products in terms of the customers' needs and wants.


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


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



Consumer Research The process and tools used to study

consumer behavior Segmentation Targeting Positioning


Implementing the Marketing Concept


Consumer Research Segmentation

Process of dividing the market into subsets of consumers with common needs or characteristics

Targeting Positioning




Consumer Research Segmentation Targeting

The selection of one or more of the segments to pursue

Positioning



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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

The Marketing Mix

ProductPricePlacePromotion


Successful Relationships


Customer Value

Customer Satisfaction

Customer Retention


Customer Value 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 proposition: an innovation, service, or feature intended to make a company or product attractive to customers.▪ Lexus: value proposition: delivering quality, zero defects in

manufacturing, superior personal post purchase service

Value, Satisfaction, Trust and Retention


Customer Satisfaction The individual's perception of the performance

of the product or service in relation to his or her expectations.

Types of customers based on loyalty:▪ Loyalists: keep purchasing and very loyal▪ Apostles: provide positive word of mouth▪ Defectors: neutral of merely satisfied▪ Terrorists: spread negative word of mouth▪ Hostages: unhappy customers but sticking to the company

for some reason like monopoly or low price etc▪ Mercenaries: satisfied by not loyal. Can switch any time



Trust: Customer trust depends on:

▪ Other customers’ positive word of mouth▪ Newspaper▪ Customer opinion posted online ▪ Brand website▪ Ads before movies▪ Search engine ad▪ Online banner ad▪ text ads on mobile phone

Delight: when trust is low, company try to set things right to the customers and give the customer a vibe that s/he is very much valued




Customer Retention Strategy of customer retention is designed to make it

in the best interest of customers to stay with a company rather than switch to another company

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▪ They spread positive word of mouth



Retention: Selective relationship:

▪ Ranking customers in terms of profitability. i.e. focusing on customers who purchase frequently and a regular customer will get intensive customer service; moderate purchaser will have limited customer service and irregular customers will be ignored

▪ Customer profitability focused marketing: Tracks costs and revenues of individual consumers Copyright 2007 by Prentice Hall



Platinum: Heavy users

Gold: heavy user but not profitable, price sensitive,

ask for discounts

Iron: light user and not profitable

Lead: wants more attention than the spending, spread

negative WOM

Retention: Customer

profitability focused marketing: Tracks costs and revenues of individual consumers

Customer pyramid



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


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.


A Simplified Model of Consumer Decision Making – Figure 1-1


Consumer Behavior, Ninth Edition Schiffman & Kanuk MKT 344 Chapter 1 Consumer Behavior: Meeting...

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