Chapter 1

Consumer Behavior & Marketing

Management

Copyright Atomic Dog Publishing, 2002

Chapter Spotlights
 Consumer benefits
 Total product concept
 Market segmentation and segmentation
strategies
 Positioning
 Consumer decision-making
 Engel, Kollat, and Blackwell (EKB)
Model
Copyright Atomic Dog Publishing, 2002
Course Objectives
 Better understand why people do what they
do in the marketplace when they do it
 Better understand yourself as a shopper,
buyer, and consumer
 Improve yourself as a shopper, buyer, and
consumer
 Improve your current/future job performance
 Better understand marketer communications
and behaviors in the marketplace

Copyright Atomic Dog Publishing, 2002

Consumer Benefits
 People do not buy products or services,
they buy benefits
 Hence we make purchases not for the
products themselves, but for the
benefits of the problems they solve or
the opportunities they offer
 e.g., “always late” so a watch helps solve
problem; has stopwatch feature so now
can keep track of “work out” times

Copyright Atomic Dog Publishing, 2002

Consumer Benefits
 Consumers seek
bundles of types of
benefits:
 Tangible benefits: e.g., a
watch keeps good time;
has leather band
 Intangible benefits: e.g.,
the “reliability” reputation
of the watch
manufacturer; the image
of the watch wearer

Copyright Atomic Dog Publishing, 2002

The Total Product Concept
 Total product: refers to the sum of benefits offered
by a product, service, outlet, etc.
 Basic core: bundle of utilitarian benefits (e.g., design,
features, etc.)
 Accessory ring: added-value benefits with no apparent extra
cost (e.g., store reputation, manufacturer prestige,
convenient location, etc.)
 Psychological ring: benefits resulting from the consumer’s
feelings associated with owning/using the product (e.g.,
belonging, youthful, powerful, sexy, etc.)
 Time: products/service “give” or “take” time; this can be
“good” or “bad” (e.g., fast food versus conventional
restaurant)

Copyright Atomic Dog Publishing, 2002

Market Segmentation
 Market segmentation is the study of the
marketplace in order to discover already
existing viable groups of consumers
who are similar or homogeneous in
their approaches to choosing and/or
consuming goods and services.

Copyright Atomic Dog Publishing, 2002

Segment Bounding
 Segment bounding is a means by which
marketers differentiate among consumers and
among market segments
 Determine the “descriptors” of the
consumers/units in the segment (e.g.,
demographics, psychographics, benefits sought,
product usage rate, type of retail outlet, etc.)
 Determine specific “geographic location” of
segment
 Bound segments in “time” to ensure that all data
is relevant and up to date for the time of use.

Copyright Atomic Dog Publishing, 2002

Segment Viability
 Four factors are
used to assess
segment viability.
Viable segments
are:
 Of sufficient size
 Measurable
 Differentiated
 Reachable

Copyright Atomic Dog Publishing, 2002

Segmentation Strategies
 Mass marketing (undifferentiated marketing):
offering the same product to the entire
consumer population
 Concentrated marketing (focused or niche
marketing): selecting one market segment,
even though the product may also appeal to
others
 Differentiated marketing: selecting two or
more different segments

Copyright Atomic Dog Publishing, 2002

Segmentation in the Global
Marketplace
 There are two approaches to market
segmentation
 Localization: treating each country as a separate
market and seeking consumer segments
accordingly
 Intermarket segmentation (also called
“standardization”): selecting groups of consumers
who exhibit similar consumption behavior across
different countries
 Marketers emphasize similarities rather than differences
across country markets

Copyright Atomic Dog Publishing, 2002

Consumer Benefits and
Product Positioning
 Product positioning is the placement of a product, service,
outlet, etc. in the mind of the consumer
 There are five ways used to position products, services,
outlets, etc.
 On perceived benefits
 On image
 On attributes
 Against competitors
 Combination of two or more of the above
 Repositioning: shifting position in the consumer’s mind
through changes in important product, price, distribution,
and promotional and/or personal selling benefits.

Copyright Atomic Dog Publishing, 2002

The Consumer Decision-
Making Process
 A consumer decision model
is a means of describing
the processes that
consumers go through
before, during, and after
making a purchase
(choice).
 A model shows the causes
or antecedents of a
particular behavior and
each of its results or
consequences.

Copyright Atomic Dog Publishing, 2002

Engel, Kollat, and Blackwell
(EKB) Model
 The EKB model is comprehensive and
shows the components of decision
making and the relationships and
interactions among them.
 The five distinct parts of consumer
decision making presented are:
 Input, information processing, a decision
process, decision process variables, and
external influences

Copyright Atomic Dog Publishing, 2002

Input
 Input includes all kinds of stimuli from
our contact with the world around us:
 Our experiences, contact with others
 Marketer-controlled stimuli (e.g.,
advertising, store display, demonstrations)
 Other stimuli (e.g., personal recollections,
conversations with friends)
 External search

Copyright Atomic Dog Publishing, 2002

Information Processing
 Stimuli are processed
into meaningful
information
 Five methods of
information processing:
 Exposure
 Attention
 Comprehension
 Yielding
 Retention

Copyright Atomic Dog Publishing, 2002

Decision Process
 It is triggered at any time during information
processing
 It consists of five steps:
 Problem recognition
 Search
 Alternative evaluation
 Choice
 Outcomes (post-purchase evaluation and
behavior)

Copyright Atomic Dog Publishing, 2002

Decision Process Variables
 Those individual qualities that make
people/consumers unique.
 Decision process variables include
 Motives
 Beliefs
 Attitudes
 Lifestyles
 Intentions
 Evaluative criteria
 Normative compliance and informational influence
 Other aspects of self

Copyright Atomic Dog Publishing, 2002

External Influences
 Such influences are
called “Circles of
Social Influence.”
They are: culture,
sub-culture (co-
culture), social class,
reference groups,
and family or
household influences

Copyright Atomic Dog Publishing, 2002