BUS7450 Strategic Marketing Management Week 3 Dr. Jenne Meyer.

BUS7450Strategic Marketing Management

Week 3Dr. Jenne Meyer

BUS7500 Article reviews

Research Class Activity

Share key brands Yes/No Questions

The Marketing Research Process

Define the problem Develop research plan Collect information Analyze information Present findings Make decision

Questionnaire Do’s and Don’ts

Ensure questions are free of bias

Make questions simple Make questions specific Avoid jargon Avoid sophisticated

words Avoid ambiguous words

Avoid negatives Avoid hypotheticals Avoid words that could

be misheard Use response bands Use mutually exclusive

categories Allow for “other” in fixed

response questions

5Creating Long-Term Loyalty Relationships

Figure 5.1 Customer-Orientations

Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 5-7

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.

Figure 5.2 Determinants of Customer Perceived Value

Image benefit Psychological cost

Personal benefit Energy cost

Services benefit Time cost

Product benefit Monetary cost

Total customer benefit Total customer cost

Steps in a Customer Value Analysis

Identify major attributes and benefits that customers value

Assess the qualitative importance of different attributes and benefits

Assess the company’s and competitor’s performances on the different customer values against rated importance

Examine ratings of specific segments Monitor customer values over time

Maximizing Customer Lifetime Value

Customer Profitability

Customer Equity

Lifetime Value

Figure 5.3 Customer-Product Profitability Analysis

Estimating Lifetime Value

Annual customer revenue: $500 Average number of loyal years: 20 Company profit margin: 10 Customer lifetime value: $1000

What is Customer Relationship Management?

CRM is the process of carefully managing detailed information about individual

customers and all customer touch points to maximize customer loyalty.

Attracting and Retaining Customers

Reduce the rate of defection Increase longevity Enhance share of wallet Terminate low-profit customers Focus more effort on high-profit customers

Figure 5.4 The Marketing Funnel

Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 5-16

6Analyzing Consumer Markets

Consumer Behavior

What Influences Consumer Behavior?

Cultural Factors

Social Factors

Personal Factors

What is Culture?

Culture is the fundamental determinant of a person’s wants and behaviors acquired

through socialization processes with family and other key institutions.

Subcultures

Nationalities Religions Racial groups Geographic regions

Fast Facts About American Culture

The average American: chews 300 sticks of gum a year goes to the movies 9 times a year takes 4 trips per year attends a sporting event 7 times each

year

Social Classes

Upper uppers

Lower uppers

Upper middles

Middle

Working

Upper lowers

Lower lowers

Social Factors

Reference groups

Family

Social roles

Statuses

Reference Groups

Membership groups Primary groups Secondary groups Aspirational groups Disassociative groups

Family Distinctions Affecting Buying Decisions

Personal Factors

Age Life cycle stage Occupation Wealth

Personality Values Lifestyle Self-concept

Age and Stage of Lifecycle

Occupation and Economic Circumstances

Personality

Brand Personality

Sincerity Excitement Competence Sophistication Ruggedness

Figure 6.1 Model of Consumer Behavior

Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 6-32

Motivation

Freud’sTheory

Behavioris guided by subconsciousmotivations

Maslow’sHierarchyof Needs

Behavioris driven by

lowest, unmet need

Herzberg’sTwo-Factor

Theory

Behavior isguided by motivating

and hygienefactors

Maslow’s Hierarchy

Perception

Selective attention Selective retention Selective distortion Subliminal perception

Emotions

Memory

Figure 6.3 State Farm Mental Map

Figure 6.4 Consumer Buying Process

Problem Recognition

Information Search

Evaluation of alternatives

Purchase Decision

Postpurchase Behavior

Sources of Information

CommercialPersonal

Public Experiential

Figure 6.6 Steps Between Alternative Evaluation and Purchase

Figure 6.7 How Customers Use or Dispose of Products

Low-Involvement Decision Making

Decision Heuristics

Availability Representativeness Anchoring and adjustment

Framing

7Analyzing Business Markets

Chapter Questions

What is the business market, and how does it differ from the consumer market?

What buying situations do organizational buyers face?

Who participates in the business-to-business buying process?

Chapter Questions

How do business buyers make their decisions?

How can companies build strong relationships with business customers?

How do institutional buyers and government agencies do their buying?

What is Organizational Buying?

Organizational buying refers to the decision-making process by which formal

organizations establish the need for purchased products and services, and identify, evaluate, and choose among

alternative brands and suppliers.

Top Marketing Challenges

Understanding customer needs in new ways; Identifying new opportunities for growth; Improving value management techniques Calculating better marketing performance and

accountability metrics; Competing and growing in global markets Countering the threat of product and service

commoditization Convincing C-level executives to embrace the

marketing concept

Characteristics of Business Markets Fewer buyers Close supplier-

customer relationships

Professional purchasing

Many buying influences

Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically

concentrated buyers Direct purchasing

Stages in the Buying Process: Buyphases

Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order-routine specification Performance review

Class wrap up

What is due for next week