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Consumer Behaviour

Started 1960s Borrowed heavily from the following disciplines:


Psychology Sociology Social Psychology Anthropology Economics


Copyright 1999 by Thomas Southwestern. All rights reserved.
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The Customer: Key to Market Success

The Importance of Understanding Customer Behaviour


A Key to Success

Satisfy customers Adopt the marketing concept Gain legitimacy in society

Copyright 1999 by Thomas Southwestern. All rights reserved.

Satisfying the Customer


Adopt a Customer Culture

Incorporate customer satisfaction as an integral part of the corporate mission and utilize an understanding of customer behavior as input to all marketing plans and decisions

Copyright 1999 by Thomas Southwestern. All rights reserved.

Adopting the Marketing Concept


Market Concept Principle Focus

vs.

Selling Concept Principle Focus


Making what the customer wants or needs

Finding a buyer for the product Selling the customer into exchanging money for the product

Copyright 1999 by Thomas Southwestern. All rights reserved.

Gaining Legitimacy in Society


A society supports businesses because they serve its members by catering to their needs and wants

Focus on the customer Pay attention to customer behavior Respond to customer needs, desires and preferences
Copyright 1999 by Thomas Southwestern. All rights reserved.
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Customer Orientation
a thorough understanding of customers needs and wants, the competitive environment, and the nature of the market used to formulate all the firms plans and actions to create satisfied customers

Competitive Advantages Through Customer Satisfaction


Customer Satisfaction

Repeat Buying

Higher Prices

Loyalty in Crisis

Word of Mouth

One-Stop shopping

New Product Innovation

Profits

Corporate Performance

Growth

Copyright 1999 by Thomas Southwestern. All rights reserved.

Creates Pride in Employees


Customer orientation has an effect on employee morale in the company

Satisfied employees create satisfied customers Happy customers lead to employee happiness

Copyright 1999 by Thomas Southwestern. All rights reserved.

Customers: Types, Roles, and Behaviors

Households (consumers)

Business

Mental Activities Physical Activities

Payers

Users

Buyers

Customer Types
Copyright 1999 by Thomas Southwestern. All rights reserved.

Roles
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Customer Behavior Domain

HOUSEHOLD

BUSINESS Business Product

PRODUCTS Consumer Products

SERVICES

Consumer Services

Business Services

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Three Roles of the Customer


User Payer Buyer

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Reasons for Role Specialization


Lack of expertise Lack of time Lack of buying power Lack of access Lack of affordability When the product or service is subsidized by payers When the product or service is free

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Customer Needs and Wants


Need arousal is driven by discomfort in a persons physical and psychological conditions Wants occur when and because humans desire to take their physical and psychological conditions beyond the state of minimal comfort
Copyright 1999 by Thomas Southwestern. All rights reserved.
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Determinants of Needs and Wants


Customer Needs

Customer Wants

Individual Traits

Individual Context

Genetics Biogenics Psychogenics

Personal Financial Worth Institutions Culture

Market Traits

Market Context

Climate Topography Ecology

Economy Technology Public Policy


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Copyright 1999 by Thomas Southwestern. All rights reserved.

Market Value
Market value is the potential of a product or service to satisfy customers needs and wants Value is created only if the product or service has the capability to satisfy a customers needs and wants

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Classification of Market Values


Universal Values Personal Values

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Matrix of Values and Customer Roles

CUSTOMER ROLES User UNIVERSAL VALUES PERSONAL VALUES Group specific Individual-specific Performance Value Payer Price Value Buyer Service Value

Social value Emotional value

Credit value Financing value

Convenience value Personalization value

Copyright 1999 by Thomas Southwestern. All rights reserved.

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Characteristics of Customer Value


Values are instrumental Values are dynamic Values are hierarchical Diversity of customer values increases with hierarchy Values are synergistic Values are role-specific Values vary across customers
Copyright 1999 by Thomas Southwestern. All rights reserved.
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