1. Session
Customer Analysis

2. Session Outline Customer Profiling Consumer Behaviour Benefits Sought
Attitudes
Values
Stereotypes

3. This Session Weekly Activity: Understanding Markets
Select a category of passenger car from the list used by VFACTS.
To find this list, go to and click on “sales”, “cars” & “segmentation criteria” in the top menu
With this category as a basis, describe (or profile) a market segment that would be interested in buying a new vehicle, using each of the segmentation approaches discussed as sub-headings.
Explain your approach for each sub-heading.

4. Customer Analysis Customer Analysis
This section analyses the factors that impact on or influence customer demand and the business’s ability to supply it’s products and services to cater for this demand, factors would include perception gaps, loyalty, satisfaction and customer service levels as well as responses to advertising and promotion
Total Market Segments
This section looks at the make-up of the catchment or trading area by various customer groups (segments) using criteria such as: education, income, religion, ethnicity, age,social class, lifestyle, family life-cycle, etc. This information is available from export trade/census data

5. Customer Analysis Target Customer Groups
This section broadly describes the specific customer groups (segments) you have selected as your targets which the majority of your business revenue will come form.
Each target customer group should be described as individual segment categories.
Group Profiles (characteristics)
This section profiles each individual segment category in detail by their segment attributes or specific characteristics

6. Topic Example Video
The following video explains customer needs and wants.
Take note of the key points.

7. Customer Analysis Consumer Behaviour (needs & wants)
This section outlines the needs and wants of each individual segment and links this to your products/service features and benefits that would be satisfied.
In other words, it considers how customers will behave (purchase or not) to what you are offering them (products and services).

8. Topic Example Video
The following video explains how marketers need to dig deep to really understand consumer needs and wants.
Take note of the key points.

9. Customers
Customers should be one of the major foci of the organisation.
Particular attention should be given to customer’s buying behaviour.
Buying behaviour can change to or adapt according to cultural trends.

10. Customer Markets

11. Topic Example Video
The following video describes the process of customer profiling.
Take note of the key points.

12. Customer Profile
Describe the profile of the customer by each market segment.
What do they buy? Where do they buy it? Why do they buy it?
When do they buy it?
Where and how are the products sold in each market segment?

13. Customer Profile
Who is the buyer and who is the end user in each market segment?
Who buys what in what market segments?
Will they change their buying habits?
Remember, buyer behaviour is affected by economic, social and political influences.

14. Customer Profiling
Customer Profiling is a prospecting tool that exploits data about customers buying patterns and behavior to gain a greater understanding of consumer motivations.
Customer Profiling assists in micro targeting the right customer with the right product or service. Businesses today are using profiling to reduce fraud, to anticipate demand, to increase new customer acquisition and customer loyalty.
Customer Profiling is also used to develop lifelong relationships with Customers by anticipating and fulfilling their needs.

15. Customer Profiling Customer profiling business uses:
Nokia uses psychological profiling to understand consumer needs and drive their business strategy
Telecommunications, stock exchanges and credit card and insurance companies use profiling to detect fraud, optimize marketing campaigns, and identify the most profitable strategies
The medical industry uses profiling to predict the effectiveness of surgical procedures, medical tests and medications
Retailers use profiling to assess the effectiveness of coupons and special events, and predict which offers are most appropriate for different consumers.

16. Basic Customer Profile

17. Topic Example Video
The following video discusses what is target marketing.
Take note of the key points.

18. Target Marketing Is Where!
Organisations specifically design, implement and maintain their marketing efforts at those most likely customer groups sharing common needs or similar traits/characteristics as well as having the highest potential for buying it’s products or services intending to result in mutually satisfying exchanges.

19. Effective Segmentation
Measurability
Substantiality
Responsiveness
Accessibility
Successful
segmentation
Requirements for Effective Segmentation
Measurability - refers to the ability to measure the size and purchasing power of the segments. The accuracy and availability of measures of market potential are important.
Accessibility - refers to the ability to reach a market segment. Selecting a segment that cannot be reached is useless.
Substantiality - refers to the ability of the segment to be large or profitable enough to service.
Responsiveness - refers to the ability of the organisation to influence the behaviour of the segment through the offering of choice. The organisations resources figure prominently in this requirement for successful segmentation.

20. Effective Segmentation
1. Measurability - size and purchasing power.
2. Accessibility - can be reached and served.
3. Responsiveness (Actionability) - effective programs can be designed to attract and serve the segment.
4. Substantiality - large and/or profitable.

21. The Consumer Market
The consumer market consists of all individuals and households who buy goods and services for their personal use.
Individuals in the consumer market will vary in their consumption patterns in terms of;
their age
their income
their occupation and educational status
their household composition.

22. Personal Factors
A buyer’s decisions are also influenced by personal characteristics such as:
age
life cycle stage
occupation
economic situation
lifestyle personality
self concept

23. Family Life Cycle
Family life cycle will determine the purchase behaviour of individuals and reason for purchase.
Single parent & two-parent family.
Young couples no children.
Family (usually 2 adults, 2 young children).
Family with teenagers.
Multi-cultural (or mixed) family.

24. Activity: Country Census Data
Census data is often not easy to find especially for foreign countries. In Australia, the Australian Bureau of Statistics provides this information
Using the ( website, under “People & Households” go to “International”. Under “Quick Links”, go to “International Data Base (IDB)”. Under “Enter the Databases”, go to “Data Access”.
Select a country and year and go to the “References” section.
Search for that country’s census website address.
Go to that specific country’s census website address and search for more specific census information.

25. Lifestyle
A person’s pattern of living as expressed in their activities, interests and opinions.

26. Topic Example Video
The following video explains what is psychographics.
Take note of the key points.

27. Psychographics
The technique of measuring lifestyles and developing lifestyle classifications.
It involves measuring the major AIO dimensions (activities, interests and opinions) towards specific products, brands, services, etc.

28. Topic Example Video
The following video outlines what is VAL’s (Values, Attitudes & Lifestyles) and how this is important in marketing.
Take note of the key points.

29. Values, Attitudes, Lifestyles - VALS
VALS is a classification of adults into eight distinct segments based on their attitudes towards social issues.
The VALS segments describe specific lifestyles as:
innovators
thinkers
believers
achievers
strivers
experiencers
makers
survivors.

30. VALS Applications
VALS information is used for market and product positioning strategies
Identifies which market opportunities are the strongest by relating features and benefits to distinct segment needs clarifies strategies for targeting and expansion.
Applications include:
Competitive Analysis
Brand Differentiation
Target Selection
Proprietary Research
Linking of Data Sets
Customer Retention.

31. Activity: VALS Online Survey
Undertake the VALS Online Survey to determine your primary and secondary VALS types.
Go to:
Comment on whether or not this is an accurate reflection of your lifestyle outlook.

32. Behavioural segmentation
Dividing a market into groups based on:
Purchase occasion
Benefits sought
User status/ usage rate
User loyalty status

33. BUYING-DECISION PROCESS Need recognition
SOCIAL AND
GROUP FORCES
Culture
Subculture
Social class
Reference groups
Family and households
PSYCHOLOGICAL FORCES
Motivation
Perception
Learning
Personality
Attitude
INFORMATION
Commercial
sources
Social sources
SITUATIONAL
FACTORS
When consumers buy
Where
consumers buy
Why consumers buy
Conditions
under which
BUYING-DECISION PROCESS
Need recognition
Identification of alternatives
Evaluation of alternatives
Purchase and related decisions
Post-purchase behaviour

34. Modes of Buyer Behaviour

35. Buyer Decision-Making
Complex
buying
behaviour
Dissonance-
reducing buying
Variety-
seeking
Habitual
High
Involvement
Significant
differences
between
brands
Few
Low

36. Buyer Decision-Making
There are four types of decisions that buyers make:
habitual (routine) decision-making
variety seeking (limited problem solving)
dissonance reducing (eg. insurance)
complex (extended problem solving).

37. Topic Example Video
The following video outlines the consumer buying process.
Take note of the key points.

38. The Consumer Decision Process
Problem Recognition
Information Search
Alternative Evaluation
Purchase Decision
Postpurchase Evaluation

39. Evaluative Criteria Marketer’s view: Consumer’s view:
Product is a bundle of attributes
Consumer’s view:
Product is a set of consequences
Functional consequences are concrete, tangible outcomes
Psychological consequences are abstract and subjective

40. Purchase Decision
The step of the buyer decision process in which the consumer actually buys the product.
Two factors can come between the purchase intention and the purchase decision:
attitudes of others
unexpected situational factors

41. Situational Influences
SITUATIONAL INFLUENCES ARE TEMPORARY FORCES ASSOCIATED WITH THE IMMEDIATE PURCHASE ENVIRONMENT THAT AFFECT BEHAVIOUR
When consumers buy—the time influence. (day, week, season).
Where consumers buy—the place a decision is made (home, point of purchase).
How consumers buy—the way in which consumers buy (bulk etc).

42. STAGE 5—POST-PURCHASE BEHAVIOR, OR COGNITITVE DISSONANCE
Post-Purchase Behaviour
STAGE 5—POST-PURCHASE BEHAVIOR, OR COGNITITVE DISSONANCE
Consumers strive for internal harmony and consistency among their cognitions (knowledge, attitudes, beliefs, values) any inconsistency in these cognitions will result in anxiety—cognitive dissonance.
Consumers will experience post-purchase, cognitive dissonance when alternatives have both advantages and limitations.

43. Post-Purchase Behaviour
The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction.
What determines whether the buyer is satisfied or dissatisfied with the purchase?
consumer’s expectations versus perceived performance

44. Psychological Processes
Decision Process Stages
Psychological Processes
Problem Recognition
Motivation
Information Search
Perception
Alternative Evaluation
Attitude Formation
Purchase Decision
Integration
Postpurchase Evaluation
Learning

45. Topic Example Video
The following video explains the use of Maslow’s Hierarchy of Needs in marketing.
Take note of the key points.

46. Motivation (Maslow) Self-actualization needs Esteem needs Social needs
(self-development, realization)
Esteem needs
(self-esteem, recognition, status)
Social needs
(sense of belonging, love)
Safety needs
(security, protection)
Physiological needs
(hunger, thirst)

47. ……
… …
Perception
The limitations to perception are due to our selective process to stimuli.
Selective attention (We perceive only part of what we are exposed to).
Selective distortion (We alter stimuli based on our attitudes and beliefs).
Selective retention (We retain only part of what we selectively perceive).
Selective action (We act upon part of what we retain).

48. Personality
A person’s unique psychological characteristics that lead to relatively consistent and lasting responses to their environment.
self confidence
dominance
sociability
autonomy
defensiveness
adaptability
aggressiveness

49. Attitudes and beliefs
Attitude—a persons enduring tendency to evaluate, feel about or act in relation to some object or idea.
Attitudes are formed by the information individuals acquire through their learning experience and influenced by personality traits.
Attitudes
Influence
Beliefs

50. Consumer Attitudes Consumers may hold attitudes toward:
Learned predispositions to respond toward an object—an individual’s overall feelings toward or evaluation of an object.
Consumers may hold attitudes toward:
Individuals
Brands
Companies
Organizations
Product categories
Retailers
Advertisements
Media

51. Leaky Bucket Theory
Every business must both have a flow of new customers (offensive marketing) at the same time restricting exiting customers (defensive marketing).
The aim is to increase the number of customers available to the business.
To achieve profitability both strategies must work in tandem.

52. Leaky Bucket Theory Customer acquisition Offensive marketing Customer
base
Defensive
marketing
Customer
retention

53. Topic Recap Video
The following video provides some tips on how consumer behaviour is changing.
Take note of the key points.

54. Next Session Weekly Activity:CRM Software
Today many organisations use computers to help them better manage their client relationships.
A basic CRM system consists of a database containing information about people with whom staff maintain relationships with.
Download the Reflect free CRM software at
Learn some of the fundamentals of CRM including customer information searching, time management, communication, sales forecasting, etc.
Evaluate it’s usefulness as a CRM tool.