Entrepreneurship Chapter 4

Customer Relationship Management:

- business strategy designed to increase profitability and customer satisfaction - uses technology to track customer interactions - focuses on understanding customers as individuals instead of as part of a group

steps of competitive analysis

- make a list of competitors - summarize the products and prices offered by your competitors - find out the strategies and objectives of your competitiors - determine the opportunities in the market - identify threats to your business from the competition - list each competitors strengths and weaknesses

other strategies for maintaining loyalty

- superior service - convenient hours - easy return policies - store-specific credit cards - personal notes or birthday cards - frequent-buyer programs

disadvantages of primary data

- time - consuming - more expensive

secondary data can be found in

-publications issued by government and community organizations - industry specific books - government and business websites - books about entrepreneurs in similar businesses - trade publications - newspaper articles and statistics

what are the three ways to collect data ?

1. Surveys 2. Observations 3. Focus groups

what are the 4 thing that CRM system companies identify ?

1. customer relationship 2. who the customers are 3. where the customers are located 4, what product and service the customers buy

what are the three secondary data ?

1. population 2. family size 3. economic trends

what are the three questions target market should use ?

1. who is my potential market ? are my customers individuals or companies ? 2. what needs or wants will my product or service satisfy ? 3. what is the demand for my product or service?

What is NOT a good way to get customer feedback?

Check with your competition

Direct Competition

Comes from a business that makes most of its market as other businesses

Indirect competition

Comes from a business that makes only a small amount of money selling the same or similar products and services to the same market as other businesses

Interactions with Customers

Companies collected data about customers through interactions that occur via - phone - web - salespersons - product registration - product warranty cards

What is NOT a step involved when preparing a competitive analysis?

Create customer profile

Secondary Data

Data found in already- published sources

Psychographics

Data that describe a group of people in terms of their tastes, opinions, personality traits and lifestyle habits.

psychographics

Data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle habits.

use-based data

Data that helps a business determine how often potential customers use a particular service

used-based data

Data that helps a business determine how often potential customers use a particular service

geographic data

Data that helps you determine where your potential customers live and how far they will travel to do business with you

Customer profile

Description of the characteristics of the person or company that is likely to purchase a product or service

Market Segments

Groups of customers within large market who share common characteristics

Competitive analysis

Identifying and examining the characteristics of a competing firm

Focus group

In-depth interview with a group of target customers who provide valuable ideas on products or services for the same good or service

target market

Includes the individuals or companies that are interested in a particular product or service and are willing and able to pay for it.

Primary data

Info collected or the very first time to fit a specific purpose

behavioral data

Information employed in marketing for designing promotional campaigns based on consumers' buying habits, brand preferences, and product usage.

It is difficult for small businesses to compete with large retailers because...

Large retailers are able to order and stock products in large qualities, large retail chains don't rely on a single product line, and large companies have more resources to devote on ads

Survey

List of questions to ask customers to find out demographic and psychographic information; can be conducted by mail, over the phone, on the internet, or in person

What is NOT an example of primary research

Obtaining statistics from a government web site

6 steps of market research

Step 1: Define the Question Step 2: Determine the Data Needed Step 3: Collect Data Step 4: Analyze the Data Step 5: Take Action Step 6: Evaluate the Results

Market research

System for collecting, recording, and analyzing info about customers, competitors, goods and services

True or False? Business do not need to identify their target market in order to succeed

True

direct competition

a business that makes most of its money selling the same or similar products/services to the same market as other businesses

indirect competition

a business that makes only a small amount of money selling the same or similar products and services to the same market as other businesses

customer profile

a description of the characteristics of the person or company that is likely to purchase the product

data warehouse

a large computerized datavase containing all the info collected in the CRM process

survey

a list of questions you would like to ask your potential customers to find out demogrpahic and psychological information

market research

a system of collecting , recording , and analzing information

focus group

an in depth interview with a group of target customers who provide valuable ideas

what is a market segment made up of ?

common characteristics

What is not included as a source of secondary data

customer feedback from a survey

What is NOT a reason that entrepreneurs need to know who their customers are..

customers have no influence on product or services offered

analyze the data

data can be used to forecast sales and find out about your potential customers

demographics

data that describes a group of people in terms of - age - marital status - family size - ethnicity - gender - profession - education - income

Demographics

data that describle a group of people in terms of age , material status , family size , ethnicity , gender , professional , ect

psychopathic

data that describles a group of people in terms of their tastes , opinions , personality , ect

Use base data

data that helps you determine how often potential customers use a particular service

Geographic data

data that helps you determine where you potential customers live and how far they will travel to do business with you

define the question

define exactly what you need to know

observation

determining information by watching customer behavior

take action

develop a plan of action based no info found in the market research

touch point

feed back

data mining

finds hidden patterns and relationships in the customer data stored in the data warehouse

Customer Relationship Management

foucese in understanding customers as indiviuals instead of as part of a group

secondary data

found in already published source

market segments

groups of customers within a large market who share common characteristics

competitive analysis

identifying and examining the characteristics of a competing firm

primary data

information that is collected for the first time; used for solving the particular problem under investigation

evaluate the results

is the last step in the market research process . entrepreuers must regular evaluate the actions they take as a result of the plan

large retailers

it can be hard for entrepreneurs to compete with large retailers because: - large retailers can keep large quantities of products in stock - large chains do not rely on a single product line - large companies have a larger advertising budget

maintain customer loyalty

listen and respond to feedback - continually ask for and respond to customers needs

why is market segmentation important ?

most product and service appeal to only a small portion of the population

electronic data transfer

movement of data between locations in a structured, computer-retrievable format

What is a strategy for maintaining customer loyalty?

offering superior service

collect the data

perform research first to familiarize yourself with your market

touch points

places where a customer might have contact with a company - discussion with delivery personnel

what do most market research ?

primary data

what the most common is primary market research ?

survey

Target Market

the individual or companies that are interested in a particular product or service and are willing to pay for it

electronic data interchange

the movement of data between locations in a structure , computer - retrievable format

Customers

the people or organizations who buy the products and services companies offer

what are the disadvantages of primary data ?

time consuming and expensive

True or False? Two disadvantages of collecting primary data are the costs and time involved

true

To identify your target market, you need to know...

who your customers are, how old your customers are and where your potential customers currently shop