Chapter 1

Introduction: Diversity in the Marketplace

Consumer Consumer ResearchResearch

Methodology used to study consumer behavior.

Market Market SegmentationSegmentation

The process of dividing a potential market into distinct

subsets of consumers and selecting one or more

segments as a target market to be reached with a distinct

marketing mix.

Personal Personal ConsumerConsumer

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. (Also referred to as the

Ultimate Consumer or End User.)

Organizational Organizational ConsumerConsumer

A business, government agency, or other institution

(profit or nonprofit) that buys the goods, services,

and/or equipment necessary for the organization to

function.

Consumer Behavior as an Academic Discipline and an Applied Science

• Factors that contributed to the growing interest in consumer behavior:– accelerated rate of new product development– consumer movement– public policy concerns– environmental concerns– the opening of national markets throughout

the world

Consumer Consumer BehaviorBehavior

The behavior that consumers display in searching for,

purchasing, using, evaluating, and disposing of products, services, and ideas.

The Marketing Concept

• 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 Marketing ConceptConcept

A 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.

The Scope of Consumer Behavior

• How do individuals make decisions to spend their resources (time, money, effort).– Includes: what they buy, why they buy it, when they

buy it, where they buy it, how often they buy it, and how often they use it.

• How do individuals dispose of their once-new purchases.– Includes: do they store it, throw it or give it away, sell

it, rent it, or lend it out?

Consumer Behavior’sInterdisciplinary Roots

• Consumer Behavior borrows from psychology, sociology, social psychology, anthropology.

• All factors combine to form a comprehensive model that reflects both the cognitive and emotional aspects of consumer decision making.

A Simplified Model of Consumer Decision Making

• The decision-making process can be viewed as three interlocking stages:– The input stage:

• marketing efforts• sociological influences

– The process stage:• psychological factors

– The output stage:• purchase behavior• postpurchase evaluation

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 1-1A Simple Model of Consumer Decision Making

Ethics in Marketing

• Unethical practices occur at every level of the marketing mix:– in the design of the products, in packaging, in

pricing, in advertising, and in distribution

• There are two different types of theories:– teleological theories and deontological theories

TeleologyTeleology

An ethical philosophy which considers the moral worth of a behavior as determined by

its consequences.

UtilitarianismUtilitarianism

A teleological theory summarized best by the idea of “the greatest good for the

greatest number.”

DeontologyDeontology

An ethical philosophy that places greater weight on

personal and social values than on economic values.

Ethics and Social Responsibility

• Corporate Codes of Ethics

• Trade Associations Codes of Ethics

• Mission-Based Social Goals

The Societal Marketing Concept

• All companies prosper when society prospers.

• Companies as well as individuals, would be better off it social responsibility was an integral component of every marketing decision.

• Requires all marketers adhere to principles of social responsibility in marketing of their goods and services.

Societal Societal Marketing Marketing

ConceptConcept

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.