Customer analysis:

1. Customer value: Customers buys product based on perceived value of product

(Customer value= perceived benefit – perceived cost)
 Perceived Benefits: (dimensions) FIEESS
o Functional benefit- PHYSICAL/TANGIBLE BENEFIT WHEN USING PRODUCT/SERVICE
 PRODUCT: RELIABILITY, DURABILITY, PERFORMANCE
 SERVICE: FLEXIBILITY, TRUST, SAFETY
 TANGIBLE BENEFITS ALSO CALLED HARD/ECONOMUC BENEFIT, E.G., COST SAVING
o Emotional benefit-INTANGIBLE BENEFITS: CUSTOMER FEELS PRODUCT/SERVICE IS
ADDRESSING NEEDS AND BETTER THAN COMPETING PRODUCTS
o Experiential benefit- SENSORY EXCITEMENT FROM USING P/S, ADRENALINE RUSH/PLEASURE
o Image benefit- IMAGE OF ORG LINKED TO STATUS- E.G., ROLEX
o Social benefit- E.G., SOCIAL RECOGNITION
o Service benefit- INDUSTRIAL PRODUCTS: SERVICES THAT ACCOMPANY PRODUCTS LIKE
DELIVERY, TRAINING, MAINTANENCE
 Perceived Costs:
o Monetary costs- Price customer pays to purchase product
o Time costs- time customer spends to acquire product, e.g., long queues, spend time
complaining, returns
o Energy costs- energy spent (effort) to acquire product, e.g., look for store, travel to store,
buy and return product
o Psychic costs- Mental energy spent, risk that product might not perform as intended
(cognitive dissonance)

2. Customer needs: Psychological or physiological requirement for the wellbeing of the customer.
Market segments (geographic, demographic etc.) can be used to identify customers with similar
needs. Segmentation based on needs of a particular segment: Need-based market segmentation.

3. Customer segments:
o Segment research: method to identify customer needs
1. Gather raw data from customers
-do market research that involves face to face interviews, focus groups or observations.
-identify end users of products and ask them what they like about the product, what
issues they had while making the purchase decision, and improvements they’d like to see
2. interpret raw data ito customer needs
Customer needs must be expressed as written statements for record keeping
Guidelines for writing need statements:
-Express need ito what the product must do to satisfy need
-Express details of need specifically to avoid loss of info
-Express need as an attribute of the product
-Understand some needs might not be technologically/economically feasible
3. Organise needs into hierarchy of primary and secondary needs
Arrange needs hierarchically
4. Establish relative importance of needs
a. importance reached via consensus by marketing team
b. utilise findings in another customer survey or follow-up survey (usually followed)
5. Reflect on results and processes
4. Attractiveness of identified customer segments
Criteria for determining attractive customer segments:
 Segment size and growth possibilities: small segment can sometimes be more profitable
than larger segment. Growth potential must be foreseeable
 Attractiveness and potential profitability: attractiveness lies in the size, growth possibilities,
and profitability. attractive segments attract competitors which is negative (price wars,
aggressive marketing, substitute products). RATHER COMBINE INTERRELATED SEGMENTS BY
MATCHING THOSE THAT USE THE SAME RAW MATERIALS
 Resources and skills of org: ENSURE PROMISES MADE TO CUSTOMERS CAN BE ACHIEVED VIA
RESOURCES AND SKILLS
 Cost of reaching target market: IF CERTAIN MARKET IS TOO EXPENSIVE TO REACH, CONSIDER
LOOKING AT DIFFERENT POTENTIAL MARKETS OR SEEK MORE AFFORDABLE WAYS OF
APPROACHING MARKETS