Customer Decision process (3)

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CUSTOMER DECISION PROCESS
Strategic Marketing for the
contemporary Chef
MSc CN 2017 CF
SOURCE MATERIAL
Hoffman. K, Bateson. J, (2002) Essentials of services marketing. Harcourt.
London
Medcalf. P, (2004) Marketing Communications, An Irish Perspective. Gill &
McMillan
Sheth, Mittal (1996) A Framework for Managing Customer Expectations.
Journal of Market Focussed Management. V1 pp137- 156
CONSUMER BUYER BEHAVIOUR
There are 4 main factor which influence buyer behaviour.
1. Cultural
2. Social
3. Personal
4. Psychological
CULTURAL
Culture represents a person’s or groups Norms Values, Perceptions and Behaviour.
We learn to develop within a culture at an early age, from family and cultural
institutions such as school , church, clubs and societies. Medcalf (2004)
Can a culture change? Of course, but it takes time. Look at Ireland since the 1950’sso much has changed- from a mono culture where the church was effectively in
charge (n=3.25 million to now-2,050 people who now list their religion as Jedi
Knight!, there is equal marriage, and abortion (the 8th Amendment) is being now
being openly discussed at the citizens assembly) to a multi-cultural society
Some assumptions are made- people speak of Irish or French “culture”. Please do not
make the assumption that everyone living in these examples share the same culture.
That is why when you are shaping a marketing campaign you should be aware of the
diversity of sub-cultures that exist in society.
SOCIAL
Reference Groups- reference groups includes individuals or groups that influence our
opinions, beliefs, attitudes and behaviours.
Family- our first reference group- we are fed, clothed and schooled until we are old
enough to make our own decisions.
Cultural Association: Wear a Manchester Utd. Or Dublin Jersey? Will you ever play
for either? no, but you might aspire to, or wear it to associate yourself with a sporting
belief or association.
Roles and Status: We aspire to belong to particular social categories- (Branding
plays a crucial role in this) We buy foods/diets/clothes/goods/cars to “fit in” or
mimic a particular lifestyle- or you actually belong to a category to which people
aspire.
PERSONAL
Personal factors include, but are not limited
to: age, occupation and economic status.
YUPPIE (Young urban professional person in
employment)
Age- you are on a life cycle- marketers know
this and at every stage of your life
marketers are targeting you as you move
through the cycle- as these acronyms show!
LIPS (Low income, parents supporting)
Activities Interests Opinions- also
determine a persons lifestyle and marketers
know this and aim carefully selected clues at
the various segments
DINKY (Double Income No Kids Yet)
OINK (One income, no kids yet)
ORCHID (One Recent Child, Heavily In Debt)
SAHD SAHM (Stay-At-Home Dad/ Mum)
KIPPERS (Kids In Parents' Pockets Eroding
Retirement Savings)
WOOF (Well Off Older Folk)
PSYCHOLOGICAL
Can be broken down into motivation,
perception, learning, belief and attitude.
Motive- a need that leads to seek
satisfaction- Basic needs must be
satisfied before others (Maslow 1954)
Perception-the process how people seek
and interpret information to form a
picture or meaning.
Selective attention: the ability to filter
out information through high levels of
“noise” (Kotler 2003)
Selective distortion: interpreting
information to support an established
belief
Selective retention: People only retain a
certain amount of information- and this
tends to match their existing beliefs and
attitudes
PSYCHOLOGICAL
Learning: Customers learn brands by
repetition and associate and connect
certain brands with a particular need
Eg.
Clarks
Lidl
Benecol
Odlums
IKEA
Beliefs and attitudes: Experience and
learning influence buyer behaviour…
Medcalf (2004) cites Kotler (2003)
defining a Belief “as a descriptive
thought that a person holds about
something” and Attitudes as a persons
consistent favourable or unfavourable
evaluations or feelings towards and
object or idea.
MASLOW’S HIERARCHY OF NEEDS
HOW DO PEOPLE CHOOSE?
We have looked briefly at the AIDA model- and how it forms a framework of how
people will choose a product of service in simple terms.
And that is what it is- a simple framework- if only if life was that simple! No decision
framework is entirely accurate. The consumers mind is actually closed to us- it’s a
black box (Bateson 2002) we know that information goes in, and decisions come outbut the reality is, we cannot be sure how or what decision will be taken!
According to Hoffman & Bateson (2002) the decision making process is divided into
the main steps- PRE-PURCHASE, CONSUMPTION & POST-PURCHASE EVALUATION
THE BUYER DECISION PROCESS
The consumer decision process is based on an assumption… that the customer goes
through a rational thought process, which goes through a number of stages before
finally deciding to purchase.
Some decisions are immediate- ad-hoc or impulsive decisions or particularly with
more expensive items- a house or a car and require a lot of research and time.
Before a decision is made at the start consumers rely on many sources-their own
knowledge and memory, evoked sets- adverts, media (Traditional & Digital), sales
reps., peers, word of mouth, direct mail, etc.
All of these media create what is called noise- the trick is cutting through the noise to
reach the customer.
CONSUMER DECISION PROCESS
Consumer Decision Making Process
Consumption Stage
POST purchase Stage
PRE-Purchase Stage
Stimulus
·
·
·
Commercial
Cue
Physical Clue
Social Cue
Problem
Awareness
· Shortage
(need)
· Unfulfilled
desire
Information
Search
·
·
·
Internal
(Memory)
External
(Research)
Evoked set
(Known brands)
Evaluation
of
Alternates
·
·
·
Impulse Buy- Stimulus-Response
Summary of
internal and
externa
evaluation
Non systematic
evaluation
Multi-attribute
Models
Choice
· Buy
· Use
· Disposing
Post
Purchace
·
·
Satisfaction level
Value for Money
PRE-PURCHASE STAGE
All consumer activity occurring before
the acquisition of the service- the
potential buyer receives a stimulus that
may incite them to make a purchase.
A consumer may receive a stimulus- they
might see a commercial, or have a
conversation with a friend or colleague;
they might pass by a restaurant with a
new and unusual USP, or simply be
reacting to physical cues- hunger, thirstor as Chefs- professional interest.
PROBLEM AWARENESS
Once the consumer has received the
stimulus, the next stage is problem
awareness.
The consumer now considers whether a
need or want exists
This could be a shortage (NEED) or an
unfulfilled desire (WANT)
For example, one needs clothes, but one
may not need designer clothes.
INFORMATION SEARCH
The consumer then searches for
alternates…but seldom consider ALL
feasible alternates, instead rely on past
experience, convenience and knowledge
This is known as a evoked set a set of
brands or solutions that come
immediately to the mind of the consumer.
Consumers rely on internal searches
(previous knowledge) and external
searches (new research)
EVALUATION OF ALTERNATIVES
Non-systematic evaluation:
 A hunch, intuition, gut-feeling
Systematic Evaluation:
 Use different criteria to assess the problem
Particularly with expensive purchases- a
prospective purchaser may make several
ROI evaluations
Example buying a new car- identify
need and want, decide budget, decide
the make and model, arrange test drive,
negotiate, purchase.
Whereas an impulse buy- goes straight
to purchase without consideration
MULTI-ATTRIBUTE CHOICE MATRIX
This is a linear compensatory approach
of evaluation- each alternate has a
value or weighting- and depending on
the circumstances (occasion) a decision is
made according to the importance of the
occasion.
A lexicographic choice can also be
made where a subjective weighting is
applied – in this case a birthday-it’s the
restaurant furthest away from me, but
has a good food, reputation and is
competitively priced
Attributes
Rolys
Chapter 1
Winding stair
Osteria Lucio
Occasion
Birthday
Anniversary
Friends
Ad-hoc
Cost
6
10
6
7
Location
5
10
10
10
Reputation
7
8
7
7
Style
8
10
7
7
Total
26
38
30
32
MULTI ATTRIBUTE MODELS
The merit in this type of analysis is in its
simplicity and explicitness.
1. Find a list of brands the customers
are familiar with
These attitudes are easily understood by
marketers as they clearly help decipher
customers thought processes
2. The type of criteria customers use to
make choice decisions
So if you can gauge where your
restaurant sits within the matrix, you
should be able to market your service
accordingly
Using these types of models allows you
to:
3. How alternates are weighted
4. Performance beliefs associated with
the restaurants
5. Performance beliefs associated with
the competition
CONSUMPTION STAGE
We have looked at the pre-purchase
stage of the process- stimulus, problem
awareness, information search,
evaluation of alternatives…
An important outcome of the prepurchase stage is the decision to pick a
particular restaurant above the otherswith this comes an expectation, which will
be evaluated after consumption.
POST-PURCHASE EVALUATION
Once the choice has been finally made
and consumed- post-purchase
evaluation takes place. If the purchase
meets or exceeds expectation, it will be
an entirely satisfactory experience
OR-Were you:
Accomodated|Shaped|Abandoned
Sheth, Mittal (1996) A Framework for Managing Customer Expectations.
Journal of Market Focussed Management. V1 pp137- 156
False expectations lead to dissatisfied
customers and will seriously damage the
bottom line.
In a study of 348 “critical incidents” it
was found that in 75% of complaints the
customer expectation did not meet the
service providers ability to perform and
the other 25% were due to “objectively
shoddy service”
SHETH & MITTAL (1996)- CUSTOMER
EXPECTATION
Restaurants have 3 ways of managing customer expectations- they can
Accommodate the expectation (meet or exceed the customers expectation) or they
can Shape (alter) the expectation (react to negative issues in an immediate and
positive manner to rescue the service) or lastly, which should never happen- Abandon
the customer.
Have you had experience of any of these expectation responses?
It is vitally important that restaurants are able to manage expectations in a realistic
fashion. It is the goal to be an accommodating service, but if things go wrong staff
must be trained to respond in such a way that the service is rescued (Shaped) and the
customer while initially unhappy is reassured and pleased at the outcome.
POST-PURCHASE EVALUATION
In expensive purchases, particularly with
goods rather than services-sometimes a
consumer will display what is known as
cognitive dissonance – a feeling that
they made the wrong choice.
Marketers can respond to this tension by
following up in after sales contacts,
phone calls letters etc.
How can restaurants use follow up sales
techniques?
HETEROGENEITY IN POST EVALUATION
Expectations and perceptions are
psychological phenomena and not
necessarily based on reality- as services
are unique to everyone.
To confuse things even more, individual
customers- even sitting at the same table
can walk away with very different
impressions of what has just occurred.
Its called the Rasho-mon effect- the same
event viewed from different viewpoints
RISK AND REWARD
In pre-purchase stage, customers of services tend to perceive a higher level of risk. In
a restaurant choice this can be explained as an uncertainty about the serviceparticularly in expensive business lunches or high end dining where there might be a
consequence to a customer if the service fails.
Financial risk- a financial loss might occur as a consequence of poor food/service
Performance risk- the restaurant will not be able to perform to expectation
Physical risk- not likely unless you complain and the waiter hits you!
Social risk- loss of social (peer) damage as a result of a poor purchase decision
Psychological risk- damage to reputation or status/self esteem of self or company
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