Chapter 1
Chapter Spotlights
Consumer benefits
Total product concept
Market segmentation and
segmentation strategies
Positioning
Consumer decision-making
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
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
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
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
Market Segmentation
Market segmentation is the study
of the marketplace in order to
discover already existing viable
groups of consumers who are
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
Segment Viability
Four factors are
used to assess
segment viability.
Viable segments
are:
Of sufficient size
Measurable
Differentiated
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
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
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
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
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
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)
Information Processing
Stimuli are processed
into meaningful
information
Five methods of
information processing:
Exposure
Attention
Comprehension
Yielding
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
Decision Process Variables
Those individual qualities that make
people/consumers unique.
Decision process variables include
Motives Beliefs Attitudes Lifestyles Intentions
Evaluative criteria
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
