Post on 18-Feb-2022
Who is customer?
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Purchase, use and
consumption
Initiator
User/consumer Influencer
DeciderPurchaser
Consumer Behavior
What Influences it?• Cultural Factors
• Social Factors
• Personal Factors
Key Psychological Processes:
• Motivation
• Perception
• Learning
• Memory
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Understanding customers: the key questions
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WHOIs involved in
buying and consuming?
CUSTOMERS
WHATAre their choice
criteria?
WHENDo they buy/use
the product?
WHYDo they buy/use
the product?
HOWDo they use the
product?
WHEREDo they buy?
Five-Stage Model of Consumer Buying Process
Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Postpurchase behavior
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Customer Perceived Value
Based on the difference between what the customer gets and what customer gives for different possible choices
Increase Value:• raising economic, functional, or emotional
benefits
and/or
• reducing one or more of the various types of costs
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Customer Value Analysis
STEPS:1. Identify the major attributes and benefits that
customers value2. Assess the quantitative importance of the different
attributes and benefit3. Assess the company's and competitors' performances
on the different customer values against their rated importance
4. Examine how customers in a specific segment rate the company's performance against a specific majorcompetitor on an individual attribute or benefit basis
5. Monitor customer values over time
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Total Customer Satisfaction
Measurement Techniques:• Periodic surveys• Customer loss rate• Mystery shoppers
The fact:no matter how perfectly designed and implemented a marketing program is, mistakes will happen
Solution:Make it easy for the customer to complain toll-free numbers, Web sites, and e-mail addresses
(quick answer and two-way communication)
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Customer Lifetime Value
• The net present value of the cash flows attributed to the relationship with a customer
• Emphasis on customer service and long-term customer satisfaction
• Maximizing long-term customer profitability
• For planning customer investment and help toadopt a long-term perspective
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Conceptual Framework for ModelingCustomer Lifetime Value
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Steps to calculate CLV:1. forecasting of remaining
customer lifetime in years2. forecasting of future revenues
year-by-year, based on estimation about future products purchased and price paid
3. estimation of costs for delivering those products
4. calculation of the net present value of these future amount
Customer Relationship Management
The process of carefully managing detailed information about individual customers and all customers “touch points” to maximize customer loyalty
Improve loyalty and retention:– Interacting with customer
– Developing loyalty programs
– Personalizing marketing
– Creating institutional ties
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Influencing Buyer Behavior
• Personality and Self Personality and Self--Concept C– Personality
– Brand personality• Sincerity
• Excitement
• Competence
• Sophistication
• Ruggedness
– Self-concept• Person’s actual self -concept
• Ideal self-concept
• Others’ self-concept
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Influencing Buyer Behavior
• Psychological Factors
– Motivation
• Motive
– Freud’s Theory
• Laddering
• Projective techniques
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Influencing Buyer Behavior
• Maslow’s Theory
Maslow’s
Hierarchy of
Needs
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Influencing Buyer Behavior
• Herzberg’s Theory
– Dissatisfiers
– Satisfiers
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Influencing Buyer Behavior
• Perception– Selective attention
• People are more likely to notice stimuli than relate to a current need
• People are more likely to notice stimuli than they anticipate
• People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli
– Selective distortion
– Selective retention
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Influencing Buyer Behavior
• Learning– Drive
– Cues
– Discrimination
• Beliefs and Attitudes– Belief
• Spreading activation
– Attitude
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Organizational buying
• Fewer buyers
• Larger buyers
• Close supplier-customer relationship
• Geographically concentrated buyers
• Derived demand
• Inelastic demand
• Professional purchasing
• Fluctuating demand
• Several buying influences
• Multiple sales calls
• Directed purchasing
• Reciprocity
• Leasing
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•The business market versus the consumer market
•Business market
Organizational buying
• Buying Situations
– Straight rebuy
– Modified rebuy
– New Task
• Systems Buying and Selling
– Systems buying
– Turnkey solution
– Systems selling
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Participants in the Business Buying Process
• The Buying Center– Initiators
– Users
– Influencers
– Deciders
– Approvers
– Buyers
– Gatekeepers• Key buying influencers
• Multilevel in-depth selling
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Major Influences on Buying Decisions
• Environmental Factors
• Organizational Factors
– Purchasing-Department Upgrading
– Cross-Functional Roles
– Centralized Purchasing
– Decentralized Purchasing of Small-Ticket Items
– Internet Purchasing
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Major Influences on Buying Decisions
– Other Organizational Factors
• Long-Term Contracts– Vendor-managed inventory
– Continuous replenishment programs
• Purchasing-Performance Evaluation and Buyers’ Professional Development
• Improved Supply Chain Management
• Lean Production– Just-in-time
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Major Influences on Buying Decisions
• Interpersonal and Individual Factors
• Cultural Factors
– France
– Germany
– Japan
– Korea
– Latin America
– Indonesia
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The Purchasing/Procurement Process
• Three Company Purchasing Orientations
– Buying Orientation
• Commoditization
• Multisourcing
– Procurement Orientation
• Materials requirement planning (MRP)
– Supply Chain Management Orientation
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The Purchasing/Procurement Process
• Types of Purchasing Processes
– Routine products
– Leverage products
– Strategic products
– Bottleneck products
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The Purchasing/Procurement Process
• Stages in the Buying Process– Problem Recognition
– General Need Description and Product Specification• Product value analysis
– Supplier Search• Vertical hubs
• Functional hubs
• Direct external links to major suppliers
• Buying alliances– Company buying sites
– Request for proposals (RFPs)
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The Purchasing/Procurement Process
– Proposal Solicitation
– Supplier Selection• Customer value assessment
• Routine-order products
• Procedural-problem products
• Political-problem products
– Order-Routine Specification• Blanket contract
• Stockless purchase plans
– Performance Review• Buyflow map
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