MKT 501: MM: # 7019

Consumer Behavior
Session 5
Mon, 11 Sep 2023
 Adopting a holistic marketing
Understand your audience
orientation requires fully
and tailor your approach
understanding customers—gaining
accordingly
a 360-degree view of both their
Identify and address
daily lives and the changes that
weaknesses in the customer
occur during their lifetimes, so the
journey
right products are always
Contextualize your
marketed to the right customers in
marketing results
the right way.

CREATE
COMMUNICATE
DELIVER
VALUE
 What Influences
Consumer Behaviour

Behavioural Decision
Key Psychological
Theory & Behavioural
Processes
Economics Analysing
Consumer
Markets

The Five-Stage The Buying Decision

Model Process
 What Influences
Consumer
Behaviour

Cultural factors: Social factors: Core values

• Values, norms, rituals • Reference groups, • Attitudes
cliques, • Behavior
• Family, roles, status

Personal: Brand personae

• Age, stage in FLC, • 1. Sincerity (down to earth, honest, wholesome, and cheerful)
• 2. Excitement (daring, spirited, imaginative, and up to date)
• Occupation, economic, • 3. Competence (reliable, intelligent, and successful)
• 4. Sophistication (upper-class and charming)
• Personality & self-concept. • 5. Ruggedness (outdoorsy and tough)
• Lifestyle & values (identify some relevant Brands)
 Key Psychological Processes
Motivation: Perception: Learning:
A need becomes a Perception is the Induces changes in
motive when it is process by which we behaviour arising from
aroused to a sufficient select, organize, and experience. Most
level of intensity to interpret information human behaviour is Memory:
drive us to act. inputs to create a learned, though much is
Motivation has both meaningful picture of incidental. ST & LT : retrieve and
direction and intensity. the world recall of information
• Drives (internal), Cues
• Maslow Hierarchy of • Selective attention, (external) and
Needs & Herzberg 2 distortion, retention & Emotional stimuli
Factor Theory Subliminal perception
 The Five-Stage Model of Consumer
Behavior
Marketing Buying Decision Purchase
Other stimuli Consumer
Stimuli Process Decision

Products Economic -Psychology Identify Product

Services Technological • Motivation Info search Brand
Price Political • Perception Evaluate Dealer
• Learning
Distribution Cultural Decide Amount
• Memory
Communication Post Purchase Timing
-Characteristics
• Cultural Payment Method
• Social
• Personal
MKT 501: MM: #
7019
Consumer
Behavior
(Contd.)
Session 6
Mon, 18 Sep
2023
 Consumer
Psychology

Buying
Marketing Other Purchase
Decision
Stimuli stimuli Decision
Process

Consumer
Characteristics
 Problem
Information Evaluation of Purchase Post-purchase
recognition
search alternatives decision behaviour

Roles Initiators Influencers Deciders Buyers Users

Awareness Consideratio
Knowledge Total Set Choice Set Decision
Set n Set
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 • Private/ Public/ Engineering/
Awareness Manufacturing / Transport/
Communication/ Telecom/IT/
Finance/ Marketing/ Sales
• FMCG Services
Discovery • MNCs Domestic

• Unilever P&G Mondelez Engro

Consideration • Abu Dawood Tapal Shaan

• Engro
Conversion • Abu Dawood
• Tapal
Customer
Relationship & • Abu Dawood
Retention
 • New/Experienced • High/Low Involvement
• Technical /Non-technical • High/Low Relevance
• Purposive/Entertaining • High/Low Price
• Rational /Irrational • High/Low Urgency
• Decisive/Impulsive • High/Low Variety
• Hedonic/Practical
Behavioral
Decision
Theory Decision Heuristics
& • Availability Different marketing
• Representativeness campaigns might be
Behavioral • Anchoring/adjustment targeted to each type of
Economics person.
 HOW CAN AND CULTIVATE
COMPANIES STRONG
ATTRACT AND CUSTOMER
RETAIN THE RIGHT RELATIONSHIPS
CUSTOMERS AND
COMMUNITIES?
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LIPTON
DENTONIC

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RHYTHM OF UNITY
(TOBACCO)
 Use QSV Build Loyalty
Target Needs & Solution
• Identify your prospects and customers; Don’t go after • Correctly identify customers’ needs
everyone. and requirements.
• Build, maintain, and mine a rich customer database; with • Communicate customer expectations
information from all the channels and customer touch properly to product designers.
points.
• Differentiate customers in terms of (1) their needs and
(2) their value to your company.
Resources
• Spend proportionately more effort on the most valuable
customers (MVCs). All are not profitable. Apply activity- Satisfaction
based costing and calculate CLV
• Make sure customers’ orders are filled
Customize correctly and on time.
• Formulate customized offerings Communicate in a • Check that customers have received
personalized way. proper instructions, training, and
• Customize products, services, and messages to each technical assistance in the use of the
customer. product.
• Facilitate customer interaction through the company
contact centre and Web site
Calculate lifetime value of customers
( Pp 161)
• Customer lifetime value (CLV) describes the net present value of the
stream of future profits expected over the customer’s lifetime
purchases.
• Estimate net present value of all future profits from purchases,
margin levels, and referrals, less customer-specific servicing costs.
• All are not profitable
• Use 80-20 Rule as guide
Manage for Connect:
Loyalty
Interact with individual customers to improve your knowledge about
their individual needs and to build stronger relationships.

After sales Service:

Stay in touch with customers after the sale to ensure they are, and
remain, satisfied. Gather customer ideas for product and service
improvement. Convey them to the appropriate departments.

The Consumer Base:

Reduce rate of customer defection. Increase the longevity of the
customer relationship. Enhance the growth potential of each customer
through “share of wallet, ” cross-selling, and up-selling ” Make low-
profit customers more profitable or terminate them. Focus
disproportionate effort on high-profit customers.