Week 8 - Customer & New Media (MKT400 - Fall 2024) PDF

Understanding the Customer and New Media MKT400 – Fall 2024 Week 8 – Individual Differences and Consumer Relationships Week 8 – Individual Differences and Consumer Relationships Personality The totality of thoughts, emotions, intentions and behaviours that a person exhibit...

Understanding the Customer and New Media MKT400 – Fall 2024 Week 8 – Individual Differences and Consumer Relationships Week 8 – Individual Differences and Consumer Relationships Personality The totality of thoughts, emotions, intentions and behaviours that a person exhibits consistently as they adapt to the environment Involves several aspects: ✓ Cognitive → thoughts ✓ Affective → emotions ✓ Motivational → intentions ✓ Behavioural → behaviours https://www.verywellmind.com/what-is-personality-2795416 Personality is one characteristic that explains why a particular behaviour provides great value to one customer but none to another Week 8 – Individual Differences and Consumer Relationships Personality Qualities Personality is unique to an individual, although some characteristics may be shared across individuals Personality can be conceptualized as a combination of specific traits or characteristics Personality traits are relatively stable and interact with situations to influence behaviour Specific behaviours can vary across time Week 8 – Individual Differences and Consumer Relationships Psychoanalytic Approach to Personality For Freud, personality consists of three important components: ✓ Id: focuses on pleasure seeking and immediate gratification (pleasure principle) – focus on hedonic value ✓ Superego works against the id by motivating behaviour that matches societal norms and expectations ✓ Ego, works under reality principle, which seeks to satisfy the id within the https://positivepsychology.com/psychoanalysis/ constrains of society Week 8 – Individual Differences and Consumer Relationships Trait Approach to Personality A Trait is a distinguishable characteristic that describes one’s tendency to act in a relatively consistent manner Nomothetic perspective is a variable-centered approach that focuses on particular variables, or traits, that exist across a number of consumers ✓ The goal is to find common personality traits that can be studied across people Ideographic perspective focuses on the total person and the uniqueness of their psychological makeup – the focus is to understand the complexity of each consumer Week 8 – Individual Differences and Consumer Relationships Trait Approach to Personality Single Trait Approach, where the focus of the research is on one particular trait, learning more about the trait and how it affects behaviour Multiple Trait Approach, where combinations of traits are examined and the total effect of the collection of traits as potential predictors of consumer behaviour Week 8 – Individual Differences and Consumer Relationships Trait Approach to Personality Week 8 – Individual Differences and Consumer Relationships Specific Traits in Consumer Research Value Consciousness, represents the tendency for consumers to focus on maximizing what is received from a transaction compared to what is given Materialism, the extent to which material goods are important in the consumer’s life ✓ Possessiveness: retain control and ownership ✓ Non-generosity: unwillingness to share ✓ Envy: resentment about others’ belongings Innovativeness, the degree to which consumers are open to new ideas and quick to adopt new products, services or experiences early in introduction Week 8 – Individual Differences and Consumer Relationships Specific Traits in Consumer Research Need for Cognition, consumers tend to engage in effortful cognitive information processing; tend to think carefully about products, problems and even marketing messages Competitiveness: the enduring tendency to strive to be better than others; use of competitive themes in marketing messages is widespread ✓ When a consumer is directly competing with others ✓ When a consumer enjoys vicariously through the efforts of others ✓ When a consumer attempts to display superiority over others by flaunting exclusive products Week 8 – Individual Differences and Consumer Relationships Specific Traits in Consumer Research Productivity Orientation, the tendency for consumers to focus on being productive, making progress and accomplishing more in less time Other Traits found in Consumer Research: Week 8 – Individual Differences and Consumer Relationships Brand Personality Consumers do describe brands with humanlike qualities Brand personality refers to human characteristics that can be associated with a brand Brand personalities can be described across five dimensions: Week 8 – Individual Differences and Consumer Relationships Brand Personality Brand personalities represent opportunities for companies to differentiate their products Accordingly, a brand’s personality may be viewed as a part of its overall image Brand personalities also provide marketers with opportunities to build strong brand relationships with consumers, especially when they have an understanding of their customer’s personality Many factors influence brand personality: product category, packaging, price, sponsorship, symbols and celebrity endorsements Week 8 – Individual Differences and Consumer Relationships Brand Personality https://blog.hubspot.com/marketing/what-is-brand-personality Week 8 – Individual Differences and Consumer Relationships Lifestyles and Psychographics Lifestyles refer to the ways customers live and spend their time and money Personality and lifestyles are closely related Importantly, lifestyles are not completely determined by personality; they emerge from the influence of culture, groups and individual processes (including personality) Purchase patterns are often influenced by consumer lifestyles; marketeers often target consumers based on lifestyles Week 8 – Individual Differences and Consumer Relationships Lifestyles and Psychographics Psychographics refers to the ways consumer lifestyles are measured Use quantitative methods in the development of lifestyle profiles; not the same as demographics Demographics refers to observable, statistical aspects of population; lifestyles, although observables, refer to how consumers live Psychographic analysis involves surveying consumers using AIO statements (attitudes, interests and opinions) Segments often contain consumers with similar lifestyles Week 8 – Individual Differences and Consumer Relationships Brand Personality https://bbamantra.com/lifestyle-segmentation/ Week 8 – Individual Differences and Consumer Relationships VALS A marketer can either identify their own lifestyle segmentation or use established methods already available VALS is a successful segmentation approach adopted by several companies that stands for “Values and Lifestyles” that includes eight segments Week 8 – Individual Differences and Consumer Relationships PRIZM PRIZM is a popular geodemographic tool used for lifestyle analysis Geodemographic techniques combine data on consumer expenditure and socioeconomic variables with geographic information to identify commonalities in consumption https://environicsanalytics.com/en-ca/data/segmentation/prizm/prizm-highlights-intro of households in various regions Week 8 – Individual Differences and Consumer Relationships Self-Concept and Consumer Behaviour Self-Concept refers to the totality of thoughts and feelings an individual has about him/herself Consumers are motivated to act in accordance with their self-concepts Consumers use products as symbols to convey their self-concepts to others; products are an essential part of self-expression Body piercings and other forms of body decoration, as tattoos, represent other methods of promoting self-concepts https://www.explorepsychology.com/self-concept/ Week 8 – Individual Differences and Consumer Relationships Personalities, Lifestyles and Self-Concepts Personality, lifestyles, and the self-concept are all important topics in the study of consumer behaviour Consumers differ across each of these concepts, and these differences help signal the need for targeted marketing communications Week 8 – Individual Differences and Consumer Relationships Outcomes of Consumption A transaction can be a starting place for future transactions One of the most important things that can happen after a first transaction is another transaction Business should be very interested in the outcomes of consumption Procedural justice refers to the extent that consumers believe the process involved in processing a transaction, performing a service or handling a complaint are fair Week 8 – Individual Differences and Consumer Relationships What Happens After Consumption? Consumer’s attributions represent cognitions about why the Behavioural engagement, particularly in terms of performance turned out as it did, and equity perceptions are future purchasing, is why marketers are interested cognitive reactions related to fairness and justice in pursuing satisfaction Week 8 – Individual Differences and Consumer Relationships Complaining Complaining Behaviour occurs when a consumer actively seeks someone to share an opinion with regarding a negative consumption event Not all dissatisfied customers complain Complains are a prime source information that can be used to make improvements to goods and services Personality, demographic and cultural factors can also influence complaining Week 8 – Individual Differences and Consumer Relationships The Results of Complaining For consumers as well as marketers, complaining pays off When consumers Complainers and Non-Complainers complain, more often than not, some corrective action is taken that culminates with the consumer feeling satisfied when they re-evaluate the situation Week 8 – Individual Differences and Consumer Relationships Handling Customers’ Complains Some tips for handling customer complaints 1. Respond by thanking the customer for providing the information 2. Listen carefully to understand the facts 3. Apologize sincerely 4. Show empathy for the customer 5. Explain the corrective action that will take place 6. Empower employees to take corrective action quickly 7. Communicate clearly and professionally 8. Address the core issue to prevent reoccurrence Week 8 – Individual Differences and Consumer Relationships Responses Pay Off Today, it’s easier than ever for consumers to complain publicly Most major companies offer customer service on social media platforms it’s better for companies to respond assertively to complaints, usually by offering compensation Providing compensation more than pays for itself in terms of customer retention— respond quickly! Week 8 – Individual Differences and Consumer Relationships Word-of-Mouth and Publicity WoM represents an important aspect of customer engagement with a brand; can be positive or negative Just because a customer doesn’t complain to the company does not mean they just keep the episode for themselves WoM exerts strong influence on other consumers: it has relatively high credibility Firms need to monitor online reviews and social media posts and respond in a way that is not argumentative, but that invites further communication with a legitimate complainant Week 8 – Individual Differences and Consumer Relationships Negative Publicity When negative WoM spreads on a relatively large scale, it can result in negative publicity which can involve media coverage Formerly loyal consumers sometimes become the biggest sources of negative WoM More and more consumers are turning to social media as a way of spreading negative publicity In the social media world, the key is to respond quickly before negative news goes viral Negative publicity can harm a brand Week 8 – Individual Differences and Consumer Relationships How to Handle Negative Publicity Some alternative courses of action: 1. Do nothing; the news will eventually go away 2. Deny responsibility for any negative events 3. Take responsibility for any negative events and be visible in the public eye 4. Release information allowing the public to draw its own conclusion Week 8 – Individual Differences and Consumer Relationships Switching Behaviour Switching refers to the times when a consumer chooses a competing choice rather than the previously purchased choice on the next purchase occasion However, consumers prefer status quo When choosing to switch, the consumer will incur some switching costs - costs associated with changing from one choice to another Switching costs are one reason why a consumer may be dissatisfied with a service provider but will continue to do business with them Week 8 – Individual Differences and Consumer Relationships Switching Costs Switching costs can be divided into three categories: 1. Procedural: involve lost time and effort 2. Financial: he total economic resources that must be spent or invested as a consumer learns how to obtain value from a new product choice 3. Relational: the emotional and psychological consequences of changing from one brand/retailer/service provider to another Even though all types of costs can prevent switching, evidence suggests that relational barriers may be the most resistant to influence Week 8 – Individual Differences and Consumer Relationships Switching Costs Week 8 – Individual Differences and Consumer Relationships Satisfaction and Switching Besides measurement difficulties associated with CS/D, switching costs are another important reason why CS/D results often fail to predict future purchasing behaviour Dissatisfaction does not always mean that the consumer is going to switch Week 8 – Individual Differences and Consumer Relationships Consumer Loyalty Getting business from a customer who has transacted with the company before is easier and less expensive This basic belief motivates much of relationship management Customer Share is the portion of resources allocated to one brand from the set of competing brands (aka Share of Wallet) Customer share represents a behavioural component that is indicative of customer loyalty Week 8 – Individual Differences and Consumer Relationships Consumer Loyalty Consumer Inertia means that a consumer will tend to continue a pattern of behaviour until some stronger force motivates them to change A Loyalty Program encourages repeated purchasing and track the amount of engagement a consumer has had with a given marketer More spending or engagement generally brings more rewards in one form or another Many marketers use loyalty programs to try to increase customer share Week 8 – Individual Differences and Consumer Relationships Consumer Loyalty Repeated behaviour alone cannot explain loyalty True consumer loyalty consists of both a pattern of repeated behaviour (evidenced by high Customer Share) as well as a strong feeling of attachment, dedication, and sense of identification with a brand Consumer Commitment captures this sense of attachment, dedication and identification Customer share is behavioural and Commitment is an affective component of loyalty Week 8 – Individual Differences and Consumer Relationships Consumer Loyalty Components Behavioural Affective Week 8 – Individual Differences and Consumer Relationships Anti-Loyalty Anti-loyal consumers will do everything possible to avoid doing business with a marketer Anti-loyalty is often motivated by a bad experience between a consumer and the marketer that the marketer could not redress Anti-loyal customers are often consumers who have switched and treat the former marketer as a jilted partner Anti-loyal consumers who are former customers become perhaps the most frequent source for negative word-of-mouth