Consumer Behavior Assignment 2
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Value and the Consumer Behavior Framework
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Learning Outcomes
Describe the consumer value framework, including its basic components
Define consumer value and compare and contrast two key types of value
Apply the concepts of marketing strategy and marketing tactics to describe the way firms go about creating value for consumers
LEARNING OUTCOMES
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Explain the way market characteristics like market segmentation and product differentiation affect marketing strategy
Analyze consumer markets using elementary perceptual maps
Justify consumers’ lifetime value as an effective focus for long-term business success
Learning Outcomes (continued)
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LEARNING OUTCOMES (continued)
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Consumer Value Framework (CVF)
LO 1
Consumer behavior theory
Illustrates factors that:
Shape consumption-related behaviors
Determine the value associated with consumption
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2.1 Consumer Value Framework (CVF)
LO 1
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Exhibit
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2.2 External Influences Shape Consumers’ Decisions
LO 1
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Exhibit
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Value
LO 2
Personal assessment of the net worth obtained from an activity
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Utilitarian Value
LO 2
Gratification derived because something helps a consumer solve a problem or accomplish some task
Consumers provide a rational explanation for their purchases
Value is provided because the object or activity allows something good to happen or be accomplished
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Hedonic Value
LO 2
Value derived from immediate gratification that comes from some activity
Provided by the actual experience and emotions associated with consumption
End in and of itself rather than a means to an end
Emotional and subjective in nature
Action to obtain hedonic value can be difficult to explain objectively
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Marketing Strategy
LO 3
Way a company goes about creating value for customers
Effectively developed and implemented when there is a complete understanding of the value consumers seek
Marketing myopia: Company views itself in a product business rather than in a value- or benefits-producing business
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Marketing Strategy (continued)
LO 3
Corporate strategy: Way a firm is defined and sets its general goals
Marketing tactics: Way by which marketing management is implemented
Involve price, promotion, product, and distribution decisions
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Total Value Concept
LO 3
Total value proposition - Basic benefits, the augmented product, and the feel benefits
Augmented product: Original product plus the extra things needed to increase the value from consumption
Companies operate with the understanding that products provide value in multiple ways
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Value Co-Creation
LO 3
Realization that a consumer is necessary and must play a part in order to produce value
Consumers add resources in the form of knowledge and skills to do their own part in the consumption process
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Market Characteristics
LO 4
Combination of product, pricing, promotion, and distribution strategies used to implement a marketing strategy
Marketing mix
Identified segment or segments of a market that a company serves
Target market
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Market Characteristics (continued)
LO 4
Market segmentation: Separation of a market into groups based on the different demand curves associated with each group
Requires marketing researchers to identify segments and describe its members
Product differentiation: Consumers do not view all competing products as identical to one another
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2.8 Total Market Sales and Sales within Market Segments
LO 4
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Exhibit
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Perceptual Map
LO 5
Tool used to depict graphically the positioning of competing products
Helps identify competitors and opportunities for doing more business
Diagnoses potential problems in the marketing mix
Used in every competitive industry, including in the nonprofit sector
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Perceptual Map (continued)
LO 5
Blue ocean strategy: Positioning a firm far away from competitors’ positions so that it:
Creates an industry of its own
Isolates itself from competitors
Ideal point
Combination of product characteristics that provide the most value to an individual consumer or market segment
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2.9 Perceptual Map for Alternative Tourist Attractions
LO 5
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Exhibit
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Customer Lifetime Value (CLV)
LO 6
Approximate worth of a customer to a company in economic terms
Overall profitability of an individual consumer
CLV = npv (sales ─ costs) + npv (equity)
Npv - Net present value
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Key terms
Customer value framework (CVF)
Customer relationship management (CRM)
Relationship quality
Service
Internal influences
Cognition
Affect
Individual differences
External influences
Social environment
Situational influences
Value
Utilitarian value
Hedonic value
Strategy
Marketing strategy
Marketing myopia
KEY TERMS
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Key terms (continued)
Product positioning
Perceptual maps
Blue ocean strategy
Ideal points
Customer lifetime value (CLV)
Corporate strategy
Marketing tactics
Augmented product
Total value concept
Value co-creation
Marketing mix
Target market
Market segmentation
Elasticity
Product differentiation
KEY TERMS
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Summary
Consumer value framework illustrates the factors that shape consumption-related behaviors
Value is a personal assessment of the net worth obtained from an activity
Effective marketing strategy enhances the chance of long-run survival
SUMMARY
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Summary (continued)
Market characteristics include market segmentation and product differentiation
Perceptual map is a standard marketing tool
Customer Lifetime Value = npv (sales ─ costs) + npv (equity)
SUMMARY
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