Lecture 2 Flashcards
Describe the first step of the customer decision process
PRE-PURCHASE
- need arousal
- unconscious identity and aspirations
- physical conditions (hungry so went to Maccas)
- external sources (advertising)
- information search
- once need recognised, motivated to find solution
- alternative solutions might involve deciding between different approaches to solving same problem eg. go to the movies, rent a movie, download a movie. These alternative brands that come to mind are the evoked set
- perceived risk
- risk with making a purchase, factors may enhance risk and uncertainty
- > highly intangible
- > relatively new (no past experience)
- > complex
- > customised
- > customer is relatively inexperienced so lacks knowledge and confidence
- > purchase is important
- evaluation of alternatives
- search qualities (qualities customer can access)
- experience qualities (evaluated after the purchase eg. taste, style, treatment)
- credence qualities (even after use hard to evaluate eg. medical services)
Describe the second step of the customer decision process
- SERVICE ENCOUNTER (purchase/consumption)
* service expectations (high, medium, low contact)
- factors influence customer desired and adequate expectations (zone of tolerance - may broaden, tighten depending on situation)
- desired service takes into account individual needs/belief
- relies on situational factors (minimum we’ll tolerate)
- based on past experience, WoM, competing brands
* mood states
- emotions part of affective domain (greater intensity than mood and include boredom, aggression and joy)
- moods temporary states that alter and vary in duration (mild, positive or negative, independent of buying situation)
* consumers in a positive mood
- process information more efficiently, less argumentative and easier to serve, enhanced experience
* cultivation of positive mood
- ambience, reception area, manner of staff, delivery process
* script and role theory
- role = social cues that guide and direct behaviour -> defines behaviour customers expect and feel comfortable with (congruence = consistent with expected roles, ambiguity = what the role entails (table service/pay at counter), conflict = uncomfortable with role)
- script = cognitive structures guiding service transactions and specify alternatives to minimise complaints
* control theory
- behavioural (actual control) vs cognitive (predictibility and perceived control) eg. flight is delayed, by how long, can I go toilet? Can be resolved by making an announcement
* understanding psychological needs and values
- security (unthreatened, avoidance of physical/financial risk)
- respect (made to feel important)
- esteem (self esteem and ego maintained -> saving face
- fairness (how customers feel they’re being treated in terms of justice, equity; distributional (perceived fairness of the outcomes) vs procedural (perceptions of whether procedures are fair)
* critical incidents
- lead to significant customer (dis)satisfaction depending on how they’re handled
- employee response to delivery system failure (slow or unavailable service)
- employee response to customer needs and requests (special needs, preferences, error)
- umprompted/unsolicited employee actions (attention paid, behaviour, cultural norms)
Describe the third step of the customer decision process
- POST-PURCHASE
* disconfirmed expectations
- during decision-making process, customers assess attributes and risks relating to service offering (expectations, zone of tolerance)
* customer satisfaction
- confirmation (or not) of pre-consumption expectations
- will be satisfied as long as experience falls within zone of tolerance
- delight results from high performance, arousal and positive affect
Explain 3 influences of culture on consumers.
=> culture is the sum of learned beliefs, values and customs that create behavioural norms for a given society
- Collectivism/Individualism
- self image defined by ‘I’ or ‘we’
- personal satisfaction comes from admiration/respect of one’s group (fitting in with others or looking after oneself) - Uncertainty Avoidance
- individuals attitude and tolerance towards change, risk and ambiguous situations (low avoidance in western societies), high in eastern - Power Distance
- extent to which less powerful members of society expect and accept that power is distributed unevenly (relatively equal distribution in western societies)
Outline the 6 types of perceived risk with examples and solutions
Functional Risk (performance outcomes)
- will they service my car correctly?
- will this card be accepted everywhere I go incl overseas
+ servicescape (consistent signal of quality)
Financial Risk (monetary loss, unexpected costs)
- will I lose money if I go ahead with this investment
- will repairing my car cost more than quoted?
+ brochure of complete schedule of fees
Temporal Risk (wasting time, delay)
- will there be a long queue?
- will service be so slow I miss my meeting?
+ use a standardised script to help stay on schedule
Psychological Risk (personal fear, emotion)
- will the consultant understand I have little knowledge?
- will the lecturer understand English is my second language?
+ sensitivity when dealing with patients with poor oral hygiene
Social Risk (how others think/react)
- will my friends laugh at my new haircut?
- will my relatives approve of the restaurant I chose for dinner?
+ emphasis on pros of good oral hygiene
Sensory Risk (unwanted impacts on any of the senses)
- will I get a bad view from my room?
- will I be kept awake by the noise from other guests?
+ use of latest technology aimed at reducing pain and noise
What are 5 ways a customer can reduced perceived risk?
- seek more information (respected personal sources)
- rely on reputation
- look for guarantees/warranties/free trials
- look for physical evidence to assess quality
- ask knowledgable employees
Outline the four principles of competitive positioning. Provide one example.
- Establish position in customers’ minds
- position should provide one simple, consistent message
- position must set a company apart from competitors
- company cannot be all things to all people (must focus)
Cathay Pacific
- target: quality and service conscious travellers
- benefits: enjoyable pre and in-flight experience
- position: better value, superior customer service in a commoditised industry
Focus is providing relatively narrow product mix for a particular market segment - focusing on the customers it can service best. What are the four kinds of focus?
Fully focused
- limited range of services (or single core product) to a narrow, specific market segment
Market focused
- focuses on a marrow market but has a wide range of services (eg. insurance company for over 50s)
Service focus
- narrow range of services to broad market (need to be knowledge about each segment)
Unfocused
- try to serve broad market with range of services (eg. department stores but are failing to niche competitors)
What are the points of difference in services?
Relevance = customer must see PoD to be relevant and important Distinct = perceived as distinct and superior Believable = seen to be believable and credible
Outline the development of a marketing positioning strategy.
- Market analysis
- definition and analysis of segments
- selection of most appropriate target market segments
- articulation of desired position
- selection of which benefits to emphasise to customer
- competitive analysis
- analysis of possibilities for differentiation
- marketing action plan
What is the benefit of a positioning map?
- geographically represents consumer perceptions of alternate offerings regarding important variables (can compare services on price, quality etc)
Outline the downfall of Starbucks in Australia
- brought coffee in a less threatening way to America (sweet, syrupy)
- created the ‘third place’ for people to visit and charged premium price for this experience
- saturated market with stores
- relied mostly on WoM rather than traditional advertising
- Australian coffee shops about convenient location and small, personalised feel
- have more sophisticated coffee tastes
- overestimated their PoD and customer perceived value of supplementary services
- implemented sales targets which degraded their service quality (what they were known for)
- didn’t tailor their products to the Australian market at all
- expanded too quickly and forced themselves on unwilling public
- unsustainable business model -> failed to communicate brand (advertise) and entered too late into competitive market
