Consumer Behavior,
Ninth Edition
Schiffman & Kanuk
MKT 344 Chapter 1
Consumer Behavior:
Meeting Changes and Challenges
Chapter Outline
• Overview of Consumer Behavior
• The Marketing Concept
• The Marketing Mix and Relationships
• Digital Technologies
• Societal Marketing Concept
• A Simplified Model of Consumer Decision Making
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Consumer Behavior
• The behavior that consumers display in searching
for, purchasing, using, evaluating, and disposing
of products and services that they expect will
satisfy their needs.
• Consumer behavior explains•
•
How, why, when, where, how frequently, consumers
make decisions
The evaluation criteria of the consumers before and
after purchase
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Types of Consumers
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.
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 function.
•Schools
•Universities
•Prisons
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Development of the Marketing Concept
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
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The Production Concept
• Assumes that consumers are interested primarily in product
availability at low prices
• Example: Ford
• Marketing objectives of the companies:
• Cheap, efficient production
• Intensive distribution
• Market expansion (don’t focus on product innovation or product expansion)
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The Product Concept
 Assumes that consumers will buy the product that offers them the
highest quality, the best performance, and the most features
 Example: GM (General Motors)
 Marketing objectives:
 Quality improvement
 Addition of features
 Tendency toward Marketing Myopia:
 A short-sighted and inward looking approach to marketing that focuses on
the needs of the company instead of defining the company and its
products in terms of the customers' needs and wants.
 Example: Apple vs Microsoft in 1980
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The Selling Concept
•Assumes that consumers are unlikely to buy a
product unless they are aggressively
persuaded to do so
•Marketing objectives:
• Sell, sell, sell
•Lack of concern for customer needs and
satisfaction
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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 better than the
competition
•Marketing objectives:
• Make what you can sell
• Focus on buyer’s needs
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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 wants of their target
markets in ways that preserve and enhance the
well-being of consumers and society as a
whole.
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The Marketing Concept
Implementing the Marketing Concept
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The Marketing Concept
Implementing the Marketing Concept
• Consumer Research The process and tools used to study
consumer behavior
• Segmentation Process of dividing the market into subsets of consumers
with common needs or characteristics
• Targeting The selection of one or more of the segments to
pursue
• Positioning Developing a distinct image for the product in
the mind of the consumer
 Successful positioning includes:
▪ Communicating the benefits of the product
▪ Communicating a unique selling proposition
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Successful Relationships
Customer
Trust
Customer
Value
Customer
Retention
Customer
Satisfaction
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Successful Relationships
Value, Satisfaction, Trust
and Retention
•Customer Value
• Defined as the ratio between the customer’s perceived benefits and the
resources used to obtain those benefits
• Perceived value is relative and subjective
• Developing a value proposition is critical
• Value proposition: an innovation, service, or feature intended to make
a company or product attractive to customers.
• Lexus: value proposition: delivering quality, zero defects in manufacturing,
superior personal post purchase service
• BMW: The Ultimate driving machine
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Successful Relationships
Value, Satisfaction, Trust and Retention
•Customer Satisfaction
• The individual's perception of the performance of the product or service in
relation to his or her expectations.
• Types of customers based on loyalty:
• Loyalists: keep purchasing and very loyal
• Apostles: provide positive word of mouth
• Defectors: neutral of merely satisfied
• Terrorists: spread negative word of mouth
• Hostages: unhappy customers but sticking to the company for some
reason like monopoly or low price etc
• Mercenaries: satisfied by not loyal. Can switch any time
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Successful Relationships
Value, Satisfaction, Trust and Retention
 Trust:
 Customer trust depends on:
▪
▪
▪
▪
▪
▪
▪
▪
Other customers’ positive word of mouth
Newspaper
Customer opinion posted online
Brand website
Ads before movies
Search engine ad
Online banner ad
text ads on mobile phone
 Delight: when trust is low, company try to set things right to the customers
and give the customer a vibe that s/he is very much valued
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Successful Relationships
Value, Satisfaction, Trust and Retention
• Customer Retention
• Strategy of customer retention is designed to make it in the best
interest of customers to stay with a company rather than switch to
another company
• The objective of providing value is to retain highly satisfied customers.
• Loyal customers are key
•
•
•
•
They buy more products
They are less price sensitive
They pay less attention to competitors’ advertising
They spread positive word of mouth
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Successful Relationships
Value, Satisfaction, Trust and Retention
• Retention:
• Selective relationship:
• Ranking customers in terms of
profitability. i.e. focusing on
customers who purchase
frequently and a regular customer
will get intensive customer service;
moderate purchaser will have
limited customer service and
irregular customers will be ignored
 Customer profitability focused
marketing: Tracks costs and
revenues of individual
consumers
 Customer pyramid
Platinum: Heavy users
Gold: heavy user but not profitable, price
sensitive, ask for discounts
Iron: light user and not profitable
Lead: wants more attention than the spending,
spread negative WOM
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Impact of Digital Technologies
• Consumers have more power and access to
information
• Marketers can gather more information about
consumers
• The exchange between marketer and customers is
interactive and instantaneous and goes beyond the
PC.
• Marketers must offer more products and services
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A Simplified Model of Consumer Decision
Making
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