What does the following question represent:

"Will they buy again?"

What does the following question represent:

"What are they worth?"

What are buying roles for Business to Consumer and Business to Business?

think: little kids and mommy magazines

Initiator

- Kids have a large role in this (ex. see another kid with a snack and want that one)

- Mothers can also be initiators (ex. "Oh I read this in a magazine the other day....")

Influencer

- Schools

- Retailers

- Bloggers

Decider

Purchaser

User

- B2B don't always have enough to check users

 Approvers (Only applies to B2B)

- Geographic

- Demographic/socio-economic

- Psychographic, Lifestyle, Personality & Preferences

- Purchase behaviour

- Consumption behaviour/usage

Analyzing the family life cycle is very useful in customer analysis. It takes into account many different demographic factors.

- Geographic

- Operating Variables (ex. size of operation)

- Purchasing Approaches

- Situational Factors (ex. financial situation of business)

- Personal characteristics of decision makers 

Business to Consumer

- Extensive Problem Solving (high risk, high complexity - like new products)

- Limited Problem Solving (medium risk, medium complexity)

- Routine Response Behaviour (low risk, low complexity - these products are regularly purchased)

Business to Business

- New-task buy

- Modified re-buy

- Straight re-buy

What are the 5 fundamental steps in the decision making process?

PIE PP

1. Problem Recognition

- OAGC = see that apple goes to waste in lunch. Best to buy slices that will minimize fruit waste

- ABS = farmers don't have time, low pregnancy rates

2. Information Search

- Advertise the problem, but then also advertise the solution offered by the firm

- Helps to influence evaluation of alternatives

3. Evaluation of Alternatives

- Must know what kind of information is important to the consumer

4. Purchase Decision

5. Post-purchase Behaviour

By knowing these 5 steps, you can identify leverage points where you can influence the customer.

True or False:

"Demand for goods only exists in the aggregate"

True.

Customers will not buy a product as a whole, but for features of the product. Customers are willing to pay for specific features and it is those features that provide the benefits

True or False:

Willingness to pay for a certain attribute is NOT the minimum/maximum dollar value of the utility it provides

False.

It is

For example, people considering mobile phone plans consider data, coverage, voicemail, cost of newest phone, etc. This is easy to comapre company to company

Things like insurance is very difficult to compare. Each firm has a different package to offer

What are some success factors for new products?

3C, 3R, T

Relative Advantage

- New products must have a relative advantage, or they will not stand out in the market 

Compatibility

- Is part of complexity and risk

- Does it fit with current customer behaviour?

Risk

- Could be financial, physical, psycho-social, etc.

Complexity

- Product must have clear benefits

Visibility/Clarity of Benefits

Trialability

- Does the consumer have the option to try it before buying it?

Increased repeat purchase likelihood

Increased likelihood of expanding business

Increased likelihood to recommend supplier

They dissappear in the market place - no feedback on how to improve the product

They can talk down the product to customer group

True or False:

The larger the gap between expectations and performance, the lower the likelihood of retaining a customer

All benefits Value Proposition

Favourable Points of Difference Value Proposition

Resonating Focus Value Proposition

Shows all benefits customers receive from a market offering. Provides sufficient value to the customer, regardless of competitors offerings

"Why should our firm purchase your offering?"

Pitfall: failure to recognize the competitor's product. Turns a blind eye to competitor

Should Include: analysis of closest competitors offerings

All favourable points of difference a market offering has relative to the next best alternative

"Why should our firm purchase your offering instead of a competitor's?"

Pitfall: Assume that favourable points of difference really matter to customer, but they may not. Entirely focused on comparison of offer, not what the customer values most

Should Include: analysis of customer preferences 

One or two points of difference whose improvement will deliver the greatest value to customer

"What is most worthwhile for our firm to keep in mind about your offering?"

Pitfall: Cost and time of in-depth and on-going customer value research. Can explain to customers that your product is good and at least as good as competitors

Points of parity

- "As good as"

- "They don't beat us in"

- Elements with essentially the same performance as next best alternative

Points of difference

- Favourable to you, unfavourable to you

- Elements that make the supplier's offering either superior or inferior to next alternative

Points of Contention

- Elements where customer and supplier disagree

- One views an element as a point of difference, but the other sees it as a point of parity (vice versa)