Chapter three

Types of market and Customer experience

 3.1 Types of marketing
3.1.1. The Consumer markets and consumer
buying behavior
What do you mean by consumer markets?
-a market in which customers buy for their own
personal consumption
- The aim of marketing is to meet and satisfy
target consumers’ needs and wants
-The buying behavior is of final consumers in
buying products for their personal
consumption
Models of consumer behavior
Stimulus- response model
This is to understand how do consumers
respond to various marketing efforts the
company might use.
 Marketing and environmental stimuli enter the
buyer’s consciousness and characteristic. The
buyer’s characteristic and decision process in
turn lead to certain purchase decisions
Marketers must answer two questions:
• How do the buyer’s characteristics or behavior?
• How does the buyer make purchasing decision?
 Conti…
Through this, the marketers can understand
what do the consumer buy? And to answer
the questions like where, how, how much,
when and why

In the same stimuli or market effort,

consumers may respond differently because
of the buyers behavior influenced by different
factors .
Characteristics affecting the consumers behavior
The purchasing decision of a consumer might be
strongly influenced by :
Cultural characteristics
Social characteristics
Economic characteristics
 Personal characteristics
psychological characteristics

-How the above characteristics of consumers

determine the buying behavior?
Types of buying decision behavior
Based on the degree of involvement and the degree of
difference among products, consumer buying behavior can be
classified as the follow:
 Complex
 Dissonance reducing
 Habitual
 variety seeking
I. complex buying behavior
-High involvement
-Significant difference among brands
-Expensive products
-Risky products
-Infrequent purchase
II. Dissonance reducing buying behavior
-High involvement & Expensive products
-Risky products
-Infrequent purchase
-But little difference among brands
-No search for more information
III. Habitual buying behavior
-Low involvement
- Less Expensive products
-frequent purchase
- little difference among brands
IV. Variety seeking buying behavior
-Low involvement
-Less Expensive products
- Significant difference among brands
- A lot of brand switching and search
more information to get variety
Consumer Buying Decision Process/Possible
Influences on the Process
3.1.2. Business market and its buying
behavior
Define business market?
 The products are purchased for doing
business rather than ultimate consumption
 Buying goods and services for one of the
following reasons:
To make other goods
To resell
to conduct operation
Participants in the business buying
Users-use the product and services
Influencer- define product specification and
requirement, provide information to
evaluate
Buyer-select the supplier, arrange terms of
purchases
Deciders-have power to purchase decision &
approve final suppliers
Gate keeper- control the flow of information
Any Questions?
Customer experience
 Customer Satisfaction
-The consumers satisfaction implies the extent to
which a product’s perceived performance
matches with a buyers expectation

• If perceived performance< buyers’ expectation= dissatisfaction

• If perceived performance> buyers’ expectation= delight
• If perceived performance ≥ buyers’ expectation= Satisfaction

- NB. the guiding concept in making choice

among product sets is value and satisfaction
• Communication: Consistently communicate with clients-on a positive basis
• Convenience: Make clients comfortable when you provide service. Listen to
their needs. Try not to disturb them.
• Choices: You may have a core services, but supplement that with services
designed to meet each client specific needs.
• Consistency: No surprises. Deliver your service on time every time. Don’t alter
how you deliver (whether it be changes in products, applications and/or
frequency) without first conferring with the client.
• Confidence: Exhibit an air of authoritative knowledge, and back it up with your
professionalism and performance.
• Care: Genuinely care and the client will see and feel it.
• Control: The bottom line is to being able to manage and keep the complaints
numbers low enough that the client is happy.
• Commitment: Stay focused on doing the job right every step of the way, every
time. Every day, renew your commitment to do whatever it takes to “make it
happen.”
 Customer profitability (CP)
 -is the profit the firm makes from serving a
customer or customer group over a specified period
of time,
 specifically the difference between the revenues
earned from and the costs associated with the
customer relationship in a specified period.
 According to Philip Kotler,“ a profitable customer is a
person, household or a company that overtime,
yields a revenue stream that exceeds by an
acceptable amount the company's cost stream of
attracting, selling and servicing the customer."
 Conti…
 Calculating customer profit is an important step in
understanding which customer relationships are better
than others.
 Often, the firm will find that some customer
relationships are unprofitable. The firm may be better
off (more profitable) without these customers.
 At the other end, the firm will identify its most profitable
customers and be in a position to take steps to ensure
the continuation of these most profitable relationships.
 However, abandoning customers is a sensitive practice,
and a business should always consider the public
relations consequences of such actions.
 Customer Loyalty
• Customer Loyalty can be measured though a rapid loyalty
approach. This approach is based on the index of
Retention, Advocacy and Purchasing loyalty.
A. Retention Loyalty Index (RLI): measures and is calculated as
an average of top purchasing, switching, and the degree to
which customers will remain as customers or not leave to
competitors.
B. Advocacy Loyalty Index (ALI): measures the positive words
of mouth about the goods or services spreader by the
customers and recommend others to buy.
C. Purchasing Loyalty Index (PLI): measure the willingness of
the customers to:
 Repeat purchase and;
 Bulk purchase