Understanding the Customer

Identify the Customer

DEMOGRAPHICS

GEOGRAPHICS

PSYCHOGRAPHICS

Identify the Consumer PSYCHOGRAPHICS examples

Culture Integrated pattern of behavior, knowledge and beliefs

that are acquired from a group and passed on to future generations.

Ritual Formalized act that is performed frequently.

Example—Thanksgiving

Identifying the Consumer

Social Class Group sharing the same economic or social status FACTORS

Income Education Occupation

Making a Purchasing Decision

Step 1 D Define the Problem

Step 2 I Identify the Choices

Step 3 C Choose an alternative & act on your choice

Step 4 E Evaluate your decision

Business Decision Flower ShopD—How do I get flowers for wedding &

maintain my current reputation.

I—1. Tell customers about problems 2. Runaway 3. Refund $ for tropical flowers 4. Substitute flowers & possibly reduce prices

or increase prices 5. Get flowers from a new connection   Alternatives—1,3,5; 1,2; 1,5; 1,4  

E Explain the outcome of each Why would this particular

outcome will occur? How will it immediately effect

the business?

Convenience Goods--Impulse Purchases; LESS THAN A MINUTE

Shopping Goods—Significant time to evaluate purchase options Specialty Goods or Big $ Items—Catering a Party; Purchasing a

Car or House. Groups can drive wants

EX. A group consisting of students has specific wants Advertisements can also create wants Before making a decision—you will remember or notice

advertisements for products that could satisfy your needs or wants.

Simple decisions you will only need recall. Complex decisions—time searching for info—including product

reviews, Internet surfing, talking with people who own the product, examining the product.

Usage & CommitmentUsage & Commitment

Nonuser Switcher—purchases

based on sales or incentives

New Consumer

Brand-loyal consumer

Heavy user

Cost & Impact Most difficult to persuade Expensive to persuade &

difficult to keep

Low short-term return, but could create brand-loyal users in the future

Difficult to convert

May not need persuasion

Cognitive Dissonance

Doubt that occurs after a purchase is made, which can be alleviated by customer after-care, money-back guarantees, and realistic sales presentations and advertising campaigns.

Select a Target

Current size of the market Expected growth of the market segment Cost of reaching the segment Compatibility with the advertiser’s objectives

& resources

Select a good or service (only pick 1). Using this slide and the previous slide, answer the following questions. Be specific and explain your answers thoroughly.

Before selecting “target markets”—advertisers must take a long look at each segment and look at its own advantages & disadvantages. Choosing the wrong target can have disastrous results. SIZE

too big the advertiser won’t be able to meet the demandtoo small, it might not be worth the advertiser’s time & money

EXPECTED GROWTHWill it continue to grow?Can the advertiser keep up with the market’s growth?Can the advertiser influence the growth of the market segment through

advertising? COST

Is the profit of reaching the segment worth the cost?COMPATIBILITY

Choose a Positioning Strategy Positioning—Making a marketers product

different from other products in the consumer’s mind.

Essential Elements of a Positioning Strategy Substance

Be certain your claims are true

Consistency Internally everything must work together to reinforce

the message

Simple, Distinctive Theme

Positioning Themes Benefit Positioning

Select a single benefit that is important to the consumer

User Positioning Focus on the user. Show how the product fits into the

user’s lifestyle

Competitive Positioning Make sure your product stands out from the competition

Small companies use this method to carve out part of the larger market (MARKET SHARE). Small companies emphasize the difference between their product & similar products on the shelf.

Creates a focus for the advertising campaign and helps an advertiser make internal decisions that create substance for the customer.

1. Select a single idea as a focus 2. Positioning themes can by physical or perceptual.

PHYSICAL POSITIONING Emphasize the function characteristics of a product Ex. Car can go from 0 to 60 mph in 2.2 seconds. Air bags deploy when the car collides with an object at 25

mph PERCEPTUAL POSITIONING Emphasize emotional/subjective opinions Ex. Car is exciting or adds to the owner’s status

Repositioning

Why? Market is constantly changing Competitor reacted differently than expected Consumer preferences changed

1. Define Positioning—substance, consistent, & simple/distinctive.

2. What does positioning provide?3. Supply an example of the Positioning

Strategies below:1. Substance; Consistency

4. Supply an example of a Physical Positioning.

5. Supply an example of a Perceptual Positioning.

6. What is the purpose of repositioning?

Answers1.Marketers making their products’ features & benefits

different from competition in the consumer’s mind. Substance is the company’s claim (what they want you to know). Consistency is telling consumers/customers the same message in different ways and in correct venues. Simple/Distinctive is making the positioning easily understood.

2. Provides the consumers with reasons to purchase specific products.

3. Substance—Statement that we have the best seafood on the South Shore

3. Consistency—receiving awards from the food critics for the best food. Making certain presentation and quality of food remains equal or better than current conditions.

Answers Continued4. Physical Positioning Theme

Leather seats—easy to keep clean Internship for students Autostart up

5. Perceptual Position Theme Remote side doors—easier to get packages in and out of

the car Pretty car Autostart up

6. Repositioning reacts to the market needs & wants. It deals with how competitor react & the ever-changing

market

Role of Research

Ad Research Thorough investigation of the planning,

preparation, & placement of advertisements.

Research Select the target segment Understand the target segment before

creating the advertisement Evaluate the advertisement’s effectiveness

(test audience) before it is released to the media

Evaluate the advertisement’s remaining effectiveness before it is withdrawn from the media (1st & 2nd)

Product Life Cycle

Introduction Growth Maturation Saturation/Decline*

*Law of diminishing returns

Developmental Research Idea Generation Environmental Analysis

Evaluates the potential influence of your environment, including social & cultural trends, economics, & politics

Audience Definition Audience Profiling

Ex.. Lifestyle research, surveys, & in depth interviews

Evaluate the Impact

Ask questions, judge the audience’s interest level, watch their behavior

PRERELEASE TEST Before the ad is placed in the media

POSTTEST After the advertisement is placed in the media.

What Can You Measure? Product Knowledge

Recall & recognition tests Shape Attitude

Preference—what makes consumer choose one product over another

Attach Emotions Validate a Brand

Focus Group Consists of 6 to 12 consumers, led by a professional

moderator, who discuss the product.

Prerelease Test Methods

Communication Test Test the message the audience receives against

the message the advertiser wants to send Magazine Dummies

Mock-up magazine is sent to test audience. Test audience then answers questions about the

content

Prerelease Test Methods Theater Tests

View ads in small theaters

Thought Listings After viewing the ad, small groups write down the

thoughts they had during the advertisement. Pilot Test

Release advertisements in small portion of the target segment.

Family Life Cycle

Single->MarriedMarried with ChildrenMarried and Empty NestWidow or Widower

Selecting Target Markets Undifferentiated Targeting

Market is one big market with no individual segments & requires a single marketing mix

Concentrated Targeting Used to select one segment of market for

targeting marketing efforts Multisegmenting Targeting

Chooses two or more well-defined market segments and develops a distinct marketing mix for each