Chapter 1

Consumer Behavior &

Marketing Management
Chapter Spotlights
 Consumer benefits
 Total product concept
 Market segmentation and
segmentation strategies
 Positioning
 Consumer decision-making
 Engel, Kollat, and Blackwell (EKB)
Model
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
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
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
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)
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.
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.
Segment Viability
 Four factors are
used to assess
segment viability.
Viable segments
are:
 Of sufficient size
 Measurable
 Differentiated
 Reachable
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
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
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.
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.
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
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
Information Processing
 Stimuli are processed
into meaningful
information
 Five methods of
information processing:
 Exposure
 Attention
 Comprehension
 Yielding
 Retention
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)
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
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