Transcript Chapter 2

Chapter 2: Value and the
Consumer Behavior Value
Framework
BABIN / HARRIS
© 2009 South-Western, a division of Cengage Learning.
Learning Outcomes
LO1
Describe the consumer value framework,
including its basic components.
LO2
Define consumer value and compare and
contrast two key types of value.
LO3
Apply the concepts of marketing strategy and
marketing tactics to describe the way firms go
about creating value for consumers.
© 2009 South-Western, a division of Cengage Learning.
2-2
Learning Outcomes
LO4
Explain the way market characteristics like
market segmentation and product differentiation
affect marketing strategy.
LO5
Analyze consumer markets using elementary
perceptual maps.
LO6
Justify adopting the concept of consumers’
lifetime value as an effective long-term
orientation for many firms.
© 2009 South-Western, a division of Cengage Learning.
2-3
LO1
Describe the consumer value
framework, including its basic
components.
© 2009 South-Western, a division of Cengage Learning.
LO1
The Consumer Value Framework
(CVF)
Represents consumer behavior
theory illustrating factors that
shape consumption related
behaviors and ultimately
determine the value associated
with consumption.
© 2009 South-Western, a division of Cengage Learning.
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LO1
Exhibit 2.1: The Consumer Value
Framework (CVF)
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Your IPOD is Calling!
Apple has successfully capitalized on
loyal consumer segments by extending
their products to provide value to
consumers in new ways.
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LO1
Internal Influences
Psychology
of the
consumer
Personality
of the
consumer
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LO1
Psychology of the Consumer
• Cognition – the thinking or mental
processes that go on as we process
and store things that can become
knowledge.
• Affect – refers to the feelings
experienced during consumption
activities or associated with specific
objects.
© 2009 South-Western, a division of Cengage Learning.
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Gimme a Break!
You know the song. But why does it
get stuck in your head? One
researcher claims we try to solve an
inconsistency in our brains – that’s why
we keep replaying it, and replaying it,
and…
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LO1
Personality of the Consumer
Individual
differences
include things like
personality and
lifestyles.
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LO1
External Influences:
Interpersonal Influences
Social Environment
Situational Influences
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LO2
Define consumer value and
compare and contrast two key
types of value.
© 2009 South-Western, a division of Cengage Learning.
LO2
Consumer Value
Value is a personal
assessment of the net worth
obtained from an activity.
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LO2
Types of Value
Utilitarian
Hedonic
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LO2
Value
What type of
value do
consumers
get from this
product?
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LO2
Caribou Coffee knows it’s not just
about the coffee!
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LO2
Exhibit 2.2
The Value Equation
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LO2
Value
What type
of value do
consumers
receive
here?
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LO2 Exhibit 2.3: Consumption Activities
Can Fall Into Any of These Categories
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LO3
Apply the concepts of marketing
strategy and marketing tactics to
describe the way firms go about
creating value for consumers.
© 2009 South-Western, a division of Cengage Learning.
LO3
Exhibit 2.4: Business Strategy
Exists at Different Levels
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LO3
Total Value Concept
Why do you
think CocaCola has
such a
large share
of the
market?
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LO3
Total Value Concept
Every product’s value is made up of
the basic benefits, plus the augmented
product, plus the “feel” benefits.
© 2009 South-Western, a division of Cengage Learning.
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LO4
Explain they way market
characteristics like market
segmentation and product
differentiation affect marketing
strategy.
© 2009 South-Western, a division of Cengage Learning.
LO4
Market Segmentation and Product
Differentiation
Market segmentation
is the separation of a
market into groups
based on different
demand curves
associated with each
group.
© 2009 South-Western, a division of Cengage Learning.
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LO4
Elasticity
Cheaper
products
don’t always
outsell their
higher-priced
alternatives.
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LO5
Analyze consumer markets using
elementary perceptual maps.
© 2009 South-Western, a division of Cengage Learning.
LO5
Exhibit 2.7
A Perceptual Map
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LO6
Justify adopting the concept of a
consumers’ lifetime value as an
effective long-term orientation for
many firms.
© 2009 South-Western, a division of Cengage Learning.
LO6
Customer Lifetime Value (CLV)
Customer lifetime value (CLV)
represents the approximate
worth of a customer to a
company in economic terms.
CLV = npv(sales-costs) + npv(equity)
© 2009 South-Western, a division of Cengage Learning.
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E-Segments
Do you make
purchases on-line?
Utilitarian Value
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