ANALYZING CUSTOMERS AND BUYER BEHAVIOR

What is customer analysis?

Customer analysis is the process of determining customer segmentation, value, purchasing behavior and motivation in order to better target marketing and increase sales.

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Customer analysis

80-20 rule!! The purpose of customer analysis is to identify the top 20% of customers (gold customers), middle 60% (silver customers) and bottom 20% (lead customers). We then try to determine how to keep the gold customers happy and how to encourage silver customers to become gold customers. Then we have to figure out what to do with our lead customers.
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Customer analysis

Most important questions??

Who?
Where? When

? What? How?

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Factors influencing customer behavior

Culture
Culture,

sub culture, social class

groups, family, roles& status

Social
Reference

Personal
Age&

life cycle stages, occupation, economic situation lifestyle, personality & self concept perception, learning, beliefs &
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Psychological
Motivation,

attitudes

Factors influencing customer behavior

CULTURE
culture is the fundamental determinant of a persons wants and behavior.

Perception Set of values Preferences Behavior

Sub culture
Sub culture provides more specific identifications and socialization For their members

Nationalities, religions, racial groups, geographical regions

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Factors influencing customer behavior

Social class

Relativity homogeneous and sustainable divisions in a society. They are hierarchically ordered and their members exhibit similar interests, values and behavior

1.

2.

3.

4.

Characteristics of a social class Members of same social class tends to behave more alike then members of two different classes members are perceived as occupying superior or inferior positions according to their social class Social class is indicated by a cluster of variables like education, wealth , income Members can move up and down in a social class ladder during their lifetime
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Factors influencing consumer behavior

The social classes of Pakistan. 1. Upper social class ( lower upper class) 2. Middle social class ( upper middle class) 3. Working social class ( lower working class)

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Factors influencing consumer behavior

1.Upper social class.

their size is 2% of the total society and approximately 3.7 million they have 60% to 65% of money of the country.

They are actually 1. High status political leadership 2. Big business man 3. Top management of the company
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Factors influencing customer behavior

2. Middle Social Class. their population is 28% out of the total population their population is 53 to 54 million of the total population They are actually 1. They are small to medium size business man. 2. Middle management 3. Low ranking govt officer

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Factors influencing consumer behavior

3. Working Social Class. size is 70% out total population of Pakistan.

1. They are very small size shop owner. Skill, semi skill & unskilled 2. Low grade government staff ( peons, driver) 3. Poor former 4. Political worker
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Factors influencing consumer behavior

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Factors influencing consumer behavior

SOCIAL Factor Consumer behavior is influenced by the following social factor

References

groups

Family
Social

role & statuses

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Factors influencing consumer behavior

References groups
A persons reference group consists of all the groups that have a direct or indirect influence on a persons behavior or attitude Membership group: direct influence
primary groups: family, friends, neighbor, coworkers (informal interaction) secondary groups: religious groups, professional trade unions ( formal interaction)

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Factors influencing consumer behavior

People are affected by references in 3 ways

1.

2.

3.

References groups expose an individual to new behaviors and lifestyle Influence attitude and self-concept Create pressure for conformity ( affect product and brand choice) Aspiration groups Dissociative groups

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Factors influencing consumer behavior

FAMILY FACTOR
The

family of orientation (parents & sibling) Family of procreation ( spouse & children)

ROLES AND STATUSES A role consists of the activities the a person is expected to perform. each role carries a status.
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People choose products that communicate their role and status in society.

Factors influencing consumer behavior

PERSONAL FACTOR
Buyers decision is also influenced by personal factor, which are as follow: Age & stage in life cycle Occupation & economic circumstances Life style & psychographics Personality and self concept
Age

& stage in life cycle:

People buy different type of goods and services during their life time. Taste in food, clothing, furniture etc is also age dependent.
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Factors influencing consumer behavior

Family life cycle

1.
2. 3. 4. 5. 6. 7.

8.
9.

Bachelor stage Newly married couples Full nest1 Full nest2 Full nest 3 Empty nest1 Empty nest2 Solitary survivor Solitary survivor

Highly influenced by advertisement

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Factors influencing consumer behavior

Occupation & economic circumstances

Occupation and economic circumstances influence buying behavior and patterns.

Blue collar workers buying basket

Work clothes

Work shoes
Lunch boxes Expensive suits

Companies presidents buying basket

Air travel
Country club membership

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Factors influencing consumer behavior

Lifestyle & psychographics

Life style is a persons pattern of living in the world as expressed in activities, interests, and opinions. Marketers search for the relationship between product and the life style group. Psychographics is the science of using psychology & demographics to better understand consumer

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Factors influencing consumer behavior

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Factors influencing consumer behavior

Personality and self-concept

we define brand personality as the specific mix of human trails that may be attributed to a particular brand.

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Factors influencing consumer behavior

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Factors influencing consumer behavior

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Factors influencing consumer behavior

Brand personalities

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Factors influencing consumer behavior

PSYCHOLOGICAL FACTOR a persons buying choice is influenced by following major psychological factors
Motivation

Perception
Beliefs

& attitudes

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Factors influencing consumer behavior

Motivation

Motivation is the driving force by which humans achieve their goals. A need becomes a motive when it is arouse to a sufficient level of intensity. Two important theories of motivation

Maslows theory of motivation Herzbergs two factor theory of motivation

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Factors influencing consumer behavior

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Factors influencing consumer behavior

Herzberg 2 factor theory: Herzberg proposed the Motivation-Hygiene Theory, also known as the two factor theory(1959) of job satisfaction. According to his theory, people are influenced by two sets of factor

hygiene factor motivator factor

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Factors influencing consumer behavior

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Factors influencing consumer behavior

PERSEPTION:
perception is the process by which an individual select, organize, and interprets information inputs to create a meaningful picture of the world.
A

motivated person is ready to act How the motivated person acts is influenced by his/her perception of the situation. People can emerge with different perception of the same situation because of three perceptual processes
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Factors influencing consumer behavior

Selective attention

People are more likely to respond to stimuli that relates to their current situation People are more likely to respond to stimuli that they anticipate People are more likely to respond to stimuli whose deviations are large in relation to the actual size the stimuli.
Is the tendency to twist information into personal meanings and interpret information in a way that will fit our preconception. People will retain only that information that supports their attitudes and beliefs. nadia hasan

Selective distortion

Selective retention

Factors influencing consumer behavior

BELIEFS & ATTITUDES

belief is a though which a person carried about something.

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BUYING DECISION PROCESS

BUYING DECISION PROCESS

Buyers

role

Initiator

Influencer
Decider Buyer user

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BUYING DECISION PROCESS

BUYING BEHAVIOUR

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Steps in consumer behavior

Problem Recognition Information Search

Evaluation of alternatives

The Purchase decision

Post purchase behavior

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Steps in consumer behavior

Information search:
Personal sources Public sources Commercial sources Experimental sources

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The move from consumer total set to choice set

Total set Awareness set Consideration set Choice set
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Organizational buying behavior

Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

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characteristics of organizational buyers

1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in number for most of the products. 2. The purchases are in large quantities. 3. Close relationships and service are required. 4. Demand is derived from the production and sales of buyers.

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characteristics of organizational buyers

5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products. 6. The organizational buyers are trained professionals in purchasing. 7. Several persons in organization influence purchase. 8. Lot of buying occurs in direct dealing with manufacturers.
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Organizational Buying Situations

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Organizational Buying Situations

Straight re-buy
In this buying situation, only purchasing department is involved. They get an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list. The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service.

Modified re-buy
In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities.
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Organizational Buying Situations

New buy
In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives are involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently.

Systems buy
Systems buying is a process in which the organization gives a single order to a single organization for supplying a full system. The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system.
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Participants in the Business Buying Process

Users:
operators. initiate

The persons who use the item. Say for safety gloves the

Initiators: The persons who request the purchase. The safety officer may
the request for the purchase.

Influencers:

Persons who defines specifications. In this case of safety gloves, the safety officer may himself define specifications. If an industrial engineer is in the organization, he may also be consulted. There can be different gloves for different working situations and industrial engineer may be more aware of specific requirements due to his special nature of work

Buyers: They are the person who actually do the buying transaction. Gatekeepers: They control access to personnel in a company. The
receptionist, the secretaries etc. final approval for product specifications and suppliers' Persons who approve the purchase. In the case of safety personal manager may have the power to approve.
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Deciders: People who decide on product requirements and suppliers. It

is the list.

Approvers:
gloves, the

Organizational Buying/Purchasing/Procurement Process

Problem recognition General need description Product specification

Supplier selection

Proposal solicitation

Supplier search

Order routine specification

Supplier performance review

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