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Advance your business, Advance your career. Consumer Behaviour Understanding consumer behaviour has significant bearing on marketing and public relations decisions. Technique Overview Consumer Behaviour Definition Consumer behaviour is the study of how individuals, groups and organisations select, buy, use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants Kotler and Keller, The firms that adopt CRM get competitive advantage in the market.
They can face the competition with much ease. Competitive advantage helps in generating higher returns on investment. The image of the firm also gets enhanced. Loyal customers become evangelists. The evangelists spread a good word about the company and its products. This enables a firm to get additional customers to its fold. Due to CRM, a company gains a position to generate higher returns on investment.
This is because of the repeat purchases on the part of the loyal customers. The company also makes money through cross selling. Firms use a number of techniques to build, maintain and enhance CRM. The techniques include the software programmes, promotional techniques, pricing strategies, MVC programmes, and so on. Some of the techniques have been discussed in detail. CRM analysts develop data warehouses and use data-mining techniques to develop and maintain long- lasting relationships with the valuable customers.
The purpose of data warehouse is not just to gather information, but to place it into a central location for easy access. Once the data warehouse locates the data at a central place, the data analysts use data mining techniques to examine the mounds of data to find out interesting facts of the customers. Some firms adopt one-to-one marketing strategy. Such firms treat their customers as partners, especially in the case of B2B markets firms solicit the help of customers to design new products or to improve their services.
If the customer gets involved with the firm, then they are more likely to remain with the firm. Firms may use variety of loyalty programmes to retain customers.
Firms may also provide gifts and other benefits to the loyal customers. But it is to be noted that all loyal customers need not be profitable, and all profitable customers need not be loyal. Therefore, the firm must be selective. In order to enhance marketing efficiency, a firm has to find out which of its customers are worth retaining and which are not, and which customers should be given extra care and attention.
In other words, the firm has to determine the value of its customers, and focus on MVCs accordingly. Some firms introduce priority customer programmes. The priority customers are the MVCs. They are given priority in after-sales service, delivery and resolving complaints.
The most comprehensive definition of satisfaction has been offered by Kotler and Keller who define satisfaction as “person’s feeling of pleasure or disappointment which resulted from comparing a product’s perceived performance or outcome against his/ her expectations” (Kotler and Keller, , p).
High satisfaction happens when perceived performance exceeds expectations. Buyer’s expectations influenced by: – Past performance – Friend’s/ associated advice – Competitor information/ Promise – Marketer’s information/ Promise. Successful companies raise expectations & deliver performances. i.e., Aim for total customer .
Brand loyalty. Loyalty is a direct measure of how willing customers are to stick to a brand. Therefore Aaker argues the price premium as the basic indicator for brand loyalty and the single best measurement of brand equity. Loyal customers prevent entry of potential competitors and lower the treat of substitutes. Customer Satisfaction – Quantifiable measurementmethodologies are available to monitor satisfaction levels of the customers. Customer Loyalty – Customer satisfaction almost always leads to customer loyalty (Loyalty is acommitment to repurchase or re-patronize a preferred product).
Dr Philip Kotler, the Marketing Guru recently visited India and shared that he has refined his legendary theory of Marketing which was based on the four P’s – Product, Place, Promotion and Price and has added another P to the same called Perception which describes the sentiment about the product in the market. The definition of customer satisfaction given by Philip Kotler (Kotler et al ) says that it is predetermined by how the expectations of the cus- tomer are met.