Το προϊόν και οι ανάγκες της αγοράς

1. Το προϊόν και οι ανάγκες της αγοράς vtheohar@alba.edu.gr www.alba.edu.gr

2. Customers are Your Business • Organizations should not view themselves as producing products, services, or marketing brands, they should view themselves as buying customers, giving customers a reason to want to do business with the company, at the expense of competition (Paraphrased from Theodore Levitt)

3. Key Questions Customer Questions: • Who are my customers and what are there needs/wants? • What does their decision process look like? • How valuable are they to me? • How many are there; will there be in the future? Company/Competition Questions: • Why should customers buy from me? • What are the impediments to their purchase? Implementation Questions: • How do I make them mine? • Can we eliminate the impediments?

4. Who is the customer? • Consider an adult who buys the following as a gift. Who is the customer? • Accounting/Finance: • Development: • Marketing: whoever pays whoever uses whoever derives value from it -child who plays -parent who gets babysitter, -purchaser getting social capital

5. The Managerial Decision Making Process Need recognition Information search Evaluation of alternatives Purchase decision Postpurchase behavior

6. A Model of Consumer Behavior SOCIAL AND GROUP FORCES CultureSubcultureSocial classReference groupsFamily and households PSYCHOLOGICAL FORCES MotivationPerceptionLearningPersonalityAttitude SITUATIONAL FACTORS Whenconsumers buy Whereconsumers buy Whyconsumers buy Conditions under which consumers buy INFORMATION Commercialsources Social sources BUYING-DECISION PROCESS Need recognition Choice of involvement level Identification of alternatives Evaluation of alternatives Purchase and related decisions Postpurchase behavior

7. More on the Fickle Customer • Perceptions are reality. • Is the customer always right? • Accuracy of consumer knowledge is often immaterial • Wants change. Do needs change?

8. Social Factors • Cultures/subcultures • Reference groups • people that an individual refers to for comparison when making judgements about his or her own circumstances, attitudes and behavior. • Aspirational/Dissociative • Opinion leaders • Family • Role

9. Socio-economic classification APPROXIMATE PERCENTAGE OF FAMILIES SOCIAL GRADE HEAD OF HOUSEHOLD’S OCCUPATION SOCIAL STATUS A 3 Upper middle class Higher managerial, administrative or professional B 10 Middle class Intermediate managerial, administrative or professional Lower middle class Supervisory or clerical and junior managerial, administrative or professional C1 24 Skilled working class C2 Skilled manual workers 30 Working class D Semi and unskilled manual workers 25 State pensioners or widows (no other earner), casual or lowest grade workers Those at lowest levels of subsistence E 8 SOURCE: From Peter M. Chisnall, Marketing: A Behavioural Analysis (Berkshire, England: McGraw-Hill Publishing Co. Ltd, 1976), pp. 114-115. Reprinted by permission.

10. Structure of household unit Household purchases and consumption behavior Marketing strategy Stage of the household life cycle Household decision process The Household Influences Most Consumption Decisions 6-1

11. Personal Factors • Age and Stage in the Lifecycle • Occupation • Lifestyle • Personality • psychological characteristics that lead to relatively consistent and enduring responses • Self-concept vs. ideal self-concept vs. others self-concept

12. Psychological Factors • Motivation • psychogenic and biogenic • Perception • how a person organizes and interprets information • selective attention/distortion/retention • Learning • changes in an individual’s behavior that arise from experience • Beliefs and Attitudes

13. Maslow’s Hierarchy of Needs Self-Actualization Needs (Self-fulfillment, Enriching Experiences) Esteem Needs (Accomplishment, Self-Respect, Prestige) Social Needs(Companionship, Friendship, Love) Safety Needs (Protection, Security) Physiological Needs (Food, Water, Sleep)

14. Low-purchase involvement High-purchase involvement Nominal decision making Limited decision making Extended decision making Problem recognitionSelective Problem recognitionGeneric Problem recognitionGeneric Information searchLimited internal Information searchInternalLimited external Information searchInternalExternal Alternative evaluationFew attributesSimple decision rules Few alternatives Alternative evaluationMany attributesComplex decision rules Many alternatives Purchase Purchase Purchase PostpurchaseNo dissonanceVery limited evaluation PostpurchaseNo dissonanceLimited evaluation PostpurchaseDissonanceComplex evaluation Involvement and Types ofDecision Making

15. What a Product is Not • It is not features, but benefits. • Why should someone buy your product or service?

16. What is a Product? • The Product Offering - Core : The Benefit Core Benefit

17. What is a Product? • The Product Offering - Core : The Benefit - Tangible: The Packaging, Features, Styling, Quality, Brand Name Core Benefit Tangible

18. What is a Product? • The Product Offering - Core : The Benefit - Tangible: The Packaging, Features, Styling, Quality, Brand Name - Augmented: Installation, Warranty, After Sale Service, Delivery and Credit Core Benefit Tangible Augmented

19. Euros

20. The Importance of New Products New product 1 New product 2 Sales volume Sales volume Euros Profits Profits + 0 – Time

21. THE IMPORTANCE OF NEW PRODUCTS • Sustain corporate growth and profits • Replace obsolete items • Improve quality of life • Take advantage of new technology • Better satisfy the needs of current and future consumers • Brand extensions

22. Customer Satisfaction Opportunities Customer expectations Customer satisfaction gap Opportunities 1. New products 2. Improvements Actual product performance

23. How Many Ideas Are Required for One Successful New Product?

24. Lead User AnalysisMethod for Creating Breakthrough Innovation How do you develop breakthrough innovation to grow organizational performance?

25. What Affects the Rate of Adoption? Complexity Compatibility Characteristics Affecting New Product Diffusion Relative Advantage Observability Trialability

26. The Diffusion Process Relationship of the Diffusion Process to the Product Life Cycle Introduction Growth Decline Maturity 100 90 80 70 60 50 40 30 20 10 0 Product life cycle curve Early majority Cumulative Percentage of Adoption Late majority Early adopters Innovators Laggards Diffusion curve Time of Adoption of Innovations

27. Companies that do succeed often share the following characteristics • A history of carefully listening to customers • An obsession with producing the best product possible • A vision of what the market will like in the future • Strong leadership • A commitment to new-product development • A team approach to new-product development

29. Tide Liquid Tide Powder Tide with Bleach Tide with Bleach Alternative Tide Kick Tide HE (High Efficiency) Tide Rapid Action Tabs

30. PRODUCT MIX CHARACTERISTICS • WIDTH • Number of different product lines • LENGTH • # of items in the product line/mix • DEPTH • Number of variants in line/mix Crest 2 flavors and 3 sizes • CONSISTENCY • How closely are the lines related

31. If you were given 0.1% of all stock, which company would you pick? (1998 data)

32. Brand Equity • Definition (Aaker 1991): • A set of brand assets and liabilities linked to a brand, its name and symbol, that + to or - from the value provided by a product or service to a firm and/or to that firm’s customers. • Brands are assets -- only if: • they have sustainable differential advantage • Brands improve firm value through goodwill

33. To the Customer: Enhances interpretation or processing of information Increases confidence in purchase decision Increases use satisfaction To the Firm: Increases effectiveness of marketing programs Increases brand loyalty Allows for better margins Allows brand extensions Provides trade leverage Increases competitive advantage How Brand Equity Provides Value

34. Brand Asset Dimensions Brand Equity Brand Awareness Perceived Quality Brand Associations Brand Loyalty

35. Brand Identity: associations that imply a promise • Should help in establishing a relationship between the brand and the customer • Value proposition • Functional, emotional or self-expressive • Credibility • Endorser’s role • Brand essence • Product (scope, quality, uses, users, country of origin) • Organization (innovation, trustworthy, local/global) • Personality (genuine, energetic) • Symbol (visual image, heritage)

36. FUNDAMENTAL DIFFERENCES BETWEEN GOODS AND SERVICES • INTANGIBILITY ASSOCIATED PROBLEMS: • Lack the ability to be stored • Not protected by patents • Not easily displayed or communicated • Pricing is difficult • Heterogeneity • Standardization and quality control are difficult to achieve

37. FUNDAMENTAL DIFFERENCES BETWEEN GOODS AND SERVICES • INSEPARABILITY ASSOCIATED PROBLEMS: • Service provider is involved in the production process • Other customers are involved in the production process (shared experience) • The mass production of services presents special challenges • Customer is involved in the production process: • impact on the type of service desired • length of the delivery process • cycle of service demand • service factory must be built with the customer’s presence in mind

38. FUNDAMENTAL DIFFERENCES BETWEEN GOODS AND SERVICES PERISHABILITY ASSOCIATED PROBLEMS: • Services cannot be inventoried • Production and consumption cannot be separated by time and space • Statistical sampling techniques cannot be used • Marketing and production must work together

39. Gaps Model of Service Quality Expected Service CUSTOMER Customer Gap Perceived Service Service Delivery External Communications to Customers COMPANY GAP 4 GAP 3 GAP 1 Customer-Driven Service Designs and Standards GAP 2 Company Perceptions of Consumer Expectations

40. Service Quality Spells Profits Costs Margins Defensive Marketing Volume of Purchases Service Quality Price Premium Customer Retention Profits Word of Mouth Market Share Sales Offensive Marketing Reputation Price Premium

41. KEYS TO SUCCESSFUL SERVICE FIRMS • Ability to master technological change • Excel at niche marketing • Excel at customer service • Excel at customer retention strategies

42. COSTCONSIDERATIONS • Price is sometimes not know until after the service has been produced • Cost-oriented pricing is more difficult • High fixed cost to variable cost ratio • Economies of scale tend to be limited

43. CUSTOMERCONSIDERATIONS • More likely to use price as a quality cue • Nonetheless, comparing prices is more difficult • Consumers are less certain about reservation prices • Self-service is a viable alternative

44. GENERAL GUIDELINES FOR DEVELOPING SERVICE COMMUNICATIONS • Develop a word-of-mouth communications network • Promise what is possible • Tangibilize the Intangible • Feature Working Relationships between Customer and Provider

45. GENERAL GUIDELINES FOR DEVELOPING SERVICE COMMUNICATIONS • Reduce consumer fears about variation in performance • Determine and focus on service quality dimensions • Differentiate the service product from service delivery • Make the service more easily understood