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Chapter 1,Introduction: The Impact of the Digital Revolution on Consumer Behavior,Consumer Behavior,Eighth EditionSCHIFFMAN & KANUK,OpeningVignette,Objectives of One-to-One Marketing,To attain customersSell them more productsMake a profit,Digital Revolution in the Marketplace,Allows customization of products, services, and promotional messages like never beforeEnhances relationships with customers more effectively and efficiently,Changes in the Business Environment,Increased consumer powerAccess to informationMore products and servicesInteractive and instant exchanges,Access to customer patterns and preferencesEvolution to other -Web connectionPDAsHDTVMobile phones,The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.,Consumer Behavior,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.,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.,Development of the Marketing Concept,Production Concept,Selling Concept,Product Concept,Marketing Concept,The Production Concept,Assumes that consumers are interested primarily in product availability at low pricesMarketing objectives:Cheap, efficient productionIntensive distributionMarket expansion,The Product Concept,Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most featuresMarketing objectives:Quality improvementAddition of featuresTendency toward Marketing Myopia,The Selling Concept,Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do soMarketing objectives:Sell, sell, sellLack of concern for customer needs and satisfaction,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 competitionMarketing objectives:Profits through customer satisfaction,Business Leaders Who Understood Consumer Behavior,Alfred Sloan, General MotorsColonel Sanders, KFCRay Kroc, McDonalds,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.,Implementing the Marketing Concept,Consumer ResearchSegmentationTargetingPositioning,Consumer Research,The process and tools used to study consumer behavior. Two perspectives:Positivist approachInterpretivist approach,Segmentation, Targeting, and Positioning,Segmentation: process of dividing the market into subsets of consumers with common needs or characteristicsTargeting: selecting one ore more of the segments to pursuePositioning: developing a distinct image for the product in the mind of the consumer,Successful Positioning,Communicating the benefits of the product, rather than its features,Communicating a Unique Selling Proposition for the product,The Marketing Mix,ProductPricePlacePromotion,Successful Relationships,Customer Value,Customer Satisfaction,Customer Retention,Types of Customers,LoyalistsApostlesDefectors,TerroristsHostagesMercenaries,Customer Profitability-Focused Marketing,Tier 1: PlatinumTier 2: GoldTier 3: IronTier 4: Lead,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.,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.,Firms Marketing Efforts1. Product2. Promotion3. Price4. Channels of distribution,Sociocultural Environment1. Family2. Informal sources3. Other noncommercial sources4. Social class5. Subculture and culture,Output,Process,Input,External Influence,Consumer Decision Making,Post-Decision Behavior,Postpurchase Evaluation,Purchase1. Trial2. Repeat purchase,Need RecognitionPrepurchase SearchEvaluation of Alternatives,Psychological Field1. Motivation2. Perception3. Learning4. Personality5. Attitudes,Experience,Figure 1-1: A Model of Consumer Decision Making,Chapter 2,Consumer Behavior,Eighth EditionSCHIFFMAN & KANUK,Consumer Research,Quantitative Research,Descriptive in nature.Enables marketers to “predict” consumer behavior.Research methods include experiments, survey techniques, and observation.Findings are descriptive, empirical and generalizable.,Positivism,A consumer behavior research approach that regards the consumer behavior discipline as an applied marketing science.,Qualitative Research,Consists of depth interviews, focus groups, metaphor analysis, collage research, and projective techniques.Administered by highly trained interviewer-analysts.Findings tend to be subjective.Small sample sizes.,Interpretivism,A postmodernist approach to the study of consumer behavior that focuses on the act of consuming rather than on the act of buying.,Table 2.2 Comparisons between Positivism and Interpretivism,PURPOSE,METHODOLOGY,PositivismPrediction of consumer actions,InterpretivismUnderstanding consumption practices,PositivismQuantitative,InterpretivismQuantitative,Table 2.2 continued,The Consumer Research Process,Six stepsdefining the objectives of the researchcollecting and evaluating secondary datadesigning a primary research studycollecting primary dataanalyzing the datapreparing a report on the findings,Figure 2.1 The Consumer Research Process,Develop Objectives,Collect Secondary Data,Design Qualitative ResearchMethodScreener questionnaireDiscussion guide,Prepare Report,Analyze Data(Subjective),Conduct Research(Using highly trained interviewers),Exploratory Study,Prepare report,Analyze Data(Objective),Collect Primary Data(Usually by field staff),Design Quantitative ResearchMethodSample designData collection instrument,Developing Research Objectives,Defining purposes and objectives helps ensure an appropriate research design.A statement of objectives helps to define the type and level of information needed.,Secondary Versus Primary Data,Secondary data: data that has been collected for reasons other than the specific research project at hand,Primary data: data collected by the researcher for the purpose of meeting specific objectives,Table 2.2 Major Sources of Secondary Data,Government Publications,Internal Sources,Periodicals &Books,Commercial Data,Data Collection Methods,Observation,Experimentation,Surveys,Observational Research,Helps marketers gain an in-depth understanding of the relationship between people and products by watching them buying and using products.Helps researchers gain a better understanding of what the product symbolizes.Widely used by interpretivist researchers.,Experimentation,Can be used to test the relative sales appeal of many types of variables.Only one variable is manipulated at a time, keeping other elements constant.Can be conducted in laboratories or in the field.,Survey Data Collection Methods,Personal Interview,Mail,Telephone,Online,Validity,The degree to which a measurement instrument accurately reflects what it is designed to measure.,Reliability,The degree to which a measurement instrument is consistent in what it measures.,Attitude Scales,Likert scales: easy for researchers to prepare and interpret, and simple for consumers to answer.Semantic differential scales: relatively easy to construct and administer.Rank-order scales: subjects rank items in order of preference in terms of some criteria.,Figure 2.4 Example of a Likert Scale,Please place the number that best indicates how strongly you agree or disagree with each of the following statements about shopping online in the space to the left of the statement.1 = Agree Strongly2 = Agree3 = Neither Agree or Disagree4 = Disagree5 = Disagree Strongly_ a. It is fun to shop online._ b. Products often cost more online._ c. It is a good way to find out about new products.,Figure 2.4 Semantic Differential Profiles of Three Pay-Per-Movie Services,Excellent,Neutral,Poor,Figure 2.5 Rank-Order Scales,Rank the following computer manufacturers in terms of hotline help by placing a 1 next to the one who provides the best telephone help, a 2 next to the second best, until you have ranked all six._ IBM_Hewlett Packard_ Dell_ Gateway_ Compaq_ NEC,Qualitative Data Collection Methods,Depth Interviews,Projective Techniques,FocusGroups,Metaphor Analysis,Focus Group,A qualitative research method in which eight to ten persons participate in an unstructured group interview about a product or service concept.,Figure 2.5 Selected Portions of a Discussion Guide,1. Why did you decide to use your current cellular company? (Probe)2. How long have you used you current cellular company? (Probe)3. Have you ever switched services? When? What caused the change? (Probe)4. What do you think of the overall quality of your current service? (Probe)5. What are the important criteria in electing a cellular service? (Probe),Projective Techniques,Research procedures designed to identify consumers subconscious feelings and motivations.,Metaphor Analysis,Based on belief that metaphors are the most basic method of thought and communication.Zaltman Metaphor Elicitation Technique (ZMET) combines collage research and metaphor analysis to bring to the surface the mental models and the major themes or constructs that drive consumer thinking and behavior.,Customer Satisfaction Data Collection Instruments (Table 2.5),Customer Satisfaction SurveysGap Analysis of Expectations versus ExperienceMystery ShoppersCritical Incident TechniqueCustomer Complaint AnalysisAnalysis of Customer Defections,Sampling Plan Decisions,Whom to survey?,How many?,How toselect them?,Table 2.6 Probability Sampling Designs,Simple random sample,Every member of the population has a known and equal chance of being selected.,Systematic random sample,A member of the population is selected at random and then every “nth” person is selected.,Cluster (area) sample,The population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview.,Stratified random sample,The population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group.,Table 2.6 Nonprobability Sampling Designs,Chapter 3,Consumer Behavior,Eighth EditionSCHIFFMAN & KANUK,Market Segmentation,Market Segmentation,The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.,Three Phases of Marketing Strategy,Phase 1: Market SegmentationPhase 2: Target Market and Marketing Mix SelectionPhase 3: Product/Brand Positioning,Table 3.1: Sodexhos Segmentation of College-age Eating Patterns,Star GazersLight, healthy foodsPrice insensitiveBrand consciousEmployed full-time over summerActive, out-goingFamily income 100,000,Fun ExpressVariety, taste, and nutritionPrice consciousWork part-time over summerValue leisure timeFamily income $30,000 - 60,000,“Best” Customer Segmentation,HighLow,Consumption,HighCurrent Share Low,LoLows(starve),HiHighs(stroke),LowHighs(chase),HiLows(tickle),Segmentation Studies,Designed to discover the needs and wants of specific groups of consumers in order to develop specialized products to satisfy specific group needs (e.g., Centrum)Designed to guide the repositioning of a product (e.g., Nintendo)Used to identify the most appropriate media for advertising (e.g., People and Teen People),Bases for Segmentation,Geographic SegmentationDemographic SegmentationPsychological SegmentationPsychographic SegmentationSociocultural SegmentationUse-Related SegmentationUsage-Situation SegmentationBenefit SegmentationHybrid Segmentation Approaches,Table 3.2 Market Segmentation,Occupation,SEGMENTATION BASE,SELECTED SEGMENTATION VARIABLES,Geographic Segmentation,Climate,Density of area,City Size,Region,Southwest, Mountain States, Alaska, Hawaii,Major metropolitan areas, small cities, towns,Urban, suburban, exurban, rural,Temperate, hot, humid, rainy,Demographic Segmentation,Income,Marital status,Sex,Age,Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+,Male, female,Single, married, divorced, living together, widowed,Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over,Education,Some high school, high school graduate, some college, college graduate, postgraduate,Professional, blue-collar, white-collar, agricultural, military,Geographic Segmentation,The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, state, or city).,Demographic Segmentation,AgeSexMarital StatusIncome, Education, and Occupation,Age: Segmentation by Age Effects and Cohort Effects,Seven Life Development Stages (Table 3.3)Provisional AdulthoodPulling up rootsFirst AdulthoodReaching out, Questions/questions, Mid-life explosionSecond AdulthoodSettling Down, Mellowing, Retirement,Marital Status,Households as a consuming unitSinglesDivorcedSingle parentsDual-income married,Psychological Segmentation,MotivationsPersonalityPerceptionsLearningAttitudes,AIOs,Psychographic (lifestyle) variables that focus on activities, interests, and opinions.,Table 3.6 Excerpts from AIO Inventory,Instructions: Please read each statement and place an “x” in the box that best indicates how strongly you “agree” or “disagree” with the statement.I feel that my life is moving faster and faster, sometimes just too fast.If I could consider the “pluses” and “minuses,” technology has been good for me.I find that I have to pull myself away from e-mail.Given my lifestyle, I have more of a shortage of time than money.I like the benefits of the Internet, but I often dont have the time to take advantage of them.,1234567,1234567,1234567,1234567,1234567,Agree Completely,Disagree Completely,Table 3.7 A Hypothetical Psychographic Profile of the Techno-Road-Warrior,Sends and/or receives 15 or more e-mail messages a weekRegularly visits Web sites to gather information and/or to comparison shopOften buys personal items via 800 numbers and/or over the InternetMay trade stocks and/or make travel reservations over the InternetEarns $100,000 or more a year,Figure 3.1 Centrum Targets Lifestyle,Sociocultural Segmentation,Family Life CycleSocial ClassCulture, Subculture, and Cross-Culture,Family Life Cycle,Phases a family goes through in their formation, growth, and final dissolutionBachelorhoodHoneymoonersParenthoodPost-parenthoodDissolutionExplicit basis: marital status, family statusImplicit basis: age, income, employment,Use-Related Segmentation,Rate of UsageHeavy vs. LightAwareness StatusAware vs. UnawareBrand LoyaltyBrand Loyal vs. Brand Switchers,Figure 3.2CampbellsSeeks to CreateAwareness and Interest,Usage-Situation Segmentation,Segmenting on the basis of special occasions or situationsExample Statements:Whenever our daughter, Jamie, gets a raise, we always take her out to dinner.When Im away on business, I try to stay at a suites hotel.I always buy my wife flowers on Valentines Day.,Figure 3.3Ad Designed to Spell OutRewards of Consumer Loyalty,Figure 3.4Occasion-SpecificAd,Benefit Segmentation,Segmenting on the basis of the most important and meaningful benefitPrudential - financial securityIomega - data protectionWheaties - good healthEclipse - fresh breath,Figure 3.5Ad OfferingCombined Benefits,Hybrid Segmentation Approaches,Psychographic-Demographic ProfilesGeodemographic SegmentationSRI Consultings Values and Lifestyle System (VALSTM),Table 3.8 Demographic-Psychographic Profile of Newsweek,Total adult readers 19,593,000MenProfessionals/ ManagersAge 35-49Household income $100,000MarriedOwn laptop PCSpent $3000+ on vacation last year,% Index,100.0 10055.9 11735.3 17436.5 11425.1 17262.4 10912.0 15012.3 164,Table 3.9 Demographic-Psychographic Internet Shopping Styles,E-bivalent NewbiesTime-Sensitive MaterialistsClicks & MortarHooked, Online, & SingleHunter-GatherersBrand Loyalists,Figure 3.6TargetingAn ActiveLifestyle,Table 3.10 Sample Claritas Geodemographic Clusters,Blue Blood Estates.8% of U.S. householdsProfessionalElite super-richCollege graduate35-44, 45-54, 55-64Country club members, own mutual phones, play golf,Young Influentials1.1% of U.S. householdsProfessionalCollege graduateUnder 24, 25-34Yuppies, drink imported beer, read fashion magazines,Figure 3.8 VALS,Figure 3.9 VALS 2 Segments and Participation in Selected Sports,Table 3.11 Size of VALS Segment as Percent of U.S. Population,VALSTM SEGMENT,PERCENT OF POPULATION,Actualizer,10.5,11.7%,Struggler,Maker,Experiencer,Striver,Achiever,Believer,Fulfilled,9.5,12.0,12.9,11.8,14.7,17.0,Mindbase Segmentation,Monitor Mindbase based on Yankelovichs Monitor Survey of American Values and Attitudes Table 3.12,Table 3.12 Eight Major Mindbase Segments,Up and ComersYoung MaterialistsStressed by LifeNew Traditionalists,Family LimitedD

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