1. McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Consumer Behavior and Product Strategy Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 16

3. The Wheel of Consumer Analysis Product Strategy Issues

4. 16-4 Satisfaction/Dissatisfaction –Consumer satisfaction is a critical concept in marketing thought and consumer research –The most current formulation of studying satisfaction is the expectancy disconfirmation with performance approach The degree to which a product’s performance exceeds the consumers’ expectations for it Product Affect and Cognition

5. 16-5 Product Affect and Cognition cont.

6. 16-6 –Prepurchase expectations –Postpurchase expectations –Disconfirmation Positive Negative –Dissatisfaction Neutral –Balancing paradigm alternative Product Affect and Cognition cont.

7. 16-7 Product Behavior Two classes of consumer behavior: –Product contact Types of occurrences –Brand loyalty/variety seeking Retention of existing customers highly profitable as against fighting to attract new customers Four categories of consumer purchasing patterns based on the degree of cognitive commitment and number of brands purchased in a particular period

8. 16-8 Product Behavior cont.

9. 16-9 Product Behavior cont. –Brand loyalty is an intrinsic commitment to repeatedly purchase a particular brand –Distinguished from repeat purchase behavior –Variety seeking is a cognitive commitment to purchase different brands because of such things as Stimulation involved in trying different things Curiosity Novelty Overcoming boredom with the same old thing

10. 16-10 Product Behavior cont. –Differentiating variety seeking from derived varied behavior The latter does not involve intrinsically motivated behavior –The degree to which consumers are brand loyal or seek variety can be viewed as a continuum –Marketers need to be concerned with the usage rate of particular products by various target markets and consumers

11. 16-11 Product Behavior cont. Attracting brand-loyal customers is most valuable when the consumers are also heavy users

12. 16-12 The Product Environment Product-related stimuli that are attended to and comprehended by consumers –Product attributes –Packaging

13. 16-13 Product Attributes Products and product attributes are major stimuli that influence consumer affect, cognition, and behavior –Consumers may evaluate these attributes in terms of their own values, beliefs, and past experiences –Marketing and other information also influences whether purchase and use of the product is likely to be rewarding

14. 16-14 Packaging Packaging objectives should –Protect the product as it moves through the channel to the consumer –Be economical and not add undue cost to the product –Allow convenient storage and use of the product by the consumer –Be used effectively to promote the product to the consumer

15. 16-15 Packaging cont. In some cases, packaging can obtain a relative advantage for a product –Package sizes Can influence not only which brands are chosen, but also how much of a product is used on particular occasions

16. 16-16 Packaging cont. –Package colors Has been argued that colors have an important impact on consumers’ affect, cognition, and behavior Has been argued that colors connote meanings to consumers and can be used strategically Reported that consumer perceptions of products may change with a change in package color

17. 16-17 Packaging cont. –Brand identification and label information Provides additional stimuli for consideration by the consumer Simplifies purchase and makes the loyalty development process possible For some products, label information can strongly influence purchase

18. 16-18 Product Strategy In the short run, new-product strategies are designed to influence consumers to try the product In the long run, product strategies are designed to develop brand loyalty and obtain large market shares A critical aspect of designing product strategies involves analyzing consumer- product relationships

19. 16-19 Characteristics of Consumers Vary in their willingness to try new products Different types of consumers may adopt a new product at different times –Classic adoption curve and five categories of adopters Innovators Early adopters Early majority Late majority Laggards

20. 16-20 The Adoption Curve

21. 16-21 Characteristics of Consumers cont. –Major focus of consumer research has been to identify the characteristics of innovators and their differences from other consumers –Marketers find innovators particularly important since they may influence early adopters, who in turn may influence the early majority to purchase –Innovators tend to be heavy users of other products within a product class –Innovators may have better-developed knowledge structures for particular products

22. 16-22 Characteristics of Products Compatibility –Degree to which a product is consistent with consumers’ current affect, cognition, and behavior Trialability –Degree to which a product can be tried on a limited basis or divided into small quantities for an inexpensive trial

23. 16-23 Characteristics of Products cont. Observability –Degree to which products or their effects can be sensed by other consumers Speed –How fast the benefits of the product are experienced

24. 16-24 Characteristics of Products cont. Simplicity –Degree to which a product is easy for a consumer to understand and use Competitive advantage –Degree to which an item has a sustainable competitive advantage over other product classes, product forms, and brands

25. 16-25 Characteristics of Products cont. –Relative advantage is a most important product characteristic not only for obtaining trial, but also for Continued purchase Development of brand loyalty –In some cases, a relative advantage may be obtained through technological developments –At the brand level it is often difficult to maintain a technological relative advantage

26. 16-26 Product Strategy cont. –Product symbolism –What the product or brand means to the consumer and what the consumer experiences in purchasing and using it Marketing strategy –Quality –Promotion –Price –Distribution

27. Important Questions in Analyzing Consumer-Product Relationships

28. 16-28 Summary Investigated some product-related affect, cognition, behavior, and environmental factors Explored several aspect of product strategy Product affect and cognition were discussed in terms of consumer satisfaction and dissatisfaction

29. 16-29 Summary cont. Discussed the analysis of behavior in looking at product contact and brand loyalty Emphasized several strategies based on relationships between brand loyalty and usage rates Product attributes and packing were among environmental factors examined Discussed product strategy