1. Customer Centricity
• Outside-in approach: how firms can help address customer-articulated needs (not about product specifications and price)
• Solve problems with and for customers (not selling to customers)
2. Building Customer Value, Satisfaction, and Loyalty
2.1 Customer-perceived value (CPV)
• The difference between the prospective customer’s evaluation of all the benefits and costs of an offering
• Total customer benefit vs. total customer cost
2.1.1 Customer value analysis
• Identify the major attributes and benefits that customers value
• Assess the quantitative importance of the different attributes and benefits
• Assess the company’s and competitors’ performances on different customer
values against their rated importance
• Examine how customers in a specific segment rate the company’s performance
against a specific major competitor on an individual attribute or benefit basis
• Monitor customer values over time
2.1.2 Product and service quality
• Quality is the totality of features and characteristics of a product or
service that bear on its ability to satisfy customer needs
• Conformance quality vs. performance quality
• Impact of quality
2.1.3 Brand community
• A specialized community of consumers and employees whose identification and activities focus around the brand
2.3.4 Cultivating Customer Relationships
• Customer relationship management (CRM)
The process of carefully managing detailed information about individual customers and all customer “touchpoints” to maximize loyalty
CRM:
• Personalizing/permission marketing
• Customer empowerment
• Customer reviews/ recommendations
• Customer complaints
• Customer value management (CVM)
3. What Influences Consumer Behavior?
3.1.Consumer behavior:
The study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants
3.2. Factors Influencing Consumer Behavior
3.2.1 What Influences Consumer Behavior?
(1) Cultural factors: Culture, Subcultures, Social classes
• Culture is a society’s personality. It is the accumulation of shared meanings, rituals, norms, and traditions.
• Values: enduring beliefs about desirable outcomes that transcend specific situations and shape one’s behavior.
• Norms: informal, usually unspoken rules that govern behavior.
• Key for Marketers: Consumer goods make culture tangible
(2) Social factors: Reference groups, Cliques, Family, Roles and status
• Reference groups:
Membership groups
Primary vs. secondary
Aspirational groups
Dissociative groups
Opinion leader: Opinion leaders influence others’ attitudes and behaviors
• Experts • Unbiased evaluation • Socially active • Similar to the consumer • Among the first to buy
• Cliques
• Family
• Roles and status
(3) Personal factors
• Age/stage in life cycle
• Occupation and economic circumstances
• Personality and self-concept
• Lifestyle and values
4. The Buying Decision Process
The consumer typically passes through five stages
4.1 Problem recognition
4.2 Information search
• Personal sources
• Commercial sources
• Public sources
• Experiential sources
4.3 Evaluation of alternatives
•Beliefs
• Attitudes
• Expectancy-value model of attitude formation
• Consumers evaluate products by combining their brand beliefs the positives and negatives – according to the importance
4.4 Purchase decision
4.5 Post-purchase behavior
• Post-purchase satisfaction
A judgment of a pleasurable level of consumption-related fulfillment, including levels of under fulfillment and over fulfillment.
• Emergent over the time span of using the product
• It is a perception, not a characteristic of the product
• Consumers can make satisfaction judgments with respect to any or all of the aspects or stages of product and service experience
• Post-purchase actions
• Post-purchase uses and disposal
5. Importance of Consumer Satisfaction
• Repeat purchase
• On average, companies lose 20% of their customers each year
• It takes about 12 positive experiences to overcome one negative one
• Cost of attracting a new customer is about 5 times cost of keeping one
6. Importance of Consumer Feedback
•Customer reactions produce Voice
• Compliments of the firm– feedback
• Complaints generate feedback
• Redress can produce more satisfied customers.
• Complaining can even enhance satisfaction
• Positive/Negative word of mouth
