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GRAHAM HOOLEY NIGEL F. PIERCY BRIGETTE

NICOULAUD

4Customer analysis

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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

DeciderPurchaser

User/consumerPurchase, use and

consumption

Who is the cus tomer?Figure 4.1

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Information on current customers

Recognizing five roles can be useful in

targeting marketing activity

The initiatorinitiates the research for solution to

consumers problem

The influencerinfluence on purchase decision

The decideractually make the decision

The purchaserbuys the product or service

The userconsumes the product or service

Different approaches may be suitable

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WHO

Is involved in buyingand consuming?

WHAT

Are their choicecriteria?

WHY

Do they buy/usethe product?

HOW

Do they use theproduct?

Unders tand ing cus tomers- the key

ques t ions

Figure 4.2

WHEN

Do they buy/usethe product?

WHERE

Do they buy?

CUSTOMERS

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MARKETING RESEARCH

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Marketing

research methods

Company recordsTailor-maid

research

Quantitative

research

Off-the-peg

research

Figure 4.3 Market ing- research methods

Qualitative

research

Surveys

Focus

groups

Personal Telephone Postal Internet

Desk

research

Shared &

syndicated

Sales

records

Accounts

records

Depth

interviewsExperiments Observation

Field Laboratory

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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 customerdescriptions ofthings

Getting reactionsto new ideas

Providinginsights into

problems

Uses o f qua l i ta t i ve researchFigure 4.4

Generating newideas

Qualitativeresearch

Understandingthe findings of

large-scaleprojects

Helpingstructure later

research

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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

customerrequirements and

expectations

To provide data

for segmentation

of markets

To determine

customer

opinions and

perceptions

To determinecustomer

behavior

Uses o f surveysFigure 4.5

Surveys

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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 havetelephone

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Surveys (Contd)

Postal methods

Advantages

Cheapest of all

Useful in locatinggeographically disperse

samples

Disadvantages

Low response rate

Little control over whoresponds

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 ofrelationship

To establishcausation

To test elements

of the strategy

Uses o f exper imenta t ionFigure 4.6

Experiments

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THE MARKETING RESEARCHPROCESS

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Stages in a comprehens ive market ing

research pro jec t

Figure 4.7

Problemdefinition

Exploratory

research

Quantitativeresearch

Analysis andinterpretation

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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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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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Market ing dec is ion suppor t sys temsFigure 4.8

Statisticaltechniques Marketmodels

Raw data

Marketing decision-maker

Managerial interface

Marketing researchinterface

Marketing environment

Respons

es

Dec

isions

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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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