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Module 4

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Ryerson University
MKT 100
Paul Finlayson

MODULE 4 REACHING CUSTOMERS • Basic drivers of consumer behaviour: culture, the economy, social influence, consumer beliefs, and customer satisfaction • Private information: microeconomics concept that states a firm profits from unique information and insight it has about production techniques and trade secrets • Unique insight in customer behaviour is not common knowledge; it is knowledge about changing consumer preferences and buying behaviour especially with innovations such as the Internet dramatically changes customer shopping behaviour • Useful to gain competitive success and profitability • Consumer research can provide insight: 1. Tracks customer satisfaction and dissatisfaction • Tracks returns and customer complaints • Surveys to identify likes/dislikes of product or service 2. Test product concepts in new product development, especially in a global market the company has never operated • Employs local market research firm to study local consumers to learn about demand by suppliers • Whatever specific research method used, marketing research process follows logical steps: 1. Problem definition/question to be answered (most difficult step) • Informal studies to identify the problem and frame the questions to be addressed 2. Research design 3. Data collection 4. Data analysis and interpretation 5. Presentation of results • Exploratory research: undertaken when problem or research question is still fuzzy and management wants additional information before undertaking further research • Includes study of internal records, customer complaints, financial analysis trends, and discussion with distributors and suppliers • Descriptive study research: describes customers, either small numbers of customers in-depth, or large number of customers by survey research • Customer profiles used to measure customer satisfaction, study product use and segment customers • Answers who, what, here, when, and why of customer behaviour • Can be cross-sectional or longitudinal: 1. Cross-sectional research: studies “cross-sectional” sample of customers’ responses at specific point in time 2. Longitudinal research: repeated measurement of same customer and addresses customer responses over a period of time MODULE 4 • Measures changing customer purchase behaviour, channel use, satisfaction, and profitability • Cause-and-effect research: explores the question “does X cause Y?” QUALITATIVE CONSUMER RESEARCH • Includes observational and in-depth interviews with customers, suppliers and middlemen • Organizations is less market oriented because they rely on survey research where too many steps and interpretative judgment separate customers and decision makers • Motivational research: reaps insight and rewards when done by skilled field researchers and interpreters • EX. Encouraging customers to take photos that describe how they use the product, then telling the story the photo illustrates • Focus group research: consists of a group of 6-12 people who focus on a particular question or issue in a free-wheeling discussion • Used to test products and product concepts, advertising creative, and political messages • To learn about beliefs, attitudes, preferences and behaviour of target customers SURVEY CONSUMER RESEARCH • Sampling and surveying population of customers using carefully prepared set of question • Categorizes variation in buyer values: lifestyles, product usage, benefits sought and beliefs about product performance • Two issues in survey research are sampling and questionnaire design • Probability sample: sample where all of the respondents in population or segment to be studied have known chance of being chosen to be in the sample from the population/segment being studied • Simple random sample: probability sample where respondents are randomly chosen from a complete list of the population; typical sample range from 400-1,000 • Reduces potential for sampling error and cost effective • Develops confidence limits around the results (EX. 95% confidence interval) • Convenience sample: sample that is gathered from a convenient pool of customers or potential customers • Results in sample bias because under-represents population CULTURAL AND SOCIAL INFLUENCE • Canada comprises of distinct ethnic and geographical markets with distinct needs • Marketplace can be broadly divided on geographic lines and within these geographic lines are regional markets created by ethnic, religious, financial and historical criteria MODULE 4 • New technologies and skills change economic processes, economic structure changes political structure which impacts nation’s culture and subculture behaviours and beliefs • Openness to foreign ideas is the single most important source of new technology and skills in developing countries • Leisure time management has some significant effects on decision making: 1. Risk taking • Looking for highest quality, lowest-maintenance, most reliable products 2. Searching and shopping • Series of informal buying rules to save time but still ensure satisfaction purchases 3. Product expertise • Do not get the most out of their products because they do not have the time to learn to use the products properly 4. Demand for quality • When time is very scarce, consumers try to squeeze the very most out of their free time • Word of mouth recommendation because important influence purchase decisions, particularly about credence goods • Brand ambassador: online sale agents as independent opinion leaders who are paid to promote brands and products in blogs and websites • Everett Rogers, developer of the diffusion curve explains how early adaptors learn from innovators, early majority from early adaptors, late majority from early majority, laggards from late majority (adds up to 100%) CUSTOMER SHOPPING BEHAVIOUR • Following reasons why we develop habits: • Worked in the bas (rewards us) is likely to work again in the future • Habits allow us to save time making decisions and to be thinking of other things as we do them •
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