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Consumer Behaviour
Creating marketing
strategies for customercentric organisations
Consumer analysis
The process of understanding consumer trends,
global consumer markets, models to predict
purchase and consumption patterns, and
communication methods to reach target markets
most effectively
Strategy
A decisive allocation of resources (capital,
technology, and people) in a particular direction
Customer-centric organisations
A strategic commitment to focus every
resource of the firm on serving and
delighting profitable customers
Value
The difference
between what
consumers give up
(pay with time,
money or other
resources) for a
product and the
benefits they
receive
Marketing strategy
Involves the allocation of resources to
develop and sell products or services that
consumers will perceive to provide more
value than competitive products or services
Market analysis
Consumer
Company
Environmental
Political/Legal
Implementation
in marketplace
Segmentation
Demographic
situational
psychographic
Marketing mix
Product, Brand,
Price, Place
Promotion, and
7Rs
Market analysis
The process of analysing changing
consumer trends, current and potential
competitors, company strengths and
resources, and the technological, legal, and
economic environments
One goal is to minimize the number of failed
products introduced to the market by better
understanding the wants and needs of the
market
Market analysis:
Consumer environment
Includes demographic trends, personal and group
influences, knowledge, attitudes, motivation,
purchase and consumption patterns, changing
consumer needs, wants, and lifestyles
Changes in the consumer environment can lead to
new product ideas, product adaptations, new
packaging or new services to help consumers
meet their changing needs (e.g. iPod accessories)
State of
economy
Market
environment
Physical
conditions
Technology
Market segmentation
Process of identifying groups of people
who behave in similar ways to each other,
but somewhat differently than other groups
Results in market segment: a group of
consumers with similar behaviours and
needs that differ from those of the entire
mass market
Goal: minimise variance within groups and
maximise variance between groups
Opposite of market aggregation
Market segmentation
Market aggregation: when organisations
choose to market and sell the same
product or service to all customers (also
known as mass marketing)
Market segmentation
Identifying segments
Market segmentation
Increasing diversity in consumer needs and wants
leads to mass customisation: customising goods
for individual customers in high volumes and at
relatively low costs
Key is understanding which customized features
customers value the most
Ability to reach segment of one
Segmentation can increase customer satisfaction
and profitability
- decreases marketing expenses
- increases value (and therefore price) to
consumers
Bayesian analysis
Statistical technique based on a theorem
that expresses uncertainty in probability
terms
Allows consumer analysts to make
educated guesses on how the human mind
affects behaviour or why people buy
Analyses data collected from point-of-sale
(POS) scanners to identify patterns of
behaviour that define market segments
Emotional elements
Image, personality, style, evoked feelings
Does the brand create an emotional connections between
the customer and the product or firm?
Brand promise
What can consumer expect in exchange for their money?
Brand Personality
Reflection consumers see of themselves or think will develop
by using a brand
Brand Protection
By promising a certain outcome, brands reduce the risk to
consumers that the product may not deliver as expected
Strategy implementation
Even the best strategies are worthless if not
implemented well in the marketplace
7Rs for formulation and implementation
Customer loyalty
It is less costly and easier to keep a
customer than it is to create a new one
Loyal customers generate superior margins
and recruit additional customers
With increased choices, consumers are
becoming more fickle and less loyal
Consumer feel entitled to try new brands and
switching behaviour increases
To retain current customers, firms must focus
on customer expectations of future benefits
Sources of demand
Sources of supply
methods
Organisations must understand markets on a
global basis in terms of people
Consumers have a myriad array of foreign-made
and globally branded products
Cultural, ethnic, and motivation variables also
affect consumer decisions
Language problems may occur, but backtranslation, visual language, and local experts
(advice) helps overcome them