Professional Documents
Culture Documents
FANNY PERREAU
THECONSUMERFACTOR.COM
CONTENTS
ABOUT ME
P. 3
INTRODUCTION
P. 4
P. 5
CULTURAL FACTORS
P. 6
SOCIAL FACTORS
P. 10
PERSONAL FACTORS
P. 14
PSYCHOLOGICAL FACTORS
P. 17
P. 23
NEED RECOGNITION
P. 24
INFORMATION SEARCH
P. 27
ALTERNATIVE EVALUATION
P. 28
PURCHASE DECISION
P. 29
POST-PURCHASE BEVAVIOR
P. 30
P. 31
RECOMMENDATIONS
P. 32
P. 34
P. 35
P. 37
RECOMMENDATIONS
P. 38
INTRODUCTION
How reacts a consumer? What are the stages through which they pass before making a
purchase? Why a consumer will choose a product or brand over another? What are the
factors that influence him? What are the motivations and aspirations that guide him?
The consumer is a complex individual. His purchase behavior varies greatly depending on
stimuli, personal, social or psychological factors as well as the situation. The purchase is
only the visible part of a more complex decision process created by the consumer for each
buying decision he makes.
For brands, understand this behavior is a major challenge. In order to meet the
expectations and needs of consumers, improve the shopping experience, build a more
effective and targeted marketing strategy and increase sales and revenues.
In this ebook, you will find out an overview of the elements and factors that influence
consumers and their purchasing behavior. As well as specific business and marketing
recommendations. And also concrete examples of brands and marketing strategies,
consumer insights, key figures and studies results.
THE INFLUENCING
FACTORS
I.
CULTURAL FACTORS
THE EXAMPLE:
McDonalds is a brilliant example of adaptation to the specificities of each culture and
each market. Well aware of the importance to have an offer with specific products to meet
the needs and tastes of consumers from different cultures, the fast-food giant has for
example: a McBaguette in France (with French baguette and Dijon mustard), a Chicken
Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as well as a Mega
Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in
Japan.
While all the ingredients used by McDonalds in Arabic and Muslim countries are certified
halal. The fast food chain is also naturally not offering any product with bacon or pork.
B. Subcultures:
A society is composed of several subcultures in which people can identify. Subcultures
are groups of people who share the same values based on a common experience or a
similar lifestyle in general.
Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the
individual, etc..
The subcultures are often considered by the brands for the segmentation of a market in
order to adapt a product or a communication strategy to the values or the specific needs
of this segment.
For example in recent years, the segment of ethnic cosmetics has greatly expanded.
These are products more suited to non-Caucasian populations and to types of skin
pigmentation for African, Arab or Indian populations for example.
Its a real brand positioning with a well-defined target in a sector that only offered
makeup products to a Caucasian target until now (with the exception of niche brands) and
was then receiving critics from consumers of different origin.
Brands often communicate in different ways, sometimes even create specific products
(sometimes without significant intrinsic difference) for the same type of product in order
to specifically target an age group, a gender or a specific sub-culture.
Consumers are usually more receptive to products and marketing strategies that
specifically target them.
THE EXAMPLE:
In terms of gender-targeted marketing strategy, the example of Coca-Cola is perhaps the
best known from consumers. The U.S. company has launched two sugar-free versions of
its famous soft drink:
The Diet Coke (or Coca-Cola Light), targeting rather a female target.
The Coke Zero (or Coca-Cola Zero), targeting more a male target, with a more
"manly" packaging, a name more "raw" and advertising campaigns heavily
targeting male consumers who, as studies have shown, may have experienced
some psychological or social resistances to the idea of buying a diet soft drink.
However, with a few tiny exceptions, the ingredients and recipes of these two products
are almost identical! However, male consumers mostly buy Coke Zero and women
principally buy Diet Coke.
C. Social classes:
Social classes are defined as groups more or less homogenous and ranked against each
other according to a form of social hierarchy. Even if its very large groups, we usually find
similar values, lifestyles, interests and behaviors in individuals belonging to the same
social class.
We often assume three general categories among social classes:
Lower class
Middle class
Upper class
People from different social classes tend to have different desires and consumption
patterns. Disparities resulting from the difference in their purchasing power, but not only.
According to some researchers, behavior and buying habits would also be a way of
identification and belonging to its social class.
Beyond a common foundation to the whole population and taking into account that many
counterexample naturally exist, they usually do not always buy the same products, do not
choose the same kind of vacation, do not always watch the same TV shows, do not always
read the same magazines, do not have the same hobbies and do not always go in the same
types of retailers and stores.
For instance, consumers from the middle class and upper class generally consume more
balanced and healthy food products than those from the lower class.
They dont go in the same stores either. If some retailers are, of course, patronized by
everyone. Some are more specifically targeted to upper classes such as The Fresh Market,
Whole Foods Market, Barneys New York or Nordstrom. While others, such as discount
supermarkets, attract more consumers from the lower class.
Some studies have also suggested that the social perception of a brand or a retailer is
playing a role in the behavior and purchasing decisions of consumers.
CONSUMER INSIGHT:
The consumer buying behavior may also change according to social class. In general, a
consumer from the lower class will be more focused on price. While a shopper from the
upper class will be more attracted to elements such as quality, innovation, features, or
even the social benefit that he can obtain from the product.
D. Cultural trends:
Cultural trends or Bandwagon effect are defined as trends widely followed by people
and which are amplified by their mere popularity and by conformity or compliance with
social pressure. The more people follow a trend, the more others will want to follow it.
They affect behavior and shopping habits of consumers and may be related to the release
of new products or become a source of innovation for brands.
By social pressure, desire to conformity or belonging to a group, desire to follow fashion
trends or simply due to the high visibility provided by media, consumers will be
influenced, consciously or unconsciously, by these trends.
For example, Facebook has become a cultural trend. The social network has widely grew
to the point of becoming a must have, especially among young people.
It is the same with the growth of the tablet market. Tablets such as iPad or Galaxy Tab
have become a global cultural trend leading many consumers to buy one. Even if they
never had specially felt the need before.
For a brand, create a new cultural trend from scratch is not easy. Apple did it with the
tablets with its iPad. But this is an exception. However, brands must remain attentive to
the new trends and bandwagon effects. Whether to accompany it (create a page on
Facebook) or to take part in the newly created market (create its own tablet).
THE STUDY:
The incredible growth of tablet sales worldwide shows the power of a new cultural trend
in consumers. In July 2010, three months after the release of the first iPad, in a study on
the website Retrevo, 53% of consumers surveyed said they were not interested in buying
a tablet. To the question of what preventing them to buy an iPad, 52% did not see the
need and 38% found it too expensive.
Three years later, things have changed. Tablet sales will soon exceed those of laptops.
While, according to a Yankee Group study, the Apple iPad is the most desired tablet by
consumer ahead the tablets from Amazon or Samsung.
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The influencer: the person whose point of view or advice will influence the buying
decision. It may be a person outside the group (singer, athlete, actor, etc..) but on
which group members rely on.
The decision-maker: the person who will choose which product to buy. In general,
its the consumer but in some cases it may be another person. For example, the
leader of a soccer supporters group (membership group) that will define, for the
whole group, which supporters scarf buy and bear during the next game.
The buyer: the person who will buy the product. Generally, this will be the final
consumer.
Many brands look to target opinion leaders (initiator or influencer) to spread the use and
purchase of their product in a social group. Either through an internal person of the group
when it comes to a small social group. Or through a sponsorship or a partnership with a
reference leader (celebrity, actor, musician, athlete, etc.) for larger groups.
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B. Family:
The family is maybe the most influencing factor for an individual. It forms an environment
of socialization in which an individual will evolve, shape his personality, acquire values.
But also develop attitudes and opinions on various subjects such as politics, society,
social relations or himself and his desires.
But also on his consumer habits, his perception of brands and the products he buys.
We all kept, for many of us and for some products and brands, the same buying habits and
consumption patterns that the ones we had known in our family.
Perceptions and family habits generally have a strong influence on the consumer buying
behavior. People will tend to keep the same as those acquired with their families.
For example, if you have never drunk Coke during your childhood and your parents have
described it as a product full of sugar and not good for health. There is far less chance
that you are going to buy it when you will grow up that someone who drinks Coke since
childhood.
For brands especially for Fast-Moving Consumer Goods (FMCG) or Consumer Packaged
Goods (CPG) successfully integrate the family is both a real challenge and an
opportunity to develop a strong consumer loyalty among all the family members.
Thats why its important for brands to be seen as a family brand in order to become a
consumer habit for parents and children when they will become adults.
THE FIGURES:
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THE EXAMPLE:
The luxury industry is a perfect example of a premium positioning in order to convey a
high social status. Brands like Louis Vuitton, Longchamp, Chanel and Herms have built
a strategy based on exclusivity, significant prices and a very upscale and glamorous
image.
Many aspects and features that attract customers also seeking to "demonstrate" and
reflect, through its products, their purchasing power and high social status.
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C. Lifestyle:
The lifestyle of an individual includes all of its activities, interests, values and opinions.
The lifestyle of a consumer will influence on his behavior and purchasing decisions. For
example, a consumer with a healthy and balanced lifestyle will prefer to eat organic
products and go to specific grocery stores, will do some jogging regularly (and therefore
will buy shoes, clothes and specific products), etc.
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THE EXAMPLE:
Since its launch, Apple cultivates an image of innovation, creativity, boldness and
singularity. Whether through these products, its "anti-IBM crusade" then "anti-Microsoft",
its advertising campaigns - such as the famous "1984" ad or the TV ads "I'm a PC - I'm a
Mac" - or even the personality of Steve Jobs.
A strong image able to attract consumers who identify to these values and who feel
valued in their self-concept by buying a product from Apple.
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B. Perception :
Perception is the process through which an individual selects, organizes and interprets
the information he receives in order to do something that makes sense. The perception of
a situation at a given time may decide if and how the person will act.
Depending to his experiences, beliefs and personal characteristics, an individual will have
a different perception from another.
Each person faces every day tens of thousands of sensory stimuli (visual, auditory,
kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all
consciously. That is why it focuses only on some of them.
The perception mechanism of an individual is organized around three processes:
For brands and advertisers successfully capture and retain the attention of consumers is
increasingly difficult. For example, many users no longer pay any attention,
unconsciously, to banner ads on the Internet. This kind of process is called Ad Blindness
or Banner Blindness.
THE FIGURE:
86% of users suffer from the phenomenon of Banner Blindness. They have become
"insensitive" or don't pay attention to banner ads on the Internet anymore.
Source: Infolinks December 2012
The attention level also varies depending on the activity of the individual and the number
of other stimuli in the environment. For example, an individual who is bored during a
subway trip will be much more attentive to a new ad displayed in the tube. It is a new
stimulus that breaks the trip routine for him.
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Consumers will also be much more attentive to stimuli related to a need. For example, a
consumer who wishes to buy a new car will pay more attention to car manufacturers ads.
While neglecting those for computers.
Lastly, people are more likely to be attentive to stimuli that are new or out of the ordinary.
For example, an innovative advertising or a marketing message (Unique Value
Proposition) widely different from its competitors is more likely to be remembered by
consumers.
Selective Distortion: In many situations, two people are not going to interpret
information or a stimulus in the same way. Each individual will have a different
perception based on his experience, state of mind, beliefs and attitudes. Selective
distortion leads people to interpret situations in order to make them consistent
with their beliefs and values.
For brands, it means that the message they communicate will never be perceived exactly
in the same way by consumers. And that everyone may have a different perception of it.
Thats why its important to regularly ask consumers in order to know their actual brand
perception.
Selective distortion often benefits to strong and popular brands. Studies have shown that
the perception and brand image plays a key role in the way consumers perceived and
judged the product.
Several experiments have shown that even if we give them the same product, consumers
find that the product is or tastes better when theyve been told that its from a brand they
like than when theyve been told its a generic brand. While it is exactly the same product!
Similarly, consumers will tend to appreciate even less a product if it comes from a brand
for which they have a negative perception.
THE STUDY:
A study conducted in the 70s showed that, in a blind test, consumers mainly preferred the
taste of Pepsi than Coke. But the results were then reversed, in a second test, when
consumers knew the brands they were drinking.
A study that inspired the "Pepsi Challenge" - blind tests organized by the brand to prove
consumers that many of them prefer the taste of Pepsi - and has enabled the brand to
make a nice breakthrough on the US market in the early 80's.
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Selective Retention: People do not retain all the information and stimuli they have
been exposed to. Selective retention means what the individual will store and
retain from a given situation or a particular stimulus. As for selective distortion,
individuals tend to memorize information that will fit with their existing beliefs and
perceptions.
For example, consumers will remember especially the benefits of a brand or product they
like and will forget the drawbacks or competing products advantages.
Selective retention is also what explains why brands and advertisers use so much
repetition in their advertising campaigns and why they are so broadcasted. So that the
selective retention can help the brand to become a top of mind brand in the consumers
mind.
THE FIGURE:
According to the model of Herbert E. Krugman on the "effective frequency" (the optimal
repetition frequency of an advertising), which has been widely adopted in the advertising
industry, it takes at least three exposures to a TV ad to ensure that advertiser's message
begins to be effective and to be memorized by the consumer.
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C. Learning:
Learning is through action. When we act, we learn. It implies a change in the behavior
resulting from the experience. The learning changes the behavior of an individual as he
acquires information and experience.
For example, if you are sick after drinking milk, you had a negative experience, you
associate the milk with this state of discomfort and you learn that you should not drink
milk. Therefore, you dont buy milk anymore.
Rather, if you had a good experience with the product, you will have much more desire to
buy it again next time.
The learning theories can be used in marketing by brands. As the theory of operant
conditioning which states that you can build a good image and high demand for a product
by associating it with a positive reinforcement (or rather a bad image with a negative
reinforcement).
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INTRODUCTION:
Engel, Blackwell and Kollat have developed in 1968 a model of consumer buying decision
process in five steps: Problem/need recognition, information search, evaluation of
alternatives to meet this need, purchase decision and post-purchase behavior.
THE 5 STAGES OF
BUYING DECISION PROCESS
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I.
NEED RECOGNITION
The need recognition is the first and most important step in the buying process. If there is
no need, there is no purchase. This recognition happens when there is a lag between the
consumers actual situation and the ideal and desired one.
However, not all the needs end up as a buying behavior. It requires that the lag between
the two situations is quite important. But the way (product price, ease of acquisition,
etc.) to obtain this ideal situation has to be perceived as acceptable by the consumer
based on the level of importance he attributes to the need.
THE EXAMPLE:
You have a pool and you would like someone to take care of regularly cleaning it instead
of you (ideal situation) because it annoys you to do it yourself (actual situation). But you
dont judge the way to reach this ideal situation (pay $250 / month for a specialized
company) as acceptable because its price to obtain it seems too high. Especially
compared to the relatively low level of importance you attach to it. So you wont have a
purchase behavior in this situation.
On the other hand, the ability to be able to go to your work by car in 20 minutes every
morning (ideal situation) rather than lose three hours in transit because you do not have a
car and you live in the countryside (actual situation) is something that means a lot to you.
So you will have a buying behavior to purchase a car. Even if the price is important.
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In addition to a need resulting from a new element, the gap between the actual situation
and the ideal situation may be due to three cases. The current situation has not changed,
but the ideal situation has (a neighbor told you about the possibility that you did not
know to clean the pool by a specialized company). Or, the ideal situation is still the same
but its the actual situation has changed (youre tired of cleaning your pool by yourself). Or
finally, the two situations have changed.
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1. Physiological needs
2. Safety needs
3. Need of love and belonging
4. Need of esteem (for oneself and from the others)
5. Need of self-actualization
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Internal information is sufficient for the purchasing of everyday products that the
consumer knows including Fast-Moving Consumer Goods (FMCG) or Consumer
Packaged Goods (CPG). But when it comes to a major purchase with a level of uncertainty
or stronger involvement and the consumer does not have enough information, he must
turns to another source:
During his decision-making process and his Consumer Buying Decision Process, the
consumer will pay more attention to his internal information and the information from
friends, family or other consumers. It will be judged more objective than these from an
ad, a sellers speech or a commercial brochure of the product.
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V. POST-PURCHASE BEHAVIOR
Once the product is purchased and used, the consumer will evaluate the adequacy with
his original needs (those who caused the buying behavior). And whether he has made the
right choice in buying this product or not. He will feel either a sense of satisfaction for the
product (and the choice). Or, on the contrary, a disappointment if the product has fallen
far short of expectations.
An opinion that will influence his future decisions and buying behavior. If the product has
brought satisfaction to the consumer, he will then minimize stages of information search
and alternative evaluation for his next purchases in order to buy the same brand. Which
will produce customer loyalty.
On the other hand, if the experience with the product was average or disappointing, the
consumer is going to repeat the 5 stages of the Consumer Buying Decision Process during
his next purchase but by excluding the brand from his evoked set.
The post-purchase evaluation may have important consequences for a brand. A satisfied
customer is very likely to become a loyal and regular customer. Especially for everyday
purchases with low level of involvement such as Fast-Moving Consumer Goods (FMCG)
or Consumer Packaged Goods (CPG). A loyalty which is a major source of revenue for the
brand when you combine all purchases made by customer throughout his entire life
(called lifetime customer value). The Holy Grail that all brands in the industry are
trying to achieve.
Positive or negative, consumers will also be able to share their opinion on the brand.
Whether in their family or by word-of-mouth. Or on a much broader scale now with social
networks or on consumer product review websites. A tendency not to be overlooked
because now with the Internet, an unhappy customer can have a strong power to harm for
a brand.
Thats why thats important for companies to have awareness of that matter. In addition to
optimizing the customer experience, a guarantee (for example, for a washing machine),
an efficient customer service and a specific call center are some of the assets that can be
developed to improve post-purchase behavior if there is any trouble with the product.
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Stage 1 Need recognition: Its sunday night. Youre hungry (internal physiological
stimulus) and there is nothing in the fridge. You will order food (statement of need).
Stage 2 Information search: You already have ordered to the Indian restaurant in your
street last month (internal information). A friend recommended a pizzeria in your
neighbourhood (external information from environment). And this morning youve found a
flyer for a sushi restaurant in your mailbox (external information from advertising).
Stage 3 Alternative evaluation: You have a bad opinion of the Indian restaurant since
youve been sick the last time (inept set). The pizzeria is both recommended by your friend
and also happens to be a well-known brand (positive perception evoked set). As for the
sushi restaurant, it got good reviews on Tripadvisor (positive perception evoked set).
Stage 4 Purchase decision: After evaluating the possibilities, youve decided to choose
the well-known pizza delivery chain. In addition, a new episode of your favorite TV show is
broadcasted tonight on TV.
Stage 5 Post-purchase behavior: The pizza was good (positive review). But you know
there was too many calories and you regret a little bit (mixed feelings about yourself). The
next time you will choose the sushi restaurant. There is less fat in sushi than pizza (next
purchase behavior)!
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RECOMMENDATIONS
A. It always starts with recognition of a
need!
The start of the buying behavior of the consumer is the need recognition. If there is no
need, there is no purchase! Thats why generate or reinforce a need in consumers mind to
trigger the buying behavior has a fundamental importance for brands.
Steve Jobs had become a master in the area with Apple thanks to remarquable marketing
campaigns by successfully creating a need for millions of consumers for products they
had never thought before before. But have finally become an important part of their daily
lives.
In a different field, TV infomercials are remarquable examples of how to create an
unexpected need in a consumers mind for a new product. You probably never felt any
difficulty to cook a salad, but while watching the introduction of this great infomercial for
this new kitchen tool, you finally realize the difficulty of the task and the importance of
this new product as a solution to this problem.
Brands must focus on the activation or recall of a need whether physiological,
functional, social or change-related for the consumer through their advertising
campaigns. An even stronger challenge for new products, those with new features or
those on new segments that consumers ignore the need or interest.
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THE DECISION-MAKING
PROCESS
INTRODUCTION:
According to the famous model developed by John Howard and Jagdish Sheth, two
famous Professors of marketing, in their Theory of Buyer Behaviour, the decisionmaking process of consumers are divided into three stages: Extensive problem solving,
Limited problem solving and Routinized response behavior.
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I.
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II.
Image 1: For a same product, a mother and a young student will not have the same decision-making
process. (Photo: GETTY IMAGES)
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III. RECOMMENDATIONS
A. Brands whose clients are in a decisionmaking process of extensive problem
solving:
With a lack of benchmarks and usually in a state of uncertainty and confusion, these
consumers need reliable, detailed and concrete information about the products to build
their choice. They need guidance and should be given confidence throughout their
buying process. They want to be certain to make the best possible choice.
A key point for companies and brands consist in assisting consumers in this process,
providing them with a maximum of clear and relevant information about their product and
follow them throughout their purchasing decision process.
Companies must favor a marketing strategy based on the detailed explanation of the
product and its benefits to the consumer rather than wrongfully assume that the
consumer is already familiar with the product. This is why the advertising media selection
of the advertising campaign is important.
Some advertising media (Press, Internet, Direct response marketing, etc.) allow
advertisers to convey a lot of information on the product, its benefits and its use to
consumers.
The Internet now offers an unprecedented opportunity for brands to reach their
consumers at the heart of their buying decision process. Being directly present by an
Inbound Marketing Strategy, an effective Google AdWords campaign and a Search Engine
Optimization (SEO) strategy when the consumer is searching for product information on
the web, brands can guide him, help him and direct him in his buying process.
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Brands can accompany him in his decision-making process, keeping him in touch (with
newsletters, social media, blogs, etc.) and continuing to give him useful content for his
reflection and decision-making process.
An approach that could also be established in store by advising consumers and explaining
them more concretely everything they needed to know about the product in order to make
their choice.
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Consumers are already familiar with the product. So brands can use advertising media for
the campaign that do not convey as much information but have a stronger impact (TV,
radio, billboards, etc.). With one goal: to communicate its Unique Value Proposition in a
meaningful way for consumers.
Having not yet made the final choice regarding the brand to use, consumers will also be
sensitive to marketing or discount campaigns in retail stores.
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Slowly innovate:
They should also anticipate that some consumers may get bored of a product after a
while. This is why there is a vital need for regular innovation for the product but without
too abrupt changes. Because creating of potential factors of habit changing (price,
design, distribution, etc.) may lead some consumers to reconsider their choice.
In their customer acquisition management, those brands can afford to spend a lot of
money on advertising and have a high customer acquisition cost (COC).
Because they know that consumers are likely to remain loyal to the product and that their
customer lifetime value (CLV) will be high. Therefore, capture the consumer as soon as
possible before he develops his purchase habit is very important.
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CONCLUSION
Consumer behavior is a vast and exciting topic which is naturally not
restricted to the elements presented in this guide.
But I hope you enjoyed it. Feel free to share this ebook on social networks or
by email.
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CONTACT ME:
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fannyperreau@gmail.com
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