chapter 2

what to calculate customer lifetime value ?

(cusomter lifetime value)=(net present value "sales-costs")of the stream of profits over a customers lifetime +plus the worth attributed to the equity a good customer can bring "word of mouth" (net present value )(equity) npv(sales-costs)+npv(equity)=Customer lifetime value

utilitarian example

a person buys bleach , which will be used for cleaning , thus purchasing and using and in the end cleaning which gratifies the customer , value is then provided bc the object or activity allows for something else to be good,accomplished

value

a personal assessment of the net worth obtained from an activity . (what you get -what you give )=(value)

consumer perception process ?

begins with sensing ,organizing ,reacting goes back to sensing

consumer value framework (CVF)

consumer behavior theory that illustrates factors that shape consumption -related behaviors and ultimately determine the value associated with consumption

sensation

describes a consumers immediate response to this information .

social enviroment

elements that specifically deal with the way other people influence consumer decision making and value .For example , the people and groups who help shape a consumers everday experiences. "group influences "

value co-creation example

for example 24 hour fitness , serves customers by making workout facilities available any time of the day . however the customer can only realize value from the offer by paying for this services and applying diligence ,skills,and effort to workout regime .

cognitive

for example referres to the thinking or mental process , that goes on when we store things in our brain, for example a child listens to there parents who refers to smoking as nasty there for smoking becomes associated with nasty .

example of internal influences

has to do with the psychology of the consumer involves both cognitive and affective process .

external influences

include the social and cultural aspects of life as a consumer ,for example they directly impact the value of activites , for example breakfast is different to others around the world . also includes social influences

product differentiation

is a market place condition in which consumers do not view all competing products as identical to one another .

cognitive organization

is the process by which the human brain assembles sensory evidence into something recognizable (organizing )

exposure

is the process of bringing some stimulus within proximity of a consumer so that the consumer can sense it with one of the 5 human sences. ( sight ,smell,taste,touch,sound)

what is value CO- creation ?

is the realization that a consumer is necessary and must play a part in order to produce value .

market segmentation

is the separation of a market into groups based on the different demand curves associated with each group . for example ,as the price for a tablet computer decreases ,the quatity sold increases.in other words there is a negative relationship between price and quality sold.

what is learning ?

its reffered to a change in behavior resulting from the interaction between a person and a stimulus .

implicit memory

memory for things that a person did not try to remmeber , implicit memory creates preattentive effects which means learning that is developed in the absence of attention , in other words implicit memory is stronger do to how distracting something might become for example an ad.

explict memory

memory that develops when a person is exposed to , attends and tries to remember information

conditioned stimulus

object or event that does not cause the desired responses naturally but that can be conditioned to do so by pairing with an unconditional stimulus

assilmilation

occurs when a stimulus has characteristics such that individuals readily recognize it as an example of a specific category .

accommodation

occurs when a stimulus shares some, but not all , of the characteristics that allow it to fit neatly in an exciting category ,at this point the consumer will begin processing which allows exceptions to rules about a category

absolute threshold

of perception ,the minimum strength needed for a consumer to perceive a stimulus , this type of learning is unintentional because the stimuli falls under the absolute threshold

selective distortion

process by which consumers interpret information in ways that are biased by their previously held beliefs

selective attention

process of paying attention to only certain stimuli

selective exposure

process of screening out certain stimuli and purposely exposing oneself to other stimuli

affectives

referes to the feelings that are experienced during consumption activities or associated with specific object , for example if the child continuous to get negative information over smoking the feeling of disgust will occur

what is consumer perception ?

refers to a customers awareness and interpretation of reality . thus perception serves as a foundation upon which a consumers learning takes place .

customer lifetime value CLV

represents the approximate worth of a customer to a company in economic terms . CLV is the overall longterm profitability of an individual consumer .

contrast

state that results when a stimulus does not share enough in common with existing categories to allow categorization

unconditional stimulus

stimulus with which a behavioral response is already associated

consumer value framework (CRM)

systematic information management system that collects ,maintains, and reports detailed information about customers to enable a more customer oriented managerial appoarach

behaviorist apporach to learning

the theory of learning that focuses on changes in behavior due to association without great concern for the cognitive mechanics of the learning process

subliminal processing

the way that the human brain deals with very low strength stimuli so low that one cannot notice anything .

internal influences

things that go on inside of the mind and heart of the consumer ,also includes situational influences

situational influence

things unique to a time or place that can affect consumer decision making and the value received from consumption . for example ,the presence of music in an environment may shape the consumers behavior and buying patterns

hedonic value

value derived from the immediate gratification that comes from some activity or comes from experiencing some activity

utilitarian value

value desired from a product that helps the consumer with some task .

hedonic example

value is provided entirely by the actual experience and emotions associated with consumption , value is an end , its value is also very emotional and subjective in nature , consumer does something to obtain this value

how do learning and perception work together ?

well value involves learning and consumer perception plays a key role in learning because consumers change behavior based on what they perceive