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2 Marketing (Subject) / ANALYSIS- 5Cs (Lesson)
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- -1 DEFINE THE CUSTOMER - Definition A customer is any person / organisation in the channel of distribution or decision (excluding competitors), whose actions can affect the purchase of the firm’s products and services. If we wish to quantify, a clear definition is required: Decider (DMU) - Does it matter who made the decision? Payer: Is payment required? If so, how recent? Buyer: Does it matter who buys? User: Does it matter who uses? Does recency of usage matter? Legal: What about legal obligations?
- -2 UNDERSTAND YOUR CUSTOMER - Why do they buy our products? People do not buy our product because of its features and attributes, they buy our product because it meets their needs and delivers the desired benefits Features & Attributes - Key Characteristics Benefits - What the attributes and features do for the customer Values & Goals - Why the customer believes these benefits are important
- -2 UNDERSTAND YOUR CUSTOMER - Benefits The challenge is to provide offerings that deliver the right combination of functional / economic, psychological (emotional, life-changing), and social benefits: Functional: Quality, Variety, Sensory appeal, Simplifies, Organized, Connects, Informs Economic: Makes Money, Saves Time, Reduces Risk / Cost / Effort Emotional: Rewards me, Design, Wellness, Fun, Attractiveness, Reduces stress Life Changing: Provides hope, Motivation, Belonging, Self-Actualization, Heirloom Social Impact: Self-Transcendence Basis: Maslow’s hierarchy of needs
- -2 UNDERSTAND YOUR CUSTOMER - Jobs to be done - People buy a product because it is, in that instance, the best means of “getting the job done." - Jobs are things customers are trying to get done in a given circumstance. Functional jobs: how customer achieves a functional goal Social jobs: how customer wants to be perceived by others Emotional jobs: how wants to feel Functional job: “Helps us keep X secure when doing Y" Emotional job: “We want to feel like we are being good Y.” Social job: “Show others X that we have the best and safest Y.”
- -3 The Path to Purchase / Consumer Journey The course of events or activities that consumers follow from the first glimmer of interest in a product [or service] up through the point where they make the payment to complete the buy. Total Sales = Made up of all individual Decision Journeys
- -3 The Purchase Funnel -There are a number of states people must occupy before a purchase can occur. -We conduct market research to identify what % of the target market occupy each state. 100% market Awareness: 70% Aware Knowledge: 70% Know Consideration: 70% Consider Preference: 70% prefer Availability: Available to 70% Purchase: 70% Buy - Marketing tries to push customers through the purchase funnel through: Awareness (Advertising) Knowledge (Advertising & Brand Power) Liking (Product Power) Consideration (Product Power, Past Experience) Preference (Product Power) Market Representation (Sales Force) Retail & Service Capacity (Selling Power) Trade-In Availability (Sales Force & Production) Buy or Re-Buy (Ownership Experience)
- -1 DEFINE THE CUSTOMER - DMU All those individuals who play a role in the purchase decision process Initiators Influencers Approvers Gatekeepers (hide information) Users Deciders Buyers More formalised in B2B settings, but the basic idea is still relevant in B2C settings. Marketing efforts needs to be tailored to not only toward the eventual buyer, but toward each individual who influences the decision Implication: Identify players and roles Appraise their relative influence Identify their need and wants Assess how they might be influenced – be specific
- Origins of Panel Data & Applications Origins of Panel Data: Early panels were custom panels set up by a given organization to study company-specific problems. 1941: Industrial Surveys Company founded its National Consumer Index panel, which saw a panel of 2,000 households being given diaries in which to record their purchases of certain categories of consumer goods. Today: NCP (National Consumer Panel - UK based Consumer Panel), Homescan Shopping Panel, Barcode Scanning Nielsen, for example, uses Homescan Shopper Panels to monitor in-store behaviour NCP Mobile App - encourage consumer to scan their Shoppings and trasmit data InfoScout Receipt Hog - Scan Receipts and earn rewards Shoparoo Fundraising (Donation, Fun competitions) Key Feature: Follow how attitudes evolve over time Firms to ask questions over time Capture individual level variation Interviews with respondents of these samples, and ask specific questions relating to product testing, taste testing, or ad testing. As a result, marketers aim to determine and understand the attitudes, values, and beliefs of their target market
- Advantages Consumer Panels Allows to answer questions such as: How many people continue buying the same brand? What brands do they switch to when they stop repeating? How many customers has the brand lost?How many has it gained? What did the new buyers purchase previously? •How many people are exclusive buyers of one brand? How many are non-exclusive buyers? - Higher rsponse rates as respondents have opted to take part in the panel - Examine actual consumer behaviour instead of intentions - Traditional survey data might be flawed
- -2 UNDERSTAND YOUR CUSTOMER - Goals & Values Goals: Self-respect Being well-respected Sense of accomplishment Sense of belonging Excitement Fun Love Security Self-fulfilment The ordering of these goals is a manifestation of an individual’s values These goals are reflected in short- to medium-term goals that are more concrete in nature. Values: enduring preferences for specific end states of existence that reflect a vision of a good life
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- -3 The Decision-Making-Process (DMP) Customers go through a decision process before committing to a purchase, which is influenced by a number of environmental and individual factors: Economic resources Cognitive resources Time availability Comfort with technology - We want to know how individuals make decisions so that we can influence their behaviour in our favour Problem Recognition Information Acquisition Evaluation of Alternatives Purchase Decision Post-Purchase Behavior(s) - There’s more to “value” than the benefits associated with the product attributes. - How can we add value throughout the DMP (and beyond)? Pre-purchase? Purchase?
- Perceptual Map A perceptual Map is intended to be a model of how a market sees a set of competing products in the same memory-like or cognitive sense "A 30,000 ft. view of the market"
- Perceptual map - Key Questions How well are customers needs being met? With whom do we compare? How are we compared to our competitors On what dimensions?