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Chapter 1
Introduction: Diversity in the
Marketplace
Consumer
Research
Methodology used to study
consumer behavior.
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.
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.
(Also referred to as the
Ultimate Consumer or End
User.)
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.
Consumer Behavior as an Academic
Discipline and an Applied Science
• Factors that contributed to the growing interest
in consumer behavior:
– accelerated rate of new product
development
– consumer movement
– public policy concerns
– environmental concerns
– the opening of national markets throughout
the world
Consumer
Behavior
The behavior that consumers
display in searching for,
purchasing, using,
evaluating, and disposing of
products, services, and ideas.
The Marketing Concept
• 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
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.
The Scope of Consumer
Behavior
• How do individuals make decisions to spend their
resources (time, money, effort).
– Includes: what they buy, why they buy it, when they
buy it, where they buy it, how often they buy it, and
how often they use it.
• How do individuals dispose of their once-new
purchases.
– Includes: do they store it, throw it or give it away, sell
it, rent it, or lend it out?
Consumer Behavior’s
Interdisciplinary Roots
• Consumer Behavior borrows from psychology,
sociology, social psychology, anthropology.
• All factors combine to form a comprehensive
model that reflects both the cognitive and
emotional aspects of consumer decision making.
A Simplified Model of Consumer Decision
Making
• The decision-making process can be viewed as
three interlocking stages:
– The input stage:
• marketing efforts
• sociological influences
– The process stage:
• psychological factors
– The output stage:
• purchase behavior
• postpurchase evaluation
External Influence
Input
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Need
Recognition
Process
Prepurchase
Search
Evaluation of
Alternatives
Output
Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial
sources
4. Social class
5. Subculture and culture
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience
Figure 1-1
A Simple Model of
Consumer Decision
Making
Ethics in Marketing
• Unethical practices occur at every level of the
marketing mix:
– in the design of the products, in packaging, in
pricing, in advertising, and in distribution
• There are two different types of theories:
– teleological theories and deontological theories
Teleology
An ethical philosophy which
considers the moral worth of
a behavior as determined by
its consequences.
Utilitarianism
A teleological theory
summarized best by the idea
of “the greatest good for the
greatest number.”
Deontology
An ethical philosophy that
places greater weight on
personal and social values
than on economic values.
Ethics and Social Responsibility
• Corporate Codes of Ethics
• Trade Associations Codes of Ethics
• Mission-Based Social Goals
The Societal Marketing Concept
• All companies prosper when society prospers.
• Companies as well as individuals, would be
better off it social responsibility was an
integral component of every marketing
decision.
• Requires all marketers adhere to
principles of social responsibility in
marketing of their goods and services.
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.