Learning Outcome
Application of Schiffman Model in Consumer Research
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Chapter Outline
Overview of Consumer Behavior The Marketing Concept The Marketing Mix and Relationships A Simplified Model of Consumer Decision Making-Schiffman CB Model by Hawkins Important CB Concepts (Babins)
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The study of Consumer Behaviour is the study of how individuals make decisions to spend their available resources; money, time and effort on consumption related items. It comprises the study of what they buy, why they buy it, how they buy it, when they buy it, from where they buy it and how often do they buy it, how often they use it, how they evaluate it after the purchase and the impact of such evaluations on future purchases and how they dispose of it (Schiffman and Kanuk, 2004, p.8).
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Consumer Behavior
The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.
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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.
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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.
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Successful Relationships
Value, Satisfaction, and Retention
Customer Value Customer Satisfaction Customer Retention
Defined as the ratio between the customers perceived benefits and the resources used to obtain those benefits Perceived value is relative and subjective Developing a value proposition is critical
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Successful Relationships
Value, Satisfaction, and Retention
Customer Value Customer Satisfaction Customer Retention
The individual's perception of the performance of the product or service in relation to his or her expectations.
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Successful Relationships
Value, Satisfaction, and Retention
Customer Value Customer Satisfaction Customer Retention
The objective of providing value is to retain highly satisfied customers. Loyal customers are key They buy more products They are less price sensitive They pay less attention to competitors advertising Servicing them is cheaper They spread positive word of mouth
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Tier 1: Platinum
Tier 2: Gold Tier 3: Iron Tier 4: Lead
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Platinum : includes heavy users who are not price sensitive and are willing to try new offerings. Gold : includes customers who are heavy users but not so profitable, as they are price sensitive. Iron : Spending volume and profitability does not matter much for company.
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Lead : Who actually cost the company money, claim more attention, than their spending, tie up company resources and spread negative word of mouth.
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Traditional Marketing Concept Vs. Value and Retention Focused Marketing Table 1-2
Traditional Marketing Concept
Make only what you can sell instead of trying to sell what you make
Do not focus on the product; focus on Focus on the products the need that it satisfies perceived value, as well as the need that it satisfies Market products and services that match customers needs better than competitors offerings Utilize an understanding of customer needs to develop offerings that customers perceive as more valuable than competitors offerings
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LO1
Consumption
Process by which goods, services or ideas are used and transformed into value.
THOMAS BARWICK/PHOTOGRAPHERS CHOICE/GETTY IMAGES
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(CVF) Represents consumer behavior theory illustrating factors that shape consumption-related behaviors and ultimately determine the value associated with consumption.
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Framework (CVF)
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