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

Copyright 2007 by Prentice Hall

1-1

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.

Copyright 2007 by Prentice Hall

1-2

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.

Copyright 2007 by Prentice Hall

1-3

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.

Copyright 2007 by Prentice Hall

1-4

Development of the Marketing

Concept
Production
Concept
Product Concept
Selling Concept
Marketing
Concept
Copyright 2007 by Prentice Hall

1-5

The Production Concept

Assumes that consumers are
interested primarily in product
availability at low prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion

Copyright 2007 by Prentice Hall

1-6

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

Copyright 2007 by Prentice Hall

1-7

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

Copyright 2007 by Prentice Hall

1-8

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 buyers needs

Copyright 2007 by Prentice Hall

1-9

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

Copyright 2007 by Prentice Hall

1 - 10

The Marketing Concept

Implementing the
Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning

Copyright 2007 by Prentice Hall

The process and

tools used to study
consumer behavior
Two perspectives:
Positivist approach
Interpretivist
approach

1 - 11

The Marketing Concept

Implementing the
Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning

Copyright 2007 by Prentice Hall

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

1 - 12

Segmentation Used
by Colgate

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?

Copyright 2007 by Prentice Hall

1 - 14

The Marketing Concept

Implementing the
Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning

Copyright 2007 by Prentice Hall

The selection of one

or more of the
segments to pursue

1 - 15

The Marketing Concept

Implementing the
Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning

Copyright 2007 by Prentice Hall

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
1 - 16

This product is
positioned as
Menz fairness
with Oil &
Sweat control.

The Marketing Mix

Product
Price
Place
Promotion

Copyright 2007 by Prentice Hall

1 - 18

Successful Relationships

Customer
Value

Customer
Retention

Customer
Satisfaction

Copyright 2007 by Prentice Hall

1 - 19

Successful Relationships
Value, Satisfaction,
and Retention
Customer
Value
Customer
Satisfaction
Customer
Retention

Copyright 2007 by Prentice Hall

Defined as the ratio between

the customers perceived
benefits and the resources
used to obtain those
benefits
Perceived value is relative
and subjective
Developing a value
proposition is critical
1 - 20

Discussion Question
How does McDonalds create value for
the consumer?
How do they communicate this value?

Copyright 2007 by Prentice Hall

1 - 21

Successful Relationships
Value, Satisfaction,
and Retention
Customer
Value
Customer
Satisfaction
Customer
Retention

Copyright 2007 by Prentice Hall

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

1 - 22

Successful Relationships
Value, Satisfaction,
and Retention
Customer
Value
Customer
Satisfaction
Customer
Retention

Copyright 2007 by Prentice Hall

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
1 - 23

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

Copyright 2007 by Prentice Hall

1 - 24

Customer Profitability-Focused
Marketing

Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
Copyright 2007 by Prentice Hall

1 - 25

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

Copyright 2007 by Prentice Hall

1 - 26

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 wellbeing of consumers and society as a
whole.

Copyright 2007 by Prentice Hall

1 - 27

Consumer Behavior Is
Interdisciplinary

Psychology
Sociology
Social psychology
Anthropology
Economics

Copyright 2007 by Prentice Hall

1 - 28

A Simplified Model of Consumer

Decision Making Figure 1-1

Copyright 2007 by Prentice Hall

1 - 29