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Consumer BehaviourKey to building customer relationships09-01-20141Confidential Rajnish RohatgiRemember Me?I'm the fellow who goes into a restaurant, sits down and patiently waits while the waitresses do everything but take my order. I'm the fellow who goes into a department store and stands quietly while the sales clerks finish their little chitchat. I'm the man who drives into a gasoline station and never blows his horn, but waits patiently while the attendant finishes reading his comic book.

"Yes, you might say, I'm a good guy. But do you know who else I am? I am the fellow who never comes back, and it amuses me to see you spending thousands of dollars every year to get me back into your store, when I was there in the first place, and all you had to do to keep me was to give me a little service; show me a little courtesy."

Source: Better Business Bureau bulletin submitted by An Arkansas Reader to Dear AbbyConfidential Rajnish RohatgiConsumers Impact on Marketing StrategyUnderstanding consumer behavior is good business.Firms exist to satisfy consumers needs, soFirms must understand consumers needs to satisfy them.The Process of Marketing Segmentation:Identifies Groups of Consumers Who are Similar to One Another in One or More Ways, andDevises Marketing Strategies that Appeal to One or More of These Groups.Confidential Rajnish RohatgiConsumers Impact On Marketing Strategy:Building Bonds With ConsumersRelationship Marketing occurs when a company makes an effort to interact with customers on a regular basis, and gives them reasons to maintain a bond with the company over time.

Database Marketing involves tracking consumers buying habits very closely, and crafting products and messages tailored precisely to peoples wants and needs based on this information.Confidential Rajnish RohatgiDirect Marketing Tools1. Response Advtg.3. Database Mktg4. Loyalty Mktg5. 1 to 1 world

2.Direct Mktg, orResponse mech.in mass media09-01-20145Confidential Rajnish RohatgiCustomer Value, Satisfaction, Trust and RetentionCost vs Benefit..

As the CustomerPERCEIVES ITPerformance vs Expectations:PERCEIVED PERFORMACEEstablishing & Maintaining Trust Key to Long term relationships65% of Sales come from Loyal CustomersBuy MoreLess Price SensitiveServicing is Cheaper 09-01-20146Confidential Rajnish RohatgiThe goal of all marketers is to build and maintain successful relationships with their consumers. This occurs by offering a product which has benefits that the consumer values. In addition, they see the value of those benefits as exceeding the cost of the product the cost in terms of money, time, and opportunity costs.If a product delivers value, the company is likely to have a high level of customer satisfaction. They will trust the marketer and continue to purchase the product. In addition, they will tell others about the product and speak highly of it when asked or when reviewing the product online.A company with strong customer relationships will be able to achieve a high level of customer retention their customers will not defect to the competitor or stop using their product. They will retain these customer over time and will be more profitable due to these valuable loyal customers.6709-01-2014Consumer BehaviourStudy of How and Why consumers buy, consume and dispose products and servicesHow consumers behave, What do they do? Sequence of Behaviours / Activities a Buying ProcessWhy consumers behave they way they doMental and emotional processesPersonal / Internal Demographics, Motivations, Beliefs, Attitudes, Perceptions, Personality & Self image.External influencers: culture, groups, family

Confidential Rajnish RohatgiHOW (they buy) helps us determine Where we target our efforts

Why (they buy/ behave the way they do) helps us determine HOW we will segment, target and communicate with them

809-01-2014How and Why?Confidential Rajnish RohatgiTraditionally, marketing thinking has been even today:1st : Segment the marketThen: Find out how & why of each segmentExample:

Is this correct?909-01-2014How Before Why ?Confidential Rajnish RohatgiMapping this Buying Process (sequence of behaviours) enables us to target changing ONLY those behaviours which maximise our resultsHence, subsequent study of Why can be restricted to these few, important selected behaviours.Underlying attitudes, beliefs Difficult to determine; Consumers often articulate what is socially acceptable, enhances my self imagePast behaviour is a good predictor of future behaviour observable and measureable; Infer underlying attitudes from observed behaviours.

1009-01-2014Study How Before WhyConfidential Rajnish RohatgiTwo Consumer Entities09-01-201411Confidential Rajnish RohatgiThe personal consumer is sometimes called the end user or ultimate consumer. This is you when you go to Best Buy to purchase a new television for your home. The organizational consumer is buying for the organization or to re-sell to the personal consumer. Although both types of consumer entities are important, we will be focusing on the personal consumer throughout these presentations.11Marketing as a science evolved through Consumer Products, where Consumer also Buys and PaysConsumer: one who ConsumesCustomer one who buys and paysChooser and payor also can be splitExampleUser: Nurse (Consumer) Not concerned about PriceChooser Buyer: Nursing superintendent / HOD:Payor: Procurement department of Hospital ??? patient ??

Influencer marketing

1209-01-2014Consumer and avatarsConfidential Rajnish RohatgiOther Examples??Army (rifles), Hotels (Detergent for Laundry)Mostly - institutional customers / B2BExamples of similar splits in consumer products?Products for kids (users)Paints: Family Payor / buyor; User? Painter Physical use of Paint; Family/woman user of the effect of paint Influencer: Interior decorator, magazines, friends house

1309-01-2014Consumer and avatarsConfidential Rajnish Rohatgi