consumer behavior, ninth edition schiffman & kanuk copyright 2007 by prentice hall chapter 1...

Consumer Behavior,Ninth Edition

Schiffman & Kanuk

Copyright 2007 by Prentice Hall

Chapter 1 Consumer Behavior:

Its Origins and Strategic Applications

1 - 2Copyright 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.


Customers Search for Products

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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.


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

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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

• Marketing objectives:– 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

• 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

• Segmentation• Targeting• Positioning

• The process and tools used to study consumer behavior

• Two perspectives:– Positivist approach– Interpretivist

approach

Implementing the Marketing Concept


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


Segmentation Used by Sports Illustrated





The selection of one or more of the segments to pursue






• 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

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SUCCESSFUL RELATIONSHIPSToday’s marketer views any exchange with a customer as apart of a customer relationship, not as a transaction.

The three drivers of successful relationship between customer and the marketer are customer value, high level of customer satisfaction and building a structure that ensure customer retention.


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 can be economic, functional and psychological.

• Resources can be monetary, time, effort, psychological

Value, Satisfaction, and Retention


Discussion Question

• How does McDonald’s create value for the consumer?

• -Quality, service, cleanliness



• Customer Value



• 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


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• Loyalist: who keep purchasing• Apostles: whose experience exceed the expectation & provide

positive WOM• Defectors: who feel neutral or merely satisfied and just like to

stop doing business• Terrorist: who had negative experience & spread negative

WOM• Hostages: who stay with product just because of monopoly• Mercenaries: who are satisfied but easily shift to another

product for short term benefit – “Co should strive to create apostles, raise the satisfaction

of defectors and turn them into loyalist, avoid having terrorist/ hostages and reduce the no of mercenaries.”




• Customer Value



• 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



Traditional Marketing Concept Vs. Value and Retention Focused Marketing

Table 1-2Traditional Marketing

ConceptValue 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 product’s

perceived value, as well as the

need that it satisfies

Market products and services that

match customers’ needs better than

competitors’ offerings

Utilize an understanding of

customer 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


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 copyright 2007 by prentice hall chapter 1...

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