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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