1) Customer analysis is often considered crucial market planning. Using the elements of customer analysis, discuss how you would go about analyzing your customers. Relevant examples should be included in your answers.
Customer analytics is a process by which data from customer behavior is used to help make key business decisions via market segmentation and predictive analytics. This information is used by businesses for direct marketing, site selection, and customer relationship management. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer. Customer analytics is playing a very important role in prediction customer behavior these days and takes place among social sciences (Kioumarsi et al., 2009).
In order to analyze customer for a company the marketers need to do segmentation and then do the targeting based on those segments to identify the target customers for the company
Figure shows the four major steps in designing a customer driven marketing strategy. In the first two steps, the company selects the customers that it will serve. Market segmentation involves dividing a market into smaller groups of buyer with distinct needs, characteristics or behavior who might require separate products or are marketing mixes. The company identifies different way to segment to market and develop profiles of the resulting market segments, Marketing target (or targeting) consists of evaluating each market segment’s attractiveness and select one or more market segments to enter, in the final two steps, the company decides on a value proposition on how it will create value for target customers. Differentiation involves actually differentiating the firm’s market offering to create superior customer value. Positioning consists of arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the mind of target consumers.
Market consists of buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentation companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. In this section, we discuss four important segmentation topics.
a) Segmenting consumer markets
A marketer has to try different segmentation variables, alone and in combination, to find the best way view the market structure, Segmenting consumer markets involve geographic, demographic, psychographic, and behavior variables.
Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, states, countries, cities or even neighborhoods.
For example, Home Depot has been introducing urban neighborhood stores that look a lot like its traditional stores but at about two third the size. It is placing these stores in high density markets such as Manhattan, where full size stores are impractical. Similarly, Wall Mart has been introducing urban neighborhood stores that look a lot like its traditional stores but at about two third the size. It is placing these stores in high density markets such as Manhattan, where full size stores are impractical; Similarly, Wal Mart has been opening small, supermarket style neighborhood market grocery stores to complement its super centers.
Demographic segmentation: diving a market into groups based on variables such as age gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationally.
For example with gender segmentation, Nike has recently stepped up its efforts to capture the women’s sports apparel market by overhauling its women’s apparel lines, revamping the Nikewomen.com Web site, and opening Nike women stores in several major cities.
Psychographic segmentation: dividing a market into different groups based on social class, lifestyle, or personality characteristics.
Behavior segmentation dividing a market into group based on consumer knowledge, attitude, use or response to a product.
b) Segmenting business markets,
Consumer and business marketers use many of the same variables to segment their markets. Business buyers can be segmented geographically, demographically (industry, company size) or buy benefits sought, user status, usage rate, and loyalty status. Business marketer also uses some additional variables such as customer operating characteristics, purchasing approaches, situational factors and personal characteristics.
c) Forming segments of consumers who have similar needs and buying behavior
Some customers have similar needs and buying behavior even though they are located in different countries. Segmenting international markets based on geographic, economic, political, cultural and other factors assumes that segments that segments should consisted of clusters of countries.
Example : Mercedes Benz targets the world’s well to do, regardless of their country, And Swedish furniture giant IKEA targets the aspiring global middle class it sells god quality furniture that ordinary people worldwide can afford.
d) Requirements for effective segmentation
Clearly, there are many ways to segment a market, but not all segmentations are effective, For example, buyer of table salt could be divided into blond and brunette customers, but hair color obviously does not affect the purchase of salt. Furthermore, if all salt buyers bought the same amount of salt each month, believed that all is the same and wanted to pay the same price, the company would not benefit from segmenting this market. To be useful, market segments must measurable, accessible, substantial, differentiable.
