WELCOME TO A PRESENTATION ON… C U S T O M E R B HAVIOUR Facilitator: Mike du Toit !

CUSTOMER BEHAVIOUR Topic 1: Introduction to customer behaviour Topic 2: Determinants of customer behaviour Topic 3: The customer’s mind set Topic 4: Customer decision-making Topic 5: Customer focused marketing

INTRODUCTION Definition: Study of individuals, groups or organisations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs

INTRODUCTION  Types of customers:  Households  Business markets  Roles of customers:  Buyers  Users  Payers

IMPORTANCE OF CUSTOMER BEHAVIOUR Customer satisfaction The marketing concept Customer focus Customer retention Focus on needs Serve needs of society Long-term survival

MARKETING STRATEGY & CUSTOMER BEHAVIOUR Outcomes Individual Organisation Society Outcomes Individual Organisation Society Customer decision Marketing strategy Market segmentation Market analysis Organisation Competitors Environment Customers Market analysis Organisation Competitors Environment Customers

Creating value for the customer Three meanings of value: Pricing value (remember the benefits pg 29) Customer value Strategic value How to measure value? 1.Determine expected value 2.Prepare strategy 3.Measure how well value was delivered 4.Investigate and adapt

Market segmentation Bases of market segmentation: Geographic Demographic Psychographic Behaviouristic Needs/benefit Market value

OVERALL MODEL OF CUSTOMER BEHAVIOUR Decision-making Individual Organisational Family Decision-making Individual Organisational Family Customer Personal characteristics Race Gender Age Personal characteristics Race Gender Age Internal influences Perception Learning Motivation Lifestyle Attitudes Personality Self-concept Internal influences Perception Learning Motivation Lifestyle Attitudes Personality Self-concept External influences Culture Subculture Reference group Social class Family Marketing activities External influences Culture Subculture Reference group Social class Family Marketing activities Market characteristics Climate Economy Government Technology Market characteristics Climate Economy Government Technology

CULTURE AND SUBCULTURE Culture and society Institutions that transmit the elements of culture  Family  Education institutions  Houses of worship  Mass media

REFERENCE GROUPS Types of reference groups  Formal and informal  Primary and secondary  Membership and non-membership  Aspirational reference group  Dissociative reference group  Automatic groups  Negative groups

PERSONAL CHARACTERISTICS  Race  Gender  Age Pay special attention to the changing roles of women!

THE CUSTOMER’S MINDSET Customer perception and learning Perceptual process Elements of learning

LEARNING Theories of learning  Cognitive learning  Classical conditioning  Instrumental conditioning

MOTIVATION Pay special attention to Maslow & Mcguire

CUSTOMER ATTITUDES Sources of influence on attitude formation  Direct experience  Influence of family and friends  Exposure to mass media

COMPONENTS OF ATTITUDES  Cognitive component Consists of customer’s beliefs about object Also customer’s knowledge about object There are two types of beliefs: - Informational beliefs – associated with product attributes - Evaluative beliefs – associated with product benefits  Affective component Involves our feelings and emotions toward object May also be result of several evaluations of performance Products are evaluated in context of specific situation

 Behavioural component This component represents outcome of cognitive and affective components Does customer buy or not?  Component consistency Three components tend to be consistent Change in one components affects others COMPONENTS OF ATTITUDES…cont.

CUSTOMER ATTITUDES Attitude change  Changing the affective component  Classical conditioning  Positive effect  Mere exposure  Changing the behavioural component  Changing the cognitive component  Changing beliefs  Shifting performance  Adding beliefs  Changing the ideal

CUSTOMER ATTITUDES  Changing the product  Packaging  Change of services  Change of properties  Attitude of sales person  Perceptual change  New information  Promotion  Strength of the attitude  Market segmentation Attitude change Cont.

CHARACTERISTICS OF PERSONALITY Personality reflects individual differences Personality is consistent and enduring Personality is partially created and influenced by the environment Personality can change

CUSTOMER DECISION-MAKING Stages in the decision-making process Problem recognition Search for information Evaluation of alternatives Buying Post-buying evaluation

FAMILY DECISION-MAKING  Influencer  Gatekeeper  Deciders  Buyers  Preparers  Users  Maintainers  Disposers

THE FAMILY LIFE-CYCLE Stage 1. Bachelorhood 2. Honeymooners 3. Parenthood 4. Post-parenthood 5. Dissolution

MODIFIED TO THE FAMILY LIFE-CYCLE  At-home singles  Starting-out singles  Mature singles  Young couples  New parents  Mature parents  Single parents  Golden nests  Left alones

CUSTOMER-FOCUSED MARKETING Stages of brand loyalty  Brand awareness  Brand trial  Brand preference  Brand habit  Brand loyalty

Relationship based buying Steps for after marketing: Maintain customer info Blueprint the customer contact point Analyse info feedback Conduct satisfaction surveys Manage communication programme Host special events for customers Audit and reclaim lost customers

THE END Questions?