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Consumer Behavior,Ninth Edition
Schiffman & Kanuk
Copyright 2007 by Prentice Hall
Chapter 1
Consumer Behavior:
Its Origins andStrategic Applications
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Learning Outcome
Application of Schiffman Model in
Consumer Research
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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)
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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).
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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 satisfytheir 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 tofunction.
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Development of the Marketing
ConceptProduction
Concept
Selling Concept
Product Concept
Marketing
Concept
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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
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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 satisfactionsbetter than the competition
Marketing objectives:
Make what you can sell
Focus on buyers needs
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The Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning
The process and
tools used to study
consumer behavior
Implement ing the
Market ing Concept
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The Marketing 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
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The Marketing Concept
Consumer
Research
Segmentation
Targeting
Positioning
The selection of one
or more of the
segments to pursue
Implement ing the
Market ing Concept
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The Marketing 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
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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
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Successful Relationships
Customer
Value
Customer
Satisfaction
CustomerRetention
The individual's perception of
the performance of the productor service in relation to his or
her expectations.
Value, Satis faction ,
and Reten t ion
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Successful Relationships
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
Value, Satis faction ,
and Reten t ion
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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
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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.
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Lead : Who actually cost the company
money, claim more attention, than their
spending, tie up company resources
and spread negative word of mouth.
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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
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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 andwants of their target markets in ways
that preserve and enhance the well-
being of consumers and society as awhole.
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A Simplified Model of Consumer
Decision Making Figure 1-1
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Consumption
Process by which goods, services or
ideas are used and transformed into
value.
LO1
THOMASBARWICK/PHOTOGRAP
HERSCHOICE/GETTYIMAGES
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Exhibit 1.2: Consumer Behavior and Closely
Related DisciplinesLO1
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The Consumer Value Framework
(CVF)
Represents consumer behavior
theory illustrating factors thatshape consumption-related
behaviors and ultimately
determine the value associatedwith consumption.
LO1
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Exhibit 2.1: The Consumer Value
Framework (CVF)LO1
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Read Case (Refer UMS for case details)
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