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Chapter 2: Consumer Behavior

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Title: Chapter 2: Consumer Behavior


1
Chapter 2 Consumer Behavior
the Marketing Manager
  • Consumer Behavior John C. Mowen Michael S. Minor

2
Ten Concepts to Learn
  • PERMS
  • Product positioning
  • Product differentiation
  • Elements of the consumer environment
  • Behavioral economics
  • CB and marketing research
  • CB and the marketing mix
  • The bases of segmentation
  • Behavioral segmentaiton
  • Managerial applications analysis

3
Application Areas of Consumer Behavior PERMS
  • Environmental Analysis
  • Market Research
  • Segmentation of the Marketplace
  • Product Positioning and Product Differentiation
  • Marketing-Mix Development

4
Product Positioning . . .
  • . . . is influencing how consumers perceive a
    brands characteristics relative to those of
    competitive offerings
  • Goal is to influence demand by creating a product
    with specific characteristics (i.e. brand
    attributes) and a clear image that differentiate
    it from competitors

5
  • Specific Positioning
  • positioning a brand based creating linkages
    between brand and key attributes and benefits.
    E.g., acceleration of auto, reliability of auto
  • Competitive Positioning
  • positioning a brand in relation to competitors.
  • E.g., Suburban is larger than an Expedition
  • Psychological Positioning
  • positioning a brand based upon dominant
    personality characteristic of target market.
  • E.g., We build excitement.

6
Product Differentiation . . .
  • . . . is the process of manipulating the
    marketing mix so as to position a product in a
    manner that allows consumers to perceive
    meaningful differences between a brand and its
    competitors

7
Environmental Analysis . . .
  • . . . is the assessment of the external forces
    that act upon the firm and its customers, and
    that create threats and opportunities

8
The Natural Environment . . .
  • . . . includes the types of raw materials
    available, pollution, consumer fear of
    contracting deadly diseases, the expansion of
    desert regions around the globe, and various
    weather phenomena, such as hurricanes or drought

9
Components of the External Environment
  • Demographic
  • Economic
  • Natural
  • Technological
  • Political
  • Cultural

10
The Economic Environment
  • Set of factors involving monetary, natural, and
    human resources that influence firms/consumers.
  • Behavioral economics study of economic
    decisions made by individual consumers and the
    behavioral determinants of those decisions.
  • 3 Major Contributions of Behavioral Economists
  • Originated and documented the idea that the
    consumer sector of the economy can strongly
    influence the course of the aggregate economy
  • Investigated what factors influence the decision
    of families to buy or save
  • Developed a methodology for making predictions of
    economic activities based upon consumer surveys

11
The Technological Environment
  • Goal is to anticipate what changes in the
    technological environment will occur and how
    these will influence the lifestyle and
    consumption patterns of consumers

12
MARKET RESEARCH . . .
  • . . . is applied consumer research designed to
    provide management with information on factors
    that impact consumers acquisition, consumption,
    and disposition of goods, services, and ideas

13
Marketing-Mix Development . . . .
involves the development and coordination
of activities involving the
  • Product
  • Promotion
  • Pricing
  • Distribution

14
Promotional Strategy
  • Advertising
  • Personal Selling
  • Sales Promotion Applications
  • Public Relations

15
Price Changes
  • Predicting the likely impact of price changes on
    consumers is an important consumer behavior area.
  • How will consumers react when companies raise or
    lower the price of a product?
  • Principles of perception can be applied to
    analyze if consumers will notice a difference in
    price and if so, what effect it has

16
Product Distribution . . .
  • . . . will be impacted by understanding how
    consumers make their purchasing decisions.
    Example low involvement decision (e.g.,
    purchase soft drink), must use extensive
    distribution.

17
Market Segmentation . . .
  • . . . involves subdividing the market place into
    distinct subsets of customers having similar
    needs and wants, each of which can be reached
    with a different marketing mix

18
Four Classifications of Segmentation Variables
  • Characteristics of the Person
  • Nature of the Situation in Which the Product or
    Service May Be Purchased
  • Geography
  • Culture and Subculture Adopted by the Consumer

19
Characteristics of the Person
  • Demographic Characteristics
  • Behavioral Segmentationprice elasticity,
    benefits sought, usage rate, brand loyalty
  • Benefit Segmentation
  • Psychographic and Personality Characteristics

20
Demographics is . . .
  • . . . the study of population changes and
    subcultural values of various demographic groups
    based on such factors as age, sex, income,
    education, ethnicity, and geography.
  • Examples of demographic variables
  • age, sex, income, ethnicity, nationality,
    household size, marital status, religion,
    education, occupation,

21
Consumer Situations . . .
  • . . . consist of the temporary environmental
    factors that form the context within which a
    consumer activity occurs at a particular time and
    place
  • Types of situations social, physical, task
    definition, time.

22
Geographic Segmentation
  • Can include region, size of cities and counties,
    census blocks, population density, and climate
  • Geodemographics is the combination of geography
    and demographics

23
Culture and Subculture
  • Culture is the way of life of the people of a
    society
  • Subculture is a subdivision of a national culture
    and is based on some unifying characteristic,
    such as social status or nationality

24
Segmenting Industrial Markets
  • Different segmenting variables are used to
    classify companies into segments including the
    North American Industry Classification System
    NAICS). Developed as part of NAFTA in 1997.
    20--2-digit codes.

25
Solving Managerial Problems . .
  • . . . is a three-step process
  • Gather information and identify the
    problem/opportunity
  • Identify the relevant consumer behavior concepts
    and how they apply to the problem
  • Develop a managerial strategy by identifying the
    managerial implications of each consumer concept.
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