Market%20Segmentation,%20Target%20Marketing,%20and%20Positioning

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GRAHAM HOOLEY NIGEL F. PIERCY BRIGETTE
NICOULAUD
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Customer 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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Who is the customer?
Figure 4.1
Initiator
Purchase, use and consumption
Influencer
User/consumer
Decider
Purchaser
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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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Understanding customers-the key questions
Figure 4.2
WHO Is involved in buying and consuming?
HOW Do they use the product?
WHAT Are their choice criteria?
CUSTOMERS
WHERE Do they buy?
WHEN Do they buy/use the product?
WHY Do they buy/use the product?
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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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Figure 4.3
Marketing-research methods
Marketing research methods
Company records
Tailor-maid research
Off-the-peg research
Sales records
Quantitative research
Accounts records
Qualitative research
Desk research
Shared syndicated
Experiments
Surveys
Observation
Focus groups
Depth interviews
Field
Personal
Laboratory
Telephone
Postal
Internet
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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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Uses of qualitative research
Figure 4.4
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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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Uses of surveys
Figure 4.5
To provide quantitative data on markets and
customers
To determine customer requirements and
expectations
To determine customer behavior
Surveys
To provide data for segmentation of markets
To determine customer opinions and perceptions
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Surveys

• Personal interviews

• Telephone interviews

• Advantages
• Greatest flexibility
• Useful in attitudinal statements,
• Disadvantages
• Most expensive to conduct

• 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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Uses of experimentation
Figure 4.6
To establish the strength of relationship
To establish causation
To estimate market potential
To test elements of the strategy
Experiments
To test customer reactions to alternative
strategies
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The marketing research process
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Stages in a comprehensive marketing research
project
Figure 4.7
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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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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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Marketing decision support systems
Figure 4.8
Marketing decision-maker
Managerial interface
Statistical techniques
Market models
Responses
Decisions
Raw data
Marketing research interface
Marketing environment
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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