mnm2605–consumerbehaviour€¦ · mnm2605–consumerbehaviour...
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MNM2605–ConsumerBehaviourStudyUnit1:NatureofConsumerBehaviour
Customerbehaviour:acombinationofactivitiesandinfluencesthatoccurbefore,duringandafterthepurchaseitself.It’salltheconsumeractivities,includingtheemotional,mentalandbehaviouralresponsesthatprecede,determineorfollowtheseactivities.
ActivitiesCustomers Users
Mental SelectorsBusinesses Physical Payers
TypesofcustomersBusiness:tomanufactureotherproducts,toreselltootherorganisationsorindividuals,toconductoperationsConsumer:all-encompassingtermtomeananyenduser,customer,client
Rolesofcustomers: Selector:participatesinprocurementfromthemarketplace Payer:financesorpaysforpurchase User:actuallyconsumestheproduct,receivesthebenefitofproductorservice
Onepersoncanbeone,two,orallthreeforaproduct.Theremaybeconflictsbetweenroles,e.g.yourparentsbuyyouasmallcarbutyouwantedasportscar.
ActivitiesPhysical:actionstakensuchasvisitingthestore,discussingproductwithsalesperson,comparingproductsandbuying.Mental:assesshowwelltheproductwillsatisfyneeds,experiencewiththeproduct,andknowledgeofdifferentbrands,opinionsorviews.
Individualfactorsthatinfluencedecision-makingMotivation:theneeds,wants,drivesanddesiresofanindividualthatleadthemtothepurchaseofproductsorideas.Perception:individualbecomesawareoftheenvironmentandinterpretsittointheirframeofreference.Learningability:consumersacquirepurchaseandconsumptionknowledge,experiencewhichtheyapplytofuture-relatedbehaviour.Attitude:learnedpredispositiontobehaveinaconsistentlyfavourableorunfavourablewaytowardsobjects,eventsorsituations.Personality:psychologicalcharacteristicsthatdetermineandreflecthowtheyrespondtotheirenvironment.Lifestyle:wayofliving.
Groupfactorsthatinfluencedecision-making:Family:nuclearandextendedfamily.Culture:institutionalisedwaysofappropriatebehaviour.Distinctivepatternsofbehaviourofagroupofpeople,includingbeliefs,norms,valuesandpremises.Socialclass:groupwhichenjoysmoreorlessthesameprestigeandstatusinsociety.Referencegroups:areusedasabasisofcomparisonorpointofreferencewhenformulatingresponses.Opinionleaders:onepersonperformingthefunctionofareferencegroup.
ImportanceofcustomerbehaviourCustomersatisfactionandcustomerretention
Itismorecostlytorecruitnewcustomersthantokeepoldones.Organisationsmustmeetorexceedcustomers’expectationsofservice,quality,priceanddelivery.
MarketingconceptMarketingactivitiesareinfluencedbyfourcompetingorientations:
Productionorientation:focusedontheinternalcapabilitiesofthebusinessratherthandesiresandneedsofthemarketplace.Whatcanwedobest?
RolesCustomertypes
Salesorientation:useofaggressivesalestechniques,withhighsalescreatinghighprofits. Marketingorientation:focusonwhatcouldbesold,i.e.theneedsofthebuyers.Thisledtothe
puremarketingconcept:●Consumerorientation:allmarketingactsshouldbeaimedatsatisfyingconsumerneeds,
demandsandpreferences.●Profitorientation:achievingprofitabilityisessential,maximisingprofitsistheprimary
objective.●Organisationalintegration:theorganisationisseenassystemofunitsthatworktogetherto
achieveajointobjective. Societalorientation:askswhetherthepuremarketingconceptisadequatewhilefacingproblems
ofenvironmentaldamage,resourceshortages,populationgrowth,etc.Isitwhatisbestinthelongrun?Customerfocus
Organisationsthatfocusontheneedsofthecustomerensurethattheneedsofsocietyareservedbetter.Thisisessentialforlong-termsurvival.
Applicationofknowledgeofcustomerbehaviour:Marketingstrategy
Basedonexplicitorimplicitbeliefsaboutcustomerbehaviour.Strategiesbasedonresearchandsoundtheorywillbemoresuccessful.Themarketingstrategyprocessconsistsoffouriterativeprocesses:
SocialmarketingSatisfywants,needsandinterestsoftargetmarketsinsuchawaythatitpreservesorenhancesthelong-termwell-beingofconsumersandsociety.(Behaviourchangecampaigns,promotingsocialissues,donatingrevenuetoacause,providingvolunteers)
Better-informedindividualsItisimportantthatcustomersunderstandthestrategiesandtacticsthatcompaniesareusingtoinfluencetheminorderforthemtomakeproperlyinformeddecisionsaboutwhattheybuy.
RoleofCustomerBehaviourinMarketingStrategyCustomervalue:thedifferencebetweenallthebenefitsderivedfromaproductandallthecostsofacquiringthosebenefits.Marketingstrategyworksinthefollowingway:
1.MarketAnalysis:detailedanalysisoftheorganisation’scapabilities,strengthsandweaknessesofthecompetitors,theeconomicandtechnologicalforcesaffectingthemarketandthecurrentandpotentialcustomersinthemarket.
a.Customers:e.g.customervalueanalysis-theuseofacustomerinformationdatabasetoenabletheorganisationtoprojectthefuturebehaviourofcustomersonthebasisoftheirpurchasehistories.b.Organisation:understandingofcapabilities,e.g.finances,managerialskills,productioncapabilitiesc.Competitors:understandthecompetitors’capabilitiesandstrategies,aswellasit
understandsitself.d.Environment:variableswhichmaybeinfluenced,butnotcontrolled,bytheorganisation.Thesearetheconditionsunderwhichthestrategywillbeimplemented.
2.MarketSegmentation:basedonmarketanalysis,theorganisationidentifieshomogenousgroupsorsegmentsonwhichtofocus.Thesegmentsaredescribedintermsofdemographic,psychographicandgeographicaspects.Customersinthesegmenthavesimilarneedsandwants.Asegmentmustbelargeenoughtobeprofitableforacompanytotargetit.
a.Benefitsi. Forcesfocusoncustomerneedsii. Identificationofnewmarketingopportunitiesfromresearchiii. Guidelinesfordevelopmentofseparatemarketofferingsiv. Facilitateappropriateallocationofmarketingresources
b.Disadvantagesi. Developmentofseparatemodelsandmarketofferingsisexpensiveii. Limitedmarketcoverageisachievediii. Excessivedifferentiationmayleadtoaproliferationofmodels,andcannibalisation
c.Criteriaforeffectivesegmentationi. Measurableintermsofsize,buyingpower,potentialprofitii. Largeenoughtobeworthexploitingwithtailoredoffersiii. Accessibletomarketersiv. Actionablee.g.fundstocreateseparatemarketofferingsv. Differentiableintermsofneeds,demandsanddesires,easytodistinguishbetween
3.MarketingStrategy:aimedatpenetratingtheselectedsegment(s).Thestrategyisformedintermsofthemarketingmix,whichinvolvescombiningproductfeatures;pricestobecharged,promotionoftheproductandmakingitavailableintheplacecustomerswantit.Thiscombinationisthetotalproduct.
a.Product:marketersmustbalancethebenefitsofcustomisationagainstawiderangeofproductoptions-includesquality,styling,specialdesignfeatures,packaging,rangeofsizesoroptions,warranties.
b.Promotion:therearesevenformsofmarketingcommunication(advertising,personalselling,publicrelations,salespromotion,sponsorships,directmarketing,publicity).Themarketingcommunicationstrategyneedstoanswer:
Withwhomdowewanttocommunicate?Whateffectdowewantourcommunicationtohaveonthetargetaudience?Whatmessageshouldweconveytothetargetmarket?Whatmeansandmediashouldweusetoreachthetargetaudience?Whenshouldwecommunicatewiththetargetaudience?
c.Price:customerscanbuyownershiporlimitedusagerights(rent).Lowerpricesdonotalwaysequalmoresales.Pricecanbeseenasameasureofquality.Companyneedstounderstandthesymbolicrolethatpriceplaysfortheproductandtargetmarket.
d.Place:distribution’sroleistogettheproducttoitstargetmarket.Customerswillonlyrarelygooutoftheirwaytoobtainaparticularbrand.Strategieshavetobedeveloped,suchasmethodsandroutestogettheproducttothelocation.
OutcomesofcustomerbehaviourOrganisationaloutcome
Productpositioning-Thewayinwhichthecustomersdefinetheproduct’simportantattributes.
Sales-Producetherevenuenecessaryfortheorganisationtostayinbusiness.Customersatisfaction-Keepingexistingcustomersbecausetheyaresatisfiedwiththe
products.Individualoutcomes
Needsatisfaction-actualandperceivedneedfulfilment.Often,fulfillingoneneedaffectstheirabilitytofulfilothersbecauseoffinancialandtimeconstraints,e.g.gambling.Societaloutcomes
Economicoutcomes-Cumulativeimpactofbuyingdecisions,incl.decisionPhysicalenvironment-Pollution,availabilityofscarceresources.
Overallmodelofcustomerbehaviour:pg28-30
StudyUnit2:CreatingMarketingValueforConsumers
Value:thebeliefsthatacommunitysharesandthatprovidesguidelinesforhowcommunitymembersshouldthink,actandfeelinagivensituation.
ThemarketvalueofP&SMarketvalue:thepotentialofaproductorservicetosolvetheconsumer’swantsandneeds.Consistsof:Universalvalue:satisfiesthebasicneedsofthecustomer,thebottomlinevaluesthateverycustomerexpectsfromtheproductorservice,e.g.aproductwhichsatisfieshunger,thirst,andsafety.Personalvalue:morediverse,varybetweencustomers.Satisfiesthewantsofthecustomer,whichareofamorepersonalnature.Personalvaluesmaybegroup-specific(targetmarket)orindividualspecific(one-on-oneselling),e.g.aproductwhichsatisfiestheneedsofloveandrespect.
Thematrixofvaluesandcustomerroles:User Payer Buyer
Universalvalues Performancevalue:whatthep/scandofortheuser.E.g.foodgivesnutrition
Pricevalue:utilitythatcanbeobtained,isitaffordable?
Servicevalue:measuredaccordingtopre-purchase&post-purchaseadviceandassistance.
PV:Group Socialvalue:inlinewithnormsandstandardsofpeergrouporfriends.E.g.cellphone
Creditvalue:customerpaysbycredit,delaysfullpayment.
Conveniencevalue:savingsintermsofinvestingtimeandeffort.E.g.open15hrsaday.
PV:Individual Emotionalvalue:throughexperientialconsumption.E.g.MercedesBenz
Financingvalue:termsofpaymentareoffered.E.g.hirepurchaseorlay-bye.
Personalisationvalue:createdbymeansofcustomisationandinterpersonalrelations.E.g.personalbanker.
Organisation’sperspectiveofmeasuringvalue:Thebestwaytodetermineaccuratelywhethervaluehasbeenaddedforthecustomeristoquantifyitinthevaluemetricsprocess:
1.Determinetheexpectedvalue:themostbasicwayisbycreatingaconsumersatisfactionindex
Externalinfluences Climate Economy Governme
nt Technolog
Externalinfluences Culture Subculture Referencegroups Socialclass Family Marketingactivities
Decisionmaking Individual Organisation
al Family
Personalcharacteristics
Race Age Gender
CUSTOMERSInternalinfluences
Perception Learning Motivation Lifestyle Attitudes Personality Self-
concept
UniversalvaluesA:tosatisfybasic
PersonalvaluesA:tosatisfywants
Groupspecific:aimedatagroupofpeople
Individualspecific:aimedasingleperson
MARKETVALUE
(CSI),whichcanbedonebyaquestionnaire.Needstobebuiltusingconsumervaluemanagement(CVM),whichfocusesonthevaluecomponent.Thevaluecomponentmeasurestheconsumersatisfactionrelativetothepricepaid,whichistheperceivedvalue.Theorganisationwillbeabletodetermine:
o Thekeybuyingfactorsthatconsumer’sfavour.o Howtheorganisationratesagainstitscompetitors.o Whattherelativeimportanceisofthesecomponentstodeliveringconsumervalue.
2.Formulateastrategyfordeliveringvaluetothecustomer:convincepersonnelofthebenefitofCVMandimplementanactionplantoensurethatvalueisbroughttothecustomer.
3.Measurevaluedelivery:canbedonebyCVMorabalancedscorecard(BSC),whichmeasureslong-termvaluecreation.Thecoremeasuresare:
o Marketshareo Consumeracquisition:rateatwhichnewcustomersareattractedo Consumerretentiono Consumersatisfaction:measuredagainstasetofperformancecriteriao Consumerprofitability:netprofitofaconsumerafterdeductingtheexpensestosupport
theconsumer4.Investigatedeviationsandadaptthestrategy:ifanythingiswrong,itmustbecorrected.Thenew
cycleofresearchstartstoassessiftheyaremeetingcustomerexpectations
StudyUnit3:MarketCharacteristics
MarketcharacteristicsandtheirinfluenceonconsumerbehaviourDemographiccharacteristics
Thesearepeople’svitalstatistics,suchasage,race,ethnicityandlocation.Theyarestronglyrelatedtobuyingbehaviour.
Individuals Population:approx.49.99millionin2010,51%female,79%black. Agedistribution:proportionatelymoreyoungthanolderpeople,31%under15yrs. Physicaldistribution:highmigrationfromruraltourban,mostlyfromECandLimpopotoWCand
Gauteng. Educationandliteracy:growthin7-15yrsisincreasing,16-18yrsisstagnant.Increasein
attendanceateducationalinstitutionsbutlargeearlydrop-outrate.Markedincreaseinliteracy,includinginoldpeople.
Labourmarket:is17.5millionof32.2millionpeopleaged15-64,with13.1millionemployed. Unemployment:slowdecreaseinoverallunemployment,increaseforwomenanddecreasefor
men. Formalandinformalsectors:formalbyfaroutweighsinformal(9.2millvs2.2mill)
Householdso Housing:informaldwellingsdecreasedveryslowly,traditionaldwellingsunchanged.o Watersources:approx.70%haveaccesstotapwater,steadydeclineinuseofrivers,streams
anddams.o Energysources:approx.82.6%haveaccesstoelectricity,informalandtraditionaldwellingsat
asteadyincrease.Useofparaffinlampsandcandlesslowlydecreasing.o Telephones:accesstolandlineorcellphonehasincreaseddramatically,includinginformal
andtraditionaldwellings.o Healthcare:slowincreaseinuseofpublichealth-care,medicalaidmembershipremains
exclusiveandoutofreachforthemajority.o Householdincome:LivingStandardsMeasurementdividesincomefromlevel10(R30
000/month)tolevel1(1493/month).Economicfactorsinfluencingconsumerbehaviour
Inflation:ageneralriseinpriceswithoutacorrespondingincreaseinwages,whichmeansdecreasedpurchasingpower.TheCPIisusedtomeasureinflation,andtodetermineinterestrates.
Currencyfluctuations:thevalueoftheranddeterminesthecostofimportedproductsandservices.
Recession:aneconomicconditionwhereincome,productionandemploymentfall,causingareductioninthedemandforproductsandservices.
GovernmentalfactorsinfluencingconsumerbehaviourMarketingisrestrictedbylawsandrestrictionsofthegovernment.Thesefallintothreemaincategories: Promotingcompetition:prohibitionofrestrictivetradingpracticessuchaspricecollusion. Limitingcompetition:protectingEskomagainstcompetition. Protectingconsumerrights:thenewCPA.
Basicconsumerrightsare: Therighttomeetbasicneeds Therighttosafety Therighttobeinformed Therighttochoose Therighttobeheard Therighttoredress Therighttoconsumereducation Therighttoahealthyenvironment
Consumerism:effortsofindependentindividuals,groupsorbodiesthatprotecttherightsofconsumers.Physicalconditionsinfluencingconsumerbehaviour:
Climate:SAhasapleasantclimate.Thisdeterminescropsgrown,clothing,housingandgeographicaldistributionofthepopulation.
Climatechangeanddamagetotheenvironment:SAhasahighcarbonfootprintperperson(10tonsCO2pp)incomparisontotheglobalaverage(7tons).Temperaturesareexpectedtoriseandrainfalltodecrease.Opportunitiesawaitforcompanieswhocancreatesolutionsthatpromisetoreconcileprosperitywithenvironmentalprotection.
SocialfactorsinfluencingconsumerbehaviourSocialchangeisdifficulttoforecastandintegrateintoastrategy.Attitudes,valuesandlifestylehavegreatinfluenceonproductsandservicesconsumed.Somerecentchangesare:
o Consumersaremoredemandingandinformed.o Consumerstendtoreadlabelsmore,showingconcernoverhealth.o Dual-incomehouseholdsarestrappedfortime,changingrolesinthehousehold.o Morepeopleareworkingfromhomeinvirtualoffices.o Morewomenareenteringtheworkplace.o Peoplestrivetoachievethehigheststandardoflivingpossible,seekingcomfort,styleandstatus.o Peoplefaceintensepressureintheworkplaceandseekwork-lifebalance.
TechnologicalfactorsinfluencingconsumerbehaviourItisvitalthatmarketersbecomeawareofthelatestdevelopmentsintechnologyandhowtheyaffecttheirmarketingactivities.IthasaffectedSouthAfricainseveralways: Theinternethastransformedthewaypeopleaccessinformationaboutthemarketplaceandthe
alternativesavailable. Marketersareincreasinglyusinganelectronicplatform. Moreandmoreconsumersareshoppingonline. Consumerscanpurchaseanythingfromanywhereintheworld,increasingcompetitionforSouth
Africancompanies.
DevelopingtrendsthatinfluenceconsumerbehaviourGreenmarketing
Focusesontheenvironment.Involvesproductswhoseproduction,useanddisposalislessharmfultotheenvironment;productsthathaveamorefavourableimpactontheenvironment;andlinkingthepurchaseofaproducttoanenvironmentalorganisationorevent.
Cause-relatedmarketingActivitywherebyacompanylinksthesaleofitsproductstoanissueorcause,e.g.rhinopoaching,breastcancer.Companiesaimtoaddressconsumers’valuesandbuildcorporateimage.
MarketingtogayconsumersThereisatrendinsocietytovaluediversity.Thesepeoplestillhavedifferentdemographics,justlikeheterosexuals.Acompanyneedstoaskitself:oIsitnecessarytomodifyourproductsinordertomeettheneedsofthismarket?oShouldweusestandardadvertisingingay-orientedmediaoradaptit?oTowhatdegreeshouldweparticipateingayandlesbianrelatedactivities?oShouldourmajormediaadvertisementsincludeadvertisementswithgaythemes?
Gender-basedmarketing
Genderroleshavechangeddrasticallyinthelastfewyears.Womenincreasinglyinfluencehigh-endpurchasesandareevenemergingasthedominantmarketforcertaincars,forexample.Manyproductsarelosinggendertypecastingandmany‘typicalmale’products,suchasguns,cars,motorbikesandcomputers,aredesignedwithwomeninmind.Maleandfemaleconsumersresponddifferentlytomarketingmessagesandconsumedifferenttypesofmedia.Theyalsoresponddifferentlytotheretailenvironment,andmoremalesaredoingtheshoppingthanbefore.Itissuggestedthatwomencanbedividedintofoursegments:●thetraditionalhousewife●thetrappedhousewife●thetrappedworkingwoman●thecareer-drivenworkingwoman.
BlackDiamondsTheseareexciting,savvy,influentialandup-and-comingindividualswhoaredriventosucceed.TheyrepresentacollectivespendingpowerofR180billion.Theylargely:have5ormorepeopleintheirhousehold,believeinlobola,speakEnglishfluently,havecredit,havealotofdebt.
StudyUnit4:CultureandSubculture
NatureofcultureFromaconsumerbehaviourperspective,culturecanbedefinedasthesumtotaloflearnedbeliefs,valuesandcustomsthatservetodirecttheconsumerbehaviourofmembersofaparticularsociety.Valuesarealsobeliefs,buttheymeetthefollowingcriteria:relativelyfewinnumber;guideforculturallyappropriatebehaviour;enduringanddifficulttochange;nottiedtospecificobjectsorsituations;andtheyarewidelyacceptedbythemembersofasociety.
Customs,valuesandbeliefsCustoms:areovertmodesofbehaviourthatconstituteculturallyapprovedwaysofbehavinginspecificsituationsValues:somethingsonecountryfeelaremoral,areseenasimmoralinothercountries.Meetthefollowingcriteria:
Fewinnumber Aguideforculturallyappropriatebehaviour Difficulttochange Nottiedtospecificsituationsorobjects Widelyacceptedinsociety
Beliefs:thegreatnumberofthoughtsorexpressedstatementsthatreflectaperson’sparticularknowledgeandassessmentofsomething.
NeedsandcultureCultureoffersorder;directionandguidanceinallphasesofhumanproblemsolvingbyprovidingtriedandtrustedwaysofsatisfyingphysiological,personalandsocialneeds.Wayscultureshiftshavechangedspending:
o Concernabouthealthandfitness=exerciseequipment,healthyfoodandfitnessserviceso Shifttowardsinformality=casualclothing,simplerhomefurnishingso Increaseddesireforleisuretime=increaseddemandforconvenienceproducts
LearningandcultureFormallearning:adultsandoldersiblingsteachayoungfamilymemberhowtobehaveInformallearning:childlearnsbyimitatingthebehaviourofselectedothersTechnicallearning:teachersinstructchildreninaneducationalenvironmentastowhat,howandwhytheyshoulddocertainthings
Language,symbolsandritualsLanguage:membersofasocietymustbeabletocommunicatethroughacommonlanguageSymbol:athing,especiallyamaterialobject,whichrepresentssomethingabstract,e.g.=Christianity.Marketersusesymbolstoconveydesiredproductimagesorcharacteristics.Ritual:atypeofsymbolicactivityconsistingofaseriesofstepsoccurringinafixedsequenceandrepeatedovertime
ThedynamicnatureofcultureThechangingnatureofculturemeansthatmarketerscontinuouslyhavetomonitor:
Whyconsumersarenowdoingwhattheyaredoing. Whothebuyersandusersoftheirproductsare. Whenconsumersdotheirshopping. Howandwherethemediacanreachconsumers.
Newproductsandservicesthatmaybeemerging.Enculturation:thelearningofyourownculture.Acculturation:learningofaforeignculture.Theprocessofacculturationmeansthatdifferentethnicgroupsareexperiencingconstantinteractionandsubcultureshavedeveloped.
Subcultureadistinctculturalgroupthatexistsasanidentifiablesegmentwithinalarger,morecomplexsociety.
Thiscanbebasedondemographicssuchasage,geographiclocation,etc.
CulturalvaluesandsocietyVarioussocialinstitutionsthattransmittheelementsofculture
1.Family:theprimaryagentforenculturation.2.Educationalinstitutions:impartbasiclearningskills,history,patriotism,citizenshipand
technicaltraining.3.Placesofworship:providereligiousconsciousness,spiritualguidanceandmoraltraining.4.Massmedia:disseminateinformationaboutproducts,ideasandcauses.
Individualism:emotionalindependencefromgroups,organisationsandothercollectives.Humanvalues
Importantfeaturesofvalues: Beliefsorconcepts Aboutdesirablebehaviourorend-states Thatgobeyondparticularsituations Guidethechoiceorevaluationofeventsandbehaviour Arearrangedinahierarchy
Terminalvalues:beliefsaboutdesiredend-statessuchasfreedom,comfortablelife,maturelove.Instrumentalvalues:beliefsaboutdesiredmodesofactionsuchasbeingindependent,ambitiousorhonest.Valuesserveasguidingprinciplesinpeople’sdailylivesbecausetheyareenduringbeliefsaboutdesirableend-states.Althoughvaluesareutilisedatthepersonallevel,theyaresociallyconstructedandinherentlycultural.Valuesareunderlyingdeterminantsofaconsumer’sattitudesandconsumptionbehaviour.
ThevalueconceptinmarketingApplicationofthevaluesperspectivetomarketingisbasedontwoperspectives: Sociologicalmacro-approach:standardsurveymethodology,classificationschemetocategorise
respondentsintopredeterminedgroups,consumersarethussegmentedintogroupsbasedontheirvalueorientations.
Psychologicalmicro-approach:focusesonthelinksbetweentheattributesthatexistintheproducts(themeans),theconsequencesfortheconsumerprovidedbytheattributes,andthepersonalvalues(theends)theconsequencesreinforce.
Means-endchain:modelthatseekstoexplainhowthechoiceofaserviceorproductfacilitatestheachievementofdesiredend-states.Laddering:thetechniqueusedtodevelopmeans-endchains.Anin-depth,one-on-oneinterviewingtechniquewhichfacilitatesanunderstandingofhowconsumerstranslatetheattributesofproductsintomeaningfulassociationswithrespecttotheself.
Instrumentaladvertisements●Promotetheutilitarianandtangiblebenefitsoftheproduct●Presentinformationinadetailedpoint-by-pointlistthatshouldfacilitateapiecemealjudgement●Illustratewhattheproductdoesorwhatconsumerscandowiththeproduct,sotheconsumerscanjudgetheproductusingtheirinstrumentalvalues●Implyhowusingtheproductwillenablemoreefficientandeffectivemanipulationoftheenvironment
Terminaladvertisements●Promotethesymbolism/imageoftheproductbyusingmetaphorsorillustratingthekindsofpeopleandsocialgroupsthatusetheproduct●Encourageconsumerstoconsidertheirintuitionandemotionalresponse●Portraystatesof“being”orultimategoals,encouragingconsumerstousetheirterminalvaluesascriteriawithwhichtojudgetheproduct●Implyhowusingtheproductwillenableself-expression,socialapprovalandself-consistency
SouthAfricancorevalues
Peopleinallculturessharebasicvalues.Thesefallintodifferentgroupsaccordingtothreesetsofcriteria: Valuesarrangedaccordingtotheobjective(instrumentalorterminalvalues) Valuesarrangedaccordingtointerest(individual,collectiveorboth) Valuesarrangedaccordingtotenmotivationaldomains,namely:
a.Power:socialstatusandprestige,controlordominanceoverpeopleandresourcesb.Achievement:personalsuccessthroughdemonstratingcompetencec.Hedonism:pleasureandsensuousgratificationforoneselfd.Stimulation:excitement,noveltyandchallengeinlifee.Self-direction:independentthoughtandaction,choosing,creatingandexploringf. Universalism:understanding,appreciation,toleranceandprotectionofallpeopleand
natureg.Benevolence:preservationandenhancementofthewelfareofpeoplewithwhomoneisin
frequentpersonalcontacth.Tradition:respect,commitmentandacceptanceofthecustomsandideasthattraditional
cultureorreligionprovidestheselfi. Conformity:restraintofactions,inclinationsandimpulseslikelytoupsetorharmothers
andviolatesocialexpectationsornormsj. Security:safety,harmonyandstabilityofsociety,relationshipsandself
Measurementofculture:Contentanalysis
Focusesonthecontentofverbal,writtenandpictorialcommunications.Fairlyobjective.Consumerfieldwork
Takesplacewithinthesubject’snaturalenvironment;issometimesperformedwithoutthesubjects’knowledge;anditfocusesontheobservationofbehaviour.Canalsobein-depthinterviewsandfocusgroupsessions.
SocialvaluesmeasurementLifestyleresearchformarketingaimstogrouppeopleaccordingtotheirvaluesystemsasexpressedbytheirlifestyle.
StudyUnit5:ReferenceGroupsandSocialClass
Referencegroupsanypersonorgroupthatservesasapointofcomparisonforanindividualconsumerinformingcertain
values,attitudesandbehaviourpatterns.Themoreinvolvedapersonisinagroup,themorelikelyitisthattheirpurchasingbehaviourwillcorrelatewiththatofothermembersinthegroup.Theinfluenceofthereferencegroupismuchhigherwhenpurchasingspecialityorluxuryproductsthanwhenbuyingnecessities.
TypesofreferencegroupsFormal:clearlydefinedstructureandmembership,e.g.soccerclubInformal:noformalrulesandlessrigidstructure,e.g.friendsandpeersPrimary:face-to-faceinteraction,e.g.studentsatthesameschoolSecondary:noface-to-facecontact,e.g.SAsupportersofanoverseassportsteamMembership:membershipisarequirement,e.g.churchcongregationNon-membership:notamemberbutadheretotherulesandregulations,e.g.ProtestantworkethicAspirational:agrouptowhichpeopleaspiretobelong,e.g.parliamentDissociative:agroupyouavoidorreject,e.g.smokersoryouthgangs
Useofreferencegroupsinmarketingi. Information:referencegroupsspreadvaluableinformation,e.g.BlackBerryphonesii. Rewardandpunishment(normativeorutilitarianinfluence):whenconsumersfulfilthe
expectationsofaparticulargroup,theymayreceiveareward.iii. Aspiration(identificationinfluence,value-expressivereferencegroups):aperson’saspirationto
belongtoacertainreferencegroupmayenhancetheirself-concept,e.g.wearingyoursportsteam’sjersey.Determinantsofreferencegroupinfluence
a.Visibility:groupinfluenceisstrongerwhenaproductisvisibletothegroup,e.g.thestyleofadressisvisible,notthebrand(necessarily)
b.Necessity:thelessitisanecessity,thestrongergroupinfluenceis,e.g.designerclothesvs.fridge
c.Commitmenttothegroup:increasedcommitmentmeanshigherlikelihoodofconforming,e.g.dressinguptogosomewherewithavaluedgroupvsunimportantgroup
d.Relevance:themorerelevantanactivityistothegroup’sfunctioning,thehigherthepressuretoconform,e.g.styleofadressisimportantinagroupwhichregularlymeetsfordinnervsonethatmeetstoplaytennis
Socialclassagroupofpeopleinacountrywhoareconsideredequalinstatusorcommunityesteem,whosocialise
togetheronaregularbasisformallyorinformally,andwhosharebehaviourpatterns.Thesocialclassstructureisbroadlydividedintothreecategories:upper,middleandlowerclass.InSA,however,itisdividedinto5categories:upper,uppermiddle,middle,workingandlowerclass.SAalsohasatriangularshapedclassstructure,withafewpeopleintheupperclassandthemajorityofthepeopleinthelowerclasses.SocialclassesareusuallydescribedusingtheLSM.ThedemographicsoftheblackSouthAfricanpopulationarechangingdramatically:increaseinhighereducation,increaseinhighstandardofliving,increaseinmatricrates,increaseinmediumstandardofliving,declineinloweducationandlowlivingstandards.Thismirrorsthetotalchanges.Thewhitepopulation’sdemographicsalsochanged,withastagnationandeventualdeclineinhigheducationandhighstandardofliving,aswellsmallgrowthinthemediumeducationandmediumlivingstandards.
Challengesintheprogresstowardsfurtherimprovements ImpactofHIV/Aids:incl.lowlifeexpectancyofhighlyeducatedpeople Threatofdouble-dipworldrecession ContinuingskillsflightfromSA Problemofeconomicgrowthwhichdoesnotstimulatejobcreation Questionsaboutthequalityandlabourmarketrelevanceoftertiaryeducation Inabilityofurbanareastocopewithrapidlyubranisingpopulation,resultinginpoorservice
delivery
StudyUnit6:PersonalCharacteristics,PersonalityandSelf-conceptofConsumers
ReligionAperson’sreligiousaffiliationhasanimpactontheirbeliefs,valuesandbehaviouraltendencies–allofwhichinfluencecustomerbehaviour.Itcaninfluencewhattheypurchase(symbols&rituals)=starofDavid,Christiancross/Ramadan,Hanukkah,Christmas,Diwali.Religionsoftheworld:
Christianity Islam Hinduism
Buddhism Judaism Confucianism
RaceThisisavariablethatmarketerscanuseifithelpsthemestablishgroupswhoseneedsandvaluesdiffer.
thegeneticheritagegroupintowhichapersonisbornCommonracialgroupsinSA=white,blacks,colouredsandIndiansEthnicidentity:ethnicheritageintowhichapersonisborn(differenttribes)Canbesensitivesubject,cantargetingaspecificethnicgroupberacist?Ifanethnicgroup’sneeds&valuesdiffer,thentheyshouldbetreateddifferentlybymarketers
RaceandproductsMarketersneedtoascertainiftherearevaliddifferencesbetweentheneedsandwantsofthedifferentracialgroupsandmustrespondtothesedifferences
LivingStandardsMeasurementTheLSMuseswealth,accessandgeographyasmajorindicatorswithwhichtosegmenttheSAmarket
GenderReferstowhetherapersonismaleorfemaleMenaremoreloyaltodomesticorlocalretailers–WomanaremoreresponsivetointernationalretailersGenderidentityreferstotraitsoffemininity(tenderness&compassion)andmasculinity(aggression&
dominance)Genderusuallyremainsconstantthroughoutanindividual’slifeanditinfluencesvaluesandpreferences
ChangingroleofwomanWomenaremovingawayfromthetraditionalroleofahousewifeMarketerswereinitiallyinterestedinwomanastheytraditionallyboughtthehousegoodsbutthatischangingTheimpactofwomanasconsumersisapowerfulimpetustoreviewmarketingefforts
1.Traditionalhousewife:stayathome,familycentered,strivestopleaseherhusband&childrenandenjoysvolunteeractivities
2.Trappedhousewife:preferstoworkbutstaysathome,lackofoutsideopportunities,notenjoyhouseholdchores,hasmixedfeelings
3.Trappedworkingwoman:worksbutpreferstostayathome,frustratedwithlackoftime,resentsmissedopportunitiesofcaringforherfamily,proudofherfinancialcontribution
4.Careerdrivenwoman:preferstowork,getssatisfactionfromhercareer,willexperienceconflictifyoungchildrengetinvolved,feelspressedfortimeChangingroleofmen
Duetoan↑inwomanintheworkplace,menarebecomingmoreinvolvedathomeMenaremoreknowledgeableonhouseholdproductsI. Metrosexual:urbanmanwithstrongaestheticsenseandspendsalotoftimeandmoneyonhis
appearanceII. Retrosexual:anti-metroandscornfulofbeingconcernedwithphysicalappearanceIII. Ubersexual:masculine,refined,confidentmalefocusedonhismindratherthanhisbodyInternetalsohasadifferentappealtogenders–W=references,books,medicalinfo,cookingideas,chatting,M=exploration,software,investments.Basicdemographicsarenotadequatefornichemarkets–needtotaketimetolearnaboutthemandtheirculture(gay/lesbians)
AgeVeryNBvariablethatinfluencesbehaviour
DefiningageChronologicalage:lengthoftimesincethebirthoftheperson(years)Biologicalage:changestakingplaceinthehumanfunctionalityovertime(affectedbydiet,lifestyle,andhealth)Psychologicalage:changesinpeople’sself-perceptionsandcognitions(howtheyseethemselvesandothers)
ImportanceofagetomarketersThethingsapersonneedsorwantschangeastheiragechangesAgehelpsmarketerstocalculatethelifetimevalueofacustomerChangesintheagecompositionofapopulationcorrelatewithshiftsinvalueanddemand
AgesubculturesMarketerscandividepopulationintoculturesusingcohortanalysis,whichistheprocessofdescribingandexplainingtheattitudes,behavioursandvaluesofanagegroup
SeniorsAssumetheyhavesubstantialfinancialresources,inpoorhealthandhaveplentyfreetime.BUTmanycaredailyforgrandchildrenordovolunteerworkManyseniorsthinkofthemselvesasyoungerthantheyare,somarketerswilluseyoungerpeoplethanaimedat
Newageelderly TraditionalelderlyPerceivethemselvestobedifferentfromotherstheirage PerceiveotherstheiragetohavethesameoutlookAgeisastateofmind AgeisaphysicalstateSeethemselvesasyounger SeethemselvesasneartheirageFeel,think,doyounger Feel,think,dothingsthattheyfeelmatchtheirageGreaterself-confidencewhenitcomestoconsumerdecisions Normalself-confidencewhenitcomestoconsumerdecisionsKnowledgeandalertconsumers Low-to-averageconsumercapabilitiesSelectivelyinnovative Notinnovative
BabyBoomersBornafterSecondWorldWarAgerangeismid-fortiestomid-sixties,havehigheducation,highincomesanddual-careerhouseholdsConcernsincludeexpensesforeducation,weddingsandretirement.Don’tlikegettingold=increaseinhealthclubmembershipsandvitamin/supplementsales
Appealingtomarketersbecause: Singlelargestagecategoryalivetoday Makeimportantconsumerpurchasedecisions Smallsubsegementoftrend-setters(yuppies)
GenerationXGrewupindifficulteconomictimes(mid60’s-mid70’s),struggledtofindjobsandcareerplacementFoundsuccessandachievementthroughtechnologyJobsatisfactionisveryNB,don’tnecessarilywanttoworkfor1companyalltheirlives(alsodon’trushintomarriage)Tendtoleavehomelater,feellesspressuretosettledownandarepreoccupiedwithpossessionsandshopping
GenerationYLate70’sand90’sanddividedinto:
1)Adults–19and242)Teens–13and183)Tweens–8and12
Theyarelogical,savvy,socially&environmentallyawareandopentoexperiencesWatchmoreovertheinternet,won’treallyreadanewspaperandwillprobablybethemostseasonedandsophisticatedgenerationyet.Oftenfromadivorcedhomeorbothworkingparents,theyshopforthemselvesandtendtobemorefussyandlookforgoodvalue
Generaltipsformulti-generationalmarketingGuidelines: Understandbackground,morals,values,lifestylesandprioritiesofeachgeneration Recognizethedifferentbehaviorpatterns Relymoreonin-depthmarketresearch
PersonalitytheoriesFreud’spsychoanalytictheoryofpersonality
OperatesonthepremisethathumandrivesarelarglyunconsciousinnatureandservetomotivatemanycustomeractionsResearcherstendtofocusonwhatcustomersbuy,treatingitasasareflectionandextensionofthecustomerspersonality
Non-FreudiantheoryTendstoemphasisethefundamentalroleofsocialrelationshipsintheformationanddevelopmentofpersonalityAlthoughthesetheoriesdon’treceivewideattention,itslikelymarketershaveemployedsomeintuitively
TraittheoryFocusesonthemeasurementofpersonalityintermofspecificindividualpsychologicalcharacteristicscalledtraitsTrait:anydistinguishingwayinwhichonepersondiffersfromanother.Individualspossessinnatepsychologicaltraitslikeself-confidence,aggression,curiosity
GestalttheoryPeopledonotexperiencethenumerousstimulitheyselectfromtheenvironmentasseparatesensations;rather,theytendtoorganisethemintogroupsandperceivethemasunifiedwholesAttitudes,perceptions,aspirations,self-concepts,satisfaction,frustrationandmotivationareallnecessarytoexplainandunderstandhumanpersonalityandcustomerbehaviourMowenarguesthatthereare8elementaltraits,emergingfromgeneticsandearlylearning,thatarecoretotheeffectofpersonalityonacustomer’sbehaviour
1)Opennesstonewexperiences2)Orderlinessorconscientiousness3)Extraversion4)Needtobeagreeableandkind5)Tendencytobemoodyortemperamental6)Needtocollectandownmaterialthings7)Desireforexcitement8)Needtolookafterthebody
Theinfluenceofpersonalityonlifestyle
Marketershavedifficultyusingpersonalityasaneasy,reliable,consistentbasisforsegmentationSo,theyarenowmorefocussedonlifestyle:howapersonlivesandinteractswiththeirenvironmentandisthereforeareflectionoftheirwayofbeingandlivingintheworldLifestyletrendsareconstantlyevolving–whicheffectshowmarketerssellCategorisingconsumers:
A.Sustenancedriven–motivatedbymaterialsecurityo Aimless:youngunemployedandelderlydrifterso Survivors:traditionallymindedworkingclasso Belongers:conservativefamily-orientatedpeople
B.Outer-directed–motivatedbystatuso Belongerso Conspicuousconsumers
C.Inner-directed–dividedinto:o Socialresisters:caringandoftendoctrinaireo Experimentalists:hedonisticandindividualistico Self-explorers:lessdoctrinaireandmaterialistic
LabellingtheconsumerYuppies YoungUpwardlyMobileProfessionalsBumps Borrowed-to-the-hilt,UpwardlyMobileProfessionalShow-
offsJollies Jet-settingOldieswithLotsofLootWoopies Well-OffOlderPersonsGlams GreyingLeisuredAffluentMiddle-AgedKippers KidsInParentsPocketsErodingRetirementSavings
ThevalueofpersonalitytomarketersCommonobstacleswhichmarketersencounterwhenusingtraditionalsegmentationstrategies
DemographicsshouldnotbeusedtoinferandaudiencesmotivationsorbehavioursAmultiplicityofattitudeswithinanaudiencemayexistandasingledemographiccategorymay
haveawiderangeofattitudestowardsaproductsorserviceMessagestargetedtoanaveragemaybeproblematicas“averageconsumers”don’texist
Customerstendtobuyproductsthatreflect,enhanceorevendefendtheirpersonalities.Inthisway,theyattachacertainsymbolicmeaningtosomeproducts=productimageTheidentificationofpersonalityvariablesthatappeartobelogicallylinkedtoproductusagewillimprovemarketersabilitytosegmentmarketsandenablethemtodesignspecificproductsthatwillappealtocertainpersonalitytypes
Selfandself-conceptthetotalityofthoughtandfeelingsanindividualmaintainsabouthimorherself
Self-conceptisahighlycomplexstructurecomparedtootherattitudesanddevelopsovertime,itisnotinnate,purposeofprotectingandenhancingtheego,isuniqueandincludesself-relatedknowledgeandbeliefsthatarestoredinmemory
OneselformultipleselvesMarketersshouldtargettheirg/stocustomerswithinthecontextofaparticularself
Themake-upofself-imagePeopletendtobuyg/sandpatroniseretailerswithimagesorpersonalitiesthatcloselycorrespondtotheirownself-imageTypesofself-conceptActualself HowapersonactuallyperceivesthemselvesIdealself Howapersonwantstobeperceivedbyothers–wouldliketobeSocialself HowapersonthinksothersperceivethemIdealsocialself
Howapersonwouldlikeotherstoperceivethem
Expectedself TheimageofselfbetweentheactualandidealselfSituationalself Personsself-imageinaspecificsituationExtendedself Apersonsself-concept;theimpactofpersonalpossessionsonself-imagePossibleself Whatapersonwouldliketobecome,couldbecomeorisafraidofbecoming
Marketerscansegmenttheirmarketsonthebasisofrelevantcustomerself-imagesandtheirproductsorstoresassymbolsofsuchself-images
TheextendedselfPossessionscanbeseenascustomer’sextensionoftheirself-image–inthefollowingways:
Actually:allowingthepersontodothingsthatwouldbedifficultorimpossibletoaccomplish
Symbolically:makingsomeonefeelbetteror‘bigger’ Status/rank:owningsomethingrare Immortality:leavingvaluedpossessionstochildren Magicalpowers:somethingpasseddowncouldbeseenas‘goodluck’
Alossofaprizedpossessionmayleadtogrief
StudyUnit7:CustomerPerceptionandLearning
ThecustomerasperceiverThenatureofperception
peopleselect,organizeandinterpretstimulitoformmeaningfulpicturesoftheworldthroughthesenseofsight,sound,smell,touchandtasteTheprocessinvolvesbeingexposedtoastimulus,payingattentiontoitandtheninterpretingitsmeaninginordertorespondtoitPerceptionisselective:Weonlynoticeasmallnumberofstimuli,somarketersfaceachallengeascustomersarenotpassiverecipientsofmessagesPerceptionissubjective:Eachofusinterpretthestimulidifferently,weseeandhearwhatweareinterestedinbecauseofwhowearePerceptionisbasedontheindividualsframeofreference:Dependsonourownpersonalexperiences,whichbuildupastablementalorganizationinthepersonthatgivemeaningtoaparticularperception.
Theperceptualprocess
ExposureThisisthedegreetowhichapersonnoticesastimulusthatisinrangeoftheirsensesExposuretoamessagemeansonlythatithasbeenseenorheard,noguaranteetheindividualpaidattention
AttentionTheextenttowhichtheprocessingactivityisdevotedtoaparticularstimulus
IndividualNeedseemstobetheprimarycharacteristicthatinfluencesattention
StimulusNBindeterminingwhatisnoticedandwhatisignored.Stimulithatdifferfromthosearoundthemwillbenoticedmore.
o Size&intensity:largerstimuliaremorelikelytobenoticedthansmalleroneso Colour:givingitadistinctidentityisawayofdrawingattention(Yellowpages)o Position:inaplacewherepeoplewillactuallylooko Isolation:separatingastimulusfromotherobjects
SituationInperceivingthestimuluswithagivensetofcharacteristics,customerswillalsobeinfluencedbythecontextofthestimulusorsituation
InterpretationPersonassignstosensorystimuli.Peoplewillinterpretinfoaccordingtotheirexistingbeliefs,attitudes&generaldispositionsandexperiencesMarketerswillalsoturntosemiotics;thisexaminesthecorrespondencebetweensignsandsymbolsandthemeaningconsumersassigntothemSelectiveinterpretation:themessageisnotinterpretedasitwasintendedtoThemessagecanbedistortedbylevellingorsharpening
Levelling:individualseitherignoreimportantinformationorsimplfythemessage,maybebyremovingNBinfo,soitbecomesmoreacceptable
Sharpening:individualsreadadditionalinfointothemessagebyaddingnewelementstomakeitfitwiththeirpredispositions
RecallAdvertiserstrymakesuretheinfowillberetainedincustomersmemorysoitisavailablewhenthecustomerisconsideringbuyingsomething
PerceptionandmarketingRetailstrategy
HighmarginitemsareputinhightrafficareastocapitalizeonincreasedexposureShelfpositionandshelfspacealsoinfluencewhichitemsandbrandsaregivencustomerattentionPoint-of-purchasedisplaysalsoattractattentiontosalesandhighmarginitems
BrandimageTheimageofaproductinacustomer’smindismoreimportantthanactualcharacteristics.Marketerstrytopositionstheirbrandssoitisperceivedtofitadistinctiveniche
PriceandqualitycueCustomerswilloftenrelyonpriceasanindicatorofqualityandmarketerswillemphasisthehighpriceforthis
CustomerlearningThenatureoflearning
LearningexperiencesdeterminetheproductsthatcustomerswillbuyandwhytheypreferacertainproductExperimentallearning:anexperiencecausesapersontochangetheirbehaviorConceptuallearning:nodirectexperienceFrommarketing,learningistheprocessbywhichindividualsacquirebuyingandconsumptionknowledgethattheyapplytofuturebehavior
Elementsoflearning
StimulusMarketersstimulatecustomersusingphysicalthingssuchasproducts,brandsandsizeorintangibleslikeservice/satisfactionAfterstimulation,customersmustbemotivatedtoseektheobjectbeforelearning–motivationthusspurslearningThestrongerthemotivation,thequickercustomerslearn
ResponseAresponseisanyaction,reactionorstateofmindresultingfromaparticularstimulusMarketerswhoprovideconstantcuesmaynotalwayssucceedinstimulatingthecustomerbutcreatemoreofafavorableimage
ReinforcementIsthesatisfactionresultingfromsuccessfulbehaviorthattriggershumanmemoryofhowthesatisfactionwasobtainedItincreasesthelikelihoodthatacertainresponsewilloccurinthefutureRepetition–sameactionisperformedseveraltimesParticipation–helpsreinforcement,retailersmustencourageinvolvementwiththemerchandise(taste,see,smell)
TheoriesoflearningClassicalconditioning
Inallkindsofselling,somerewardisassociatedwiththemarketer’sproductsinanattempttopersuadethecustomertobuy
InstrumentalconditioningOccursasaresultofarewardreceivedfollowingthedesiredbehavior
CognitivetheoryViewspeopleasproblem-solverswhoactivelyuseinfofromtheworldaroundthemtomastertheirenvironment
Iconicrotelearning:learningtheassociationbetween2+conceptsintheabsenceofconditioning(Disprin+headache=remedy)-(“Disprinisaheadacheremedy”)
Vicariouslearning/modelling:notnecessaryforcustomerstoexperiencereward/punishmenttolearn(newemployeesobserveotherstoseetheirstyle)
Reasoning:engagingincreativethinkingtorestructureandrecombineexistingandnewinfo
StudyUnit8:CustomerMotivationandAttitudes
NatureofmotivationNeeds,motivesandobjectives
Motivationreferstotheprocessesthatleadpeopletobehaveastheydo.ItoccurswhenaneedisarousedthatthecustomerwishestosatisfyAneedcreatestensionthatdrivesaconsumertoreduceoreliminateitNeedsarethebasicsourcesofbuyerbehaviour,andhavetobestimulatedbeforetheconsumerisdriventoactionAcquiredneedsareneedsthatwelearnisresponsetoourcultureorenvironmentInmarketinganeedisnotenough,thecustomermustalsowanttodosomethingaboutit
Howmotivationlinksneedsandobjectives
Basicneeds:hunger,thirstUtilitarianneeds:emphasistheobjective,tangibleattributesofproducts(petrolconsumption)
Hedonicneeds:subjectiveandexperimentalNeedarousal
ThisbeginswiththepresenceofastimulusthatcausestherecognitionofaneedPhysiologicalarousal
BodilyneedarebasedontheindividualsphysiologicalconditionatthemomentMostphysiologicalcuesareinvoluntarybuttheyarouserelatedneedsthatcauseuncomfortabletensionsuntilsatisfied
EmotionalarousalBoredpeoplewilldaydream,imaginingthemselvesininallsortsofsituationswhichcancausearousal
CognitivearousalCognitiveawarenessmaybetriggeredbyastimulusintheenvironment
EnvironmentalarousalNeedsactivatedataspecifictimeareoftendeterminedbyspecificcuesintheenvironment,withoutthesetheneedswouldremaindormant
ThedrivestateWhenweexperiencethis,weengageingoal-directedbehaviour(waysthatwillrelieveourneedstate)MarketershaveadaptedMaslow’suniversalapproachtomotivationbecauseitindirectlyspecifiescertainproductspeoplemightbelookingfor–dependingontheirstage
Classificationofmotives(needs)Maslow’shierarchyofneeds
Anindividual’sdesiretofulfilhisorherpotentialandbecomeeverythingtheircapableof
I:self-acceptance,success,independence.O:prestige,reputation,status
Expressioninbuyinggoodsandparticipatingingroupactivities(sports)
Notonlyphysicalsafetybutalso,order,stability,routine,control
Firstandmostbasiclevelofhumanneeds
Table8.1pg.171
McGuire’spsychologicalmotivesInternal
Consistency Needforinternalequilibriumandbalance
Causation NeedtodeterminewhoorwhatcausesthethingsthathappentousCategorisation Needtoestablishcategoriesthatprovideframesofreference
Cues NeedforobservablecuesthatenableustoinferwhatwefeelandknowIndependence Needforafeelingofself-controlNovelty Needforvarietyanddifference
ExternalSelf-expression Needtoexpressself-identitytoothers
Egodefence NeedtoprotectouridentitiesAssertion Needtoincreaseself-esteemReinforcement NeedtoactinsuchawaythatotherswillrewardusAffiliation NeedtodevelopmutuallysatisfyingrelationshipswithothersModelling Needtobasethebehaviouronthatofothers
EconomicandemotionalclassificationWhencustomersbuyproducts,theyarealsoconcernedabouttheeconomy,quality,performance,suitabilityandreliabilityEconomicmotivesarerationalinnatureandmarketersoftenexpresstheminquantifiabletermsCustomersdonotnecessarilyactinnon-rationalmannerwhentheyallowtheiremotionstoinfluencetheirbuyingdecision
Psychographicscharacteristicsofindividualsthatdescribethemintermsoftheirpsychologicalandbehavioural
makeupPsychographicsandlifestyle
ThisresearchattemptstoassesscustomersonthebasisofpsychologicaldimensionsasopposedtopurelydemographicdimensionsDemographicsdescribeswhobuyswhilepsychographicslooksatwhytheybuyPsychographicvariablesgobeyondsuperficialcharacteristicstoanunderstandingofcustomermotivationsforbuyingandusingproducts
ValuesdeterminelifestyleOurlifestyleexpressesthegoalsweliveforwhilevaluesarethegoalswelivefor
PsychographicprofilesACNielsenMRA’sSociomonitorValueGroupsSurveyisthemostauthoritativepsychologicalprofileinSARespondentsansweranextensivebatteryofpsychographicstatements,whicharethengroupedandscored,givingeachrespondentadifferentscoreandpositiononthesocialmap
UsesofpsychographicsMostnotable:marketsegmentationItguidesmarketersinemphasisingfeaturesoftheproductthatfitinaperson’slifestyleOffersusefulinputinadvertising,specificallycommunicatingsomethingabouttheproduct
NatureofcustomerattitudesDefinition
Anattitudedescribesaperson’srelativelyconsistentevaluations,feelings,andtendenciestowardsanobjectorideaNBaspects:Attitudesarelearned:attitudesareformedafteradirectexperiencewiththeproduct,infofromothersandexposuretomassmediaAttitudestendtobeconsistent:notpermanent,canchange.
AttitudesasacombinationofinterrelatedbeliefsandvaluesNBformarketerstorealisethatattitudesaredifferentfrompersonalvaluesandbeliefs
ABCmodelofattitudeAffect–feelingsBehaviour–actionsCognition–beliefs
TheaffectivecomponentTodowiththeconsumersfeelingsoremotionsAffectismostimportantforproductsweusetosaysomethingaboutourselves
ThebehaviouralcomponentManifestsinboththeintentiontobuyandtheactualactofbuyingWhatapersondoesabouttheirknowledgeofandfeelingstowardsaproductisNBtoacompanyCustomermayhavepositiveinfoonaproductandlikeitbutnotbuyit(otherpreferredbrandsorcost)
Thecognitivecomponent
Consistsofacustomer’sbeliefsandknowledgeabouttheobject–2typesofbeliefsInformational:productattributesEvaluative:productbenefitsBenefitsareabasisfor:
Defininganopportunity Positioninganewproduct Developinganadvertisingstrategy
FunctionsofattitudesUtilitarianfunction
CustomersdeveloppositiveattitudestowardsthoseproductsthathavesatisfiedthemandvvEgo-defensivefunction
ToprotectpeoplefrombasictruthsaboutthemselvesorformharshrealitiesoftheexternalworldValue-expressivefunction
HowpeopleexpresstheircentralvaluestoothersKnowledgefunction
Attitudescanalsoserveasstandardsthathelppeopletounderstandtheirenvironmentandsogiveorderandmeaningtoit
AttitudeformationClassicalconditioning
TheideaoffamilybrandingisbasedonclassicalconditioningasaformofattitudelearningAttitudesarelearnt–peoplearenotbornwiththemUsingclassicalconditioning,thebrandnameistheunconditionedstimulusthat,throughrepetitionandpositivereinforcement,resultsina+attitude
InstrumentalconditioningSometimesattitudesareformedonlyafterthebuyingandconsumptionofaproductCustomersalsomaketrialpurchasesofnewbrandsfromproductcategoriesinwhichtheyhavelittlepersonalinvolvement
CognitivelearningtheoryThemoreinfocustomershave,themorelikelytheywillformattitudesaboutaproduct(±)
ExperienceTheprimarymeanbywhichattitudestowardsg/sareformedisthroughtheconsumersdirectexperienceintrailingandevaluatingthemMarketersfrequentlyattempttoencourageconsumerstotryoutnewproducts(freesamplesorcoupons)
ExternalauthoritiesAswecomeintocontactwithothers,weacquireattitudesthatinfluenceourlives(esp.friends,family,andteachers)
MarketingcommunicationsThisisimportantforinfluencing,buildingandmaintainingpositiveconsumerattitudestowardsacompanyanditsproducts
AttitudechangeTheABCmodelisimportantformarketersasitcanidentifycustomerattitudesandeitherdesignproductsthatareconsistentwiththeseortrychangetheattitudes
ChangingtheaffectivecomponentMarketersareincreasinglytryingtoinfluencecustomerslikingoftheirbrandwithoutdirectlyinfluencingtheirbeliefsorbehaviour
ClassicalconditioningMarketerslinkstimulusthattheaudiencewilllike(pics,music)soovertimeitwilltransfertothebrand
ProducingpositiveaffecttowardstheadPositivitytowardanadmayincreaselikingthebrand–celebs,humour,emotionsAd’sthatarousenegativeaffectoremotions(anger,guilt)canalsochangeanattitude
MereexposureExposecustomersrepeatedlyPeopleslikingmayincreasesimplybecausetheyseeitoverandoveragain
ChangingthebehaviouralcomponentAttitudesformedasaconsequenceofproducttrialareusuallystronglyheldIftheywanttoestablishacustomer’sbrandloyalty,marketersshouldconsidernotonlybehavioural
ProductAttributes ProductBenefits
#ofkilojoules Goodwithmeals
Vitamincontent Refreshing
Sweetness Givesalift
Aftertaste Restoresenergy
brandloyaltybutalsoattitudinalbrandloyaltyChangingthecognitivecomponent
ChangingbeliefsShiftingthebeliefsabouttheperformanceofabrandononeormoreattributes
ShiftingperformanceSomeproductattributesaremoreimportantthanothersMarketerstryconvincecustomersthattheattributesontheirbrandsarestrongandthemostNB
AddingbeliefsAlsotryaddnewbeliefstocustomersbeliefstructure
ChangingtheidealCanchangeanattitudebychangingtheperceptionsoftheidealbrandorsituation
FactorsinfluencingattitudechangeAttitudesthatarestronglyheldaremoredifficulttochangethanweakonesAttitudechangeismorelikelytohappenifithasbeenadoptedbecauseofaknowledgefunctionConsiderthefollowingadappeals:
Fear:usethethreatofanegativeconsequences Humour:builtaroundtheproduct Emotional:createapositiveaffectiveresponseratherthanprovideinfo
StudyUnit9:ConsumerDecision-makingProcessandFamilyDecision-making
Theconsumerdecision-makingprocessDecisionmakingisacognitiveprocessthatconsistsofthosementalactivitiesthatdeterminewhatactivitiesareundertakentoremoveatensionstatecausedbyaneedConsumersdon’tjustbuyobjects,butalsosolutionstoproblemsConsumeranalysisincludedanelevationof4dimensions;cognition,behaviour,environmentandmarketingstrategies,inordertoobtainaprofileofthetargetmarketItisasequentialandrepetitivesetofpsychologicalandphysicalactivitiesrangingfromproblemrecognitiontopost-buyingbehaviour
BuyingsituationsConsumersareinfluencedbyfactorscalledpsychologicaldomainInabuyingsituation,peopleabsorbinfofromtheexternalenvironmentandintegrateitwiththeirinnerneeds,motives,perceptionsandattitudesPeopleareinfluencedbytheirsurroundingenvironment(family,peergrouppressure,referencegroups,andadverts)Despitethepressures,tobuyornottobuyinthefinalbuyingsituationisanindividualone
Stagesinthedecision-makingprocess
ProblemrecognitionWhenconsumersrecognisea
differencebetweentheirperceivedcurrentstateofaffairsandthestateofaffairstheywant–aproblemarisesProblemrecognitioncantakeplaceatallthestages:
WithwhethertheproductisneededWhatproductorbrandtobuyWhethertoputitoncashorcreditConcernswhethertheconsumeraresatisfied
Mostproblemsariseasaresultofthefollowing: Assortmentinadequacies:whenaconsumerssuppliesofaproductstartrunningout Newinfo:createsastateofawarenesssoconsumersfeeltheneedforap/s
Expandeddesires:peoplealwayswanttoimprovetheirstandardofliving Expandedorreducedmeans:increaseinincomewillincreaseconsumerspending,while
unemploymentwilldotheoppositeSearchforinformation
Consumersearch:mentalandphysicalactivitiesundertakenbyconsumerstoobtaininfoonidentifiedproblemsThesearchcanbeexternalorinternal
InfofromoutsidetheirexperiencesFromconsumermemories
Individualdifferencesinclude:consumerresources,motivation,knowledge,attitudes,lifestyle,personalityEnvironmentalinfluences:personalinformationsources,businessandmarketingforces,instorepromo’s
ConsumerinvolvementindecisionmakingThisisamotivationalstatethatencouragesandguidesconsumers’attitudesastheymakedecisionsProductinvolvementisinfluencedbyperceivedrisk&badgevalue
amountofrisktheconsumerperceivesinthebuyingdecisionasaresultofuncertaintypersonbecomesinvolvedwithapurchasebecauseitissociallyacceptable
TypesofconsumerdecisionsAsconsumersmovefromalowlevelofpurchaseinvolvementtoahigherlevel,thedecision-makingprocessbecomesmorecomplex,movingfromhabitual→limited→extendeddecisionmaking
HabitualdecisionmakingExistswhenthereislowinvolvementwiththebuyingprocessandresultsinrepeatbuyingbehaviourCategorisedintobrandloyaltyandrepeatbuyingbehaviour
LimiteddecisionmakingConsumersarenothighlyinvolvedwiththealternatives
ExtendeddecisionmakingResponsetoahighlevelofbuyinginvolvementwhereinternalandexternalinfosearchesarefollowedbyacomplexevaluationofmanyalternatives
EvaluationofalternativesConsumerevaluation:actofidentifyingalternativesolutionstoaproblemandassessingtherelativemeritsanddemeritsofeachsolutionConsumersbuyproductstowardswhichtheyholdfavourableattitudesandwhicharekeepingwiththeirpersonalities4typesofindividuals:
1.Economicindividualtakescalculated,rationaldecisionsbasedoncompleteinfo2.Passiveindividualsisnotknowledgeableandcanbemanipulated3.Emotionalindividualsmakedecisionsbasedentirelyonpersonalandirrationalneeds4.Cognitiveindividualsbasetheirdecisionsontheenvironment,socialinfluences,personalneeds&
attitudesBuying
Consumerresponseistheoutcomeofevaluationandinvolvesthementalprocessofselectingthemostdesirablealternativefromtheoptions
PostbuyingevaluationConsumersbuythingsinordertofulfilneedsandseekgreatersatisfactionsothebiggestquestionis,aretheynowsatisfiedoncethey’vemadethepurchase?Postbuyingassessmentistheconsumer’sevaluationoftheperformanceoftheproductafteritwasboughtPostbuyinglearningmeansthatafteracquiring,usinganddisposingofap/s,theconsumerdiscoverssomethingandstoresthisknowledgeintheirmemory
Post-buyingsatisfactionWhentheoutcomehasmatchedtheconsumers’expectations
Post-buyingdissatisfactionTheproductsperformancedoesnotmatchtheirexpectationsConsumerresponsesmaybeverbal(talkabouttheirdissatisfactionoftheproductandspreadrumours)orbehavioural(complaintbehaviour=PVT,warningfriends,orPBC,demandingredress,complainingtothefirm,takinglegalactionorbrandswitching=displaytheirdissatisfactiontopreventunhappinessinthefuture)
Post-buyingconflictQuestionwhethertheymadetherightdecisionorshouldhaveboughtthealternativeproduct
HouseholddecisionmakingHouseholdresearch:describe,understandandpredicthowhouseholdmembersinteractandinfluenceoneanother
RolebehaviourToworkasacohesiveunit,memberscarryoutvarioustasks–makingtheprocesshighlycomplexHouse-holdrelateddutiesareconstantlychanging;theidentityandnumberofthesememberswhoplaytherolesvaryfromhouseholdtohouseholdandfromproducttoproduct
1.Influencers:provideinfotoothermembersaboutap/s2.Gatekeepers:controltheflowofinfo3.Deciders:decidealoneorwithotherswhethertobuy,use,consumeordisposeofaspecificg/s4.Buyers:dotheactualbuying5.Preparers:transformtheproduct(rawmeat)6.Users:useorconsumetheproduct7.Maintainers:serviceorrepairthegoodsoitcancontinuetogivesatisfaction8.Disposers:decideonorcarryoutthedisposalordiscontinuationofaparticularg/s
Husband-and-wifedecisionmakingMarketersareinterestedintherelativeamountofinfluenceahusbandandwifehavewhenitcomestohouseholdconsumerchoices
Howspouseinfluencethedecision-makingprocessDifferentdegreesofinfluence:
Influenceofdecisionstage→Carriedoutmorebyonespouseandthemovementwillbeminimalforlowinvolvementgoodsbutmorepronouncedforriskyinvolvementgoodsforthehousehold
Influenceofemployment→Increaseinwomanworkingoutsidethehomeandchangingspousalroleshasaffectedthewaycouplesdividetheirbuyingresponsibilities
Influenceofgender→asgendergapnarrows,decisionsareincreasinglymadejointly
ThehouseholdlifecycleThedeclineinthe%ofhomesthatprogressthroughthetraditionalHLCstagesiscausedby:increasingdivorcerate,increaseinout-of-wedlockbirths,andadeclineinnumberofextendedhouseholds
TraditionalhouseholdlifecycleStage1:Bachelorhood
Youngsinglemenandwomenwhoareawayfromtheirparents,mosthaveajobandaregraduates.Spendtheirmoneyonrent,clothing,entertainment,travelling,carsandhomefurnishings
Stage2:HoneymoonersStartsimmediatelyaftermarriageandwillcontinueuntilababyarrives,combinedincomesmeanstheycanbuywhattheywant,saveorinvesttheirextraincome
Stage3:ParenthoodUsuallylasts±20years,canbedividedintopreschoolphase-elementaryschoolphase-highschoolphase-tertiaryeducationphase
Stage4:Post-parenthoodChildrenleavehome,causes‘emptynestsyndrome’whereparentscandothingstheycouldn’tbeforeandnotworryaboutschoolingexpenses,re-entertheworkforce,seeknewinterestsandhobbies,travelmore,entertainanddorenovations
Stage5:DissolutionWhenoneofthespousesdies,thesurvivorwillleadamoreeconomicallifestyle,mightseekcompanionshipandenterintoanothermarriage
ModificationstotheHLCThe8life-stagegroups1 At-homesingles Upto34,mostly16-24.Livewithparents,notmarried2 Youngindependent
singlesUpto34,mostly25-34.Notlivingwithparents,notmarried,nochildren
3 Maturesingles 35+.Notmarried,nochildren4 Youngcouples Upto49,mostly35-49.MarriedorlivingwithSO,nochildren5 Maturecouples 50+.MarriedorlivingwithSO,nochildren6 Youngfamily MarriedorlivingwithSO,dependentchildrenunder137 Single-parenthousehold Notmarriedorlivingwithsomeone,dependentchildreninhome8 Maturehousehold MarriedorlivingwithSO,nochildrenunder13,atleast1childover
13
StudyUnit10:DiffusionofInnovationandtheConsumerAdoptionProcess
DiffusionofinnovationMarketersaretaskedwithcommunicatingandpublicisingnewproductsinthemarketinordertomakeconsumersawareof,andinterestedin,theproductsandtopersuadethemtomakethedecisiontobuythem.
aprocessbywhichnewproductsarecommunicatedtomembersofasocietythroughvariouschannelsoveracertaintimeperiod4mainelementsidentifiedinthisdefinition:•Aninnovation:anewideaintroducedtosocietyorindividuals,itmayalsobeanimprovementonanexistingidea•Communicationchannels:responsibleforspreadinginformationonnewideasandproducts•Time:timeittakesconsumerstoadopt(accept)anewideaorproduct•Socialsystem:membersofthesociety,individualsandgroupsororganisationsthatengageinproblemsolvingtoachievecommongoals.
ConsumeradoptercategoriesItisimportantformarketerstounderstandhowconsumersdifferfromeachotherintermsoftherateatwhichtheyadoptaninnovationoranewproductandhowtheyperceiveattributesofinnovation.Ifmarketersunderstandthis,itwillassistthemindevelopingtargetedstrategiestocommunicatethenewideatoconsumers.Differentadoptercategoriescanbeidentified.Fiveadoptercategoriesandtheircharacteristics: Innovators.Thesepeoplearethefirstgroupofconsumerstoadoptanewproductandtheyare
calledtheenthusiasts.Theyarethetypeofconsumerswhowantadvancedtechnologyandperformance,arewillingtotakerisks,andareenthusiasticaboutpurchasingnewproducts.
Earlyadopters.Thesepeoplearetermedthevisionaries.Theyspreadthemessagebywordofmouth.Theseconsumersaretheopinion-makingleadersandanimportantgroupformarketerstotakeintoaccountastheyareheldinhighesteembyotherswhofollow.Theyalsodeterminewhetherconsumerswillhaveapositiveornegativeattitudetowardsaproduct.
Earlymajority.Consumersinthiscategorypreferproductsthathavebeentriedandtested,sincetheyavoidrisks(psychological,financialandperformance).Theyarepragmatistswhowantsolutionsandconveniencefromtheproductstheypurchase.
Latemajority.Thesearepessimisticconsumerswhodonotseekanyone’sopinionandonlyusetheproductoncetheyhavebeenreassuredofitsbenefitsandvalues.Thismaybeduetothefactthattheyarelesseducated,older,financiallymorestableandconservativethanthepreviouslymentionedgroup.
Lateadopters,laggardsornon-adopters.Thelaggardsaretermedthesceptics,sincetheydonotbelieveinnewideas.Instead,theyaresuspiciousandpreferthingstobedoneasinthepast.Theyreacttothenewproductorserviceanditsbenefitsataslowrate.
FactorsaffectingthediffusionofinnovationComplexity.Thisfactorreferstothedegreeofdifficultyintermsofthelevelofunderstandingand
theuseofthenewproduct.Productsthatarecomplexanddifficulttouseandunderstandtendtospreadslowerinthemarket.
Compatibility.Thisfactorreferstowhethertheproductiscompatiblewiththeconsumers’values,beliefsandobjectivesregardingitspurchaseanduse.
Relativeadvantage.Thisfactorrelatestoconsumerneeds,whicharemetbyinnovation,suchasreducedcostsornewmethodsofdoingthings.
Observation.Thisfactordealswiththeextenttowhichthepotentialadopterhashadtheopportunitytomonitorthepositiveeffectsoftheproductorservicewhenacceptingtheinnovation.Iftheadopterhashadanopportunitytoseetheuseandbenefitsoftheproduct,thepossibilityofamorerapiddiffusionisfeasible.
Trial.Theeasieritistohavealow-costorlow-risktrialoftheinnovation,themorerapiditsdiffusion.
Perceivedrisk.Shouldtheriskoftryingouttheinnovativeproductorservicebehigh,diffusionwillbeslow.Theseriskscanbepsychologicalorfinancial.Financialriskoccurswhentheproductisexpensiveandconsumerscannotberefunded.
Marketingeffort.Themarketingmixconsistsof7Ps,whichareactivitiesexecutedbytheorganisationtoinfluencetherateofdiffusion.7Ps:price,place(CNA),promotion(TV,magazines),product(NintendoWII),people(teenagers,youngadultsandtheinternalstaff),processandphysical
evidence(displaysinstore)Typeofgroup.Thetargetmarketdeterminestherateatwhichinnovationwillbediffused,assome
groupsaremoreacceptingthanothers.Theyoung,affluentandhighlyeducatedmarketsegmentstendtoacceptchangeandnewproductseagerly.
Typeofdecision.Decisionsaremadecollectivelyorindividually.Collectivedecisionsarethosemadebymorethanoneconsumer(familymembers).Collectivedecisionsmayresultinslowratesofdiffusion,sincefamilymembersmaynothavethesameopinion.Individualdecisionsareonlymadebytheactualbuyer,whodoesnothavetodeliberatewithotherconsumers.Thespeedofdiffusionismorerapidbecauselessdecision-makingconsultationisrequired.
Fulfilmentofperceivedneed.Whenthesatisfactionthatwillbederivedfromtheinnovationisobviousintermsofmeetingtheneed,thediffusionismorerapid.
ConsumeradoptionprocessStepsintheadoptionprocess
Awareness.Thepotentialconsumerhassomeknowledgeoftheproductbutdoesnothavealltheinformation.Atthisstage,theconsumermaynotknowhowtheproductworksorwhatitcando.Theconsumerbecomesawareoftheproductviacommunicationchannels
Interest.Theconsumerknowsabouttheproductbutstilllacksinformation.Ifconsumersbecomeinterestedtheywilltrytoobtaininformationontheproduct.Thisinformationmaybeobtainedfromsecondarysources.
Evaluation.Consumersevaluatetheproductonthebasisoftheirpastexperiences.Whenusingaproduct,consumersusetheirintellectualcapitaltoevaluateitintermsofitsbenefits.
Trial.Atthisstage,theconsumermaybuytheproducttodetermineifitmeetshisorherneeds.Itisimportantformarketers,especiallythosewhomarketfastconsumableproductstohavesamplesavailableforconsumers.
Decision.Oncetheproducthasbeentested,theconsumerdecidestoadoptorrejectthenewproduct.Consumersadoptanewproductiftheyaresatisfiedwithitandvalueitsbenefitsandmaybecomeregularusers.
Confirmation.Theconsumersearchesformoreinformationpertainingtotheproducttheyhavepurchased.Thismaybedonebyspeakingtootherconsumers,readingmagazinesandarticles
StudyUnit11:CommunicationandPersuasion
Communicationparticipants,collectively,createmeaningthroughtheexchangeofsymbols.
Thisdefinitionemphasisesfourmajorpoints:Communicationasatransaction
Atransactioninvolvestwoormorepeoplethatengageincreatingmeaning.Peopleworkingcollectively
Thisemphasisestheimportanceoftheparticipantsworkingtogether.Theadvertisementdrawsyour(theconsumer’s)attentionandyourattentionisdemonstratedbyyouractiontopurchasetheproduct.Theparticipantsdevelopmutualexpectationsandthisresultsinbothpartiesbeinginfluenced.
CreationofmeaningWordshavenomeaninginthemselves;theirmeaningsarecreatedthroughthevalues,normsandcultureofsociety.Thismeansthatindifferentculturesandcountrieswordscarrydifferentconnotations.
ExchangeofsymbolsTheexchangeofsymbolsenablespeopletocreatemeaning.Suchsymbolsmaybeinverbal,non-verbal
orgraphicform.Verbalsymbolsarewordsthataresaidorwritten,non-verbalsymbolsincludebodylanguageorfacialexpressionandgraphicsymbolscanbepictures,iconsordiagrams.
Elementsofcommunicationandthecommunicationprocess Sender.Thisreferstothepersonwhoisconveyingthemessage Message.Themessageitthatwhichisbeingconveyed. Receiver.Thisreferstothetargetconsumersatwhomthemessageisaimed Feedback.Thisistheresponsefromthetargetmarket,andreferstohowthemessagewas
received. Medium.Themessageissentthroughdifferentmediavehicles,includingprintmedia(magazines)
orbroadcastmedia(radio) Context.Thecontextisthesituationorsettingwithinwhichcommunicationtakesplace. Noise.Duringcommunicationtheremaybeforcesthatinterferewiththecommunicationprocess.
(backgroundnoise-peopletalkingloudly.Psychologicalnoise-distractingthoughts) Code.Codecanbeintheformofwords,images,soundsorsymbolsandisusedtocommunicate
themessage
Marketingcommunicationmix(MCM)Advertising Publicity
Salespromotion SponsorshipNewmediamarketing Publicrelations
Directmarketing Personalselling
AdvertisingThisisapaidformofcommunicationusingmediavehicles,suchasmagazinesortelevision,dependingonthecompany’smarketingbudgetandtheimageoftheproductthecompanywantsconsumerstoperceive.
PublicityThisisaformofcommunicationthatfocusesoncompanymattersandactivities.Therearetwotypesofpublicity:marketingpublicity-focusesonpersuadingconsumerstopurchaseaproduct;andpublicrelationspublicity-convincingconsumersthatasocialresponsibilityprojectisworthy.
SalespromotionThisisaimedatimprovingthedecliningsalesofproductsthatareinthematurestageoftheirlifecycle.Thisformofcommunicationhasshort-termobjectives.
SponsorshipThesponsorprovidesresourcestothesponsoredcompanyorbrandfordevelopingitscommunicationstrategyand,inreturn,getscertainsponsorshiprights.
Newmediamarketing(e-communications)Thisformofcommunicationhascomeaboutasaresultofadvancedtechnology.(internet,iTV,touchscreens)
PublicrelationsTheaimofpublicrelationsistoinfluencetheopinionofthepublicorthesocietywithinwhichthecompanyoperates.
DirectmarketingThisisatwo-wayformofcommunicationbetweenthemarketerandconsumers.Marketerscustomiseanadvertisementandasktheirtargetaudiencetorespondwithinacertaintimeperiod.
PersonalsellingThesellerandthebuyercommunicateonaone-on-onebasis.Thisisapersonalandpaid-forformofcommunication.TheMCMisimportantbecausemarketersmayuseacombinationoftheseelementstocommunicatetheirmessageeffectivelytothetargetaudienceandalsotakeadvantageofthebenefitsthattheelementsoftheMCMofferthem.
PersuasionPersuasionisanotherformofcommunication;itisaudiencebasedandcouldinfluenceconsumerswithdifferingopinions,aswellasthosewhoareneutral,sinceitisanintentionalstrategythatincludesverbalandnon-verbalcommunication
anattempttoconvinceothersusingthepersuader’scredibility,logicalarguments,appealandrepresentation.Persuasionusesmediaasatool(vehicle)tocommunicate.Thecommunicationcarriedbythesemediais
intendedtoresultinbehaviouralchanges,whichmaybeinternalorexternal.Elementsofpersuasion
o Intent.Thismeansthatwhatiscommunicatedisintentional,althoughtheremaybesituationswherethiselementofpersuasionisaccidental.
o Coercion.Thisistoensurecompliancewherebehaviourischanged.o Context.Changedbehaviourmaybeconfinedtoalimitedcontext.o Plurality.Thisreferstopersuasionaimedatmorethanoneperson.o Media.Therearedifferentformsofmediathatcanbeusedasvehiclesforcommunication.
StudyUnit12:MarketSegmentation
Marketsegmentationaprocessofdividingamarketintosegmentsofcustomerssothatmembersofeachsegmentshare
characteristicsandaredistinctfrommembersofothersegmentsUsageorbehaviouralsegmentation
MostSAcompaniescansegmentcustomersduetoallthedataavailableItispossibledodividecurrentusersofaproduct,serviceorbrandintocategoriesoflight,mediumorheavylayersLackssufficientdepthtoapplywhendevelopingmarketingstrategiessoshouldbeusedwithothersegmentationbases
DemographicsegmentationBasedonaspectssuchasage,gender,maritalstatus,familylifecycle,income,occupation&educationThisisverycloselylinkedtoacustomer’sproductsneedsandbuyingbehaviour
LifestyleandpsychographicsegmentationBreakingupintermofattributeslikesocialclass,lifestyleandpersonalitySegmentationofmarketsbylifestageoragegroupsshowshowaperson’slifespancanbedividedinto5yrperiods.Ineachperiod,circumstances,interests,activities,buyingbehaviourandlevelofconsumerexpenditurechange.
CombiningdemographicandpsychographicsegmentationPg228Parkers6lifeplanesbasedoneducation
LifeplaneADoctors,lawyers,accountants–usuallygraduateprofessionals
LifeplaneBNothaveauniversitydegreebutstudiesafterschool–manyreachseniorpositionsinbusiness
LifeplaneCCompletedmatricbutnotstudiedanyfurther–salesorclericalpositions
LifeplaneDPlumber,mechanic–completed¾yearsofschooleducationandfollowtechnicalcareers
LifeplaneEAssistants,factoryworkers-Completed½yearsofseniorschool
LifeplaneFDomestics,gardeners,labourers–noseniorschoolingandbarelyliterate
GeographicdemographicDivisionsaredoneaccordingtolocation–countriesorregionsNBelement=localadvertisingmediaandtheallocationofsalesrepstodifferentareas
Needs/benefitssegmentationClassifyingcustomersintogroupsaccordingtospecificbenefitstheywantfromaproductBenefitsarethebasicreasonpeoplebuyaproductandthereforisaproperbasisforMS
Market-value-basedsegmentationSimilartobenefitsegmentationbutinsteadusesmarketvalueAbroadvalue-baseddivisionofthetotalmarketcanbeobtainedbyusingthebasicdistinctionofuniversalandpersonalvalues4outcomes:
1.Bestvaluemarket:universalvalues=highimportance;personalvalues=lowimportance2.Basic-product/economymarket:bothuniversal&personalvalues=low3.Premiummarket:bothuniversal&personal=high4.Convenience/personalisationmarket:universalvalues=low;personalvalues=high
Purchasedecision-makers Ultra-conservatives–donotrocktheboat,theybuythingsthatareconsistent.Oftenbuy
improvements,seldominclinedtoreviewalternatives,negativetowardsanythingtoocomplex,cost-effectivenessisonlyconsideredifitdoesn’tdisturbstatusquoandreactpositivelytovolumepurchasing
Conservatives–willingtochange,butonlybyasmallincrementandonlyifcosteffective,willreviewcompetitiveofferings,negative/neutralwhenconsideringtechnicallycomplexofferingsandinfluencedby“bestprice”opportunities
Liberals–regularlylookingfornewsolutions,willingtomakechanges,useproductsthatmakeeffectiveuseoftechnology,willalwaysreviewcompetitiveoffers,neutral/positivewhenconsideringtechnologyandstronglyinfluencedbythedesired“endresult”
Technicalliberals–fascinatedwithbenefitsprovidedbyhigh-techsolutions,usuallyconsidernewproducts,considercertainproductsbecauseofthetechnology,alwaysreviewcompetition,regardthemselvesastechnicallycompetent,conversioncostsareofnoconcernandstronglyinfluencedbythedesired“endresult”
Self-helpers–constantlydefine/designsolutionstotheirproblems,willconsidernewproducts,considerproductsbecauseofthetechnology,alwaysreviewcompetition,considerthemselvestechnicallycompetent,andstronglyinfluencedbythedesired“endresult”SegmentationinB2Bmarkets
Pg234-236
Positioningtheconsumersperceptionofap/s,brandorcompanyinrelationtoitscompetitors
Aproductspositioningistheplacetheproductoccupiesinacustomer’smindThroughpositioning,marketersinfluencehowcustomersperceiveabrandscharacteristicsrelativetoitscompetitorsNorulesandfewguidelinesCompanywith7brandswillbenefitbypositioningeachbrandwithinthep/sportfolioagainstcustomerneeds
Developingpositioningstrategy①Analysingcompetitor’spositions
Marketersmustknowwhoisinthemarketandhowtheyareperceived②Identifyingcompetitiveadvantage
Afirmhasasubstantialcompetitiveadvantagewhenithasvalue-creatingproducts,processesandservicesforitscustomersthatcannotbeimitatedbycompetitorsCanusedifferentiationdimensions:
o Dimension1:productdifferentiation→physicalfeatures,durability,reliability,style,designo Dimension2:servicesdifferentiation→delivery,installation,consulting,repairo Dimension3:personneldifferentiation→welltrained,courteous,reliability,competenceo Dimension4:imagedifferentiation→symbols,atmosphere,logo
RepositioningProcessofalteringabrands“personality”toappealtoadifferentsegmentCanbedonewhentoomanycompetitorsarestressingthesameattributesofaproductDeliberatedecisiontoalterthewaythemarketsee’stheproduct
StudyUnit13:ConsumerLoyalty
BrandloyaltyBrandingisaformofsecuritythataddsvalueandprofitabilitytotheoverallmarketingeffortWithbrands,consumersbuybenefitsandevenformacloseemotionalbondwithbrandRepeatbuyingofabranddoesn’timplyloyalty–theremustbeapsychologicalcommitment
TheinfluenceofbrandnamesonproductpreferenceBrandsmakeiteasierforconsumerstoidentifyparticularitemsfromamultitudeofgoodsandassurethemitwillalwaysbethesameThedefinitionandbenefitsofbrandsDefinition Benefits
Name,term,symbolordesignthatidentifytheg/s
o Convenienceinshoppingthrougheasyidentification/recognition
Productwithpersonality Uniquecharacterorappeal
o Facilitatestheconsumerdecision-makingprocesso Providesconsistentqualityo Simplifiesthebuyingo Reducesperceivedrisk
Brandimagesumtotalofaconsumersattitudesto,andknowledgeabout,abrand.
Consumerexperienceswithbrandsgetstoredintheirmind,andformanimageofthebrandMarketersarebuildinganimagewhenlaunchinganewproductandengageinextensivedecisionmakingThisimageisthencommunicatedthroughadvertising,sellingandpackaging
Brandpreferenceisconsumerstendencytoselectabrandorproductfromasetofknownavailablebrands
ConsumerswillbemorepositivetoonebrandoverothersKABprocess–asknowledgechangesovertime,sowillattitudesandbehaviourExistsfor2majorreasons:
1.Consumersfeelonebrandisbetterthananother,alsoforpsychologicalbenefitslikestatus,self-image
2.HabitsdevelopfrompastexperienceswhichprovideefficiencyinshoppingFormationofbrandloyalty
whereacustomerstronglyprefersonebrandtoanotherBecomingbrandloyaltakestimeandlearning3vitalfactors:i. Exposuretoinfoconcerningthebrandii. Favourableexperiencebuyingandusingthebrandiii. Extentofitsusebypeersandsocialreferencegroups
Brandloyaltyislowerwhen: Therearemorebrandstochoosefrom Moreproductsofgreatervaluearebought Pricesareactiveamongcompetingbrands Consumersusemanybrandsatthesametime
BrandloyaltyandrepeatbuyingbehaviourRepeatbuyingiswhenconsumersbuythesamebrandoverandover,whilebrandloyaltyincludedapsychologicalandevaluativeprocessesTheprocessesdon’tneedtobeextensive,butshouldshowwhyapersonhasactedsoBrandloyalcustomersareconsistent,havestrongbeliefsaboutquality,feeldevotiontobrandandresistcompetitorseffortstogetthemtoswitch
ComplexdecisionmakingandbrandloyaltyBrandloyaltyisoftenmeasuredbyhowinvolvedconsumersareinthebuyingdecisionsBrandcommitmentimpliesbrandloyaltybutnotV.V.Consumerswhoarenotbrandloyalcanbepersuadedbycompetitors
BrandloyaltyandvulnerabilityVulnerabilitymaybeusedtodistinguishloyalcustomers,whobothbuyandlikethebrand,fromthosewholikeotherbrandstooManagementneedtopayattentiontothedegreeanddistributionofloyaltyinthemarket
Stagesofbrandloyalty
BrandloyaltyandbrandsegmentationFirmscanfindessentialinfobyanalysingloyaltypatternsinitsmarketanddoingsegmentationanalysis→identifyingconsumerswhoaremorelikelytobeinfluencedbyanefforttomarketaspecificp/sAimofthisistoreduceriskindecidingwhere,when,how&towhomtomarkettheproductAmarketcanbesegmentedbyconsumerloyaltytobrands,storesandcompanies
Segmentationanalysisinformsmarketersabout: Theirbrands’positioninginthemarket Howconsumersdistinguishtheirbrandfromothers Importanceofproductattributestoconsumers’evaluationsofthebrand Thepsychologicalaspectsofconsumersthatleadthemtobuyornotbuyaspecificbrand
DeterminingthebrandloyalsegmentAloyalconsumerhasacommitmenttowardsabrandanditwillingtopaypremiumpricesConsumershoppingpatternsandmarketstructurecharacteristicsareassociatedwithvaryingdegreesofbrandloyaltyBrandloyaltydependsonthefollowing:●#ofconsecutivetimessomeonebuysabrand●Consumer’sknowledgeofabrand
BehaviouralapproachDefinebrandloyaltyinbehaviouraltermsbythesequenceandproportionofpurchasesBehaviouristsarguethatwhatconsumersthinkorbelieveisunimportantandthattheconsumers’behaviouristhefullstatementofwhatbrandloyaltyis
CognitiveapproachThisstatesthatbrandloyaltyimpliesrepeatbuyingbehaviourbasedoncognitive,affectiveandbehaviouralfactorsOffersmarketerstheadvantageofenablingthemtogathervaluableinfoonstrengthsandweaknessesonthebrand
BrandloyaltycorrelatesConsumerbuyinghabits
Brandloyalconsumersaremorelikelytobeinfluencedbyreferencegroupsbecauseoflackofinfoandthedesiretoconformandbeaccepted
ShoppingpatterncharacteristicsShoppingpronenessisrelatedtobrandsConsumerswhoaren’tpronetoshopping,gotofewstoresandremainloyaltoasmallnumberofbrands
MarketstructurecharacteristicsConsumersareloyalinmarketswhereawiderdistributionofbrandsexistsandwheremarketshareisrepresentedbytheleadingbrand
ModelsofbrandloyaltyDeterministicmodels
Explainstheprocessesthroughwhichbuyersmaketheirbrandchoices,decidetoengageinrepeatbuyingorbecomebrandloyalAttemptstopredictbehaviourinexactornon-probabilisticterms
StochasticmodelsAllowforvariablesthatarenotmeasuredandareasimplificationofreality2philosophies,internal&externalvariablesdeterminebehaviouroutcomesANDthemodelofmarketresponseandactualconsumptionprocessarebothstochastic
ConsumerbehaviourandbrandtypeManufacturer’sbrands
ProductsproducedandmerchandisedunderabrandnameidentifiedwithaspecificmanufacturerDevelopedandownedbytheproducer,whoisinvolvedindistribution,promotionandsometimesevenprice
StorebrandsBrandsofproductswhosedistributioniscontrolledbyretailersandwholesalersOftenownedbyonechainofstores–alsocalledprivatebrandsPg314-box
GenericbrandsBasicmarketingstrategyistoreducetraditionalmarketingfrillsandoffertheproductatalowerpriceMostlyfoundinsupermarkets
StoreloyaltyThisisthetendencyofapersontoactinthesamewayinasimilarsituationinordertosecuresatisfaction
Studyunit14:BuildingRelationshipswithCustomers
TraditionalmarketingapproachTraditionalmarketingframework
Compromisesof:1. Themarketingmix(4P’s)2. Marketforces(opportunitiesandthreatsthatinfluence)3. Amatchingprocess(processensuringallpoliciesareappropriate)
Marketingdefineswhatcustomerswantandneed,it’saboutpeopleandtheywaymarketerstrycreateap/sthatsatisfiescustomers
ThemarketingconceptTheessenceofthemarketingconcept–understandingcustomerneedsandwants,thefocusisonthecustomerThishasfailedinitsconceptandthetraditionalmarketingapproachisflawed
MarketingincrisisMarketingisdeadbecauseoldrulesofidentifyingandsatisfyingcustomerdemandnolongerapplyTheworldischangingbutmarketingisstuckinarut
RelationshipmarketingNewmarketingparadigm
5keyelements1.Developingacorep/saroundwhichtobuildacustomerrelationship2.Customisingtherelationship3.Augmentingthecorep/swithextrabenefits4.Pricinginamannertoencourageloyalty5.Marketingtoemployeessotheyperformwell
B2BisaloteasierthanB2Cbecauseof:businesseschangetheirneedslessoftenthancustomers,fewersuppliersandcustomersinB2BmarketsandB2Btransactionsalmostalwaysinvolvepersonalrelationships
theobjectivesaretoidentifyandestablish,maintain,enhanceoreventerminaterelationshipswithcustomersataprofitsothattheobjectivesofallpartiesaremetTheimplementationofthenewphilosophyusuallytakesplaceincustomerrelationshipmanagement(CRM),mostcompaniesuseamixtureoftransactionalandrelationshipmarketingapproaches
Adaptingthe4P’sProduct
Customerswantdifferentthings,atdifferenttimesanddon’twant1standardproductRelationshipmarketinginvolvesreal-timeinteractionbetweencompaniesandthemostprofitablecustomers
PriceCustomerswanttoparticipateindecisionsregardingthevaluetheyreceiveandpricestheypayGiveacustomerachancetohaveamoretailoredsolutionandtheymightpaymoreThepriceneedstoreflectthechoicesmadeandvaluecreatedfromthesechoices
PromotionGivesthecustomertheopportunitytodecidehowtheywanttocommunicatewiththebusinessShouldbereplacedwith2waycommunicationtoinvolvecustomersmuchearlierinmattersthataffectfuturepurchasingbehaviourMarketersmustalsousetechnologyappropriately(internet,POS,smartcards)togivecustomersahostofoptions
PlaceRMconsidersdistributionfromtheperspectiveofthecustomerwhodecideswhere,how,andwhentobuythecombinationofp/sthatcompromisethesupplierstotalofferingThinkofitmoreas‘placement’,givingcustomerschoicewithregardtolocationatwhichtheyspecify,purchase,receive,install,repairandreturnindividualcomponentsofp/s
AdvantagesofCRMIncreasedcustomersatisfactionImprovedinteractionwiththeorganisationandcustomers
DisadvantagesofCRM
PeoplemaynotwanttobeinvolvedwiththebusinessNumberoftimesapersondealswithabusinessdoesn’tnecessarilyindicatetheirloyaltyCRMcanaddcostsandnotalwaysprovidethebenefits
CharacteristicsofCRMThisisnotjustamethodusedbyserviceorganisationstogaincompetitiveadvantage,IhasbecomeanecessityforsurvivalWelldesignedCRMstrategywillincorporatethefollowingfeatures:pg333
Relationshipmanagement Salesautomation
Useoftechnology Opportunityinmanagement
WhatCRMisnotNotjustaboutcollecting,processinganddeployingcustomerinfo,itisaboutservingcustomersinafundamentallyimprovedway
PrerequisitesforimplementingCRMTeamworkandprocesses
arethefundamentaltasksor‘waythingsaredone’thus,processmanagementinvolvesprocedures,tasks,schedules,mechanisms,activitiesandroutinesbywhichap/sisdeliveredtothecustomerTeamworkshouldbeenhancedamongemployeesSo,processesintheorganisationneedtochangefromthetraditional‘siloapproach’totheintegrationofallfunctionalareasRMtakestheviewthatthecompanyshouldbeorganisedaroundthecustomersandthatalltechnologies/processesshouldhelpfostercompanyrelationships
SupportatexecutivelevelWithouttopmanagementssupport,aCRMstrategywillnotsucceed–toimplementcorrectly,changemustbemadeinallpartsofthebusiness–andleadershipmustshowtheway
Excellentcustomerservice“thecustomerisalwaysright”↕itisnecessarytogivecustomerssatisfactionwhentheycomplainWhencustomerscomplainit’sasignofabreakdownsomewhereintheprocessIntermsofRMcustomerservicecentresshouldbechangedintocustomerinfocentresgearedtoanticipatingissuessothattheservicerolehasgreatersignificance
TechnologytogaincustomerknowledgeandinsightRMisnotpossiblewithoutenablingeffectsoftechnologytostore,retrieve,process,communicateandanalysedataIt’sabigdangerformarketerstoassumethattechnologycanalwayseffectivelyreplacepersonalcontactCustomerknowledgeandinsightcomesfromdataoncustomerinteractions,transactionsandmanifestedbehaviours–includingpurchase,serviceandreturnactivity
ThefollowingmustbeinplacebeforeaCRMsystemisputinplace
Technology:facilitatorofCRMCrucialroleoftechnology
TechnologyenablesthesuccessfulimplementationofrelationshipmarketingButifusedinappropriately,canalienateacustomerCannotreplacehumancontactTodaymostcustomersareusedtohavingtheirneedsmetimmediately,convenientlyandinexpensively
TechnologyforbuildingrelationshipsTheperformanceoftechnologyhasledtotremendousopportunitiesforcompaniestotietechnologyinwiththeimplementationanduseofRMBusinessescancommunicateandservecustomersinrealtimePg.340-343
DevelopmentsintechnologyTheinternet
Providesopportunitiesformarketerstoengageinteractivelywiththecustomerusingprocessesthatarestandardised,butwhichaffordcustomerstheopportunitytoassemblethevaluetheywantinacustomisedproduct
Datawarehousestheenginethatenablescustomerrelationshipmanagement
Thesearelargerepositoriesofinfogatheredoncustomersinternally,fromthecustomersandexternal
sourcesDatamining
ProcessthatemploysIT(hardwareandsoftware)touncoverpreviouslyunknownpatternsofbehaviour,trendsandissuesCompaniescansiftthroughmassesofinfowiththerightsoftware–usuallyaboutcustomerpurchasingbehaviourEmploystoolsthatlookformeaning,findpatternsandinferrulesthatmightbecasual,predictiveordescriptive
RelationshiployaltyCustomerloyalty
Customersarecommittedtopurchasingp/sfromaspecificorganisation,andresisttheactivitiesofcompetitorsItsmorethanmakingrepeatpurchasesandbeingsatisfiedwiththeexperienceandp/s
IntegratedCLmodel
CustomersatisfactionsustainsloyaltySatisfactiondoesn’talwaysresultinretentionandV.V
Loyalty-typebehaviour3categories
1.Switchingbehaviour:either/ordecision,customerstayswithyouorleaves2.Promiscuousbehaviour:whentheymakeastreamofdecisionsbutstillwithintheeither/or
decision3.Polygamousbehaviour:makeastreamofpurchasesbutloyaltyisdivided
CustomerretentionManycustomersspendmuchtime,effortandmoneywooinginnewcustomersbutfewtakethetroubletoretainexistingonesCustomerretentionhasaprofoundinfluenceonprofitabilityasfollows:
o Acquiringnewcustomerscostsmorethankeepinganexistingoneo Makessensetofocusoncustomersbringinginaprofitalreadyo Regularcustomersplacefrequentorderssocostofservicingthemislesso Makesitdifficultforcompetitorstoenterthemarketo Canleadtoincreasedemployeesatisfactiono Long-timecustomerstendtobelesspricesensitiveo Providefree+word-of-mouth
LifetimevalueThisdescribesthepresentvalueofthestreamoffutureprofitsthatthecompanyexpectstomakefromlifetimepurchasesMarketerslookatcustomerspastsandassumeitwillbethesameinthefutureAlsoNBisgrowthpotential–orstrategicvalue→theadditionalvalueacustomercouldyieldifmarketershadastrategytoobtainit
LimitationsofimplementingCRMLittlevaluetobecreated
ThecustomersmaynotbeamenabletowhatvaluecreationtherecouldbeInsufficientlifetimevalue
TheremaybeinsufficientLTVtowarrantvaluecreationLargeinvestmentsinproductdesignanddevelopment
AdoptingaRMapproachmayresultindepreciationorevenwasteofinvestmentsNocapabilityforrelationshipmarketing
Somecompaniesdon’thavethefinancialortechnologicalassetstoapplyRM
Image
Quality
Price
Barrierstoswitching
Valuerelativetocompetition
Individual/organizationalcharacteristics
Marketenvironment
Attraction&loyalty
Experience
s
MarketShare&
Profitability
TheindividualcustomerapproachPg352Marketersshouldconfinehigh-intensityrelationshipstothecustomerswiththehighestprofitpotentialwhoactivelyseekcustomisedproducts
DevelopingCRMstrategiesTotreatcustomersdifferentlyitisnecessarytogroupthemintovalue-basedtiers–groupsofcustomerswithsimilarvaluestotheorganisation
ButterfliesProfitablebutdisloyalAttemptstoconvertbutterfliesarenotusuallysuccessful
StrangersNotloyalanddonotcontributetoprofitsCurrentlyunprofitableandwillbeunprofitableinfuture-dontmeritfurtherattention
TruefriendsProfitablenowandlikelytobesointhefutureTheidealcustomer
BarnaclesProperlymanaged,theycanbeturnedintoprofitablecustomersNottooprofitableastheirtransactionsaretoolow
RelationshipswithallstakeholdersMustbuildrelationshipswithallstakeholders: Employees Suppliers Intermediaries
Investors Community
BuildingrelationshipswithemployeesPg356
StudyUnit15:TheOnlineWorldandCustomerBehaviour
3mainfunctionsofthewebCommunications
Thewebenablescheaper,fasterandmoreeffectivecommunicationbetweenorganisationsandtheircustomers
InformationEnablesbusinessestogatherinfoaboutcustomers,includingtheirprofiles,onlinebehaviour,wantsandneedsAswellasshareinfo
BusinessWebcanbeusedasamarketingtoolinordertoadvertiseproducts,transactsalesandbrandacompanyAswellascollectinfoaboutcustomersandmarkets
InternetvsWebAdvantages
It’samultimediaenvironment–video,sound,text,graphicsandanimationscanbedisplayedontheweb
It’sahyper-mediatedenvironment–canlinktogetherinfofromothersourcesspreadacrosstheglobe
Largeamountsofinfocanbestoredandupdatedonthenet Anyinfodisseminatedonthewebisimmediatelyavailable Theinfoisinteractivewhichisimportantforbuildingrelationshipswithcustomers Thewebisan‘alwayson’environment Thewebisflexible Throughhewebwecanreachthemasses
Theweb,onlinebusinessandcustomerbehaviourDoingbusinessonline=e-businesse-businessincludedallformofelectronicbusinessbothonlineandofflinee-tailing:acompanythatrunsonlineandsellsretailgoodstoconsumers
e-tailingisasubsetofe-commerceandalsoe-businesse-marketing:dealsonlywithpromotingabusinessthroughonlinechannelssocialmedia:variouselectronicformsofcommunicationthroughwhichuserscreateonlineandpeer-to-peercommunitiestoshareinfo
TheadventofsocialmediaSocialmediaenablesuserstoshareinfowithothercustomersusingonlinetechnologiesAssocialmediaistotallycustomer-driven,itepitomisescustomer-centrism
Onlinetechnologiessupportcustomer-centrismeCRMsystemsshouldbeflexibleenoughtoadjustconstantlyandregularlytochangingbusinessrulespg372-373
ThethreatoftheinvisiblecustomerIsaseriousthreatascustomersmaybetreatedmorecasuallyandindifferentlythanbeforeNBtoremember3factorswhenembracingtechnology:
1.Don’tusetechnologyfortechnology’ssake2.Thetechnologymustbetriedandtestedsoensureitfulfilsitspurpose3.Customersegmentationintodifferentbuyingcategoriesinordertoestablishpersonalcontactwith
lucrativecustomerswillbeessentialDealingwithonlineparadigmshift
DisintermediationandreintermediationThewebbringstheproducerintodirectcontactwiththefinalcustomer
PersonalisationandcustomisationProvidingvalueisaboutmeetingindividualneeds
ShoppingondemandThiswillincludeany-time,any-placeprocurementandconsumption
Customersasco-producersInthefuture,customer-centredorganisationswillopenadirectchannelbetweenthemselves,theirproductionprocessesandcustomers
BlurringbetweencustomersandbusinessmarketsAstechnologyenablesanincreasingnumberofpeopletoworkfromhome,therewillbeablurbetweencustomerandbusinessmarketboundaries
ThepowershifttocustomersCustomersnowhavethepowertochoosewhetherornottoreceivethemessagemarketersareputtingout
AutomationofconsumptionPoweroftechnologytoautomateregularandstandardactivities,combineswiththegeneralshortageortimethatanincreasingnumberofcustomershaveavailable–willlikelyleadtoAofC
Facilitatingcustomerdecisionmakingthroughonlinemedia
ProblemrecognitionUsinginteractivemethods,sothebusinessescanprovideahigherlevelofassistancetoidentifyandsolveproblems
InformationresearchModernsearchalgorithmsandAImakeiteasytofindthespecificinforequiredforproblem
solvingEvaluationofalternatives
Manycustomersdoproductcomparisonsonlineandthengotothestorethatoffersthebestdealinordertobuy
BuyingAnincreasingnumberofcustomersarenowbuyingonline
Post-buyingevaluationThewebservesasapowerfultooltodealwithanydissatisfactionthecustomermighthavewiththeproduct
HabitualdecisionmakingTheabilityofsoftwaretodetectregular/routinepurchasesandtoautomatethistaskisamajoradvantageinfacilitatinghabitualdecisionmakingAsoftwareprogrammecanindicate:
Productsonspecial Substituteproductsonspecialoffer Changesthathaveoccurredtoaproduct Newerorbetterproductsavailable Complementaryproductsavailable
GettingtoknowindividualcustomersThewebcanbeusedtogatherinfooncustomers–onlinesurveysorfocusgroups
OnlinecustomerbehaviourOnlineshoppingbehaviour
ThewebisafairlynewenvironmentthatisratherdifferentfromthephysicalmarketplaceIsolation&integration
Webalsomakesitpossibleforlike-mindedpeopletocometogetherasacommunityandshareinterestsandconcerns
AnabbreviatedattentionspanSpendingtimeonlinecanbecometiringandfrustrating,whichcanleadtotherejectionofthistechnology
InstantgratificationThemoretimeisspentonline,themorecustomerswantfasterdownloadsandinstantgratificationwithregardtoinfo,p/s
YourworldinamonitorIt’safocusedworldwhereabusiness’sweaknessesarequicklyhighlightedandit’seasyforcustomerstomoveontothenextsupplierWebusability:measureofeffectivenessofwebsites,willbecomeaweaponforonlinemarketers
DependenceonshoppingagentsSoonatimewillcomewhenorganisationsneedtoconsidernothowtoattractandkeeponlinecustomers,buthowtoengagethecustomers’shoppingagents
ToomuchinfoIt’sbecomingincreasinglydifficulttodealwithalltheinfoCompaniesthatdon’tdemonstratetheirp/squickly,findthecustomersdessertsthem