MBA Marketing Mgt Module 3

8/8/2019 MBA Marketing Mgt Module 3

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Consumer Markets andConsumer Buyer Behavior


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Customer Perceived Value Customer perceived value is the

difference between total customer value

and total customer cost of a market

offering relative to those of competing

offers.

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Determinantsof

Customer Perceived Value

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ACustomers Perception

of Value

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StepsinaCustomer Value

Analysis Identifymajorattributesandbenefitsthat

customersvalue Assessthe qualitative importance ofdifferentattributesandbenefits

Assessthe companysand competitorsperformancesonthe different customervaluesagainstratedimportance

Examine ratingsofspecific segments Monitor customervaluesovertime

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Loyalty

A deeply held commitment to re-buy

or re-patronize a preferred product

or service in the future despite situational

influences and marketing efforts having

the potential to cause switching behavior.

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CustomerSatisfaction

Customer satisfaction is the extent to

which a products perceived performance

matches a buyers expectations.

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MeasuringSatisfaction

Periodic surveys

Customer lossrate

Mysteryshoppers

Monitor competitive performance

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CustomerLifetime Value

Customer lifetime value is the value of

the entire stream of purchases that the

customer would make over a lifetime of

patronage.

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EstimatingLifetime Value

Annual customerrevenue: $500

Average numberof loyal years: 20

Company profitmargin: 10

Customer lifetime value: $1000

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MaximizingCustomer

Lifetime Value Customer profitability

Customer equity

Lifetime value

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MaximizingCustomer

Lifetime Value Customer equity is the total combined customer

lifetime values of all of the companys customers.

Building the right relationships with the rightcustomers involves treating customers as assets that

need to be managed and maximized.

Different types of customers require different

relationship management strategies

Build the rightrelationship with the rightcustomers

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Customer Relationship

Management CRMisthe processof carefullymanagingdetailedinformation

aboutindividual customersandallcustomertouch-pointstomaximize customer loyalty.

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The Changing Nature of

Customer Relationships Relating with more carefully selected customers uses

selective relationship management to target fewer,

more profitable customers.

Relating for the long term uses customer relationship

management to retain current customers and build

profitable, long-term relationships.

Relating directly uses direct marketing tools

(telephone, mail order, kiosks, Internet) to makedirect connections with customers.

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CRMS

trategies Reduce rate ofdefection

Increase longevity

Enhance share of wallet

Terminate low-profit customers

Focusmore effortonhigh-profit

customers

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D

efinitions Consumerbuyerbehavior referstothe buyingbehavioroffinal

consumers individualsandhouseholds whobuygoodsandservicesfor personal consumption

All ofthese final consumerscombine tomake up the consumermarket


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FactorsAffectingConsumer

Behavior Culture

Forms a persons wantsandbehavior

Subculture

Groups with shared valuesystems

Social Class

Societys divisions whoshare values, interestsandbehaviors

Cultural

Social

Personal

Psychological

Key FactorsKey Factors


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Behavior Groups

Membership

Reference

A

spirational OpinionLeaders

Buzzmarketing

Family

Manyinfluencers

RolesandStatus

Cultural

Social

Personal

Psychological



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Behavior Age and life cycle

Occupation

Economic situation

LifestyleActivities, interests andopinions

Lifestyle segmentation

Personalityandself-concept

Cultural

Social

Personal

Psychological



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CharacteristicsAffecting

ConsumerBehavior

Motivation

Perception

Learning

BeliefsandattitudesCultural

Social

Personal

Psychological



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Psychological Factors

Motivation Amotive isaneedthatissufficiently

pressingtodirectthe persontoseek

satisfaction MotivationresearchisbasedonFreud;Looksforhiddenandsubconsciousmotivation

Maslow orderedneedsbasedonhowpressingtheyare tothe consumer


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Perception Perceptionisthe processby which

people select,organize,andinterpret

information Perception Includes:

Selective attention Consumersscreenoutinformation

Selective distortion People interprettosupportbeliefs

Selective retention People retain pointstosupportattitudes


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LearningLearning describes changesinanindividualsbehaviorarisingfromexperienceLearningoccursthrough:

Drives Internal stimulusthat callsforaction

Stimuli Objectsthatmove drive tomotive

Cues Minorstimulithataffectresponse

Reinforcement Feedbackonaction


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BeliefsandAttitudesBelief

adescriptive thoughtaboutabrandor

service maybe basedonreal knowledge,opinion,orfaith

Attitude

describesa persons evaluations,feelingsandtendenciestowardanobjectoridea

Theyare difficultto change


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TypesofBuying

DecisionBehaviorComplex

Highlyinvolved,significantbranddifferences Example computer

Dissonance-reducing Highlyinvolved, little branddifferences Example carpeting

Habitual Low involvement, little branddifferences Example salt

Variety-seeking Low involvement,significant perceivedbranddifferences

Example cookies


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The ConsumerBuying

Decision Process

Needrecognition

Informationsearch

Evaluationof alternatives

Purchase decision

Postpurchase behavior

Needs canbe triggeredby:

Internal stimuli Normal needsbecome strongenoughtodrivebehavior

External stimuli

Advertisements

Friendsoffriends

ProcessProcess

StagesStages


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The BuyerDecision

Process

Needrecognition

Informationsearch


Purchase decision


Consumers exhibitheightened attentionoractivelysearch forinformation.

Sourcesofinformation:

Personal

Commercial

Public Experiential

Word-of-mouth

ProcessProcess

StagesStages


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The BuyerDecision

Process

Needrecognition

Informationsearch


Purchase decision


Evaluation procedure dependson the consumer and the buyingsituation.

Mostbuyers evaluate multipleattributes, eachof whichisweighted differently.

At the endof the evaluationstage,purchase intentions areformed.

ProcessProcess

StagesStages


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The BuyerDecision

Process

Needrecognition

Informationsearch


Purchase decision


Two factorsintercedebetweenpurchase intentionsand the actualdecision:

Attitudesofothers

Unexpectedsituationalfactors

ProcessProcess

StagesStages


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The BuyerDecision

Process

Needrecognition

Informationsearch


Purchase decision


Satisfactionisimportant: Delighted consumers

engage in positive word-of-mouth.

Unhappy customerstellonaverage 11 otherpeople.

It costsmore toattractanew customerthanitdoestoretainan existingcustomer.

Cognitive dissonance iscommon

ProcessProcess

StagesStages


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END OFMODULE

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MBA Marketing Mgt Module 3

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