Hi, welcome. My name is Dr. Marcy Stone and this is Unit 6 Consumer Analysis and Marketing Strategy of your Consumer Behavior Course. This course has 10 units. In Unit 6 is Consumer Analysis and Marketing Strategy. Here are the Unit 6 learning outcomes. Identify the components of an effective customer management strategy. Compare the different formulas for calculating customer value. Identify the different dimensions for a customer segmentation. Explain how to use information from the customer management cycle to better acquire to acquire better customers. Evaluate the differences between the customer management approaches for mass marketing versus direct marketing. Why are learning outcomes important? So every learning outcome ties back to your course materials and your content. This includes assessments and test preparation. These are the Unit 6 overview topics that we're going to. So we have components of a customer management strategy, calculating customer value, customer segmentation dimensions, the customer management cycle, and customer management approaches. And then these are the vocabulary terms that we're going to be discussing in this presentation. Okay. Almost every business uses some type of customer relationship management or CRM system to organize customer data, consumer data. This includes marketing sales, any consumer interactions, and your account information. So some CRM systems gather very detailed information, and this data can be used by marketing to determine future sales. So for example, a general merchandise store may notice that a customer or a consumer is buying prenatal vitamins. So maybe they go through the checkout line, they ask for a phone number, and it gets recorded into like their buying habits or buying purchases get recorded into a system. So they buy prenatal vitamins, and that may, and then the company may end up sending the consumer coupons that are related to maybe being pregnant or having a baby. So that would be an example of how a company might use the CRM system. Okay. So this gives you and it shows you all of these different areas that might input information for any business. Even schools, education systems have this. So each company will have a way to support the customer. And it might be through sales, they might record some basic information, they might get names, phone numbers, sometimes they might ask you for addresses that might end up in the system, depending on shipping, that kind of thing. And so you look at any sales interaction in there, any service, any follow up, it could be, I don't know if you're on Amazon and you're buying something, you might even be able to chat with somebody if you have a question about a product that arrived or maybe didn't arrive, that any service interactions would be recorded in that system as well. And then you have support. So anything that they're doing like in an education environment, it might be you have your, your sales or your admissions team would cover one aspect of it. Your service might be anybody that has interaction, it could be career services, it could be your registrar's office. And then your support might be financial aid, it might be an advisor, but any of those interactions would be put into the CRM system. And then you have quality and quality is, you know, what, how are the level of those employees helping this person? Are they recording all of the pertinent information into it? The more quality of information that can be put into the system, the better. And then all of this information can be used by marketing. So I gave you the example of somebody goes into a grocery store, maybe, and then they record, you put in your phone number, you want to get rewards, but they're really analyzing how often does this person come into the store? What is this person buying? Can we give this person coupons that are related to their purchase so that they'll come back again? All of those things are part of that CRM system. All right. By analyzing consumer data, a marketer can better determine customer value. For example, if a consumer makes $300 purchases biweekly for several years, they may be more valuable as a customer who makes maybe a one time purchase of $1,000. So this information can help a company determine which customers they may want to focus their marketing efforts on. So some customers may require extra arrangements. Maybe they use employees times with a lot of questions. Maybe they return half of the products that they purchase. And these customers may have a decreased value. So when you're reviewing this information over time, marketing may be able to determine a customer lifetime value with formulas that can be easily calculated. All right. By segmenting customers, a marketer may be able to focus on their exact target market. This customer segmentation might include demographics, psychographics, geographics or behavioral information. So for example, if a marketer determines the average age of a target market, they may be able to easily promote a product to that specific demographic. So psychographic occurs when a consumer makes decisions based on their interests, their values or their beliefs. And then geographic segmentation is based on physical location of the customer. And behavioral segmentation occurs when consumers make purchasing decisions based on their habits. So this might include their spending or maybe online browsing. So having the ability to segment customers into more than just basic demographic information is important in marketing. So this helps a marketer to better understand its target market and then focus that marketing on that target market. Okay. So this slide is interesting. It looks at segmenting people who fly. So you've got your air travel consumers and an airline may do something like this. So they look at who are the bulk of our people that fly? Where do we make the most money from? And it looks like 46% are your efficiency seekers. So this might be business travel, they're doing short trips, and then they most likely are going to take economy class if their employer is paying for their purchase. So that's 46%. That's quite a large number when you're looking at all of these other travelers that are here. Then you've got your convenience seeker. These might be people taking a longer trip. It could be a business trip. They might fly economy. They might fly premium. And then you've got your individuality seeker, which is about 10%. So these are the people who are taking business trips. They may take any route and they might fly first or business. And usually these are people that are paying for their own tickets. But that's individuals. And then you have 5% exclusivity seeker. These might be leisure trips. They're going on vacation, a honeymoon, something like that. It could be any route. They might be flying international. It might be domestic. They typically want like a premium cabin. And then you have 19%, which is your adventure seeker. So these are typically they're going on a leisure trip. It might be a long haul trip. They're going somewhere internationally. They're typically going to fly international class or economy class. And then we have a care seeker or family. You're looking at about 6% of the population. So we have a leisure trip. They're looking at all routes and they might be in any class economy class. It could be comfort. I think they call it or first class. So this is interesting when we look at the airlines that are segmenting their customers into certain categories. So this can help somebody in marketing to say, you know what? If 46% are efficiency seekers, that's really our target market. The rest of them are going to come whether we like it or not. And so maybe they don't focus their marketing on these other types of flyers. And maybe they're looking at these efficiency seekers. And so it's an interesting way from another market's perspective or another industry's perspective. It's an interesting way to look at it. Okay, so a customer management cycle. It's sometimes also called a customer life cycle. It's important in marketing to determine customer loyalty. So a few customer life aspects might include retention, conversion rate, or information about how a customer was initially obtained, or perhaps customer loyalty. So the more detailed this information is, the more focus the target marketing might be. And this information may help to gain additional customers or consumers. So for example, marketing can be more focused when the average age and a conversion rate for a specific product is better understood. If marketing research uncovers the target market for RV ownership, and maybe they find out that they're 60 to 70 years of age, and then at this age, they may buy two or three RVs in that 10 year period. And maybe the 40 to 50 year olds may buy one during the same timeframe. Then getting strategy may focus on the 60 or set to 70 year olds because of their buying potential. Mass marketing attempts to reach a large amount of people at the same time. So this type of advertising might include television commercials, radio ads, at home mailers or newspapers. So the return on mass marketing is lower than other types of marketing. So grocery stores may create a weekly advertising flyer that's mailed out to everybody who lives in the immediate area. Although the grocery store may also get walk-ins, a few people will read the weekly advertising flyer and make purchasing decisions based on that marketing. Direct marketing will target a specific market. For example, a gym might promote advertisements in health food stores where health conscious or athletic individuals may visit. This type of marketing is very focused on a very specific customer. Alright, in conclusion, so these are the learning outcomes that we covered in this presentation. So we looked at components of an effective customer management strategy. We looked at the different formulas for calculating customer value. We looked at the dimensions for customer segmentation. We also talked a little bit about customer management cycle to acquire better customers. And then we evaluated the differences between customer management approaches for mass marketing versus direct marketing. What's next? So Unit 7 is on the effects of consumer groups. So my name is Dr. Marcy Stone, and I just wanted to say thank you for listening.