MKT 3301 Buyer Behavior PDF

Preview

Summary

Connect assignment...

Description

Buyer Behavior

Page 1 of 11

Buyer Behavior This mission will focus on understanding the motivations of specific market segments and the resulting buyer behavior. We will look at the impacts of buyer behavior on product feature valuation, promotional and channel choices. After completing this mission, you should have an improved understanding of what motivates buyers to make a purchase of one product over another.

Welcome to Marketing Mini Sims: Buyer Behavior!

This mission will focus on understanding the motivations behind buyer behavior in specific market segments and look at how buyer behavior impacts choices for product features (PRODUCT), channels (PLACE) and advertising (PROMOTION).

Buyer Behavior

Page 2 of 11

Basic Simulation

Suggested Pre-Requisite: Planning and the Marketing Mix LEARNING OBJECTIVES After completing this simulation you should be able to: * Describe the stages of the buying process * Explain how consumers perceive value * Analyze how a product's purchase can be influenced by where it is sold * Apply an understanding of consumer wants/needs in the development of a desirable product

How You Earn Your Grade

Each Marketing Mini Sim is comprised of two parts, each worth 50% of your grade. * Accomplishing a mission goal or set of goals associated with the simulation topic * Answering a series of questions to demonstrate your understanding of the topic

Buyer Behavior

Choose your name and avatar image. Player name Student Success

Buyer Behavior Mission Goals 

Feature Desirability for Outdoor Enthusiasts of at least 90%

You have 3 turns to complete this Mission.

Page 3 of 11

Buyer Behavior

Page 4 of 11

Behavior Training Susan A Chief Marketing Officer needs to have a team that understands what motivates customers to buy products. Ian, our Director of Market Research, researches BUYER BEHAVIOR so that we make marketing investments that are based on customer needs. Ian will walk you through some fundamentals in preparation for your mission in buyer behavior. Ian Thank you, Susan. Our market research team spends quite a bit of time collecting data on customers. Research on buyer behavior focuses on how consumers select, procure, use and dispose of products and services. During this mission, we will spend time looking at elements that influence buyer behavior. Our focus will be on the OUTDOOR ENTHUSIAST Ian Pay particular attention to the five characteristics under PREFERENCES for OUTDOOR ENTHUSIASTS. Take some time to also explore the other target segments: COMMUTERS, LUXURY, SCHOOL CHILDREN and UNIVERSITY. Make note of their PREFERENCES. Ian PREFERENCE ratings show us which characteristics are most important to specific market segments. Marketers are always looking at data to establish correlations that can prove helpful in making decisions about all elements of the 4 P's. Although some correlations are established (for example, the greater frequency an ad is run, the greater the awareness), others like aggregate preference ratings and price are not. Ian Let's look at the data between PREFERENCES and PRICE PREFERENCE DATA. Add up the ratings for all five CHARACTERISTICS to arrive at a combined score for each SEGMENT (CAPACITY + COMFORT+ DURABILITY + WATERPROOF + ECOFRIENDLY.) Some segments have a higher combined rating than others.

Buyer Behavior

Page 5 of 11

Ian Now compare the combined preference ratings of each segment with the average purchase price. Is there a reasonable correlation between the combined preference ratings and average purchase price? Yes No Urban Commuter Combined Preference Rating: 28% + 56% + 14% + 28% + 14% = 140% Purchase Price: $45.00 Luxury Trendfollowers Combined Preference Rating: 31% + 62% + 31% + 16% + 16% = 156% Purchase Price: $170.00 Outdoor Enthusiast Combined Preference Rating: 83% + 21% + 41% + 83% + 21% = 249% Purchase Price: $90.00 School Children Combined Preference Rating: 47% + 23% + 23% + 12% + 12% = 117% Purchase Price: $24.00 University Students Combined Preference Rating: 34% + 17% + 17% + 17% + 68% = 153% Purchase Price: $32.00 Student Yes For the most part, the higher the combined preference ratings, the higher the average purchase price (Outdoor Enthusiasts (249%, $90), Luxury Trendfollowers (156%, $70), University Students (153%, $32) Urban Commuters (140%, $45), School Children (117%, $24)

Buyer Behavior

Page 6 of 11

Problem recognition Information search Alternative evaluation Purchase decision Post-purchase bevaviour

Ian For the backpack buyer, note the importance of each of the five main characteristics under PREFERENCES and consider each in terms of the five steps. Why are CAPACITY and WATERPROOF the most influential preferences in buyer behavior for the Outdoor Enthusiast? Outdoor Enthusiasts typically hike or camp for more than a day, so they need a big backpack than can handle a lot of wear and tear. Outdoor Enthusiasts are spending a lot of money for a good backpack, so it needs to be comfortable in addition to being big enough to carry everything they need. Outdoor Enthusiasts would need a large backpack – one that could handle the elements – since they are likely hiking or camping for more than a day. Student Outdoor Enthusiasts would need a large backpack – one that could handle the elements – since they are likely hiking or camping for more than a day. A hiking or camping trip of several days means overnights and the need to bring everything with them. Since you can't control the weather, you need to plan for rain. Ian It is now time for our backpack buyer to begin the INFORMATION SEARCH and EVALUATION OF ALTERNATIVES. Rachel, our Product Development Manager, will guide you through this process. Click FINISH to begin. FINISH Buyer Be Aware

Click to advance

Buyer Behavior

Page 7 of 11

Rachel Thanks, Ian. Make sure you are on the OUTDOOR ENTHUSIAST tab. This group of consumers is serious about their backpack gear. With this in mind, let's look at FEATURE DESIRABILITY options for our product. Rachel The goal of this mission is to achieve a FEATURE DESIRABILITY of at least 90%. FEATURE DESIRABILITY is a measure of how well your product aligns with the PREFERENCES of your target segment. For this exercise, focus on how well the product features align with customer needs and wants. Rachel PRICE is a manifestation of what VALUE a customer assigns to a product. If you accurately align the product features with the customer needs and wants, your customers are more likely to pay more for your product. For this exercise, the PRICE for your backpack has already been set at the average price for this target segment: $90. Rachel Click on the BACKPACK tab and make choices for the SHAPE, STRAPS, MATERIAL, FEATURES and COLOR. Notice as you make your choices, the STATS and PRODUCTION COST will change. Do not forget who your target customer is and what they VALUE. You can always click on the SEGMENTS tab for reference if you need to. When you are done with your choices, click FINISH to move onto the next phase. Oh Behave

click to advance

Buyer Behavior

Page 8 of 11

Rachel Where they choose to purchase their products is a key choice all consumers make in the decision-making process. Let's check on where these products will be sold. Click on the CHANNELS tab and then review the data on each channel choice. The key to which channels make sense is the TOTAL CUSTOMER REACH each channel has with each market segment and the ability to sell into the channel based on any price range limitations. Rachel Select the retail choice(s) that you feel are NOT appropriate for your target segment. As you do so, notice that different channels demand a greater or lower percentage of the sales price for your product. Retail University and Retail Fashion University Student University and Retail Correct. Both have an upper sales limit below the $90 average sales price. Rachel When arriving at a POSITIONING STATEMENT for our product, our job is to find the most effective one for this market segment. One source of influence that impacts buyers is that of values. Click on the ADVERTISING tab and the click on POSITIONING.There are a range of different positioning statements to choose from. Which of the positioning statements shown is a typical values-based message? Lightweight Fashionable Eco-Friendly Student Eco-Friendly Eco-Friendly is one form of value-bases messaging

Buyer Behavior

Page 9 of 11

Rachel Throughout the product design phase we emphasized the rational aspects of buyer behavior. Market research helped us determine the key features that needed to be a part of our product. But there are many other factors that play a part in buyer behavior. A good marketing manager thinks about the many PSYCHOLOGICAL and INDIVIDUAL influences that play a part in buyer behavior as this will help us tailor our promotional strategies to our target customer. Often, consumers use a values-based decision as opposed to a facts-based decision. Rachel We have selected PEAK PERFORMANCE as our positioning statement. Our research shows us that this is the optimal message for the Outdoor Enthusiast market segment. Rachel Click FINISH and then END TURN to review your choices. If you are happy, click YES END TURN to see how you did. If you are not happy with your choices, click NO REVISE STRATEGY and make any changes. After you made your changes, again END TURN and then YES - END TURN to find out how you did. FINISH

Buyer Behavior

Page 10 of 11

Susan Looks like you did not realize your goal. Click NEXT and Rachel will provide you with some feedback to allow you to make some adjustments to your strategy. Rachel There is quite a bit of feedback on your customers and what is happening in the market for you to review. To view the feedback, click on the SEGMENTS, COMPETITORS and HQ tabs. Each tab provides a variety of important metrics on your performance. Rachel In particular, look at the feedback on your backpack from your target segment. Analyze the information in the SEGMENTS/OUTDOOR/FEEDBACK and HQ/POSITION MAP tabs. Do the comments align with the requirements of the target market? Rachel Make any changes you see fit by clicking back on the BACKPACK tab to many any changes to the backpack elements, click FINISH and then END TURN to review your choices. If you are happy, click YES - END TURN to see how you did. FINISH Backpack Design: Shape: Large rectangular $15 Straps: Wide Padded $8 Material: Advanced $10 Features: Water Bottle $2 and extra waterproof protector for $10 extra Color: Blue Backpack production cost will be $45

Buyer Behavior

Page 11 of 11

Buyer Behavior YOUR PERFORMANCE Overall Score

100%

Goal Success

100/100

Questions Success

50/50

Mission Goals Feature Desirability for Outdoor Enthusiasts of at least 90% 94% Challenge Succeeded! Success The game is finished. You may inspect the game state, but no further changes are allowed.

click to advance Susan As Chief Marketing Officer, I want to congratulate you on reaching your goal! You realized that a perfect pack for the target market required a focus on CAPACITY and WATERPROOFING. Consumers will always be willing to pay for something that perfectly suits their needs. Susan After you click FINISH, take a few minutes to navigate the HQ, COMPETITORS, and SEGMENTS tabs to check out your results. These tabs include a lot of information on how you did such as: What did the other markets think of your backpack? What did your competitors sell into each market? As you progress, other missions will increase in difficulty. Taking a few moments to review how you succeeded here will help your future efforts. Congratulations! FINISH...