2 day customer analysis

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Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009

Customer Analysis


Agenda and Learning Objectives

TaKaDu case

How to approach customer groups as

segments

Importance of the Value Proposition

Tools for Assessing Customers: Conjoint Analysis

Consideration Sets

Customer Lifetime Value (CLV) Models

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TaKaDu Case


Figure 7.2 Model of consumer behavior

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The Value Proposition


The Value Proposition

Net

Value to

Target

Market

Cost

to

Target

Market

Benefits

to

Target

Market

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Amazon

Xiaomi

Volvo Station Wagon

Successful Value Propositions:

Examples


Tools for Assessing Our

Customers

http://www.mi.com/en/about/

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Product and Value Proposition

Product can be thought of as a bundle of attributes and set of specifications

Better to think of it as a bundle of benefits

How do we know importance of different attributes or benefits?

A simple way is to ask the customers

For example, Amazon can ask

How important is timely delivery to you?

How important are low prices to you?

Very

Important

Not

Important

At All

Very

Important

Not

Important

At All


The World’s Favorite Painting: Survey

Results in the US Do you prefer paintings that are

related to religion or not related?

What seasons would you like to depict?

Do you prefer outdoor or indoor scenes?

Do you prefer paintings predominantly of children, women, men, or it doesn’t matter?

Do you like paintings of one person or a group of people?

Thinking back on the paintings you have liked in the past, for the most part were the figures working, at leisure, or posed portraits?

20% related, 63% not related

15% Winter, 26% Spring, 16% Summer, 33% Fall

88% outdoor, 5% indoor

11% children, 6% women, 2% men, 77% doesn’t matter

24% one person, 48% group

23% working, 43% leisure, 27% posed

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Survey Results (continued...)

Do you prefer paintings in which the person or people are nude, partially clothed, or fully clothed?

Do you prefer paintings from a long time ago, like Lincoln or Jesus, or more recent figures like Kennedy or Elvis?

Do you prefer painting of wild animals, like lions, giraffes, or deer, or of domestic animals like dogs, cats, or other pets?

What type of outdoor scene appeals to you the most: forests, lakes, rivers, oceans, and seas; field and rural scenes, or cities?

3% nude, 13% partially clothed, 68% fully clothed

56% long ago, 14% recent

51% wild animals, 27% pets

19% forests, 49% water, 18%

fields, 3% cities



Do you prefer paintings in which the person or people are nude, partially clothed, or fully clothed?

Do you prefer paintings from a long time ago, like Lincoln or Jesus, or more recent figures like Kennedy or Elvis?

Do you prefer painting of wild animals, like lions, giraffes, or deer, or of domestic animals like dogs, cats, or other pets?

What type of outdoor scene appeals to you the most: forests, lakes, rivers, oceans, and seas; field and rural scenes, or cities?

3% nude, 13% partially clothed, 68% fully clothed

56% long ago, 14% recent

51% wild animals, 27% pets

19% forests, 49% water, 18%

fields, 3% cities

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If you had to name one color as

your favorite, what would it be?

Do you like to see expressive

brush strokes or the surface of the

canvas to be smooth?

Do you prefer larger paintings or

smaller paintings?

If large, would it be the size of a

dishwasher, full-sized refrigerator,

or a full wall?

44% blue, 12% green 11% red,

4% black, 4% purple, 3% brown,

3% pink, 16% others

54% strokes, 35% smooth

41% larger, 34% smaller

67% dishwasher, 17%

refrigerator, 11% wall


America’s “Perfect” Painting

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France

Finland

Canad

a

Turkey


Italy Holland

http://www.museenkoeln.de/ludwig/temp/9709_komar/komar.htm

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Key psychological processes

Motivation

Memory Learning

Perception


Consumer buying process

Figure 7.5 Five-stage model of the consumer buying process

https://www.youtube.com/watch?v=IGQmdoK_ZfY

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Figure 7.6 Successive sets involved in consumer decision making


Consideration Set

A large body of research shows customers do not

evaluate all products

They typically consider and evaluate only a small subset,

even for big ticket items

Consideration set = set of products considered by the

customer

If you are not in the consideration set, you will not be

chosen!

Simple market research can reveal consideration set for

your target segment

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How much choice is beneficial? (Iyengar & Lepper, 2000)

24 alternatives

40% of customers stopped 60% of customers stopped

30% of them bought 3% of them bought

6 alternatives

Customer Lifetime Value:

Prioritizing Customers

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Customers Deliver Value to Firm

Net

Value of

Target

Market

Cost

of

Serving

Target

Market

Revenue

Provided

by

Target

Market


Valuing Customers: An Example

Time 0 1 2 3 …

Expected

contribution

C C C …

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Valuing customers: An example

(Cont.) Time 0 1 2 3 4 …

Expected

Contribution

….


Valuing customers: An example

(Cont.)

Time 0 1 2 3 4 …

Expected

Contribution

-A ….

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Summary and lessons TaKaDu case

Constantly evaluate your value proposition

Market creation

Barriers to adoption

Understand your Value Proposition to EACH target segment = (value to the target market) – (cost to the target market)

Tools for assessing customers Customers trade-off various benefits: Conjoint Analysis is a tool to

assess preference based on simple choices designed to force these tradeoffs

Consideration set

Customer lifetime value (CLV): From the firm’s perspective, a customer can be viewed as sum of cash flows