4 - 1 Chapter Chapter 4 4 Analyzing Analyzing Consumer Consumer Behavior Behavior 4 - 2 Key Learning Points Key Learning Points   Concept & activity of market segmentation Concept & activity of market segmentation   Segmentation implementation issues Segmentation implementation issues   Understanding consumer motives for Understanding consumer motives for buying behavior buying behavior   Understanding how consumers make Understanding how consumers make purchase decisions purchase decisions   Importance of understanding where and Importance of understanding where and when consumers buy when consumers buy   Implications for global and technology Implications for global and technology - - based markets based markets 4 - 3 Customer Analysis Customer Analysis   Customer analysis addresses five Customer analysis addresses five questions: questions: – – Who are the current and potential Who are the current and potential customers for the product or service? customers for the product or service? – – Why do they buy? Why do they buy? – – How do they make purchasing How do they make purchasing decisions? decisions? – – Where do they buy the product or Where do they buy the product or service (what channels are used)? service (what channels are used)? – – When do they buy? When do they buy? 4 - 4 Customer Analysis Customer Analysis   Customer analysis should include: Customer analysis should include: – – Current customers Current customers – – Competitors Competitors ’ ’ customers customers • • Helps understand why competitors Helps understand why competitors ’ ’ products are being bought. products are being bought. – – Former customers Former customers • • Helps to understand weaknesses of your Helps to understand weaknesses of your product or service. product or service. – – Nonusers Nonusers • • Helps understand how to expand the market. Helps understand how to expand the market. 4 - 5 Who Are the Customers? Who Are the Customers?   Market segmentation is the key Market segmentation is the key – – Breaks mass markets into groups with Breaks mass markets into groups with unique buying habits. unique buying habits. – – Segments are useful when: Segments are useful when: • • People in different segments behave People in different segments behave differently toward the product. differently toward the product. • • Different marketing elements (price, etc.) Different marketing elements (price, etc.) can be used to effectively reach different can be used to effectively reach different segments. segments. – – The segmentation process makes use The segmentation process makes use of both primary and secondary data. of both primary and secondary data. 4 - 6 Who Are the Customers? Who Are the Customers?   Benefits of market segmentation Benefits of market segmentation – – More efficient than mass marketing. More efficient than mass marketing. • • Less money is wasted on low Less money is wasted on low probability contacts. probability contacts. – – More effective than mass More effective than mass marketing. marketing. • • Every aspect of the marketing mix can Every aspect of the marketing mix can be customized to appeal to the needs be customized to appeal to the needs of each segment. of each segment. 4 - 7 Who Are the Customers? Who Are the Customers?   Single Single - - customer segments make customer segments make sense in certain circumstances: sense in certain circumstances: – – Number of customers is small. Number of customers is small. – – Companies try to create perception that Companies try to create perception that individuals are treated as a unique individuals are treated as a unique group using: group using: • • One One - - to to - - one marketing, by means of one marketing, by means of individualized communications. individualized communications. • • Mass customization, via personalized Mass customization, via personalized products and services. products and services. 4 - 8 1. 1. What particular database fields What particular database fields would casino marketers use in would casino marketers use in developing one developing one - - to to - - one marketing one marketing appeals? appeals? 2. 2. Can you think of an example of a Can you think of an example of a product or service that offers product or service that offers consumers mass customization consumers mass customization opportunities? Explain. opportunities? Explain. Discussion Questions Using one Using one - - to to - - one marketing one marketing effectively requires that marketers effectively requires that marketers have access to extensive databases. have access to extensive databases. 4 - 9 Product & Service Product & Service Decisions Decisions Key Decisions Key Decisions Who Are the Customers? Who Are the Customers? Geographic and Psychographic Geographic and Psychographic Variables Variables   Region Region   City or City or metro size metro size   Density Density   Climate Climate 4 - 9   Lifestyle Lifestyle   Personality Personality 4 - 10 Product & Service Product & Service Decisions Decisions Key Decisions Key Decisions Who Are the Customers? Who Are the Customers? Demographic Variables Demographic Variables   Age Age   Family size Family size   Family life cycle Family life cycle   Gender Gender   Income Income   Occupation Occupation 4 - 10   Education Education   Religion Religion   Race Race   Generation Generation   Nationality Nationality   Social class Social class [...]... activity: “You are where you live” 4 - 22 Who Are the Customers? Marketing Research Implications: Developing Target Markets – Parsimony must be considered – Selected segmentation scheme must statistically explain differences in purchasing behavior or other key variables • Behavior = f (segmentation variables) 4 - 23 Who Are the Customers? Marketing Research Implications: Developing Target Markets – Other... Do Customers Buy? Steps in the purchase decision process – Need recognition: Maslow’s Hierarchy of Needs • Physiological • Safety • Social • Ego • Self-actualization 4 - 26 Product & Service DecisionsMarketing managers must managers must translate product features into benefits The Goodyear web page provides an excellent example of this premise in practice 4 - 27 How Do Consumers Make Purchase Decisions?... determined? How do customers combine prior information to make choices? 4 - 31 How Do Consumers Make Purchase Decisions? Postpurchase Behavior – Consumers form expectations about the product prior to usage • Marketing communications influence expectations – Consumers evaluate product during and after consumption – Future purchases are highly dependent on postpurchase evaluation 4 - 32 How Do Consumers Make... Cultural values are transmitted via religion, education, and family 4 - 34 Figure 4-9: Elements of Culture 4 - 35 Product & Service “Cultural differences are Decisions particularly important in a global marketing context The biggest issue facing companies wanting to market products in other countries is the fact that significant differences in culture can affect the way customers respond to the product . than mass More effective than mass marketing. marketing. • • Every aspect of the marketing mix can Every aspect of the marketing mix can be customized. product. differently toward the product. • • Different marketing elements (price, etc.) Different marketing elements (price, etc.) can be used to effectively