11374_L1 12082013 SSchiffman Basics

7/29/2019 11374_L1 12082013 SSchiffman Basics

1/32

Consumer Behavior,Ninth Edition

Schiffman & Kanuk

Copyright 2007 by Prentice Hall

Chapter 1

Consumer Behavior:

Its Origins andStrategic Applications
http://creative.gettyimages.com/source/Search/59','2','http://creative.gettyimages.com/source/Search/9','2','http://creative.gettyimages.com/source/Search/31','2','http://creative.gettyimages.com/source/Search/3','2','


2/32

1 - 2

Learning Outcome

Application of Schiffman Model in

Consumer Research

Co ri ht 2007 b Prentice Hall


3/32

1 - 3Co ri ht 2007 b Prentice Hall

Chapter Outline

Overview of Consumer Behavior

The Marketing Concept

The Marketing Mix and Relationships A Simplified Model of Consumer

Decision Making-Schiffman

CB Model by Hawkins

Important CB Concepts (Babins)


4/32

1 - 4

The study of Consumer Behaviour is the study of how

individuals make decisions to spend their available resources;

money, time and effort on consumption related items.

It comprises the study of what they buy, why they buy it, how

they buy it, when they buy it, from where they buy it and howoften do they buy it, how often they use it, how they evaluate it

after the purchase and the impact of such evaluations on future

purchases and how they dispose of it (Schiffman and Kanuk,

2004, p.8).



5/32


Consumer Behavior

The behavior that consumers display in

searching for, purchasing, using,

evaluating, and disposing of products

and services that they expect will satisfytheir needs.


6/32


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.


7/32


Organizational Consumer

A business, government agency, or other

institution (profit or nonprofit) that buys

the goods, services, and/or equipment

necessary for the organization tofunction.


8/32


Development of the Marketing

ConceptProduction

Concept

Selling Concept

Product Concept

Marketing

Concept


9/32


10/32


The Product Concept

Assumes that consumers will buy the

product that offers them the highest

quality, the best performance, and the

most features

Marketing objectives:

Quality improvement

Addition of features


11/321 - 11Co ri ht 2007 b Prentice Hall

The Selling Concept

Assumes that consumers are unlikely

to buy a product unless they are

aggressively persuaded to do so


Sell, sell, sell

Lack of concern for customer needs

and satisfaction




Assumes that to be successful, a

company must determine the needs

and wants of specific target markets

and deliver the desired satisfactionsbetter than the competition


Make what you can sell

Focus on buyers needs




Consumer

Research

Segmentation

Targeting

Positioning

The process and

tools used to study

consumer behavior

Implement ing the

Market ing Concept




Consumer

Research

Segmentation

Targeting

Positioning

Process of dividing

the market into

subsets of

consumers with

common needs orcharacteristics

Implement ing the

Market ing Concept




Consumer

Research

Segmentation

Targeting

Positioning

The selection of one

or more of the

segments to pursue

Implement ing the

Market ing Concept




Consumer

Research

Segmentation

Targeting

Positioning

Developing a distinct image

for the product in the mindof the consumer

Successful positioning

includes:

Communicating the

benefits of the product

Communicating a unique

selling proposition

Implement ing the

Market ing Concept



Successful Relationships

Customer

Value

Customer

Satisfaction

CustomerRetention

Defined as the ratio between

the customers perceivedbenefits and the resources

used to obtain those

benefits

Perceived value is relativeand subjective

Developing a value

proposition is critical

Value, Satis faction ,

and Reten t ion




Customer

Value

Customer

Satisfaction

CustomerRetention

The individual's perception of

the performance of the productor service in relation to his or

her expectations.


and Reten t ion




CustomerValue

CustomerSatisfaction

CustomerRetention

The objective of providing value

is to retain highly satisfiedcustomers.

Loyal customers are key

They buy more products

They are less price sensitive

They pay less attention tocompetitors advertising

Servicing them is cheaper

They spread positive word of

mouth


and Reten t ion



Customer Profitability-Focused

Marketing

Tracks costs and revenues of

individual consumers

Categorizes them into tiers based on

consumption behavior

A customer pyramid groups customers

into four tiers


21/32



Platinum : includes heavy users who

are not price sensitive and are willing

to try new offerings.

Gold : includes customers who are

heavy users but not so profitable, as

they are price sensitive.

Iron : Spending volume and profitability

does not matter much for company.



Lead : Who actually cost the company

money, claim more attention, than their

spending, tie up company resources

and spread negative word of mouth.



Traditional Marketing Concept Vs. Value

and Retention Focused Marketing

Table 1-2

Traditional Marketing

Concept

Value and Retention

Focused Marketing

Make only what you can sell instead

of trying to sell what you make

Use technology that enables

customers to customize what

you make

Do not focus on the product; focus on

the need that it satisfies

Focus on the products

perceived value, as well as the

need that it satisfies

Market products and services thatmatch customers needs better than

competitors offerings

Utilize an understanding ofcustomer needs to develop

offerings that customers

perceive as more valuable than

competitors offerings



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 andwants of their target markets in ways

that preserve and enhance the well-

being of consumers and society as awhole.



A Simplified Model of Consumer

Decision Making Figure 1-1


27/321 - 27

Consumption

Process by which goods, services or

ideas are used and transformed into

value.

LO1

THOMASBARWICK/PHOTOGRAP

HERSCHOICE/GETTYIMAGES


28/321 - 28

Exhibit 1.2: Consumer Behavior and Closely

Related DisciplinesLO1


29/321 - 29

The Consumer Value Framework

(CVF)

Represents consumer behavior

theory illustrating factors thatshape consumption-related

behaviors and ultimately

determine the value associatedwith consumption.

LO1


30/32

1 - 30

Exhibit 2.1: The Consumer Value

Framework (CVF)LO1


31/32

1 - 31

Read Case (Refer UMS for case details)



32/32

Documents

11374_L1 12082013 SSchiffman Basics