copyright © 2002 all rights reserved. 1 chapter 7 researching customer behavior

1

Copyright © 2002

All rights reserved.

CHAPTER 7CHAPTER 7

Researching Customer BehaviorResearching Customer Behavior

CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE

PART 2: Foundations of Customer BehaviorPART 2: Foundations of Customer Behavior

CUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVECUSTOMER BEHAVIOR: A MANAGERIAL PERSPECTIVE

PART 2: Foundations of Customer BehaviorPART 2: Foundations of Customer Behavior

Copyright © 1999 by Thomas Southwestern. All rights reserved.

CHAPTER 7CHAPTER 7PART 2

2 Copyright © 2002


Customer Behavior: A Managerial Perspective

Conceptual FrameworkConceptual Framework

Payer

UserBuyer UNDERSTANDING CUSTOMER BEHAVIOR

UNDERSTANDING CUSTOMER BEHAVIOR

• Qualitative• Quantitative• Qualitative• Quantitative

InformationProcessing Research

InformationProcessing Research

• Public Data• Proprietary Data• Public Data• Proprietary Data

Secondary ResearchSecondary Research

• Survey• Experiment• Simulation

• Survey• Experiment• Simulation

Primary ResearchQuantitative

Primary ResearchQuantitative

• Focus Groups• Customer Visits• Motivation Research• Interpretative Research

• Focus Groups• Customer Visits• Motivation Research• Interpretative Research

Primary ResearchQualitative

Primary ResearchQualitative

Researching Customer Behavior

Researching Customer Behavior



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Two Broad Categories of ResearchTwo Broad Categories of Research

Qualitative Measuring in terms of general descriptions

and categories

Quantitative Measuring in terms of numbers



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Qualitative ResearchQualitative Research

Requires verbal response The respondent is requested to state the answer in his

or her own words

Several specific methods or techniques are available for implementing qualitative research Focus groups Customer visits Motivation research Interpretative research



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Focus GroupsFocus Groups

With focus groups, a small group of customers is assembled in a room, and a moderator steers the group discussion along certain questions of interest to the marketerFocus groups have several applications: Generating ideas for product improvements or new

products Understanding customer perceptions of competing

brands Testing new concepts



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Customer VisitsCustomer Visits

The specific program of research that involves visiting a dozen or so customer firms to hold interviews with customers to learn about the their experience with the product and requirements



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Advantages of Customer Visits Advantages of Customer Visits

Face-to-face interactions Affords a good opportunity to understand

customer requirements Enables the technical staff of the vendor firm

to understand and respond to the customers’ thought world



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Applications of Customer Visits Applications of Customer Visits

Discovery research Primarily suited to B2B marketers Especially beneficial to producers and vendors

of high-tech or otherwise complex products



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Techniques for Motivation Research Techniques for Motivation Research

DISGUISED?

YES NO

STRUCTURED?

YES• Disguised• Structured• Techniques

• Nondisguised• Structured• Techniques

NO• Disguised• Nonstructured• Techniques

• Nondisguised• Nonstructured• Techniques



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Nondisguised-Structured Techniques Nondisguised-Structured Techniques

A technique that makes the research purpose obvious and seeks responses along prespecified response categories






Nondisguised-Nonstructured Techniques Nondisguised-Nonstructured Techniques

A technique in which the purpose of the study is not disguised; however, the consumer response categories are not predetermined






Disguised-Structured TechniquesDisguised-Structured Techniques

A questionnaire design wherein the real intent of the question is disguised, but the response categories are provided






Disguised-Nonstructured TechniquesDisguised-Nonstructured Techniques

Projection TechniquesThe respondent is given a fairly vague stimulus and is asked to interpret that stimulus Word association Sentence completion Story completion Hybrid techniques






Interpretative ResearchInterpretative Research

Post-modern research The purpose is on understanding the meaning

of a product or consumption experience in a consumer's life Ethnographic studies






Consumer Behavior OdysseyConsumer Behavior Odyssey

The observation of the acquisition, consumption and disposition of products and services at any consumption site The Odyssey Project






Advantages and Disadvantages of Subjective, Interpretative Research Advantages and Disadvantages of Subjective, Interpretative Research

AdvantagesThe researcher is able to encounter customers and consumption activities in their natural settingsThe researcher observes firsthand the customer activityThe questioning is much more open ended and qualitativeA greater trust is builtThe customer activity being analyzed and questioned is much more immediate and physically present

DisadvantagesIt requires highly skilled and well trained researchersIt is very time consuming and very expensiveThe interpretation of data is too subjectiveThe methods are good at generating hypotheses, but not at confirming hypotheses or suggesting generalizable principles






Quantitative Research Quantitative Research

A research method wherein a person’s answers are obtained on a numerical scale

Quantitative research can use either of two broad methods Survey Experiment






SurveySurvey

In the survey method, respondents are simply asked to respond to a questionnaire Numerical responses Verbatim responses






ExperimentExperiment

A method in which the researcher places respondents in a situation that does not normally occur and then observes or records their response Test marketing Simulation






Applications of Quantitative ResearchApplications of Quantitative Research

i

1

Dislike 1 2 3 4 5 Like

Disagree 1 2 3 4 5 Agree

Traditional 1 2 3 4 5 Modern

Masculine 1 2 3 4 5 Feminine

(beliefsi)(importancej)

Image and Self-concept Measurement

Attitude Research

MultiattributeAttitude Model

Perceptual andPreference Mapping






Attitude ResearchAttitude Research

Attitude measurement scales Semantic differential scales

Ask respondents to rate the object in terms of pairs of traits

Likert scales Ask respondents the degree to which they agree or disagree

with statements

Pictorial scales Behaviorally anchored scales

Are anchored in specific behaviors that children are likely to relate to






Semantic Differential Scale Semantic Differential Scale

Brand A office equipment is:

My opinion of this brand of office equipment is:






Likert ScalesLikert Scales

1. Strongly Disagree

2. Disagree

3. Feel Neutral

4. Agree

5. Strongly Agree






Pictorial Scales to Measure Customer AttitudesPictorial Scales to Measure Customer Attitudes

1 2 3 4 5






Behaviorally Anchored Rating ScalesBehaviorally Anchored Rating Scales

B. “Sharing” Scale (BARS2)

A. “Shopping” Scale (BARS1)






Description of Behavioral Incidents Description of Behavioral Incidents






Image/Self-Concept MeasurementImage/Self-Concept Measurement

Consumers’ own self-image as well as their image of specific products, brands, and so on can be measured by using a semantic differential scale






Multiattribute Attitude ModelMultiattribute Attitude Model

A consumer’s attitude toward a product or service is a weighted sum of his or her beliefs about the extent to which the product or service possesses a set of attributes or characteristics






Perceptual and Preference Mapping Perceptual and Preference Mapping

These analytical techniques provide a visual map in a multidimensional space that shows how similar or different various brands are considered to be by the consumer Multidimensional scaling






Methods of Measuring Customer Perceptions and PreferencesMethods of Measuring Customer Perceptions and Preferences

Brand A of soda is more similar to:___Brand B or ___Brand CBrand A of soda is more similar to:___Brand C or ___Brand DBrand B of soda is more similar to:___Brand C or ___Brand DBrand B of soda is more similar to:___Brand A or ___Brand D and so on.

Brand A of soda is more similar to:___Brand B or ___Brand CBrand A of soda is more similar to:___Brand C or ___Brand DBrand B of soda is more similar to:___Brand C or ___Brand DBrand B of soda is more similar to:___Brand A or ___Brand D and so on.

PERCEPTION MEASUREMENT 1PERCEPTION MEASUREMENT 1

In the following matrix, place 1 in the cell for the pair of brand most similar, 2 for the next most similar, and so on.In the following matrix, place 1 in the cell for the pair of brand most similar, 2 for the next most similar, and so on.

PERCEPTION MEASUREMENT 2PERCEPTION MEASUREMENT 2

ABCDE

ABCDE

A B C D E...A B C D E...






Methods of Measuring Customer Perceptions and Preferences (cont’d)Methods of Measuring Customer Perceptions and Preferences (cont’d)

Which brand do you prefer more in each pair (circle one brand in each pair)?A or BB or CA or CA or DB or DC or D

Which brand do you prefer more in each pair (circle one brand in each pair)?A or BB or CA or CA or DB or DC or D

PREFERENCE MEASUREMENT 1PREFERENCE MEASUREMENT 1

Please rank the following brands from the most preferred (1) to the least preferred (5)Brand A___Brand B___Brand C___Brand D___Brand E___

Please rank the following brands from the most preferred (1) to the least preferred (5)Brand A___Brand B___Brand C___Brand D___Brand E___

PREFERENCE MEASUREMENT 2PREFERENCE MEASUREMENT 2






A Perceptual MapA Perceptual Map






A Perceptual Map with Product AttributesA Perceptual Map with Product Attributes






A Perceptual Map with Ideal Points (I1 & I2) ShownA Perceptual Map with Ideal Points (I1 & I2) Shown






Information Processing ResearchInformation Processing Research

Information boards

Measures of eye movement

Galvanic skin response, and brain activity

Visual image profiles

Protocols






Information BoardsInformation Boards

WarrantyPriceFeaturesPerformance

Rating

Brand ‘E’

Brand ‘D’

Brand ‘C’

Brand ‘B’

Brand ‘A’






Eye MovementEye Movement

The researcher uses data gathered by the eye camera to identify the information at which the customer gazed longestThis method can be used to study customer’s information acquisition while Reading or viewing an advertisement Looking at aisle displays and examining package

information on products in a supermarket Participating in an experiment such as an information

board






Galvanized Skin Response (GSR)Galvanized Skin Response (GSR)

GSR measures the amount of skin resistance to electric current between two electrodes

GSR activity indicates customer response to a stimulus An item of information (e.g., price) An emotional storyline in an advertisement






Brain ActivityBrain Activity

When customers process any information or react to any marketing stimulus, electric impulses are generated in the brain

Electroencephalographic (EEG) measures Alpha activity inversely measures the degree

of the brain’s attentiveness






Visual Image ProfileVisual Image Profile

A method used to elicit nonverbal responses by using a set of pictures illustrating facial expressions that represent a wide range of human emotions






ProtocolProtocol

The consumer is asked to speak his or her thoughts out loud Concurrent protocols

Thoughts recorded at the time of decision-making

Retrospective protocols Reports on the decision process for a decision

made in the recent past






Secondary ResearchSecondary Research

An examination of data that already exists

Two types of secondary data Public Proprietary






Public DataPublic Data

Secondary data in the public domain are collected mostly by the government and other domestic, foreign, and international public organizations






Selected Sources of U.S. Government DataSelected Sources of U.S. Government Data

Statistical Abstract of the U.S., updated annually, provides summary data on demographic, economic, social, and other aspects of the American economy and society.County and City Data Book, updated every three years, presents statistical information for counties, cities, and other geographical units on population, education, employment, aggregate and median income, housing, bank deposits, retail sales, and so on.U.S. Industrial Outlook provides projections of industrial activity by industry and includes data on production, sales, shipments, employment, and so on.Marketing Information Guide provides a monthly annotated bibliography of marketing information.Other government publications include the Annual Survey of Manufacturers; Business Statistics; Census of Manufacturers; census of Population; Census of Retail Trade, Wholesale Trade, and Selected Service Industries; Census of Transportation; Federal Reserve Bulletin; Monthly Labor Review; Survey of Current Business; and Vital Statistics Report.

Statistical Abstract of the U.S., updated annually, provides summary data on demographic, economic, social, and other aspects of the American economy and society.County and City Data Book, updated every three years, presents statistical information for counties, cities, and other geographical units on population, education, employment, aggregate and median income, housing, bank deposits, retail sales, and so on.U.S. Industrial Outlook provides projections of industrial activity by industry and includes data on production, sales, shipments, employment, and so on.Marketing Information Guide provides a monthly annotated bibliography of marketing information.Other government publications include the Annual Survey of Manufacturers; Business Statistics; Census of Manufacturers; census of Population; Census of Retail Trade, Wholesale Trade, and Selected Service Industries; Census of Transportation; Federal Reserve Bulletin; Monthly Labor Review; Survey of Current Business; and Vital Statistics Report.






Proprietary DataProprietary Data

Proprietary data are collected by private business firms for their own use or by firms that are in the business of collecting and marketing information of interest to a class of clients Syndicated Customized






Selected Sources of Commercial DataSelected Sources of Commercial Data

A.C. Nielsen Company provides data on products and brands sold through retail outlets (Retail Index Services), supermarket scanner data (Scantrack), data on television audiences (Media Research Services), Magazine circulation data (Neodata Services, Inc.), and others.MRCA Information Services provides data on weekly family purchases of consumer products (National Consumer Panel) and data on home food consumption (National Menu Census).Information Resources, Inc., provides supermarket scanner data (InfoScan) and data on the impact of supermarket promotions (PromotioScan).SAMI/Burke provides reports on warhouse withdrawals to food stores in selected market areas (SAMI reports) and supermarket scanner data (Samscan)Simmons Market Research Bureau (MRB Group) provides annual reports covering television markets, sporting goods, and proprietary drugs, giving demographic data by sex, income, age, and brand preferences (selective markets and media reaching them).Other commercial research houses selling data to subscribers include the Audit Bureau of Circulation; Arbitron, Audits and Surveys; Dun and Bradstreet; National Family Opinion; Standard Rate & Data Service; and Starch.

A.C. Nielsen Company provides data on products and brands sold through retail outlets (Retail Index Services), supermarket scanner data (Scantrack), data on television audiences (Media Research Services), Magazine circulation data (Neodata Services, Inc.), and others.MRCA Information Services provides data on weekly family purchases of consumer products (National Consumer Panel) and data on home food consumption (National Menu Census).Information Resources, Inc., provides supermarket scanner data (InfoScan) and data on the impact of supermarket promotions (PromotioScan).SAMI/Burke provides reports on warhouse withdrawals to food stores in selected market areas (SAMI reports) and supermarket scanner data (Samscan)Simmons Market Research Bureau (MRB Group) provides annual reports covering television markets, sporting goods, and proprietary drugs, giving demographic data by sex, income, age, and brand preferences (selective markets and media reaching them).Other commercial research houses selling data to subscribers include the Audit Bureau of Circulation; Arbitron, Audits and Surveys; Dun and Bradstreet; National Family Opinion; Standard Rate & Data Service; and Starch.






Tracking ServicesTracking Services

Customers are surveyed to track their opinions and attitudes on a longitudinal basis

Four leading tracking studies for consumer markets are: Yankelovich Monitor ABC News/Harris Survey Gallup Poll DDB Needham Study






Selected Trends Measured by Monitoring ServicesSelected Trends Measured by Monitoring Services

Our whole family usuallyeats dinner together

At noontime, I often skip lunchor just have a light snack

Television is my primaryform of entertainment

‘76 ‘78 ‘80 ‘82 ‘84 ‘86 ‘88 ‘90 ‘92 ‘76 ‘78 ‘80 ‘82 ‘84 ‘86 ‘88 ‘90 ‘92 ‘76 ‘78 ‘80 ‘82 ‘84 ‘86 ‘88 ‘90 ‘92

Graph 1 Graph 2 Graph 3






The Process of Single Source Data CollectionThe Process of Single Source Data Collection

Completed databases are converted to the required client format, transferred to appropriate recording mediums…hard copy, mage tape, pc diskette, etc…., and sent to the subscriber.

Completed databases are converted to the required client format, transferred to appropriate recording mediums…hard copy, mage tape, pc diskette, etc…., and sent to the subscriber.

UPC’S for each grocery item are scanned at checkout. Information is sent from store to chain and on to IRI via telecommunication systems.

UPC’S for each grocery item are scanned at checkout. Information is sent from store to chain and on to IRI via telecommunication systems.

Household panel members present an identification card at checkout, which identifies and assigns items purchased to that household. Coupons are collected and matched to the appropriate UPC. Information is electronically communicated to IRI computers.

Household panel members present an identification card at checkout, which identifies and assigns items purchased to that household. Coupons are collected and matched to the appropriate UPC. Information is electronically communicated to IRI computers.

Household panel members are selected for television monitoring and equipped with meters, which automatically record the set’s status every five seconds. Information is relayed back to IRI’s computers.

Household panel members are selected for television monitoring and equipped with meters, which automatically record the set’s status every five seconds. Information is relayed back to IRI’s computers.

IRI field personnel visually survey stores and all print media to record retailer’s merchandising efforts, displays, and ad feature. Field personnel also survey retail stores for a variety of custom applications. Results are electronically communicated to IRI computers.

IRI field personnel visually survey stores and all print media to record retailer’s merchandising efforts, displays, and ad feature. Field personnel also survey retail stores for a variety of custom applications. Results are electronically communicated to IRI computers.

Information is received at IRI and processed through the Neural Network (Artificial Intelligence) Quality Control System. The system approves the over 35 million records obtained weekly for further data processing and identifies records that require further verification.

Information is received at IRI and processed through the Neural Network (Artificial Intelligence) Quality Control System. The system approves the over 35 million records obtained weekly for further data processing and identifies records that require further verification.






Database ResearchDatabase Research

Marketers build their own database containing the names and relevant information about their current/prospective customers Warranty cards Sweepstakes entries Rebate forms Special surveys






Virtual Reality: New Tool of Customer ResearchVirtual Reality: New Tool of Customer Research

Virtual reality (VR) refers to interactive, computer-generated 3D immersive displays and sound Virtual shopping Virtual test marketing






Advantages of Virtual Reality TechniquesAdvantages of Virtual Reality Techniques

Ability to simulate the real-world shopping environment much more realistically

The computer is able to record much more detailed data about the shopper behavior Information is presented more realistically It costs much less to program and create virtual

images and also to record customer processing data The computer records the data unobtrusively






Data Trail From Shopping on the InternetData Trail From Shopping on the Internet

Information about every transaction is tracked by cookies

These unique identifiers make it possible to analyze this data for customer profiles and patterns of purchasing






Researching Customer Behavior and the Three Customer RolesResearching Customer Behavior and the Three Customer Roles

• Researching customer attitudes toward alternative vendors (e.g., home-shopping network).

• Researching buyer use of an experience with EDI systems.

Need to Research Customer Behavior

• Researching user needs and wants for new product designs.

• Researching price-sensitivity of customers.

• Researching customer preferences toward leasing.

• Researching customers’ reference prices.

BUYERUSER PAYER

• Perceptions of alternative vendors can be explored.

1. Focus Groups

1. Customer Visits

• To explore user views and to identify unfulfilled needs and wants.

• Perceived value and reference price as discussion topics in focus group & customer visits.

SPECIFIC RESEARCH METHODS






Researching Customer Behavior and the Three Customer Roles (cont’d)

Researching Customer Behavior and the Three Customer Roles (cont’d)

BUYERUSER PAYER

SPECIFIC RESEARCH METHODS continued

• Motivation research

• To identify subconscious motives of users.

• Survey of buyers to assess vendor attitudes.

• Survey research • To elicit user’s beliefs, attitudes, behaviors, etc.

• Survey of customers for target pricing, price awareness, and so on.

• Test markets.• Experimental research

•Blind taste tests•Product use tests.

• Primarily applicable to study the information processing by buyers.

• Information processing research

• Research on how viewers process advertising messages.

copyright © 2002 all rights reserved. 1 chapter 7 researching customer behavior

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