Marketing Management (MKT600) M B A. Anna Zarkada

Marketing Management (MKT600) M B A Anna Zarkada

Developing Exchange Relationships Theories Who are the buyers? What do buyers want? Consumers and Industrial Buyers Products and Services VALUE Why do people choose the things they do? Buyer Behaviour How do we find the answers? Market and Buyer Behaviour Research Where should we target our efforts? Strategy Market Segmentation Which is the best approach for out target market? Techniques Product Positioning

What is consumer behaviour? Consumer behaviour is the study of how individuals or groups buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants.

Model of Consumer Behavior Figure 7.2 Model of consumer behaviour

CONSUMER PSYCHOLOGY

Key Psychological Processes Motivation Maslow Freud Yung Learning behavioral changes in response to experience drive cues discrimination (the process by which we learn to make different responses to different stimuli) hedonic bias (I passed / he failed me) Perception Selective attention Selective distortion Selective retention Subliminal perception Memory Short term Long term Associative network

Learning

CONSUMER CHARACTERISTICS

Culture: Definition

shared learned dynamic adaptive but resilient identity context Culture is Culture provides cohesion Culture: Characteristics

Material Culture Artefacts Materialism Technology Determinism Science, Exploration & R&D Economics Production, distribution & consumption Wealth creation, accumulation & distribution Migration, Colonisation & Imperialism Language & Communication Verbal Translation & Interpretation Perfect Language & Lingua Franca Non-verbal Space & Time Body Language Social Structure Stratification Mobility Organisations Association Kinship Religion Beliefs Practice Morality Aesthetics Beauty Good taste Form, Shape and Colour Art Popular & High Art Humour Culture: Elements

Behaviours, Artefacts & Products Norms & Values Basic Assumptions Culture: A model

Hall Comparing Cultures I

Hofstede den gbr sin ind phil nzl usa saf aus ger fin ita fra mex isr jap Comparing Cultures II gre

Santa Died for your Mastercard CULTURAL VARIEGATION

Subcultures Nationalities Religions Racial groups Geographic regions

Social roles Social Factors Family Family of Orientation (parents and siblings) Reference groups Membership primary secondary Non membership aspirational dissassociative Family of Procreation (spouse and children) Status(es)

Roles of family members in the buying decision process income earner decision maker influencer user buyer payer

Lost Generation (1883 1900) Greatest Generation (1901 1924) Silent Generation (1925 1942) Baby Boomer (1943 1960) Generation X (1961 1981) Generation Y-millennials-9/11* (1982 2001) * people who were between the ages of 10 and 20 on September 11, 2001? Generation Z-Generation@- Net/iGeneration-Plurals* (2001 - ) * expected to be the first generation to earn less than their parents Digital Immigrants Digital Natives Age VS Generation

early years (<14) new consumers (15-17) young adults (18-34) single married no children married with children single parents middle years (35-54) single married no children married with children single parents empty nesters elderly (>55) Life Cycle Stage

VALS survey Values-Lifestyle culture-personality

LOHAS (Lifestyles of Health and Sustainability) market segments Sustainable economy Healthy lifestyles Ecological lifestyles Alternative health care Personal development

CONSUMER DECISION MAKING

Homo Œconomicus rational, focused on use and cost Passive man receiver of messages, Pavlov s dogs and cockroaches Cognitive man collector of information Emotional man - consumed by subjective criteria Postmodern man the variegated one Philosophical Perspectives on Buyer Behaviour

Problem recognition Information search Evaluation Choice Purchase decision Core Product Tangible Product Post Purchase Behaviour Buy re-buy Loyalty Augmented Product Buyer Decision model of the Homo Œconomicus

Sources of information Personal Commercial Public Experiential

Post-purchase behaviour Post-purchase behaviour Post-purchase satisfaction/ dissonance Post-purchase actions Post-purchase use and disposal

What are customer value, satisfaction, and Loyalty and Questions how can companies deliver them? How can companies cultivate strong customer relationships? How can companies both attract and retain customers?

EXPECTATIONS -> VALUE-> SATISFACTION-> LOYALTY

words thoughts emotions Extension of the Five Types of Customer Needs Five Types of Customer Needs 1.Stated needs: what the customer explicitly asks for I want an inexpensive car 2.Real needs: what the customer has in mind but might not want to ask for It s not only the price, I want low running costs as well 3.Unstated needs: what the customer expects, especially in terms of service, but assumes will be provided without having to ask for it he s polite, he listens to me, I trust him Related to the product/service value. They have to be fulfilled for the exchange to take place Related to the exchange process. They have to be fulfilled to create customer satisfaction reactions dreams 4.Delight needs: vaguely formed customer expectations of freebies that make the customer happy he s giving me the GPS for free!!!! 5.Secret needs: innermost and very personal desires that are never explicitly expressed wait till my neighbors see this car! Related to the exchange and post-purchase experience. They have to be fulfilled to create customer loyalty

Determinants of Customer Perceived Value Total customer benefit Total customer cost Customer Perceived Value Product benefit Monetary cost Services benefit Time cost Personal benefit Energy cost Image benefit Psychological cost

What is customer perceived value? Customer perceived value is the difference between the prospective customer s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

The value proposition The value proposition consists of the whole cluster of benefits the company promises to deliver Safety is a leading, but not the only, benefit promised in Volvo s value proposition Source: Courtesy of Volvo Car Corporation / Agency: Arnold

How do buyers form their expectations? Expectations result from past buying experience, friends and associates advice, and marketers and competitors information and promises.

What is Quality? Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-43

What is loyalty? Loyalty is a deeply held commitment to re-buy or re-patronise a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behaviour.

What is customer relationship management (CRM)? CRM is the process of carefully managing detailed information about individual customers and all customer touchpoints to maximise customer loyalty.

Framework for CRM Identify prospects and customers Differentiate customers by their needs and value to our company Interact to improve knowledge Customize for each customer Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-47

Figure 11.6 The customer-development process Source: J. Griffin (1995) Customer Loyalty: How to Earn It, How to Keep It, New York: Lexington Books, p. 36. See also M. Raphel and N. Raphel (1995) Up the Loyalty Ladder: Turning Sometime Customers Into Full-Time Advocates of Your Business, New York: HarperBusiness

Figure 11.5 Customer-product profitability analysis

CRM Strategies to increase the value of customer base Reduce the rate of defection Increase longevity Enhance share of wallet, cross selling & up selling Terminate low-profit customers Focus more effort on high-profit customers Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 5-50