Intro to Marketing: Consumer Behavior Consumer Decision Process Problem Recognition Information Search Evaluation Purchase Postpurchase

What This Is

The Consumer Decision Process (CDP) is a crucial concept in marketing that explains how consumers make purchasing decisions. It involves a series of stages, from problem recognition to post-purchase evaluation. Understanding the CDP is essential for marketers to develop effective marketing strategies that resonate with their target audience. For instance, Nike's "Just Do It" campaign successfully tapped into the problem recognition stage by encouraging consumers to take action and pursue their fitness goals.

Key Frameworks & Metrics

• STP (Segmentation, Targeting, Positioning): Divides the market, selects the most attractive segment(s), and crafts a unique value proposition. Practical use: Develop a marketing strategy that resonates with a specific target audience.
• NPS (Net Promoter Score): Measures customer loyalty by asking how likely they are to recommend the brand – a key CX metric. Practical use: Identify loyal customers and improve their experience to boost retention.
• AIDA (Attention, Interest, Desire, Action): A classic framework for understanding consumer behavior. Practical use: Develop a marketing campaign that captures attention, generates interest, creates desire, and drives action.
• Customer Journey Map: Visualizes the customer's experience across touchpoints. Practical use: Identify pain points and opportunities to improve the customer experience.
• 4Ps (Product, Price, Promotion, Place): A fundamental framework for marketing mix decisions. Practical use: Develop a marketing strategy that balances product offerings, pricing, promotion, and distribution channels.
• 7Ps (Product, Price, Promotion, Place, People, Process, Physical Evidence): An extension of the 4Ps, considering additional factors. Practical use: Develop a comprehensive marketing strategy that incorporates people, process, and physical evidence.
• LTV (Lifetime Value): Measures the total value a customer brings to a business over their lifetime. Practical use: Set CAC (Customer Acquisition Cost) targets based on LTV to ensure profitability.
• CAC (Customer Acquisition Cost): Measures the cost of acquiring a new customer. Practical use: Set realistic CAC targets based on LTV and marketing channel performance.
• ROAS (Return on Ad Spend): Measures the revenue generated by an ad campaign compared to its cost. Practical use: Optimize ad spend to maximize ROAS.
• NPS (Net Promoter Score): Measures customer loyalty by asking how likely they are to recommend the brand – a key CX metric. Practical use: Identify loyal customers and improve their experience to boost retention.

Step-by-Step Process

1. Identify the target audience: Use STP to segment the market, select the most attractive segment(s), and craft a unique value proposition.
2. Understand the customer journey: Create a customer journey map to visualize the customer's experience across touchpoints.
3. Develop a marketing strategy: Use the 4Ps or 7Ps to develop a comprehensive marketing strategy that balances product offerings, pricing, promotion, and distribution channels.
4. Measure and optimize: Use metrics like LTV, CAC, ROAS, and NPS to measure marketing performance and optimize marketing strategies.
5. Evaluate and refine: Continuously evaluate and refine the marketing strategy based on customer feedback and market trends.

Common Mistakes

• Mistake: Confusing market segmentation with personas.
• Correction: Market segmentation involves dividing the market into distinct groups, while personas are fictional representations of ideal customers.
• Mistake: Relying only on last-click attribution.
• Correction: Use multi-touch attribution models to accurately measure the impact of each marketing touchpoint.
• Mistake: Ignoring LTV when setting CAC.
• Correction: Set realistic CAC targets based on LTV to ensure profitability.

Marketing Strategy Tips

• When positioning a new product, avoid over-segmentation that leads to a niche with insufficient market size.
• Use customer journey mapping to identify pain points and opportunities to improve the customer experience.
• Develop a comprehensive marketing strategy that incorporates people, process, and physical evidence.

Quick Practice Scenario

Scenario: A D2C brand's ROAS dropped from 4x to 2x after scaling Facebook ads. What analysis would you perform to diagnose the issue?

Answer: Analyze the ad creative, targeting, and bidding strategies to identify potential issues. Consider using A/B testing to optimize ad performance.

Explanation: Diagnose the issue by analyzing the ad creative, targeting, and bidding strategies to identify potential issues.

Last-Minute Cram Sheet

1. STP (Segmentation, Targeting, Positioning) helps marketers develop a unique value proposition.
2. NPS (Net Promoter Score) measures customer loyalty by asking how likely they are to recommend the brand.
3. AIDA (Attention, Interest, Desire, Action) is a classic framework for understanding consumer behavior.
4. Customer Journey Mapping visualizes the customer's experience across touchpoints.
5. 4Ps (Product, Price, Promotion, Place) is a fundamental framework for marketing mix decisions.
6. 7Ps (Product, Price, Promotion, Place, People, Process, Physical Evidence) considers additional factors beyond the 4Ps.
7. LTV (Lifetime Value) measures the total value a customer brings to a business over their lifetime.
8. CAC (Customer Acquisition Cost) measures the cost of acquiring a new customer.
9. ROAS (Return on Ad Spend) measures the revenue generated by an ad campaign compared to its cost.
10. ⚠️ 'Brand equity' is not just awareness – it includes perceived quality, loyalty, and brand associations.