Samenvatting
Summary Lectures CM
- Instelling
- Vrije Universiteit Amsterdam (VU)
A summary of all the lectures of Consumer Marketing, with additional notes for clarification
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Voorbeeld 4 van de 41 pagina's
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Voorbeeld van de inhoud
Table of ContentsSession 1: Introduction to Consumer Marketing..................................................................................2
Session 2: Understanding Customers.....................................................................................................3
Session 3: Consumer Attention, Perception and Memory.....................................................................5
Session 4: Consumer Behavior Refresher.............................................................................................9
Session 5: The Art of Choosing............................................................................................................12
Session 6: AH and Mid-Term Review..................................................................................................18
Session 7: Price Promotions.................................................................................................................20
Session 8: Influence & Persuasion......................................................................................................25
Session 9: Ethics of Marketing.............................................................................................................27
Session 10: Customer Loyalty and Sustainability................................................................................29
Session 11: Consumer Happiness........................................................................................................32
Session 12: Final review.......................................................................................................................36
Practice exam questions........................................................................................................................39
1
, Session 1: Introduction to Consumer Marketing
Direct to consumer (DTC) brands
Sell products directly to end users through their own e-commerce sites, cutting the middleman (e.g.
department stores, marketplaces) out of the traditional retail process.
Many of them are online brands
Examples:
o Subscription based brands
o Personalized products based on questions asked
o Small businesses
Consumers like DTC brands because
Better alignment with the brand – direct conversation: it is faster, easier (to build brand trust and
loyalty as you build a relationship)
Customized programs (multiple product recommendation) – people want to feel heard and be part of
a community
More transparency
They feel like they can really help the brand
Bigger product range (as they don’t have to deal with retailers)
It can be cheaper because we don’t have to pay the retailer anymore
o Not always the case (customization costs more)
Access
Variety – sizes, color
Customer service (1-on-1 communication)
Relationship (being part of community)
Sense of impact
Are DTC brands the new dawn or are they a fad?
Benefits of DTC for companies
More control for the company
o Information (brand story)
o Own data – easier to understand your consumer better; access to feedback
o Independence, less reliance on retailers - “Controlling their own destiny”
More personal experience (improve customer engagement)
Easy to start, cheap to fail
Easier to communicate and understand (identify needs/satisfaction)
Expand your reach (offer boarder product assortment – no shelf space limit)
Better margins
o More money for other marketing levers (e.g. superior customer service and improvement of
the quality of product)
Control of your brand story
Challenges of DTC for companies
More costs because you need more people working for you (owner does everything)
o Will they trust us?
Acquiring customers is not easy
o Is there an audience to communicate to? There are no already established customers – hard
to acquire customers, is costly
Will they trust us?
Having to compete against big players
More money spending on promotion
Harder to keep prices low (without mass production)
Brand building takes a time
2
,How did DTC brands become so successful?
The rise of DTC brands can be attributes to at least 3 major shifts:
1. Legacy players used to have a strong hold on retail channels and it was impossible for a new product
to get shelf space. Rise of e-commerce and direct distribution significantly reduced this barrier.
2. Democratized marketing where smaller players can reach and capture the attention of consumers
with much lower budgets.
3. Each part of value chain has become modular and many third party players have emerged to take of
production, warehousing, logistics, web hosting, and distribution. These services are often on-demand
and are flexible. So, young entrepreneurs can launch new products at minimal cost.
Example: Casper
Would ship mattresses to your house, in a vacuumed box.
Only online, predominantly WOM, minimal ads, no retail location
What would you to do grow?
SEO: brand awareness on google – if you are the first brand that comes up, people will click on you
(ease, reputation, trust, best product)
Influencer marketing (ad with celebrity)
100 days of trial (return policy)
Data conjoint analysis to see what customers find important
Pop up store (to also target offline – new segments)
Others DTC firms are also adding bricks to clicks by opening their own stores or getting retail partnership in
established stores (target)
Takeaways
Marketing has undergone a dramatic shift in the last decade (e.g., new distribution and media
channels to build new brands and stronger relationship with customers).
Unmet customer needs, not technology, are often the cause of disruption: don’t lose sight of your
customer and their needs as the consumer experience drives business.
Customer centricity aims to manage how individual customers, not only products or brands, create
profitability.
Good products do not sell themselves.
You can’t ignore the numbers as they will help you understand the gaps in your business.
Session 2: Understanding Customers
DMU: decision making unit
Categorizing the buying process
> Utilitarian products (wine, Turkish shwarma): Triggers may be based on (basic) needs
Shorter research process, maybe not a key decision (low price)
Deliberation process is short/nonexistent
Repeat purchases shorten the process
Triggers are emotional
Depends on need, context, convenience if what to buy or where to buy is first
Orderly thinking process AIDA
AIDA(R) funnel
Awareness – product features, awareness of the problem, social
media (more rational)
3
, Interest
Desire
Action
(recurring)
more than one place where marketers can impact/influence consumers
takes some time before someone takes action, how long someone takes to go through the funnel
not all steps may be included
Categorizing the buying process
> Ego-expressive products
Long decision-making process (e.g., time, search)
You take other people’s opinions
o They might know better
o Might have a relevant experience
o Ego (validated decision)
Taking alternatives into consideration
AIDA funnel takes longer
Serves a different type of purpose
Cross model – involvement vs product type
Low involvement vs high involvement
Low involvement: how you buy and interact with the product
High involvement: opportunity costs, lots of thinking
Context dependent, culture dependent, price dependent
Marketers can use branding, design, packaging and influencers to
change the place on the cross model
Customer
Why segment?
Waste of company’s money if you don’t
Understanding the differences in preferences – heterogeneity
Who is interested?
Segmentation and benefits
Segmentation is needed in order to provide to certain and different needs
Segmentation aims at dividing the market into subsets of customers
Members are different between segments, but similar within
What are the benefits of segmentation?
To the firm:
o Identification of valuable customers (higher customer lifetime cycle or CLV)
o More targeted promotions & marketing communications
o Leads to sustainable profit growth
To the customers
o Customized products & services
o Personalized experience
o Leads to satisfaction and loyalty
Too many segments may lead to wasting your resources
Segmentation base (descriptor): characteristics that help identify segments
4
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