What is the importance of understanding the customer profile?

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What is the importance of understanding the customer profile?

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What is the importance of understanding the customer profile?

Explanation & AnswerSolution by a verified expert

Explanation
Customer profiling refers to the act of defining the customers. It gives detailed characteristics of customers. It also states who the customers are with respect to gender, age, personality, and so on. This customer profiling also includes giving information about what are the different needs of the customers and their expectations for products or services.

The following explains the significance of understanding customer profile:

Customer profiling gives a clear picture to the company regarding the customers the company wants to serve, which helps the company to segregate the entire market into small segments and choose the target market among these clusters.
After deciding the target market, the company closely works to study the needs of the targeted customers and opt to satisfy them, which means the product or services of the company are developed by keeping the needs of the customers in mind, which makes the service or products best suited for the customers.
The company also creates a marketing mix for the product, keeping in mind the profile of the customers. This includes designing products, promotional strategies, determining the pricing strategy, and the place at which the product will be available along with the distribution channel. Everything will be designed keeping the customers in mind. For instance, the company targeting rural customers might think that low-priced products in small quantities will be preferred by them.
Sample Response
The following is the significance of comprehending the customer profile:

It helps the company to develop a target market for the company.
It also helps in providing services and developing products that are best suited for its customers' needs.
The marketing mix of the company can also be designed better with the understanding of customer profiles.

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