Customers and market (v. 2017-2018 eng)

Customers & Market
Frieda Brioschi / Emma Tracanella
frieda.brioschi@gmail.com / emma.tracanella@gmail.com
IED, 7 Nov 2017

Lesson 4/2017-18

4. Customers & Market
Course program
1. Start-ups
2. Business Model & Canvas
3. Value Proposition Design
2

4. Customers & Market3
The exam

Greetings from Dubai!
5

4. Customers & Market7 https://www.ﬂickr.com/photos/osterwalder/7888051104/

Target market
8

Target market
9
• Who are your customers? Who will buy your product?
• People purchase products or services for three basic
reasons:
• To satisfy basic needs.
• To solve problems.
• To make themselves feel good.
http://sbinfocanada.about.com/cs/marketing/a/targetmarket.htm

Definition of a target market
10
1. Look at your current customer base
2. Check out your competitors
3. Analyze your product/service
4. Choose specific demographics to target
5. Consider the psychographics of your target
6. Evaluate your decision
http://www.successdesigns.net/articles/entry/how-to-define-your-target-market/

Segmentation
11

4. Customers & Market12 BronHiggs CC BY-SA 4.0 from Wikimedia Commons

Segmentation by
geographics
13
• Country: e.g. USA, UK, China, Japan, South Korea,
Malaysia, Singapore, Australia, New Zealand
• Region: e.g. North, North-west, Mid-west, South, Central
• Population density: e.g. central business district (CBD),
urban, suburban, rural, regional
• City or town size: e.g. under 1,000; 1,000–5,000; 5,000–
10,000 ... 1,000,000–3,000,000 and over 3,000,000
• Climatic zone: e.g. Mediterranean, Temperate, Sub-
Tropical, Tropical, Polar,
https://en.wikipedia.org/wiki/Market_segmentation

Segmentation by
demographics
14
• Age: children, teens, young, middle, elderly
• Gender: male, female
• Education: high school, college, university
• Income: low, medium, high
• Marital status: single, married, divorced
• Ethnic and/or religious background
• Occupation
• Family life cycle: newly married, married for 10 – 20 years,
with or without children.
http://sbinfocanada.about.com/cs/marketing/a/targetmarket_2.htm

Segmentation by
psychographics
15 http://sbinfocanada.about.com/cs/marketing/a/targetmarket_2.htm
• Personality
• Values
• Lifestyle: conservative, exciting, trendy, economical
• Social class: lower, middle, upper
• Opinion: easily led or opinionated
• Activities and interests: sports, physical ﬁtness, shopping,
books
• Attitudes and beliefs: environmentalist, security conscious.
• Behaviour

Segmentation by behavioral
16 https://en.wikipedia.org/wiki/Market_segmentation
• Purchase/Usage Occasion: e.g. regular occasion, special occasion,
festive occasion, gift-giving
• Beneﬁt-Sought: e.g. economy, quality, service level, convenience, access
• User Status: e.g. First-time user, Regular user, Non-user
• Usage Rate/ Purchase Frequency: e.g. Light user, heavy user, moderate
user
• Loyalty Status: e.g. Loyal, switcher, non-loyal, lapsed
• Buyer Readiness: e.g. Unaware, aware, intention to buy
• Attitude to Product or Service: e.g. Enthusiast, Indifferent, Hostile; Price
Conscious, Quality Conscious
• Adopter Status: e.g. Early adopter, late adopter, laggard

Here’s the problem with target
markets: They’re too big.

Narrowing your target
market
"Companies that try to be all things to all customers are
sure to fail.”
• The Dangers of Being Unfocused
• Become an Expert in one Area (Starbucks!)
• Do the Market Research
• Tweak your Marketing
http://www.inc.com/guides/201104/how-to-narrow-your-target-market.html

The Dangers of Being
Unfocused
"If you're not differentiating yourself in the marketplace,
what happens is the consumer looks at price as being
the motivator, and they look at the cheapest.”
- Susan Friedmann -

Do market reasearch
Look for growth markets to identify burgeoning new
areas that may not be claimed by existing businesses.
OR
Find your niche ﬁrst by focusing on the areas in which
they already have a strong interest, or by looking at
markets that already know about you and your services.
Then, look for areas of the marketplace where a gaping
need exists that you can ﬁll with your company's
services.

Matter of balancing
http://www.educationbusinessblog.com/2007/07/target_market_selection_1.html

Reassess
Look at Your Product or Service with a Fresh Light
• There are enough potential customers within your target
audience?
• Will your target market beneﬁt from your product or service?
• Will this target market see a true need for it?
• Can your target market afford your product or service? how
frequently?
• Can you reach your market with your message?

Kinds
B2B
B2C
http://plantostart.com/how-to-deﬁne-target-market-product/

Kinds
B2B
B2C
http://plantostart.com/how-to-deﬁne-target-market-product/
+ B2G

B2B
Your business model is to make a product or service and
charge other companies for using it.
The advantage of this model is that companies have
money and they are willing to spend it on a product/
service, which improves their daily operations, helps them
sell more or communicate better.
Google, Cisco, MySQL and others are using this model.

B2C
Your business model is to make a product or service and
charge consumers for using it.  
Even though most people think this is a very proﬁtable
model, most often companies need to have at least
hundreds of thousands of users in order to earn enough
money to maintain and expand the business.
This model is being used by Starbucks, McDonald’s,
Amazon and others.

B2G
Your business model is to make a product or service or
information and charge the government for using it.  
“B2G networks or models provide a way for businesses
to bid on government projects or products that
governments might purchase or need for their
organizations. This can encompass public sector
organizations that propose the bids. B2G activities are
increasingly being conducted via the Internet through
real-time bidding. “

B2B, B2C, B2G?
• B2C: building emotional connections
• B2B: building relationships
• B2G: building expertise
https://www.bluetreedigital.com/marketing-businesses-b2c-vs-b2b-vs-b2g/

4. Customers & Market29 https://petovera.com/b2b-v-b2c-content-marketing-which-is-the-best-approach-for-your-audience/

H2H?
http://www.hellosoutherly.com/what-does-h2h-instead-of-b2b-b2c-mean-for-business-storytelling/

B2B Vs B2C e-commerce
http://blogs.bazara2z.com/b2b-e-commerce-not-b2c/

Customer relationship
34

Customer relationship
CR could rely on different motivations, three common ones
are:
1. Customer acquisition
2. Customer retention
3. Increased sales (upselling)
Consider the mobile phone market: at the beginning CR
were driven by acquisition strategies, but when the market
was saturated, operators switched to customer retention
and tried to increase the average revenue per customer.
http://www.ecommerce-digest.com/customer-relationships.html

Categories of CR
• personal assistance
• dedicated personal assistance
• self-service
• automated service
• communities
• co-creation
http://www.whittakercpas.com/what-type-of-customer-relationship-builds-value-for-your-business/

Personal assistance
This is based on human interaction. Customers can
communicate directly with company representatives
throughout the sales process and after the sale is
complete. This may happen in person, by email, through
call centers, etc. Nordstrom’s would be a good example
of this. There is usually a customer service
representative in the department that can help you ﬁnd
your perfect ﬁt, help you with the sale, and help if there
is a problem down the road.

Dedicated personal
assistance
This is also based on human interaction, but adds the
speciﬁcity of a dedicated customer service
representative. This is the deepest type of customer
relationship and normally develops over a long period of
time. Think of this with an investment advisor, CPA or an
attorney.

Self-service
In this relationship, the company does not maintain a
direct relationship with its customers. Instead, it
provides all the necessary means for the customer to
help themselves. Think of how you buy music through
iTunes. This service does not require any customer
service; you can begin and complete the transaction on
your own. Another example would be how you purchase
gas for you cars. This transaction typically happens at
the pump and you never speak to an attendant.

Automated service
This relationship mixes customer self-service with
automated processes. Automated services can
recognize individual customers and their characteristics.
While iTunes is an example of self-service, Pandora (a
web-based music service) is an example of an
automated service. With Pandora, you create a proﬁle
and populate a couple of “stations” you like to listen to.
As you continue to listen to music, you can give the
songs a ‘thumbs-up’ or a ‘thumbs-down’ when you like
or dislike music. Over time, the software actually tailors
the music it plays to your liking.

Communities
Many companies are using communities to become more
involved with their customers/prospects and to facilitate
connections between community members. Many
companies maintain online communities to exchange
knowledge and solve problems. There are several
examples of this that come to mind. Most technology
companies have online communities where people share
questions and solve problems. If you have ever Googled a
computer or software problem, you were probably provided
with several online communities that had answers. Some of
these forums (online communities) are established and
monitored by the software and hardware companies.

Co-creation
This is a model in which the company and the customer
co-create value, done quite frequently with technology.
When you purchase something online, you typically get
to peruse through the reviews of the item that you are
buying prior to making your decision. In this instance,
the seller and previous customers are working together
to co-create value. The customer reviews add value to
the product as well as to the customer service of the
seller. This can also be done with testimonials for typical
brick and mortar companies.

Case study:
Wolﬀepack
The unique orbital backpack
https://www.wolffepack.com/#
https://www.kickstarter.com/projects/wolffepack/
wolffepack-luna-ultraeasy-baby-changing-backpack-d/
description

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