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

consumer behavior & marketing management

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