WELCOME TO A PRESENTATION ON…

C U S T O M E R

B HAVIOUR

Facilitator: Mike du Toit

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CUSTOMER BEHAVIOUR

Topic 1: Introduction to customer behaviourTopic 2: Determinants of customer

behaviourTopic 3: The customer’s mind setTopic 4: Customer decision-makingTopic 5: Customer focused marketing

INTRODUCTION

Definition:

Study of individuals, groups or organisations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs

INTRODUCTION

Types of customers: Households Business markets

Roles of customers: Buyers Users Payers

IMPORTANCE OF CUSTOMER BEHAVIOUR

Customer satisfaction

The marketing concept

Customer focus

Customer retention

Focus on needs

Serve needs of society

Long-term survival

MARKETING STRATEGY & CUSTOMER BEHAVIOUROutcomes

IndividualOrganisation

Society

OutcomesIndividual

OrganisationSociety

Customer decisionCustomer decision

Marketing strategyMarketing strategy

Market segmentationMarket segmentation Market analysisOrganisationCompetitorsEnvironmentCustomers

Market analysisOrganisationCompetitorsEnvironmentCustomers

Creating value for the customer

Three meanings of value:• Pricing value (remember the benefits pg 29)• Customer value• Strategic value

How to measure value?1. Determine expected value2. Prepare strategy3. Measure how well value was delivered4. Investigate and adapt

Market segmentation

Bases of market segmentation:GeographicDemographicPsychographicBehaviouristicNeeds/benefitMarket value

OVERALL MODEL OF CUSTOMER BEHAVIOUR

Decision-makingIndividual

OrganisationalFamily

Decision-makingIndividual

OrganisationalFamily

CustomerCustomer

Personal characteristicsRace

GenderAge

Personal characteristicsRace

GenderAge

Internal influencesPerceptionLearning

MotivationLifestyleAttitudes

PersonalitySelf-concept

Internal influencesPerceptionLearning

MotivationLifestyleAttitudes

PersonalitySelf-concept

External influencesCulture

SubcultureReference group

Social classFamily

Marketing activities

External influencesCulture

SubcultureReference group

Social classFamily

Marketing activities

Market characteristicsClimate

EconomyGovernmentTechnology

Market characteristicsClimate

EconomyGovernmentTechnology

CULTURE AND SUBCULTURE

Culture and society

Institutions that transmit the elements of culture Family Education institutions Houses of worship Mass media

REFERENCE GROUPS

Types of reference groups

Formal and informal Primary and secondary Membership and non-membership Aspirational reference group Dissociative reference group Automatic groups Negative groups

PERSONAL CHARACTERISTICS

Race Gender Age

Pay special attention to the changing roles of women!

THE CUSTOMER’S MINDSET

Customer perception and learning

Perceptual process

Elements of learning

LEARNING

Theories of learning Cognitive learning Classical conditioning Instrumental conditioning

MOTIVATION

Pay special attention to Maslow & Mcguire

CUSTOMER ATTITUDES

Sources of influence on attitude formation Direct experience Influence of family and friends Exposure to mass media

COMPONENTS OF ATTITUDES

Cognitive componentConsists of customer’s beliefs about object

Also customer’s knowledge about objectThere are two types of beliefs:

- Informational beliefs – associated with product attributes

- Evaluative beliefs – associated with product benefits

Affective componentInvolves our feelings and emotions toward objectMay also be result of several evaluations of performanceProducts are evaluated in context of specific situation

Behavioural componentThis component represents outcome of cognitive and affective componentsDoes customer buy or not?

Component consistencyThree components tend to be consistent

Change in one components affects others

COMPONENTS OF ATTITUDES…cont.

CUSTOMER ATTITUDES

Attitude change

Changing the affective component Classical conditioning Positive effect Mere exposure

Changing the behavioural component Changing the cognitive component

Changing beliefs Shifting performance Adding beliefs Changing the ideal

CUSTOMER ATTITUDES

Changing the product Packaging Change of services Change of properties Attitude of sales person

Perceptual change New information Promotion

Strength of the attitude Market segmentation

Attitude change Cont.

CHARACTERISTICS OF PERSONALITY

• Personality reflects individual differences

• Personality is consistent and enduring

• Personality is partially created and influenced by the environment

• Personality can change

CUSTOMER DECISION-MAKING

Stages in the decision-making process

Problem recognitionProblem recognition

Search for informationSearch for information

Evaluation of alternativesEvaluation of alternatives

BuyingBuying

Post-buying evaluationPost-buying evaluation

FAMILY DECISION-MAKING

Influencer Gatekeeper Deciders Buyers Preparers Users Maintainers Disposers

THE FAMILY LIFE-CYCLE

Stage

1. Bachelorhood2. Honeymooners3. Parenthood4. Post-parenthood5. Dissolution

MODIFIED TO THE FAMILY LIFE-CYCLE

At-home singles Starting-out singles Mature singles Young couples New parents Mature parents Single parents Golden nests Left alones

CUSTOMER-FOCUSED MARKETING

Stages of brand loyalty

Brand awareness

Brand trial Brand

preference Brand habit Brand loyalty

Relationship based buying

Steps for after marketing:

• Maintain customer info• Blueprint the customer contact point• Analyse info feedback• Conduct satisfaction surveys• Manage communication programme• Host special events for customers• Audit and reclaim lost customers

THE END

Questions?