Chapter 1
Consumer Behavior:
Its Origins and
Strategic Applications
Consumer Behavior,
Ninth Edition
Schiffman & Kanuk
Copyright 2007 by Prentice Hall
Chapter Outline
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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.
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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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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.
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Government Buying
weblink
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Development of the Marketing
Concept
Production
Concept
Product Concept
Selling Concept
Marketing
Concept
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The Production Concept
• Assumes that consumers are
interested primarily in product
availability at low prices
• Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market 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
• Marketing objectives:
– Quality improvement
– Addition of features
• Tendency toward Marketing Myopia
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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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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
Implementing the
Marketing Concept
• Consumer
Research
• Segmentation
• Targeting
• Positioning
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• The process and
tools used to study
consumer behavior
• Two perspectives:
– Positivist approach
– Interpretivist
approach
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The Marketing Concept
Implementing the
Marketing Concept
• Consumer
Research
• Segmentation
• Targeting
• Positioning
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• Process of dividing
the market into
subsets of
consumers with
common needs or
characteristics
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The Marketing Concept
Implementing the
Marketing Concept
• Consumer
Research
• Segmentation
• Targeting
• Positioning
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The selection of one
or more of the
segments to pursue
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The Marketing Concept
Implementing the
Marketing Concept
• Consumer
Research
• Segmentation
• Targeting
• Positioning
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• 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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This product is
positioned as
a solution to
facial redness.
The Marketing Mix
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Product
Price
Place
Promotion
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Successful Relationships
Customer
Value
Customer
Retention
Customer
Satisfaction
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Successful Relationships
Value, Satisfaction,
and Retention
• Customer
Value
• Customer
Satisfaction
• Customer
Retention
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• 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
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Discussion Question
• How does McDonald’s create value for
the consumer?
• How do they communicate this value?
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Successful Relationships
Value, Satisfaction,
and Retention
• Customer
Value
• Customer
Satisfaction
• Customer
Retention
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• The individual's perception of
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
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Successful Relationships
Value, Satisfaction,
and Retention
• Customer
Value
• Customer
Satisfaction
• Customer
Retention
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• 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
– Servicing them is cheaper
– They spread positive word of
mouth
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Customer Profitability-Focused
Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
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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 wellbeing of consumers and society as a
whole.
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Consumer Behavior Is
Interdisciplinary
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Psychology
Sociology
Social psychology
Anthropology
Economics
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A Simplified Model of Consumer Decision
Making – Figure 1-1
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