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Consumer Markets andConsumer Buyer Behavior
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Customer Perceived Value Customer perceived value is the
difference between total customer value
and total customer cost of a market
offering relative to those of competing
offers.
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Determinantsof
Customer Perceived Value
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ACustomers Perception
of Value
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StepsinaCustomer Value
Analysis Identifymajorattributesandbenefitsthat
customersvalue Assessthe qualitative importance ofdifferentattributesandbenefits
Assessthe companysand competitorsperformancesonthe different customervaluesagainstratedimportance
Examine ratingsofspecific segments Monitor customervaluesovertime
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Loyalty
A deeply held commitment to re-buy
or re-patronize a preferred product
or service in the future despite situational
influences and marketing efforts having
the potential to cause switching behavior.
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CustomerSatisfaction
Customer satisfaction is the extent to
which a products perceived performance
matches a buyers expectations.
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MeasuringSatisfaction
Periodic surveys
Customer lossrate
Mysteryshoppers
Monitor competitive performance
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CustomerLifetime Value
Customer lifetime value is the value of
the entire stream of purchases that the
customer would make over a lifetime of
patronage.
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EstimatingLifetime Value
Annual customerrevenue: $500
Average numberof loyal years: 20
Company profitmargin: 10
Customer lifetime value: $1000
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MaximizingCustomer
Lifetime Value Customer profitability
Customer equity
Lifetime value
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MaximizingCustomer
Lifetime Value Customer equity is the total combined customer
lifetime values of all of the companys customers.
Building the right relationships with the rightcustomers involves treating customers as assets that
need to be managed and maximized.
Different types of customers require different
relationship management strategies
Build the rightrelationship with the rightcustomers
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Customer Relationship
Management CRMisthe processof carefullymanagingdetailedinformation
aboutindividual customersandallcustomertouch-pointstomaximize customer loyalty.
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The Changing Nature of
Customer Relationships Relating with more carefully selected customers uses
selective relationship management to target fewer,
more profitable customers.
Relating for the long term uses customer relationship
management to retain current customers and build
profitable, long-term relationships.
Relating directly uses direct marketing tools
(telephone, mail order, kiosks, Internet) to makedirect connections with customers.
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CRMS
trategies Reduce rate ofdefection
Increase longevity
Enhance share of wallet
Terminate low-profit customers
Focusmore effortonhigh-profit
customers
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D
efinitions Consumerbuyerbehavior referstothe buyingbehavioroffinal
consumers individualsandhouseholds whobuygoodsandservicesfor personal consumption
All ofthese final consumerscombine tomake up the consumermarket
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FactorsAffectingConsumer
Behavior Culture
Forms a persons wantsandbehavior
Subculture
Groups with shared valuesystems
Social Class
Societys divisions whoshare values, interestsandbehaviors
Cultural
Social
Personal
Psychological
Key FactorsKey Factors
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FactorsAffectingConsumer
Behavior Groups
Membership
Reference
A
spirational OpinionLeaders
Buzzmarketing
Family
Manyinfluencers
RolesandStatus
Cultural
Social
Personal
Psychological
Key FactorsKey Factors
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FactorsAffectingConsumer
Behavior Age and life cycle
Occupation
Economic situation
LifestyleActivities, interests andopinions
Lifestyle segmentation
Personalityandself-concept
Cultural
Social
Personal
Psychological
Key FactorsKey Factors
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CharacteristicsAffecting
ConsumerBehavior
Motivation
Perception
Learning
BeliefsandattitudesCultural
Social
Personal
Psychological
Key FactorsKey Factors
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Psychological Factors
Motivation Amotive isaneedthatissufficiently
pressingtodirectthe persontoseek
satisfaction MotivationresearchisbasedonFreud;Looksforhiddenandsubconsciousmotivation
Maslow orderedneedsbasedonhowpressingtheyare tothe consumer
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Psychological Factors
Perception Perceptionisthe processby which
people select,organize,andinterpret
information Perception Includes:
Selective attention Consumersscreenoutinformation
Selective distortion People interprettosupportbeliefs
Selective retention People retain pointstosupportattitudes
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Psychological Factors
LearningLearning describes changesinanindividualsbehaviorarisingfromexperienceLearningoccursthrough:
Drives Internal stimulusthat callsforaction
Stimuli Objectsthatmove drive tomotive
Cues Minorstimulithataffectresponse
Reinforcement Feedbackonaction
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Psychological Factors
BeliefsandAttitudesBelief
adescriptive thoughtaboutabrandor
service maybe basedonreal knowledge,opinion,orfaith
Attitude
describesa persons evaluations,feelingsandtendenciestowardanobjectoridea
Theyare difficultto change
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TypesofBuying
DecisionBehaviorComplex
Highlyinvolved,significantbranddifferences Example computer
Dissonance-reducing Highlyinvolved, little branddifferences Example carpeting
Habitual Low involvement, little branddifferences Example salt
Variety-seeking Low involvement,significant perceivedbranddifferences
Example cookies
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The ConsumerBuying
Decision Process
Needrecognition
Informationsearch
Evaluationof alternatives
Purchase decision
Postpurchase behavior
Needs canbe triggeredby:
Internal stimuli Normal needsbecome strongenoughtodrivebehavior
External stimuli
Advertisements
Friendsoffriends
ProcessProcess
StagesStages
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The BuyerDecision
Process
Needrecognition
Informationsearch
Evaluationof alternatives
Purchase decision
Postpurchase behavior
Consumers exhibitheightened attentionoractivelysearch forinformation.
Sourcesofinformation:
Personal
Commercial
Public Experiential
Word-of-mouth
ProcessProcess
StagesStages
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The BuyerDecision
Process
Needrecognition
Informationsearch
Evaluationof alternatives
Purchase decision
Postpurchase behavior
Evaluation procedure dependson the consumer and the buyingsituation.
Mostbuyers evaluate multipleattributes, eachof whichisweighted differently.
At the endof the evaluationstage,purchase intentions areformed.
ProcessProcess
StagesStages
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The BuyerDecision
Process
Needrecognition
Informationsearch
Evaluationof alternatives
Purchase decision
Postpurchase behavior
Two factorsintercedebetweenpurchase intentionsand the actualdecision:
Attitudesofothers
Unexpectedsituationalfactors
ProcessProcess
StagesStages
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The BuyerDecision
Process
Needrecognition
Informationsearch
Evaluationof alternatives
Purchase decision
Postpurchase behavior
Satisfactionisimportant: Delighted consumers
engage in positive word-of-mouth.
Unhappy customerstellonaverage 11 otherpeople.
It costsmore toattractanew customerthanitdoestoretainan existingcustomer.
Cognitive dissonance iscommon
ProcessProcess
StagesStages
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END OFMODULE
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