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Consumer Behavior and Segmentation
 

Consumer Behavior and Segmentation

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Marketing : Consumer Behavior and Segmentation

Marketing : Consumer Behavior and Segmentation

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    Consumer Behavior and Segmentation Consumer Behavior and Segmentation Presentation Transcript

    • UNDERSTANDING MARKET ‘ Consumer Behavior’ Session 3 Chapter 5&6
    • The Gaps Model Word-of-mouth Personal Needs Past Experience Expected Product Perceived Product Product Delivery Translation of perceptions into product-quality specifications Management perceptions of consumer expectations External communications to consumers Gap 5 Gap 4 Gap 3 Gap 2 Gap 1 Consumer Marketer
    • The Gaps
      • Customer’s Gap
        • Customer’s expectation not matching with customer’s perception (Gap 5)
      • Provider’s Gaps
        • Not Knowing what Customers Expect (Gap 1)
        • Not Selecting Right Product Designs & Standards (Gap 2)
        • Not Delivering to Product Standards (Gap 3)
        • Not Matching Performance to Promises (Gap 4)
    • Consumer Behavior
      • Role of Marketing is:
      • To Understand the ‘ INTERVENING PROCESS’
      • that Influences Buying Decision.
      • Think on:
      • Who buys? How do they buy? When do they buy? Where do they buy? Why do they buy? … … … …
      • Consumer Buying Behavior
        • Buying behavior of individuals and households that buy products for personal consumption.
      • Stimulus Response Model
        • Marketing and other stimuli enter the buyer’s “black box” and produce certain choice/purchase responses.
        • Marketers must figure out what is inside of the buyer’s “black box” and how stimuli are changed to responses.
      Consumer Behavior Model Marketing & Other Stimuli Marketing Product Price Place Promotion Other Economic Technological Political Cultural Buyer’s Black box Buyer Charac- teristics Buyer Decision Process Buyer Responses Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount Figure: Model of Buyer Behavior
    • Characteristics Affecting Consumer Behavior
      • Cultural
      • Social
      • Personal
      • Psychological
      • Culture
      • Subculture
      • Social Class
        • Upper class
        • Middle Class
        • Working Class
        • Lower Class
      Key Factors
    • Characteristics Affecting Consumer Behavior
      • Cultural
      • Social
      • Personal
      • Psychological
      • Groups
        • Membership
        • Reference
          • Aspirational groups
        • Opinion leaders
          • Buzz marketing
      • Family
        • Children can influence
      • Roles and Status
      Key Factors
    • Characteristics Affecting Consumer Behavior
      • Cultural
      • Social
      • Personal
      • Psychological
      • Age and life cycle
      • Occupation
      • Economic situation
      • Lifestyle
        • Lifestyle segmentation
      • Personality and self-concept
        • Brand personality
      Key Factors
    • Family Life Cycle & Banking Needs An Example Stage Banking Needs Financial Situation Young Single People Few Financial Burdens; recreation oriented Low-cost checking; auto loan; credit card Full Nest I: Youngest child under 6 Home purchasing peak; Liquid assets low; Many working mothers Mortgage; Credit card; Revolving Credit Line; Bill Consolidation Loan Full Nest II: Older couples with Dependent Children Good Financial Position; Many Working Mothers Home Improvement Loans; Equity Credit Lines; Money Mkt Deposit accounts Investment services Empty Nest: Older Couples; No child at home; One/ both Retired Significantly reduced Income Monthly Income Checks on CDs; Direct Deposit of Social Security
    • Characteristics Affecting Consumer Behavior
      • Cultural
      • Social
      • Personal
      • Psychological
      • Motivation
        • Needs provide motives for consumer behavior
        • Motivation research
          • Maslow’s hierarchy of needs
      • Perception
        • Selective attention, selective distortion, selective retention
      • Learning
        • Drives, stimuli, cues, responses and reinforcement
      • Beliefs and attitudes
      Key Factors
    • Maslow’s Hierarchy of Needs Once a Lower-level need is Satisfied, a Higher-level need Emerges, and Demands Satisfaction Physiological Needs Hunger, thirst Self actualization Needs Esteem Needs Self-esteem Belongingness & Love Needs Friendship Security & Safety Needs Protection from physical harm
    • Types of Buying Decision Behavior Difference between brands Significant Complex buying behavior Low Few Dissonance-reducing buying behavior Habitual buying behavior Variety-seeking buying behavior High Involvement Level
    • Five Stages Buyer Decision Process
      • Need recognition
      • Information search
      • Evaluation of alternatives
      • Purchase decision
      • Postpurchase behavior
      • Needs can be triggered by:
        • Internal stimuli
          • Normal needs become strong enough to drive behavior
        • External stimuli
          • Advertisements
          • Friends of friends
      Process Stages
      • Need recognition
      • Information search
      • Evaluation of alternatives
      • Purchase decision
      • Postpurchase behavior
      • Consumers exhibit heightened attention or actively search for information.
      • Sources of information:
        • Personal
        • Commercial
        • Public
        • Experiential
      • Word-of-mouth
      Process Stages Five Stages Buyer Decision Process
      • Need recognition
      • Information search
      • Evaluation of alternatives
      • Purchase decision
      • Postpurchase behavior
      • Evaluation procedure depends on the consumer and the buying situation.
      • Most buyers evaluate multiple attributes, each of which is weighted differently.
      • At the end of the evaluation stage, purchase intentions are formed.
      Process Stages Five Stages Buyer Decision Process
      • Need recognition
      • Information search
      • Evaluation of alternatives
      • Purchase decision
      • Postpurchase behavior
      • Two factors intercede between purchase intentions and the actual decision:
        • Attitudes of others
        • Unexpected situational factors
      Process Stages Five Stages Buyer Decision Process
      • Need recognition
      • Information search
      • Evaluation of alternatives
      • Purchase decision
      • Post-purchase behavior
      • Satisfaction is important:
        • Delighted consumers engage in positive word-of-mouth.
        • Unhappy customers tell on average 11 other people.
        • It costs more to attract a new customer than it does to retain an existing customer.
      • Cognitive dissonance is common!
      Process Stages Five Stages Buyer Decision Process
    • Marketing Research
      • The process of planning, collecting and analyzing data relevant to a marketing decision.
        • Much can be learned about consumers through marketing research by
          • Collecting, recording, and analyzing data important in marketing products
          • Communicating results to management
        • Must be done prior and after the sale
        • Marketing Research Process
      • Define the Marketing Problem
      • Choose a Method of Research
      • Collect the Data
      • Analyze the Data
      • Make Recommendations to Management
    • Buyer Decision Process for New Products
      • New Products are goods, services or ideas that are perceived by customers as new.
      • Marketers should help consumers move through these stages:
          • Awareness
          • Interest
          • Evaluation
          • Trial
          • Adoption
      • Individual Differences in Innovativeness
        • Consumers can be classified into five adopter categories
          • Innovators
          • Early Adopters
          • Early Majority
          • Late Majority
          • Laggards
      Buyer Decision Process for New Products
      • Product Characteristics and Adoption
        • Five product characteristics influence the adoption rate
          • Relative Advantage
          • Compatibility
          • Complexity
          • Divisibility
          • Communicability
    • Business Markets: Buyer Behavior
      • Marketing Structure and Demand
      • Nature of the Buying Unit
      • Types of Decisions and the Decision Process
      • Compared to consumer market
        • Business markets
          • have fewer but larger customers
        • Business customers
          • are more geographically concentrated
        • Demand is different
          • Demand is derived
          • Demand is price inelastic
          • Demand fluctuates more, and changes more quickly
      Characteristics
        • The buying behavior of organizations that buy goods/services for use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.
      • Marketing Structure and Demand
      • Nature of the Buying Unit
      • Types of Decisions and the Decision Process
      • Compared to consumer purchases
        • Business purchases involve more buyers in the decision process .
        • Purchasing efforts are undertaken by professional buyers .
      Characteristics Business Markets: Buyer Behavior
      • Marketing Structure and Demand
      • Nature of the Buying Unit
      • Types of Decisions and the Decision Process
      • Compared to consumer purchases
        • Business buyers face more complex buying decisions .
        • Buying process is more formalized , more participants in the process:
          • Users
          • Influencers
          • Deciders
          • Buyers
          • Gatekeepers
        • Buyers and sellers work more closely together and build long-term relationships .
      Characteristics Business Markets: Buyer Behavior
      • Stage 1 : Problem Recognition
      • Stage 2 : General Need Description
      • Stage 3 : Product Specification
        • Value analysis helps to reduce costs
      • Stage 4 : Supplier Search
        • Supplier development
      • Stage 5 : Proposal Solicitation
      • Stage 6 : Supplier Selection
      • Stage 7 : Order-Routine Specification
        • Blanket contracts are often used for maintenance, repair and operating items.
      • Stage 8 : Performance Review
      Eight Stages Business Buying Process
    • Major Influences on Business Buyers
      • Environmental
      • Organizational
      • Interpersonal
      • Individual
      • Economic trends
      • Supply conditions
      • Technological change
      • Regulatory and political environments
      • Competitive developments
      • Culture and customs
      Key Factors
    • Major Influences on Business Buyers
      • Environmental
      • Organizational
      • Interpersonal
      • Individual
      • Objectives
      • Policies
      • Procedures
      • Organizational structure
      • Systems
      Key Factors
    • Major Influences on Business Buyers
      • Environmental
      • Organizational
      • Interpersonal
      • Individual
      • Authority
      • Status
      • Empathy
      • Persuasiveness
      Key Factors
    • Major Influences on Business Buyers
      • Environmental
      • Organizational
      • Interpersonal
      • Individual
      • Authority
      • Age
      • Education
      • Job position
      • Personality
      • Risk attitudes
      Key Factors
      • E-procurement is growing rapidly.
      • E-procurement offers many benefits:
          • Access to new suppliers
          • Lower purchasing costs
          • Quicker order processing and delivery
      Business Buying on the Internet Strategies Influencing Customer Perception
      • Measure & manage Customer Satisfaction and Service Quality
      • Aim for Service Quality & Satisfaction in every encounter
      • Facilitate Adaptability & Flexibility
      • Encourage Spontaneity
      • Help Employees cope with problem customer
      • Manage Dimensions of Quality at encounters
      • Ensure the Quality of Service
      • Sound Distribution to the End Customer
      • Ensure a Composite Promotional Effort
        • Advertising
        • Sales Promotion
        • Personal Sales
        • Public Relation
      • Make Right Prices
      Tips for Marketers
      • Have Satisfied People who have (PAI)
        • P = (right) Personality
        • A = (right) Attitude
        • I = Interest / Initiative
      • Simplified Procedure
      • Proper Show-off
      • Keep good Relationship
      • Ensure cross-sell & repeat sell
      Know your Organization Know your Product Know your Customers Know your Competitors Know your Process of Selling Know Yourself