unitiv consumerbehaviour and retaintiong2821
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` Consumer behavior is "The study of individuals, groups,
or organizations and the processes they use to select,
secure, use, and dispose of products, services, experiences,
or ideas to satisfy needs and the impacts that these
processes have on the consumer and society."
` Consumer behavior is the study of when, why, how, and
where people do or do not buy product/Service and
dispose it.
` Consumer behavior is thus a "decision process engaged in
by individuals.
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` Women dont buy message therapy, they buy hope
` Customers dont buy insurance they buy security.` Thus a marketer of service need to understand the
complete mental process of consumers while
purchasing.
` CB is a process where, a purchaser plays different
roles
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` Role Description
` Initiator: The person who determines that some need or
want is not being met.
`
Influencer: The person who intentionally/unintentionallyinfluences the decision to buy the actual
purchase and/or use of product or service.
` Buyer: The person who actually makes the purchase.
` User: The person who actually uses or consumes
the product or service.
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The consumers mind is like a Black Box
` External Stimulus + Internal StimuliA Company Controlled
Service offer
Price
Advertising
Promotions
Distribution outlets
B Social Forces
Word of Mouth
Reference GroupConsumers
mind
ResponseBuy
No Buy
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` Assume you are planning to take Coaching classes
for IIT for the young ones in your family. Describe
the decision process and physical activities,preceding the purchase undertaken by the various
members of the family.
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` Who Buys? Organization
Occupants/ Individual
` Why they Buy Objective
` What they Buy Object
` When they Buy Occasion
` How they buy Operation
` Where they buy Outlets
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` Engel-Kollat-Blackwell model
Problem recognition Information search Evaluation of alternatives
Purchase decision Post-purchase behavior
` Strongs (1925)AIDA
Awareness Interest
Desire Action
` Based on the assumption that buyers will pass through a cognitive,affective, and behavioral stage when there is a high degree ofinvolvement with a product category which is perceived to have a highdegree of differentiation of products within it
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`
Consumer wants, learning, motives etc. are influenced byopinion leaders, person's family, reference groups, social classand culture.
` Ex- Opinion leadersspokespeople, Formal social group ofRotary Club, Lions Club
` Roles and Family Influences--Individuals role are continuing to change therefore marketersmust continue to update information.
` Reference Groups: Individual identifies with the group to the
extent that he takes on many of the values, attitudes orbehaviors of the group members.
` Ex - Housewives, Celebrity, doctor.
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`
Social Class--an open group of individuals who have similar social rank. upper middleclass Americans prefer luxury cars Mercedes.
Ex Leisure activity pursue by upper class, upper middle class, middleclass, lower class.
` Culture and Sub-culture--` Culture refers to the set of values, ideas, and attitudes that are accepted
by a homogenous group of people and transmitted to the nextgeneration. Culture determines what people wear, eat, reside and travel.Cultural values in the US are good health, education, individualism andfreedom.
Subcultures: price. A culture followed by a group of people within aculture e.g.: InAndhra Pradesh, most advertisement air in Telugu.
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` The human mind and its attributes. These variables
influence the way consumers proceed thro a
decision making process regarding products &
services. They are :
Personality & Self-concept,
Motivation & Involvement,
P
erception & InformationP
rocessing, Learning & Memory,
Attitudes.
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Company Controlled- Service/ Product, Offers, Price,
Promotion, displays, Outlets.
Social influence Word of moth & reference group
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The study of consumers helps firms and organizations improve their marketingstrategies by understanding issues such as how
` The psychology of how consumers think, feel, reason, and select betweendifferent alternatives (e.g., brands, products, and retailers);
` The psychology of how the consumer is influenced by his or her environment
(e.g., culture, family, signs, media);` The behavior of consumers while shopping or making other marketing
decisions;
` Limitations in consumer knowledge or information processing abilitiesinfluence decisions and marketing outcome;
` How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer;and
` How marketers can adapt and improve their marketing campaigns andmarketing strategies to more effectively reach the consumer.
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` Market segmentation is the process of identifying smallermarkets that exits within a larger market.
Grouping people according to their similarity related toparticular product category.
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` Better serving customers needs and wants.
` Higher Profits
` Opportunities for Growth
` Sustainable customer relationships in all phasesof customer life cycle
` To increase customer loyalty
` To remain competitive
` Higher Market Shares
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Geographic
e ographic
Age, gender, fa ily sizeand life cycle, orinco e
sychographic
Social class, lifestyle,
or personality
Behavioral
Occasions, benefits,uses
Nations, states,regions or cities
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` Step 1. Identifying a set of possiblecompetitive advantages: CompetitiveDifferentiation.
` Step 2. Selecting the right competitiveadvantage.
` Step 3. Effectively communicating anddelivering the chosen position to the market.
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Pr t Servi e
Pri e Image
Areas f r C mpetitive
Differentiati n
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` Describe the factors influencing ConsumerDescribe the factors influencing ConsumerBehavior of student belong to upperBehavior of student belong to uppermiddle class and Katrinamiddle class and Katrina KaifKaif while goingwhile going
for tourist package.for tourist package.
` Although shopping malls started making their presencefelt, consumers still had to go to the traditional stand-alone stores, when they were purchasing specializedproducts like electronics, home needs, and jewelry.What are the ways in which shopping malls in India canattract more number of customers?
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` is a philosophy of doing business that focuses onkeeping and improving current customers does notnecessarily emphasize acquiring new customers
` is usually cheaper (for the firm)--to keep a currentcustomer costs less than to attract a new one
` goal = to build and maintain a base of committedcustomers who are profitable for the organization
`
thus, the focus is on the attraction, retention, andenhancement of customer relationships
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` Prospects
` Customers
` Client` Supporter
` Advocates
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Transaction Marketing Relationship Marketing
Focus on Single sale Focus on Customer retention
Orientation on product features Orientation on product benefits
Short time scales Long timescales
No emphasis on customer service High emphasis on customer service
Moderate customer contact High customers co0ntact
Limited customer commitment High customer commitment
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` Customer retention is cheaper than customer acquisition
` Reduces communication costs
` loyal customers tend to spend more with the organization
over time, Repeat purchase.` On average costs of relationship maintenance are lower
than new customer costs
` employee retention is more likely with a stable customer
base
` lifetime value of a customer can be very high
` Perform the role of advocate or unpaid salesman.
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Organization
Customer Market-
Good service,
trustworthiness,
Value for moneyInfluencer
markets-
Shareholders &
Government
RecruitmentMarkets- Job
supply, courteous
treatment Internal Markets
Recognition, reward,
security, opportunity
Supplier Market-
Partnership, largeorder
Referral Markets-
Reliability,
performance,recognition
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Getting
Satisfying
Retaining
Enhancing
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Customer Retention &
Increased Profits
Employee Loyalty
Quality
Service
Customer Satisfaction
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After 14 years:
` Double its customer base Has the same customer
Base
Service
Company A
Service company B
10% new
customer every
year
5% loss of
customers
95% RetentionRate
10% loss
of
customers
90%
Retention
Rate
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Service Failure
Do NothingTake Action
Stay with ProviderSwitch Providers
o lain to
Providero lain to
Fa ily & Friends
o lain to
Third Party
Stay with ProviderSwitch Providers
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ServiceSwitching
Behavior
High Price Price Increases
Unfair Pricing Deceptive Pricing
Pricing
Location/Hours
Wait for Appointment Wait for Service
Inconvenience
Service Mistakes Billing Errors
Service Catastrophe
Core Service Failure
Uncaring
Impolite
Unresponsive Unknowledgeable
Service Encounter Failures
Negative Response No Response
Reluctant Response
Response to Service Failure
Found Better Service
Competition
Cheat Hard Sell
Unsafe
Conflict of Interest
Ethical Problems
Customer Moved Provider Closed
Involuntary Switching
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Service Recovery StrategiesService Recovery Strategies
Service
Recovery
Strategies
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` Explain Six market model and its importance in education institute.
` Consumer retention is cheaper than customer acquisition. Explain
` Kingfisher is planning to expand its business in public road transport.
As a marketing operation consultant advice them on STP and various
factors affecting the consumer behavior( Bus Service).
` Explain service profit chain model for new IT service.
` How customers response to Service Failure.What are the causes
Behind Service Switching
` Explain what is service recovery strategies.Apply the same to HDFC
who have lost its customers to ICICI andAxis bank.
` Why it is important to understand and analyse consumer behavior.