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C H A P T E R

Customer Analysis 5Meaning of a Customer: - Current and Potential

- Immediate and Final

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Major TopicsMajor Topics

1. Review ofMajor Issues from BA390*

2. An Approach for Customer Analysis*

3. Long-term Value of a Customer

4. Market Segmentation

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Major Topics for Consumer BehaviorMajor Topics for Consumer Behavior

1. Consumer Decision Process

2. Types of Buying Decisions

3. Influences on the Rate ofNew Product Adoption (RCCDC)

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What We Need to Know about Current andWhat We Need to Know about Current and

Potential CustomersPotential Customers

Whobuys and uses the product?

What customers buy and how they use it?

Where customers buy? When customers buy?

How customers choose?

Whythey prefer a product over others?

How they respond to marketing programs?

Will they buy it (again)?

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1.1. Who Buys and Uses the ProductWho Buys and Uses the Product

1. Buyer versus Influencer and User

2. Describing Consumers

Demographic

Socioeconomic

Personality

Psychographics and values

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Buying Roles and Needs/Benefits SoughtBuying Roles and Needs/Benefits Sought

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Who Buys and Uses the Product (Contd)Who Buys and Uses the Product (Contd)

3. Describing Business Markets

Demographic

Operating variables Purchasing approaches

Situational factors

Personal characteristics

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2.2. What Customers Buy and How they Use itWhat Customers Buy and How they Use it

People buy Benefits, not Products

Product Assortment (RFM): Grocery Products Recency

Frequency

Monetary Value

Product Use

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3. Where and When Customers Buy3. Where and When Customers Buy

Where issue Desired Service Output in

Shopping

When issue Seasonality

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4. How Customers Choose4. How Customers Choose

MultiattributeModel Questions

1. Which attributes do customers use to define a

product?

2. What are the perceptions of the products on theattributes?*

3. What are the importance weights?

4. What decision rule is used to combine theinformation?

1. Compensatory

2. Noncompensatory

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Bank Perceptual MapBank Perceptual Map

Courteous

personnel

Convenient

ATM locations

A

D

B

C

E

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5.5.Why they prefer a product/brandWhy they prefer a product/brand

1. Three elements of a customer value of a brand

Importance of the usage situation

Effectiveness of the product category in the situation

Relative effectiveness of the brand in the situation

2. Sources of Customer Value

Economic

Functional

Psychological: Brand Equity

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Measuring Brand EquityMeasuring Brand Equity

1. Awareness.

2. Associations.

3. Attitude.

4. Attachment..

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[Manifestations of] Customer Value[Manifestations of] Customer Value

Price.

Price sensitivity.

Level of Satisfaction.

Complaints and compliments.

Word-of-mouth.*

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[Manifestations of] Customer Value (contd).[Manifestations of] Customer Value (contd).

Margin/profit contribution.

Dollar sales.

Repeat purchase rate.

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Assessing the Value of theAssessing the Value of the Product CategoryProduct Category

1. Determine the uses of the product

2. Estimate the importance of the uses

3. List competing products for the uses

4. Determine the relative effectiveness of the

product category in each usage situation

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Personal ComputerPersonal Computer Product Category ValueProduct Category Value

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Assessing the Value of theAssessing the Value of the Brand/ProductBrand/Product

Direct Ratings

Constant Sum Ratings

Graded Pair Comparison*

Conjoint Analysis

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Paired Comparison Example: Soft Drink PreferencePaired Comparison Example: Soft Drink Preference

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Will they buy it (again)?Will they buy it (again)?

Satisfaction

Intention

Behavior

Loyalty: ex) Casino Study

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Methods for market segmentationMethods for market segmentation

Descriptive Purpose

Cluster Analysis

Tabular Analysis*

Prescriptive Purpose

Regression Analysis: Individual-basedLatent Class Analysis: Segment-based

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Cluster Analysis IllustrationCluster Analysis Illustration

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Raw Data: Cranberry Sauce UsageRaw Data: Cranberry Sauce Usage

Heavy

Users

Medium

users

Light

users

Total

(row marginal)

Convenience

oriented 81 144 74 299

Enthusiastic cook 97 115 45 257

Disinterested 35 108 127 270

Decorator 45 96 37 178

Column total(marginal)

258 463 283 1004

Cooking Attitude

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Cranberry Sauce Usage PercentagesCranberry Sauce Usage Percentages

Cooking

Attitude

Heavy Users Medium Users Light Users

Convenience

oriented

Row %

Column %

27%

31

48%

31

25%

26

Enthusiastic cook

Row %

Column %

38

38

45

25

18

16

Disinterested

Row %Column %

1314

4023

4745

Decorator

Row %

Column %

25

17

54

21

21

13

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Customer Analysis Illustration: Energy BarsCustomer Analysis Illustration: Energy Bars

Who the Customers are:

63.7 percent of volume is from households with greater than$40,000 income

32.4 percent of volume is from households with greater than$60,000 income

72.8 percent of volume is from households with no kids

65.8 percent of volume is from households where the Head hassome college education

39.4 percent of volume is from households with the Head under35 years old

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Percent Who Have Eaten Energy Bars in the Last SixPercent Who Have Eaten Energy Bars in the Last Six

MonthsMonths

Female 20%

Male 18%

65 and over 12%

55-65 10%

45-54 20%

36-44 21%

25-34 21%

18-24 27%

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Customer Analysis Illustration: Energy BarsCustomer Analysis Illustration: Energy Bars ((cont)cont)

What They Buy:

Convenience

Taste

TextureHealth Benefits

Performance/Energy

Hunger Satisfaction

Price (expect to pay $1.00 to $1.50 per bar)Packaging/Buy In Bulk

Availability

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Customer Analysis Illustration: Energy BarsCustomer Analysis Illustration: Energy Bars (cont)(cont)

What Use For:

Meal Replacements

Snacks

Athletic Energy Booster

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Customer Analysis Illustration: Energy BarsCustomer Analysis Illustration: Energy Bars

Customer Segments:

Hard-core Athletes

Musclemen

Dieters Health Purists

Health Conscious and On-the-Go

Sports Enthusiasts

Specialty Segments Nutrition-seeking Families