## Market and Customer

### What is a Market?

A market is a place (physical or virtual) where buyers and sellers exchange goods and services for a price.

Applies to: stock exchanges, specific industries (e.g., global oil market), local business ecosystems
4 Ps of Marketing: Product, Place, Pricing, Promotion

### Customer vs. Consumer

Term	Meaning	Strategic Relevance
Customer	The one who buys the product/service	Central to pricing strategy
Consumer	The one who uses/consumes the product	Central to design and usability

> A customer can be a consumer and vice versa. But for strategy teams — especially marketing — distinguishing them is critical.

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## Customer-Centric Business

A customer-centric business continuously learns from its customers' needs and market dynamics. In today's competitive environment, success often depends on adopting customer-centric approaches.

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## Customer Analysis

An essential marketing component of any strategic business plan that:

Identifies target clients
Determines their wants
Defines how the product meets those needs

Customer analysis includes:

Administration of customer surveys
Study of consumer data
Evaluation of market positioning strategies
Development of customer profiles (demographic information)
Selection of the best market segmentation techniques

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## Customer Behaviour

Goes beyond identifying customers to explain how they purchase.

Three conceptual domains influencing consumer behaviour:

Domain	Description
External Influences	Advertisements, peer recommendations, social norms — directly impact psychological processes
Internal Influences	Psychological factors internal to the customer that affect decision-making
Decision Making Process	Sequential stages from need recognition to final purchase

### Decision-Making Process

1. Problem recognition — identify an existing need or desire that is unfulfilled

2. Search for desirable alternatives and list them

3. Information gathering — seek information on alternatives, weigh pros and cons

4. Final choice — make a purchase decision

### Post-Decision Behaviour

Happy customer → repeat purchase + recommends to others
Dissonant customer (cognitive dissonance) → neither repurchases nor recommends

> Understanding customer behaviour enables businesses to establish effective marketing campaigns, design fitting products/services, and retain customers for repeat sales.

Worked example

### Example 1

Customer vs. Consumer — Children's Toy:

A company launching a children's toy must distinguish the customer (parent who pays) from the consumer (child who uses it). Pricing strategy targets the parent's budget concerns; product design centers on the child's engagement and safety. A mismatch — e.g., designing solely around child appeal without considering parent price sensitivity — leads to poor sales.

### Example 2

Customer Analysis in Action — Mobile Phone:

A mobile phone company conducts customer surveys revealing buyers prioritize camera quality over battery life. Using this customer analysis, the company redesigns its marketing to highlight camera specs and repositions its product tier pricing. Result: better conversion and higher market share in the target segment.

### Example 3

Post-Decision Behaviour — E-commerce Returns:

A customer orders a premium jacket online. If it fits and looks as expected → positive reinforcement → repeat purchase + positive review. If it doesn't match expectations → cognitive dissonance → return, negative review, and brand switch. This is why product descriptions and images must set accurate expectations.

⚠️ Common exam mistakes

Using 'customer' and 'consumer' interchangeably in strategic analysis — this leads to misdirected marketing spend (e.g., advertising to the wrong audience).
Ignoring post-purchase behaviour — a dissatisfied customer creates negative word-of-mouth, which is harder to measure but can be more damaging than lost sales.
Treating customer analysis as a one-time exercise — customer preferences and profiles evolve, requiring continuous reassessment.
Assuming the decision-making process is always rational — internal psychological influences can override rational cost-benefit analysis.

Reference:

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Market, Customer, Customer Analysis, and Consumer Behaviour

Worked example

⚠️ Common exam mistakes