Section 5: Market Research, Global Segmenting, Targeting, and Positioning

What are the 8 steps in the research process?

1. Identify the information requirement.​

2. Redefine the information requirement while addressing the ‘Self-Reference Criterion’ issue.​

3. Choose a geographic range.​

4. Collect secondary data.​

5. Assess the time/investment needed to acquire the missing data.​

6. Design the research method and collect that data.​

7. Analyze the data (based on the initial information requirement).​

8. Present the findings.

What are some common questions in step 1 of the research process?

• What information do i need to start the research process?

• What questions will i need to ask that will allow me to ‘segment’ my research data

What does it mean when a product is early in the product life cycle?

The product is unknown, and only indirect secondary data is available

What does it mean when a product is late in the product life cycle?

The product is known among customers, and substantial secondary data is available

What is Self-Reference Criteria (SRC)? and why is it important?

It is when a person evaluates a foreign culture in terms of ‘right vs wrong’ rather than noticing the differences. Often people base their evaluations on their own culture and bringing awareness will enhance management’s willingness to conduct market research, ensure research design has minimal home-country bias, and prepares management for results that don’t align with their expectations.

What are some important characteristic to consider for step 3: choose a geographic range?

• The economic region

• The country

• The province/state

• The city/neighborhood

• The town or Village

What are the two sources of secondary data?

• Internal sources: company records, staff

• External Sources: trade journals, government sites, third-party sources

What are some common RESEARCH methods for Step 6: Design the Research Method

• Surveys

• Focus Groups

• Observation

What is the general rule for Step 6: Design the Research Method when it comes to data?

Use multiple indicators, do not rely on one set of data! but be aware of diminishing returns.

What are some Advantages of surveys in data collection?

• Large amount of data can be collected

• Both quantitative and qualitative can be captured

• Cost effective

What are some Disadvantages of surveys in data collection?

• Inaccurate responses

• Technology limitations

• SCR could bias questions! (to prevent, use back and parallel transitions to ensure accuracy and validity

What is the best method to gather quantitative data?

Surveys due to responses can be summarized in percentages, averages, or other statistics.

What is the best method to gather qualitative data?

Ask open-ended or in-depth questions, as the intent is to get access to the person’s thoughts and feelings on the subject.

What are some problems in gathering primary research data?

• Lack of willingness to respond

• Incomplete and out-of-date government population statistics

• No accurate maps of population centers

• Questions translated incorrectly makes answering them impossible

• Literacy issues would make written questionnaires useless

• Different dialects can make a national questionnaire

What is Probability Sampling in surveys?

a method of selecting a sample from a target audience where every individual has a known and equal chance of being chosen. Problem is that the results can be skewed due to all other groups who didn’t get selected, has been ignored.

What is Non-Probability Sampling in surveys?

A method of selecting a sample from a target audience where NOT every individual has an equal chance of being selected, and those who are the intended audience will be targeted. Provides a complete image, however bias can play a role in the results.

What are some Data Collection Methods?

• Consumer Panels

• Focus Groups

• Observation

What are Focus Groups?

These are groups of individuals who are valid representation of the target audience that are invited to discuss various topics regarding the research questions and is led by a trained moderator.

How does observation work in data collection?

Often uses tools like cameras, real-time purchase scanners, location-tracking based on smart-phone technology, and more. it results in a correlation of data that provides an accurate profile of the target audience.

What are the two issues regarding observation in data collection?

• Reactivity: People react differently if they know they are being watched

• Privacy: At what point does data collection become “invasion of privacy”? therefore legal issues.

What are some ways, to perform Step 7: Analyze the Data ?

• Use graphical models to present the data

• Statistical techniques to predict outcome variations.

What are the two types of data collection results that you may find?

• Latent Market

• Incipient Market

What is a Latent Market

An undiscovered segment that will demand the product when they are educated and it is made available. First mover advantage is key!

What is a Incipient Market?

An undiscovered segment that is not yet ready for the product but, it will demand the product in the near future! First mover advantage WITH patience is key!

What is important to know regarding to executive interest in Step 8: Interpretation and Presentation?

Executives are interested in briefings, findings, recommendations, and conclusions! therefore present graphical summaries.

What was the Pre-Internet Assumptions of Global Segmentation?

• Every country is different

• Cultural preferences are consistent within an entire country

• Sub-culture differences within one country are minor

• Clustering of national markets that are beside each other will always gain economies of scale

• It is not cost-effective to segment within one country.

What was the Post-Internet Assumptions of Global Segmentation?

• Identical segments exist in different countries.​

• Multiple segments exist in each country.​

• Research sub-cultural preferences (not national preferences) for highest quality research.​

• Multiple micro-markets (if crossing borders) can justify a business case.

What are 4 criterias for Global Market Segmentation?

• Demographics

• Psychographics

• Behavioral Characteristics/Preferences

• Desired Benefits

What are some attributes in demographics?

• Income

• Population

• Age Distribution

• Gender

• Education

What is Economic Dualism?

It defines two or more economic (or social) classes that exist at the same geographic locations. This characteristic creates two distinct economic and marketing opportunities.

What are the 4 categories of Psychographics?

• Idealists

• Materialists

• Lower and Upper Middle-Class

• Lower Working Class

What are idealists?

These are the 5% to 10% of a population; who are wealthy, successful, but do not feel a need to advertise their success

What are materialists?

These are status-sensitive business professionals who use obvious consumption to communicate their success. In addition, they tend to use debt to project a false image of wealth.

What are Lower and Upper Middle-Class individuals?

These are the 25% to 50% of a population, and have no extremist views and prefer stability. In addition they support social and ethical concepts but purchases are governed by economics.

What are Lower Working Class individuals?

These are people who are in debt, with no savings, no power or influence. They have minimal expectation for a positive future and are concentrated in high-crime urban inner cities.

Why is Behavioral Characteristics/Preferences important in Global Market Segmentation?

It is so that marketers can determine when and why people purchase a product; how much and how often.

What is 80/20 Pareto’s Law?

It is a law that states that 80% of a company’s revenues come from 20% of some factor, which can range from its customer, technology, experience, etc.

What is value from a marketer’s viewpoint?

Whatever is offered vs. the cost!

What is a Marketing Model Driver?

It is defined as the factors that will determine success.

What are some Target Market Strategy Options?

• Standardized

• Niche marketing

• Multi-Segment Marketing

What is Standardized in Target Market Strategy?

It means that there is mass marketing, with a single marketing mix, Therefore minimal advertising cost, no product adaptation, and low costs. Relies on high volumes for profits

What is Niche Marketing?

A single marketing mix is applied to the same type of segment that is located in several geographical areas. It is designed for intense depth into multiple identical segments. (Ex. Expensive colognes, Industrial air compressors, etc.)

What is Multi-Segment Marketing?

A single marketing mix is applied to similar segments that are located in several geographic areas. Results in a wider market coverage.

What is Positioning?

This is the key thing that you’re product is doing, that is different from your competition!

What are the 3 types of Positioning Strategies?

• Attribute or Benefit: (Economic, Reliable, Safe, Durable)

• Quality (High or Low)

• Price (High or low)

What is ‘National Pride’ (Local) Positioning?

A high emphasis on national pride; prefers local products!

What is ‘Foreign Perception’ Positioning?

A big emphasis on high quality perceived with an explicit culture. (Ex. A car made in Italy - would be a foreign perception positioning)

What is Global Brand Equity Positioning?

Identifies the product as part of a global branding strategy (Minimizes references to any country)