Market Analysis (3C's) Flashcards
Consumer Behaviour
Study of the process involved when consumers, select, purchase, use, and dispose of product, services, ideas, and experiences.
Series of decisions in which each steps offer opportunity to market:
1. value creation and customer needs
2. consumer decision making process
3. attitude and perceptions
Consumer Value
Economic value: total cost of ownership of good or service
Functional value: enhanced tangible benefits
Experimental value: intangible emotional benefits
Social value: value from interaction with other users
Need Recognition
Phenomenon that occurs when a person becomes aware of a disparity between their actual circumstances and those they consider ideal or desirable.
How do consumers recognise the need?
- Deprivation
- Context
- Product
- Direct highlighting
Information Search
The process by which a buyer seeks to identify the most appropriate supplier once a need has been recognised.
How do they gather information about options?
- Perception: the process by which people select organisation and interpret information
- Selective retention: retain points to support attitudes
- Selective distortion: people interpret and support beliefs
- Selective attention: disregard most information
- Basic perception: our brains compress alter information
Evaluation & Purchase/Choice
Traditional multi attribute model: consumers evaluate products by weighing beliefs about product attributes to importance
- consider a set of suppliers in the market
- weigh the attributes the consumer cares about and their importance
- grade every suppliers with respect to each attributes
- multiply the grade with the weight of the attributes to get the evaluation of a product
What does this imply?
- change consumer beliefs about attributes, by resigning or changing perception
- change consumer beliefs about competitors attributes
- change consumer importance weights
- call attention to neglected attributes or shift buyers ideas
Post Choice Evolution
Traditional view: consumers winnow options from a set of brands, finally choosing brand
- firms influence them at consideration stage and buying stage
Emerging view: Customer Loyalty Loop
Consumer behaviour that shows how potential and current customers decide what to purchase and develop loyalty to a particular brand, continuing to make a purchase from the same brand in the future.
Core Competency of Corporation
Collective abilities and knowledge in the organisation, on how to create a customer relationship, deliver value and communicate.
Criteria:
- provides potential access to a wide variety of markets
or can be reused widely for many products and markets
- makes a substantial contribution to the perceived customer benefits of the end product
- difficult for competitors to imitate/replicate
- reside downstream, in the marketplace
Identifying Competitors
When identifying potential, first the competitors in the narrow and broadly defined target market should be looked at. Once these are found, one should decide on whether to react now or later. Company can also choose their competitive set via positioning, distribution, and pricing. When faced with a new/late entrant, an established company can express they have more offers than competitors.
Analytic Methods for Identifying the Closest Competitors
Identifying competitors is very important because they have to stay ahead of them and monitor them.
Thus, following methods must be considered:
- Customer judgement: companies can get this information by asking customers or observation
- Purchasing records: in the form of analytics and data, identifying why the customers are switching and the cross-elasticity of demand
Competitive Intelligence
Information about competitors that can be gathered through sales literature, published documents, stock market analyst reports, CEO/CFO/VP interviews, and the internet.
Companies must be aware of misinformation on the internet and adjust their their parameters for fact-checking accordingly.
Avoiding outflow of information:
1. restricting information access to temporary employees
2. avoiding tax procedures, especially in data storage and passwords
3. monitoring any company material that is made available to the public
4. ensuring employees travel carefully through introducing travel policies
5. giving anticompetitive intelligence training
Deciding on a Competitive Strategy
When a company decides on a competitive strategy, it is done by thinking of benefits an costs in relation to price and product and link these benefits to the STP.
Strategy 1: low cost (price)
Strategy 2: product or service differentiation
Strategy 3: customised solutions
- focuses on completely solving customers’ problems and offering products and services as an integrated package
Marketing Analysis Wrap-Up
Marketing analysis should always include the benefits the products deliver, the resources needed, and the position in comparison to the competitors. The STP process brings all three Cs together from a customer perspective.
