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5. C H A P T E R. Customer Analysis. Meaning of a Customer: - Current and Potential - Immediate and Final. Major Topics. Review of Major Issues from BA390* An Approach for Customer Analysis* Long-term Value of a Customer Market Segmentation. - PowerPoint PPT Presentation
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McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
C H A P T E R
Customer Analysis5
Meaning of a Customer: - Current and Potential - Immediate and Final
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Major TopicsMajor Topics
1. Review of Major Issues from BA390*
2. An Approach for Customer Analysis*
3. Long-term Value of a Customer
4. Market Segmentation
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Major Topics for Consumer BehaviorMajor Topics for Consumer Behavior
1. Consumer Decision Process
2. Types of Buying Decisions
3. Influences on the Rate of
New Product Adoption (RCCDC)
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
What We Need to Know about Current and What We Need to Know about Current and Potential CustomersPotential Customers
• Who buys and uses the product?• What customers buy and how they use it?• Where customers buy?• When customers buy?• How customers choose?• Why they prefer a product over others?• How they respond to marketing programs?• Will they buy it (again)?
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
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
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Buying Roles and Needs/Benefits SoughtBuying Roles and Needs/Benefits Sought
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Who Buys and Uses the Product (Cont’d)Who Buys and Uses the Product (Cont’d)
3. Describing Business Markets Demographic Operating variables Purchasing approaches Situational factors Personal characteristics
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
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
Multiattribute Model Questions1. Which attributes do customers use to define a
product?
2. What are the perceptions of the products on the attributes?*
3. What are the importance weights?
4. What decision rule is used to combine the information?
1. Compensatory
2. Noncompensatory
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Bank Perceptual MapBank Perceptual Map
Courteous personnel
Convenient ATM locations
A•
D•
B•
C•
E•
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
5. 5. Why they prefer a product/brandWhy they prefer a product/brand
1. Three elements of a customer value of a brandImportance of the usage situationEffectiveness of the product category in the situationRelative effectiveness of the brand in the situation
2. Sources of Customer Value Economic Functional Psychological: Brand Equity
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Measuring Brand EquityMeasuring Brand Equity
1. Awareness.
2. Associations.
3. Attitude.
4. Attachment..
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
[Manifestations of] Customer Value[Manifestations of] Customer Value
• Price.
• Price sensitivity.
• Level of Satisfaction.
• Complaints and compliments.
• Word-of-mouth.*
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
[Manifestations of] Customer Value [Manifestations of] Customer Value (cont’d).(cont’d).
• Margin/profit contribution.
• Dollar sales.
• Repeat purchase rate.
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Assessing the Value of the Assessing 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
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Personal ComputerPersonal Computer Product Category Value Product Category Value
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Assessing the Value of the Assessing 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
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Will they buy it (again)?Will they buy it (again)?
• Satisfaction
• Intention
• Behavior
• Loyalty: ex) Casino Study
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Methods for market segmentationMethods for market segmentation
Descriptive Purpose
Cluster Analysis
Tabular Analysis* Prescriptive Purpose
Regression Analysis: Individual-based
Latent Class Analysis: Segment-based
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Cluster Analysis IllustrationCluster Analysis Illustration
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Raw Data: Cranberry Sauce UsageRaw Data: Cranberry Sauce Usage
HeavyUsers
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
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Cranberry Sauce Usage PercentagesCranberry Sauce Usage Percentages
Cooking Attitude
Heavy Users Medium Users Light Users
Convenience orientedRow %Column %
27%31
48%31
25%26
Enthusiastic cookRow %Column %
3838
4525
1816
DisinterestedRow %Column %
1314
4023
4745
DecoratorRow %Column %
2517
5421
2113
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
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 income32.4 percent of volume is from households with greater than
$60,000 income72.8 percent of volume is from households with no kids65.8 percent of volume is from households where the Head has
some college education39.4 percent of volume is from households with the Head under
35 years old
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Percent Who Have Eaten Energy Bars in the Last Six Percent 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%
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Customer Analysis Illustration: Energy Bars Customer Analysis Illustration: Energy Bars ((cont)cont)
What They Buy:ConvenienceTasteTextureHealth BenefitsPerformance/EnergyHunger SatisfactionPrice (expect to pay $1.00 to $1.50 per bar)Packaging/Buy In BulkAvailability
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Customer Analysis Illustration: Energy Bars Customer Analysis Illustration: Energy Bars (cont)(cont)
What Use For:Meal ReplacementsSnacksAthletic Energy Booster
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
Customer Analysis Illustration: Energy BarsCustomer Analysis Illustration: Energy Bars (cont)(cont)
Where They Buy:Health Food StoresOutdoor Retailers (e.g., REI)Grocery StoresDrug StoresConvenience StoresMass MerchandisersClub Stores
McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved.
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”
