Understanding the Customer

Identify the Customer DEMOGRAPHICS GEOGRAPHICS PSYCHOGRAPHICS

Identify the Consumer PSYCHOGRAPHICS examples  Culture Integrated pattern of behavior, knowledge and beliefs that are acquired from a group and passed on to future generations.  Ritual Formalized act that is performed frequently.  Example—Thanksgiving

Identifying the Consumer Social Class  Group sharing the same economic or social status  FACTORS Income Education Occupation

Making a Purchasing Decision Step 1 D Define the Problem Step 2 I Identify the Choices Step 3 C Choose an alternative & act on your choice Step 4 E Evaluate your decision

Business Decision Flower Shop D —How do I get flowers for wedding & maintain my current reputation. I —1. Tell customers about problems 2. Runaway 3. Refund $ for tropical flowers 4. Substitute flowers & possibly reduce prices or increase prices 5. Get flowers from a new connection Alternatives—1,3,5; 1,2; 1,5; 1,4

C 1Tell customers about problems 2. Runaway 3. Refund $ for tropical flowers 4. Substitute flowers & possibly reduce prices or increase prices 5. Get flowers from a new connection 1 & 41, 3, 4 1, 3 & 5 1 & 5 3 & 4 ……….

E Explain the outcome of each Why would this particular outcome will occur? How will it immediately effect the business?

Convenience Goods--Impulse Purchases; LESS THAN A MINUTE Shopping Goods—Significant time to evaluate purchase options Specialty Goods or Big $ Items—Catering a Party; Purchasing a Car or House. Groups can drive wants EX. A group consisting of students has specific wants Advertisements can also create wants Before making a decision—you will remember or notice advertisements for products that could satisfy your needs or wants. Simple decisions you will only need recall. Complex decisions—time searching for info—including product reviews, Internet surfing, talking with people who own the product, examining the product.

Usage & Commitment Nonuser Switcher—purchases based on sales or incentives New Consumer Brand-loyal consumer Heavy user Cost & Impact Most difficult to persuade Expensive to persuade & difficult to keep Low short-term return, but could create brand-loyal users in the future Difficult to convert May not need persuasion

Cognitive Dissonance Doubt that occurs after a purchase is made, which can be alleviated by customer after- care, money-back guarantees, and realistic sales presentations and advertising campaigns.

Select a Target Current size of the market Expected growth of the market segment Cost of reaching the segment Compatibility with the advertiser’s objectives & resources

Select a good or service (only pick 1). Using this slide and the previous slide, answer the following questions. Be specific and explain your answers thoroughly. Before selecting “target markets”—advertisers must take a long look at each segment and look at its own advantages & disadvantages. Choosing the wrong target can have disastrous results. SIZE too big the advertiser won’t be able to meet the demand too small, it might not be worth the advertiser’s time & money EXPECTED GROWTH Will it continue to grow? Can the advertiser keep up with the market’s growth? Can the advertiser influence the growth of the market segment through advertising? COST Is the profit of reaching the segment worth the cost? COMPATIBILITY

Choose a Positioning Strategy Positioning—Making a marketers product different from other products in the consumer’s mind.

Essential Elements of a Positioning Strategy Substance  Be certain your claims are true Consistency  Internally everything must work together to reinforce the message Simple, Distinctive Theme

Positioning Themes Benefit Positioning  Select a single benefit that is important to the consumer User Positioning  Focus on the user. Show how the product fits into the user’s lifestyle Competitive Positioning  Make sure your product stands out from the competition Small companies use this method to carve out part of the larger market (MARKET SHARE). Small companies emphasize the difference between their product & similar products on the shelf.

Creates a focus for the advertising campaign and helps an advertiser make internal decisions that create substance for the customer. 1. Select a single idea as a focus 2. Positioning themes can by physical or perceptual. PHYSICAL POSITIONING Emphasize the function characteristics of a product Ex.Car can go from 0 to 60 mph in 2.2 seconds. Air bags deploy when the car collides with an object at 25 mph PERCEPTUAL POSITIONING Emphasize emotional/subjective opinions Ex. Car is exciting or adds to the owner’s status

Repositioning Why?  Market is constantly changing  Competitor reacted differently than expected  Consumer preferences changed

1. Define Positioning—substance, consistent, & simple/distinctive. 2. What does positioning provide? 3. Supply an example of the Positioning Strategies below: 1. Substance; Consistency 4. Supply an example of a Physical Positioning. 5. Supply an example of a Perceptual Positioning. 6. What is the purpose of repositioning?

Answers 1.Marketers making their products’ features & benefits different from competition in the consumer’s mind. Substance is the company’s claim (what they want you to know). Consistency is telling consumers/customers the same message in different ways and in correct venues. Simple/Distinctive is making the positioning easily understood. 2.Provides the consumers with reasons to purchase specific products. 3. Substance—Statement that we have the best seafood on the South Shore 3. Consistency—receiving awards from the food critics for the best food. Making certain presentation and quality of food remains equal or better than current conditions.

Answers Continued 4. Physical Positioning Theme  Leather seats—easy to keep clean  Internship for students  Autostart up 5. Perceptual Position Theme  Remote side doors—easier to get packages in and out of the car  Pretty car  Autostart up 6. Repositioning reacts to the market needs & wants.  It deals with how competitor react & the ever-changing market

Role of Research Ad Research  Thorough investigation of the planning, preparation, & placement of advertisements.

Research Select the target segment Understand the target segment before creating the advertisement Evaluate the advertisement’s effectiveness (test audience) before it is released to the media Evaluate the advertisement’s remaining effectiveness before it is withdrawn from the media (1 st & 2 nd )

Product Life Cycle Introduction Growth Maturation Saturation/Decline* *Law of diminishing returns

Developmental Research Idea Generation Environmental Analysis  Evaluates the potential influence of your environment, including social & cultural trends, economics, & politics Audience Definition Audience Profiling  Ex.. Lifestyle research, surveys, & in depth interviews

Evaluate the Impact Ask questions, judge the audience’s interest level, watch their behavior PRERELEASE TEST  Before the ad is placed in the media POSTTEST  After the advertisement is placed in the media.

What Can You Measure? Product Knowledge  Recall & recognition tests Shape Attitude  Preference—what makes consumer choose one product over another Attach Emotions Validate a Brand  Focus Group Consists of 6 to 12 consumers, led by a professional moderator, who discuss the product.

Prerelease Test Methods Communication Test  Test the message the audience receives against the message the advertiser wants to send Magazine Dummies  Mock-up magazine is sent to test audience.  Test audience then answers questions about the content

Prerelease Test Methods Theater Tests  View ads in small theaters Thought Listings  After viewing the ad, small groups write down the thoughts they had during the advertisement. Pilot Test  Release advertisements in small portion of the target segment.

Family Life Cycle Single->Married  Married with Children  Married and Empty Nest  Widow or Widower

Selecting Target Markets Undifferentiated Targeting  Market is one big market with no individual segments & requires a single marketing mix Concentrated Targeting  Used to select one segment of market for targeting marketing efforts Multisegmenting Targeting  Chooses two or more well-defined market segments and develops a distinct marketing mix for each