Consumer Behavior Consumer Behavior is a sociology of marketing defines the what who and why of consumers 9 Disciplines of Consumer Behavior Marketing Advertising New Product Development Anthropology Sociology Branding Economics American Pop Culture Psychology Why People Buy Maintain life lifestyle Become part of group acceptance Express cultural identity Strengthens self image Buying Process 1 Consumer realizes need 2 Find solutions 3 Weigh solution options 4 Make purchase where how when 5 Psychological responses happy remorse Socio external influences Culture subculture Groups Households Why Research 1 Cuts chances of costly mistakes 2 Existing brand helps with retention loyalty 3 Finds gaps in service 4 Anticipates change Consumer Behavior Marketing Ad Agency Outside service that provides marketing Ad agencies 1 Mega Holding Companies 2 Mid Sized 3 Boutique Brand Managers Liaison with ad agency that is responsible for planning budgeting sales and profit performance of a brand Always reports to marketing director In house ad agency get stale and lousy because it doesn t bring in new people with new ideas When you re through changing you re through Marketing directors 1 Get new customers 2 Retain existing customers a CRM Customer Relationship Management Satisfied vs Loyal Customers Satisfied Stays with you for price location variety Often no personal interaction Loyal Forgives glitches Not price sensitive Help with word of mouth Don t jump ship when someone offers perks Loyal customers spend 33 more on average than satisfied 107 of referrals for companies come from loyal customers Loyal customers cost 6x more to a company than a satisfied customer Brand Loyalty preference for specific brand results in repeated purchase Types of Loyalty 1 Committed Loyalty Loyal for emotional reasons 2 Cost of Change Loyalty Cost to change isn t worth the hassle cable companies 3 Habitual Loyalty Use it out of convenience 4 5 Monopoly Loyalty You go there because you don t have a choice Incentivized Loyalty Incentives outweigh poor service Needs why you choose a company Need to be understood Need to feel welcomed Need to feel important Need to feel comfortable How to keep people coming back Communication listen to them Competence be an expert Customer orientation Equity resolve conflict Personalization cater to them Trust Create Loyalty Expertise Attention Patience Friendliness Flexibility
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