Summary
Industrial psychology 224 full summary
- Course
- Institution
Industrial psychology 224 full summary of all the work covered in the module
[Show more]
Seller
Follow
Studynotes101
Reviews received
Content preview
Chapter 1 – Consumer Behaviour: Handling Changes and ChallengesIntroduction
Marketing: The activity, set of institutions and processes for creating, communicating, and
delivering offerings that have value for consumers, clients, partners and society
Development of the marketing concept: Production orientation – > Sales orientation – >
Marketing concept
Consumer behaviour
Consumer behaviour: The study of consumer’s choices during searching, evaluating,
purchasing and using products and services that they believe would satisfy their needs.
Explains how people decide to spend their money, time, and effort on goods that marketers
offer for sale and describes which products and brands consumers select and why, when,
and where they purchase them
• Hard to understand consumer behaviour because it often defies logic and common
sense
• Two consumer identities: individual consumer and organisational consumer
o Individual consumer: the individual that buys products and services for their own
use, for a household or through family and friends
o Organisational consumer: companies, state service sectors or other institutions
(profit or non-profit orientated) that buys products and services for
organisational functioning
Production Orientation
• From 1850’s until late 1920’s
• Companies focus on production capacity (mass production)
• Consumer demand is higher than the supply (if we make it, they will buy it mentality)
Sales Orientation
• From 1930’s until middle 1950’s
• Focus is on sales
• Supply exceeds demand (overproduction must be sold)
Marketing Concept
Marketing concept: premise that marketing consists of satisfying consumer’ needs, creating
value, and retaining customers and that companies must produce only those goods that
they have already determined would satisfy consumer needs and meet organisational goals
• Core principle: marketers must satisfy consumer needs effectively by making only those
products that consumers are likely to buy
• Emerged in 1960’s until today
• Marketing-orientated companies: do not try to persuade consumers to buy what the
firm had already produced. They only make products that satisfy consumers’ needs and
aim to convert first time buyers into long-term loyal customers
• The focus is on the consumer/buyer
• Determine the wants and needs of specific target markets
,• Deliver more satisfaction than competitors
Product concept: when companies mistakenly assume that satisfying consumers’ needs
meant marketing products that offer the most features. Ignore buyers who would rather
buy simpler and easier-to-use products
Marketing myopia: focusing on the product itself rather than the needs it is designed to
satisfy. Focusing exclusively on adding features to products. Companies ignore consumer
needs. Short sighted approach where companies “look in the mirror instead of out the
window”. In other words, managers focus on the product, not the needs it is designed to
fulfil
Selling concept: Companies should sell what they had already made instead of making only
those products they could sell. Assume that consumers would only buy their products if
aggressively persuaded to do so. Before the development of marketing focused on
consumers
Development of the marketing concept
• Production concept
• Selling concept
• Product concept
• Marketing concept
Marketing concept requirements
• Marketing segmentation
• Targeting
• Positioning
• The marketing mix (4 Ps)
o Product
o Price
o Place
o Promotion
Market segmentation, targeting, and positioning
• Satisfying consumer needs consists of recognising the diversity of consumers and their
desires
• Humans share biological needs: nourishment, air, water, shelter
• Humans develop psychological needs: shaped by upbringing, culture, social stratum,
financial resources and education
Consumer research: The process and tools used to study consumer behaviour. To identify
consumers’ unsatisfied and unsure needs, consumers are highly complicated individuals
Segmentation: Process of diving the market into subsets of consumers with common needs
or characteristics. Each subset represents a consumer group with shared needs that are
different from those shared by other groups. Geographic (countries, nations, states, regions,
cities, neighbourhoods) Demographic (age, gender, sex, family, education, income)
Psychographic (life style, social class, personality) Behavioural ( user status, usage rate,
benefits sought, occasions, loyalty, attitude)
,Targeting: the selection of one or more of the segments that the company views as
prospective customers and pursuing them with distinct offerings
Positioning: developing a distinct image and identity for the products and services in
consumers’ minds. The image differentiates the company’s offering from competition by
communicating to the target audience that the product, service, or brand fulfils the target
consumers’ needs better than alternatives. Successful positioning includes: communicating
the benefits of the product and communicating a unique selling proposition
The Marketing Mix (4 Ps)
Marketing mix: component of the business plan that includes 4 elements: product (or
service), price, place (distribution) and promotion
Product – features, design, brands, packaging, post-purchase benefits
Price – list price, discounts, allowances, payment methods
Place – distribution of the product or service through stores and outlets
Promotion – advertising, sales promotion, public relations, sales efforts
Technology Benefits Consumers and Marketers
Electronic communications enable a two-way interactive exchange in which consumers
instantly react to marketers’ messages
Value exchange
• Technologies create a value exchange
• Marketers provide value to consumers by giving them means to shop more efficiently,
become better informed, buy customised products, and have access to entertainment
and information
• Consumers pay for content by giving information about themselves
Lower prices, more information and customised products
• Increasingly, consumers have been relying on information from websites and purchasing
daily-use products digitally
• Social media have significantly influenced choices, and comparing products online was
the primary source of information in making purchase decisions
• Technology has enabled forming more refined targeting
• Since consumers can easily track prices on their smartphones and devices, they know
they have the upper hand over retailers and more likely to negotiate over prices
• Marketers have increasingly been offering personalised products
Impact of Digital Technologies
Marketers – more products and services given adaptation to individual needs, immediate
response, quicker collection and analysis of data
Consumers – power, information, computers/telephones/GPS/PDA/smart tv, PVR and
ads/YouTube
Vices and Virtues
• Presence of healthy food option “licenced” consumers to eat unhealthy food
• Estimated burger calories decreased over 200 calories when accompanied by three
celery sticks
, • How and why do consumers make decisions based on factors other than facts and
rationality
More precise targeting
• Online data enable data brokers and marketers to exchange information and allow data
aggregators to track who is interested in what through “cookies”. Type in criteria for the
people they want to reach in the exchange and bids on the price
• Marketers can optimise their resources by targeting individual consumers instead of
larger segments
• Marketers track and influence what they buy using global positioning systems (GPS)
navigation that provides precise location data, and some use sensors indicating if people
are sitting, walking or driving
• Selfies have become a prominent source of data about consumer habits
Interactive communications
• Electronic communications enable a two-way interactive exchange in which consumers
instantly react to marketers’ messages. Therefore companies can see the effectiveness
of their promotional messages instantly, instead of relying on delayed feedback as in
traditional advertising
Cross-Screen Marketing: a promotional strategy that consists of tracking and targeting users
across their computers, mobile phones, and tablets, and sending them personalised ads
based on their interests, as observed by marketers
Customer Value, Satisfaction, and Retention
Customer value: ratio between customers’ perceived benefits (economic, functional, and
psychological) and the resources they have used to obtain those benefits (monetary, time,
effort). Ex. Expensive restaurant the customer expect a special experience that is worth their
money and other resources
Customer satisfaction: the individual’s perception of how the product or service meets their
expectations (lower than expectation – satisfied, more than expectation – customer delight)
Groups of consumers are grouped according to their level of loyalty – loyalists, defectors,
terrorists, hostages and mercenaries
Customer retention: turning individual consumer transactions into long-term customer
relationships. More expensive to win new customers than to retain existing ones
4 Drives for Successful Relationships
1. Consumer values
2. Consumer satisfaction
3. Consumer trust: to gain consumer trust is necessary. Trust is the foundation on which a
lasting relationship with consumers is considered. Create loyal consumers. Word of
mouth and other advertising. Where do you find information on products and services?
4. Retention of consumers
Technology and customer relationships
• Technologies often enhance relationships and retention by engaging consumers with
brands
• Two forms of engagement: emotional bonds, transactional bonds:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Studynotes101. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.54. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78998 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now