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Chapter Outline
• Overview of Consumer Behavior• The Marketing Concept• The Marketing Mix and Relationships• Digital Technologies
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• Digital Technologies• Societal Marketing Concept• A Simplified Model of Consumer
Decision Making
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Consumer Behavior
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy
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and services that they expect will satisfy their needs.
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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.
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member, or for a friend.
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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
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necessary for the organization to function.
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Development of the Marketing Concept
Production Concept
Product Concept
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Selling Concept
Product Concept
Marketing Concept
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The Production Concept
• Assumes that consumers are interested primarily in product availability at low prices
• Marketing objectives:
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• Marketing objectives:– Cheap, efficient production– Intensive distribution– Market expansion
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The Product Concept
• Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features
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most features• Marketing objectives:
– Quality improvement– Addition of features
• Tendency toward Marketing Myopia
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The Selling Concept
• Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so
• Marketing objectives:
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• Marketing objectives:– Sell, sell, sell
• Lack of concern for customer needs and satisfaction
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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
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and deliver the desired satisfactions better than the competition
• Marketing objectives:– Make what you can sell– Focus on buyer’s needs
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Discussion Question
• What two companies do you believe grasp and use the marketing concept?
• Why do you believe this?
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The Marketing Concept
• Consumer Research
• The process and tools used to study
Implementing the Marketing Concept
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Research• Segmentation• Targeting• Positioning
tools used to study consumer behavior
• Two perspectives:– Positivist approach– Interpretivist
approach
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The Marketing Concept
• Consumer Research
• Process of dividing the market into
Implementing the Marketing Concept
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Research• Segmentation• Targeting• Positioning
the market into subsets of consumers with common needs or characteristics
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Segmentation Used by Colgate
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Discussion Question
• What products that you regularly purchase are highly segmented?
• What are the different segments?• Why is segmentation useful to the
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• Why is segmentation useful to the marketer for these products?
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The Marketing Concept
• Consumer Research
The selection of one or more of the
Implementing the Marketing Concept
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Research• Segmentation• Targeting• Positioning
or more of the segments to pursue
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The Marketing Concept
• Consumer Research
• Developing a distinct image for the product in the mind
Implementing the Marketing Concept
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Research• Segmentation• Targeting• Positioning
for the product in the mind of the consumer
• Successful positioning includes:– Communicating the
benefits of the product– Communicating a unique
selling proposition
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This product is positioned as Menz fairness
with Oil & with Oil & Sweat control.
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The Marketing Mix
• Product• Price• Place• Promotion
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• Promotion
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Successful Relationships
Customer Customer
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Customer Value
Customer Satisfaction
Customer Retention
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Successful Relationships
• Customer Value
• Defined as the ratio between the customer’s perceived benefits and the resources
Value, Satisfaction, and Retention
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Value• Customer
Satisfaction• Customer
Retention
benefits and the resources used to obtain those benefits
• Perceived value is relative and subjective
• Developing a value proposition is critical
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Discussion Question
• How does McDonald’s create value for the consumer?
• How do they communicate this value?
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Successful Relationships
• Customer Value
• The individual's perception of the performance of the product
Value, Satisfaction, and Retention
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Value• Customer
Satisfaction• Customer
Retention
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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Successful Relationships
• Customer Value
• The objective of providing value is to retain highly satisfied customers.
Value, Satisfaction, and Retention
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Value• Customer
Satisfaction• Customer
Retention
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
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Customer Profitability -Focused Marketing
• Tracks costs and revenues of individual consumers
• Categorizes them into tiers based on consumption behavior
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consumption behavior• A customer pyramid groups customers
into four tiers
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Customer Profitability-Focused Marketing
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Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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Impact of Digital Technologies
• Consumers have more power and access to information
• Marketers can gather more information about consumers
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consumers• The exchange between marketer and
customers is interactive and instantaneous and goes beyond the PC.
• Marketers must offer more products and services
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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
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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.
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Consumer Behavior Is Interdisciplinary
• Psychology • Sociology • Social psychology• Anthropology
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• Anthropology• Economics
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A Simplified Model of Consumer Decision Making – Figure 1 -1
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