CB Chapter 2

7/30/2019 CB Chapter 2

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Consumer Behavior & theMarketing Manager

Consumer Behavior


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Concepts to Learn PERMS

Product positioning

Productdifferentiation

Elements of theconsumer

environment Behavioral

economics

CB and marketingresearch

CB and the marketingmix

The basis ofsegmentation

Behavioral segmentation


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Application Areas ofConsumer Behavior: PERMS

Environmental Analysis

Market Research

Segmentation of the Marketplace

Product Positioning and ProductDifferentiation

Marketing-Mix Development


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Product Positioning . . .

. . . is influencing how consumersperceive a brands characteristics

relative to those of competitiveofferings

Goal is to influence demand by creating aproduct with specific characteristics (i.e.brand attributes) and a clear image thatdifferentiate it from competitors


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Specific Positioning

positioning a brand based creating linkages between brandand key attributes and benefits. E.g., acceleration of auto,

reliability of auto Competitive Positioning

positioning a brand in relation to competitors.

Psychological Positioning

positioning a brand based upon dominant personalitycharacteristic of target market.

E.g., We build excitement.


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Product Differentiation . . .

. . . is the process of manipulating themarketing mix so as to position aproduct in a manner that allowsconsumers to perceive meaningfuldifferences between a brand and itscompetitors


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Environmental Analysis . . .

. . . is theassessment of theexternal forces thatact upon the firmand its customers,and that createthreats andopportunities


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Components of the External

Environment

Demographic

Economic

Natural

Technological

Political

Cultural


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The Economic Environment

Set of factors involving monetary, natural, and human resources thatinfluence firms/consumers.

Behavioral economics: study of economic decisions made byindividual consumers and the behavioral determinants of those

decisions. 3 Major Contributions of Behavioral Economists:

Originated and documented the idea that the consumer sector ofthe economy can strongly influence the course of the aggregateeconomy

Investigated what factors influence the decision of families to buyor save

Developed a methodology for making predictions of economicactivities based upon consumer surveys


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The Technological

EnvironmentGoal is to anticipatewhat changes in thetechnologicalenvironment willoccur and how thesewill influence thelifestyle andconsumptionpatterns ofconsumers


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MARKET RESEARCH . . .

. . . is applied consumer researchdesigned to provide management withinformation on factors that impactconsumers acquisition, consumption,

and disposition of goods, services, andideas


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Product

Promotion

Pricing

Distribution

Marketing-Mix Development .. . . involves the development andcoordination of activities involving the:


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Advertising

Personal Selling

Sales PromotionApplications

Public Relations

Promotional Strategy


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Price Changes

Predicting the likely impact of pricechanges on consumers is an important

consumer behavior area. How will consumers react when companies

raise or lower the price of a product?

Principles of perception can be applied to

analyze if consumers will notice adifference in price and if so, what effect ithas


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Product Distribution . . .

. . . will be impacted byunderstanding howconsumers make their

purchasing decisions.**Example: lowinvolvement decision(e.g., purchase soft

drink), must useextensive distribution.


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Market Segmentation . . .

. . . involves subdividingthe market place intodistinct subsets of

customers havingsimilar needs andwants, each of whichcan be reached with a

different marketing mix


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Four Classifications ofSegmentation Variables:

Characteristics of the Person

Nature of the Situation in Which theProduct or Service May Be Purchased

Geography

Culture and Subculture Adopted bythe Consumer


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Demographics is . . .

. . . the study of population changes and subcultural values of various demographic groups

based on such factors as age, sex, income,education, ethnicity, and geography.

Examples of demographic variables:

age, sex, income, ethnicity, nationality,

household size, marital status, religion,education, occupation,


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Consumer Situations . . .

. . . consist of the temporaryenvironmental factors that form thecontext within which a consumer activityoccurs at a particular time and place.


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Geographic Segmentation

Can include region,size of cities and

counties, censusblocks, populationdensity, and climate

Geodemographics is

the combination ofgeography anddemographics


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Culture and Subculture

Culture is the way of life of the people

of a society

Subculture is a subdivision of a national

culture and is based on some unifyingcharacteristic, such as social status ornationality

CB Chapter 2

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