Page 69 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes Anyone who regularly makes purchases from a store or a company is termed as “customer” of
that store or the company. Thus a customer is typically defined in terms of specific store or
company.
We can also outline, five different types of customers based on their purchase habits. They are:
Loyal Customers: they are those customers who purchase the same brands or from the
same stores again and again. Companies and stores need to communicate with these
customers on a regular basis by mass media, telephone, mail, email, etc. They can influence
a brand’s marketing mix decisions. Nothing will make a loyal customer happier than
appreciating them and showing them how much you value it. If a loyal customer is happy,
chances are high that he/she will recommend a brand or store to others.

Discount Customers: they are the ones that help ensure your inventory is turning over and
due to this they are a key contributor to cash flow. However, such customers can also raise
cost-of-sales as they are more inclined to return product.
Impulse Customers: these are the ones, who pick up products or brands on impulse, i.e., they
make decisions just before the purchase. For a brand or store, there is nothing more exciting
than assisting an impulse customer and having them respond favorably to our
recommendations. Brands want to target their displays towards this group of customers
because they will provide them with a significant amount of customer insight and knowledge.
Need-based Customers: these customers are driven by a specific need. They will buy a brand
only if it fulfils their need. Or when they enter a retail store, they will look to see if they can
find that brand that fulfils their need. If not, they will leave right away. They buy for a
various reasons such as a specific occasion, a specific need, or an absolute price point. These
customers can be converted into loyal customers if their need is taken care of immediately
and they are delighted. Marketers may not find them to be a lot of fun to serve, but, at the
end of the day, they are the greatest source of long-term growth for a brand.
For a brand or a retailer, it is important to remember that need-based customers can easily
be lost to competitors.

Example: Lux may lose out a customer to Fiama Di Wills soap or a retailer may lose out
a customer to Internet shopping or a different retailer. To overcome this issue, positive
communication is required, usually in form of innovation and improved service.

Wandering Customers: for a retail store, such customers make the largest segment in
terms of traffic, while, at the same time, they make up the smallest percentage of sales.
There is not a whole lot you can do about this group because the number of Wanderers
you have is driven more by your store location than anything else. Especially, if a retail
store is located in a mall or a shopping centre, it will attract more number of such customers.

Self Assessment

State whether the following statements are true or false:
4. A consumer is a potential customer.

5. Customers in consumer markets are also referred to as the ultimate consumers.
6. Loyal customers are likely to engage in negative word-of-mouth communication.
7. Impulse consumers are more likely to pick up products from Point-of-purchase displays.
8. Wandering customers make up the largest percentage of a retail store’s traffic and sales.

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