Consumer Behavior,

Ninth Edition

SCHIFFMAN & KANUK

Chapter 1

Consumer Behavior: Its

Origins and Strategic
Applications
1-1
 Dramatic Changes in Consumer
Behavior and impact of digital
technology

1-2
 Objectives of One-to-One
Marketing
• To attain customers
• Sell them more products
• Make a profit

1-3
 Digital Revolution in the
Marketplace
• Allows customization of products, services,
and promotional messages like never before
• Enhances relationships with customers
more effectively and efficiently
• Has increased the power of customers and
given them access to more information

1-4
 Digital Revolution in the
Marketplace - Continued
• The exchange between consumers and
marketers has become more interactive
• May affect the way marketing is done

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 Changes in the Business Environment
• Increased consumer • Access to customer
power patterns and
• Access to preferences
information • Evolution to other
• More products and -Web connection
services – Facebook
• Interactive and – Twiter
instant exchanges – Mobile phones

1-6
 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.

1-7
 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.

1-8
 Development of the Marketing
Concept
Production
Concept

Product Concept

Selling Concept

Marketing
Concept
1-9
 The Production Concept

• Assumes that consumers are interested

primarily in product availability at low
prices
• Marketing objectives:
– Cheap, efficient production
– Intensive distribution
– Market expansion

1-10
 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

1-11
 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

1-12
 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:
– Profits through customer satisfaction

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 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.

1-14
 Business Leaders Who Understood
Consumer Behavior

• Alfred Sloan, General Motors

• Colonel Sanders, KFC
• Ray Kroc, McDonald’s

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 Why study consumer behaviour?
• Understanding consumer behaviour
will help you become better marketers
as it is the foundation for
 Segmenting markets
 Positioning products
 Developing an appropriate marketing
 continued

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 Why study consumer behaviour?
• Knowledge of consumer behaviour is
essential for non-profit organizations
– Non profits have different customers to
please
– Donors, users, volunteers, general public,
government
» continued

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 Why study consumer behaviour?
• Public service initiatives have to be
based on an understanding of
consumer behaviour
– Most government initiatives (e.g.,
antismoking campaigns) need a
knowledge of consumer behaviour to
succeed
• Better understanding of our own
consumption behaviour

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 Why study consumer behaviour?

• Better understanding of our own

consumption behaviour

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 What is Consumer Behavior?
The study of how consumers

• Select
• Purchase
• Use
• Dispose of

goods and services in the process of satisfying their

personal and household needs and wants.

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 Consumer Behavior
• Consumer behavior is the study of individuals, groups, or
organizations and the processes they use to select, use, and
dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on
the consumer and society.
• Sheth, Mittal, and Newman (1999) define customer
behavior as “the mental and physical activities undertaken
by household and business customers that result in
decisions and actions to pay for, purchase, and use
products and services.

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 Why Study Consumer
Behavior?

BECAUSE CONSUMPTION IS
THE FUEL THAT DRIVES
THE ENGINE OF OUR
ECONOMY

1-22
 Consumer Behavior is
Different for Different People

1-23
 Why Study
Consumer
Behavior?
1-24
 Very simply,
understanding
consumer
behavior is good
business!!
1-25
 When
When did
did the
the formal
formal
study
study ofof consumer
consumer
behavior
behavior first
first start
start to
to
become
become popular?
popular?

1-26
 Consumer behavior research was
motivated by two needs:

 Finding out what would sell and who was

buying
DESCRIPTIVE CONSUMER RESEARCH

 Finding out why consumers were buying

or not buying
INFERENTIAL CONSUMER RESEARCH

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 Why did consumer behavior become a
separate discipline from marketing?
• Marketers came to realize that consumers did not always
act or react as marketing theory suggested they would
• Consumers rejected mass-marketed products, preferring
differentiated products that reflected their own special
needs, personalities and lifestyles
• Even in industrial markets, where needs are more
homogeneous than consumer markets, buyers exhibited
diversified preferences and less predictable purchase
behavior

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 Other factors that contributed to the
growing interest in consumer behavior

• The accelerated rate of new product

development
• The consumer movement
• Public policy considerations
• Environmental concerns
• The opening of national markets throughout the
world
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 Consumer behavior is more than just
purchasing
Consumer Behavior involves
• Exposure to the media
• Browsing
• Influencing others
• Being influenced by others
• Complaining about and returning products

1-30
 Economics alone does not explain
consumer behavior
• Early theories based on notion that individuals act
rationally to maximize their benefits (satisfaction)
from purchasing
• Later research discovered that consumers are just
as likely to
• Purchase impulsively
• Be influenced by family, friends, advertisers and role models
• Be influenced just as strongly by mood, situation and
emotion

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 Consumer behavior is an
Interdisciplinary Field

Psychology Anthropology
Consumer
Behavior
studies

Social
Psychology Economics

Other Fields
1-32
 What Do Buying Decisions Involve?

Consider a decision to acquire a pet

• Decision entails determining:

– Where to learn about pets
– Where to purchase the selected pet
– How much to pay for it
– Who will take care of it
– What supplies or services are needed for it
– Where to purchase such supplies or services
– How much to pay for supplies and services

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 Implementing the Marketing
Concept
• Consumer Research
• Segmentation
• Targeting
• Positioning

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 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

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

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 The Marketing Mix
• Product
• Price
• Place
• Promotion

1-37
 MKT Mix: (4P’s) 4C’s 4A’s
-Product Customer solution Acceptability
-Price Customer cost Affordability
-Place Convenience Accessibility
-Promotion Communication Awareness

Additional Marketing Mix

38
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 Successful Relationships

Customer Customer
Value Retention

Customer
Satisfaction

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 Types of Customers

• Loyalists • Terrorists
• Apostles • Hostages
• Defectors • Mercenaries

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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

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.
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 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.
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 External Influence
Firm’s Marketing Efforts
1. Product
Input 2. Promotion
3. Price
4. Channels of distribution
Consumer Decision Making
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial
sources
4. Social class
5. Subculture and culture

Psychological Field
Need 1. Motivation
Recognition 2. Perception
3. Learning
Prepurchase 4. Personality
Process
Search 5. Attitudes
Evaluation of
Alternatives Experience

Purchase Figure 1-1:

Post-Decision
Behavior

1. Trial
2. Repeat purchase
A Model of
Output
Consumer
Postpurchase Evaluation
Decision
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Making