consumer behavior & marketing management
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Chapter 1
Consumer Behavior &
Marketing Management
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Chapter Spotlights Consumer benefitsTotal product concept Market segmentation and
segmentation strategies Positioning
Consumer decision-making Engel, Kollat, and Blackwell (EKB)
Model
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Course Objectives Better understand why people do what they do in the
marketplace when they do it Better understand yourself as a shopper, buyer, and
consumer Improve yourself as a shopper, buyer, and consumer Improve your current/future job performance
Better understand marketer communications andbehaviors in the marketplace
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Consumer Benefits People do not buy products or services,
they buy benefits
Hence we make purchases not for theproducts themselves, but for the benefitsof the problems they solve or theopportunities they offer e.g., always late so a watch helps solve
problem; has stopwatch feature so now cankeep track of work out times
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Consumer Benefits Consumers seek
bundles of types ofbenefits: Tangible benefits: e.g.,
a watch keeps goodtime; has leather band
Intangible benefits:e.g., the reliability
reputation of the watchmanufacturer; theimage of the watchwearer
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The Total Product Concept Total product: refers to the sum of benefits
offered by a product, service, outlet, etc. Basic core: bundle of utilitarian benefits (e.g., design,
features, etc.) Accessory ring: added-value benefits with no apparent
extra cost (e.g., store reputation, manufacturerprestige, convenient location, etc.)
Psychological ring: benefits resulting from theconsumers feelings associated with owning/using theproduct (e.g., belonging, youthful, powerful, sexy, etc.)
Time: products/service give or take time; this canbe good or bad (e.g., fast food versus conventionalrestaurant)
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Market Segmentation Market segmentation is the study
of the marketplace in order to
discover already existing viablegroups of consumers who aresimilar or homogeneous in their
approaches to choosing and/orconsuming goods and services.
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Segment Bounding Segment bounding is a means by which marketers
differentiate among consumers and among marketsegments
Determine the descriptors of the consumers/units inthe segment (e.g., demographics, psychographics,benefits sought, product usage rate, type of retail outlet,etc.)
Determine specific geographic location of segment Bound segments in time to ensure that all data is
relevant and up to date for the time of use.
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Segment Viability Four factors are
used to assess
segment viability.Viable segmentsare: Of sufficient size
Measurable Differentiated
Reachable
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Segmentation Strategies Mass marketing (undifferentiatedmarketing):
offering the same product to the entire consumerpopulation
Concentrated marketing (focusedor nichemarketing): selecting one market segment, eventhough the product may also appeal to others
Differentiated marketing: selecting two or more
different segments
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Segmentation in the
Global Marketplace There are two approaches to market
segmentation
Localization: treating each country as aseparate market and seeking consumersegments accordingly
Intermarket segmentation (also calledstandardization): selecting groups of
consumers who exhibit similar consumptionbehavior across different countries Marketers emphasize similarities rather than
differences across country markets
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Consumer Benefits and
Product Positioning Product positioning is the placement of a product,
service, outlet, etc. in the mind of the consumer There are five ways used to position products,
services, outlets, etc. On perceived benefits On image On attributes Against competitors Combination of two or more of the above
Repositioning: shifting position in the consumersmind through changes in important product, price,distribution, and promotional and/or personal sellingbenefits.
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The Consumer Decision-
Making Process A consumer decision model
is a means of describing theprocesses that consumersgo through before, during,and after making a purchase(choice).
A model shows the causes orantecedents of a particularbehavior and each of its
results or consequences.
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Engel, Kollat, and
Blackwell (EKB) ModelThe EKB model is comprehensive and
shows the components of decision
making and the relationships andinteractions among them.The five distinct parts of consumer
decision making presented are:
Input, information processing, a decisionprocess, decision process variables, andexternal influences
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Input Input includes all kinds of stimuli from our
contact with the world around us:
Our experiences, contact with others Marketer-controlled stimuli (e.g., advertising,
store display, demonstrations)
Other stimuli (e.g., personal recollections,
conversations with friends) External search
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Information Processing Stimuli are processed
into meaningfulinformation
Five methods ofinformation processing: Exposure Attention
Comprehension Yielding Retention
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Decision Process
It is triggered at any time during informationprocessing
It consists of five steps: Problem recognition
Search
Alternative evaluation
Choice Outcomes (post-purchase evaluation and
behavior)
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Decision Process Variables
Those individual qualities that makepeople/consumers unique.
Decision process variables include
Motives Beliefs Attitudes Lifestyles Intentions
Evaluative criteria Normative compliance and informational influence Other aspects of self
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External Influences
Such influences arecalled Circles ofSocial Influence.
They are: culture,sub-culture (co-culture), social class,reference groups,and family or
household influences
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