Exam 2 Marketing

b. Research methods are generally classified as the following:

exploratory, descriptive, casual

Consumers are fundamentlaly

rational

Customers aim to maximize their benefits (like quality, value, and satisfaction)

while minimizing their costs (like money, time, and effort)

bounded by limits on knowledge, time, and cognitive abilities

Involvement refers

level of interest or emotional connection a consumer has with a product

Low Involvement Products:

low risk and/or are low in price

don't require thought or research

ex. soap, toothpaste

High Involvement Products

expensive, highly visible, and/or highly risky

more time before purchasing

Routine/Habitual Response

found in low involvement, frequently purchased products regular or habitual decisions

same brand without much thought

ex: grocery store

Limited Problem Solving

some prior experience but unsure, they may engage limited problem-solving

ex: new flavor from a favorite ice cream brand, (some thought but not extensive research)

Extended Problem Solving

products classified as high involvement are decided upon using extended problem-solving

because products are expensive, visible, and/or risky, a consumer would spend a significant time and effort

ex: purchasing laptop might involve comparing brands, reviews, considering specifications

Impulse Buying:

consumers but products spontaneously without any pre-shopping intentions

The consumer buying process is a

series of steps that consumers typically go through when making a purchase

Problem Recognition:

identify a difference between your current, less-than-pefect state and an ideal state

ex: you're bored and want to be entertained

crucial because it triggers your decision to buy something or solve a problem

Maslow's Hierarchy of needs

theory that can help us understand why we recognize specific problems and how we prioritize our efforts to solve them

includes physiological needs (food, water), safety needs (security, health), love and belongingness needs (friendship, family), esteem needs (prestige, accomplishment), and self-actualization needs (achieving one's potential).

Information Search

one a problem is recognized, consumers seek information to solve it

Internal Search:

information from memory, like past experiences or knowledge

ex: remembering a dessert at a specific restaurant

External Search:

information from outside sources, like online reviews, friends, or experts

ex: blogs, yelp reviews, influencers

Evaluation of Alternatives:

As consumers, we compare products based on price, features, quality, or brand reputation.

Evoked Set:

Instead of considering every available option, consumers have a specific set of products they consider

ex: deciding on a lunch destination (3-5 different places you already know vs every tally store_

Purchase

Consumers decide and make the actual purchase.

Heuristics or mental shortcuts can often influence this decision

ex: high price equals higher quality,

scarcity - "limited stock" sign signals that is it sought after and might not be available soon

Post-Purchase

after buying, consumers evaluate their decision

Cognitive Dissonance

state of tension that arises when a consumer has conflicting thoughts about purchase

buying laptop and whether is was worth the money or if cheaper model was smarter

Successful companies

needs to anticipate customer needs and desires and create products and services that meet those needs before customers even know they exist

-step requires a deep understanding of the market, customer behavior, emerging technologies, and the ability to take risks and invest in innovation

Marketing research is

gathering and analyzing information about a market or target audience to better understand their needs, preferences, and behaviors.

-helps businesses make informed decisions about products, services, and marketing strategies

While Ford's comment provides one perspective on innovation and product creation,

most firms rely on feedback from current and potential customers.

5 specific questions on Market Research

1. What is Marketing Research?

2. Where did it come from?

3. Why is it important?

4.What types are there?

5.How's it done?

Customer Assessments

help firms forecast things like the likelihood of specific customer behaviors and customer satisfaction.

Net Promoter Score (NPS)

example of marketing research tool

based on "How likely are you to recommend our product/service to a friend or colleague

to evaluate satisfaction and loyalty to a specific business or brand.

0 means "not at all likely"

10 means "extremely likely"

Promoters (score 9-10):

customers who are highly satisfied with the product/service and are likely to recommend it to others

Passives (score 7-8):

customers who are somewhat satisfied with the product/service but may not be enthusiastic enough to recommend it to others

marketing research has impacted marketing strategy in many ways,

providing businesses with insights into customer needs, preferences, and behavior that can be used to develop products, position brands, set prices, and create effective advertising and promotion strategies.

Cluster Analysis

is a statistical technique used to group customers or products based on similar characteristics.

emphasizing low prices to first group and high-quality products to the second group

Multidimensional scaling (MDS)

statistical technique used to visually represent the similarities and differences between products or brands based on customer perceptions.

MDS uncovers what customers use (product features, colors, etc) to evaluate products or brands

Car manufacturers use MDS to weigh features

such as safety, reliability, fuel efficiency, and style that customers use to make decisions. These findings can be used to develop marketing campaigns and product changes.

Marketing research can be classified into two general types:

applied research and basic research.

Basic research (

also known as fundamental or pure research

is conducted to advance knowledge in a particular field without a specific practical application.

most research by faculty at universities falls into this category

questions conducted at marketing FSU:

How should firms implement self-serving technology for their customers?

How does wearable technology affect consumer behavior?

How does a firm create an effective online customer experience?

Applied research is focused on

solving practical problems or addressing real-world issues

Basic research is focused

on advancing knowledge in a particular field without a specific practical application in mind.

Marketing Research process

includes six key steps

Problem Definition

Research Design

Sampling

Data Gathering

Data Analsis

Report Preparation

(1) Problem Definition:

identifying the information needed to make informed business decisions and determining the research objectives and goals

given the importance of accurately identifying the problem researchers regularly use exploratory research

open-ended questioning and conducted with methods such as

a. manager interviews

b. expert interviews

c. secondary data

d. qualitative research

(2) Research Design

Once the research problem has been defined, the next step is to design the research study

must determine several key directions for the study, such as type of data used and the research method utilized for the study

Primary data:

data that is collected specifically for the project at hand. Data collected through surveys, focus groups, and experiments are all classified as primary.

Exploratory Research

to create a hypothesis instead of testing one using sources like focus groups, observational research, and other secondary sources.

(5) Data Analysis:

With the data in hand, the researcher now determines the statistical methods needed to identify patterns, trends, and relationships.

determine if data should be analyzed using descriptive statistics, inferential statistics, or other methodologies

(6) Report Preparation:

: The final step is preparing a report summarizing the research findings and providing recommendations for business decisions.

may include tables, charts, graphs, and other visual aids to help communicate research to stakeholders

Geographic Apple Music

Available in more countries, giving it a broader global reach

Geographic Spotify

Although available in fewer countries, Spotify tends to dominate in the markets it operates in

Psychographic Apple Music

Integrated with the Apple ecosystem for a seamless user experience. Appeals to customers with a strong affinity for the Apple brand

Psychographic Spotify

Focuses on personalized and data-driven music discovery, attracting users who enjoy exploring new music

Behavioral Spotify

Offers a free, ad-supported tier to attract users who may not be willing to pay for a subscription

Cluster analysis

is a statistical technique used to classify customers based on the segmentation bases mentioned above

main objective- maximize the similarity of individuals within each cluster while maximizing the dissimilarity between different groups.

Active Subscribers:

These users regularly use Spotify and are willing to pay for an ad-free experience. They might use Spotify across various devices and use features like downloading songs for offline listening.

Concentrated (Niche) Marketgin

target a single or a few segments (niches)

-good stategy for smaller firms with limited resources

ex: tesla focusing on electric vehicle market

Micromarketing

practice of tailoring products, services, and marketing programs to the needs and wants to specific individuals and local customer segments

Local Marketing; Target cities, neighborhoods, and/or specific stores

Individual Marketing: Target a single individual

ex: online retailer Amazon, recommends products based on browsing and history

Forecasting demand can be very simplistic methods depending on

costs, products, market characteristics, time span, the purpose of the forecast, historical sales data, and many other variables.

Trend Analysis:

Using aggregate sales data from many years to determine general trends

Test Markets:

This is when a company tries out a new product in a small area before selling it everywhere.

A fast-food chain might introduce a new burger in just a few restaurants to see how well it sells before deciding whether to offer it in all their locations.

Positioning

is crucial to the success of a product as it relates to how a customer views a specific product.

ex: iPhone and positioning it as a unique user experience, allowing for very different attitude towards the technology (not just a smartphone, but an IPHONE)

The question of how foreign markets will react to a domestic product is

paramount when considering a global customer focus. Two primary factors influencing this reaction are culture and language.

Sociocultural Forces:

Sociocultural factors, like language and interpretation difficulties, can pose challenges for global marketers.

ex: Chevrolet had to rename its Nova model in Spanish-speaking countries because "No Va" translates to "doesn't go" in Spanish.

Ethical and Social Responsibility Forces:

Issues like situational ethics, corruption, and bribes can impact market entry. Companies must maintain ethical standards while navigating different business practices and cultural norms.

Technological Forces:

The Internet, mobile technology, and advertising have revolutionized global business.

Technological advancements have enabled the international success of app-based companies like Uber and Spotify.

Adaptation is pursued when

the market has unique characteristics based on language, culture, regulations, income level, economic conditions, infrastructure

Advantages

-meet customer needs more precisely

-differentiate products

-comply with government regulations

Gray market goods are authentic

but may not meet the same standards or come with the same warranties as goods sold through official channels

Hence the name suggests the products aren't technically black market (or fake) while also not being completely legal.

for example, a camera bought on the gray market might not be eligible for warranty service in the buyer's country.

Automobiles:

cars, especially luxury models, can be found on the gray market.

Although titling the car can prohibit some of these transactions, the gray market for cars does exist.

Nissan experienced this first-hard with their Skyline GT-R model

Detractors (score 0-6):

customers who are unsatisfied with the product/service and may even discourage others from using it

To calculate the NPS score,

the percentage of detractors is subtracted from the percentage of promoters.

-100 to 100, with higher scores indicating higher customer loyalty and satifaction

Product Development:

A better understanding of the customer base makes the new product development process much more efficient.

Whether fine-tuning a product concept's appeal, uncovering unmet needs, or discovering opportunities in the competitive landscape,

Research increases the likelihood of new product success

Product Pricing

Market research about pricing explores customer demand, pricing sensitivity, and competitive pricing strategies

ex: Uber uses data to calculate surge pricing rates

Marketing research began

with growth of TQM (Total Quality Management) movement

TQM

is a management approach focusing on improving product and service quality, customer satisfaction, and employee involvement.

originated in United States in 1950's and gained popularity in the 1980's and 1990's

TQM involves a set of principles and practices

that are designed to improve quality and customer satisfaction across all aspects of an organzation

Customer focus:

TQM emphasizes the importance of meeting and exceeding customer expectations by understanding their needs, preferences, and feedback.

-Organizations using TQM prioritize customer satisfaction and strive to improve their products and services based on customer feedback.

Process improvement

TQM involves a systematic approach to process improvement, with the goal of identifying and eliminating waste, reducing errors, and improving efficiency.

Organizations using TQM use data and metrics to track their progress and identify improvement areas.

Total Quality Management is designed to improve what across all aspects of an organization?

quality, customer satisfaction

Applied research is conducted

to solve practical problems or address real-world issues and is the type of research conducted by consulting firms.

Starbucks: How are customers responding to the recent changes in our loyalty program?

Apple: Did using Best Buy as a marketing channel affect our brand reputation?

TikTok: How does our algorithm compare to our competitor companies?

the critical difference between applied research and basic research

is their goals and focus

a. A general classification of data

a is primary or secondary.

Secondary data

this is data that was already collected for another purpose. Census data and ACSI data are examples of secondary data.

Descriptive research

attempts to characterize a population by answering questions about customer buying behaviors. Specifically, "who, what, when, and why" as it relates to customer decisions.

Causal research

identifies cause and effect between variables by using experiments.

(3) Sampling

Sampling is the process of selecting a representative group of participants or customers to participate in the research study.

(4) Data Gathering

Once the sample has been selected, the next step is to collect the data using the chosen data collection methods.

primary data (surveys, interviews, focus groups, or other methods)

secondary data (census or ACSI)

Philip Kotler famously said,

"If you nail positioning and targeting, the rest falls into place."

Market segmentation is the process of dividing a market into distinct groups of

with similar needs, characteristics, or preferences

Demographic Apple Music

Typically targets more affluent users likely to pay for a streaming service.

Deomographic Spotify

Targets a broader user base, including younger users and students, with both premium (paid) and free (ad-supported) tiers

Behavioral Apple Music

It doesn't offer a free tier Offers exclusive content and early album releases to attract dedicated music fans

Casual Listeners

These users may not listen to music often but use the platform occasionally. They are likely more price-sensitive and might use the free, ad-supported version of Spotify.

Playlist Curators:

Spotify users who listen and actively curate their playlists. These users often use features like Discover Weekly and are engaged with the social aspects of the platform.

Podcast Listeners:

These users primarily use Spotify for its wide range of podcasts rather than music.

Undifferentiated (Mass) Marketing

Target the entire market with a single offer; ignore segments

works with new-to-the-world products for a limited time

ex: Ford Model T marketed as a car for everyone but adjusted once competitors

Differentiated (Segmented) Marketing

Target several market segments, each with a separate offer

ex: corolla for budget people and prius for environmentally

Differentiated marketing is an example of a(n) _____________________.

target market strategy

Cycle Analysis:

Analyzing sales for three to five years to assess consistent fluctuations

seasonal Analysis:

Analyzing daily, weekly, or monthly sales to assess seasonal influences

Nolan is planning to use three to five years of sales data to identify a consistent fluctuations in sales. Nolan is using a ___________ to help forecast his business needs.

cycle analysis

Multidimensional Scaling (MDS)

S) is a statistical technique often used in marketing for visualizing the level of similarity or dissimilarity between different products or brands.

provides map of perceptions, with brands perceived as similar places close together and those perceived as distinct placed farther apart

Ford and Honda are positioned close together,

, indicating that consumers perceive these as similar brands. They might be associated with attributes like reliability, value for money, and suitability for families.

BMW is somewhat closer to Ford and Honda but also has some distance from them.

his finding might indicate that consumers see BMW as offering some of the reliability of Ford and Honda but with added elements of luxury and performance.

Ferrari is positioned far away from the other three brands

This result indicates that consumers see Ferrari as a very different car brand, likely associated with attributes like high performance, luxury, and exclusivity