1. Consumer Behavior, Eighth Edition SCHIFFMAN & KANUK
Chapter 1
Introduction: The Impact of the Digital Revolution on Consumer Behavior

2. Opening Vignette

3. Objectives of One-to-One Marketing
To attain customers
Sell them more products
Make a profit

4. Digital Revolution in the Marketplace
Allows customization of products, services, and promotional messages like never before
Enhances relationships with customers more effectively and efficiently

5. Changes in the Business Environment
Increased consumer power
Access to information
More products and services
Interactive and instant exchanges
Access to customer patterns and preferences
Evolution to other -Web connection
PDAs
HDTV
Mobile phones

6. 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.
It focuses on how individuals make decisions to spend their resources – time, money and effort – on consuming products and services.

7. Consumer Behavior
It includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it, and how they dispose it.

8. 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, i.e., end users or ultimate consumers.

9. Organizational Consumer
When profit & not-for-profit businesses, government agencies and institutions buy products & services in order to run their organizations, i.e., they are intermediary consumers.

10. Development of the Marketing Concept
Production
Concept
Product Concept
Selling Concept
Marketing
Concept

11. The Production Concept
Assumes that consumers are interested primarily in product availability at low prices. Here demand is excessively higher than supplies.
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion

12. The Product Concept
Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features. Demand is still greater than supply.
Marketing objectives:
Quality improvement
Addition of features
Tendency toward Marketing Myopia

13. The Selling Concept
Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so. Now supply is catching up with demand.
Marketing objectives:
Sell, sell, sell
Lack of concern for customer needs and satisfaction

14. 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. Now, supplies are greater than demand.
Marketing objectives:
Profits through customer satisfaction

15. Business Leaders Who Understood Consumer Behavior
Alfred Sloan, General Motors
Colonel Sanders, KFC
Ray Kroc, McDonald’s

17. The Marketing Concept
A consumer-oriented philosophy that suggests that satisfaction of consumer needs provides the focus for product development and marketing strategy to enable the firm to meet its own organizational goals.

18. BOC BD VIEW OF THEIR CUSTOMERS
Customers are the most important person in our business.
Customer is not dependent upon us; we are dependent upon him/her.
Customer is not an interruption of work – he/she is the purpose of it.
Customer does us a favor when he/she buys from us – we are not doing him/her a favor.
Customer is part of our business – not an outsider.
Customer is not a cold statistic – he is a flesh & blood human being with feeling and emotions like our own.
Customer is not someone to argue with or match wit with.
Customer is one who brings us his/her wants – it is our job to fulfill his/her need.

19. Implementing the Marketing Concept
Consumer Research
Marketing Research
Segmentation
Targeting
Positioning:
Marketing Mix: Product, Price, Place, Promotion, Packaging, People, etc
Value = Perceived Benefits / Resources Used
Satisfaction
Retention

20. Consumer Research
The process and tools used to study consumer behavior.
Two perspectives:
Positivist approach
Interpretivist approach

21. Segmentation, Targeting, and Positioning
Segmentation: process of dividing the market into subsets of consumers with common needs or characteristics
Targeting: selecting one ore more of the segments to pursue
Positioning: developing a distinct image for the product in the mind of the consumer

22. Successful Positioning
Communicating the benefits of the product, rather than its features
Communicating a Unique Selling Proposition for the product

23. The Marketing Mix
Product
Price
Place
Promotion

24. Successful Relationships
Customer
Value
Customer
Retention
Customer
Satisfaction

25. Types of Customers Loyalists Apostles Defectors Terrorists Hostages
Mercenaries

26. Customer Profitability-Focused Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead

27. Societal Marketing Concept
A revision of the traditional marketing concept that suggests that 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.

28. The Societal Marketing Concept
All companies prosper when society prospers.
Companies, as well as individuals, would be better off if social responsibility was an integral component of every marketing decision.
Requires all marketers adhere to principles of social responsibility.

29. Evaluation of Alternatives Consumer Decision Making
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial sources
4. Social class
5. Subculture and culture
Input
External Influence
Need Recognition
Prepurchase Search
Evaluation of Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Consumer Decision Making
Process
Experience
Figure 1-1:
A Model of Consumer Decision Making
Purchase
1. Trial
2. Repeat purchase
Post-Decision
Behavior
Output
Postpurchase Evaluation