1112-q2-topic 1-customers-20111031 (2)
TRANSCRIPT
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CUSTOMERS
1112-Q2-TOPIC 1-MARKETING
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Markets
Consumer market (Chapter 5 Kotler)
• individuals and households who buy goods and services forpersonal consumption
Business market (Chapter 6 Kotler)
• Organisations that buy goods and services to use in theproduction of other goods and services or for the purpose of reselling or renting them to others at a profit
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Learning Goals
• Define the consumer market and construct asimple model of consumer buyer behaviour
• Tell how consumer buyer characteristics influenceconsumer buyer behaviour
• List and understand the major types of buyingdecision behaviour and the stages in the buyer
decision process
• Discuss how consumer decision making varieswith the type of buying decision
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Analysing consumer buying behaviour
• What do customers buy?
• Where do they buy?
• When do they buy?
• Why do they buy?
• How do they buy?
• Who buys?
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Buyer behaviour
HOW do consumers respond tovarious marketing efforts?
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Stimulus-response model of buying behaviour
HOW do consumers respond tovarious marketing efforts?
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Buyer characteristics
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1. Cultural factors
• Culture
– Culture is the set of basic values, perceptions, wants and
behaviours learned by a member of society from familyand other important institutions.
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France Germany Japan Holland USA
Power distance
Individualism
Uncertainty avoidance
Masculinity
Culture
http://www.geert-hofstede.com
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Culture
http://www.worldbusinessculture.com
• Specific information on different business cultures
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1212
1. Cultural factors (cont.)
• Subculture
– Nationalities
– Religion
– Racial groups– Geographic regions
HSBC is the first to
offer Islamic financial products
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1313
1. Cultural factors (cont.)
• Social class
Source: Class Thompson Hickey
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1414
Buyer characteristics
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1515
2. Social factors
• Reference groups
–Reference groups serve as direct or indirect points of
comparison or reference in forming a person’s attitudes orbehaviour
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1616
2. Social factors (cont.)
• Reference groups
–Opinion leaders are people within a reference group who,
because of special skills, knowledge, personality, or othercharacteristics, exert influence on others
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1717
GroupsExtent of group influence on product and brand choice
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1818
2. Social factors (cont.)
• Family
–Family of orientation
–Family of procreation
–Decision-making unit: consumers’ buying roles
–Initiator
–Influencer
–Decider
–Buyer
–User
• Roles and status
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 1919
Buyer characteristics
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2020
3. Personal factors
• Buyer’s age and lifecycle stage
Young
– Single
– Married without children
– Married with children
– Divorced with children
Middle-aged
– Single
– Married without children
– Married with children
– Married without dependent children
– Divorced without children– Divorced with children
– Divorced without dependent children
Older
– Older married
– Older unmarried
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2121
3. Personal factors (cont.)
• Occupation
• Economic situation
• Lifestyle
–Activities
– Interests
–Opinions
–Demographics
• Personality and self-concept
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2222
Personality
Personality is a person’s distinguishing psychological characteristics
that lead to relatively consistent and lasting responses to his or her
own environment.
Brand personality:
a set of human characteristics related to a brand
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2323
Buyer characteristics
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2424
4. Psychological factors
• Motivation
Freud:
suggested that a person’s buying decisions are affected bysubconscious motives that even the buyer may not understand.
Maslow:
Human needs are arranged in a hierarchy from the most
pressing at the bottom to the least pressing at the top.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2525
Maslow’s theory’s of motivation
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2626
4. Psychological factors (cont.)
• Perception
The process by which people select, organise and interpret
information to form a meaningful picture of the world
• Three perceptual processes:
–Selective attention
–Selective distortion
–Selective retention
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2727
Perception
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2828
4. Psychological factors (cont.)
• Learning
changes in an individual’s behaviour arising from experience
• Beliefs and attitudes– A belief is a descriptive thought that a person has about
something
– An attitude describes a person’s relatively consistentfavorable or unfavorable evaluations, feelings, andtendencies toward an object or idea
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 2929
BeliefsConsumer market beliefs
Products and brands
–The best brands are the ones that sell best
–Keep clear of products new to the market until “bugs” have
been ironed out
Store
–You can tell a store by its window display
– Larger stores offer better prices than smaller ones
–Specialty stores are great to learn about product options,
but it is best to buy from a discount store
–A store offering good value on some of its items probablyoffers it on all its items
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3030
BeliefsConsumer market beliefs
Price
–Higher prices often mean higher quality
–Sales are designed to remove poorly selling products
–Prices will fall soon after the product is launched
Promotion
–The harder the sell the poorer the quality
–Free gifts to products mean the product may not be up to much
Packaging
–Big containers are always cheaper per unit than smaller sizes
–Environmentally friendly packaging adds cost to the product
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3131
Stimulus-response model of
buying behaviour
HOW do consumers respond tovarious marketing efforts?
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3232
How consumers make buying
decisions…
• Types of decisions that consumers face
• Main steps in the buyer decision process
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3333
Determinants of the extent of
problem solving
Price
Perceived risk
Purchasefrequency
Self-expressive
Level of involvement
Differentiation andnumber of
alternatives
Time pressure
Extent of
problem solving
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3434
Types of buying behaviour
Complex
buyingbehavior
Variety-
seekingbehavior
Dissonance-
reducingbuying
behavior
Habitualbuying
behavior
HighInvolvement
LowInvolvement
Significant
differencesbetween
brands
Few
differencesbetween
brands
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3535
What is complex buying
behaviour?
Complex buying behaviour is consumer buying
behaviour in situations characterised by high consumer
involvement in a purchase and significant perceived
differences among brands.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3636
What is dissonance-reducing
buying behaviour?
Dissonance-reducing buying behaviour is consumer
behaviour in situations characterised by high involvement
but few perceived differences among brands.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3737
What is habitual buying behaviour?
Habitual buying behaviour is consumer behaviour in
situations characterised by low consumer involvement and
few perceived brand differences.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3838
What is variety-seeking buying
behaviour?
Variety-seeking buying behaviour is consumer
behaviour in situations characterised by low consumer
involvement, but significant perceived brand differences.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 3939
Buyer decision process
Needrecognition
Information
search
Evaluation ofalternatives
Purchasedecision
Postpurchasebehaviour
Purchase intention
Attitude of others
Unexpectedsituational factors
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 4040
Buyer decision process
Needrecognition
Information
search
Evaluation ofalternatives
Purchasedecision
Postpurchasebehaviour
Encourage consumers to see that existing state does not
equal desired state
Provide information when and where consumers are likely
to search
Understand the criteria consumers use in comparing
between brands and communicate own brand
superiority
Understand choice heuristics (beliefs) used
by consumers and provide communicationthat encourages brand decision
Encourage accurate consumer
expectations
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 41
Markets
Consumer market (Chapter 5 Kotler)
• individuals and households who buy goods and services forpersonal consumption
Business market (Chapter 6 Kotler)
• Organisations that buy goods and services to use in theproduction of other goods and services or for the purpose of reselling or renting them to others at a profit
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 42
Learning Goals
• Define the business market and explain howbusiness markets differ from consumer markets
• Identify the major factors that influence business
buyer behaviour
• List and define the steps in the business buyingdecision process
• Compare the institutional and governmentmarkets and explain how institutional andgovernment buyers make their buying decisions
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 43
Business market
1. Business market
– business buyers
2. Institutional market
– includes schools, hospitals, nursing homes, prisons and other institutions providing care
3. Government market– includes national and local units that purchase
or rent goods to carry out government functions.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 44
Characteristics of business markets
Market structure and demand–Fewer but larger buyers–Geographically concentrated
–Derived from final consumer demand –More inelastic –More fluctuations
Nature of buying unit–More buyers in process
–More professional purchasing effort
Types of decisions and the decision process –More complex and formalised buying decisions–Based on long-term relationships
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 45
Model of business buyer behaviour
Theenvironment
The
buying
organisation
Buyerresponse
• Marketing stimuli
• Other stimuli
• Economic
• Technological
• Political
• Cultural
• Competitive
• The buying centre
• Buying decision process
• Product choice
• Supplier choice
• Order quantities
• Delivery terms and times
• Service terms
• Payment
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 46
The buying centre
All the individuals and units that play a role in thebusiness purchase decision-making process
Five roles in the purchase decision process:• Users• Influencers• Buyers• Deciders
• Gatekeepers
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 47
Major influences on business buyers
• Environmental factors
• Organisational factors
• Interpersonal factors
• Individual factors
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 48
The business buying process
The business buying process is the decision-making
process by which businesses establish the need
for purchased products and services, and
identify, evaluate, and choose among alternative
brands and suppliers.
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 49
Stages of the business buying process
Problem recognition
General need description
Product specification
Supplier search
Proposal solicitation
Supplier selection
Order-routine specification
Performance review
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 50
E-procurement: buying on the internet
Benefits:
• Gives buyers access to new suppliers
• Lowers purchasing costs
• Hastens order processing and delivery
• Frees purchasing people to focus on strategicissues
Acme Whistles
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 51
Major types of buying situations
Modified Rebuy
New Task Buying
Straight RebuyExtranet; e-procurement I n
v o l v e d
D e c i s i o n M
a k i n g
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 52
Differences B2B and B2C marketing
• purchase goods and services thatmeet specific business needs
• need emphasis on economicbenefits
• lengthy purchasing policies andprocesses
• buy large quantities and buyinfrequently
• want a customized product package
• purchase goods & services to meetindividual or family needs
• need emphasis on psychologicalbenefits
• buy on impulse or with minimalprocesses
• purchase as individuals or as a familyunit
• are content with a standardized productpackage
B2B customers often / usually Consumer customers often / usually
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Marketing Q2 TOPIC 1: CUSTOMERS Theory 53
• experience minor irritation if supplyfails
• find switching to another suppliereasy
• accept the stated price
• purchase from intermediaries
• emphasis on mass media
• experience major problems if supply fails
• find switching to another supplierdifficult
• negotiate on price
• purchase direct from suppliers
• emphasis on personal selling
Differences B2B and B2C marketing
B2B customers often / usually Consumer customers often / usually
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Questions:
1. How do the market structure and demand of the businessmarkets for Michelin tyres sold to car makers differ fromthose selling Michelin tyres to final consumers?
2. Discuss several ways in which a straight rebuy differs from anew-task situation.
3. How does the business buying process differ from theconsumer buying process?
4. Suppose that you own a small printing firm and have theopportunity to bid on a government contract that couldbring a considerable amount of new business to yourcompany. List 3 advantages and 3 disadvantages of workingin a contract situation with the government.