customer analysis 1

External Analysis Implications External Analysis Identification: Trends/future events Opportunities/Threats Strategic uncertainties Strategic Decisions: Product-Market Investment Functional Area Strategies Bases for SCA Analysis: Information-need areas Scenario analysis Trends/Future events • Occurrences in the external environment that will have a direct/ indirect impact on one’s marketing strategy • Fad Vs long term impact – Health consciousness – Technology savvy businesses and consumers – Snooker and pool houses – 99 shops Strategic Uncertainty • Uncertainty surrounding the way in which you create and capture value in an industry. • Questioning the relevance and feasibility of a strategic decision • Strategic Decision – Introducing a new product – Investment in a new technology – Online sales • Strategic Uncertainty – Will a major competitor enter? – Will it be replaced? – Will consumers want to shop online? Strategic Uncertainty • Works at more than one level i.e. primary and second level uncertainties • “Will consumers want to shop online?” – Are online transactions secure? – Will there be any regulatory issues surrounding online payments? – Will consumer want to shift from their present buying behaviour? Analysis • Helps reduce the strategic uncertainties through: – Information acquisition in the need area • Supporting research and surveys – Modeling • Scenario analysis Customer Analysis Scope • Segmentation • Customer motivations • Unmet needs Segmentation To begin with… • “There are no longer markets for products that everyone likes a little, there are only markets for products that somebody likes a lot.” • ”In the 1980s we looked for the customer in each individual. Now we must look for the individual in each customer.” • ”If you went out of business, would anyone miss you?” Nokia 1992 Nokia 2006 Ford 1915 Ford 2006 Characteristics of Markets • Definition: Market is a group of actual or potential customers of a particular offering – Willingness to purchase the product – Enough purchasing power to buy the offering – The authority to make the purchasing decision • All customers rarely have similar needs and preferences – User, payer, influencer, and maker of the final purchase decision is not always the same person Companies need to design and offer differentiated products to specific target groups Segmentation • Identifying and profiling distinct groups of buyers who differ in their needs, preferences and behavior • Aim: Each segment can be approached with a unique marketing mix (4P) • The groups that result from the market segmentation process are called market segments – maximum similarity between individuals within a segment – maximum heterogeneity between different segments The STP Model S Segmentation 1. 2. Identify segmentation variables and segment the market Develop profiles of resulting segments T Targeting 3. 4. Evaluate the attractiveness of each segment Select the target segment(s) P Positioning 5. 6. Identify possible positioning concepts for each target segment (4P) Select, develop and communicate the chosen positioning concept Characteristics of Relevant Segments • Measurable – size, purchasing power and characteristics of the segment can be measured • Substantial – segments large enough; largest possible homogenous group (from marketing point of view, maximizing profitability) • Accessible – the segments can be effectively reached and served • Differentiable – segments conceptually different and respond differently to the marketing-mix elements • Actionable – effective individual marketing programs can be formulated and implemented Segmentation Variables Identifier Variables (Who they are) Response Variables (What they want) • Consumer markets • Demographic • Socio-economic • Psychographic • Business markets • Size • Industry • Geographic location • Benefits desired: • Price, reliability, service • Sensitivity to 4P • Purchasing behavior • Volume & Frequency • Switching • Channels Bases of Segmentation • Geographic variables – Region: by continent, country, state, or even neighborhood – Population density: often classified as urban, suburban, or rural – Climate: according to weather patterns common to certain geographic regions Bases of Segmentation • Demographic variables – – – – – – – – – – Age Gender Occupation Education Income Ethnicity Family size Family lifecycle Religion Social class Bases of Segmentation • Psychographic variables – Personality attributes • Attitudes, values, beliefs – Motives – Lifestyles Bases of Segmentation • Behavioral variables – – – – Benefits sought Usage rate Brand loyalty User status: potential, first-time, regular, etc. – Occasions: holidays and events that stimulate purchases Segmentation Strategies Thank You!