- [Instructor] Hello, everyone,
and welcome to week three of CDA 168.
So this week,
we're gonna be talking about "Customers and Competitors".
And this week's topic
will help you think about who is going to buy your product
as sort of deep dive into what are the influences
of why people buy what they buy
and then also beginning to look at competitors.
The agenda for this, and this is a three-part lecture,
gonna start with announcements
and then go through the two main topics,
"Customers and Competitors".
So as always,
there will be an assessment on this topic
basically, to ensure that you come to class prepared
and that, so that I know what clicked for you
and what didn't click?
That's always helpful for me.
So do that by 10:00 am, September 9th.
The homework for this week is due a week after that,
on September 16th.
And next week's topic,
we'll be beginning to do an even deeper dive into consumers
and how to break them up into groups.
So how to segment, how to target them.
And beginning to think about a very important concept
in marking, which is the position in the marketplace.
And that's next week.
Here is the homework that will be due on September 16th.
(plane engine rolling)
So, first of all,
I want you to think about the potential customer.
What might trigger a need?
How involved are they going to be?
Are there any specific socio-cultural groups
or sub-cultures that you think will be especially interested
and why?
What are the situational influences?
When and how do you anticipate customers
buying your product or service?
And then in part two,
we're gonna look at who are the two main competitors?
And where do they fall on the competition continuum?
And how do their respective strengths and weaknesses
compare to yours?
And how do they create opportunity for you?
To begin with, there's two main types of competitors.
There is so-called B2C, which is business to consumers,
where whoever ends up consuming the product or service
buys from you.
There is also B2B sort of intermediary markets,
where you would be selling to another business
who will then take what you buy
and transform it in some way
or use it in some way to deliver a product or service
down the supply chain eventually to the end consumer.
So that's B2B and B2C,
business to consumer, business to business.
The first thing we're going to do
is jump into the B2C model.
I'm imagining many of you, your business ideas
or organizational ideas that you'll be doing,
your marketing plans will be on, will have the B2C model
that you'll be dealing with the end consumer.
So we're gonna do that first.
And we're gonna think about,
why are they making the decisions that they are?
And our textbook author, Crane,
says that "Behind every purchase is a customer".
And so to be able to hopefully,
guide the customer to your business
and buying something from you,
we need to know who they are and what they buy.
But especially for this class,
we're thinking about how they buy and why they buy?
The who they are, will be next week.
And the what they buy will be when we think about product,
when we get into the four Ps
where we'll deal with that in more depth.
This is a really simple three step model
for the purchase decision.
The pre-purchase, the purchase and the post-purchase.
The next few slides,
we'll walk you through the five stage model
where the consumer recognizes a problem,
does an info search, evaluates the alternatives,
decides what to buy,
and then sort of evaluates, am I happy?
The first step is problem recognition.
So the consumer is triggered in some way
to want a product or service.
It might be I'm hungry,
or my laptop got destroyed, many others.
What are some other things, some other needs?
Or you could maybe think
what was the trigger of the last thing that you bought?
And also think of what problem or need
is your product or service addressing?
What problem or need is your product or service addressing?
Once you recognize the problem,
then you begin to do an information search
and you think about what should I buy to fill this need,
to solve this problem, to fill this want?
So the first thing you will probably do
is an internal search.
Have I bought anything like this before?
And did I like it?
Did it work well?
Was I happy?
And if it's new or if you weren't that happy,
then you might wanna do
some sort of an internal and external search.
So asking your friends, searching online,
maybe going on something like Yelp or other product reviews,
thinking about maybe some advertising
for products or services in this category
that you might know about.
And then this will yield the brand awareness set.
So you're thinking about,
what are all of the options out there,
that will fill this need or want or solve this problem.
And that is your brand awareness set.
So it's sort of the list of options
that you come up with after the search.
Now, obviously,
the customer will not buy yours if they are not aware of it.
So they have to be aware of it.
So part of your job,
and especially when we start to talk about promotion
is to get into the head of the consumer
and have yours be bumped to the very top of the list.
So once the consumer has these alternatives,
then she begins to choose from them.
So when they're making this decision,
these are some of the considerations
that they will be thinking about.
So first there are the objective criteria.
So if you're talking about food it'll be like nutrition,
taste, texture.
For any sort of consumer product things like color,
shape, size, anything like that.
But then there's also more subjective.
Some goods bring a certain sense of prestige or fashion.
Some certainly,
some things are seen as being more fashionable than others.
And again, logically, if the consumer is not aware of you,
they're not going to consider you.
Many of these objective criteria
can be thought of as product attributes.
What are the attributes of the product
that you are offering or that you are considering?
And there's an interesting model it's quite old now,
but that looks at three possible kinds of attributes.
The first is a search attribute.
That is something that you can tell just by seeing it.
So its size, its shape, its color, et cetera.
Something like a large TV or a red bell pepper.
The next type is an experience good,
which you have to try it to know.
So is an apple tart, what this something tastes like,
how does a car perform?
Can it go fast?
Does it hug the curves well?
How does a new cell phone or an electronics product perform?
Is it easy to use?
Is it intuitive?
Do you enjoy using it?
The third one, also called credence goods.
So you can think of this word
as having the same root word as credibility.
So here, it is difficult or impossible for the consumer
to know whether these are true by looking at it
like its size,
or by consuming it, like it's taste.
And this is things like organic or fair trade.
Many of the attributes that have to do with sustainability
are credence attributes.
So you can't know that a business pays a fair wage
or sources from local businesses
or has a smaller carbon footprint
or recycles all of its waste or anything like that.
You can't tell those things by looking at the product
or even consuming it.
So you sort of have to take their word for it.
And in many cases, so, USDA organic
is a really good example.
There is a third party verification process
where a farm that wants to call its product organic.
We'll bring in an inspector.
The inspector comes and looks at the farm
and gains an understanding
of how this farm goes about its business.
And it's doing all the things it must do
and not doing any of the things that it can not do.
And then it gets this stamp of approval.
But my main point here is to think about that,
most attributes having to do with sustainability
are credence attributes.
And how are you going to be credible
in the eyes of your consumers?
Can you get a third party verification?
Or do you just have to sort of establish a reputation
and just go with that?
Once the consumer has sort of weighed all the options,
then they will go through the next two stages
where the purchase and post purchase.
So they decide which one to buy, they buy it,
they consume it
and then they think about their expectations.
(humming) Was this good?
Did it taste good?
Is this electronic device intuitive
and is it fast
and does it help me work more efficiently?
Et cetera.
Did this new CD or this new music download, do I like it?
Did I enjoy this movie?
And then think about, would I buy it again?
Would I pay to download another from this band?
Would I eat lunch at this food truck again?
Et cetera.
That's the end of part one.
So when you're ready, please watch the video for part two.
Thank you.