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Unit 11 Lecture (What is Consumption?
Luxury, excess and waste. eg what…
Unit 11 Lecture
What is Consumption?
- Luxury, excess and waste. eg what may be a luxury in Japan may be normal in the UK
- Consumption is consumer culture. US became a consumer culture in the 1950's, China in the 1990s
- Consumption or consumerism
- The outcome of advertising and social influence. Would consumption exist in its current for if it were not for advertising?
- Consumption is self expression and role playing.
Consumers are now:
- well informed
- confident
- Educated
- Demanding
- Information - seekers
Today's conditions:
- Recession and purchasing power
- Emerging countries and markets
- Global brands
- Expansion to new markets
- Tech competition and online purchasing
Consumer decision making process:
- Need recognition and problem awareness
- Information search
- Evaluation of alternatives
- Purchase
- Post-purchase evaluation
Segmentation - differentiating the market
- Very few firms can survive on pure customisation
- Dell
- Pizza firms
There are comonalities:
- Common needs and wants
- Common behaviours
- Common attitudes and beliefs
- Common priorities and preferences
Who are our typical customers?
What are the characteristics?
Need to accept that there are customers who will never buy your product.
We can segment consumer markets in the following ways:
- Behavioural: Benefits sought, Purchase occasion, Purchase behaviour, usage, perception and benefits
- Psychographic: Lifestyle and personality
Psychographic focus - Innovators
- Innovators are successful, sophisticated, take-charge people with high self-esteem. CEOs, actors, these type of people. They have a lot of resources but not necessarily go for status symbols. Image is important but not for showing off, but as expressions of their personality
Psychographic focus - Strivers
- Trendy and fun-loving. Motivated by achievement. Concerned about the opinion and approval of others. Money defines success for them. They favour stylish products, modelling themselves on the more successful.
- They are active consumers as shopping is an opportunity to demonstrate their spending/buying power and is also a social activity.
Segmentation - Age group
For example SAGA who offer holidays and other products/services for older people
Country segmentation: eg China
Geographical - localised segments (rural) and semi-globalised (cities)
- Global products arrived almost simultaneously over a short period of time as incomes rose.
- Measurable
- Accessible
- Differentiable
- Actionable (Can you actually attract and serve that segment?)
Reference groups:
A reference group is an actual or imaginary group conceived of having a significance upon an individuals evaluations, aspirations or behaviour
Consumers often belong to or admire different groups and are influenced in their purchasing by seeking the acceptance of others
The Customer in B2B
Supply chain - previously supply chains were national
Outsourcing - It is now becoming more truly global where cars are assembled incrementally in many different global locations.
Supply chains are no longer national
B2C:
- Interdisciplinary background with an emphasis on Psych, Mgt, Econ and Sociology
Researcher works individually or as part of marketing team
- Market research - both qualitative and quantitative collection of data. inteviews, questionnaires, focus groups and ethnography
- Consumer - unpredictable, well educated and informed, rational or other directed.
B2B:
Interdisciplinary background on economics, law, pub relations, sciences, media anc comms
- Essential Teakm Working skills, emphasis on int marketing, foreign language, cross cultural business practices.
- Marketing research: Industry reports, online research, databases and competitor analysis
- The client: Demanding, interactive, marketing, part of the suppy chain, insider and in many cases considered a colleague
Differences between B2B and B2C:
- Product/Service: Bigger variety of products in B2B markets because they also include consumer products as well
- Price: Industry prices are lower than to consumers and negotiation is often in place
- Promotion: Far less emphasis on advertising and more focus on RM than in consumer sector
- Place: less investment in premises
- Buyer behaviour: closer relationship with fewer customers
Relationship Marketing:
A marketing orientation that seeks to develop close interactions with selected customers, suppliers and competitors through collaboration
or
"The process of identifying and creating new value with individual customers and then sharing the benefits of this over the lifetime of the association." (Gordon 1994)
or
"Identify and establish, maintain and enhance and, when necessary terminate relationships with customers. And this is done by mutual exchange and fulfilment of promises. " (Gronroos 1994)
Key issues in B2B:
Long term perspective
- Trust
- Commitment
- Communication
- Customer Service
- Mutual benefits
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