Final Exam Full Study Sheet

16 Pages

Marketing and Consumer Studies
Course Code
MCS 1000
Douglas Adlam

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7 Ps of service Product Elements: all components of the service performance that create value for customers [dont make bad products] Place and Time: management decisions about when, where and how to deliver services to customers. Place how companies get their products to customers Time How long it takes, what customers expect Price and other user outlays: expenditures of money, time and effort that customers incur in purchasing and consuming services [is it worth it?] Promotion and education: all communication activities and incentives designed to build customer preferences for a specific service or service provider [communication is key] Process: a particular method of operations or series of actions, typically involving steps that need to occur in a defined sequence. [Standardized procedures, implementing good management, good training] Physical environment: visual appearance of building, landscape, vehicle, ect. People: customers and employees who are involved in service production Brand Equity The idea that a brand has numeric dollar value even though there are no tangible assessments. Competition-based pricing (services) Setting prices relative to those charged by competitors Price competition is greater with: Increasing # of competitors Increasing # of substitutes excess capacity in the industry Price competition is reduced when: Non-price-related costs of using competitors alternatives are high Saving time and effort are equal to cost Personal relationships matter Ex. Loyalty to a hairdresser Switching costs are high Time and location specificity reduces choice Consumer buyer behavior Consumer Behaviour The buying behavior of consumers individuals who buy goods and services for their own use or consumption Model of consumer Buyer Behaviour (In Order from top to bottom) Marketing and other Stimuli Marketing Product, Price, place, promotion Other Economic, Technological, Social, Cultural Buyers Black Box Buyers characteristics Buyers decision process Buyer responses Buying attitudes and preferences Purchase behavior: what the buyer buys, when, where, and how much Brand and company relationship behavior Factors Influencing Consumer Behaviour Cultural Culture The set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Subculture A group of people with shared value systems based on common life experiences and situations Social Class A segment of society based on income, education, occupation, and standing in the community Social Reference Group A group you do not belong to, that serves as a point of comparison or reference in forming your attitudes and consumer choices. Family your family. Roles and status A person belongs to many groups: family, clubs, and organizations. The persons position in each group can be defined in terms of both role and status. Personal Age and life-cycle stage People change their preferences in the goods and services they by over their lifetimes. Occupation occupations affect the goods and services they buy. Lifestyle Personality and self-concept Psychological Motivation Perception Learning Beliefs and attitudes The Consumer Buyer Decision Process Need recognition Information Search Evaluation of alternatives Purchase decision Post-purchase behavior Consumer surplus Consumerism Consumerism The concept that an ever-expanding consumption of goods is advantageous to the economy Consumerism, in economics, is the belief that high and constantly increasing consumer spending leads to a healthy economy, and that government policy should encourage this. Conventional distribution channel vs vertical marketing system Vertical marketing system A distribution channel structure in which producers, wholesalers and retailers act as a unified system One channel member owns the other, has contracts with them or has so much power that they all cooperate Conventional marketing channel Manufacture -> wholesaler - > retailer -> consumer Disagreement between members over goals and roles Horizontal conflict Conflict between forms on the same level Vertical conflict Conflict between firms on different levels Core product & Supplementary services (flower of service) Flower of service A visual framework for understanding the supplementary service elements that surround and add value to the product core (see augmented product) Facilitating Supplementary Services Supplementary services that aid un the use of the core product or are required for service delivery Enhancing Supplementary Services supplementary services that may add extra value for customers Facilitating Services Enhancing Services Information Consultation Order-taking Hospitality Billing Safekeeping Payment Exceptions Criticisms of marketing High prices - lead to higher prices due to marketing activities ($) Unnecessary - advertising ads in washrooms, email spam High pressure - selling limited time deal Deceptive advertising - vacation prices Creating false needs - cologne/ perfume CRM (Customer Relationship Management) Strategies Comprehensive CRM Strategy Breakdown Strategy development Value creation Multichannel integration Information management Performance assessment The practice of managing customer relationships CRM is what marketing is all about: building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Relationship Building Blocks: Customer Value People buy from the firm that offers the most value Relationship Building Blocks: Customer Satisfaction Customer satisfaction depends on the products performance relative to a buyers expectation. The goal is to deliver what you promise to gain satisfied customers, then go the extra mile and deliver more to delight your customers to gain their loyalty. A company can always increase customer satisfaction by lowering its prices, but that isnt always smart marketing. Cycle of failure, mediocrity, success All Cycles contain two cycles, (Employee Cycle and Customer Cycle which interact with each other creating the end result) The Cycle of Failure In many service industries, the search for productivity leads to simplifying work processes and paying the lowest possible wages. Such employees perform repetitive tasks that need little or no training. Employee Cycle of failure Some companies reach such low levels of employee moral that frontline staff engage in service sabotage rather than deliver service excellence. Customer Cycle of failure Employees are dissatisfied so customers become dissatisfied with employee performance. The Cycle of Mediocrity Most likely to be found in large organizations that operate on lots of rules and procedures. Jobs tend to be rule-based. Employees get bored and find their work repetitive. However these workers are paid well and are given good benefits as well as high security. Customers get frustrated when dealing with such customers. There are many rules, lack of service flexibility and unwillingness of employees to make an effort to serve them well. The Cycle of Success Some firms take a view of financial performance, seeking to prosper by investing in their people in order to create the cycle of success. Better pay attracts good quality staff. More focus on recruitment and broadened job designs make employees happy which in turn they provide higher quality service Lower employee turnover means that regular customers appreciate the continuity in service relationships and are more likely to remain loyal With greater customer loyalty, profit margins tend to be higher. The organization is free to focus its marketing efforts on strengthening customer loyalty through customer retention strategies. Demand management approaches F
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