GRAHAM HOOLEY • NIGEL F. PIERCY • BRIGETTE NICOULAUD

GRAHAM HOOLEY • NIGEL F. PIERCY • BRIGETTE NICOULAUD

4Customer 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

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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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Initiator

Influencer

DeciderPurchaser

User/consumerPurchase, use and

consumption

Who is the customer?Figure 4.1

Information on current customers

• Recognizing five roles can be useful in targeting marketing activity– The initiator The initiator – initiates the research for solution to

consumer’s problem– The influencer The influencer – influence on purchase decision– The decider The decider – actually make the decision– The purchaser The purchaser – buys the product or service– The user The user – consumes the product or service

• Different approaches may be suitable6-5

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WHOIs involved in buying

and consuming?

WHATAre their choice

criteria?

WHYDo they buy/use

the product?

HOWDo they use the

product?

Understanding customers-the key questionsFigure 4.2

WHENDo they buy/use

the product?

WHEREDo they buy?

CUSTOMERS

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

Company records Tailor-maidresearch

Quantitative research

Off-the-pegresearch

Figure 4.3 Marketing-research methods

Qualitative research

Surveys Focus groups

Personal Telephone Postal Internet

Desk research

Shared & syndicated

Sales records

Accounts records

Depth interviews

Experiments Observation

Field Laboratory

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 requirements6-10

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 Group discussion take the form of relaxed, informal discussion among 7-9 respondents

• The Depth interview Depth interview takes place between one interviewer and one respondent

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Uses of qualitative researchFigure 4.4

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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To provide quantitative data on markets and

customers

To determine customer

requirements and expectations

To provide data for segmentation

of markets

To determine customer

opinions and perceptions

To determine customer behavior

Uses of surveysFigure 4.5

Surveys

Surveys

Personal interviewsAdvantagesAdvantages• Greatest flexibility• Useful in attitudinal

statements,

DisadvantagesDisadvantages• Most expensive to conduct

Telephone interviewsAdvantagesAdvantages• Data is acquired quickly• Low cost• Closely controlled

DisadvantagesDisadvantages• Every one may not have

telephone

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Surveys (Cont’d)

Postal methodsAdvantagesAdvantages• Cheapest of all• Useful in locating

geographically disperse samples

DisadvantagesDisadvantages• 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 Field experiments take place in the real world• In-house experiments In-house experiments are conducted in more

controlled but less realistic settings

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To test customer reactions to alternative strategies

To estimate market potential

To establish the strength of relationship

To establish causation

To test elements of the strategy

Uses of experimentationFigure 4.6

Experiments

THE MARKETING RESEARCH PROCESS

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Stages in a comprehensive marketing research project

Figure 4.7

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 systemsFigure 4.8

Statistical techniques

Market models

Raw data

Marketing decision-maker

Managerial interface

Marketing research interface

Marketing environment

Respon

ses

Decisions

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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