Schiffman Cb09 Ppt 01

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Consumer Behavior,Ninth Edition

Schiffman & Kanuk

Copyright 2007 by Prentice Hall

Chapter 1

Consumer Behavior:Its Origins and

Strategic Applications
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1 - 2Co ri ht 2007 b Prentice Hall

Chapter Outline

Overview of Consumer Behavior

The Marketing Concept

The Marketing Mix and Relationships Digital Technologies

Societal Marketing Concept

A Simplified Model of ConsumerDecision 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

weblink
http://www.froogle.com/http://www.froogle.com/


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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 tofunction.


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Government Buying

weblink
http://www.ogcbuyingsolutions.gov.uk/http://www.ogcbuyingsolutions.gov.uk/


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Development of the Marketing

ConceptProduction

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


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


Sell, sell, sell

Lack of concern for customer needs

and satisfaction


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Assumes that to be successful, a

company must determine the needs

and wants of specific target markets

and deliver the desired satisfactionsbetter than the competition


Make what you can sell

Focus on buyers 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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Consumer

Research

Segmentation

Targeting

Positioning

The process and

tools used to study

consumer behavior

Two perspectives:

Positivist approach Interpretivist

approach

Implement ing the

Market ing Concept



weblink
http://www.acrwebsite.org/http://www.acrwebsite.org/




Consumer

Research

Segmentation

Targeting

Positioning

Process of dividing

the market into

subsets of

consumers with

common needs orcharacteristics

Implement ing the

Market ing Concept


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Segmentation Used

by Sports Illustrated



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?




Consumer

Research

Segmentation

Targeting

Positioning

The selection of one

or more of the

segments to pursue

Implement ing the

Market ing Concept




Consumer

Research

Segmentation

Targeting

Positioning

Developing a distinct image

for the product in the mindof the consumer

Successful positioning

includes:

Communicating thebenefits of the product

Communicating a unique

selling proposition

Implement ing the

Market ing Concept


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This product is

positioned asa solution to

facial redness.



The Marketing Mix

Product

Price

Place Promotion



Successful Relationships

CustomerValue

CustomerSatisfaction

CustomerRetention




Customer

Value

Customer

Satisfaction

CustomerRetention

Defined as the ratio between

the customers perceivedbenefits and the resources

used to obtain those

benefits

Perceived value is relativeand subjective

Developing a value

proposition is critical

Value, Satisfactio n ,

and Retent ion



Discussion Question

How does McDonalds create value for

the consumer?

How do they communicate this value?




Customer

Value

Customer

Satisfaction

CustomerRetention

The individual's perception of

the performance of the productor service in relation to his or

her expectations.

Customers identified based on

loyalty include loyalists,apostles, defectors, terrorists,

hostages, and mercenaries


and Retent ion




Customer

Value

CustomerSatisfaction

CustomerRetention

The objective of providing value

is to retain highly satisfiedcustomers.

Loyal customers are key

They buy more products

They are less price sensitive

They pay less attention tocompetitors advertising

Servicing them is cheaper

They spread positive word of

mouth


and Retent ion



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



Customer Profitability-Focused

Marketing

Tier 1: Platinum

Tier 2: Gold

Tier 3: Iron

Tier 4: Lead

T diti l M k ti C t V V l



Traditional Marketing Concept Vs. Value

and Retention Focused Marketing

Table 1-2

Traditional Marketing

Concept

Value 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 products

perceived value, as well as the

need that it satisfies

Market products and services thatmatch customers needs better than

competitors offerings

Utilize an understanding ofcustomer needs to develop

offerings that customers

perceive as more valuable than

competitors offerings



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 andwants of their target markets in ways

that preserve and enhance the well-

being of consumers and society as awhole.


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Consumer Behavior Is

Interdisciplinary

Psychology

Sociology

Social psychology Anthropology

Economics


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A Simplified Model of Consumer

Decision MakingFigure 1-1

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Schiffman Cb09 Ppt 01