M4-FULL rev 23NOV10

M4-FULL rev 23NOV10 - Marketing Principles and Processes...

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Marketng Principles and Processes M odul e 4 Understanding Buyer Behavior Getting Closer to the Customer Product Designer Customer Visit Product Designer Customer Market Executive Research Firm Analyst Telephone Interviewer User Market Research Traditional Market Research Increasingly, listening-to-the-customer processes are being simplified to make them more timely and useful in rapidly evolving markets. This requires the use of common sense, such as eliminating the number of people between the designer and the customer in product development research. Of course in many situations, experts are needed to undertake consumer research, but common commercial sense also needs to be applied in assessing the relative utility, value and timeliness of various market research methods. Sometimes companies become fixated on their spending on a particular research method, such as focus groups or supermarket scanner data analysis. The means or method should never dominate the goal, which is to understand your customers better than other suppliers. Such knowledge is market power. Peter R. Dickson ©Backbone Press 2009
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Knowledge is power 1 . 1. Researching Customers In microeconomics there is a concept called private information which states that a firm profits from unique information and insights it has about production techniques and trade secrets. An important trade secret is the unique insight a business has about the behavior of customers that is not common knowledge, particularly knowledge about changing consumer preferences and buying behavior. This is even more important when innovations such as the Internet are dramatically changing customer search and shopping behavior. Private information and insightful interpretation of such information about customer behavior can be a powerful driver of competitive success and profitability. This module introduces you to the major tools used to study customers, particularly for new product development. It then provides you with some general insights into customer buying behavior and the cultural and social influences on such behavior. When done simply and sensibly, consumer research can provide insights worth millions of dollars. It is an important marketing capability that all business students should know something about. The first and most important consumer research activity of a current business is to track customer satisfaction and dissatisfaction. Firms keep track of customer dissatisfaction by tracking returns and customer complaints. This should be a given, and in some markets (such as prescription drugs), is sometimes required by law. Many firms also survey their own customers or have someone else survey customers to measure customer satisfaction. This identifies what it is about the firm’s product or service that most delights the consumer and what it is about the product or service that they dislike. Tracking customer satisfaction/dissatisfaction and trends in demand is what a lot of modern market research is about. How do companies put their market
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M4-FULL rev 23NOV10 - Marketing Principles and Processes...

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