Consumer behavior

1. Consumer behavior Marketing 1B Consumer behavior

2. Hugo van Zyl • Representative – SA Druggist, Knoll, Roche • Product and Brand Manager - Roche • Senior Marketing and Sales Manager – AstraZeneca • General Manager – Bausch & Lomb • Director – Knowledge Warehouse • Managing Director – Hugo van Zyl & Associates Marketing 1B Consumer behavior

3. Housekeeping • Cell phones switched off. • Being on time is a matter of choice • Lecture structure • 10min – Quiz on previous week’s lecture (Points to count for semester mark) • 50min lecture • 10min break • 50min lecture • Text book – Customer behavior – SAF perspective • Cant, Brink, Brijball • Juta Marketing 1B Consumer behavior

4. Lecture program Marketing 1B Consumer behavior

5. Introduction Defining Customer behavior Importance of customer behavior Application of this knowledge Role of CB in Marketing Strategy Component of Market analysis Market segmentation Marketing Strategy Customer decisions Outcomes Nature of Customer behavior Creating Value for customers Definition of value Measuring value Marketing implications Customer behavior Marketing 1B Consumer behavior

6. Customer behavior Marketing 1B Consumer behavior

7. Customer behavior • Definition • Study of Groups, individuals and organizations and the processes they use to select, secure, use and dispose of products, services, experiences or ideas to satisfy needs and the impact these processes have on the consumer and society. – Hawkins et al • Types of Customers • Consumers – end user • Business customers – Plays a role in the end purchase Marketing 1B Consumer behavior

8. Customer behavior • Three roles of Customers • Selector • Payer • Consumer • Levels of Activities • Mental – Cognitive process involved in selecting info and making decisions • Physical – Visiting the shop, picking up a brochure, asking your friends for advice Marketing 1B Consumer behavior

9. Customer behavior Importance of Customer Behavior • Customer Retention • Satisfaction of the customers needs over a long period to ensure customer loyalty and retention • “Marketing Concept” • Product orientation • Sales orientation • Marketing orientation • Needs of society • Triple bottom line accounting Marketing 1B Consumer behavior

10. Customer behavior Application of this knowledge • Marketing Strategy • Differentiation from Competition / Alternatives • Customer value = Benefit > Cost involved • By Satisfying the correct needs we add value • Market analysis • Environment (Macro) • Organization (Micro) • Customers • Competitors • Market Segmentation • Demographic • Sociegraphic • Psychographics Marketing Strategy Customer decisions Outcomes Marketing 1B Consumer behavior

11. Customer behavior Components of Market analysis • Customers • The be able to re-act to customer needs we need to understand them first • Market research, Focus groups etc. • The Organization • Understanding its own capabilities • SWOT analysis • Competitors • Due to fast changing marketplace • SWOT of Competitors • Environment • Macro (External) factors that can influence • PESTLE analysis Marketing 1B Consumer behavior

12. Customer behavior Market Segmentation • Definition – Part of a larger market, and is made up of groups or individuals whose needs and wants are very similar. • Must be measurable • Must be large enough • Must be accessible • Must be actionable • Must be differentiable • Market targeting – Selecting and focusing on a specific section of the total market • Positioning – The competitive advantage that the organization will aim to achieve. • Price, exclusivity, Geographic position etc. Marketing 1B Consumer behavior

13. Customer behavior Benefits of Segmentation • Focus all efforts on customer need satisfaction • Identifies un-explored markets • Clarifies needs for different or separate market offerings • Guides the allocation of marketing resources Disadvantages of Segmentation • Process is expensive • Limited coverage achieved – validity of segmentation data….. • Excessive market offerings or product variations is dangerous and costly Marketing 1B Consumer behavior

14. Customer behavior Marketing Strategy • Product • Customer buys the physical material or service and the “need” satisfaction that accompanies it. • Balance the benefit of one size fits all to customization in order to satisfy needs. • Promotion • Advertising, Selling, Sales promo, PR, Direct selling, Sponsorship • All in essence various forms of communication. • Price • The money that the customer is “happy” to exchange for the product • Not the cost of the product – this is more intangible • Place • Right product, at the right place at the right time. Marketing 1B Consumer behavior

15. Customer behavior Customer decisions • Need awareness • Recognize that you need something - hunger • Info search • Gather info on what will satisfy the need – Menu of Mr. Delivery • Evaluate alternatives • Way up the positives and negatives of various solutions – Feel like pizza or Burger? • Purchase decision • Decide on a solution based on perceived risk – how much money is sushi going to cost? • Post purchase evaluation • I shouldn’t have had that second burger now I will have to go to Gym twice… Marketing 1B Consumer behavior

16. Customer behavior Outcomes • Organizational outcomes • Product position • Sales • Customer satisfaction • Individual outcomes • Need satisfaction • Societal outcomes • Economic outcomes • Environmental outcomes Marketing 1B Consumer behavior

17. Customer behavior Nature of Customer behavior External influences Market Characteristics Decision making Customer Personal characteristics Internal influences Marketing 1B Consumer behavior