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
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.
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.
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.
Development of the Marketing Concept
Production Concept
Product Concept
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Selling Concept
Product Concept
Marketing Concept
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
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
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
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
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
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
Segmentation Used by Colgate
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?
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
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
This product is positioned as Menz fairness
with Oil & with Oil & Sweat control.
The Marketing Mix
• Product• Price• Place• Promotion
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• Promotion
Successful Relationships
Customer Customer
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Customer Value
Customer Satisfaction
Customer Retention
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
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
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
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
Customer Profitability-Focused Marketing
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Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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
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.
Consumer Behavior Is Interdisciplinary
• Psychology • Sociology • Social psychology• Anthropology
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• Anthropology• Economics
A Simplified Model of Consumer Decision Making – Figure 1 -1
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