Situational Analysis

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Situational Analysis

• Customer Analysis

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What Do We Need to Know About Our Customers?
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Framework for Customer Analysis

• Identify the relevant market
• Tailor customer analysis to the relevant market.
• Which customers or customer segments have
  needs/wants that can be satisfactorily met with
  the products or services offered?

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How do we identify the relevant market?

• Brainstorm?!
• Use market definition to identify what level of
  demand is most relevant.
• Primary demand
• Selective demand

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Market Definition
Thirst
Primary Demand
Milk
Coffee
Soda
Tea
Juice
Ground
Whole Bean
Instant
Coffee Bag
Secondary Demand
Folgers
Starbucks
Millstone
Gevalia
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Primary Demand

• Demand for product form or class.
• Broad definition of relevant market.

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Analyzing primary demand involves...

• Asking questions in two areas
• Buyer identification
• Willingness-to-buy and ability-to-buy

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Selective Demand

• Demand for a specific brand or supplier within
  the relevant market.
• Consistent with defining narrow relevant markets.
• Associated with

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Analyzing selective demand involves...

• Understanding how customers make choices from
  among alternative brands within the relevant
  market.
• Focus on specific decision processes and
  determinant attributes.

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Expanded 5-W Model for Customer Analysis

• Who are our current and potential customers?

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5-W Model, continued

• What do our customers do with our products?

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5-W model, continued

• Where do our customers purchase our products?

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5-W model, continued

• When do our customers purchase our products?

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5-W model, continued

• Why (and how) do our customers select our
  products?

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• How are the needs of our customers expected to
  change in the future?
• What methods of payment do our customers use when
  making a purchase?
• Are our customers prone to developing close
  long-term relationships with us and our
  competitors, or do they buy in a transactional
  fashion (primarily based on price)?

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5-W model, continued

• Why do potential customers not purchase our
  products?
• What are the basic needs of noncustomers that are
  not being met by our products?
• What are the features, benefits, or advantages of
  competing products that cause noncustomers to
  choose them over our products?

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• Are there issues related to distribution,
  communications, and pricing that cause customers
  to not purchase our products?
• What is the potential for converting these
  noncustomers to our products?

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How Do Firms Collect Data?

• Qualitative research methods
• Focus groups
• Interviews
• Observation
• Quantitative research methods
• Surveys
• Mail, phone, on-line, mall intercept
• Experimental design