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Consumer Insight
A Necessary Evil
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What is Consumer
Insight
Customer insight is a process that begins with knowing andunderstanding what your customers want, and ends with proof oftheir satisfaction with you as an organization.
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Consumer Insight
Identifying customer needs and expectations, not only ofyour unique products and services, but also of the level ofservice you provide
Examining your processes and functions to ensure they arecustomer-centric
Encouraging and enabling your employees to be able tofocus entirely on the customer
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Implementing actions to improve the customer experience
Measuring internal performance, customer behavior andcustomer perception to determine what further action isrequired
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Developing Customer
Insight includes:
Understanding the explicitly stated or articulated needsof customers and potential customers, but moresignificantly...
Identifying their unarticulated needs
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Articulated Customer Needs Needs that arerecognized and communicated (stated) by customers
Unarticulated Customer Needs Needs unrecognizedby customers that when recognized and satisfied leadto products and services that delight them
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Ways of gainingconsumer insightUsing Companies Internal Records
Sales Information :
marketing managers can look at easily available, reliable andreal time sales report to gain how well there product is taken in
the market.
Databases, Data warehousing and Data mining
Companies organize their data in Databases- consumer
databases, product databases etc . For e.g. customer databasecontains data like customer name, past transactions,demographics etc. and based on it companies rank theircustomer according to purchase recency, frequency andmonetary value.
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Ways of gainingconsumer insight
Taking Inputs for sales force :
Many companies encourages sales personnel toprovide inputs on improvements as sales team isdirectly exposed to customers as well as competitors.
Setup customer advisory panel :
Members might include companys largest customersor its most outspoken or sophisticated customersalong with highly qualified moderator.
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Ways of gainingconsumer insight
Purchase information from outsidesuppliers : In India we have companiessuch as ACNielsen or TAM Media researchthat provides research data and reports.
Take advantage of government dataresources : government agencies fromtime to time comes out with host of usefuldata like population trends, demographiccharacteristics, agricultural data etc.
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Ways of gainingconsumer insight
Motivate distributors andretailers to pass along importantintelligence : We can look at Wal-Mart model where it captures data on
every item, every customer, for everystore and refreshes it every hour.
Use online customer feedbacksystems : Blogs, review boards,discussion forums, chat rooms can beused to capture candid opinions andvarious needs of customers.
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SUCCESSFULSTORIES
iPod- not first entrant indigital music player businessbut first to get it right
v How consumers want to
consume digital music
Insight:
v
People want to take all theirmusic with them
v But yet being Unobtrusive
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SUCCESSFULSTORIES
Eat the middle first and save thechocolate cookie outside for last
Insight:
Children love what they instinctively
discover for themselves: this issimply the best way to eat an Oreo
Oreo Double-Stufffor those who justcan't get enough of the creamymiddle bit
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SUCCESSFULSTORIES
Emami launched first Mens fairnesscream segment in 2005
Insight:
v Customer research which showed that
25-30% of customers of Fairness creamswere men.
v This insight paved way for a specializedbrand for men
Brand became creator and the marketleader of this segment
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SUCCESSFULSTORIES
ITC launched Sunfeast Yippee
Insight:
Some of the noodles in the marketbecome sticky if they are not
consumed early
Children prefer to slurp noodleswhile eating and therefore prefer alonger noodle
Many kids add sauce to enhancethe taste and look of noodles.
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SUCCESSFULSTORIES
Starbucks: Coffee is not a product but an experience marketed in athird place between home and work
Sony Walkman: Redefined the relationship between personal space
and private space
P&Gs Pampers:Insight about Japanese mothers as being fastidiousabout personal hygiene, spending a lot of time outside their homesand travelling on public transportation
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Consumer Insight -Need of the
HourCompanies need information about their:
Customers needsMarketing environment
Competition Limitations of Traditional Market Research
Marketing managers do not need more information, they need better
information that provides insights, which are useful for decision making.
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Gaining Consumer Insight helps in answeringfollowing questions:
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Importance of Consumer Insight:
Envisions a future dramatically different from the present
Targets and develops both long- and short-term innovations
Engages the customer as a collaborator, partner and knowledge resource
an integral part of the process
Thinks offensively and focused on beyond-me-too strategies
Challenges business boundaries and explores beyond existing
comfort zone where breakthroughs reside
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Importance of ConsumerInsight:
Retail profitability is connected to consumer insight-Customer Insight can be used to determine merchandising
decisions, determine a technology investment and drive brand relevanceto help retailers uniquely differentiate themselves
Firms use customer insights to develop competitive advantage.
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Kelloggs The concept of eating breakfast
cereal a new for the Indian Subcontinent The company faced challenge of not only promoting its product
but even the concept of eating cereal for breakfast
As the product was expensive consumer bought it cornflakes as
one-off novelty purchase Kelloggs remained unwilling to bow to price pressure and
decided to launch other products in India, without doing anyfurther research of the market
FAILURE
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New Coke A classic example of product failure
As company decided to scrap Original Coke consumers
boycotted New Coke
Coca-Cola capitalized on its original status in variousadvertising campaigns so by launching New Coke, Coca-Colawas therefore contradicting its previous marketing efforts
FAILURE
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McDonalds Arch
Deluxe McDonalds launched this new burger as a more sophisticated
option for consumers
The target market segment for this product was adults
But the working class adults were not ready to pay more for aslightly better tasting burger
FAILURE
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Coca-Cola Blak
A coffee - flavored soft drink introduced by coca-cola in2006
Launched as an energy drink
Poor coffee to coke ratio and bad taste led to failure
FAILURE
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Tata Nano
The Tata Nano is a cause for every Indian to celebrate, butthe joy was short lived.
Faulty features led to failure of the car
FAILURE
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Advantages ofCustomer Insight Identifies High-Potential Target Markets to Increase
Revenue & Market Share
Focused Marketing Efforts on Highest Leverage Activities
Increased Lifetime of Customers Loyalty
Increased New Business Referrals
Reduced Marketing Costs
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Disadvantages ofCustomer Insight
Cost to the Company
Time Constraint
Dehumanized
Maintenance and Repetition
Difficult to interpret their requirements
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Consumer Insight : A Failure
Problem not because of lack of skill of the workers
Problems in getting incomplete/incorrect picture ofconsumer needs
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FAILURE INSIGHT
1. Targeting Wrong Customers
1. Asking Wrong Questions
1. Failing to act on the information they have
1. Failing to turn Good customer insights they have into greatproducts
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Targeting WrongCustomers
Selection of wrong sample for survey
These users might not reflect the true needs ofthe masses
Problem of recognizing who real customers are
Focusing only on existing customers andignoring potential customers
Can be avoided by having a truly representativesample
Requires great level of intervention bymanagement
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Asking WrongQuestions
Questions about what they want rather thanwhat they are willing to pay for
Can be avoided by having discretequestionnaires of comparing two products
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Not acting on availabledata
Some kind of bias prevents managers fromtaking a fair valuation of data
The data collected is wasted
Can be avoided by having multiple views on thedata collected
Also by changing or rotating the decisionmaking teams
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Not converting good insightto great products
Failure of translation of customerrequirement to product specification
May be caused due to ignorance tosome of the facts collected
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THE PROFESSIONAL DOMAIN OF
CONSUMER INSIGHT
Professionally, the domain of consumer insight stretchesfrom market research, into database marketing, intocustomer service, into any function that deals directlywith consumers
Where it is used ?
q Direct marketing
q Direct Mail
q Database marketing
q Customer relationship management
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The relationship between market research and database
marketing is often troubled.
Database marketers need research to make their workeffective
Much can be gained by using the information thatdatabase marketing generates
Consumer insight process helps to change how we thinkabout consumers, staff and our organizations, rather than
supports a counterproductive way of thinking about them
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Thank you!!