Consumer Behavior at 3 segments-Apostles, Mercenaries and Terrorists

SUBMITTED BY:-ABHINAV MEHROTRA

SANDEEP GREWAL

Actions a person takes in purchasing and using products and services, including the mental physical and social processes that precede and follow these actions.

Consumer Behaviour

Consumer Decision Making Model- Factors

Consumer Decision Making Model- Factors

Prob Recognition

Inf Search & Evaluation

Pur process

Post Pur Beh

Motivation &

Involvement

Attitudes

Personality & Self-Concept

Learning &

Memory

Sub-Cultural Influences

Social-Class Influences

Cultural

Social-Group Influences

Family Influences

External Env

External Env

Internal

Determinants Internal

Determinants

Personal Influences

DECISION PROCESS

DECISION PROCESS

STEPS IN CONSUMER BUYING DECISION MAKING PROCESS

CONSUMER DECISION PROCESS

NEED RECOGNITIONINFORMATION SEARCHEVALUATION OF

ALTERNATIVESPURCHASE &

CONSUMPTIONPOST-PURCHASE

EVALUATIONDIVESTMENT

Customer satisfaction &customer behavior

• Loyalists• Apostles• Defectors• Terrorists• Hostages• Mercenaries

APOSTLES

• Apostles - at the other end of the scale the highly loyal and highly satisfied customers. What sets them apart is the fact they actively go out and spread the good word. Some interesting research carried out by Xerox found that customers rating “extremely satisfied” were 6 times more likely to repurchase than those ranking “satisfied” the very next option down. These are the company’s best friends

LOYALISTS

• Loyalists - High satisfaction and high loyalty but do not spread the word that much. What separates loyalists from apostles is really how they spread the word. As well as being active Apostles need to be very well connected and typically influential – i.e. they are able to spread the word to lots of people and those people are likely to listen. However the loyalists can be thought of as the bedrock of your company, they keep on coming back.

MERCENARIES

• Mercenaries - often the bulk of the customer base. Apparently satisfied and loyal these people tend to switch to the best deal as they see it. In industries with a low cost of switching they are likely to change supplier quickly and without warning. For example where there are plenty of reasonable “me too” products then price / special offer is often the differentiator. Many Mercenaries have the behavior to deeply ingrained to change, but others would willingly become Loyalists when they receive the right product and service combination from a supplier.

TERRORISTS

• Terrorists - at the very bottom of the scale there are customers who are extremely dissatisfied and have very low loyalty. They can do great damage to the business – particularly in the Internet age -though blogs, emails and word of mouth are the more likely outlets.

HOSTAGES

• Hostages - with medium to high loyalty and satisfaction these customers tend be to “stuck” – think of contracts where you are locked in for 12-18 months, not very happy but no easy way out or where other “costs of switching” keep you locked in to your current supplier. Monopoly / oligopoly supply situations create hostages too.

DEFECTORS

• Defectors - neither particularly loyal nor particularly satisfied. If they haven’t already left they are likely to. However they tend not be as vocal as the Terrorists in expressing their dissatisfaction. They are often one trigger away from leaving. As with Mercenaries many would willingly become Loyalists when they receive the right product and service combination from a supplier.

WHAT THIS MODEL IS FOR?

• As with all such models the key lies not so much with the analysis, but what you actively do to improve things for your business. How do you win over the terrorists or increase the number of apostles, for example.

Customer retention

1. Loyal customers buy more2. Loyal customers are less price sensitive3. Servicing existing customers are cheaper4. Loyal customers spread positive word-of

mouth