Lecture Two
- 1. Gaining customer and market insight through business intelligence Product and Brand Management (23C630) Ch. 5 & Ch. 6 September, 12th Giuseppe Pedeliento, University of Bergamo (Italy) Visiting Aalto University School of Economics, Department of Marketing
- 2. Learning objectives After the lecture, students should be able to – Describe common practices for both the collection and the analysis of information about competitive brands and customers – Understand how basic tools and frameworks can be used to facilitate the before mentioned processes – Explain how this activity takes place through practical examples 2
- 4. Competitor Secondary data Primary data Analysis System Key questions: - Who are they? - What are the competing product features? - What do they want? - What is their current strategy? Differential competitor advantage analysis i.e. Who has the competitive product advantage? What are they going to do? 4
- 5. Secondary Sources of Competitor Information InternalCustomer Communications Sources Local Consultants Newspapers Annual Trade Press Reports Patent Internet Secondary data Filings Promotional 10Ks Literature Business Trade Press Associations News Electronic Government Releases Databases 5
- 6. Primary Sources of Competitor Information Investment Bankers Consultants/ Specialized Sales Force Firms Primary Data Suppliers Employees Customers 6
- 7. Other Sources of Competitor Information Ethics? Help-Wanted Advertisements Hiring Key Employees Trade Shows Primary Data Monitoring Plant Tours Test Markets Reverse Engineering 7
- 8. Competitor analysis tools • Product features matrix 8
- 9. Assessing Competitors’ Strategies • Marketing strategy –Comparing value chains –Marketing mix • Pricing • Promotion • Distribution • Product/Service capabilities 9
- 10. The value chain Firm Infrastructure Support Human Resource Management Activities Technology Development Procurement Inbound Marketin Operations Outbound Logistics g and Service Logistics Sales Primary Activities 10
- 11. The Marketing Mix • Pricing • Promotion • Distribution • Product/Service capabilities 11
- 12. Competitor Information to Collect • Ability to conceive and design • Ability to produce • Ability to market • Ability to finance • Ability to manage
- 14. A Competitive Conjecture Process First period Our total outcome Second period Should we cut price?
- 15. Ch. 6 CUSTOMER ANALYSIS 15
- 16. What we need to know about customers and their roles? • Who buys and uses the product • What customers buy and how they use it • Where customers buy • When customers buy • How customers choose • Why they prefer a product • How they respond to marketing programs • Will they buy it (again) 16
- 17. Who Buys and Uses the Products? • Initiator -who identifies the need for product • Influencer -who has informational or preference input to the decision • Decider –who makes the final decision through budget authorization • Purchaser –who makes the actual purchase • User 17
- 18. Buying Roles and Needs/Benefits Sought • Needs/benefits sought by eachactor involved • Assessing value: – Determine the uses of the product – Estimate the importance of the uses – List competing products for the uses – Determine the relative effectiveness of the product category in each usage situation 18
- 19. Categories for Describing Consumers 1. Demographic 2. Socioeconomic 3. Personality 4. Psychographics and values
- 20. Gambero Rosso: the core target description (demo and socio variables) THE MAIN TARGET FOR GAMBERO ROSSO: “FOODIES” Foodies constitute 9.8% of Italy’s population between the ages of 15 and 74, or about 4.5 million people. Only two years ago, they comprised 8.6% and the number is growing by 250,000 each year. Foodies are mainly males aged between 25 and 54 living in northern Italy (27.8%) with medium to high income and a secondary education. 53% are couples with children but concentration is above average among singles and couples without children. Giuseppe Pedeliento - May 25-26, 2011 20
- 21. Gambero Rosso: the core target description (psychographics) Foodies are strongly interested in eating out and in the quality of food and wine. For Foodies food is a multisensorial experience. Foodies care about quality, shun excess and care about fitness. They are inclined to experiment, adore internet, read books and cookery magazines and watch food programs on TV. Foodies are less traditionalist at table. They regard eating as “one of life’s most important pleasures”. Knowledge – and its subsequent application – is foodies’ chosen strategy to play an influential role in this context. Giuseppe Pedeliento - May 25-26, 2011 21
- 22. Gambero Rosso: the core target description (psychographics) cont. INTERNET, THE FOODIES’ MEDIUM OF CHOICE Seven foodies in ten (against just 33.2% of non-foodies) are frequent users of internet to visit/consult sites dedicated to food. Foodies use the web to look mainly for “information” (58.5%) and recipes (54.3%) but also check out restaurants and other eateries (43.5%). 11.3% of foodies contribute to food or cookery-related blogs and discussion groups. The foodies’ favorite restaurant guide is Gambero Rosso (52%), followed by the evergreen Michelin (45.3%), l’Espresso (37.1%) and Touring Club (36.9%) guides. Giuseppe Pedeliento - May 25-26, 2011 22
- 23. Nielsen’s cultural/tech segmentation Culture (+) Sophisticated Eclectics 13% 14% Traditionalist 24%s Traditional Technological matrix vanguard Tecnology (+) Tecnology (-) Technofan TV People 18% 31% Culture (-) Giuseppe Pedeliento - May 25-26, 2011 23 23
- 24. Major Segmentation Variables for Business Markets • Demographic (e.g. industry, company size, location) • Operating variables (e.g. technology, user/non user status, customer capabilities) • Purchasing approaches (e.g. purchasing processes and criteria, nature of existing relationships) • Situational factors (e.g. urgency, size of orders) • Personal characteristics (e.g. buyer seller similarity, loyalty)
- 25. What customers buy and how they use it • Focus on benefits • Purchase patterns (Does the customer has recently bought from you? Does he/she buy frequently? Does he/she is an high or a low value customer?) • Utilitarian vs hedonic consumption 25
- 26. What customers buy? A “special case” 26
- 27. Where customers buy • Large retailers • Small retailers • Flagship stores • On line • …. 27
- 28. The importance of the web in car’s purchasing decision Internet Perceived usage importance Search for informations 67% 75% Brands’ 61% comparison 70% Purchasing 28% 57% decision Choice 35% 51% of the reseller Source: TNS – Google (2007) On line purchasing= 0% 28
- 29. How customers choose – The Multiattribute Model 1. Which attributes do customers use to define a product? 2. How do customers determine how much of each attribute a brand possesses? 3. How are the importance weights determined? 4. What decision rule is used to combine the information? 29
- 30. How truck drivers define competing products/brands Source: Gambero Rosso’s customers panel Source: SdM Research Project 30
- 31. Gambero Rosso: sources of brand value Source: Gambero Rosso’s customers panel 31
- 32. Why they prefer a product • Economic: – The economic benefit a customer derives from using a product • Functional: – Those aspects of a product that provide functional or utilitarian benefits to customers • Psychological: – The image of the product, including how the product “feels” and whether that feeling matches the image the customer wants to project
- 33. Manifestations of Customer Value • Price sensitivity • Satisfaction • Complaints and compliments • Word-of-mouth • Margin/profit contribution • Repeat purchase rate • …..
- 34. Assessing the Value of the Product Category 1. Determine the uses of the product 2. Estimate the importance of the uses 3. List competing products for the uses 4. Determine the relative effectiveness of the product category in each usage situation
- 35. Desirable Criteria for Segments • Sizeable • Identifiable • Reachable • Respond differently • Coherent • Stable
- 36. Gaining customer and market insight through business intelligence Product and Brand Management (23C630) Ch. 5 & Ch. 6 September, 12th Giuseppe Pedeliento, University of Bergamo (Italy) Visiting Aalto University School of Economics, Department of Marketing