ii.

Identify the customer’s behavior in the industry – Who/why/when/what/how

Customer is the cornerstone of marketing, customer is a very important in marketing which is as a sole
income to any companies. In this Consumers Good industry, many company tried as best as their can to
understand the customer whether it is a loyal customer or the potential customer. out of many companies
in this industry, Syarikat Perniagaan Perabot Nuri Sdn Bhd also has being doing their best to provide a
good services and products to their loyal customers and also their potential customer that they think will
come and buy their product.

Market Research
Market research is the systematic process of collecting, analyzing, and reporting information to enhance
decision making throughout the marketing planning process (Shank 2005). Market research is used to
answer any number of questions about products and customers, including the following:

Product Information Needs

 What do customers want from our products?

 How do they view our products?
 What products do they use?
 How big is our market?
 Where and when do customers register for programs?
 How often do they participate in programs?

Customer Information Needs

 What is the customer’s contact information (e.g., name, children, age, address)?
 How far do customers drive to use our products?
 Where do customers hear about our products?

Market research data are either primary or secondary. Primary data come directly from consumers. Data
can come from surveys, interviews, observations, focus groups, or Internet surveys. The process for
collecting these data is much like that for collecting evaluation data (see chapter 4). Secondary data, on
the other hand, are compiled by market research firms and are available for purchase. These data include
demographics, psychographics, product use, advertising preferences, and so on.

Primary data can come from internal and external sources. Good sources of internal data come from
registration systems because customers must complete basic information about themselves and their
families. Amazon.com tracks purchases for customers logging into their accounts. Amazon asks for basic
demographic data, tracks purchases, and then recommends books or materials that are similar to those
of past purchases. Customer loyalty cards are another source of information. Grocery stores promote
these cards as a way of giving discounts, but they are really using the cards to track purchases and gain
a demographic profile of purchasers and their products. External primary data can be gathered from the
Census Bureau, a local chamber of commerce, or libraries. Much of these data are demographics, but
demographics can prove valuable when determining the target market.

Market research is essentially gathering data so that marketing decisions can be made. Without data on
customers, good decisions become guesses. Poor guessing results in wasted resources.

Market Segments and Target Markets

 Market research provides the ability to segment markets. Market segmentation is the process of dividing a
large and heterogeneous group of people into smaller, more homogenous groups with similar wants,
needs, and demographic profiles. Market segments divide the population into groups who are likely to
respond to a certain marketing mix (Mullin, Hardy, and Sutton 2007). Target marketing then selects one
or more of the market segments to direct its efforts toward.

Some parks and recreation agencies, especially those in the public and nonprofit sectors, feel they must
provide services for everyone. Thus they direct their marketing efforts to the general public instead of a
targeted group. Known as mass marketing, this approach is often a waste of resources. Selecting a target
market does not mean that people outside the target market are excluded from participating. Target
marketing means that the marketing mix is aimed at a group of people most likely to participate and most
likely to respond to that particular marketing mix. For example, the Manhattan Beach Parks and
Recreation Department in Manhattan Beach, California, offers a trip to the Catalina Silent Film Festival.
The trip is designed and promoted as a trip for people 55 years or older, but this does not mean that a 50-
year-old would be excluded from the trip (City of Manhattan Beach 2009).

There are five bases of segmentation, or means to segment a market. These are demographics,
geography, psychographics, behavioral characteristics, and benefits (Hurd, Barcelona, and Meldrum
2008).

Demographics
Demographics are characteristics used to define a population. They include age, race, family income, and
education level, among others. Demographic data are relatively easy to access through the Census
Bureau and are commonly used by many parks and recreation agencies. For example, the Burlington
(Connecticut) Parks and Recreation uses age to classify its programs (Burlington Parks and Recreation
2010). Its brochure has activities for children and youths, adults, and older adults.

Geography
A second segmentation base, geography, focuses on geodemographics and proximity. The premise
behind geodemographics is that people who are similar in income, culture, and perspectives naturally
gravitate toward one another. Once these people move to their neighborhoods, they become even more
alike and share similar consumer behaviors (Carroll 2009). When a store asks for your zip code when you
make a purchase, it’s using geodemographics as a segmentation technique.
One example of segmentation is the PRIZM lifestyle segmentation system, which divides every U.S.
neighborhood into 1 of 62 clusters. Variables such as demographics, lifestyle, urbanization, and
socioeconomic status are used to cluster these neighborhoods. Here are few examples of the clusters
(Claritas 2000):

 Blue Blood Estates—People aged 45 to 64, predominantly White and Asian, established executives, old-
money heirs, used to luxury and privilege, one-tenth are multimillionaires.

 Urban Gold Coast—People aged 45 to 64, predominantly White and Asian, highly educated, live in urban
apartments and condos, few have children or own cars, very busy and affluent, many live in places like
New York City.

 American Dreams—Mixed age and ethnically diverse, immigrants, descendents from multicultural
backgrounds, multilingual neighborhoods, married couples with and without children, high school
education with some college, work in trades and public service jobs.
 Another common geography-based segmentation strategy is proximity, or how close people live or work
to a service. A person living or working 10 minutes from a fitness center is more likely to use that location
than someone 30 to 40 minutes away (especially if there are other options that are closer). Some
agencies locate facilities based on proximity so as to serve an entire community. For example, the
Houston Parks and Recreation Department has a multitude of branches because it serves such a large
community. Today, the Houston Parks and Recreation Department manages 350 parks and 56
community centers located throughout the city to accommodate its users (Houston Parks and Recreation
Department 2009).

Psychographics
A third base of segmentation is psychographics. Psychographics are lifestyle and personality descriptors.
There is a relationship between lifestyle and consumer behavior (Fullerton 2007), so people with similar
lifestyles buy similar products. Lifestyle descriptors are often categorized as activities, interests, and
opinions. Table 11.2 depicts psychographics that can be used to segment a market.

Behavioral Characteristics
Behavioral characteristics are based on the product consumption habits of the consumers, the skill level
of the users, and the product loyalty of the consumers. Agencies must be cognizant of use levels and
understand how products should be offered to meet the needs of a multitude of user levels. Think about
how companies are increasingly recognizing their high-level users, such as with the Hilton Honors
rewards program and airline frequent-flier miles. The Chicago White Sox offer a variety of ticket
packages, including a single-game package, a seven-game package, and season tickets. Also, for mid- to
high-level users they offer premium seating in areas such as the LG Skyline Club, Jim Beam Club, and
Diamond Suites. High-level users who purchase season tickets also receive many benefits such as gift
packages, lower-priced parking, resell opportunities, and discounted suite prices (Chicago White Sox
2009).

Here are a few things to keep in mind when segmenting by behavioral characteristics (Mullin, Hardy, and
Sutton 2007):

 It is wise to offer programs at all use levels so that light users can possibly increase to medium or heavy
use over time. This ensures a steady stream of users.
 Levels of consumption will vary from product to product and by age group.
 Sales volume is more likely to increase by moving light and medium users up to medium and heavy users
than by attracting first-time users.

Understanding the skill level of consumers is valuable in knowing what products to offer to meet their
needs. Agencies can offer softball leagues for various skill levels or golf leagues for various golf
handicaps.

Benefits
Finally, markets can be segmented by product benefits, because consumers seek certain qualities in a
product. For example, Nike has shoes for basketball players, dancers, lacrosse players, and walkers.
Each line of shoes offers the benefits the consumer is seeking. For instance, the lacrosse shoes offer
traction, comfort, support, and speed. Trek makes bikes for roads, triathlons, mountains, and bike paths,
among others. Each bike has unique features, from the size of the tire and seat to how upright the rider
sits. These two companies thus use benefits as one way to segment their markets.

Combining Segmentation Methods

Most agencies use one or more of the five market segmenting methods. The more data the agency has,
the more able it is to select the best market and to utilize a marketing mix to reach that market. Once the
market is segmented, the agency selects which market to target. Market segmentation and target
marketing are keys to all aspects of marketing and ensure that agency resources are put to best use.
Haphazard marketing and mass marketing rarely attract the number of consumers sought.

Consumer Behavior
Consumer behavior involves the decision making and buying patterns of users. Although much
information can be gathered through the segmentation process, there is still the matter of how customers
decide to buy the products they buy. Understanding consumer behavior is enhanced by knowing the
consumer decision-making process.

Consumers move through a four-step decision-making process (figure 11.4). First, they identify a need
through media exposure, friends, family, self-awareness, or environmental factors. Next, they seek ways
to meet the need through products and services, and they evaluate their options. Once the options are
evaluated, they make a purchase or experience a service. Afterward, the product or service is evaluated.
Customers evaluate their satisfaction with the purchase decision and weaknesses of this choice. People
mentally perform a cost–benefit analysis, measuring the costs of the product (such as time or money) in
relation to the benefits they receive. If the benefits outweigh the costs, the consumer is satisfied with the
product purchase. If the costs outweigh the benefits, then the consumer is dissatisfied.

Marketing can affect all levels of the consumer decision-making process. For example, an agency can
launch an advertising campaign to convince a potential consumer that a need exists, can make
information readily available so the customer can make an informed decision about which product to buy,
can make the purchase easy and can build the anticipation of the experience via e-mail messages or
photos of past experiences, and can send reminders of the experience that has passed by giving
certificates, providing photos, or making phone calls to follow up on the experience.
The customer analysis part of the marketing plan is all about market research and gathering data that
provide insight into who the customer is, how to segment the market, and how the customer behaves.
These data are the impetus for the next section of the marketing plan.
 Customer Wants and Needs
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Consumer wants and needs should drive marketing

decisions, and no strategy should be pursued until it
passes the test of consumer research.
LEARNING OBJECTIVE[ EDIT ]
 Identify how customers fulfill their wants and needs from a marketing perspective

KEY POINTS[ EDIT ]

 A need is a consumer's desire for a product's or service's specific benefit, whether that be
functional or emotional. A want is the desire for products or services that are not
necessary, but which consumers wish for.
 The five step consumer decision process includes need identification, information
search and processing, identification and evaluation of alternatives, the purchase decision,
and post-purchase behavior.
 Consumers process information through exposure to a stimulus, actively paying
attention to it, assigning meaning to the stimulus, retaining that meaning, and
retrieving and applying that information to solve a problem or need they have in the
future.
 Customer focus should be treated as a subset of the corporate strategy rather than the
sole driving factor. This means looking beyond current-state customer focus to predict
what customers will demand in the future, even if they themselves discount the
prediction.

TERMS[ EDIT ]
 dissonance
A state of disagreement or conflict.
 customer retention
An assessment of the product or service quality provided by a business that measures
how loyal its customers are.
 demand
The desire to purchase goods and services.
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FULL TEXT[ EDIT ]
Demand is the economic principle that describes a consumer's desire,

willingness and ability to pay a price for a specific good or service. A firm in

the market economy survives by producing goods that are in demand by

consumers. Consequently, ascertaining consumer demand is vital for a firm's

future viability. Many companies today have a customer focus. In this

approach, consumer wants and needs are the drivers of all strategic marketing

decisions. No strategy is pursued until it passes the test of consumer research.

Every aspect of a market offering, including the nature of the product itself, is

driven by the needs and wants of potential consumers.

A need is a consumer's desire for a product's or service's specific benefit,

whether that be functional or emotional. The emotional benefit tends to be a

stronger driver for consumers, as functional benefits can be easily copied

by competitors. On the other hand, a consumer want is the desire for products

or services that are not necessary, but which consumers wish for. For example,

food is considered a consumer need. However, a steak dinner or dessert is

considered a consumer want, as these things are not necessary in order to live.

Customer Decision Process

 There is a five step process that consumers can go through in making a

purchase decision. These steps include:

1. Need recognition

2. Information search

3. Evaluation of Alternatives

4. Purchase

5. Post-purchase

The customer decision process begins with need identification. Whether we

act to resolve a particular problem depends upon two factors: the magnitude

of the discrepancy between what we have and what we need, and the

importance of the problem. This involves the concept of consumer motivation,

which is the internal drive consumers experience to fulfill conscious and

unconscious wants and needs. Once the problem is recognized, it must be

defined in such a way that the consumer can actually initiate the action that

will bring about a relevant solution.

The next step is information search and processing. After a need is recognized,

the prospective consumer may seek information from family, friends, personal

observation, consumer reports, salespeople, or mass media. The promotional

component of the marketer's offering is aimed at providing information to

assist the consumer in their problem-solving process. If the buyer can retrieve
relevant information about a product, brand, or store, he or she will apply it to

solve a problem or meet a need.

The criteria used in the evaluation of alternatives vary from consumer to

consumer. One consumer may consider price the most important factor while

another may put more weight upon quality or convenience. The search for

alternatives is influenced by such factors as time and money costs, how much

information the consumer already has, the amount of the perceived risk if a

wrong selection is made, and the consumer's disposition toward particular

choices.

During the purchase phase of the decision-making process, the consumer may

form an intention to buy the most preferred brand because he has evaluated

all the alternatives and identified the value that it will bring him. Anything

marketers can do to simplify purchasing will attract buyers. Providing basic

product, price, and location information through labels, advertising, personal

selling, and public relations is an obvious starting point. Product sampling,

coupons, and rebates may also provide an extra incentive to buy.

A consumer's feelings and evaluations after the sale come into play during the

post-purchase phase. These feelings can influence customer retention and

influence what the customer tells others about the product or brand. The

marketer may take specific steps to reduce post-purchase dissonance.

Advertising that stresses the many positive attributes or confirms the popularity

of the product can be helpful.

Caveats of a Customer Focus

Customer focus should be treated as a subset of the corporate strategy rather

than the sole driving factor. This means looking beyond current-state

customer focus to predict what customers will demand in the future, even if

they themselves discount the prediction.

Companies should pay attention to the extent to which what customers say

they want does not match their purchasing decisions. Surveys of customers

might claim that 70% of a restaurant's customers want healthier choices on

the menu, but only 10% of them actually buy the new items once they are

offered. Truly understanding customers sometimes means understanding

them better than they understand themselves.

Customers can be currently ignorant of what a company might argue they

should want. IT hardware and software capabilities and automobile features

are examples. Customers who in 1997 said that they would not place any value

on Internet browsing capability on a mobile phone, or 6% better fuel efficiency

in their vehicle, might say something different today, because the value

proposition of those opportunities has changed .

Cell Phone Need vs. Want

Customers who in 1997 said that they would not place any value on Internet browsing capability
on a mobile phone might say something different today. A marketer needs to discern what
customers would want in spite of what they might say.

Source: Boundless. “Customer Wants and Needs.” Boundless Marketing Boundless, 18 Oct. 2016.
Retrieved 13 Dec. 2016 from https://www.boundless.com/marketing/textbooks/boundless-marketing-
textbook/introduction-to-marketing-1/introduction-to-marketing-18/customer-wants-and-needs-107-4453/