MNM2605–ConsumerBehaviour€¦ · MNM2605–ConsumerBehaviour StudyUnit1:NatureofConsumerBehaviour Customerbehaviour:acombinationofactivitiesandinfluencesthatoccurbefore,duringandafterthe

MNM2605–ConsumerBehaviourStudyUnit1:NatureofConsumerBehaviour

Customerbehaviour:acombinationofactivitiesandinfluencesthatoccurbefore,duringandafterthepurchaseitself.It’salltheconsumeractivities,includingtheemotional,mentalandbehaviouralresponsesthatprecede,determineorfollowtheseactivities.

ActivitiesCustomers Users

Mental SelectorsBusinesses Physical Payers

TypesofcustomersBusiness:tomanufactureotherproducts,toreselltootherorganisationsorindividuals,toconductoperationsConsumer:all-encompassingtermtomeananyenduser,customer,client

Rolesofcustomers: Selector:participatesinprocurementfromthemarketplace Payer:financesorpaysforpurchase User:actuallyconsumestheproduct,receivesthebenefitofproductorservice

Onepersoncanbeone,two,orallthreeforaproduct.Theremaybeconflictsbetweenroles,e.g.yourparentsbuyyouasmallcarbutyouwantedasportscar.

ActivitiesPhysical:actionstakensuchasvisitingthestore,discussingproductwithsalesperson,comparingproductsandbuying.Mental:assesshowwelltheproductwillsatisfyneeds,experiencewiththeproduct,andknowledgeofdifferentbrands,opinionsorviews.

Individualfactorsthatinfluencedecision-makingMotivation:theneeds,wants,drivesanddesiresofanindividualthatleadthemtothepurchaseofproductsorideas.Perception:individualbecomesawareoftheenvironmentandinterpretsittointheirframeofreference.Learningability:consumersacquirepurchaseandconsumptionknowledge,experiencewhichtheyapplytofuture-relatedbehaviour.Attitude:learnedpredispositiontobehaveinaconsistentlyfavourableorunfavourablewaytowardsobjects,eventsorsituations.Personality:psychologicalcharacteristicsthatdetermineandreflecthowtheyrespondtotheirenvironment.Lifestyle:wayofliving.

Groupfactorsthatinfluencedecision-making:Family:nuclearandextendedfamily.Culture:institutionalisedwaysofappropriatebehaviour.Distinctivepatternsofbehaviourofagroupofpeople,includingbeliefs,norms,valuesandpremises.Socialclass:groupwhichenjoysmoreorlessthesameprestigeandstatusinsociety.Referencegroups:areusedasabasisofcomparisonorpointofreferencewhenformulatingresponses.Opinionleaders:onepersonperformingthefunctionofareferencegroup.

ImportanceofcustomerbehaviourCustomersatisfactionandcustomerretention

Itismorecostlytorecruitnewcustomersthantokeepoldones.Organisationsmustmeetorexceedcustomers’expectationsofservice,quality,priceanddelivery.

MarketingconceptMarketingactivitiesareinfluencedbyfourcompetingorientations:

Productionorientation:focusedontheinternalcapabilitiesofthebusinessratherthandesiresandneedsofthemarketplace.Whatcanwedobest?

RolesCustomertypes

Salesorientation:useofaggressivesalestechniques,withhighsalescreatinghighprofits. Marketingorientation:focusonwhatcouldbesold,i.e.theneedsofthebuyers.Thisledtothe

puremarketingconcept:●Consumerorientation:allmarketingactsshouldbeaimedatsatisfyingconsumerneeds,

demandsandpreferences.●Profitorientation:achievingprofitabilityisessential,maximisingprofitsistheprimary

objective.●Organisationalintegration:theorganisationisseenassystemofunitsthatworktogetherto

achieveajointobjective. Societalorientation:askswhetherthepuremarketingconceptisadequatewhilefacingproblems

ofenvironmentaldamage,resourceshortages,populationgrowth,etc.Isitwhatisbestinthelongrun?Customerfocus

Organisationsthatfocusontheneedsofthecustomerensurethattheneedsofsocietyareservedbetter.Thisisessentialforlong-termsurvival.

Applicationofknowledgeofcustomerbehaviour:Marketingstrategy

Basedonexplicitorimplicitbeliefsaboutcustomerbehaviour.Strategiesbasedonresearchandsoundtheorywillbemoresuccessful.Themarketingstrategyprocessconsistsoffouriterativeprocesses:

SocialmarketingSatisfywants,needsandinterestsoftargetmarketsinsuchawaythatitpreservesorenhancesthelong-termwell-beingofconsumersandsociety.(Behaviourchangecampaigns,promotingsocialissues,donatingrevenuetoacause,providingvolunteers)

Better-informedindividualsItisimportantthatcustomersunderstandthestrategiesandtacticsthatcompaniesareusingtoinfluencetheminorderforthemtomakeproperlyinformeddecisionsaboutwhattheybuy.

RoleofCustomerBehaviourinMarketingStrategyCustomervalue:thedifferencebetweenallthebenefitsderivedfromaproductandallthecostsofacquiringthosebenefits.Marketingstrategyworksinthefollowingway:

1.MarketAnalysis:detailedanalysisoftheorganisation’scapabilities,strengthsandweaknessesofthecompetitors,theeconomicandtechnologicalforcesaffectingthemarketandthecurrentandpotentialcustomersinthemarket.

a.Customers:e.g.customervalueanalysis-theuseofacustomerinformationdatabasetoenabletheorganisationtoprojectthefuturebehaviourofcustomersonthebasisoftheirpurchasehistories.b.Organisation:understandingofcapabilities,e.g.finances,managerialskills,productioncapabilitiesc.Competitors:understandthecompetitors’capabilitiesandstrategies,aswellasit

understandsitself.d.Environment:variableswhichmaybeinfluenced,butnotcontrolled,bytheorganisation.Thesearetheconditionsunderwhichthestrategywillbeimplemented.

2.MarketSegmentation:basedonmarketanalysis,theorganisationidentifieshomogenousgroupsorsegmentsonwhichtofocus.Thesegmentsaredescribedintermsofdemographic,psychographicandgeographicaspects.Customersinthesegmenthavesimilarneedsandwants.Asegmentmustbelargeenoughtobeprofitableforacompanytotargetit.

a.Benefitsi. Forcesfocusoncustomerneedsii. Identificationofnewmarketingopportunitiesfromresearchiii. Guidelinesfordevelopmentofseparatemarketofferingsiv. Facilitateappropriateallocationofmarketingresources

b.Disadvantagesi. Developmentofseparatemodelsandmarketofferingsisexpensiveii. Limitedmarketcoverageisachievediii. Excessivedifferentiationmayleadtoaproliferationofmodels,andcannibalisation

c.Criteriaforeffectivesegmentationi. Measurableintermsofsize,buyingpower,potentialprofitii. Largeenoughtobeworthexploitingwithtailoredoffersiii. Accessibletomarketersiv. Actionablee.g.fundstocreateseparatemarketofferingsv. Differentiableintermsofneeds,demandsanddesires,easytodistinguishbetween

3.MarketingStrategy:aimedatpenetratingtheselectedsegment(s).Thestrategyisformedintermsofthemarketingmix,whichinvolvescombiningproductfeatures;pricestobecharged,promotionoftheproductandmakingitavailableintheplacecustomerswantit.Thiscombinationisthetotalproduct.

a.Product:marketersmustbalancethebenefitsofcustomisationagainstawiderangeofproductoptions-includesquality,styling,specialdesignfeatures,packaging,rangeofsizesoroptions,warranties.

b.Promotion:therearesevenformsofmarketingcommunication(advertising,personalselling,publicrelations,salespromotion,sponsorships,directmarketing,publicity).Themarketingcommunicationstrategyneedstoanswer:

Withwhomdowewanttocommunicate?Whateffectdowewantourcommunicationtohaveonthetargetaudience?Whatmessageshouldweconveytothetargetmarket?Whatmeansandmediashouldweusetoreachthetargetaudience?Whenshouldwecommunicatewiththetargetaudience?

c.Price:customerscanbuyownershiporlimitedusagerights(rent).Lowerpricesdonotalwaysequalmoresales.Pricecanbeseenasameasureofquality.Companyneedstounderstandthesymbolicrolethatpriceplaysfortheproductandtargetmarket.

d.Place:distribution’sroleistogettheproducttoitstargetmarket.Customerswillonlyrarelygooutoftheirwaytoobtainaparticularbrand.Strategieshavetobedeveloped,suchasmethodsandroutestogettheproducttothelocation.

OutcomesofcustomerbehaviourOrganisationaloutcome

Productpositioning-Thewayinwhichthecustomersdefinetheproduct’simportantattributes.

Sales-Producetherevenuenecessaryfortheorganisationtostayinbusiness.Customersatisfaction-Keepingexistingcustomersbecausetheyaresatisfiedwiththe

products.Individualoutcomes

Needsatisfaction-actualandperceivedneedfulfilment.Often,fulfillingoneneedaffectstheirabilitytofulfilothersbecauseoffinancialandtimeconstraints,e.g.gambling.Societaloutcomes

Economicoutcomes-Cumulativeimpactofbuyingdecisions,incl.decisionPhysicalenvironment-Pollution,availabilityofscarceresources.

Overallmodelofcustomerbehaviour:pg28-30

StudyUnit2:CreatingMarketingValueforConsumers

Value:thebeliefsthatacommunitysharesandthatprovidesguidelinesforhowcommunitymembersshouldthink,actandfeelinagivensituation.

ThemarketvalueofP&SMarketvalue:thepotentialofaproductorservicetosolvetheconsumer’swantsandneeds.Consistsof:Universalvalue:satisfiesthebasicneedsofthecustomer,thebottomlinevaluesthateverycustomerexpectsfromtheproductorservice,e.g.aproductwhichsatisfieshunger,thirst,andsafety.Personalvalue:morediverse,varybetweencustomers.Satisfiesthewantsofthecustomer,whichareofamorepersonalnature.Personalvaluesmaybegroup-specific(targetmarket)orindividualspecific(one-on-oneselling),e.g.aproductwhichsatisfiestheneedsofloveandrespect.

Thematrixofvaluesandcustomerroles:User Payer Buyer

Universalvalues Performancevalue:whatthep/scandofortheuser.E.g.foodgivesnutrition

Pricevalue:utilitythatcanbeobtained,isitaffordable?

Servicevalue:measuredaccordingtopre-purchase&post-purchaseadviceandassistance.

PV:Group Socialvalue:inlinewithnormsandstandardsofpeergrouporfriends.E.g.cellphone

Creditvalue:customerpaysbycredit,delaysfullpayment.

Conveniencevalue:savingsintermsofinvestingtimeandeffort.E.g.open15hrsaday.

PV:Individual Emotionalvalue:throughexperientialconsumption.E.g.MercedesBenz

Financingvalue:termsofpaymentareoffered.E.g.hirepurchaseorlay-bye.

Personalisationvalue:createdbymeansofcustomisationandinterpersonalrelations.E.g.personalbanker.

Organisation’sperspectiveofmeasuringvalue:Thebestwaytodetermineaccuratelywhethervaluehasbeenaddedforthecustomeristoquantifyitinthevaluemetricsprocess:

1.Determinetheexpectedvalue:themostbasicwayisbycreatingaconsumersatisfactionindex

Externalinfluences Climate Economy Governme

nt Technolog

Externalinfluences Culture Subculture Referencegroups Socialclass Family Marketingactivities

Decisionmaking Individual Organisation

al Family

Personalcharacteristics

Race Age Gender

CUSTOMERSInternalinfluences

Perception Learning Motivation Lifestyle Attitudes Personality Self-

concept

UniversalvaluesA:tosatisfybasic

PersonalvaluesA:tosatisfywants

Groupspecific:aimedatagroupofpeople

Individualspecific:aimedasingleperson

MARKETVALUE

(CSI),whichcanbedonebyaquestionnaire.Needstobebuiltusingconsumervaluemanagement(CVM),whichfocusesonthevaluecomponent.Thevaluecomponentmeasurestheconsumersatisfactionrelativetothepricepaid,whichistheperceivedvalue.Theorganisationwillbeabletodetermine:

o Thekeybuyingfactorsthatconsumer’sfavour.o Howtheorganisationratesagainstitscompetitors.o Whattherelativeimportanceisofthesecomponentstodeliveringconsumervalue.

2.Formulateastrategyfordeliveringvaluetothecustomer:convincepersonnelofthebenefitofCVMandimplementanactionplantoensurethatvalueisbroughttothecustomer.

3.Measurevaluedelivery:canbedonebyCVMorabalancedscorecard(BSC),whichmeasureslong-termvaluecreation.Thecoremeasuresare:

o Marketshareo Consumeracquisition:rateatwhichnewcustomersareattractedo Consumerretentiono Consumersatisfaction:measuredagainstasetofperformancecriteriao Consumerprofitability:netprofitofaconsumerafterdeductingtheexpensestosupport

theconsumer4.Investigatedeviationsandadaptthestrategy:ifanythingiswrong,itmustbecorrected.Thenew

cycleofresearchstartstoassessiftheyaremeetingcustomerexpectations

StudyUnit3:MarketCharacteristics

MarketcharacteristicsandtheirinfluenceonconsumerbehaviourDemographiccharacteristics

Thesearepeople’svitalstatistics,suchasage,race,ethnicityandlocation.Theyarestronglyrelatedtobuyingbehaviour.

Individuals Population:approx.49.99millionin2010,51%female,79%black. Agedistribution:proportionatelymoreyoungthanolderpeople,31%under15yrs. Physicaldistribution:highmigrationfromruraltourban,mostlyfromECandLimpopotoWCand

Gauteng. Educationandliteracy:growthin7-15yrsisincreasing,16-18yrsisstagnant.Increasein

attendanceateducationalinstitutionsbutlargeearlydrop-outrate.Markedincreaseinliteracy,includinginoldpeople.

Labourmarket:is17.5millionof32.2millionpeopleaged15-64,with13.1millionemployed. Unemployment:slowdecreaseinoverallunemployment,increaseforwomenanddecreasefor

men. Formalandinformalsectors:formalbyfaroutweighsinformal(9.2millvs2.2mill)

Householdso Housing:informaldwellingsdecreasedveryslowly,traditionaldwellingsunchanged.o Watersources:approx.70%haveaccesstotapwater,steadydeclineinuseofrivers,streams

anddams.o Energysources:approx.82.6%haveaccesstoelectricity,informalandtraditionaldwellingsat

asteadyincrease.Useofparaffinlampsandcandlesslowlydecreasing.o Telephones:accesstolandlineorcellphonehasincreaseddramatically,includinginformal

andtraditionaldwellings.o Healthcare:slowincreaseinuseofpublichealth-care,medicalaidmembershipremains

exclusiveandoutofreachforthemajority.o Householdincome:LivingStandardsMeasurementdividesincomefromlevel10(R30

000/month)tolevel1(1493/month).Economicfactorsinfluencingconsumerbehaviour

Inflation:ageneralriseinpriceswithoutacorrespondingincreaseinwages,whichmeansdecreasedpurchasingpower.TheCPIisusedtomeasureinflation,andtodetermineinterestrates.

Currencyfluctuations:thevalueoftheranddeterminesthecostofimportedproductsandservices.

Recession:aneconomicconditionwhereincome,productionandemploymentfall,causingareductioninthedemandforproductsandservices.

GovernmentalfactorsinfluencingconsumerbehaviourMarketingisrestrictedbylawsandrestrictionsofthegovernment.Thesefallintothreemaincategories: Promotingcompetition:prohibitionofrestrictivetradingpracticessuchaspricecollusion. Limitingcompetition:protectingEskomagainstcompetition. Protectingconsumerrights:thenewCPA.

Basicconsumerrightsare: Therighttomeetbasicneeds Therighttosafety Therighttobeinformed Therighttochoose Therighttobeheard Therighttoredress Therighttoconsumereducation Therighttoahealthyenvironment

Consumerism:effortsofindependentindividuals,groupsorbodiesthatprotecttherightsofconsumers.Physicalconditionsinfluencingconsumerbehaviour:

Climate:SAhasapleasantclimate.Thisdeterminescropsgrown,clothing,housingandgeographicaldistributionofthepopulation.

Climatechangeanddamagetotheenvironment:SAhasahighcarbonfootprintperperson(10tonsCO2pp)incomparisontotheglobalaverage(7tons).Temperaturesareexpectedtoriseandrainfalltodecrease.Opportunitiesawaitforcompanieswhocancreatesolutionsthatpromisetoreconcileprosperitywithenvironmentalprotection.

SocialfactorsinfluencingconsumerbehaviourSocialchangeisdifficulttoforecastandintegrateintoastrategy.Attitudes,valuesandlifestylehavegreatinfluenceonproductsandservicesconsumed.Somerecentchangesare:

o Consumersaremoredemandingandinformed.o Consumerstendtoreadlabelsmore,showingconcernoverhealth.o Dual-incomehouseholdsarestrappedfortime,changingrolesinthehousehold.o Morepeopleareworkingfromhomeinvirtualoffices.o Morewomenareenteringtheworkplace.o Peoplestrivetoachievethehigheststandardoflivingpossible,seekingcomfort,styleandstatus.o Peoplefaceintensepressureintheworkplaceandseekwork-lifebalance.

TechnologicalfactorsinfluencingconsumerbehaviourItisvitalthatmarketersbecomeawareofthelatestdevelopmentsintechnologyandhowtheyaffecttheirmarketingactivities.IthasaffectedSouthAfricainseveralways: Theinternethastransformedthewaypeopleaccessinformationaboutthemarketplaceandthe

alternativesavailable. Marketersareincreasinglyusinganelectronicplatform. Moreandmoreconsumersareshoppingonline. Consumerscanpurchaseanythingfromanywhereintheworld,increasingcompetitionforSouth

Africancompanies.

DevelopingtrendsthatinfluenceconsumerbehaviourGreenmarketing

Focusesontheenvironment.Involvesproductswhoseproduction,useanddisposalislessharmfultotheenvironment;productsthathaveamorefavourableimpactontheenvironment;andlinkingthepurchaseofaproducttoanenvironmentalorganisationorevent.

Cause-relatedmarketingActivitywherebyacompanylinksthesaleofitsproductstoanissueorcause,e.g.rhinopoaching,breastcancer.Companiesaimtoaddressconsumers’valuesandbuildcorporateimage.

MarketingtogayconsumersThereisatrendinsocietytovaluediversity.Thesepeoplestillhavedifferentdemographics,justlikeheterosexuals.Acompanyneedstoaskitself:oIsitnecessarytomodifyourproductsinordertomeettheneedsofthismarket?oShouldweusestandardadvertisingingay-orientedmediaoradaptit?oTowhatdegreeshouldweparticipateingayandlesbianrelatedactivities?oShouldourmajormediaadvertisementsincludeadvertisementswithgaythemes?

Gender-basedmarketing

Genderroleshavechangeddrasticallyinthelastfewyears.Womenincreasinglyinfluencehigh-endpurchasesandareevenemergingasthedominantmarketforcertaincars,forexample.Manyproductsarelosinggendertypecastingandmany‘typicalmale’products,suchasguns,cars,motorbikesandcomputers,aredesignedwithwomeninmind.Maleandfemaleconsumersresponddifferentlytomarketingmessagesandconsumedifferenttypesofmedia.Theyalsoresponddifferentlytotheretailenvironment,andmoremalesaredoingtheshoppingthanbefore.Itissuggestedthatwomencanbedividedintofoursegments:●thetraditionalhousewife●thetrappedhousewife●thetrappedworkingwoman●thecareer-drivenworkingwoman.

BlackDiamondsTheseareexciting,savvy,influentialandup-and-comingindividualswhoaredriventosucceed.TheyrepresentacollectivespendingpowerofR180billion.Theylargely:have5ormorepeopleintheirhousehold,believeinlobola,speakEnglishfluently,havecredit,havealotofdebt.

StudyUnit4:CultureandSubculture

NatureofcultureFromaconsumerbehaviourperspective,culturecanbedefinedasthesumtotaloflearnedbeliefs,valuesandcustomsthatservetodirecttheconsumerbehaviourofmembersofaparticularsociety.Valuesarealsobeliefs,buttheymeetthefollowingcriteria:relativelyfewinnumber;guideforculturallyappropriatebehaviour;enduringanddifficulttochange;nottiedtospecificobjectsorsituations;andtheyarewidelyacceptedbythemembersofasociety.

Customs,valuesandbeliefsCustoms:areovertmodesofbehaviourthatconstituteculturallyapprovedwaysofbehavinginspecificsituationsValues:somethingsonecountryfeelaremoral,areseenasimmoralinothercountries.Meetthefollowingcriteria:

Fewinnumber Aguideforculturallyappropriatebehaviour Difficulttochange Nottiedtospecificsituationsorobjects Widelyacceptedinsociety

Beliefs:thegreatnumberofthoughtsorexpressedstatementsthatreflectaperson’sparticularknowledgeandassessmentofsomething.

NeedsandcultureCultureoffersorder;directionandguidanceinallphasesofhumanproblemsolvingbyprovidingtriedandtrustedwaysofsatisfyingphysiological,personalandsocialneeds.Wayscultureshiftshavechangedspending:

o Concernabouthealthandfitness=exerciseequipment,healthyfoodandfitnessserviceso Shifttowardsinformality=casualclothing,simplerhomefurnishingso Increaseddesireforleisuretime=increaseddemandforconvenienceproducts

LearningandcultureFormallearning:adultsandoldersiblingsteachayoungfamilymemberhowtobehaveInformallearning:childlearnsbyimitatingthebehaviourofselectedothersTechnicallearning:teachersinstructchildreninaneducationalenvironmentastowhat,howandwhytheyshoulddocertainthings

Language,symbolsandritualsLanguage:membersofasocietymustbeabletocommunicatethroughacommonlanguageSymbol:athing,especiallyamaterialobject,whichrepresentssomethingabstract,e.g.=Christianity.Marketersusesymbolstoconveydesiredproductimagesorcharacteristics.Ritual:atypeofsymbolicactivityconsistingofaseriesofstepsoccurringinafixedsequenceandrepeatedovertime

ThedynamicnatureofcultureThechangingnatureofculturemeansthatmarketerscontinuouslyhavetomonitor:

Whyconsumersarenowdoingwhattheyaredoing. Whothebuyersandusersoftheirproductsare. Whenconsumersdotheirshopping. Howandwherethemediacanreachconsumers.

Newproductsandservicesthatmaybeemerging.Enculturation:thelearningofyourownculture.Acculturation:learningofaforeignculture.Theprocessofacculturationmeansthatdifferentethnicgroupsareexperiencingconstantinteractionandsubcultureshavedeveloped.

Subcultureadistinctculturalgroupthatexistsasanidentifiablesegmentwithinalarger,morecomplexsociety.

Thiscanbebasedondemographicssuchasage,geographiclocation,etc.

CulturalvaluesandsocietyVarioussocialinstitutionsthattransmittheelementsofculture

1.Family:theprimaryagentforenculturation.2.Educationalinstitutions:impartbasiclearningskills,history,patriotism,citizenshipand

technicaltraining.3.Placesofworship:providereligiousconsciousness,spiritualguidanceandmoraltraining.4.Massmedia:disseminateinformationaboutproducts,ideasandcauses.

Individualism:emotionalindependencefromgroups,organisationsandothercollectives.Humanvalues

Importantfeaturesofvalues: Beliefsorconcepts Aboutdesirablebehaviourorend-states Thatgobeyondparticularsituations Guidethechoiceorevaluationofeventsandbehaviour Arearrangedinahierarchy

Terminalvalues:beliefsaboutdesiredend-statessuchasfreedom,comfortablelife,maturelove.Instrumentalvalues:beliefsaboutdesiredmodesofactionsuchasbeingindependent,ambitiousorhonest.Valuesserveasguidingprinciplesinpeople’sdailylivesbecausetheyareenduringbeliefsaboutdesirableend-states.Althoughvaluesareutilisedatthepersonallevel,theyaresociallyconstructedandinherentlycultural.Valuesareunderlyingdeterminantsofaconsumer’sattitudesandconsumptionbehaviour.

ThevalueconceptinmarketingApplicationofthevaluesperspectivetomarketingisbasedontwoperspectives: Sociologicalmacro-approach:standardsurveymethodology,classificationschemetocategorise

respondentsintopredeterminedgroups,consumersarethussegmentedintogroupsbasedontheirvalueorientations.

Psychologicalmicro-approach:focusesonthelinksbetweentheattributesthatexistintheproducts(themeans),theconsequencesfortheconsumerprovidedbytheattributes,andthepersonalvalues(theends)theconsequencesreinforce.

Means-endchain:modelthatseekstoexplainhowthechoiceofaserviceorproductfacilitatestheachievementofdesiredend-states.Laddering:thetechniqueusedtodevelopmeans-endchains.Anin-depth,one-on-oneinterviewingtechniquewhichfacilitatesanunderstandingofhowconsumerstranslatetheattributesofproductsintomeaningfulassociationswithrespecttotheself.

Instrumentaladvertisements●Promotetheutilitarianandtangiblebenefitsoftheproduct●Presentinformationinadetailedpoint-by-pointlistthatshouldfacilitateapiecemealjudgement●Illustratewhattheproductdoesorwhatconsumerscandowiththeproduct,sotheconsumerscanjudgetheproductusingtheirinstrumentalvalues●Implyhowusingtheproductwillenablemoreefficientandeffectivemanipulationoftheenvironment

Terminaladvertisements●Promotethesymbolism/imageoftheproductbyusingmetaphorsorillustratingthekindsofpeopleandsocialgroupsthatusetheproduct●Encourageconsumerstoconsidertheirintuitionandemotionalresponse●Portraystatesof“being”orultimategoals,encouragingconsumerstousetheirterminalvaluesascriteriawithwhichtojudgetheproduct●Implyhowusingtheproductwillenableself-expression,socialapprovalandself-consistency

SouthAfricancorevalues

Peopleinallculturessharebasicvalues.Thesefallintodifferentgroupsaccordingtothreesetsofcriteria: Valuesarrangedaccordingtotheobjective(instrumentalorterminalvalues) Valuesarrangedaccordingtointerest(individual,collectiveorboth) Valuesarrangedaccordingtotenmotivationaldomains,namely:

a.Power:socialstatusandprestige,controlordominanceoverpeopleandresourcesb.Achievement:personalsuccessthroughdemonstratingcompetencec.Hedonism:pleasureandsensuousgratificationforoneselfd.Stimulation:excitement,noveltyandchallengeinlifee.Self-direction:independentthoughtandaction,choosing,creatingandexploringf. Universalism:understanding,appreciation,toleranceandprotectionofallpeopleand

natureg.Benevolence:preservationandenhancementofthewelfareofpeoplewithwhomoneisin

frequentpersonalcontacth.Tradition:respect,commitmentandacceptanceofthecustomsandideasthattraditional

cultureorreligionprovidestheselfi. Conformity:restraintofactions,inclinationsandimpulseslikelytoupsetorharmothers

andviolatesocialexpectationsornormsj. Security:safety,harmonyandstabilityofsociety,relationshipsandself

Measurementofculture:Contentanalysis

Focusesonthecontentofverbal,writtenandpictorialcommunications.Fairlyobjective.Consumerfieldwork

Takesplacewithinthesubject’snaturalenvironment;issometimesperformedwithoutthesubjects’knowledge;anditfocusesontheobservationofbehaviour.Canalsobein-depthinterviewsandfocusgroupsessions.

SocialvaluesmeasurementLifestyleresearchformarketingaimstogrouppeopleaccordingtotheirvaluesystemsasexpressedbytheirlifestyle.

StudyUnit5:ReferenceGroupsandSocialClass

Referencegroupsanypersonorgroupthatservesasapointofcomparisonforanindividualconsumerinformingcertain

values,attitudesandbehaviourpatterns.Themoreinvolvedapersonisinagroup,themorelikelyitisthattheirpurchasingbehaviourwillcorrelatewiththatofothermembersinthegroup.Theinfluenceofthereferencegroupismuchhigherwhenpurchasingspecialityorluxuryproductsthanwhenbuyingnecessities.

TypesofreferencegroupsFormal:clearlydefinedstructureandmembership,e.g.soccerclubInformal:noformalrulesandlessrigidstructure,e.g.friendsandpeersPrimary:face-to-faceinteraction,e.g.studentsatthesameschoolSecondary:noface-to-facecontact,e.g.SAsupportersofanoverseassportsteamMembership:membershipisarequirement,e.g.churchcongregationNon-membership:notamemberbutadheretotherulesandregulations,e.g.ProtestantworkethicAspirational:agrouptowhichpeopleaspiretobelong,e.g.parliamentDissociative:agroupyouavoidorreject,e.g.smokersoryouthgangs

Useofreferencegroupsinmarketingi. Information:referencegroupsspreadvaluableinformation,e.g.BlackBerryphonesii. Rewardandpunishment(normativeorutilitarianinfluence):whenconsumersfulfilthe

expectationsofaparticulargroup,theymayreceiveareward.iii. Aspiration(identificationinfluence,value-expressivereferencegroups):aperson’saspirationto

belongtoacertainreferencegroupmayenhancetheirself-concept,e.g.wearingyoursportsteam’sjersey.Determinantsofreferencegroupinfluence

a.Visibility:groupinfluenceisstrongerwhenaproductisvisibletothegroup,e.g.thestyleofadressisvisible,notthebrand(necessarily)

b.Necessity:thelessitisanecessity,thestrongergroupinfluenceis,e.g.designerclothesvs.fridge

c.Commitmenttothegroup:increasedcommitmentmeanshigherlikelihoodofconforming,e.g.dressinguptogosomewherewithavaluedgroupvsunimportantgroup

d.Relevance:themorerelevantanactivityistothegroup’sfunctioning,thehigherthepressuretoconform,e.g.styleofadressisimportantinagroupwhichregularlymeetsfordinnervsonethatmeetstoplaytennis

Socialclassagroupofpeopleinacountrywhoareconsideredequalinstatusorcommunityesteem,whosocialise

togetheronaregularbasisformallyorinformally,andwhosharebehaviourpatterns.Thesocialclassstructureisbroadlydividedintothreecategories:upper,middleandlowerclass.InSA,however,itisdividedinto5categories:upper,uppermiddle,middle,workingandlowerclass.SAalsohasatriangularshapedclassstructure,withafewpeopleintheupperclassandthemajorityofthepeopleinthelowerclasses.SocialclassesareusuallydescribedusingtheLSM.ThedemographicsoftheblackSouthAfricanpopulationarechangingdramatically:increaseinhighereducation,increaseinhighstandardofliving,increaseinmatricrates,increaseinmediumstandardofliving,declineinloweducationandlowlivingstandards.Thismirrorsthetotalchanges.Thewhitepopulation’sdemographicsalsochanged,withastagnationandeventualdeclineinhigheducationandhighstandardofliving,aswellsmallgrowthinthemediumeducationandmediumlivingstandards.

Challengesintheprogresstowardsfurtherimprovements ImpactofHIV/Aids:incl.lowlifeexpectancyofhighlyeducatedpeople Threatofdouble-dipworldrecession ContinuingskillsflightfromSA Problemofeconomicgrowthwhichdoesnotstimulatejobcreation Questionsaboutthequalityandlabourmarketrelevanceoftertiaryeducation Inabilityofurbanareastocopewithrapidlyubranisingpopulation,resultinginpoorservice

delivery

StudyUnit6:PersonalCharacteristics,PersonalityandSelf-conceptofConsumers

ReligionAperson’sreligiousaffiliationhasanimpactontheirbeliefs,valuesandbehaviouraltendencies–allofwhichinfluencecustomerbehaviour.Itcaninfluencewhattheypurchase(symbols&rituals)=starofDavid,Christiancross/Ramadan,Hanukkah,Christmas,Diwali.Religionsoftheworld:

Christianity Islam Hinduism

Buddhism Judaism Confucianism

RaceThisisavariablethatmarketerscanuseifithelpsthemestablishgroupswhoseneedsandvaluesdiffer.

thegeneticheritagegroupintowhichapersonisbornCommonracialgroupsinSA=white,blacks,colouredsandIndiansEthnicidentity:ethnicheritageintowhichapersonisborn(differenttribes)Canbesensitivesubject,cantargetingaspecificethnicgroupberacist?Ifanethnicgroup’sneeds&valuesdiffer,thentheyshouldbetreateddifferentlybymarketers

RaceandproductsMarketersneedtoascertainiftherearevaliddifferencesbetweentheneedsandwantsofthedifferentracialgroupsandmustrespondtothesedifferences

LivingStandardsMeasurementTheLSMuseswealth,accessandgeographyasmajorindicatorswithwhichtosegmenttheSAmarket

GenderReferstowhetherapersonismaleorfemaleMenaremoreloyaltodomesticorlocalretailers–WomanaremoreresponsivetointernationalretailersGenderidentityreferstotraitsoffemininity(tenderness&compassion)andmasculinity(aggression&

dominance)Genderusuallyremainsconstantthroughoutanindividual’slifeanditinfluencesvaluesandpreferences

ChangingroleofwomanWomenaremovingawayfromthetraditionalroleofahousewifeMarketerswereinitiallyinterestedinwomanastheytraditionallyboughtthehousegoodsbutthatischangingTheimpactofwomanasconsumersisapowerfulimpetustoreviewmarketingefforts

1.Traditionalhousewife:stayathome,familycentered,strivestopleaseherhusband&childrenandenjoysvolunteeractivities

2.Trappedhousewife:preferstoworkbutstaysathome,lackofoutsideopportunities,notenjoyhouseholdchores,hasmixedfeelings

3.Trappedworkingwoman:worksbutpreferstostayathome,frustratedwithlackoftime,resentsmissedopportunitiesofcaringforherfamily,proudofherfinancialcontribution

4.Careerdrivenwoman:preferstowork,getssatisfactionfromhercareer,willexperienceconflictifyoungchildrengetinvolved,feelspressedfortimeChangingroleofmen

Duetoan↑inwomanintheworkplace,menarebecomingmoreinvolvedathomeMenaremoreknowledgeableonhouseholdproductsI. Metrosexual:urbanmanwithstrongaestheticsenseandspendsalotoftimeandmoneyonhis

appearanceII. Retrosexual:anti-metroandscornfulofbeingconcernedwithphysicalappearanceIII. Ubersexual:masculine,refined,confidentmalefocusedonhismindratherthanhisbodyInternetalsohasadifferentappealtogenders–W=references,books,medicalinfo,cookingideas,chatting,M=exploration,software,investments.Basicdemographicsarenotadequatefornichemarkets–needtotaketimetolearnaboutthemandtheirculture(gay/lesbians)

AgeVeryNBvariablethatinfluencesbehaviour

DefiningageChronologicalage:lengthoftimesincethebirthoftheperson(years)Biologicalage:changestakingplaceinthehumanfunctionalityovertime(affectedbydiet,lifestyle,andhealth)Psychologicalage:changesinpeople’sself-perceptionsandcognitions(howtheyseethemselvesandothers)

ImportanceofagetomarketersThethingsapersonneedsorwantschangeastheiragechangesAgehelpsmarketerstocalculatethelifetimevalueofacustomerChangesintheagecompositionofapopulationcorrelatewithshiftsinvalueanddemand

AgesubculturesMarketerscandividepopulationintoculturesusingcohortanalysis,whichistheprocessofdescribingandexplainingtheattitudes,behavioursandvaluesofanagegroup

SeniorsAssumetheyhavesubstantialfinancialresources,inpoorhealthandhaveplentyfreetime.BUTmanycaredailyforgrandchildrenordovolunteerworkManyseniorsthinkofthemselvesasyoungerthantheyare,somarketerswilluseyoungerpeoplethanaimedat

Newageelderly TraditionalelderlyPerceivethemselvestobedifferentfromotherstheirage PerceiveotherstheiragetohavethesameoutlookAgeisastateofmind AgeisaphysicalstateSeethemselvesasyounger SeethemselvesasneartheirageFeel,think,doyounger Feel,think,dothingsthattheyfeelmatchtheirageGreaterself-confidencewhenitcomestoconsumerdecisions Normalself-confidencewhenitcomestoconsumerdecisionsKnowledgeandalertconsumers Low-to-averageconsumercapabilitiesSelectivelyinnovative Notinnovative

BabyBoomersBornafterSecondWorldWarAgerangeismid-fortiestomid-sixties,havehigheducation,highincomesanddual-careerhouseholdsConcernsincludeexpensesforeducation,weddingsandretirement.Don’tlikegettingold=increaseinhealthclubmembershipsandvitamin/supplementsales

Appealingtomarketersbecause: Singlelargestagecategoryalivetoday Makeimportantconsumerpurchasedecisions Smallsubsegementoftrend-setters(yuppies)

GenerationXGrewupindifficulteconomictimes(mid60’s-mid70’s),struggledtofindjobsandcareerplacementFoundsuccessandachievementthroughtechnologyJobsatisfactionisveryNB,don’tnecessarilywanttoworkfor1companyalltheirlives(alsodon’trushintomarriage)Tendtoleavehomelater,feellesspressuretosettledownandarepreoccupiedwithpossessionsandshopping

GenerationYLate70’sand90’sanddividedinto:

1)Adults–19and242)Teens–13and183)Tweens–8and12

Theyarelogical,savvy,socially&environmentallyawareandopentoexperiencesWatchmoreovertheinternet,won’treallyreadanewspaperandwillprobablybethemostseasonedandsophisticatedgenerationyet.Oftenfromadivorcedhomeorbothworkingparents,theyshopforthemselvesandtendtobemorefussyandlookforgoodvalue

Generaltipsformulti-generationalmarketingGuidelines: Understandbackground,morals,values,lifestylesandprioritiesofeachgeneration Recognizethedifferentbehaviorpatterns Relymoreonin-depthmarketresearch

PersonalitytheoriesFreud’spsychoanalytictheoryofpersonality

OperatesonthepremisethathumandrivesarelarglyunconsciousinnatureandservetomotivatemanycustomeractionsResearcherstendtofocusonwhatcustomersbuy,treatingitasasareflectionandextensionofthecustomerspersonality

Non-FreudiantheoryTendstoemphasisethefundamentalroleofsocialrelationshipsintheformationanddevelopmentofpersonalityAlthoughthesetheoriesdon’treceivewideattention,itslikelymarketershaveemployedsomeintuitively

TraittheoryFocusesonthemeasurementofpersonalityintermofspecificindividualpsychologicalcharacteristicscalledtraitsTrait:anydistinguishingwayinwhichonepersondiffersfromanother.Individualspossessinnatepsychologicaltraitslikeself-confidence,aggression,curiosity

GestalttheoryPeopledonotexperiencethenumerousstimulitheyselectfromtheenvironmentasseparatesensations;rather,theytendtoorganisethemintogroupsandperceivethemasunifiedwholesAttitudes,perceptions,aspirations,self-concepts,satisfaction,frustrationandmotivationareallnecessarytoexplainandunderstandhumanpersonalityandcustomerbehaviourMowenarguesthatthereare8elementaltraits,emergingfromgeneticsandearlylearning,thatarecoretotheeffectofpersonalityonacustomer’sbehaviour

1)Opennesstonewexperiences2)Orderlinessorconscientiousness3)Extraversion4)Needtobeagreeableandkind5)Tendencytobemoodyortemperamental6)Needtocollectandownmaterialthings7)Desireforexcitement8)Needtolookafterthebody

Theinfluenceofpersonalityonlifestyle

Marketershavedifficultyusingpersonalityasaneasy,reliable,consistentbasisforsegmentationSo,theyarenowmorefocussedonlifestyle:howapersonlivesandinteractswiththeirenvironmentandisthereforeareflectionoftheirwayofbeingandlivingintheworldLifestyletrendsareconstantlyevolving–whicheffectshowmarketerssellCategorisingconsumers:

A.Sustenancedriven–motivatedbymaterialsecurityo Aimless:youngunemployedandelderlydrifterso Survivors:traditionallymindedworkingclasso Belongers:conservativefamily-orientatedpeople

B.Outer-directed–motivatedbystatuso Belongerso Conspicuousconsumers

C.Inner-directed–dividedinto:o Socialresisters:caringandoftendoctrinaireo Experimentalists:hedonisticandindividualistico Self-explorers:lessdoctrinaireandmaterialistic

LabellingtheconsumerYuppies YoungUpwardlyMobileProfessionalsBumps Borrowed-to-the-hilt,UpwardlyMobileProfessionalShow-

offsJollies Jet-settingOldieswithLotsofLootWoopies Well-OffOlderPersonsGlams GreyingLeisuredAffluentMiddle-AgedKippers KidsInParentsPocketsErodingRetirementSavings

ThevalueofpersonalitytomarketersCommonobstacleswhichmarketersencounterwhenusingtraditionalsegmentationstrategies

DemographicsshouldnotbeusedtoinferandaudiencesmotivationsorbehavioursAmultiplicityofattitudeswithinanaudiencemayexistandasingledemographiccategorymay

haveawiderangeofattitudestowardsaproductsorserviceMessagestargetedtoanaveragemaybeproblematicas“averageconsumers”don’texist

Customerstendtobuyproductsthatreflect,enhanceorevendefendtheirpersonalities.Inthisway,theyattachacertainsymbolicmeaningtosomeproducts=productimageTheidentificationofpersonalityvariablesthatappeartobelogicallylinkedtoproductusagewillimprovemarketersabilitytosegmentmarketsandenablethemtodesignspecificproductsthatwillappealtocertainpersonalitytypes

Selfandself-conceptthetotalityofthoughtandfeelingsanindividualmaintainsabouthimorherself

Self-conceptisahighlycomplexstructurecomparedtootherattitudesanddevelopsovertime,itisnotinnate,purposeofprotectingandenhancingtheego,isuniqueandincludesself-relatedknowledgeandbeliefsthatarestoredinmemory

OneselformultipleselvesMarketersshouldtargettheirg/stocustomerswithinthecontextofaparticularself

Themake-upofself-imagePeopletendtobuyg/sandpatroniseretailerswithimagesorpersonalitiesthatcloselycorrespondtotheirownself-imageTypesofself-conceptActualself HowapersonactuallyperceivesthemselvesIdealself Howapersonwantstobeperceivedbyothers–wouldliketobeSocialself HowapersonthinksothersperceivethemIdealsocialself

Howapersonwouldlikeotherstoperceivethem

Expectedself TheimageofselfbetweentheactualandidealselfSituationalself Personsself-imageinaspecificsituationExtendedself Apersonsself-concept;theimpactofpersonalpossessionsonself-imagePossibleself Whatapersonwouldliketobecome,couldbecomeorisafraidofbecoming

Marketerscansegmenttheirmarketsonthebasisofrelevantcustomerself-imagesandtheirproductsorstoresassymbolsofsuchself-images

TheextendedselfPossessionscanbeseenascustomer’sextensionoftheirself-image–inthefollowingways:

Actually:allowingthepersontodothingsthatwouldbedifficultorimpossibletoaccomplish

Symbolically:makingsomeonefeelbetteror‘bigger’ Status/rank:owningsomethingrare Immortality:leavingvaluedpossessionstochildren Magicalpowers:somethingpasseddowncouldbeseenas‘goodluck’

Alossofaprizedpossessionmayleadtogrief

StudyUnit7:CustomerPerceptionandLearning

ThecustomerasperceiverThenatureofperception

peopleselect,organizeandinterpretstimulitoformmeaningfulpicturesoftheworldthroughthesenseofsight,sound,smell,touchandtasteTheprocessinvolvesbeingexposedtoastimulus,payingattentiontoitandtheninterpretingitsmeaninginordertorespondtoitPerceptionisselective:Weonlynoticeasmallnumberofstimuli,somarketersfaceachallengeascustomersarenotpassiverecipientsofmessagesPerceptionissubjective:Eachofusinterpretthestimulidifferently,weseeandhearwhatweareinterestedinbecauseofwhowearePerceptionisbasedontheindividualsframeofreference:Dependsonourownpersonalexperiences,whichbuildupastablementalorganizationinthepersonthatgivemeaningtoaparticularperception.

Theperceptualprocess

ExposureThisisthedegreetowhichapersonnoticesastimulusthatisinrangeoftheirsensesExposuretoamessagemeansonlythatithasbeenseenorheard,noguaranteetheindividualpaidattention

AttentionTheextenttowhichtheprocessingactivityisdevotedtoaparticularstimulus

IndividualNeedseemstobetheprimarycharacteristicthatinfluencesattention

StimulusNBindeterminingwhatisnoticedandwhatisignored.Stimulithatdifferfromthosearoundthemwillbenoticedmore.

o Size&intensity:largerstimuliaremorelikelytobenoticedthansmalleroneso Colour:givingitadistinctidentityisawayofdrawingattention(Yellowpages)o Position:inaplacewherepeoplewillactuallylooko Isolation:separatingastimulusfromotherobjects

SituationInperceivingthestimuluswithagivensetofcharacteristics,customerswillalsobeinfluencedbythecontextofthestimulusorsituation

InterpretationPersonassignstosensorystimuli.Peoplewillinterpretinfoaccordingtotheirexistingbeliefs,attitudes&generaldispositionsandexperiencesMarketerswillalsoturntosemiotics;thisexaminesthecorrespondencebetweensignsandsymbolsandthemeaningconsumersassigntothemSelectiveinterpretation:themessageisnotinterpretedasitwasintendedtoThemessagecanbedistortedbylevellingorsharpening

Levelling:individualseitherignoreimportantinformationorsimplfythemessage,maybebyremovingNBinfo,soitbecomesmoreacceptable

Sharpening:individualsreadadditionalinfointothemessagebyaddingnewelementstomakeitfitwiththeirpredispositions

RecallAdvertiserstrymakesuretheinfowillberetainedincustomersmemorysoitisavailablewhenthecustomerisconsideringbuyingsomething

PerceptionandmarketingRetailstrategy

HighmarginitemsareputinhightrafficareastocapitalizeonincreasedexposureShelfpositionandshelfspacealsoinfluencewhichitemsandbrandsaregivencustomerattentionPoint-of-purchasedisplaysalsoattractattentiontosalesandhighmarginitems

BrandimageTheimageofaproductinacustomer’smindismoreimportantthanactualcharacteristics.Marketerstrytopositionstheirbrandssoitisperceivedtofitadistinctiveniche

PriceandqualitycueCustomerswilloftenrelyonpriceasanindicatorofqualityandmarketerswillemphasisthehighpriceforthis

CustomerlearningThenatureoflearning

LearningexperiencesdeterminetheproductsthatcustomerswillbuyandwhytheypreferacertainproductExperimentallearning:anexperiencecausesapersontochangetheirbehaviorConceptuallearning:nodirectexperienceFrommarketing,learningistheprocessbywhichindividualsacquirebuyingandconsumptionknowledgethattheyapplytofuturebehavior

Elementsoflearning

StimulusMarketersstimulatecustomersusingphysicalthingssuchasproducts,brandsandsizeorintangibleslikeservice/satisfactionAfterstimulation,customersmustbemotivatedtoseektheobjectbeforelearning–motivationthusspurslearningThestrongerthemotivation,thequickercustomerslearn

ResponseAresponseisanyaction,reactionorstateofmindresultingfromaparticularstimulusMarketerswhoprovideconstantcuesmaynotalwayssucceedinstimulatingthecustomerbutcreatemoreofafavorableimage

ReinforcementIsthesatisfactionresultingfromsuccessfulbehaviorthattriggershumanmemoryofhowthesatisfactionwasobtainedItincreasesthelikelihoodthatacertainresponsewilloccurinthefutureRepetition–sameactionisperformedseveraltimesParticipation–helpsreinforcement,retailersmustencourageinvolvementwiththemerchandise(taste,see,smell)

TheoriesoflearningClassicalconditioning

Inallkindsofselling,somerewardisassociatedwiththemarketer’sproductsinanattempttopersuadethecustomertobuy

InstrumentalconditioningOccursasaresultofarewardreceivedfollowingthedesiredbehavior

CognitivetheoryViewspeopleasproblem-solverswhoactivelyuseinfofromtheworldaroundthemtomastertheirenvironment

Iconicrotelearning:learningtheassociationbetween2+conceptsintheabsenceofconditioning(Disprin+headache=remedy)-(“Disprinisaheadacheremedy”)

Vicariouslearning/modelling:notnecessaryforcustomerstoexperiencereward/punishmenttolearn(newemployeesobserveotherstoseetheirstyle)

Reasoning:engagingincreativethinkingtorestructureandrecombineexistingandnewinfo

StudyUnit8:CustomerMotivationandAttitudes

NatureofmotivationNeeds,motivesandobjectives

Motivationreferstotheprocessesthatleadpeopletobehaveastheydo.ItoccurswhenaneedisarousedthatthecustomerwishestosatisfyAneedcreatestensionthatdrivesaconsumertoreduceoreliminateitNeedsarethebasicsourcesofbuyerbehaviour,andhavetobestimulatedbeforetheconsumerisdriventoactionAcquiredneedsareneedsthatwelearnisresponsetoourcultureorenvironmentInmarketinganeedisnotenough,thecustomermustalsowanttodosomethingaboutit

Howmotivationlinksneedsandobjectives

Basicneeds:hunger,thirstUtilitarianneeds:emphasistheobjective,tangibleattributesofproducts(petrolconsumption)

Hedonicneeds:subjectiveandexperimentalNeedarousal

ThisbeginswiththepresenceofastimulusthatcausestherecognitionofaneedPhysiologicalarousal

BodilyneedarebasedontheindividualsphysiologicalconditionatthemomentMostphysiologicalcuesareinvoluntarybuttheyarouserelatedneedsthatcauseuncomfortabletensionsuntilsatisfied

EmotionalarousalBoredpeoplewilldaydream,imaginingthemselvesininallsortsofsituationswhichcancausearousal

CognitivearousalCognitiveawarenessmaybetriggeredbyastimulusintheenvironment

EnvironmentalarousalNeedsactivatedataspecifictimeareoftendeterminedbyspecificcuesintheenvironment,withoutthesetheneedswouldremaindormant

ThedrivestateWhenweexperiencethis,weengageingoal-directedbehaviour(waysthatwillrelieveourneedstate)MarketershaveadaptedMaslow’suniversalapproachtomotivationbecauseitindirectlyspecifiescertainproductspeoplemightbelookingfor–dependingontheirstage

Classificationofmotives(needs)Maslow’shierarchyofneeds

Anindividual’sdesiretofulfilhisorherpotentialandbecomeeverythingtheircapableof

I:self-acceptance,success,independence.O:prestige,reputation,status

Expressioninbuyinggoodsandparticipatingingroupactivities(sports)

Notonlyphysicalsafetybutalso,order,stability,routine,control

Firstandmostbasiclevelofhumanneeds

Table8.1pg.171

McGuire’spsychologicalmotivesInternal

Consistency Needforinternalequilibriumandbalance

Causation NeedtodeterminewhoorwhatcausesthethingsthathappentousCategorisation Needtoestablishcategoriesthatprovideframesofreference

Cues NeedforobservablecuesthatenableustoinferwhatwefeelandknowIndependence Needforafeelingofself-controlNovelty Needforvarietyanddifference

ExternalSelf-expression Needtoexpressself-identitytoothers

Egodefence NeedtoprotectouridentitiesAssertion Needtoincreaseself-esteemReinforcement NeedtoactinsuchawaythatotherswillrewardusAffiliation NeedtodevelopmutuallysatisfyingrelationshipswithothersModelling Needtobasethebehaviouronthatofothers

EconomicandemotionalclassificationWhencustomersbuyproducts,theyarealsoconcernedabouttheeconomy,quality,performance,suitabilityandreliabilityEconomicmotivesarerationalinnatureandmarketersoftenexpresstheminquantifiabletermsCustomersdonotnecessarilyactinnon-rationalmannerwhentheyallowtheiremotionstoinfluencetheirbuyingdecision

Psychographicscharacteristicsofindividualsthatdescribethemintermsoftheirpsychologicalandbehavioural

makeupPsychographicsandlifestyle

ThisresearchattemptstoassesscustomersonthebasisofpsychologicaldimensionsasopposedtopurelydemographicdimensionsDemographicsdescribeswhobuyswhilepsychographicslooksatwhytheybuyPsychographicvariablesgobeyondsuperficialcharacteristicstoanunderstandingofcustomermotivationsforbuyingandusingproducts

ValuesdeterminelifestyleOurlifestyleexpressesthegoalsweliveforwhilevaluesarethegoalswelivefor

PsychographicprofilesACNielsenMRA’sSociomonitorValueGroupsSurveyisthemostauthoritativepsychologicalprofileinSARespondentsansweranextensivebatteryofpsychographicstatements,whicharethengroupedandscored,givingeachrespondentadifferentscoreandpositiononthesocialmap

UsesofpsychographicsMostnotable:marketsegmentationItguidesmarketersinemphasisingfeaturesoftheproductthatfitinaperson’slifestyleOffersusefulinputinadvertising,specificallycommunicatingsomethingabouttheproduct

NatureofcustomerattitudesDefinition

Anattitudedescribesaperson’srelativelyconsistentevaluations,feelings,andtendenciestowardsanobjectorideaNBaspects:Attitudesarelearned:attitudesareformedafteradirectexperiencewiththeproduct,infofromothersandexposuretomassmediaAttitudestendtobeconsistent:notpermanent,canchange.

AttitudesasacombinationofinterrelatedbeliefsandvaluesNBformarketerstorealisethatattitudesaredifferentfrompersonalvaluesandbeliefs

ABCmodelofattitudeAffect–feelingsBehaviour–actionsCognition–beliefs

TheaffectivecomponentTodowiththeconsumersfeelingsoremotionsAffectismostimportantforproductsweusetosaysomethingaboutourselves

ThebehaviouralcomponentManifestsinboththeintentiontobuyandtheactualactofbuyingWhatapersondoesabouttheirknowledgeofandfeelingstowardsaproductisNBtoacompanyCustomermayhavepositiveinfoonaproductandlikeitbutnotbuyit(otherpreferredbrandsorcost)

Thecognitivecomponent

Consistsofacustomer’sbeliefsandknowledgeabouttheobject–2typesofbeliefsInformational:productattributesEvaluative:productbenefitsBenefitsareabasisfor:

Defininganopportunity Positioninganewproduct Developinganadvertisingstrategy

FunctionsofattitudesUtilitarianfunction

CustomersdeveloppositiveattitudestowardsthoseproductsthathavesatisfiedthemandvvEgo-defensivefunction

ToprotectpeoplefrombasictruthsaboutthemselvesorformharshrealitiesoftheexternalworldValue-expressivefunction

HowpeopleexpresstheircentralvaluestoothersKnowledgefunction

Attitudescanalsoserveasstandardsthathelppeopletounderstandtheirenvironmentandsogiveorderandmeaningtoit

AttitudeformationClassicalconditioning

TheideaoffamilybrandingisbasedonclassicalconditioningasaformofattitudelearningAttitudesarelearnt–peoplearenotbornwiththemUsingclassicalconditioning,thebrandnameistheunconditionedstimulusthat,throughrepetitionandpositivereinforcement,resultsina+attitude

InstrumentalconditioningSometimesattitudesareformedonlyafterthebuyingandconsumptionofaproductCustomersalsomaketrialpurchasesofnewbrandsfromproductcategoriesinwhichtheyhavelittlepersonalinvolvement

CognitivelearningtheoryThemoreinfocustomershave,themorelikelytheywillformattitudesaboutaproduct(±)

ExperienceTheprimarymeanbywhichattitudestowardsg/sareformedisthroughtheconsumersdirectexperienceintrailingandevaluatingthemMarketersfrequentlyattempttoencourageconsumerstotryoutnewproducts(freesamplesorcoupons)

ExternalauthoritiesAswecomeintocontactwithothers,weacquireattitudesthatinfluenceourlives(esp.friends,family,andteachers)

MarketingcommunicationsThisisimportantforinfluencing,buildingandmaintainingpositiveconsumerattitudestowardsacompanyanditsproducts

AttitudechangeTheABCmodelisimportantformarketersasitcanidentifycustomerattitudesandeitherdesignproductsthatareconsistentwiththeseortrychangetheattitudes

ChangingtheaffectivecomponentMarketersareincreasinglytryingtoinfluencecustomerslikingoftheirbrandwithoutdirectlyinfluencingtheirbeliefsorbehaviour

ClassicalconditioningMarketerslinkstimulusthattheaudiencewilllike(pics,music)soovertimeitwilltransfertothebrand

ProducingpositiveaffecttowardstheadPositivitytowardanadmayincreaselikingthebrand–celebs,humour,emotionsAd’sthatarousenegativeaffectoremotions(anger,guilt)canalsochangeanattitude

MereexposureExposecustomersrepeatedlyPeopleslikingmayincreasesimplybecausetheyseeitoverandoveragain

ChangingthebehaviouralcomponentAttitudesformedasaconsequenceofproducttrialareusuallystronglyheldIftheywanttoestablishacustomer’sbrandloyalty,marketersshouldconsidernotonlybehavioural

ProductAttributes ProductBenefits

#ofkilojoules Goodwithmeals

Vitamincontent Refreshing

Sweetness Givesalift

Aftertaste Restoresenergy

brandloyaltybutalsoattitudinalbrandloyaltyChangingthecognitivecomponent

ChangingbeliefsShiftingthebeliefsabouttheperformanceofabrandononeormoreattributes

ShiftingperformanceSomeproductattributesaremoreimportantthanothersMarketerstryconvincecustomersthattheattributesontheirbrandsarestrongandthemostNB

AddingbeliefsAlsotryaddnewbeliefstocustomersbeliefstructure

ChangingtheidealCanchangeanattitudebychangingtheperceptionsoftheidealbrandorsituation

FactorsinfluencingattitudechangeAttitudesthatarestronglyheldaremoredifficulttochangethanweakonesAttitudechangeismorelikelytohappenifithasbeenadoptedbecauseofaknowledgefunctionConsiderthefollowingadappeals:

Fear:usethethreatofanegativeconsequences Humour:builtaroundtheproduct Emotional:createapositiveaffectiveresponseratherthanprovideinfo

StudyUnit9:ConsumerDecision-makingProcessandFamilyDecision-making

Theconsumerdecision-makingprocessDecisionmakingisacognitiveprocessthatconsistsofthosementalactivitiesthatdeterminewhatactivitiesareundertakentoremoveatensionstatecausedbyaneedConsumersdon’tjustbuyobjects,butalsosolutionstoproblemsConsumeranalysisincludedanelevationof4dimensions;cognition,behaviour,environmentandmarketingstrategies,inordertoobtainaprofileofthetargetmarketItisasequentialandrepetitivesetofpsychologicalandphysicalactivitiesrangingfromproblemrecognitiontopost-buyingbehaviour

BuyingsituationsConsumersareinfluencedbyfactorscalledpsychologicaldomainInabuyingsituation,peopleabsorbinfofromtheexternalenvironmentandintegrateitwiththeirinnerneeds,motives,perceptionsandattitudesPeopleareinfluencedbytheirsurroundingenvironment(family,peergrouppressure,referencegroups,andadverts)Despitethepressures,tobuyornottobuyinthefinalbuyingsituationisanindividualone

Stagesinthedecision-makingprocess

ProblemrecognitionWhenconsumersrecognisea

differencebetweentheirperceivedcurrentstateofaffairsandthestateofaffairstheywant–aproblemarisesProblemrecognitioncantakeplaceatallthestages:

WithwhethertheproductisneededWhatproductorbrandtobuyWhethertoputitoncashorcreditConcernswhethertheconsumeraresatisfied

Mostproblemsariseasaresultofthefollowing: Assortmentinadequacies:whenaconsumerssuppliesofaproductstartrunningout Newinfo:createsastateofawarenesssoconsumersfeeltheneedforap/s

Expandeddesires:peoplealwayswanttoimprovetheirstandardofliving Expandedorreducedmeans:increaseinincomewillincreaseconsumerspending,while

unemploymentwilldotheoppositeSearchforinformation

Consumersearch:mentalandphysicalactivitiesundertakenbyconsumerstoobtaininfoonidentifiedproblemsThesearchcanbeexternalorinternal

InfofromoutsidetheirexperiencesFromconsumermemories

Individualdifferencesinclude:consumerresources,motivation,knowledge,attitudes,lifestyle,personalityEnvironmentalinfluences:personalinformationsources,businessandmarketingforces,instorepromo’s

ConsumerinvolvementindecisionmakingThisisamotivationalstatethatencouragesandguidesconsumers’attitudesastheymakedecisionsProductinvolvementisinfluencedbyperceivedrisk&badgevalue

amountofrisktheconsumerperceivesinthebuyingdecisionasaresultofuncertaintypersonbecomesinvolvedwithapurchasebecauseitissociallyacceptable

TypesofconsumerdecisionsAsconsumersmovefromalowlevelofpurchaseinvolvementtoahigherlevel,thedecision-makingprocessbecomesmorecomplex,movingfromhabitual→limited→extendeddecisionmaking

HabitualdecisionmakingExistswhenthereislowinvolvementwiththebuyingprocessandresultsinrepeatbuyingbehaviourCategorisedintobrandloyaltyandrepeatbuyingbehaviour

LimiteddecisionmakingConsumersarenothighlyinvolvedwiththealternatives

ExtendeddecisionmakingResponsetoahighlevelofbuyinginvolvementwhereinternalandexternalinfosearchesarefollowedbyacomplexevaluationofmanyalternatives

EvaluationofalternativesConsumerevaluation:actofidentifyingalternativesolutionstoaproblemandassessingtherelativemeritsanddemeritsofeachsolutionConsumersbuyproductstowardswhichtheyholdfavourableattitudesandwhicharekeepingwiththeirpersonalities4typesofindividuals:

1.Economicindividualtakescalculated,rationaldecisionsbasedoncompleteinfo2.Passiveindividualsisnotknowledgeableandcanbemanipulated3.Emotionalindividualsmakedecisionsbasedentirelyonpersonalandirrationalneeds4.Cognitiveindividualsbasetheirdecisionsontheenvironment,socialinfluences,personalneeds&

attitudesBuying

Consumerresponseistheoutcomeofevaluationandinvolvesthementalprocessofselectingthemostdesirablealternativefromtheoptions

PostbuyingevaluationConsumersbuythingsinordertofulfilneedsandseekgreatersatisfactionsothebiggestquestionis,aretheynowsatisfiedoncethey’vemadethepurchase?Postbuyingassessmentistheconsumer’sevaluationoftheperformanceoftheproductafteritwasboughtPostbuyinglearningmeansthatafteracquiring,usinganddisposingofap/s,theconsumerdiscoverssomethingandstoresthisknowledgeintheirmemory

Post-buyingsatisfactionWhentheoutcomehasmatchedtheconsumers’expectations

Post-buyingdissatisfactionTheproductsperformancedoesnotmatchtheirexpectationsConsumerresponsesmaybeverbal(talkabouttheirdissatisfactionoftheproductandspreadrumours)orbehavioural(complaintbehaviour=PVT,warningfriends,orPBC,demandingredress,complainingtothefirm,takinglegalactionorbrandswitching=displaytheirdissatisfactiontopreventunhappinessinthefuture)

Post-buyingconflictQuestionwhethertheymadetherightdecisionorshouldhaveboughtthealternativeproduct

HouseholddecisionmakingHouseholdresearch:describe,understandandpredicthowhouseholdmembersinteractandinfluenceoneanother

RolebehaviourToworkasacohesiveunit,memberscarryoutvarioustasks–makingtheprocesshighlycomplexHouse-holdrelateddutiesareconstantlychanging;theidentityandnumberofthesememberswhoplaytherolesvaryfromhouseholdtohouseholdandfromproducttoproduct

1.Influencers:provideinfotoothermembersaboutap/s2.Gatekeepers:controltheflowofinfo3.Deciders:decidealoneorwithotherswhethertobuy,use,consumeordisposeofaspecificg/s4.Buyers:dotheactualbuying5.Preparers:transformtheproduct(rawmeat)6.Users:useorconsumetheproduct7.Maintainers:serviceorrepairthegoodsoitcancontinuetogivesatisfaction8.Disposers:decideonorcarryoutthedisposalordiscontinuationofaparticularg/s

Husband-and-wifedecisionmakingMarketersareinterestedintherelativeamountofinfluenceahusbandandwifehavewhenitcomestohouseholdconsumerchoices

Howspouseinfluencethedecision-makingprocessDifferentdegreesofinfluence:

Influenceofdecisionstage→Carriedoutmorebyonespouseandthemovementwillbeminimalforlowinvolvementgoodsbutmorepronouncedforriskyinvolvementgoodsforthehousehold

Influenceofemployment→Increaseinwomanworkingoutsidethehomeandchangingspousalroleshasaffectedthewaycouplesdividetheirbuyingresponsibilities

Influenceofgender→asgendergapnarrows,decisionsareincreasinglymadejointly

ThehouseholdlifecycleThedeclineinthe%ofhomesthatprogressthroughthetraditionalHLCstagesiscausedby:increasingdivorcerate,increaseinout-of-wedlockbirths,andadeclineinnumberofextendedhouseholds

TraditionalhouseholdlifecycleStage1:Bachelorhood

Youngsinglemenandwomenwhoareawayfromtheirparents,mosthaveajobandaregraduates.Spendtheirmoneyonrent,clothing,entertainment,travelling,carsandhomefurnishings

Stage2:HoneymoonersStartsimmediatelyaftermarriageandwillcontinueuntilababyarrives,combinedincomesmeanstheycanbuywhattheywant,saveorinvesttheirextraincome

Stage3:ParenthoodUsuallylasts±20years,canbedividedintopreschoolphase-elementaryschoolphase-highschoolphase-tertiaryeducationphase

Stage4:Post-parenthoodChildrenleavehome,causes‘emptynestsyndrome’whereparentscandothingstheycouldn’tbeforeandnotworryaboutschoolingexpenses,re-entertheworkforce,seeknewinterestsandhobbies,travelmore,entertainanddorenovations

Stage5:DissolutionWhenoneofthespousesdies,thesurvivorwillleadamoreeconomicallifestyle,mightseekcompanionshipandenterintoanothermarriage

ModificationstotheHLCThe8life-stagegroups1 At-homesingles Upto34,mostly16-24.Livewithparents,notmarried2 Youngindependent

singlesUpto34,mostly25-34.Notlivingwithparents,notmarried,nochildren

3 Maturesingles 35+.Notmarried,nochildren4 Youngcouples Upto49,mostly35-49.MarriedorlivingwithSO,nochildren5 Maturecouples 50+.MarriedorlivingwithSO,nochildren6 Youngfamily MarriedorlivingwithSO,dependentchildrenunder137 Single-parenthousehold Notmarriedorlivingwithsomeone,dependentchildreninhome8 Maturehousehold MarriedorlivingwithSO,nochildrenunder13,atleast1childover

13

StudyUnit10:DiffusionofInnovationandtheConsumerAdoptionProcess

DiffusionofinnovationMarketersaretaskedwithcommunicatingandpublicisingnewproductsinthemarketinordertomakeconsumersawareof,andinterestedin,theproductsandtopersuadethemtomakethedecisiontobuythem.

aprocessbywhichnewproductsarecommunicatedtomembersofasocietythroughvariouschannelsoveracertaintimeperiod4mainelementsidentifiedinthisdefinition:•Aninnovation:anewideaintroducedtosocietyorindividuals,itmayalsobeanimprovementonanexistingidea•Communicationchannels:responsibleforspreadinginformationonnewideasandproducts•Time:timeittakesconsumerstoadopt(accept)anewideaorproduct•Socialsystem:membersofthesociety,individualsandgroupsororganisationsthatengageinproblemsolvingtoachievecommongoals.

ConsumeradoptercategoriesItisimportantformarketerstounderstandhowconsumersdifferfromeachotherintermsoftherateatwhichtheyadoptaninnovationoranewproductandhowtheyperceiveattributesofinnovation.Ifmarketersunderstandthis,itwillassistthemindevelopingtargetedstrategiestocommunicatethenewideatoconsumers.Differentadoptercategoriescanbeidentified.Fiveadoptercategoriesandtheircharacteristics: Innovators.Thesepeoplearethefirstgroupofconsumerstoadoptanewproductandtheyare

calledtheenthusiasts.Theyarethetypeofconsumerswhowantadvancedtechnologyandperformance,arewillingtotakerisks,andareenthusiasticaboutpurchasingnewproducts.

Earlyadopters.Thesepeoplearetermedthevisionaries.Theyspreadthemessagebywordofmouth.Theseconsumersaretheopinion-makingleadersandanimportantgroupformarketerstotakeintoaccountastheyareheldinhighesteembyotherswhofollow.Theyalsodeterminewhetherconsumerswillhaveapositiveornegativeattitudetowardsaproduct.

Earlymajority.Consumersinthiscategorypreferproductsthathavebeentriedandtested,sincetheyavoidrisks(psychological,financialandperformance).Theyarepragmatistswhowantsolutionsandconveniencefromtheproductstheypurchase.

Latemajority.Thesearepessimisticconsumerswhodonotseekanyone’sopinionandonlyusetheproductoncetheyhavebeenreassuredofitsbenefitsandvalues.Thismaybeduetothefactthattheyarelesseducated,older,financiallymorestableandconservativethanthepreviouslymentionedgroup.

Lateadopters,laggardsornon-adopters.Thelaggardsaretermedthesceptics,sincetheydonotbelieveinnewideas.Instead,theyaresuspiciousandpreferthingstobedoneasinthepast.Theyreacttothenewproductorserviceanditsbenefitsataslowrate.

FactorsaffectingthediffusionofinnovationComplexity.Thisfactorreferstothedegreeofdifficultyintermsofthelevelofunderstandingand

theuseofthenewproduct.Productsthatarecomplexanddifficulttouseandunderstandtendtospreadslowerinthemarket.

Compatibility.Thisfactorreferstowhethertheproductiscompatiblewiththeconsumers’values,beliefsandobjectivesregardingitspurchaseanduse.

Relativeadvantage.Thisfactorrelatestoconsumerneeds,whicharemetbyinnovation,suchasreducedcostsornewmethodsofdoingthings.

Observation.Thisfactordealswiththeextenttowhichthepotentialadopterhashadtheopportunitytomonitorthepositiveeffectsoftheproductorservicewhenacceptingtheinnovation.Iftheadopterhashadanopportunitytoseetheuseandbenefitsoftheproduct,thepossibilityofamorerapiddiffusionisfeasible.

Trial.Theeasieritistohavealow-costorlow-risktrialoftheinnovation,themorerapiditsdiffusion.

Perceivedrisk.Shouldtheriskoftryingouttheinnovativeproductorservicebehigh,diffusionwillbeslow.Theseriskscanbepsychologicalorfinancial.Financialriskoccurswhentheproductisexpensiveandconsumerscannotberefunded.

Marketingeffort.Themarketingmixconsistsof7Ps,whichareactivitiesexecutedbytheorganisationtoinfluencetherateofdiffusion.7Ps:price,place(CNA),promotion(TV,magazines),product(NintendoWII),people(teenagers,youngadultsandtheinternalstaff),processandphysical

evidence(displaysinstore)Typeofgroup.Thetargetmarketdeterminestherateatwhichinnovationwillbediffused,assome

groupsaremoreacceptingthanothers.Theyoung,affluentandhighlyeducatedmarketsegmentstendtoacceptchangeandnewproductseagerly.

Typeofdecision.Decisionsaremadecollectivelyorindividually.Collectivedecisionsarethosemadebymorethanoneconsumer(familymembers).Collectivedecisionsmayresultinslowratesofdiffusion,sincefamilymembersmaynothavethesameopinion.Individualdecisionsareonlymadebytheactualbuyer,whodoesnothavetodeliberatewithotherconsumers.Thespeedofdiffusionismorerapidbecauselessdecision-makingconsultationisrequired.

Fulfilmentofperceivedneed.Whenthesatisfactionthatwillbederivedfromtheinnovationisobviousintermsofmeetingtheneed,thediffusionismorerapid.

ConsumeradoptionprocessStepsintheadoptionprocess

Awareness.Thepotentialconsumerhassomeknowledgeoftheproductbutdoesnothavealltheinformation.Atthisstage,theconsumermaynotknowhowtheproductworksorwhatitcando.Theconsumerbecomesawareoftheproductviacommunicationchannels

Interest.Theconsumerknowsabouttheproductbutstilllacksinformation.Ifconsumersbecomeinterestedtheywilltrytoobtaininformationontheproduct.Thisinformationmaybeobtainedfromsecondarysources.

Evaluation.Consumersevaluatetheproductonthebasisoftheirpastexperiences.Whenusingaproduct,consumersusetheirintellectualcapitaltoevaluateitintermsofitsbenefits.

Trial.Atthisstage,theconsumermaybuytheproducttodetermineifitmeetshisorherneeds.Itisimportantformarketers,especiallythosewhomarketfastconsumableproductstohavesamplesavailableforconsumers.

Decision.Oncetheproducthasbeentested,theconsumerdecidestoadoptorrejectthenewproduct.Consumersadoptanewproductiftheyaresatisfiedwithitandvalueitsbenefitsandmaybecomeregularusers.

Confirmation.Theconsumersearchesformoreinformationpertainingtotheproducttheyhavepurchased.Thismaybedonebyspeakingtootherconsumers,readingmagazinesandarticles

StudyUnit11:CommunicationandPersuasion

Communicationparticipants,collectively,createmeaningthroughtheexchangeofsymbols.

Thisdefinitionemphasisesfourmajorpoints:Communicationasatransaction

Atransactioninvolvestwoormorepeoplethatengageincreatingmeaning.Peopleworkingcollectively

Thisemphasisestheimportanceoftheparticipantsworkingtogether.Theadvertisementdrawsyour(theconsumer’s)attentionandyourattentionisdemonstratedbyyouractiontopurchasetheproduct.Theparticipantsdevelopmutualexpectationsandthisresultsinbothpartiesbeinginfluenced.

CreationofmeaningWordshavenomeaninginthemselves;theirmeaningsarecreatedthroughthevalues,normsandcultureofsociety.Thismeansthatindifferentculturesandcountrieswordscarrydifferentconnotations.

ExchangeofsymbolsTheexchangeofsymbolsenablespeopletocreatemeaning.Suchsymbolsmaybeinverbal,non-verbal

orgraphicform.Verbalsymbolsarewordsthataresaidorwritten,non-verbalsymbolsincludebodylanguageorfacialexpressionandgraphicsymbolscanbepictures,iconsordiagrams.

Elementsofcommunicationandthecommunicationprocess Sender.Thisreferstothepersonwhoisconveyingthemessage Message.Themessageitthatwhichisbeingconveyed. Receiver.Thisreferstothetargetconsumersatwhomthemessageisaimed Feedback.Thisistheresponsefromthetargetmarket,andreferstohowthemessagewas

received. Medium.Themessageissentthroughdifferentmediavehicles,includingprintmedia(magazines)

orbroadcastmedia(radio) Context.Thecontextisthesituationorsettingwithinwhichcommunicationtakesplace. Noise.Duringcommunicationtheremaybeforcesthatinterferewiththecommunicationprocess.

(backgroundnoise-peopletalkingloudly.Psychologicalnoise-distractingthoughts) Code.Codecanbeintheformofwords,images,soundsorsymbolsandisusedtocommunicate

themessage

Marketingcommunicationmix(MCM)Advertising Publicity

Salespromotion SponsorshipNewmediamarketing Publicrelations

Directmarketing Personalselling

AdvertisingThisisapaidformofcommunicationusingmediavehicles,suchasmagazinesortelevision,dependingonthecompany’smarketingbudgetandtheimageoftheproductthecompanywantsconsumerstoperceive.

PublicityThisisaformofcommunicationthatfocusesoncompanymattersandactivities.Therearetwotypesofpublicity:marketingpublicity-focusesonpersuadingconsumerstopurchaseaproduct;andpublicrelationspublicity-convincingconsumersthatasocialresponsibilityprojectisworthy.

SalespromotionThisisaimedatimprovingthedecliningsalesofproductsthatareinthematurestageoftheirlifecycle.Thisformofcommunicationhasshort-termobjectives.

SponsorshipThesponsorprovidesresourcestothesponsoredcompanyorbrandfordevelopingitscommunicationstrategyand,inreturn,getscertainsponsorshiprights.

Newmediamarketing(e-communications)Thisformofcommunicationhascomeaboutasaresultofadvancedtechnology.(internet,iTV,touchscreens)

PublicrelationsTheaimofpublicrelationsistoinfluencetheopinionofthepublicorthesocietywithinwhichthecompanyoperates.

DirectmarketingThisisatwo-wayformofcommunicationbetweenthemarketerandconsumers.Marketerscustomiseanadvertisementandasktheirtargetaudiencetorespondwithinacertaintimeperiod.

PersonalsellingThesellerandthebuyercommunicateonaone-on-onebasis.Thisisapersonalandpaid-forformofcommunication.TheMCMisimportantbecausemarketersmayuseacombinationoftheseelementstocommunicatetheirmessageeffectivelytothetargetaudienceandalsotakeadvantageofthebenefitsthattheelementsoftheMCMofferthem.

PersuasionPersuasionisanotherformofcommunication;itisaudiencebasedandcouldinfluenceconsumerswithdifferingopinions,aswellasthosewhoareneutral,sinceitisanintentionalstrategythatincludesverbalandnon-verbalcommunication

anattempttoconvinceothersusingthepersuader’scredibility,logicalarguments,appealandrepresentation.Persuasionusesmediaasatool(vehicle)tocommunicate.Thecommunicationcarriedbythesemediais

intendedtoresultinbehaviouralchanges,whichmaybeinternalorexternal.Elementsofpersuasion

o Intent.Thismeansthatwhatiscommunicatedisintentional,althoughtheremaybesituationswherethiselementofpersuasionisaccidental.

o Coercion.Thisistoensurecompliancewherebehaviourischanged.o Context.Changedbehaviourmaybeconfinedtoalimitedcontext.o Plurality.Thisreferstopersuasionaimedatmorethanoneperson.o Media.Therearedifferentformsofmediathatcanbeusedasvehiclesforcommunication.

StudyUnit12:MarketSegmentation

Marketsegmentationaprocessofdividingamarketintosegmentsofcustomerssothatmembersofeachsegmentshare

characteristicsandaredistinctfrommembersofothersegmentsUsageorbehaviouralsegmentation

MostSAcompaniescansegmentcustomersduetoallthedataavailableItispossibledodividecurrentusersofaproduct,serviceorbrandintocategoriesoflight,mediumorheavylayersLackssufficientdepthtoapplywhendevelopingmarketingstrategiessoshouldbeusedwithothersegmentationbases

DemographicsegmentationBasedonaspectssuchasage,gender,maritalstatus,familylifecycle,income,occupation&educationThisisverycloselylinkedtoacustomer’sproductsneedsandbuyingbehaviour

LifestyleandpsychographicsegmentationBreakingupintermofattributeslikesocialclass,lifestyleandpersonalitySegmentationofmarketsbylifestageoragegroupsshowshowaperson’slifespancanbedividedinto5yrperiods.Ineachperiod,circumstances,interests,activities,buyingbehaviourandlevelofconsumerexpenditurechange.

CombiningdemographicandpsychographicsegmentationPg228Parkers6lifeplanesbasedoneducation

LifeplaneADoctors,lawyers,accountants–usuallygraduateprofessionals

LifeplaneBNothaveauniversitydegreebutstudiesafterschool–manyreachseniorpositionsinbusiness

LifeplaneCCompletedmatricbutnotstudiedanyfurther–salesorclericalpositions

LifeplaneDPlumber,mechanic–completed¾yearsofschooleducationandfollowtechnicalcareers

LifeplaneEAssistants,factoryworkers-Completed½yearsofseniorschool

LifeplaneFDomestics,gardeners,labourers–noseniorschoolingandbarelyliterate

GeographicdemographicDivisionsaredoneaccordingtolocation–countriesorregionsNBelement=localadvertisingmediaandtheallocationofsalesrepstodifferentareas

Needs/benefitssegmentationClassifyingcustomersintogroupsaccordingtospecificbenefitstheywantfromaproductBenefitsarethebasicreasonpeoplebuyaproductandthereforisaproperbasisforMS

Market-value-basedsegmentationSimilartobenefitsegmentationbutinsteadusesmarketvalueAbroadvalue-baseddivisionofthetotalmarketcanbeobtainedbyusingthebasicdistinctionofuniversalandpersonalvalues4outcomes:

1.Bestvaluemarket:universalvalues=highimportance;personalvalues=lowimportance2.Basic-product/economymarket:bothuniversal&personalvalues=low3.Premiummarket:bothuniversal&personal=high4.Convenience/personalisationmarket:universalvalues=low;personalvalues=high

Purchasedecision-makers Ultra-conservatives–donotrocktheboat,theybuythingsthatareconsistent.Oftenbuy

improvements,seldominclinedtoreviewalternatives,negativetowardsanythingtoocomplex,cost-effectivenessisonlyconsideredifitdoesn’tdisturbstatusquoandreactpositivelytovolumepurchasing

Conservatives–willingtochange,butonlybyasmallincrementandonlyifcosteffective,willreviewcompetitiveofferings,negative/neutralwhenconsideringtechnicallycomplexofferingsandinfluencedby“bestprice”opportunities

Liberals–regularlylookingfornewsolutions,willingtomakechanges,useproductsthatmakeeffectiveuseoftechnology,willalwaysreviewcompetitiveoffers,neutral/positivewhenconsideringtechnologyandstronglyinfluencedbythedesired“endresult”

Technicalliberals–fascinatedwithbenefitsprovidedbyhigh-techsolutions,usuallyconsidernewproducts,considercertainproductsbecauseofthetechnology,alwaysreviewcompetition,regardthemselvesastechnicallycompetent,conversioncostsareofnoconcernandstronglyinfluencedbythedesired“endresult”

Self-helpers–constantlydefine/designsolutionstotheirproblems,willconsidernewproducts,considerproductsbecauseofthetechnology,alwaysreviewcompetition,considerthemselvestechnicallycompetent,andstronglyinfluencedbythedesired“endresult”SegmentationinB2Bmarkets

Pg234-236

Positioningtheconsumersperceptionofap/s,brandorcompanyinrelationtoitscompetitors

Aproductspositioningistheplacetheproductoccupiesinacustomer’smindThroughpositioning,marketersinfluencehowcustomersperceiveabrandscharacteristicsrelativetoitscompetitorsNorulesandfewguidelinesCompanywith7brandswillbenefitbypositioningeachbrandwithinthep/sportfolioagainstcustomerneeds

Developingpositioningstrategy①Analysingcompetitor’spositions

Marketersmustknowwhoisinthemarketandhowtheyareperceived②Identifyingcompetitiveadvantage

Afirmhasasubstantialcompetitiveadvantagewhenithasvalue-creatingproducts,processesandservicesforitscustomersthatcannotbeimitatedbycompetitorsCanusedifferentiationdimensions:

o Dimension1:productdifferentiation→physicalfeatures,durability,reliability,style,designo Dimension2:servicesdifferentiation→delivery,installation,consulting,repairo Dimension3:personneldifferentiation→welltrained,courteous,reliability,competenceo Dimension4:imagedifferentiation→symbols,atmosphere,logo

RepositioningProcessofalteringabrands“personality”toappealtoadifferentsegmentCanbedonewhentoomanycompetitorsarestressingthesameattributesofaproductDeliberatedecisiontoalterthewaythemarketsee’stheproduct

StudyUnit13:ConsumerLoyalty

BrandloyaltyBrandingisaformofsecuritythataddsvalueandprofitabilitytotheoverallmarketingeffortWithbrands,consumersbuybenefitsandevenformacloseemotionalbondwithbrandRepeatbuyingofabranddoesn’timplyloyalty–theremustbeapsychologicalcommitment

TheinfluenceofbrandnamesonproductpreferenceBrandsmakeiteasierforconsumerstoidentifyparticularitemsfromamultitudeofgoodsandassurethemitwillalwaysbethesameThedefinitionandbenefitsofbrandsDefinition Benefits

Name,term,symbolordesignthatidentifytheg/s

o Convenienceinshoppingthrougheasyidentification/recognition

Productwithpersonality Uniquecharacterorappeal

o Facilitatestheconsumerdecision-makingprocesso Providesconsistentqualityo Simplifiesthebuyingo Reducesperceivedrisk

Brandimagesumtotalofaconsumersattitudesto,andknowledgeabout,abrand.

Consumerexperienceswithbrandsgetstoredintheirmind,andformanimageofthebrandMarketersarebuildinganimagewhenlaunchinganewproductandengageinextensivedecisionmakingThisimageisthencommunicatedthroughadvertising,sellingandpackaging

Brandpreferenceisconsumerstendencytoselectabrandorproductfromasetofknownavailablebrands

ConsumerswillbemorepositivetoonebrandoverothersKABprocess–asknowledgechangesovertime,sowillattitudesandbehaviourExistsfor2majorreasons:

1.Consumersfeelonebrandisbetterthananother,alsoforpsychologicalbenefitslikestatus,self-image

2.HabitsdevelopfrompastexperienceswhichprovideefficiencyinshoppingFormationofbrandloyalty

whereacustomerstronglyprefersonebrandtoanotherBecomingbrandloyaltakestimeandlearning3vitalfactors:i. Exposuretoinfoconcerningthebrandii. Favourableexperiencebuyingandusingthebrandiii. Extentofitsusebypeersandsocialreferencegroups

Brandloyaltyislowerwhen: Therearemorebrandstochoosefrom Moreproductsofgreatervaluearebought Pricesareactiveamongcompetingbrands Consumersusemanybrandsatthesametime

BrandloyaltyandrepeatbuyingbehaviourRepeatbuyingiswhenconsumersbuythesamebrandoverandover,whilebrandloyaltyincludedapsychologicalandevaluativeprocessesTheprocessesdon’tneedtobeextensive,butshouldshowwhyapersonhasactedsoBrandloyalcustomersareconsistent,havestrongbeliefsaboutquality,feeldevotiontobrandandresistcompetitorseffortstogetthemtoswitch

ComplexdecisionmakingandbrandloyaltyBrandloyaltyisoftenmeasuredbyhowinvolvedconsumersareinthebuyingdecisionsBrandcommitmentimpliesbrandloyaltybutnotV.V.Consumerswhoarenotbrandloyalcanbepersuadedbycompetitors

BrandloyaltyandvulnerabilityVulnerabilitymaybeusedtodistinguishloyalcustomers,whobothbuyandlikethebrand,fromthosewholikeotherbrandstooManagementneedtopayattentiontothedegreeanddistributionofloyaltyinthemarket

Stagesofbrandloyalty

BrandloyaltyandbrandsegmentationFirmscanfindessentialinfobyanalysingloyaltypatternsinitsmarketanddoingsegmentationanalysis→identifyingconsumerswhoaremorelikelytobeinfluencedbyanefforttomarketaspecificp/sAimofthisistoreduceriskindecidingwhere,when,how&towhomtomarkettheproductAmarketcanbesegmentedbyconsumerloyaltytobrands,storesandcompanies

Segmentationanalysisinformsmarketersabout: Theirbrands’positioninginthemarket Howconsumersdistinguishtheirbrandfromothers Importanceofproductattributestoconsumers’evaluationsofthebrand Thepsychologicalaspectsofconsumersthatleadthemtobuyornotbuyaspecificbrand

DeterminingthebrandloyalsegmentAloyalconsumerhasacommitmenttowardsabrandanditwillingtopaypremiumpricesConsumershoppingpatternsandmarketstructurecharacteristicsareassociatedwithvaryingdegreesofbrandloyaltyBrandloyaltydependsonthefollowing:●#ofconsecutivetimessomeonebuysabrand●Consumer’sknowledgeofabrand

BehaviouralapproachDefinebrandloyaltyinbehaviouraltermsbythesequenceandproportionofpurchasesBehaviouristsarguethatwhatconsumersthinkorbelieveisunimportantandthattheconsumers’behaviouristhefullstatementofwhatbrandloyaltyis

CognitiveapproachThisstatesthatbrandloyaltyimpliesrepeatbuyingbehaviourbasedoncognitive,affectiveandbehaviouralfactorsOffersmarketerstheadvantageofenablingthemtogathervaluableinfoonstrengthsandweaknessesonthebrand

BrandloyaltycorrelatesConsumerbuyinghabits

Brandloyalconsumersaremorelikelytobeinfluencedbyreferencegroupsbecauseoflackofinfoandthedesiretoconformandbeaccepted

ShoppingpatterncharacteristicsShoppingpronenessisrelatedtobrandsConsumerswhoaren’tpronetoshopping,gotofewstoresandremainloyaltoasmallnumberofbrands

MarketstructurecharacteristicsConsumersareloyalinmarketswhereawiderdistributionofbrandsexistsandwheremarketshareisrepresentedbytheleadingbrand

ModelsofbrandloyaltyDeterministicmodels

Explainstheprocessesthroughwhichbuyersmaketheirbrandchoices,decidetoengageinrepeatbuyingorbecomebrandloyalAttemptstopredictbehaviourinexactornon-probabilisticterms

StochasticmodelsAllowforvariablesthatarenotmeasuredandareasimplificationofreality2philosophies,internal&externalvariablesdeterminebehaviouroutcomesANDthemodelofmarketresponseandactualconsumptionprocessarebothstochastic

ConsumerbehaviourandbrandtypeManufacturer’sbrands

ProductsproducedandmerchandisedunderabrandnameidentifiedwithaspecificmanufacturerDevelopedandownedbytheproducer,whoisinvolvedindistribution,promotionandsometimesevenprice

StorebrandsBrandsofproductswhosedistributioniscontrolledbyretailersandwholesalersOftenownedbyonechainofstores–alsocalledprivatebrandsPg314-box

GenericbrandsBasicmarketingstrategyistoreducetraditionalmarketingfrillsandoffertheproductatalowerpriceMostlyfoundinsupermarkets

StoreloyaltyThisisthetendencyofapersontoactinthesamewayinasimilarsituationinordertosecuresatisfaction

Studyunit14:BuildingRelationshipswithCustomers

TraditionalmarketingapproachTraditionalmarketingframework

Compromisesof:1. Themarketingmix(4P’s)2. Marketforces(opportunitiesandthreatsthatinfluence)3. Amatchingprocess(processensuringallpoliciesareappropriate)

Marketingdefineswhatcustomerswantandneed,it’saboutpeopleandtheywaymarketerstrycreateap/sthatsatisfiescustomers

ThemarketingconceptTheessenceofthemarketingconcept–understandingcustomerneedsandwants,thefocusisonthecustomerThishasfailedinitsconceptandthetraditionalmarketingapproachisflawed

MarketingincrisisMarketingisdeadbecauseoldrulesofidentifyingandsatisfyingcustomerdemandnolongerapplyTheworldischangingbutmarketingisstuckinarut

RelationshipmarketingNewmarketingparadigm

5keyelements1.Developingacorep/saroundwhichtobuildacustomerrelationship2.Customisingtherelationship3.Augmentingthecorep/swithextrabenefits4.Pricinginamannertoencourageloyalty5.Marketingtoemployeessotheyperformwell

B2BisaloteasierthanB2Cbecauseof:businesseschangetheirneedslessoftenthancustomers,fewersuppliersandcustomersinB2BmarketsandB2Btransactionsalmostalwaysinvolvepersonalrelationships

theobjectivesaretoidentifyandestablish,maintain,enhanceoreventerminaterelationshipswithcustomersataprofitsothattheobjectivesofallpartiesaremetTheimplementationofthenewphilosophyusuallytakesplaceincustomerrelationshipmanagement(CRM),mostcompaniesuseamixtureoftransactionalandrelationshipmarketingapproaches

Adaptingthe4P’sProduct

Customerswantdifferentthings,atdifferenttimesanddon’twant1standardproductRelationshipmarketinginvolvesreal-timeinteractionbetweencompaniesandthemostprofitablecustomers

PriceCustomerswanttoparticipateindecisionsregardingthevaluetheyreceiveandpricestheypayGiveacustomerachancetohaveamoretailoredsolutionandtheymightpaymoreThepriceneedstoreflectthechoicesmadeandvaluecreatedfromthesechoices

PromotionGivesthecustomertheopportunitytodecidehowtheywanttocommunicatewiththebusinessShouldbereplacedwith2waycommunicationtoinvolvecustomersmuchearlierinmattersthataffectfuturepurchasingbehaviourMarketersmustalsousetechnologyappropriately(internet,POS,smartcards)togivecustomersahostofoptions

PlaceRMconsidersdistributionfromtheperspectiveofthecustomerwhodecideswhere,how,andwhentobuythecombinationofp/sthatcompromisethesupplierstotalofferingThinkofitmoreas‘placement’,givingcustomerschoicewithregardtolocationatwhichtheyspecify,purchase,receive,install,repairandreturnindividualcomponentsofp/s

AdvantagesofCRMIncreasedcustomersatisfactionImprovedinteractionwiththeorganisationandcustomers

DisadvantagesofCRM

PeoplemaynotwanttobeinvolvedwiththebusinessNumberoftimesapersondealswithabusinessdoesn’tnecessarilyindicatetheirloyaltyCRMcanaddcostsandnotalwaysprovidethebenefits

CharacteristicsofCRMThisisnotjustamethodusedbyserviceorganisationstogaincompetitiveadvantage,IhasbecomeanecessityforsurvivalWelldesignedCRMstrategywillincorporatethefollowingfeatures:pg333

Relationshipmanagement Salesautomation

Useoftechnology Opportunityinmanagement

WhatCRMisnotNotjustaboutcollecting,processinganddeployingcustomerinfo,itisaboutservingcustomersinafundamentallyimprovedway

PrerequisitesforimplementingCRMTeamworkandprocesses

arethefundamentaltasksor‘waythingsaredone’thus,processmanagementinvolvesprocedures,tasks,schedules,mechanisms,activitiesandroutinesbywhichap/sisdeliveredtothecustomerTeamworkshouldbeenhancedamongemployeesSo,processesintheorganisationneedtochangefromthetraditional‘siloapproach’totheintegrationofallfunctionalareasRMtakestheviewthatthecompanyshouldbeorganisedaroundthecustomersandthatalltechnologies/processesshouldhelpfostercompanyrelationships

SupportatexecutivelevelWithouttopmanagementssupport,aCRMstrategywillnotsucceed–toimplementcorrectly,changemustbemadeinallpartsofthebusiness–andleadershipmustshowtheway

Excellentcustomerservice“thecustomerisalwaysright”↕itisnecessarytogivecustomerssatisfactionwhentheycomplainWhencustomerscomplainit’sasignofabreakdownsomewhereintheprocessIntermsofRMcustomerservicecentresshouldbechangedintocustomerinfocentresgearedtoanticipatingissuessothattheservicerolehasgreatersignificance

TechnologytogaincustomerknowledgeandinsightRMisnotpossiblewithoutenablingeffectsoftechnologytostore,retrieve,process,communicateandanalysedataIt’sabigdangerformarketerstoassumethattechnologycanalwayseffectivelyreplacepersonalcontactCustomerknowledgeandinsightcomesfromdataoncustomerinteractions,transactionsandmanifestedbehaviours–includingpurchase,serviceandreturnactivity

ThefollowingmustbeinplacebeforeaCRMsystemisputinplace

Technology:facilitatorofCRMCrucialroleoftechnology

TechnologyenablesthesuccessfulimplementationofrelationshipmarketingButifusedinappropriately,canalienateacustomerCannotreplacehumancontactTodaymostcustomersareusedtohavingtheirneedsmetimmediately,convenientlyandinexpensively

TechnologyforbuildingrelationshipsTheperformanceoftechnologyhasledtotremendousopportunitiesforcompaniestotietechnologyinwiththeimplementationanduseofRMBusinessescancommunicateandservecustomersinrealtimePg.340-343

DevelopmentsintechnologyTheinternet

Providesopportunitiesformarketerstoengageinteractivelywiththecustomerusingprocessesthatarestandardised,butwhichaffordcustomerstheopportunitytoassemblethevaluetheywantinacustomisedproduct

Datawarehousestheenginethatenablescustomerrelationshipmanagement

Thesearelargerepositoriesofinfogatheredoncustomersinternally,fromthecustomersandexternal

sourcesDatamining

ProcessthatemploysIT(hardwareandsoftware)touncoverpreviouslyunknownpatternsofbehaviour,trendsandissuesCompaniescansiftthroughmassesofinfowiththerightsoftware–usuallyaboutcustomerpurchasingbehaviourEmploystoolsthatlookformeaning,findpatternsandinferrulesthatmightbecasual,predictiveordescriptive

RelationshiployaltyCustomerloyalty

Customersarecommittedtopurchasingp/sfromaspecificorganisation,andresisttheactivitiesofcompetitorsItsmorethanmakingrepeatpurchasesandbeingsatisfiedwiththeexperienceandp/s

IntegratedCLmodel

CustomersatisfactionsustainsloyaltySatisfactiondoesn’talwaysresultinretentionandV.V

Loyalty-typebehaviour3categories

1.Switchingbehaviour:either/ordecision,customerstayswithyouorleaves2.Promiscuousbehaviour:whentheymakeastreamofdecisionsbutstillwithintheeither/or

decision3.Polygamousbehaviour:makeastreamofpurchasesbutloyaltyisdivided

CustomerretentionManycustomersspendmuchtime,effortandmoneywooinginnewcustomersbutfewtakethetroubletoretainexistingonesCustomerretentionhasaprofoundinfluenceonprofitabilityasfollows:

o Acquiringnewcustomerscostsmorethankeepinganexistingoneo Makessensetofocusoncustomersbringinginaprofitalreadyo Regularcustomersplacefrequentorderssocostofservicingthemislesso Makesitdifficultforcompetitorstoenterthemarketo Canleadtoincreasedemployeesatisfactiono Long-timecustomerstendtobelesspricesensitiveo Providefree+word-of-mouth

LifetimevalueThisdescribesthepresentvalueofthestreamoffutureprofitsthatthecompanyexpectstomakefromlifetimepurchasesMarketerslookatcustomerspastsandassumeitwillbethesameinthefutureAlsoNBisgrowthpotential–orstrategicvalue→theadditionalvalueacustomercouldyieldifmarketershadastrategytoobtainit

LimitationsofimplementingCRMLittlevaluetobecreated

ThecustomersmaynotbeamenabletowhatvaluecreationtherecouldbeInsufficientlifetimevalue

TheremaybeinsufficientLTVtowarrantvaluecreationLargeinvestmentsinproductdesignanddevelopment

AdoptingaRMapproachmayresultindepreciationorevenwasteofinvestmentsNocapabilityforrelationshipmarketing

Somecompaniesdon’thavethefinancialortechnologicalassetstoapplyRM

Image

Quality

Price

Barrierstoswitching

Valuerelativetocompetition

Individual/organizationalcharacteristics

Marketenvironment

Attraction&loyalty

Experience

s

MarketShare&

Profitability

TheindividualcustomerapproachPg352Marketersshouldconfinehigh-intensityrelationshipstothecustomerswiththehighestprofitpotentialwhoactivelyseekcustomisedproducts

DevelopingCRMstrategiesTotreatcustomersdifferentlyitisnecessarytogroupthemintovalue-basedtiers–groupsofcustomerswithsimilarvaluestotheorganisation

ButterfliesProfitablebutdisloyalAttemptstoconvertbutterfliesarenotusuallysuccessful

StrangersNotloyalanddonotcontributetoprofitsCurrentlyunprofitableandwillbeunprofitableinfuture-dontmeritfurtherattention

TruefriendsProfitablenowandlikelytobesointhefutureTheidealcustomer

BarnaclesProperlymanaged,theycanbeturnedintoprofitablecustomersNottooprofitableastheirtransactionsaretoolow

RelationshipswithallstakeholdersMustbuildrelationshipswithallstakeholders: Employees Suppliers Intermediaries

Investors Community

BuildingrelationshipswithemployeesPg356

StudyUnit15:TheOnlineWorldandCustomerBehaviour

3mainfunctionsofthewebCommunications

Thewebenablescheaper,fasterandmoreeffectivecommunicationbetweenorganisationsandtheircustomers

InformationEnablesbusinessestogatherinfoaboutcustomers,includingtheirprofiles,onlinebehaviour,wantsandneedsAswellasshareinfo

BusinessWebcanbeusedasamarketingtoolinordertoadvertiseproducts,transactsalesandbrandacompanyAswellascollectinfoaboutcustomersandmarkets

InternetvsWebAdvantages

It’samultimediaenvironment–video,sound,text,graphicsandanimationscanbedisplayedontheweb

It’sahyper-mediatedenvironment–canlinktogetherinfofromothersourcesspreadacrosstheglobe

Largeamountsofinfocanbestoredandupdatedonthenet Anyinfodisseminatedonthewebisimmediatelyavailable Theinfoisinteractivewhichisimportantforbuildingrelationshipswithcustomers Thewebisan‘alwayson’environment Thewebisflexible Throughhewebwecanreachthemasses

Theweb,onlinebusinessandcustomerbehaviourDoingbusinessonline=e-businesse-businessincludedallformofelectronicbusinessbothonlineandofflinee-tailing:acompanythatrunsonlineandsellsretailgoodstoconsumers

e-tailingisasubsetofe-commerceandalsoe-businesse-marketing:dealsonlywithpromotingabusinessthroughonlinechannelssocialmedia:variouselectronicformsofcommunicationthroughwhichuserscreateonlineandpeer-to-peercommunitiestoshareinfo

TheadventofsocialmediaSocialmediaenablesuserstoshareinfowithothercustomersusingonlinetechnologiesAssocialmediaistotallycustomer-driven,itepitomisescustomer-centrism

Onlinetechnologiessupportcustomer-centrismeCRMsystemsshouldbeflexibleenoughtoadjustconstantlyandregularlytochangingbusinessrulespg372-373

ThethreatoftheinvisiblecustomerIsaseriousthreatascustomersmaybetreatedmorecasuallyandindifferentlythanbeforeNBtoremember3factorswhenembracingtechnology:

1.Don’tusetechnologyfortechnology’ssake2.Thetechnologymustbetriedandtestedsoensureitfulfilsitspurpose3.Customersegmentationintodifferentbuyingcategoriesinordertoestablishpersonalcontactwith

lucrativecustomerswillbeessentialDealingwithonlineparadigmshift

DisintermediationandreintermediationThewebbringstheproducerintodirectcontactwiththefinalcustomer

PersonalisationandcustomisationProvidingvalueisaboutmeetingindividualneeds

ShoppingondemandThiswillincludeany-time,any-placeprocurementandconsumption

Customersasco-producersInthefuture,customer-centredorganisationswillopenadirectchannelbetweenthemselves,theirproductionprocessesandcustomers

BlurringbetweencustomersandbusinessmarketsAstechnologyenablesanincreasingnumberofpeopletoworkfromhome,therewillbeablurbetweencustomerandbusinessmarketboundaries

ThepowershifttocustomersCustomersnowhavethepowertochoosewhetherornottoreceivethemessagemarketersareputtingout

AutomationofconsumptionPoweroftechnologytoautomateregularandstandardactivities,combineswiththegeneralshortageortimethatanincreasingnumberofcustomershaveavailable–willlikelyleadtoAofC

Facilitatingcustomerdecisionmakingthroughonlinemedia

ProblemrecognitionUsinginteractivemethods,sothebusinessescanprovideahigherlevelofassistancetoidentifyandsolveproblems

InformationresearchModernsearchalgorithmsandAImakeiteasytofindthespecificinforequiredforproblem

solvingEvaluationofalternatives

Manycustomersdoproductcomparisonsonlineandthengotothestorethatoffersthebestdealinordertobuy

BuyingAnincreasingnumberofcustomersarenowbuyingonline

Post-buyingevaluationThewebservesasapowerfultooltodealwithanydissatisfactionthecustomermighthavewiththeproduct

HabitualdecisionmakingTheabilityofsoftwaretodetectregular/routinepurchasesandtoautomatethistaskisamajoradvantageinfacilitatinghabitualdecisionmakingAsoftwareprogrammecanindicate:

Productsonspecial Substituteproductsonspecialoffer Changesthathaveoccurredtoaproduct Newerorbetterproductsavailable Complementaryproductsavailable

GettingtoknowindividualcustomersThewebcanbeusedtogatherinfooncustomers–onlinesurveysorfocusgroups

OnlinecustomerbehaviourOnlineshoppingbehaviour

ThewebisafairlynewenvironmentthatisratherdifferentfromthephysicalmarketplaceIsolation&integration

Webalsomakesitpossibleforlike-mindedpeopletocometogetherasacommunityandshareinterestsandconcerns

AnabbreviatedattentionspanSpendingtimeonlinecanbecometiringandfrustrating,whichcanleadtotherejectionofthistechnology

InstantgratificationThemoretimeisspentonline,themorecustomerswantfasterdownloadsandinstantgratificationwithregardtoinfo,p/s

YourworldinamonitorIt’safocusedworldwhereabusiness’sweaknessesarequicklyhighlightedandit’seasyforcustomerstomoveontothenextsupplierWebusability:measureofeffectivenessofwebsites,willbecomeaweaponforonlinemarketers

DependenceonshoppingagentsSoonatimewillcomewhenorganisationsneedtoconsidernothowtoattractandkeeponlinecustomers,buthowtoengagethecustomers’shoppingagents

ToomuchinfoIt’sbecomingincreasinglydifficulttodealwithalltheinfoCompaniesthatdon’tdemonstratetheirp/squickly,findthecustomersdessertsthem