Transcript Document
Dr. Bea Bourne 1 If you have any trouble in seminar, please do call Tech Support at: 1-866-348-1196 They can assist if you get “bumped” from the seminar room or experience other difficulties. 2 This seminar will examine the consumer decision making process. The following consumer decision making process stages will be discussed: the input stage, the process stage, and the output stage. In addition to the consumer decision making process, this seminar will discuss the importance of customer retention. Questions 3 Unit 2 provides an overview of consumer behavior and consumer research. It is important to note the impact that the digital revolution has had on the marketplace by allowing much greater customization of products, services, and promotional messages than older marketing tools. 4 Read Chapters 1 and 2 in Consumer Behavior Chapter 1 Chapter 1 introduces the marketing concept. As you read, you should pay particular attention to the following ideas: The marketing concept Customer value Customer satisfaction Customer retention Market segmentation and targeting Chapter 2 Chapter 2 introduces the two different types of research methodology. As you read, you should pay particular attention to the qualities of quantitative research and qualitative research. 5 The purpose of Unit 1 was to establish a classroom community, and to introduce the content that you will be learning about in the course. 6 After completing this unit, you should be able to: •Explain the importance of consumer behavior •Describe the evolution of the marketing concept •Explain the strategy of customer retention •Describe the role of ethics in marketing •Assess consumer research paradigms 7 Last week we defined consumer behavior as the process by which people determine whether, what, when, where, how, from whom, and how often to purchase goods and services. In order to effectively market, sell, and interact with consumers businesses need to understand the buying behavior and decision making process their consumers go through with every purchasing decision. It may seem like common sense but businesses are in a better selling position when they are able to step into the shoes of the people they sell to. 8 Be sure to review Figure 1.1(page 8) Figure 1.1 is a diagram of the consumer decision making process. As marketers, we need to understand why people by products and services. We are all consumers. Any ideas on why we buy the things that we do? 9 People buy in order to fulfill a need. Needs can be functional or rational for pleasure or emotional. Simply knowing what type of need a customer is looking to fill is a great start for a marketer. Think about the last purchase you made. Why did you buy it? What type of need were you fulfilling? 10 Now, think about the promotional strategy used to market that product. Anyone want to share an example? What are the Four P's of Marketing? 11 Product, Price, Promotion, and Placement (channel of distribution) It is important to know that most business do not wait for customers to figure out their needs. Instead, they use advertising, promotions, salespeople, visual displays, and more, to draw our attention to needs. In other words to get people thinking about how their lives could be better with what they are offering. 12 In addition to a company’s marketing efforts, there are other external influences that affect the Input Phase such as the socio cultural environment. Why types of influences are socio cultural influences? 13 Socio cultural Environment Family, social class and cultures help influence our decision making process. Can anyone think of an example of how the socio cultural environment can influence your buying decision? 14 Once consumers have discovered or been persuaded that a need exists they will begin to search for information on how to best fill their need. This begins the Process Stage of the Consumer Decision Making Process. Criteria for doing this is infinite. ◦ ◦ Some examples include price, quality, convenience, durability, and service. These criteria are used to select a retailer and then a particular product or brand. 15 The other part of this step is to develop a consideration set. The evaluation of alternatives. A consideration set includes all of the retailers, or brand options that consumers will consider when performing their evaluation. Once the consideration set is established customers evaluate each retailer or brand on key criteria, giving more weight to the criteria more important to them. 16 After completing the evaluation process, consumers determine what retailer and brand option best meet their need. Essentially, they are answering the question, “What option gives me the best value.” The answers to this question vary greatly depending on the quality to price relationship different consumers look for. The result of this step is the purchase of a product or service. 17 Which moves us to the Output Stage of the Consumer Decision Making Process. This is where a post-purchase evaluation happens. What do you think this means? 18 Once the product or service is used, the consumer evaluate whether their purchase was a good one. If the product meets or exceeds expectations, the need will be satisfied and are likely to be a repeat customer. On the other hand, contrary, if the value derived is less than what was expected, a feeling of being ripped off or unsatisfied will cause a customer to avoid making the same decision to fill the same need in the future. And even worse, the consumer becomes an external influence by encourage friends and family to avoid making the same mistake. From your perspective, why is this process important to a business? 19 What is customer retention? 20 Customer retention means simply keeping customers and not losing them to competitors. As a business, why is customer retention important? 21 Regardless of why type of business, companies rely on customer retention to keep the company growing and profitable. The success of a business is not from one time customer but the repeat customer. Repeat customers keep coming back and become the foundation businesses can rely on. That is why customer retention is so important! If customers don’t return, businesses will never grow. Even worse, if businesses begin losing customers the business could fail. To be truly successful, you have to establish strong customer loyalty that can translate to repeat business and great referrals. 22 23 Assignments Complete the Project: Digitization = Customization Complete Questions 1 and 2 for Case One: Digitization = Customization for Chapter 1, which starts on page C-1 in the back of your Consumer Behavior textbook. As with all material you submit to the Instructor, check for correct spelling, grammar, punctuation, mechanics, and usage. Please refer to the Online Communications Guidelines for Paper Submission Standards. Assignment Checklist: Recognize trends in consumer buying habits. Describe changes that will be required to market strategy. Compare the shifts in behavior and its impact on overall market strategy. 24 I appreciate your time and attention during our 1 hour seminar today. If you have questions, feel free to contact me: [email protected] and I’ll be happy to help! See you in Class! 25