Customer Analysis Strategies the Many

Customer Analysis Strategies

The many responsibilities of product management revolve around their expertise in understanding the nuances and specific needs, preferences and wants of customers (Tyagi, Sawhney, 2010). Product management in many businesses is focused on translating the unique user needs and requirements of the markets served and transforming them into product benefits, features, and attributes. For a product management professional to excel they must have a thorough understanding of their customer segments served, including how to reach the key audiences within each segment (Tyagi, Sawhney, 2010). What many product management professionals are challenged with however is the continual shift in their primary segments' requirements, needs, wants and preferences, and often these aspects are changing significantly faster as consumers become more educated over time (Crain, Abraham, 2008). The center or essence of what makes a product management professional successful or not is the extent to which they understand their customers' needs, preferences and wants. The intent of this analysis is to define what product managers need to know about the customers and market segments they serve. There is significant variation between Business-to-Business (B2B) and Business-to-Consumer (B2C) customers, their purchasing process, buying cycles, consumer or buyer behavior and preferences for how they stay educated about new products (Crain, Abraham, 2008). As a result, product management professionals in each of these industry areas need to continually stay focused on customers and market segments as they change rapidly.

What Product Managers Needs to Know About Customers & Market Segments

For the product manager who is managing a B2B-oriented product, the need to know how their primary customers, who are all other businesses, perceive product, its value, and its substitutes are all critically important (Taghian, 2010). A product manager of any B2B-oriented product or solution must also understand the purchasing process, or purchase cycle, who is involved in it, who has the greatest responsibility for the decision, and how the timeframes of purchasing are

(Hughes, Morgan, Kouropalatis, 2008). This is critically important because in devising the next generation of a B2B product or service the purchasing process or cycles within the segment are just as important as the product features themselves (Tyagi, Sawhney, 2010).

For the B2B product management professional being able to understand when a given product or solution is needed by their base of customers and potential prospects sets a very solid foundation for specifying, building and delivering a highly competitive product (Hughes, Morgan, Kouropalatis, 2008). For the B2B product management professional, insights into the complex processes their business customers rely on for choosing their next generation of product can also help to sway an entire industry their direction. Intel did this in the B2B market by having its product managers serve on industry boards that helped define market standards for WiFi chipsets and high-speed data buses for example (Wu, Kempf, Atan, Aytac, Shirodkar, Mishra, 2010).

As the B2B customer bases and market segments have a more complex, interconnected sales cycle and often have a different person or group making the buying decision vs. The departments using the product, product management must be attuned to a much more complex set of relationships and processes if they are going to succeed (Tyagi, Sawhney, 2010). The stage of the buying cycle each customer group participates in is critical for also defining the best possible marketing planning approach and go-to-marketing strategy for any B2B-orineted product or service as well (Thorpe, Morgan, 2007). Having an understanding of the stage in the buying cycle a given prospect company is in can also serve multiplicative benefits in defining new pricing, product, promotion and distribution strategies for B2B-oriented products as well. Having insight into all of these aspects of a B2B customer and market segment often leads to the entire comp[any benefiting from these insights, leading to more effective knowledge dispersion and resulting business performance (Hughes, Morgan, Kouropalatis, 2008). From a B2B context, the potential for product management professionals to redefine and sharpen the focus of their company's mindset, perception and strategies pertaining to customers and markets is possible through knowledge sharing and dispersion (Tyagi, Sawhney, 2010). The product manager must see themselves as change agents, a person bringing insight and intelligence into their company to make sure it stays relevant to customers over time.

For product management professionals in the B2C market, the challenges are even greater as the competition and speed in their markets is magnitudes greater than their B2B counterparts. Often consumer-oriented products have a high degree of seasonality to them, substitutes abound, and product lifecycles can be very short (Thorpe, Morgan, 2007). Determining the best possible market segments, defining customers as accurately as possible and monitoring the performance of go-to-market strategies is critical for a new business to succeed in consumer-based or B2C-oriented markets (Van Fleet, Van Fleet, Flint, 2010). Considering how competitive the consumer packaged goods (CPG) market is and the level of investment required for any new product to be successful, the need for accurate customer information becomes central to innovation (Kannan, Yim, 2001). The success of Proctor & Gamble in the CPG markets they compete in is evidence of how thoroughly customer insight, intelligence and market segment analysis permeates their company and its strategies (Kannan, Yim, 2001). The product management teams at P&G focus on the segmentation profiles of their customers, defining them from a demographic, psychographic and behavior standpoint through the use of continual customer panels and research programs (Crocker, Tay, 2004). P&G regularly uses such advanced forms of research as perceptual mapping and cluster analysis to understand the motivations, needs, and wants of their customers (Kannan, Yim, 2001). Just as b2B-based product management teams are actively changing the cultures of their companies all the time to keep them focused on customer needs, product managers in B2C are even more critical to making this happen. In the B2C markets, there is much more churn and rapid change, making the role of the product manager critical to staying on top of customers' needs over time. The product management professional must be a catalyst of customer-driven change.