Transcript Customer Value

Customer behavior
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Quiz
What are the 4 components of a Market analysis? (4+1)
Provide a brief, specific reason for doing each of them?
(4+1)
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Customer behavior
Components of Market analysis
• Customers
– The be able to re-act to customer needs we need to understand them
first
– Market research, Focus groups etc.
• The Organization
– Understanding its own capabilities
– SWOT analysis
• Competitors
– Due to fast changing marketplace
– SWOT of Competitors
• Environment
– Macro (External) factors that can influence
– PESTLE analysis
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Creating market value for
customers
Chapter 2
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Creating market value for customers
Definition of Value
Measuring Value
Marketing implications
1. Pricing value
1. Expected Value
•
Market driven
2. Customer value
2. Value Strategy
•
Value-based marketing
3. Strategic value
3. Measuring value
4. Investigate
deviations
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Definition of value
Those beliefs that are shared by a community and provide
guidelines for how they would think, act and feel in a
given situation.
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Pricing Value
• Customer value= Benefits received – Costs
incurred
• Value obtained in following ways ( Zeithaml):
–
–
–
–
Buying at a low price
Obtaining something that they really want
Obtaining a quality product at agreed price
Obtain total benefits.
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Pricing Value
• Benefits:
–
–
–
–
Functional benefits
Social benefits
Personal benefits
Experiential benefits
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Pricing Value
• Costs:
–
–
–
–
Monetary costs
Temporal costs
Psychological costs
Behavioral costs
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Customer Value
• Customer value is created when needs and wants are
fulfilled – Chapter 1
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Strategic Value
• Organizational value – That which the buyer is prepared
to pay for the product or service.
• Strategic value – process of meeting or exceeding the
expectations of the customer in the areas of Product,
Service and Price quality
– Differentiation strategy
– Focus strategy
– Low cost strategy
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Creating market value for customers
Definition of Value
Measuring Value
Marketing implications
1. Pricing value
1. Expected Value
•
Market driven
2. Customer value
2. Value Strategy
•
Value-based marketing
3. Strategic value
3. Measuring value
4. Investigate
deviations
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Measuring value
Expected value by customer
Strategy to deliver that value
Measure how well it was done
Investigate deviations and fix it
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Determining the expected value.
•
Customer satisfaction index
•
Example – Survey to assess satisfaction with Lecturer.
1.
2.
3.
4.
Does the lecturer meet your expectations for quality of material ?
Does the lecturer respond to questions in a satisfactory manner?
Does the lecturer allow enough Smoke breaks?
Does the lecturer provide enough examples?
Scale 1 – 5 (1 = terrible, 5 = superman)
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Determining the expected value
•
Customer value management
•
Example – Survey to assess Value added by lecturer
1. Rate this lecturer’s material compared to your xxx lecturer’s
2. How would you rate this lecturer’s quality of responses to queries
compared to the high school you attended.
3. In your opinion is this lecturer adequately aware of your smoking
needs compared to your boss?
4. Rate the examples used by this lecturer to the ones of your xxx
lecturer
Scale 1-5
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Strategy to deliver value
• Important that whole organization “buys” into this
approach
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Measuring Value
• “Balanced scorecard”
• Used to measure Customer driven aspects of the
business.
Market Share
Customer
acquisition
Customer
profitability
Customer
Satisfaction
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Customer
Retention
Measuring Value
Market Share
•Proportion of business that organization
has in certain area.
Customer acquisition
•Rate at which new customers are attracted
Customer retention
•Rate at which customers and organization
retain relationship
Customer satisfaction
•Level of satisfaction against performance
criteria
Customer profitability
•Net profit of a customer after support
expenses has been deducted
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Investigate deviations
• As with any process of measuring performance it is
important to implement corrective actions to ensure
improved performance
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Creating market value for customers
Definition of Value
Measuring Value
Marketing implications
1. Pricing value
1. Expected Value
•
Market driven
2. Customer value
2. Value Strategy
•
Value-based marketing
3. Strategic value
3. Measuring value
4. Investigate
deviations
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Marketing implications – concept of value
• Market driven organizations – focused on delivering
superior value to customers
• Value based marketing – Developing, producing and
selling products that is based on the concept of adding
value.
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Exercise
How do you feel about PnP:
•Passion
•Quality
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Exercise
Does Woolies offer:
•A Difference?
•Quality?
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Market characteristics
Chapter 3
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Market characteristics
Characteristics of
SAF population
•Individuals
•Households
Influence of other
factors on Customer
behavior
Other useful sources
of info
•Climate
•Economic conditions
•Government
•Technology
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Marketing
implications
Characteristics of SAF population
South Africa
1980
1990
2000
2004
Population
(mil)
27
35
44
46
Female %
50
50
51
51
Aged 0-14
(% of total)
42
39
34
33
Aged 15-64
(% of total)
55
58
63
63
Aged 65+
(% of total)
3
3
4
4
Death rate
(/1000 people)
12
9
16
22
Birth rate
(/1000 people)
36
32
26
24
World Bank data on SAF
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Characteristics of SAF population
South Africa
1980
1990
2000
2004
Births / woman
4.6
3.3
2.9
2.7
Inf. mortality
64
45
50
54
Under 5 MR
91
60
63
67
Life
Expectancy @
birth
57
62
48
45
Birth rate /
1000 people
36
32
26
24
Woman 65+ % of Total
woman
3.7
3.8
4.3
4.9
% of total Pop.
1.9
1.9
2.2
2.5
World Bank data on SAF
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Characteristics of SAF population
South Africa
1980
1990
2000
2004
GNP / Capita $
2510
3390
3050
3630
Life
Expectancy @
birth - Male
54
59
47
44
Female
60
65
49
45
Adult literacy
(% of +15
years) – Male
82
84
Female
80
81
Labor force
(mil)
11
14
19
19
Female %
43
42
39
38
World Bank data on SAF
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Characteristics of SAF population
South Africa
1980
1990
2000
2004
Primary
school
enrolment rate
Male
88
90
88
Female
91
91
89
% Progression
to Grade 5 Male
65
82
Female
64
87
% Primary
Completion
rate - Male
71
88
94
Female
80
90
98
World Bank data on SAF
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Population Distribution and
Urbanization
Population distribution
by province and location
Gauteng
8.57
0.27
Western Cape 0.50
4.02
Eastern Cape
4.08
Northern Cape 0.25
Free State
0.57
1.86
0.85
5.37
Kwazulu/Natal
2.39
North-West
4.06
1.28
1.90
Mpumalanga
1.22
4.69
Limpopo
0
Non-Urban
2.36
1
Urban
2
0.58
3
4
6
Population (millions)
Hugo van Zyl
083-629 2069
[email protected]
5
Marketing 1B
Customer behavior
7
8
9
10
A General Trend Towards
Urbanization
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
The Black Middle Class is the largest
Growing Sector
Source: FW De Klerk Foundation
Hugo van Zyl
083-629 2069
[email protected]
Source: FW De Klerk Foundation
Marketing 1B
Customer behavior
Interest rates
Source: SA Reserve Bank
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Sources of info
• http://www.statssa.gov.za/
• http://www.polity.org.za/
• http://www.afdb.org/portal/page?_pageid=473,1&_dad=p
ortal&_schema=PORTAL
• http://www.saarf.co.za/
• http://www.worldbank.org/
• http://www.fwdklerk.org.za/indexe.php
• http://www.mrs.org.uk/
• www.markinor.co.za
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Implications for the marketer.
Application of this knowledge
• Marketing Strategy
– Differentiation from Competition / Alternatives
– Customer value = Benefit > Cost involved
– By Satisfying the correct needs we add value
Market
analysis
Market
Segmentation
•Environment
(Macro)
•Demographic
•Organizatio
n (Micro)
•Customers
•Sociegraphic
•Psychographic
s
•Competitors
Hugo van Zyl
083-629 2069
[email protected]
Marketing 1B
Customer behavior
Marketing
Strategy
Outcomes
Customer
decisions