L4 Customer Analysis SMM PDF

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Summary

Customer analysis by Johnathon Wilson. Includes
Business to Customer Analysis
Consumer Behaviour Model
Hierarchy of Needs
Baker Composite Model
Evaluation of Alternatives/Buying situations
Hierarchy of Effects
AIDA Model
CAC and CAB model
Black b...

Description

CUSTOMER ANALYSIS – JOHNATHON WILSON L4 Business to Customer Analysis Consumers and consumption -

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Who is a consumer? - Traditionally, consumers are passive individuals who response to environmental and biological forces beyond control - Modern view is that they are informants and behavioural studies are used to understand the consumer viewpoint. What is consumption? - Purchase, use, reuse, discard, recycling, possession and loss of tangible and intangible objects Understanding consumer behaviour and customer analysis … example, im buying a Christmas dress - How you consume, I find it in the shop, try it on and buy it if I like it. - What you consume, the Christmas dress - When you consume, a few weeks before christmas - Where you consume, in the shop - Why you consume, for an occasion - Who decides the process, I do and the organiser of the event - What influences the decision, the location I will where it to, the fit, the price, the material, the look, how tired I am. - What are the choice criteria, it’s a size 8, looks good on, is below £20 - What meaning do the objects and experiences have, will be worn to a big event A customer audit - Who buys - What do they buy - Where do they buy - How do they buy - Why do they buy

Choice and the social sciences There are four MOTIVATION MODELS: 1. The Marshallian model Based on money, generally speaking if something is of lower price people are more likely to buy it but if its too cheap, they may question the quality. And some people will buy more expensive items to show off. E.g. expensive cars. 2. The Pavlovian model Based on pavlovs dog and learning, if you can stress the benefits, then customers may remember and respond. If you can reinforce this behaviour, then customers keep coming back. 3. The Freudian model Stressing psychoanalytical motivations Ego, self esteem. E.g. buying something to show off 4. The Veblenian model

Stressing social psychological factors, e.g. because a friend has it you want to buy it.

Consumer behaviour model

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Individual/personal influences: who we are, your history - Personality, e.g. a consumer likes the colour pink - A consumers individual personality is already made up of personal, inner, psychological characteristics and socio-cultural influences and this would influence purchasing decisions. - Personality can also be a motivation for purchasing, e.g. self-image - Perception, e.g. what the consumer thinks of the company - Selective perception: leads us to interpret the world in terms of our expectations of it, its selective so we often ignore irrelevant logos/signs/brands but this process is unique to every individual. It protects us from information overload. - Selective perception is made up of selective attention and selective retention - Selective attention: the process of focussing on a particular object for a certain period of time, allowing us to tune out unimportant details and focus. - Selective retention: the process whereby people more accurately remember certain bits of information. - Learning from their past experiences of a product - An almost permanent change in behaviour which occurs as a result of practice - Behavioural learning - Classical conditioning: Pavlovs dog, a learning process that occurs when two stimuli are repeatedly paired: a response that is, at first, elicited by the second stimulus is eventually elicited by the first stimulus alone. It is used in marketing to make the viewer feel and react positively to a product or viewpoint. Scarlett Johansson, Eva Longoria, and Kerry Washington – spoke about women’s rights and abortion, ending with a “Vote for Obama.” Ads like these use both attractiveness and fame as well as real heartfelt issues to influence people. - Operant conditioning: behaviour is modified by reward or punishment. E.g. If you buy our insurance, you get a free parker pen - Cognitive learning - Observational: unconsciously get used to something and need to do it or have it, e.g. product placement - Motivation, e.g. I need this product for a Christmas ball - Drive + motivation = needs - Maslows five step hierarchy

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Self actualisation: where you see yourself after an achievement Esteem: feeling of worth and how you see yourself Love/belonging: being wanted Safety Physiological: food, shelter, essentials to survive - Attitudes, e.g. im an impulsive buyer. - An exhibit of ones beliefs, feelings and intended behaviour - Cognitive: beliefs and values: drivers - Affective (feelings): positives and negatives - Conative (Intended Behaviour): linking behaviours - The above is the CAC model Group influences: what do you friend have, what do your role models have - Culture – sub culture, social class, religion - Reference groups – family, friends, role models, status Situational influences: where you came from - Sociocultural: what will your friends buy - Technological: - Economic - Competitive - Political: Can I use this in another country - Regulatory Marketing mix: the companies strategies

The baker composite model (see book) The model serves as an analytical framework that explains new product development (NPD) successes and failures after they have happened, and thus can be used to help improve success rates of future NPD

Buying situations/Evaluation of Alternatives The process is different depending on what your buying and what for. 1. Extended problem solving: involves a high degree of information search, as well as close examination of alternative solutions using many choice criteria 2. Limited problem solving: involves a combination of both internal and external information search, more thought will go into the most expensive items 3. Habitual problem-solving: happens when a consumer repeat-buys a product while carrying out little or no evaluation of the alternative… e.g. impulse buys, or even soup.

Hierarchy of Effects Individuals pass through a number of stages in coming to a decision as to whether or not to buy an object AIDA Model: Awareness, Interest, Desire, Action

The AIDA model identifies cognitive stages an individual goes through during the buying process. It illustrates marketing communication process as a sequence. Awareness: creating brand awareness or affiliation with your product or service -

How can we make buyers aware of our products or services What is our outreach strategy What is our brand awareness campaign Which tools or platforms do we use

Interest: generating interest in the benefits of your product or service, and sufficient interest to encourage the buyer to start to research further -

How will we gain their interest What is our content strategy How do we make information available and where

Desire: for your product or service through an emotional connection showing your brand personality. Move the consumer from liking it to wanting it -

What makes us desirable How do we interact personally to make an emotional connection

Action: CTA – Move the buyer to interacting with your company and taking the next step, an action step. -

What are the call to actions and where do we place them Is it easy for consumers to connect and where would they expect to find it

Criticisms of AIDA: -

Implies passive consumer behaviour Most attention is an emotional response Interest in an indicator for active cognitive information seeking

CAC Model: Cognitive, Affective, Conative, as seen in Attitudes section of personality of the Consumer Behaviour Model. CAC are the components of attitude CAB Model: Cognition-Affect-Behaviour, this is based on the stimulus-response-model and black box theory. Black Box Model Norbert Weiner 1961 This is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and process by companies, whereas the environmental stimulus are given by social factors, based on the economical, political and cultural circumstances of a society.

Buyers Decision making process 1. 2. 3. 4. 5. 6.

Problem recognition Information search Evaluation of alternatives Purchase decision Consumption Post purchase behaviour

1. Problem recognition a. Problem awareness/needs recognition: consumers can be encouraged to believe they have a problem. This depends on the functional need, emotional need and the level of importance b. To the customer, it depends on the risks involved (financial, psychological, social, physical, functional, lifestyle), the urgency of the need, costs involved and the anticipated satisfaction. 2. Information search a. The identification of alternative ways of problem solving. The objective of information search is to construct an awareness set i. What kind of purchase will address the problem ii. Where can the product be obtained iii. What information is required b. The greater the perceived risk, the greater and more extensive the information search 3. Evaluation of alternatives a. Screening and filtering the awareness set to produce an evoked set. This process is based on constructing performance crtieria upon which to judge choices. This is usually based on i. Self-image ii. Perceived risk iii. Social factors iv. Hedonistic influences (the pursuit of pleasure/self-indulgence) 4. Purchasing decision a. The purchase depends on where there is high/low involvement b. The five roles in the buying decision making process are: i. Initiator: the person who begins the process of considering the purchse ii. Influencer: the person who attempts to persuade others about the decision iii. Decider: the person with the authority and power to make the final decision choice

iv. Buyer: the person who conducts the transaction v. User: the actual consumer/user of the product FCB Grid: Foots, Cone and Belding

5. Consumption a. There are different types of buying and usage behaviour i. Purchasing for 1. Self-use 2. Sharing 3. Gifting ii. Use/possession iii. Reuse, recycle, repurpose iv. Sharing, exchange v. Discard b. Online consumer behaviour i. Types of consumers ii. Time and frequency spent online iii. Online behaviour (analytics) iv. Average spend v. Online marketing communications vi. Online brand reputation 6. Post-purchase behaviour a. The creation of customer satisfaction or cognitive dissonance. It is the post-purchase concerns of a consumer arising from uncertainty as to whether a decision to purchase was the correct one. b. This affects the likelihood of a repeat purchase c. This is dependent on the relationship between a consumers expectations and the products perceived performance. The larger the gap here, the greater the dissatisfaction leading to cognitive dissonance d. Cognitive dissonance is the state of having inconsistent thoughts, beliefs and attitudes e. Consonance is an individuals effort to organise perceieved stimuli into coherent and consistent patterns which are in accord with our knowledge, beliefs and attitude

The Characteristics of Goods

The five product characteristics that help decide the most effective marketing strategy for a product 1. 2. 3. 4. 5.

Replacement Gross Margin Adjustment Time of Consumption Searching Time

Red goods, orange goods, yellow goods.

Business to Business Analysis Organisational Buyers Versus Consumer buyers 1. Definitions a. Consumer buyer behaviour refers to the buying behaviour of individuals and households who buy goods and services for personal consumption. b. Organisational buyer behaviour refers to the buying behaviour of organisations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others. c. What is organisation buying behaviour? An orientation to satisfy the needs of the market, targeting key sectors of the market 2. Buyer Behaviour - Compared with markets for consumer goods, organisational markets are characterised by o the use of professional buying specialists following prescribed procedures o a closer buyer-seller relationship o the presence of multiple individuals in the buying process o the greater likelihood on buying on specification rather then price 3. Characteristics of Demand - The demand for industrial goods and services is: o Derived from the demand for consumer goods and services. o Relatively inelastic—price changes in the short run are not likely to significantly affect demand. o More erratic because small increases or decreases in consumer demand can, over time, strongly affect the demand for manufacturing plants and equipment. o More cyclical - Without consumer demand, there is no organisation 4. Market Dynamics - Compared to consumers, organizational buyers are o Fewer in number o Larger in size o Geographically concentrated - Has an impact on the marketing mix from segmentation, targeting, market research

Types of organizational buying There are three buying situations 1. Straight re-buy: automatic and regular purchase of familiar and understood products 2. Modified re-buy: current supplier no longer appropriate so need to ‘shop around’ 3. New buy: buyer seeks to fulfil a need never before addressed

The organisational buying process: who and how 1. Who -

Buying tends to involve more then one individual A buying centre is a group that is involved in the buying decision, they are also known as a decision making unit (DMU) in industrial buying situations A decision making process includes the various stages that organizations and people pass through when purchasing a physical product or service DMUs can be o Initiators: person who instigates the buying decision process o Buyers: usually the person who pays for the purchase o Deciders: final decision maker o Influencers: person who exercises the most influence – can change according to culture and family unit o Approvers o Users: person who uses and consumes the product o Gatekeepers

2. Stages - Problem recognition

3. How

Need description and product specification Information search Supplier search Call for proposal/tender Evaluation and selection of products and suppliers Purchase decision Use/trial Maintain relationship Supplier evaluation

Buying Criteria, Relationships and Evaluation Environmental Influences - External

External: 1. Economic outlook: overall demand 2. Primary demand: market strength 3. Cost of money: impact of financing 4. Supply conditions: time and availability 5. Rate of technological change: demand stability 6. Politics and regulation: legal concerns 7. Competitibe/industry situation

Environmental Influences - Internal

1. 2. 3. 4. 5.

Objectives: quality/efficiency Organisational structure: level of centralisation Policies: ability to make changes Procedures: process rules Systems: compatibility issues

Personal and Interpersonal Influences 1. 2. 3. 4. 5. 6. 7. 8. 9.

Education: complexity of offer/presentation Job position: ability to make a decision Personality: perspective on the job Risk attitudes: willingness to shift from the status quo Authority: levels of spending authorisation Status: levels of spending authorisation Empathy: level of understanding Persuasiveness: negotiation skills Age: degree of flexibility

Maintaining Relationships Buyer-seller relationships are often long term with complex patterns of interaction. However, links between buyers and sellers may become institutionalised. Marketers and purchasers are often more involved with supporting relationships then actually buying and selling.

Supplier Evaluation Assessment of existing or new suppliers on the basis of their delivery, prices, production capacity, quality of management, technical capabilities and service. 1. Technical criteria a. Reliability b. Durability c. Performance d. Style/looks e. Comfort f. Delivery g. Convenience

h. Taste 2. Economic Criteria a. Price b. Value for money c. Running and lifecycle costs d. Value 3. Social criteria a. Status b. Social belonging c. Convention d. Fashion 4. Personal criteria a. Self-image b. Risk-reduction c. Morals d. Emotion Features and Trends 

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Just-in-time (JIT) o Aims to minimize stocks by organising a supply system that provides materials and components as they are required Online Purchasing o Includes vertical and horizontal electronic marketplaces Centralised Purchasing o Involves bulk buying from a central office Relationship Marketing o The process of creating, maintaining and enhancing strong relationships with customers and other stakeholders Reverse Marketing o The process whereby the buyer attempts to persuade the supplier to provide exactly what the organisation wants....