Approaches to Customer Analysis

Understanding Buyers Behavior

Irrespective of whether the marketing planner is operating in a consumer, industrial or organizational market, there are eight questions which underpin any understanding of buyer behavior:
1. 2. 3. 4. 5. 6. 7. 8. Who is in the market? their power in contrast to organization? What do they buy? Why do they buy? Who is involved in the buying? How do they buy? When do they buy? Where do they buy? What are the customers hot and cold spots?

GROUP ACTIVITY

THE BUYING DECISION PROCESS

The five buying roles

People differ greatly in their readiness to try new products. We divide the customers into 5 roles based on their readiness to buy a new product
Innovators they try new ideas at some risk. Early adopters they are opinion leaders in their communities and adopt new ideas early but carefully. The early majority although they rarely are leaders, they adopt new ideas before the average person. The late majority they adopt an innovation only after a majority of people have tried it. Laggards they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself.

Product Adoption and Product Lifecycle

innovating firm should research the characteristics of innovators and early adopters in their product categories and direct marketing efforts toward them.

Different types of buying behaviour

Buying behavior differs greatly for a tube of toothpaste, an iPhone, financial services, and a new car. More complex decisions usually involve more buying participants and more buyer deliberation.

Buying PC/Smart Phone Home Furnishings, AC

Buying Cookies, Shampoos etc Soap, Salt, Spices, Socks

The Buyer Decision Process

Need Recognition

The process begins with the consumers recognition of a problem, or perhaps more commonly, a want.
an internal stimulus (hunger or thirst) an external stimulus in the form of an advertisement or a colleagues comment.

Information Search
Personal sources, such as family, friends, colleagues and neighbours Public sources, such as the mass media and consumer organizations Commercial sources, such as advertising, sales staff and brochures Experimental sources, such as handling or trying the product. The relative importance of each of these varies greatly from person to person and product to product.

Evaluation of Alternatives

Evaluation of Alternatives
The products attributes, such as its price, performance, quality and styling Their relative importance to the consumer The consumers perception of each brands image The consumers utility function for each of the attributes.

Modifying Product Offers

Changing the physical product by, for example, adding features (real repositioning) Changing beliefs about the product by giving greater emphasis to particular attributes (psychological repositioning) Changing beliefs about competitors products by comparative advertising and knocking copy (competitive depositioning) Changing the relative importance of particular attributes Emphasizing product features that previously have been largely ignored Changing buyers expectations.

ORGANIZATIONAL BUYING BEHAVIOUR

The three types of buying decision

New Task Buying

Involved Decision Making

Modified Rebuy

Straight Rebuy

Participants in the Business Buying Process: The Buying Center

Gatekeepers

Users

Deciders

Buying Center
Buyers

Influencers

The principal influences on industrial buyers

How do industrial buyers arrive at their decisions?

Relationship marketing
The costs of gaining a new customer, particularly in mature and slowly-declining markets, are often high. The marketing planner needs to ensure that the existing customer base is managed as effectively as possible Thus a need for relationship building as opposed to transactional focus

Benefits of Relationship Marketing

The price premium that loyal customers are or may be willing to pay Customer referrals A reduction in marketing costs The value of a greater number of purchases.

Developing the relationship strategy

(pre-req)

Identify the key customers Determine which customers want a relationship categorize customers in terms of their current or future potential
Potential Vs Focus of effort

Developing the relationship strategy

(pre-req)

Examine expectations of each segment Identify how, potential and efforts can be matched in a cost-effective and profitable way. In the case of relationships in the commercial sector, appoint a relationship manager Start with a series of small wins Recognize that different customers have very different expectations

Developing the relationship strategy

Analyze the gap Identify what needs to be done to close the gap Formulate a program of benefits that satisfy customers needs in order of importance of each within the segment communications plan Monitoring performance