Schiffam01

Chapter 1 Consumer Behavior: Its Origins and Strategic Applications

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

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.

Customers Search for Products weblink

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.

Government Buying weblink

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:
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
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
Sell, sell, sell
Lack of concern for customer needs and satisfaction

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
Make what you can sell
Focus on buyer’s needs

Discussion Question
What two companies do you believe grasp and use the marketing concept?
Why do you believe this?

Consumer Research
Segmentation
Targeting
Positioning
The process and tools used to study consumer behavior
Two perspectives:
Positivist approach
Interpretivist approach
Implementing the Marketing Concept

weblink

Consumer Research
Segmentation
Targeting
Positioning
Process of dividing the market into subsets of consumers with common needs or characteristics

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

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

This product is positioned as a solution to facial redness.

The Marketing Mix
Product
Price
Place
Promotion

Successful Relationships Customer Value Customer Satisfaction Customer Retention

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

Discussion Question
How does McDonald’s create value for the consumer?
How do they communicate this value?

Customer Value
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

Customer Value
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

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

Traditional Marketing Concept Vs. Value and Retention Focused Marketing Table 1-2 Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors’ offerings Market products and services that match customers’ needs better than competitors’ offerings Focus on the product’s perceived value, as well as the need that it satisfies Do not focus on the product; focus on the need that it satisfies Use technology that enables customers to customize what you make Make only what you can sell instead of trying to sell what you make Value and Retention Focused Marketing Traditional Marketing Concept

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.

Consumer Behavior Is Interdisciplinary
Psychology
Sociology
Social psychology
Anthropology
Economics

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

Schiffam01

by jollyguy1987 on Dec 27, 2009

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Schiffam01 — Presentation Transcript