University of Washington EMBA Program Regional 20 Marketing Management “Customer Analysis,...

University of Washington EMBA ProgramRegional 20

Marketing Management

“Customer Analysis, Needs/Values”

Instructor: Elizabeth Stearns

Course Structure

The Marketing Framework/Concept

Analysis5C’s Opportunity Analysis

Marketing Strategy & Customer StrategyGoal Setting, Segmentation, Targeting, and Positioning

Implementation/Action PlansMarketing Mix (4 P’s)

MarketingResearch

Marketers Need to know:• “How buyers respond to the various marketing

stimuli that the organization might use?”They need to know:

WHO buys?WHERE do they buy?

HOW do they buy?WHY do they buy?

WHAT do they buy?WHEN do they buy?

Two Key Questions:

• Who is the Customer?

• What does the Customer Value?

The Customer: Definition

Manufactureror

Distributor

Dealeror

Retailer

End Useror Consumer

The Firm

Influencers

Customer: Any person or organization in the chain of distribution and decision whose actions can affect the purchase of your products and services

Parents of Preschoolers

vehix.com:30

&

Toyota Sienna:60

Defining the Customer: Consequences

• Requires an active versus a passive view of customers

• Recognizes that different persons are often involved in purchase decisions (e.g., specifier, gatekeeper, decision maker, user, spoiler, champion)

• Firms should go beyond the immediate customer to unaddressed influencers

• As markets mature, immediate customers may discourage or block attempts to address customers’ customers and prevent your understanding of the full value of your offer

Who is Today’s Customer?

Beyond.com

Demographic Environment

Worldwide Population GrowthWorldwide Population Growth

Population Age MixPopulation Age Mix

Ethnic MarketsEthnic Markets

Household PatternsHousehold Patterns

Educational GroupsEducational Groups

Geographical Shifts in PopulationGeographical Shifts in Population

Shift from Mass Market to MicromarketsShift from Mass Market to Micromarkets©2000 Prentice Hall

Average Life Expectancy

1776 35

Changing Demographics ????


1776 35

1876 38



1776 35

1876 38

1996 75

2001 76.5



1776 35

1876 38

1996 75

2001 76.5

2050 90 - 95


Life Stages Tied to Age

0 1000 - 18 19 - 60 61 - 75

Easy for Marketers: Very Linear

Work/Family LeisureEducation

Life Stages Not Tied to Age

0 100

Now Cyclic: Not so easy for Marketers

0 - 16

Education Work/Family Leisure

A Positive Appeal to Mature Consumers

Bases for Describing Groups

• Demographics/”Firmographics”

–Consumer: language, age, wealth, income, sex, race, geographic location

–Organization: industry, size, ownership, profitability, legal entity, growth, geographic location

Bases for Describing Groups

• Behavior Patterns–Usage, growth in usage, decision-making unit,

decision-making practices

• Psychographic Characteristics–Lifestyle, lifecycle, lifestage

• Technographics–Understanding, usage, integration into

home/work

Sources of Information

The Press

Syndicated ServicesDemographics/Firmographics

SMRB (Simmons), MRI, NAICS/SIC codesBehavioral Patterns

SMRB (Simmons), MRIPsychographics

Claritas/PRIZM, Microvision

General Business

Industry Specific


Syndicated Services, con’t

TechnographicsForrester Report

Advertising Spending

Mediamark (Formerly LNA - Leading National Advertisers)

Product Movement

Nielsen, IRI (Scanner Data)

Industry Specific Data

(e.g., Greenwich Associates, The Hartman Group)

The Stearns Group


Proprietary Data

Sales Data

Marketing Research

Qualitative (e.g., focus groups, IDI’s, triads, ethnographies)

Quantitative (e.g., tracking studies, A&U studies)

Psychographics

An Appeal to the Bohemian Mix

Psychographic Targeting

• Psychographics represents a combination of consumers’ aactivities, iinterests and oopinions (AIO items)

• Useful but more difficult to identify and measure compared to demographic variables

monster.com :30

Use of Psychographics in Marketing Strategy

• Understanding life-style and personality characteristics

are useful to:

1. Identify market segments.

2. Position products and/or services through

advertising.

3. Develop “media” guidelines.

4. Define new product targets.

5. Develop products.

What is VALS?

• VALS is an acronym for Values and Lifestyles, a program of SRI International. The VALS program includes a typology of the American consumer (created by Arnold Mitchell in 1978), a method of measuring such types in the population, several data bases, a large number of reports prepared by VALS staff and other consultants, and the right to access other proprietary data bases.

What is VALS?

• In addition to promoting the VALS typology, the VALS program routinely examines general values and lifestyle trends in the United States, focusing on overall social change and elucidating implications for the culture as a whole.

What is the VALS typology?

• A theoretical blend of Maslow’s hierarchy of human needs and Riesman’s concept of social character (in The Lonely Crowd), the VALS typology places people’s self-images, aspirations and values within an economic and social context. The result was a dynamic typology with four main categories: Need Driven, Outer-Directed, Inner-Directed and Integrated. Each of these segments is further divided into subgroups, comprising nine types in all.

Maslow’s Hierarchy of Needs

Self-Actualization

Esteem

Social

Safety

Physiological

Double Hierarchy

• Together these groups constitute the double hierarchy, a conceptual model which looks like this:

Survivors

Sustainers

Belongers

Emulators I-Am-Me

Experiential

Achievers

Socially Conscious

Integrated

Zone of the double hierarchy

Inner DirectedOuterDirected

NeedDriven

Contemporary, Inner Directed

Traditional, Outer Directed

The Stearns Group

VALS 2 Groupings

VALS 2• Consumer

segmentation system based on lifestyle characteristics

• Established in 1978; updated to VALS 2 in 1989

• Based on: self-orientation (horizontal axis) and resources (vertical axis)

VALS2

• Eight categories are identified based on a combination of demographic and lifestyle factors such as age, income, education, level of self-confidence, health, and interest in consumer issues

• Two-dimensional format

VALS2

Three self-orientations

(horizontal dimension)

1. Principle-oriented: guided by their views of how the world should be

2. Status-oriented: guided by the actions and opinions of others

3. Action-oriented: guided by a desire for social or physical activity, variety, and risk taking

“Never kissed a Frog….”

Geodemographic Targeting

People who reside in similar areas,

such as neighborhoods or postal ZIP-

code zones, also share demographic

and lifestyle similarities

Geodemographic Targeting

• Companies which have developed geodemographic services – Donnelly Marketing (Cluster Plus)– Claritas (PRIZM – VALS basis)– CACI (ACORN)– National Decision Systems (Vision)

Claritas PRIZM & MicroVision

• “Find yourself, print it, and comment!”

• Also, find your company (NAICS).

• Hand in (hardcopy) by 10/10!

CY2002 Statistics:

US Households: 5,107,734 (4.74%)

US Population: 12,256,318 (4.27%)

Median HH Income: $50,664

Lifestyle Traits

1. Be a member of a veteran club

2. Use a local internet service provider

3. Bank at a savings and loan

4. Watch The Travel Channel

5. Have central air conditioning

Demographics Traits:

Ethnic Diversity: White

Family Types: Singles

Age Ranges: 55+

Education Levels: High School/Some College

EmployementLevels:

White-Collar

Housing Types: Owners, Single/Double Unit

Urbanicity: Suburban

Income: Middle

These are typically households with one or two young adults, living in renter-occupied housing and located in urban and suburban areas. Their median household income is slightly higher than the national average and they are more likely to have attended at least some college and work in white-collar occupations.

MicroVision 2003 New Face

•Demographics: Low income young adults, age 18-34, with a large number of children, seven or more

people•Lifestyle & Retail: Dine at midscale Mexican restaurants, attend movies 2-3 times a month, purchase

doll toys, and had transmission service done in past year•Communications & Technology: Have an unlisted phone number, have speed dialing telephone

feature, and own a paging device•Financial: Have Allstate property/casualty insurance, Acquired a home equity line of credit last

year, and have a loan for furniture, appliances or electronics•Media: Watch COPS (primetime) and the Simpsons (syndication), listen to contemporary hits radio,

and read Parent's magazine•Geography: Urban areas, primarily concentrated in the Southwest

MicroVision Segment 41: Close-Knit Families

Demographics: Slightly higher than average income singles, one to four peopleLifestyle & Retail: Dine at fast food Asian and Mexican restaurants, shop at 7-Eleven, and lease their carCommunications & Technology: Own a paging device, use the internet at home for more than five hours per week, and use the home PC to do work from the officeFinancial: Obtain account balance through automated response phone system, purchase goods and services with ATM/debit card, and have an auto loan from a credit unionMedia: Watch Friends & the MTV Music Video Awards, read Glamour magazine, and listen to contemporary hits radio formatGeography: Suburban and urban areas, concentrated along the two coasts, especially in Boston, Miami, California and Seattle

MicroVision Segment 15: Great Beginnings

Demographics: High income households containing singles and couples, age 35-49, with no children, one to two people Lifestyle & Retail: Eat at casual dining restaurants, bakeries and bagel shops, shop at Pier 1 Imports, play tennis and jogCommunications & Technology: Own a PC for on-line and internet services, like conferencing and accessing e-mailFinancial: Hold an American Express credit card, own an umbrella insurance policy, and use full service brokerage servicesMedia: Listen to National Public Radio, read Golf Digest, Newsweek, and Car & Driver magazinesGeography: Suburban areas in North Carolina, Ohio, Texas and Florida

MicroVision Segment 8: Movers And Shakers

What Does the Customer Value?

“Average American Consumer Quiz”—2000 DDB Needham

Percentage of Consumers Agreeing

Statement Women Men A nationally advertised brand is usually better than a generic brand.

I went fishing at least once in the past year. I am a homebody. The government should exercise more control over what is shown on television.

Information from advertising helps me make better buying decisions.

I like to pay cash for everything I buy. The working world is no place for a woman. I am interested in spices and seasonings. The father should be the boss in the house. You have to use disinfectants to get things really clean.

Customer Values

Psychological

EconomicFunctional

Customer Values

Psychological

EconomicFunctional

statusself-assurancepeace of mindperceived risk of changing suppliers

pricediscountscredit terms

reliabilityavailabilityease of useefficacyefficiencysafety

Frank Horner

Example of Proprietary Research for Coffee!

• Research can be valuable in two stages of creative

development: as a developmental tool, and as an

evaluative tool.

• It can also be useful in understanding the prospect and

their choices of media

• “A Case for Brand Loyalty”

Understand Your Customers

• Their Demand for Your Product or Service

• Their Changes over Time

• Their “Growth” Needs

• Their Technology/Personal Service Conundrum

• Their Available Choices for Solutions

Their Value to You!

Sell the product

The Value-Delivery Process

Make the product

ProcureDesignproduct Make Price Sell Advertise/

promote Distribute Service

Choose the Value Provide the Value

Communicate the Value

(a) Traditional physical process sequence

(b) Value creation & delivery sequence

Strategic marketing Tactical marketing©2000 Prentice Hall

Designing Offers for Customers

Offer

CostValue

PriceTimeEffortRisk

TechnicalInnovation

SalesRelation-ship

BrandEquity

Delivery Services

Product

Satisfaction =

Performance minus Expectations

Thank You!

“Average American Consumer Quiz”—2000 DDB Needham

Percentage of Consumers Agreeing

Statement Women Men A nationally advertised brand is usually better than a generic brand.

33% 39%

I went fishing at least once in the past year. 39% 58% I am a homebody. 72% 76% The government should exercise more control over what is shown on television.

41% 39%

Information from advertising helps me make better buying decisions.

79% 63%

I like to pay cash for everything I buy. 66% 70% The working world is no place for a woman. 8% 15% I am interested in spices and seasonings. 78% 61% The father should be the boss in the house. 39% 60% You have to use disinfectants to get things really clean. 64% 51%

Consumer Buying Process

ProblemProblemrecognitionrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Postpurchasebehavior

©2000 Prentice Hall

Model of Buying Behavior

Buyer’s decisionprocess

Problem recognitionInformation searchEvaluationDecisionPostpurchase behavior

Otherstimuli

EconomicTechnologicalPoliticalCultural

Buyer’scharacteristics

CulturalSocialPersonalPsychological

Buyer’s decisions

Product choiceBrand choiceDealer choicePurchase timingPurchase amount

Marketingstimuli

ProductPricePlacePromotion



The Press

Syndicated ServicesDemographics/Firmographics

SMRB (Simmons), MRI, NAICS/SIC codesBehavioral Patterns

SMRB (Simmons), MRIPsychographics

Prizm/Claritas

General Business

Industry Specific


Syndicated Services, con’t

TechnographicsForrester Report

Advertising Spending

LNA (Leading National Advertisers)

Product Movement

Nielsen, IRI (Scanner Data)

Industry Specific Data

(e.g., Greenwich Associates, The Hartman Group)

The Stearns Group


Proprietary Data

Sales Data

Marketing Research

Qualitative (e.g., focus groups, IDI’s, triads, ethnographies)

Quantitative (e.g., tracking studies, A&U studies)

The Stearns Group

Mature, home oriented, well Mature, home oriented, well educated professionalseducated professionals

High incomesHigh incomes

Value-orientedValue-oriented

Open to new ideasOpen to new ideas

Mature, home oriented, well Mature, home oriented, well educated professionalseducated professionals

High incomesHigh incomes

Value-orientedValue-oriented

Open to new ideasOpen to new ideas

Fulfillers

An Appeal to Fulfillers

The Stearns Group

Work orientedWork oriented

SuccessfulSuccessful

High job satisfactionHigh job satisfaction

Respect authority, and favor the Respect authority, and favor the status quostatus quo

Demonstrate success through Demonstrate success through their purchasetheir purchase

Work orientedWork oriented

SuccessfulSuccessful

High job satisfactionHigh job satisfaction

Respect authority, and favor the Respect authority, and favor the status quostatus quo

Demonstrate success through Demonstrate success through their purchasetheir purchase

Achievers

The Stearns Group

Main component of action-Main component of action-oriented segment oriented segment

Youngest in VALS2, median age Youngest in VALS2, median age is 25 yearsis 25 years

Active in both physical and social Active in both physical and social activitiesactivities

Favor new productsFavor new products

Main component of action-Main component of action-oriented segment oriented segment

Youngest in VALS2, median age Youngest in VALS2, median age is 25 yearsis 25 years

Active in both physical and social Active in both physical and social activitiesactivities

Favor new productsFavor new products

Experiencers

An Appeal to Experiencers

The Stearns Group

Family and community oriented Family and community oriented peoplepeople

Modest meansModest means

Brand loyalBrand loyal

Favor American-made productsFavor American-made products

Family and community oriented Family and community oriented peoplepeople

Modest meansModest means

Brand loyalBrand loyal

Favor American-made productsFavor American-made products

Believers

The Stearns Group

Lower-income peopleLower-income people

Values similar to achieversValues similar to achievers

Style is important in lifestyle.Style is important in lifestyle.

Lower-income peopleLower-income people

Values similar to achieversValues similar to achievers

Style is important in lifestyle.Style is important in lifestyle.

Strivers

The Stearns Group

Main component of action-Main component of action-oriented segment along with oriented segment along with experiencersexperiencers

Self-sufficient groupSelf-sufficient group

Practical with little interest in most Practical with little interest in most material possessionsmaterial possessions

Main component of action-Main component of action-oriented segment along with oriented segment along with experiencersexperiencers

Self-sufficient groupSelf-sufficient group

Practical with little interest in most Practical with little interest in most material possessionsmaterial possessions

Makers

The Stearns Group

Posses both high income and Posses both high income and self-esteemself-esteem

Indulge in a variety of self-Indulge in a variety of self-orientationsorientations

Posses both high income and Posses both high income and self-esteemself-esteem

Indulge in a variety of self-Indulge in a variety of self-orientationsorientations

Actualizers

The Stearns Group

Have few resourcesHave few resources

Do not fit into the regular VALS2 Do not fit into the regular VALS2 categoriescategories

Brand loyal to the extent possibleBrand loyal to the extent possible

Have few resourcesHave few resources

Do not fit into the regular VALS2 Do not fit into the regular VALS2 categoriescategories

Brand loyal to the extent possibleBrand loyal to the extent possible

Strugglers

Four Types of Buying Behavior

ComplexBuying

Behavior

Dissonance-Reducing Buying

Behavior

Variety-SeekingBehavior

HabitualBuying

Behavior

Significantdifferences

betweenbrands

Fewdifferences

betweenbrands

HighInvolvement

LowInvolvement


Other profiling tools/methods used to better understand the individual consumer are:

• VALS, VALS 2

• Demographics

• Geographics

• Personal Experiences

• Socioeconomic Descriptors

• Media Exposure Patterns

• Product Benefits Desired (values)

• Purchase Behavior (Brand Attitudes, Intentions)

Geodemography

Claritas PRIZM

• Potential rating index by zip marketers

• Delineated the 500,000 + U.S. neighborhoods into 40 clusters with descriptive names that characterize these regions

University of Washington EMBA Program Regional 20 Marketing Management “Customer Analysis,...

Documents

Transcript of University of Washington EMBA Program Regional 20 Marketing Management “Customer Analysis,...