Customers

Who is important?

What are their choice

criteria?

Howdo they buy?

Wheredo they buy?

When do they buy?

Understanding customers : the key questions

What is consumer behaviour

Study of how the individuals ,groups or organisations

select, buy, use and dispose

of goods, services, ideas or experiences to satisfy their needs

Factors influencing consumer behaviour

Cultural factors

Social factors

Personal factorsAge and stage in the life cycleOccupation & economic circumstancesPersonality & self conceptLifestyle & values

Brand personalitySincerity (down-to-earth, honest, wholesome and cheerful)

Excitement (daring, spirited, imaginative & up-to-date)

Sophistication (upper-class & charming)

Ruggedness (out doorsy & tough)

E:g-

Levi’s-ruggedness

MTV- Excitement

CNN-competence

Reference groupsMembership groups

Primary group Secondary group

Aspirational group

Dissociative group

Buying roles

INITIATOR

INFLUENCER

PAYERDECIDERBUYER

USER

Consumer buying processNeed recognition & Problem awareness

Information search

Evaluation of alternatives

Purchase decision

Post-purchase behavior

Need recognition

Routine needsEvolved needs

Emergency needs

Which product to buy?

Internal Stimulus

External Stimulus

Information search

Which brand to buy?

sources

Retrieving information from memory

•Personal-family,friends,neighbours,acquintances

•Commercial-advert, web-site, sales-persons

•Public- mass media, consumer rating organisation

•Experiential-handling, examining, using the product

Internal sources

External sources

EntireSetOf

BrandsAvailable

Orknown

ConsiderationSet

Evokedset

Inertset

Inept set

Choice set

Market segmentation

Dividing a market into distinct groups with

•Distinct needs•Distinct characteristics or behavior

who might require separate products or marketing mixes.

Why segmentation

Through market segmentation, companies divide large, heterogeneous

markets into smaller segments that can be reached more effectively

and efficiently with products and services that match their unique needs

Bases of segmentation

Demographic-

Age & LifecycleGender

Life stagesoccupation

Behavioral-

Benefits soughtPurchase occasion

Brand loyaltyUsage

Perception& beliefs

Geographic- UrbanRural

etc.

Psychographic- LifestylePersonality

Strategies of segmentation

•Niche - marketing One product one market strategy

•One product many market One product, with different

variations in the productbut catering to the

needs of different market segments

•Many product one market Different products catering to theneeds of one consumer segment.

•Multiple niching Many product many market

Market segmentation1.Identify bases for

segmenting themarket.

2. Develop segment profiles.

Target marketing

3.Develop measureof segment

attractiveness4. Select target

segments

Market positioning5. Develop

positioning for target segments.

6. Develop a marketing mix for

each segment.

Market segmentation – Company identifies different ways to segment the market.

& Develop profiles of the resulting

market segments

Target marketing- evaluating each market segment’s attractiveness

& Selecting one or more of the market

segments to enter.

Marketing positioning- setting the competitive positioning for the product

& creating a detailed marketing mix

Target market

A target market is a group of people or organisationsfor which a company

Designs Implements and

Maintains a marketing mix intended to meet the needs of that group, resulting in mutually beneficial and satisfying exchanges.

Product positioningThe way the product is defined by consumers on important attributes – the place the product occupies in consumer’s minds relative to competing products.

A product’s position is the complex set of Perception Impression & Feeling

That the consumers have for the product compared with competing product

Result of positioning

Customer- focused value proposition

A cogent why the target market should buy the productPositioning is:

Not what you do to a product .

But what you do to the minds of the prospect.

Company &product

Targetcustomers

Benefits price Value proposition

Perdue(chicken)

Volvo (station wagon)

Domino’s(pizza)

Quality-conscious consumers of chicken.

Safety-conscious “upscale” families.Convenience-minded pizza lovers

Tenderness

Durability and safety

Delivery speed and good quality

10% premium

20% premium

15% premium

More tender golden chicken at a moderate premium price

The safest, most durable wagon in which your family can ride.

A good hot pizza,delivered to your door within 30 minutes of ordering at a moderate price.

Choosing a positioning strategy

Three steps:

•Identifying a set of possible competitive advantages upon which to build a position

•Choosing the right competitive advantages

•Selecting an overall positioning strategy

The company must effectively communicate and deliver the chosenposition to the market

Decision on positioning requires determining the

Competitive frame of reference by identifying

•The target market

•The competition

•The ideal points-of-parity (POP)

•The points-of-difference (POD)

&

Identifying the

CATEGORY MEMBERSHIP

the products or set of products with which a brand competes

&which functions as a close substitutes

Target market

•Buyer behavior•Identify the consideration set consumer use in making brand choices

•Buying roles

Point-of-difference (PODs)

Attributes and benefits consumers strongly associate with a brand ,positively evaluate, and believe that they could not find to the same extent with a competitive brand.

Point-of-parity (POPs)Associations that are not necessarily unique to the brand but may infact be shared with other brand.

•Category POPs

•Competitive POPs

Category point- of- parity

Associations consumers view as essential to be a legitimate and credible offering within a certain product or service category

They represent necessary- but not necessarily sufficient-conditions for brand choice

Competitive point-of-parity

Associations designed to negate competitors points-of-difference

Choosing POPs & PODsRelevance

Distinctiveness

Believability

There are three deliverability criteria

Feasibility

Communicability

Sustainability