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- [Instructor] Hello, everyone,

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and welcome to week three of CDA 168.

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So this week,

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we're gonna be talking about
"Customers and Competitors".

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And this week's topic

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will help you think about who
is going to buy your product

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as sort of deep dive into
what are the influences

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of why people buy what they buy

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and then also beginning
to look at competitors.

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The agenda for this, and
this is a three-part lecture,

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gonna start with announcements

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and then go through the two main topics,

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"Customers and Competitors".

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So as always,

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there will be an assessment on this topic

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basically, to ensure that
you come to class prepared

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and that, so that I know
what clicked for you

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and what didn't click?

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That's always helpful for me.

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So do that by 10:00 am, September 9th.

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The homework for this week
is due a week after that,

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on September 16th.

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And next week's topic,

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we'll be beginning to do an
even deeper dive into consumers

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and how to break them up into groups.

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So how to segment, how to target them.

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And beginning to think about
a very important concept

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in marking, which is the
position in the marketplace.

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And that's next week.

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Here is the homework that
will be due on September 16th.

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(plane engine rolling)

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So, first of all,

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I want you to think about
the potential customer.

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What might trigger a need?

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How involved are they going to be?

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Are there any specific
socio-cultural groups

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or sub-cultures that you think
will be especially interested

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and why?

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What are the situational influences?

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When and how do you anticipate customers

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buying your product or service?

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And then in part two,

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we're gonna look at who are
the two main competitors?

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And where do they fall on
the competition continuum?

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And how do their respective
strengths and weaknesses

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compare to yours?

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And how do they create
opportunity for you?

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To begin with, there's two
main types of competitors.

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There is so-called B2C, which
is business to consumers,

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where whoever ends up consuming
the product or service

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buys from you.

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There is also B2B sort
of intermediary markets,

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where you would be selling
to another business

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who will then take what you buy

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and transform it in some way

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or use it in some way to
deliver a product or service

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down the supply chain
eventually to the end consumer.

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So that's B2B and B2C,

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business to consumer,
business to business.

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The first thing we're going to do

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is jump into the B2C model.

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I'm imagining many of
you, your business ideas

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or organizational ideas
that you'll be doing,

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your marketing plans will be
on, will have the B2C model

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that you'll be dealing
with the end consumer.

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So we're gonna do that first.

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And we're gonna think about,

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why are they making the
decisions that they are?

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And our textbook author, Crane,

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says that "Behind every
purchase is a customer".

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And so to be able to hopefully,

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guide the customer to your business

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and buying something from you,

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we need to know who they
are and what they buy.

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But especially for this class,

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we're thinking about how
they buy and why they buy?

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The who they are, will be next week.

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And the what they buy will be
when we think about product,

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when we get into the four Ps

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where we'll deal with that in more depth.

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This is a really simple three step model

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for the purchase decision.

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The pre-purchase, the purchase
and the post-purchase.

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The next few slides,

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we'll walk you through
the five stage model

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where the consumer recognizes a problem,

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does an info search,
evaluates the alternatives,

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decides what to buy,

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and then sort of evaluates, am I happy?

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The first step is problem recognition.

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So the consumer is triggered in some way

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to want a product or service.

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It might be I'm hungry,

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or my laptop got destroyed, many others.

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What are some other
things, some other needs?

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Or you could maybe think

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what was the trigger of the
last thing that you bought?

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And also think of what problem or need

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is your product or service addressing?

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What problem or need is your
product or service addressing?

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Once you recognize the problem,

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then you begin to do an information search

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and you think about what
should I buy to fill this need,

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to solve this problem, to fill this want?

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So the first thing you will probably do

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is an internal search.

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Have I bought anything like this before?

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And did I like it?

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Did it work well?

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Was I happy?

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And if it's new or if
you weren't that happy,

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then you might wanna do

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some sort of an internal
and external search.

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So asking your friends, searching online,

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maybe going on something like
Yelp or other product reviews,

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thinking about maybe some advertising

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for products or services in this category

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that you might know about.

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And then this will yield
the brand awareness set.

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So you're thinking about,

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what are all of the options out there,

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that will fill this need or
want or solve this problem.

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And that is your brand awareness set.

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So it's sort of the list of options

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that you come up with after the search.

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Now, obviously,

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the customer will not buy yours
if they are not aware of it.

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So they have to be aware of it.

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So part of your job,

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and especially when we start
to talk about promotion

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is to get into the head of the consumer

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and have yours be bumped to
the very top of the list.

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So once the consumer
has these alternatives,

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then she begins to choose from them.

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So when they're making this decision,

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these are some of the considerations

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that they will be thinking about.

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So first there are the objective criteria.

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So if you're talking about
food it'll be like nutrition,

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taste, texture.

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For any sort of consumer
product things like color,

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shape, size, anything like that.

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But then there's also more subjective.

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Some goods bring a certain
sense of prestige or fashion.

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Some certainly,

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some things are seen as being
more fashionable than others.

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And again, logically, if the
consumer is not aware of you,

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they're not going to consider you.

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Many of these objective criteria

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can be thought of as product attributes.

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What are the attributes of the product

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that you are offering or
that you are considering?

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And there's an interesting
model it's quite old now,

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but that looks at three
possible kinds of attributes.

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The first is a search attribute.

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That is something that you
can tell just by seeing it.

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So its size, its shape,
its color, et cetera.

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Something like a large
TV or a red bell pepper.

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The next type is an experience good,

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which you have to try it to know.

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So is an apple tart, what
this something tastes like,

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how does a car perform?

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Can it go fast?

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Does it hug the curves well?

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How does a new cell phone or
an electronics product perform?

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Is it easy to use?

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Is it intuitive?

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Do you enjoy using it?

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The third one, also called credence goods.

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So you can think of this word

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as having the same root
word as credibility.

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So here, it is difficult or
impossible for the consumer

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to know whether these
are true by looking at it

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like its size,

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or by consuming it, like it's taste.

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And this is things like
organic or fair trade.

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Many of the attributes that
have to do with sustainability

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are credence attributes.

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So you can't know that a
business pays a fair wage

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or sources from local businesses

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or has a smaller carbon footprint

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or recycles all of its
waste or anything like that.

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You can't tell those things
by looking at the product

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or even consuming it.

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So you sort of have to
take their word for it.

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And in many cases, so, USDA organic

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is a really good example.

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There is a third party
verification process

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where a farm that wants to
call its product organic.

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We'll bring in an inspector.

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The inspector comes and looks at the farm

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and gains an understanding

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of how this farm goes about its business.

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And it's doing all the things it must do

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and not doing any of the
things that it can not do.

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And then it gets this stamp of approval.

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But my main point here
is to think about that,

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most attributes having
to do with sustainability

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are credence attributes.

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And how are you going to be credible

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in the eyes of your consumers?

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Can you get a third party verification?

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Or do you just have to sort
of establish a reputation

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and just go with that?

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Once the consumer has sort
of weighed all the options,

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then they will go through
the next two stages

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where the purchase and post purchase.

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So they decide which
one to buy, they buy it,

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they consume it

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and then they think
about their expectations.

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(humming) Was this good?

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Did it taste good?

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Is this electronic device intuitive

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and is it fast

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and does it help me work more efficiently?

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Et cetera.

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Did this new CD or this new
music download, do I like it?

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Did I enjoy this movie?

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And then think about,
would I buy it again?

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Would I pay to download
another from this band?

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Would I eat lunch at
this food truck again?

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Et cetera.

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That's the end of part one.

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So when you're ready, please
watch the video for part two.

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Thank you.