Customer Insights

SESSION I

Learning Outcome:

Understand the range of customer

contexts in which the marketer
operates
 Assessment Criteria

At the end of this session you should be able to:

• Explain the characteristics and context of the organization’s
customers
• Outline how the process of segmentation, targeting and positioning
supports differentiation in the market
 Customer Insights
Organizational contexts:
Key concept to consider from the Applied Marketing unit:
Stakeholder concept:
Marketers need to understand whom their activities affect:
Organizational operations are largely influenced by the opinions and perspectives of a
wide range of people who have an interest in the organization. A stakeholder is any
individual or group(s), or community that has an interest in an organization, and is
impacted by the operations of the organization.
Stakeholders can be categorized into three:
• Internal
• Connected
• External
 Customer Insights

Organizational contexts:
Key concept to consider from the Applied Marketing unit:
Stakeholder mapping:
This is a method marketers can use to identify all the different stakeholders of an
organization. Mendelow’s Stakeholder Matrix (Mendelow, 1991), assists to categorize
stakeholders according to their level of interest in an organization, and power to
influence the organization
• Power: refers to the ability of a stakeholder to influence an organization’s
resources and strategy
• Interest: refers to the degree of concern in the outcome of an organization’s
activities
 Customer Insights
Stakeholder mapping:

Keep Satisfied Monitor Closely

LEVEL OF POWER

MENDELOW’S
STAKEHOLDER MATRIX

Minimal Effort Keep Informed

(Mendelow, 1991) LEVEL OF INTEREST

 Customer insights

Organizational contexts:

Ownership and finance

Marketers need to consider the differences between the types of profit, not-for-
profit, and public sector organizations and the motives of setting up these
companies e.g. financial, social and personal. Different countries/jurisdictions
may have different descriptions and requirements for these companies as well as
different regulations on the operations of these companies
 Customer Insights

Organizational contexts:
Scope of operations
Organizations’ scope of operations may differ in terms of the area covered,
investments in the market, and product characteristics. Considerations here
include:
• Regional companies
• Multinational companies
• Global companies
 Customer Insights

Organizational contexts:
Size of operations
Organizations’ size may defer and this will have a significant influence on their
resources and capabilities. In the Kenyan context, the majority of companies are
recognized as SMEs (small and medium enterprises). A category of micro
enterprises also exists, which are smaller in comparison to SMEs. There is no
clear definition or law for this, however.
Size is generally determined by the resources a company has which can generally
be considered with the 5Ms framework. This framework sets out the different
resources available to an organization; money, man, minutes, machinery,
material
 Customer Insights

Organizational contexts:
Not-for-profit Organizations
These are also referred to as third sector organizations as they are neither
profit making nor public
The major difference between the profit and not-for-profit sectors is that
the latter does not seek to make profits. However, this does not mean these
organizations are not interested in cost control; most NPOs will operate
under strict budgetary controls.
 Customer Insights
Organizational contexts:
Not-for-profit Organizations
These organizations will have to consider an extended view of who the customer is e.g.: A
charity for vulnerable children:
• Provides services for vulnerable children
• Provides opportunities for volunteers
• Solicits donations from concerned benefactors
• May provide services on behalf of the government i.e. a government may contract
and pay charities to provide specific services such as catering for vulnerable
children
NPOs will generally also have other stakeholders involved such as suppliers, distributors,
and the local community etc. so marketers also need to take this into consideration
 Customer Insights
Organizational contexts:
Not-for-profit Organizations:
National and International NGOs
NGOs are organizations that are not related to the government; they may receive funding
from a government but there is no government oversight. INGOs work around the world.
In the Kenyan context, they are referred to as PBOs; Public Benefit Organizations which
refers to a voluntary membership or non-membership grouping of individuals or
organizations, which is autonomous, non-partisan, non-profit making and which is:
• Organized locally, nationally, or internationally
• Engages in public benefit activities in predefined areas
• Registered as such by the authority
Membership PBOs are those that recruit members while non-membership PBOs only
have a Board and a Secretariat
 Customer Insights

Organizational contexts:
Not-for-profit Organizations
National and International NGOs
Public benefit activities are those that support or promote public benefit by
enhancing, or promoting environmental, economic, social, or cultural development,
protecting the environment, advocating or lobbying on general public interest
issues, or the well-being of the public or individuals and organizations
Objectives that PBOs can achieve include: agriculture, disability, education, energy,
culture, conservation, gender, children, poverty eradication, human rights, peace
building, human rights, health, information, population and reproductive health,
disaster prevention, pastoralism and marginalized communities, water and
sanitation, animal welfare, youth, relief, informal sector, and old age
 Customer Insights

Organizational contexts:
Not-for-profit Organizations:
Voluntary organizations and charity sectors
Organizations set up and run by volunteers for the benefit of the community. They are
usually independent, self-governing bodies of people who have voluntarily joined
The main purpose of these organizations cannot be to make profit, even if salaries are
paid to the staff and expenses paid to volunteers – money raised must be used for the
benefit of the community
Charities are run by trustees, who are personally liable for the charity’s debts,
personally responsible for the proper use of the charity’s funds and assets, responsible
for the charity meeting its objectives, responsible for the health and safety of
employees, and ensuring the organization complies with the law
 Customer Insights
Organizational contexts:
Not-for-profit Organizations:
Trade Unions
Refers to an organisation of workers who collectively work for common goals e.g.
protecting their trade, increasing wages, improving safety standards and working
practices etc. Trade unions bargain with employers on behalf of their members in a
process known as collective bargaining
For one to become a member, individuals must be workers in the trade or industry and
pay a membership fee. This fees usually goes towards catering for the costs incurred by
the operations of the union
The members become the union’s customers and it will still have to consider the needs
of other stakeholders such as the government and companies their members work for
 Customer Insights
Organizational contexts:
Not-for-profit Organizations:
Professional Bodies
This is a grouping for professional workers e.g. CIM is a professional body for
marketers. Professional workers register to become members of these organizations,
where some charge a fee to cater for the cost of operations. In some professions,
professional body membership is a prerequisite for working e.g. engineers must be
members of the Engineers Board of Kenya
These bodies provide benefits such as networking, advice, setting professional
standards, and qualifications. Some organizations can be both a trade union and a
professional body e.g. Kenya Medical Practitioners, Pharmacists and Dentists Union
(KMPDU)
The main customer for these organizations are the members; there are also other
stakeholders to be considered e.g. the government
 Customer Insights

Organizational contexts:
Not-for-profit Organizations:
Motives
The role of marketers in NPOs may be to:
• Appeal for donations
• Raise awareness of an issue
• Encourage volunteers
• Appeal to the local community for support etc.
NPOs also have to be aware of the motivations of the organizations they wish
to ally themselves with
 Customer Insights
Organizational contexts:
Educational Institutions
This covers a wider range of organizations including schools, colleges, universities,
and other institutions of further learning e.g. vocational training
Schools are a market for organizations selling educational products. There are private
and state sponsored schools with the former relying solely on charging fees for
children to attend, while the latter being funded by taxes, though still charging a
small fee to cover some operating costs
The government sets the national curriculum for all subjects and all state schools
must adhere to this, while private schools can opt to offer the government based
curriculum or an approved international curriculum (Kenyan context)
The major customers for schools are the children and the parents, for independent
schools children and parents may be local or international
 Customer Insights
Organizational contexts:
Social Enterprises
Traditionally, profit-making organizations are valued based on the profits they make
which is usually paid, in form of dividends, to shareholders. However, organizations are
increasingly expected to show the social value of their activities, and to adopt ethical
practices and standards (social value entails considering the wider benefits to society
of doing business)
The push to be seen to create social value has encouraged organizations to develop CSR
policies which demonstrate to customers, staff, and other stakeholders, that the
organization supports social values
The CSR concept argues that organizations should look to their impact on the wider
community. They should take responsibility for the impact of their activities on
customers, suppliers, employees, shareholders, local communities, the environment,
and other stakeholders
 Customer Insights

Organizational contexts:
Public Sector Organizations
These organizations are owned or controlled by the government and they
can either be under direct administration (funded through taxation and
have no commercial obligation) or state owned enterprises (operate
according to commercial principles)
With state owned enterprises, the government has significant control of
the organization’s operations through full, majority, or major minority
ownership
 Customer Insights

Organizational contexts:
Public Sector Organizations:
The roles of the public sector include:
• Policy setting
• Implementation of government policy
• Funding
• Provision of services
• Enhance the quality, efficiency, and effectiveness of services, processes,
management, and leadership
 Customer Insights

Organizational contexts:
Profit Making Organizations
Franchise
A business model that can be applied/adopted by organizations as a strategy for
business expansion. It occurs when a business owner (franchisor) licenses, at a
fee, to a franchisee, its rights to:
• Sell and distribute its branded products (goods and/or services),
• Its business model and know-how (technical and non-technical),
• Its intellectual property,
• Its business procedures
• Its name, brand and ideas
 Customer Insights

Organizational contexts:

Profit Making Organizations

Franchise
The different types of franchise agreements include:
• Business format franchising
• Product/trade name franchising
• Management franchising
 Thank you!

Any Questions?