analyzing customers and buyer behavior

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    ANALYZING

    CUSTOMERS ANDBUYER BEHAVIOR

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    What is customer analysis?

    nadia hasan

    Customer analysis is the process of determining customer

    segmentation, value, purchasing behavior and motivationin order to better target marketing and increase sales.

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    Customer analysis

    nadia hasan

    80-20 rule!!

    The purpose of customer analysis is to identify

    the top 20% of customers (gold customers),

    middle 60% (silver customers) and bottom20% (lead customers).

    We then try to determine how to keep the gold

    customers happy and how to encourage silvercustomers to become gold customers. Then

    we have to figure out what to do with our lead

    customers.

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    Customer analysis

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    Most important questions??

    Who?

    Where?

    When ?

    What?

    How?

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    Factors influencing customer

    behavior

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    Culture

    Culture, sub culture, social class

    Social

    Reference groups, family, roles& status

    Personal

    Age& life cycle stages, occupation, economic

    situation lifestyle, personality & self concept Psychological

    Motivation, perception, learning, beliefs &

    attitudes

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    CULTURE

    culture is the fundamental determinant of a persons

    wants and behavior.

    Perception Set of values

    Preferences

    Behavior

    Sub culture

    Sub culture provides more specific identifications and

    socialization

    For their members

    Nationalities, religions, racial groups, geographical regions

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    Social classRelativity homogeneous and sustainable divisions in a society. They

    are hierarchically ordered and their members exhibit similarinterests, values and behavior

    Characteristics of a social class

    1. Members of same social class tends to behave morealike then members of two different classes

    2. members are perceived as occupying superior orinferior positions according to their social class

    3. Social class is indicated by a cluster of variables likeeducation, wealth , income

    4. Members can move up and down in a social classladder during their lifetime

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    The social classes of Pakistan.

    1. Upper social class ( lower upper class)

    2. Middle social class ( upper middle class)

    3. Working social class ( lower working

    class)

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    1.Upper social class.

    their size is 2% of the total society and

    approximately 3.7 million they have 60% to 65% of

    money of the country.They are actually

    1. High status political leadership

    2. Big business man3. Top management of the company

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    2. Middle Social Class.

    their population is 28% out of the total population

    their population is 53 to 54 million of the total

    population

    They are actually

    1. They are small to medium size business man.

    2. Middle management

    3. Low ranking govt officer

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    3. Working Social Class.

    size is 70% out total population of Pakistan.

    1. They are very small size shop owner. Skill,

    semi skill & unskilled

    2. Low grade government staff ( peons, driver)

    3. Poor former

    4. Political worker

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    Factors influencing consumer

    behavior

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    Factors influencing consumer

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    SOCIAL Factor

    Consumer behavior is influenced by the

    following social factor

    References groups

    Family

    Social role & statuses

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    References groups

    A persons reference group consists of all the

    groups that have a direct or indirect influence on

    a persons behavior or attitudeMembership group: direct influence

    primary groups: family, friends, neighbor, co-

    workers (informal interaction)

    secondary groups: religious groups,professional trade unions ( formal interaction)

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    Factors influencing consumer

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    People are affected by references in 3 ways

    1. References groups expose an individual to new

    behaviors and lifestyle

    2. Influence attitude and self-concept3. Create pressure for conformity ( affect product

    and brand choice)

    Aspiration groups

    Dissociative groups

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    Factors influencing consumer

    behavior

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    FAMILY FACTOR

    The family of orientation (parents & sibling)

    Family of procreation ( spouse & children)

    ROLES AND STATUSES

    A role consists of the activities the a person is

    expected to perform. each role carries astatus.

    People choose products that communicate their role and

    status in society.

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    PERSONAL FACTORBuyers decision is also influenced by personal factor,

    which are as follow:

    Age & stage in life cycle

    Occupation & economic circumstances

    Life style & psychographics

    Personality and self concept

    Age & stage in life cycle:

    People buy different type of goods and services duringtheir life time. Taste in food, clothing, furniture etc isalso age dependent.

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    Factors influencing consumer

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    Family life cycle1. Bachelor stage

    2. Newly married couples

    3. Full nest14. Full nest2

    5. Full nest 3

    6. Empty nest1

    7. Empty nest28. Solitary survivor

    9. Solitary survivor

    Highly influenced by

    advertisement

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    Factors influencing consumer

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    Occupation & economic circumstances

    Occupation and economic circumstances influence buying

    behavior and patterns.

    Blue collar workers buying basket

    Work clothes

    Work shoes

    Lunch boxes

    Companies presidents buying basket

    Expensive suits Air travel

    Country club membership

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    Factors influencing consumer

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    Lifestyle & psychographicsLife style is a persons pattern of living in the world as

    expressed in activities, interests, and opinions.

    Marketers search for the relationship between productand the life style group.

    Psychographics is the science of using psychology &

    demographics to better understand consumer

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    Personality and self-concept

    we define brand personality as the specific mix of

    human trails that may be attributed to a particular brand.

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    Factors influencing consumer

    behavior

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    Factors influencing consumer

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    Factors influencing consumer

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    Brand personalities

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    Factors influencing consumer

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    PSYCHOLOGICAL FACTOR

    a persons buying choice is influenced by

    following major psychological factors

    Motivation

    Perception

    Beliefs & attitudes

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    Motivation

    Motivation is the driving force by which humans

    achieve their goals. A need becomes a motive when

    it is arouse to a sufficient level of intensity. Two

    important theories of motivation Maslows theory of motivation

    Herzbergs two factor theory of motivation

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    Factors influencing consumer

    behavior

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    Factors influencing consumer

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    Herzberg 2 factor theory:

    Herzberg proposed the Motivation-Hygiene

    Theory, also known as the two factor

    theory(1959) of job satisfaction. According tohis theory, people are influenced by two sets of

    factor

    hygiene factor

    motivator factor

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    Factors influencing consumer

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    f

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    Factors influencing consumer

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    PERSEPTION:

    perception is the process by which an individual

    select, organize, and interprets information inputs to

    create a meaningful picture of the world.A motivated person is ready to act

    How the motivated person acts is influenced by

    his/her perception of the situation.

    People can emerge with different perception ofthe same situation because of three perceptual

    processes

    F t i fl i

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    Factors influencing consumer

    behavior

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    Selective attention People are more likely to respond to stimuli that relates

    to their current situation

    People are more likely to respond to stimuli that they

    anticipate

    People are more likely to respond to stimuli whose

    deviations are large in relation to the actual size the

    stimuli.

    Selective distortion

    Is the tendency to twist information into personalmeanings and interpret information in a way that will fit

    our preconception.

    Selective retention People will retain only that information that supports their

    attitudes and beliefs.

    F t i fl i

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    Factors influencing consumer

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    BELIEFS & ATTITUDES

    belief is a though which a person carried about

    something.

    BUYING DECISION PROCESS

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    BUYING DECISION PROCESS

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    BUYING DECISION PROCESS

    Buyers role

    Initiator

    Influencer

    Decider

    Buyer

    user

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    BUYING DECISION PROCESS

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    BUYING BEHAVIOUR

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    Steps in consumer behavior

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    Information Search

    The Purchase decision

    Post purchase behavior

    Problem Recognition

    Evaluation of alternatives

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    Steps in consumer behavior

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    Informationsearch:

    Personal sources

    Public sources

    Commercial sources

    Experimental sources

    Th f t t l t

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    The move from consumer total set

    to choice set

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    Total set

    Awareness set

    Considerationset

    Choice set

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    Organizational buying behavior

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    Organization buying is the decision-making

    process by which formal organizations

    establish the need for purchased products

    and services and identify, evaluate, andchoose among alternative brands and

    suppliers.

    h t i ti f i ti l

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    characteristics of organizational

    buyers

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    1. Consumer market is a huge market in millions

    of consumers where organizational buyers are

    limited in number for most of the products.

    2. The purchases are in large quantities.3. Close relationships and service are required.

    4. Demand is derived from the production and

    sales of buyers.

    h t i ti f i ti l

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    characteristics of organizational

    buyers

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    5. Demand fluctuations are high as purchases

    from business buyers magnify fluctuation in

    demand for their products.

    6. The organizational buyers are trainedprofessionals in purchasing.

    7. Several persons in organization influence

    purchase.8. Lot of buying occurs in direct dealing with

    manufacturers.

    Organizational Buying

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    Organizational Buying

    Situations

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    Organizational Buying

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    Organizational Buying

    Situations

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    Straight re-buyIn this buying situation, only purchasing department is involved.They get an information from inventory control department orsection to reorder the material or item and they seek quotationsfrom vendors in an approved list.

    The "in-suppliers" make efforts to maintain product and servicequality. The "out-suppliers" have to make efforts to get their namelist in the approved vendors' list and for this purpose they have tooffer something new or find out any issues of dissatisfaction withcurrent suppliers and promise to provide better service.

    Modified re-buyIn this buying situation, there is a modification to the specificationsof the product or specifications related to delivery. Executives apartfrom the purchasing department are involved in the buyingdecisions. The company is looking for additional suppliers or isready to modify the approved vendors list based on the technicalcapabilities and delivery capabilities.

    Organizational Buying

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    Organizational Buying

    Situations

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    New buyIn this situation, the buyer is buying the product for the first time. Asthe cost of the product or consumption value becomes higher, morenumber of executives are involved in the process. The stages ofawareness, interest, evaluation, trial, and adoption will be there forthe products of each potential supplier. Only the products whichpass all the stages will be on the approved list and price competitionwill follow subsequently.

    Systems buySystems buying is a process in which the organization gives a

    single order to a single organization for supplying a full system. Thebuying organization knows that no single party is producing all theunits in the system. But it wants the system seller to engineer thesystem, procure the units from various vendors and assemble,fabricate or construct the system.

    Participants in the Business Buying

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    Participants in the Business Buying

    Process

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    Users: The persons who use the item. Say for safety gloves theoperators.

    Initiators: The persons who request the purchase. The safety officer mayinitiate the request for the purchase.

    Influencers: Persons who defines specifications. In this case of safety

    gloves, the safety officer may himself define specifications. If an industrialengineer is in the organization, he may also be consulted. There can bedifferent gloves for different working situations and industrial engineer maybe more aware of specific requirements due to his special nature of work

    Buyers: They are the person who actually do the buying transaction.

    Gatekeepers: They control access to personnel in a company. Thereceptionist, the secretaries etc.

    Deciders: People who decide on product requirements and suppliers. Itis the final approval for product specifications and suppliers'list.

    Approvers: Persons who approve the purchase. In the case of safetygloves, the personal manager may have the power to approve.

    Organizational

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    OrganizationalBuying/Purchasing/Procurement

    Process

    Problemrecognition

    Generalneed

    description

    Productspecification

    Suppliersearch

    Proposalsolicitation

    Supplierselection

    Order routinespecification

    Supplierperformance

    review