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How to Conduct a Customer Analysis

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In this episode, we will cover the first component of the marketing strategy development process: Consumer Analysis.

Consumer Analysis

                Consumer Analysis > Market > Competition Distribution > Marketing Mix > Economics > Revise

  • The primary objective of all marketing efforts is to “promote” a product/service to the consumer.
  • But every consumer has individual needs and wants. Like finger prints, no two are exactly alike.
  • The goal of consumer analysis is to find groups of individuals with similar needs and likings so that promoting efforts can be targeted at them.
  • Some questions commonly asked here are:

Now, all marketing plan needs to begin by looking at the all-important “consumer” and his or her needs.

Everyone does not have the same needs or desires.

The objective of consumer analysis, is therefore, to identify “segments” or groups within a population, with similar needs so that marketing efforts can be targeted directly at them.

In order to find the market, we need to ask specific questions:

  • What is the need category?
  • Who is buying and/or who is using the product/service?
  • What is the buying process like?
  • Is what I’m selling a High or Low involvement product?
  • How should we segment the market?
  • Who needs us and why?
  • What needs or uses does your product addresses?

What is the need category?

  • What is the need for your product/service?
  • This question helps address the category in which your product fits a need.
  • If there is none, it means a new demand may yet be tapped.
  • Case Study: Arm & Hammer

This question helps to uncover any potential market for the product that may have been previously overlooked.

customer analysis
customer analysis

A good example of this process in action is the Arm & Hammer baking soda.

They have successfully made use of their humble baking soda and transformed it into its own brand of toothpaste, air fresheners, and carpet fresheners.

Furthermore, they have also recommended over hundreds of uses for their raw baking powder, which helped to greatly dollarize their creativity.

Who is buying and who is using the product?

  • Buyers are now always users of the product.
    • E.g. Men’s’ socks are mostly bought by women. So advertising in Sports Illustrated may not be as useful as advertising in Her World.
  • Determining the purchaser and user will help to create insights into the buying process, and create a better targeted promotional plan.

Many times the buyers are not the users. For example, woman normally makes purchases of underwear and socks for men.

This may not be true for everyone, but for the majority it might be true.

Anyway, if an advertising campaign wanted to target the buyer of men’s socks, it would probably be inappropriate to buy slots in Sports Illustrated.

Therefore, determining the buyer and user provides the essential initial insights to create an effective marketing plan.

 

What is the buying process?

  • Once we have addressed who buys and uses a product. We have to understand how it is bought.
  • Marketing Research is one avenue to get his information.
  • However, most times intuition and observation will yield good insights.
  • This step is important. As it gives insights to the routes possible in reaching the buyers.

Once we have addressed the need, and who is making the purchase, we should now form a hypothesis on how the product is bought.

customer analysis
customer analysis

Marketing research is an excellent source of such information.

But even our own observations, investigations, and intuition will be as useful as well.

Understanding the buying process is important, as this will help us understand and identify possible routes to reach our buyers.

  • One popular analysis tool is called “AIDA”:

Attention > Interest > Desire > Action

  • Attention: How you capture the buyer’s attention with your product?
  • Interest: How you interests the in buying?
  • Desire: What differentiates your products from others?
  • Action: How do you encourage them to take action and buy one?

The buying process includes all the steps that a person takes leading up to a purchase.

It is commonly called the AIDA process.

AIDA stands for Attention, Interest, Desire, and Action.

  • A more self-explanatory process:

Awareness > Information search > Evaluate alternatives > Purchase > Evaluate

For the sake of clarity, we will expand it into: Awareness, Information Search, and Evaluate alternatives, Purchase, and evaluate again.

As an example of a soap purchase, the process will look something like this: Smell Body, what should I use? Soap, Ask wife for advice, Make trip to store, Read labels, Buy Dove soap, Bathe, Smell body, Buy Dove soap again next time.

Let’s break the above steps down further:

  • Awareness (Identifying a Need)
  • Information Search (Searching for Sources)
  • Evaluate Alternatives (Comparisons)
  • Purchase Decision (Actual Purchase)
  • Evaluate (Post-Purchase Evaluation)

In Awareness, our guy here realizes a need. In this case, the need was soap.

Advertising may have triggered that need. Prestige brands such as designer clothing and fragrances may trigger desires.

They meet emotional needs such as love and group acceptance. Head & Shoulders is a great brand that plays on our desire for love and group acceptance; having dandruffs of which may cause us to lose it.

customer analysis
customer analysis

Important questions to ask here are:

How do consumers become aware of my products?

Where are my targets likely to be exposed to my messages?

In information search, people in a purchase-making decision, are bombarded with information from a variety of sources: consumer reports, salesmen, specialty magazines, family, friends, and even the local experts

As a marketer, you want your target market to get as much favorable information as possible about your products, whenever and wherever buyers make their buying decisions.

For example, in-store displays are a form of Point-of-Purchase (POP) promotional aid.

Cosmetic giant Estee Lauder has its Clinique ladies’ man counters in departmental stores to do the talking for them.

Evaluate the alternatives. Which one is best?

This includes not only products within a category, but all its substitutes as well. Depending on the importance of the product, consumers may seek additional information and advice.

Placing positive information where your buyers are likely to look is one key to marketing successfully.

At this stage, a marketer should be looking at identifying the influencers of his targets buying behavior.

In the sporting goods industry, professional players are a key influencer in equipment buying decisions. If you can sell to an influential professional, you can sell it to anyone aspiring to be like them.

Distribution is also crucial at the evaluation stage.

If a product is not readily available, a comparable substitute may be chosen just for convenience or immediate availability.

Coca-Cola’s and Pepsi’s wide distribution channels, ensures difficulty for any new cola competitor to ever break through the market. Even if you crave a Dr. Pepper’s soda, you will most likely accept a Coke or Pepsi when it’s not available at the store.

The Purchase Decision.

We have reached the big sale! Even though our consumer has decided to make the purchase, in certain instances, the first purchase may only be a trial.

Adoption of the “new and improved” Head & Shoulders may only happen, after a successful test run with those pesky dandruffs.

However, with many big ticket items, such as automobiles, and electrical equipment’s, a trial may not be possible.

In such instances, the decision-making process may be a more time consuming and difficult to make, because of the higher risks involved.

It is therefore important, for the marketer to understand the risks.

Through the use of various marketing tools, such as advertising, knowledgeable salespeople, warranties, and printed materials, purchase risks can be reduced by offering buyers information explaining what level of performance he or she can expect, as well as providing a solid basis of comparison with competing products.

Finally, we have reached the evaluate or post-purchase behavior phase.

Most commonly asked questions by consumers here is: Did I make a mistake?

The conclusion can be reached either on a physical level by testing our product’s efficacy, or on a psychological level by checking for peer approval.

Buyer’s remorse and post-purchase dissonance are terms used to describe the period of confusion that often follows a purchase.

Automobiles advertising, for example, is not only targeted at potential buyers, but also at recent buyers, to reassure them that they didn’t made a wrong choice.

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