GRAHAM HOOLEY NIGEL F.

PIERCY BRIGETTE
NICOULAUD
4
Customer analysis
Introduction
Information; raw material for decision making
Marketing research; provision of information to
reduce level of uncertainty in decision making
Chapter includes;
Information needs about customers
Research techniques for collecting data
Uses of these techniques i.e. creating &
segmenting market and identifying current and
potential product/service positions
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What we need to know about
customers
Grouped into current and future information
Critical issues concerning current customers;
Who are the prime market targets?
What give them value?
How they can be brought closer?
How can they be better served?
For future, we also need to know;
How will customers and their needs and requirements change?
Which new customers should we pursue?
How should we pursue them?
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Initiator
Influencer
Decider Purchaser
User/consumer
Purchase, use and
consumption
Who i s t he cust omer ?
Figure 4.1
Information on current customers
Recognizing five roles can be useful in
targeting marketing activity
The initiator initiates the research for solution to
consumers problem
The influencer influence on purchase decision
The decider actually make the decision
The purchaser buys the product or service
The user consumes the product or service
Different approaches may be suitable
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WHO
Is involved in buying
and consuming?
WHAT
Are their choice
criteria?
WHY
Do they buy/use
the product?
HOW
Do they use the
product?
Under st andi ng cust omer s - t he key
quest i ons
Figure 4.2
WHEN
Do they buy/use
the product?
WHERE
Do they buy?
CUSTOMERS
Information on future customers
Two main types of change essential to
customer analysis
First; change in existing customers their wants,
needs and expectations (Kaizen approach)
Second; new customers emerging as potentially
more attractive targets
Main way to analyze customers is through
marketing research and market modeling
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MARKETING RESEARCH
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Marketing
research methods
Company records
Tailor-maid
research
Quantitative
research
Off-the-peg
research
Figure 4.3
Mar ket i ng- r esear ch met hods
Qualitative
research
Surveys
Focus
groups
Personal Telephone Postal Internet
Desk
research
Shared &
syndicated
Sales
records
Accounts
records
Depth
interviews
Experiments Observation
Field Laboratory
Company records
Companys own records
Data about who purchase and how much
purchase may be obtained from invoice records
Purchase records may show customer loyalty
pattern
Identify gaps in customer purchasing and
highlight most valuable customers
Collect routine data on as detail a basis as
possible for unforeseen data requirements
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Off-the-peg research
Tapping into existing research services; data
that are already in existence
Information such as market size, growth rates,
economic trends
Crouch and Housden classify research as;
Secondary or desk research
Syndicated research
Shared research
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Secondary desk research
Data already been published by someone else
Advantages;
Relatively cheap, quick to obtain, can be reliable
and accurate i.e. govt. publications
Disadvantages;
Out of date and not specific enough, vary
dramatically in quality, both from country to
country and supplier to supplier
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Following question must be born in mind to
check accuracy of secondary data
1. Who collected the data and why?
(Are they likely to be biased in their reporting?)
2. How did they collect the data?
(Sample or census? Sampling method? Research instrument?)
3. What level of accuracy do they claim?
(Does the methodology support the claim?)
4. What use did they put the data to?
(Is its use limited?)
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Syndicated research
Research buyers share costs and findings of
research among themselves
Conducted by marketing research agencies
and sold to whoever will buy
Examples are A.C. Nelsen, TCA, AGB, TGI etc
Advantages; methodology usually tried and
tested, samples are often bigger
Disadvantages; data are limited in usefulness
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Shared research
Some of the costs and fieldwork are shared by
number of companies but not results
Advantages;
Established methodologies and are relatively quick
and cheap to tap into
Disadvantages;
Its scope and number of questions that can be
asked
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Tailor-made research
Flexibility to design the research to exactly
match the need of the client company
Categorized as quantitative and qualitative
research
Qualitative research emphasize gaining
understanding and depth in data that can not be
quantified
Quantitative research involves large samples and
produces quantifiable outputs
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Qualitative techniques
Unstructured or semi-structured interviewing
methods
Two main techniques are used; group
discussion and individual depth interviews
Group discussion take the form of relaxed,
informal discussion among 7-9 respondents
The Depth interview takes place between one
interviewer and one respondent
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Having customer
descriptions of
things
Getting reactions
to new ideas
Providing
insights into
problems
Uses of qual i t at i ve r esear ch
Figure 4.4
Generating new
ideas
Qualitative
research
Understanding
the findings of
large-scale
projects
Helping
structure later
research
Quantitative techniques
Include surveys, observation methods and
experimentation
Surveys are vast subject in themselves
Surveys include three types; personal
interviews, telephone interviews and postal
surveys (mail)
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To provide
quantitative data
on markets and
customers
To determine
customer
requirements and
expectations
To provide data
for segmentation
of markets
To determine
customer
opinions and
perceptions
To determine
customer
behavior
Uses of sur veys
Figure 4.5
Surveys
Surveys
Personal interviews
Advantages
Greatest flexibility
Useful in attitudinal
statements,
Disadvantages
Most expensive to conduct
Telephone interviews
Advantages
Data is acquired quickly
Low cost
Closely controlled
Disadvantages
Every one may not have
telephone
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Surveys (Contd)
Postal methods
Advantages
Cheapest of all
Useful in locating
geographically disperse
samples
Disadvantages
Low response rate
Little control over who
responds
Requires clearly laid out
questionnaire, well
pretested to insure clarity
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Observation techniques
Observation techniques can be particularly
useful where respondents are unlikely to be
able or willing to give the types of information
required
Observing what items a shopper has taken from
supermarket shelf, considered for purchase but
not bought
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Experimentation
Experiments are either carried out in the field
or in-house (laboratory)
Field experiments take place in the real world
In-house experiments are conducted in more
controlled but less realistic settings
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To test customer
reactions to
alternative
strategies
To estimate
market potential
To establish the
strength of
relationship
To establish
causation
To test elements
of the strategy
Uses of exper i ment at i on
Figure 4.6
Experiments
THE MARKETING RESEARCH
PROCESS
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St ages i n a compr ehensi ve mar ket i ng
r esear ch pr oj ect
Figure 4.7
Problem
definition
Exploratory
research
Quantitative
research
Analysis and
interpretation
Problem definition
Define clearly the problem to be tackled
Series of discussion between marketing
research personal and marketing decision
maker are necessary
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Exploratory research
Identify information gaps and specify the need
for further research
Initially secondary sources and company
records can be utilized
Qualitative research might then be used to
explore
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Quantitative research
Help in formulating hypothesis about how
market is segmented and what factors
influence purchase
Followed by quantitative study
Ask respondents to evaluate competing products
Experimentation might also be used in
quantitative phase of segmentation
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Analysis and interpretation
Turn the data generated into meaningful
information
Factor analysis
Cluster analysis
Perceptual mapping
Finally results will be presented to senior
marketing decision-maker
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Organizing customer information
Information is organized through MIS
Information system (MIS) has five basic
components;
Market research interface to collect data
The raw data collected
Statistical techniques used to analyze
Market models to utilize raw data and statistical
techniques
Finally managerial interface as decision maker
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Mar ket i ng deci si on suppor t syst ems
Figure 4.8
Statistical
techniques
Market
models
Raw data
Marketing decision-maker
Managerial interface
Marketing research
interface
Marketing environment
R
e
s
p
o
n
s
e
s

D
e
c
i
s
i
o
n
s

Raw data
Data come into system from variety of
sources, from internal and external primary
and secondary sources
Stored in various forms i.e. paper, peoples
head, on computer

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Statistical techniques
Synthesize and analyze the raw data
Commonly used statistics are averages,
means, standard deviations, ranges etc
Market models
Model is representation of the real world

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Marketing decision support systems
Change in emphases in marketing from
information systems (MIS) to marketing
decision support systems
Provision of question and answer facilities
Grouped into two types;
Data-oriented decision support systems,
Data retrieval and simple analysis using statistical techniques
Model-oriented decision support systems
Simulation and representation of aspects of the real world
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Characteristics of MDSS
MDSS support decisions!
Support rather than replace, managerial decision
making
MDSS are essentially interactive
Ask questions, receive inputs and experiment with
decision
MDSS should be flexible and easy to use
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