Role of Consumer Behavior

The Role of Consumer Behavior in the

Marketing Process

2

Under Armour Protects Its House

Under Armour Protects Its House

• Keys to Under Armour’s success– Niche markets– Strong product positioning– Unique brand identity– Strong brand reputation

Marketing and Promotions Process Model

Productdecisions

Pricingdecisions

Channel-of-distributiondecisions

Opportunityanalysis

Competitiveanalysis

Targetmarketing

Identifyingmarkets

Marketsegmentation

Selecting atarget market

Positioningthrough

marketingstrategies

Promotionaldecisions• Advertising• Direct

marketing• Interactive

marketing• Sales

promotion• Publicity

and public relations

• Personal selling

Ultimateconsumer• Consumers• Businesses

Promotionto finalbuyer

Resellers

Promotion to trade

Internet/Interactive

Purchase

Marketing to a Lifestyle

The Target Marketing Process

Position through marketing strategies

Select market to target

Determine market segmentation

Identify markets with unfulfilled needs

A Product for Every Market Segment

The Marketing Segmentation Process

Take marketing actions to reach target segments

Select the product segments toward which the firm will direct its marketing actions

Develop a market/product grid to relate the market segments to the firm’s products and actions

Find ways to group marketing actions available to the organization

Find ways to group consumers according to their needs

What do NASCAR, Coors, and Unilever know?

Bases for Segmentation

Behavior

Benefits

Outlet Type

Psychographic

Geographic

Demographic

CustomerCharacteristics

Socioeconomic

BuyingSituationUsage

Awareness

Geographic Marketing

Demographic Segmentation

Psychographic Segmentation

• Dividing the market on the basis of– Personality– Values– Lifestyle

• VALS lifestyle segmentation– Eight lifestyles with distinctive attitudes,

behaviors, and decision-making patterns– Combined with estimate of the resources

on which the consumer can draw

Behavioristic Segmentation

Usage

LoyaltiesBuyingResponses

Benefit Segmentation

PRIZM Cluster ProfilesHIGH

LOW

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Test Your KnowledgeThe key factor in communicating information about a brand and differentiating it from competitors is:

A) Its perceived price differential B) Its integrated promotional strategy C) The market positioning strategy assigned

it by the manufacturer D) Its distribution intensity E) The benefits the brand offers

Selecting a Target Market

Determine how many segments to enter

Undifferentiated, Differentiated Concentrated

Determine which segments have the greatest potential

Market Positioning

Fitting the product or service to one or more segments of the broad market in such a way

as to set it apart from the competition

Developing a Positioning Strategy

What position do we have now?

Do we have the money to do the

job?

What position do we want to own?

From whom must we win this position?

Do we have the tenacity to stay

with it?

Does our creative strategymatch it?

ThePosition

Positioning Strategies

Attributes and Benefits?

Price or Quality?

Use or Application?

Product Class?

Product User?

Competitor?

Cultural Symbols?

How shouldwe position?

Positioning by Use or Application

Developing a Positioning Platform

6. Monitor the position

5. Make the positioning decision

4. Analyze consumer preferences

3. Determine their positions

2. Assess perceptions of them

1. Identify the competitors

Making the Positioning Decision

Is the current position strategy

working?Is the segmentation

strategy appropriate?

Are there sufficient resources to

communicate the position?

How strong is the competition?

TheChecklist

Advertising Develops Brand Image

Branding and Product Names

• Brand names often communicate attributes and meaning– Safeguard– I Can’t Believe It’s Not Butter!– Easy-Off– Arrid– Spic and Span

Branding and Packaging Are Linked

Product Decisions

BRANDING

Brand name

commun-icates

attributes and

meaning

Advertising creates and maintains

brand equity

Has become increasingly important

Often customers’

first exposure to

product

PACKAGING

A Package is More than a Container

Pricing Decisions

What consumers give up to purchase a

product or service

TimePrice Variable

Mental activity

Behavioral effort

Factors the firm must consider

Costs

Demand

Competition

Perceived value

Relating Price to Ads and Promotion

Price must be consistent with perceptions of the product

Higher prices communicate higher product quality

Lower prices reflect bargain or “value” perceptions

Price, advertising and distribution be unified in

identifying product position

PricingConsiderations

A product positioned as high quality while carrying a lower price than

competitors will confuse customers

When Price is Not an Issue

Distribution Channel Decisions

Selecting

Managing

Motivating

DistributionChannel

Decisions

Distribution Intermediaries

Distribution Channel

Intermediaries

Brokers

Distributors

Wholesalers

Retailers

Promotional Strategy: Push or Pull?

Push Policy

Producer

Wholesaler

Retailer

Consumer

Information Flow

Pull Policy

Producer

Wholesaler

Retailer

Consumer

Test Your KnowledgeAn ad in a publication aimed at veterinarians explains why they should recommend Eukanuba cat food to the owners of the cats they treat. This is an example of:

A) Consumer advertising B) A promotional pull strategy C) A harvesting strategy D) A consumer promotion E) A promotional push strategy