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