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Lecture 2

MGMA01H3 Lecture Notes - Lecture 2: Prospect Theory, Sport Utility Vehicle, Hard Disk Drive


Department
Management
Course Code
MGMA01H3
Professor
Sam J Maglio
Lecture
2

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Lecture 2: The Customer
- We want our customers to like us and have a good image of the company
- However, at times marketing goes too far, for instance harassing customers by calling
them even when their number is on the do not call list
- We as a marketer can probably get a customer to buy our product once, but what we
want are lifetime customers, since they are more profitable
- Loyal customers would need less convincing to use a product from a familiar company
and would still use the product even if the prices increased over time (e.g. Tide)
- Loyal customers would also refer products to their friends and family and increase the
amount they buy over time as they build a family
- Whe trig to uderstad ustoers, it’s easier to osere the ehaiour tha to
understand why it happens; to understand consumer behaviour we need to use
psychology
Influences on Consumer Behaviour (market mix)
- Product: the product must exist in order for the customer to buy it
- Place: depending on where marketing is, it is more likely that the customer would buy it
- Price: cheaper prices may influence a person to buy a product
- Promotion: need to market in order for customer to know the product is there
Customer purchase decision process:
- Recognize there is a need (e.g. my computer is too old, and incompatible for a lot of files
vs I see an ad on the new Macbook, I should maybe get a new computer)
- Think about what your criteria are (e.g. I want at least 16 RAM, with 1 TB hard disk
space, at least 15 -inch screen), and get research from external sources (friends, online
sources, etc.) or from own experiences, the level of involvement of searching
information is dependent on the product
- Once you have the attributes you need the most on a product (e.g. laptop), you can find
candidates that fit the criteria and evaluate the choices
- Multiply the importance of each category to each score from each brand and add up the
categories, then choose the one with the highest score
- Then, depending on whether your expectations and the performance meets or not and
as a customer they may become a loyal customer
- People usuall tr to like the hoie the ade ogitie dissoae, sie the do’t
like the oflitig thoughts i their heads, resultig i er fe people haig uer’s
remorse
Situational influences
- Purchase task: depending on the purpose of the purchase (gift vs own use)
- Social surroundings: depending on who we are with, we are more likely to purchase
from a certain business (e.g. hanging out with friends who like Tims, even though the
Starbucks is closer, goes to Tims)
find more resources at oneclass.com
find more resources at oneclass.com
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