2. Copyright Atomic Dog Publishing, 2002
Chapter Spotlights
Consumer benefits
Total product concept
Market segmentation and segmentation
strategies
Positioning
Consumer decision-making
Engel, Kollat, and Blackwell (EKB)
Model
3. Copyright Atomic Dog Publishing, 2002
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
4. Copyright Atomic Dog Publishing, 2002
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
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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
6. 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)
Copyright Atomic Dog Publishing, 2002
7. Copyright Atomic Dog Publishing, 2002
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.
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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.
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Segment Viability
Four factors are
used to assess
segment viability.
Viable segments
are:
Of sufficient size
Measurable
Differentiated
Reachable
10. 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
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11. 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
Copyright Atomic Dog Publishing, 2002
12. 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.
Copyright Atomic Dog Publishing, 2002
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.
13. The Consumer Decision-
Making Process
Copyright Atomic Dog Publishing, 2002
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.
14. 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
Copyright Atomic Dog Publishing, 2002
15. Copyright Atomic Dog Publishing, 2002
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
16. Information Processing
Copyright Atomic Dog Publishing, 2002
Stimuli are processed
into meaningful
information
Five methods of
information processing:
Exposure
Attention
Comprehension
Yielding
Retention
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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)
18. Decision Process Variables
Copyright Atomic Dog Publishing, 2002
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
19. Copyright Atomic Dog Publishing, 2002
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