unitiv consumerbehaviour and retaintiong2821

8/7/2019 unitIV consumerbehaviour and retaintiong2821

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` Consumer behavior is "The study of individuals, groups,

or organizations and the processes they use to select,

secure, use, and dispose of products, services, experiences,

or ideas to satisfy needs and the impacts that these

processes have on the consumer and society."

` Consumer behavior is the study of when, why, how, and

where people do or do not buy product/Service and

dispose it.

` Consumer behavior is thus a "decision process engaged in

by individuals.


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` Women dont buy message therapy, they buy hope

` Customers dont buy insurance they buy security.` Thus a marketer of service need to understand the

complete mental process of consumers while

purchasing.

` CB is a process where, a purchaser plays different

roles


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` Role Description

` Initiator: The person who determines that some need or

want is not being met.

`

Influencer: The person who intentionally/unintentionallyinfluences the decision to buy the actual

purchase and/or use of product or service.

` Buyer: The person who actually makes the purchase.

` User: The person who actually uses or consumes

the product or service.


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The consumers mind is like a Black Box

` External Stimulus + Internal StimuliA Company Controlled

Service offer

Price

Advertising

Promotions

Distribution outlets

B Social Forces

Word of Mouth

Reference GroupConsumers

mind

ResponseBuy

No Buy


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` Assume you are planning to take Coaching classes

for IIT for the young ones in your family. Describe

the decision process and physical activities,preceding the purchase undertaken by the various

members of the family.


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` Who Buys? Organization

Occupants/ Individual

` Why they Buy Objective

` What they Buy Object

` When they Buy Occasion

` How they buy Operation

` Where they buy Outlets


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` Engel-Kollat-Blackwell model

Problem recognition Information search Evaluation of alternatives

Purchase decision Post-purchase behavior

` Strongs (1925)AIDA

Awareness Interest

Desire Action

` Based on the assumption that buyers will pass through a cognitive,affective, and behavioral stage when there is a high degree ofinvolvement with a product category which is perceived to have a highdegree of differentiation of products within it


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`

Consumer wants, learning, motives etc. are influenced byopinion leaders, person's family, reference groups, social classand culture.

` Ex- Opinion leadersspokespeople, Formal social group ofRotary Club, Lions Club

` Roles and Family Influences--Individuals role are continuing to change therefore marketersmust continue to update information.

` Reference Groups: Individual identifies with the group to the

extent that he takes on many of the values, attitudes orbehaviors of the group members.

` Ex - Housewives, Celebrity, doctor.


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`

Social Class--an open group of individuals who have similar social rank. upper middleclass Americans prefer luxury cars Mercedes.

Ex Leisure activity pursue by upper class, upper middle class, middleclass, lower class.

` Culture and Sub-culture--` Culture refers to the set of values, ideas, and attitudes that are accepted

by a homogenous group of people and transmitted to the nextgeneration. Culture determines what people wear, eat, reside and travel.Cultural values in the US are good health, education, individualism andfreedom.

Subcultures: price. A culture followed by a group of people within aculture e.g.: InAndhra Pradesh, most advertisement air in Telugu.


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` The human mind and its attributes. These variables

influence the way consumers proceed thro a

decision making process regarding products &

services. They are :

Personality & Self-concept,

Motivation & Involvement,

P

erception & InformationP

rocessing, Learning & Memory,

Attitudes.


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Company Controlled- Service/ Product, Offers, Price,

Promotion, displays, Outlets.

Social influence Word of moth & reference group


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The study of consumers helps firms and organizations improve their marketingstrategies by understanding issues such as how

` The psychology of how consumers think, feel, reason, and select betweendifferent alternatives (e.g., brands, products, and retailers);

` The psychology of how the consumer is influenced by his or her environment

(e.g., culture, family, signs, media);` The behavior of consumers while shopping or making other marketing

decisions;

` Limitations in consumer knowledge or information processing abilitiesinfluence decisions and marketing outcome;

` How consumer motivation and decision strategies differ between products that

differ in their level of importance or interest that they entail for the consumer;and

` How marketers can adapt and improve their marketing campaigns andmarketing strategies to more effectively reach the consumer.


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` Market segmentation is the process of identifying smallermarkets that exits within a larger market.

Grouping people according to their similarity related toparticular product category.


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` Better serving customers needs and wants.

` Higher Profits

` Opportunities for Growth

` Sustainable customer relationships in all phasesof customer life cycle

` To increase customer loyalty

` To remain competitive

` Higher Market Shares


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Geographic

e ographic

Age, gender, fa ily sizeand life cycle, orinco e

sychographic

Social class, lifestyle,

or personality

Behavioral

Occasions, benefits,uses

Nations, states,regions or cities


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` Step 1. Identifying a set of possiblecompetitive advantages: CompetitiveDifferentiation.

` Step 2. Selecting the right competitiveadvantage.

` Step 3. Effectively communicating anddelivering the chosen position to the market.


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Pr t Servi e

Pri e Image

Areas f r C mpetitive

Differentiati n


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` Describe the factors influencing ConsumerDescribe the factors influencing ConsumerBehavior of student belong to upperBehavior of student belong to uppermiddle class and Katrinamiddle class and Katrina KaifKaif while goingwhile going

for tourist package.for tourist package.

` Although shopping malls started making their presencefelt, consumers still had to go to the traditional stand-alone stores, when they were purchasing specializedproducts like electronics, home needs, and jewelry.What are the ways in which shopping malls in India canattract more number of customers?


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` is a philosophy of doing business that focuses onkeeping and improving current customers does notnecessarily emphasize acquiring new customers

` is usually cheaper (for the firm)--to keep a currentcustomer costs less than to attract a new one

` goal = to build and maintain a base of committedcustomers who are profitable for the organization

`

thus, the focus is on the attraction, retention, andenhancement of customer relationships


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` Prospects

` Customers

` Client` Supporter

` Advocates


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Transaction Marketing Relationship Marketing

Focus on Single sale Focus on Customer retention

Orientation on product features Orientation on product benefits

Short time scales Long timescales

No emphasis on customer service High emphasis on customer service

Moderate customer contact High customers co0ntact

Limited customer commitment High customer commitment


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` Customer retention is cheaper than customer acquisition

` Reduces communication costs

` loyal customers tend to spend more with the organization

over time, Repeat purchase.` On average costs of relationship maintenance are lower

than new customer costs

` employee retention is more likely with a stable customer

base

` lifetime value of a customer can be very high

` Perform the role of advocate or unpaid salesman.


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Organization

Customer Market-

Good service,

trustworthiness,

Value for moneyInfluencer

markets-

Shareholders &

Government

RecruitmentMarkets- Job

supply, courteous

treatment Internal Markets

Recognition, reward,

security, opportunity

Supplier Market-

Partnership, largeorder

Referral Markets-

Reliability,

performance,recognition


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Getting

Satisfying

Retaining

Enhancing


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Customer Retention &

Increased Profits

Employee Loyalty

Quality

Service

Customer Satisfaction


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After 14 years:

` Double its customer base Has the same customer

Base

Service

Company A

Service company B

10% new

customer every

year

5% loss of

customers

95% RetentionRate

10% loss

of

customers

90%

Retention

Rate


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Service Failure

Do NothingTake Action

Stay with ProviderSwitch Providers

o lain to

Providero lain to

Fa ily & Friends

o lain to

Third Party

Stay with ProviderSwitch Providers


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ServiceSwitching

Behavior

High Price Price Increases

Unfair Pricing Deceptive Pricing

Pricing

Location/Hours

Wait for Appointment Wait for Service

Inconvenience

Service Mistakes Billing Errors

Service Catastrophe

Core Service Failure

Uncaring

Impolite

Unresponsive Unknowledgeable

Service Encounter Failures

Negative Response No Response

Reluctant Response

Response to Service Failure

Found Better Service

Competition

Cheat Hard Sell

Unsafe

Conflict of Interest

Ethical Problems

Customer Moved Provider Closed

Involuntary Switching


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Service Recovery StrategiesService Recovery Strategies

Service

Recovery

Strategies


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` Explain Six market model and its importance in education institute.

` Consumer retention is cheaper than customer acquisition. Explain

` Kingfisher is planning to expand its business in public road transport.

As a marketing operation consultant advice them on STP and various

factors affecting the consumer behavior( Bus Service).

` Explain service profit chain model for new IT service.

` How customers response to Service Failure.What are the causes

Behind Service Switching

` Explain what is service recovery strategies.Apply the same to HDFC

who have lost its customers to ICICI andAxis bank.

` Why it is important to understand and analyse consumer behavior.

unitiv consumerbehaviour and retaintiong2821

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