GRAHAM HOOLEY • NIGEL F. PIERCY • BRIGETTE
NICOULAUD
4
Customer analysis
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
6-2
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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Figure 4.1
Who is the customer?
Initiator
User/consumer
Purchaser
Purchase, use and
consumption
Influencer
Decider
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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
consumer’s 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
6-5
Figure 4.2
Understanding customers-the key
questions
WHO
Is involved in buying
and consuming?
HOW
WHAT
Do they use the
product?
Are their choice
criteria?
CUSTOMERS
WHERE
WHEN
Do they buy?
Do they buy/use
the product?
WHY
Do they buy/use
the product?
6-6
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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Marketing-research methods
Figure 4.3
Marketing
research methods
Tailor-maid
research
Company records
Sales
records
Accounts
records
Experiments
Observation
Field
Laboratory
Off-the-peg
research
Quantitative
research
Qualitative
research
Surveys
Focus
groups
Depth
interviews
Personal
Telephone
Postal
Desk
research
Shared &
syndicated
Internet
6-9
Company records
• Company’s 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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Figure 4.4
Uses of qualitative research
Providing
insights into
problems
Generating new
ideas
Having customer
descriptions of
things
Qualitative
research
Helping
structure later
research
Getting reactions
to new ideas
Understanding
the findings of
large-scale
projects
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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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Figure 4.5
Uses of surveys
To provide
quantitative data
on markets and
customers
To determine
customer
behavior
To determine
customer
requirements and
expectations
Surveys
To determine
customer
opinions and
perceptions
To provide data
for segmentation
of markets
6-20
Surveys
Personal interviews
Telephone interviews
Advantages
Advantages
• Greatest flexibility
• Useful in attitudinal
statements,
• Data is acquired quickly
• Low cost
• Closely controlled
Disadvantages
Disadvantages
• Most expensive to conduct
• Every one may not have
telephone
6-21
Surveys (Cont’d)
Postal methods
Advantages
Disadvantages
• Cheapest of all
• Useful in locating
geographically disperse
samples
• 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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Figure 4.6
Uses of experimentation
To establish the
strength of
relationship
To establish
causation
To test elements
of the strategy
Experiments
To estimate
market potential
To test customer
reactions to
alternative
strategies
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THE MARKETING RESEARCH
PROCESS
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Figure 4.7
Stages in a comprehensive marketing
research project
Problem
definition
Exploratory
research
Quantitative
research
Analysis and
interpretation
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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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Figure 4.8
Marketing decision support systems
Marketing decision-maker
Statistical
techniques
Market
models
Decisions
Responses
Managerial interface
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, people’s
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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