Marketing quiz 2

Marketing research

The process of developing, collecting, analyzing, and reporting insights used to solve a specific marketing problem.

Purpose of marketing research

To inform decisions about customer needs, opportunities, new products, marketing strategies, and changes in customer attitudes/behavior.

Qualitative data

Descriptive, non-numerical information focused on stories, perceptions, interpretations, and expressive descriptions.

Quantitative data

Information communicated through numbers or metrics and suited to formal/statistical analysis.

Exploratory research

Unstructured, informal research used to gain background information and clarify a problem or tentative hypothesis.

Conclusive research

Structured research designed to verify insights objectively and help marketers make decisions.

Exploratory research purpose

Generate background information and insights when the problem is not yet fully understood.

Conclusive research purpose

Verify insights and help choose a course of action among alternatives.

Exploratory research data needs

Vague or not fully defined.

Conclusive research data needs

Clear and well defined.

Exploratory research data collection

Flexible, open-ended, and relatively unstructured.

Conclusive research data collection

Usually structured with a rigid, well-defined procedure.

Exploratory research sample

Usually relatively small and subjectively selected.

Conclusive research sample

Usually larger and more objectively selected to support generalization.

Exploratory research analysis

Informal and typically non-quantitative.

Conclusive research analysis

Formal and typically quantitative.

Focus group

A small group, typically 8-12 people, brought together for open discussion for research purposes.

Focus group moderator

The person who guides the focus-group discussion and encourages participation.

Focus group advantage

Can reveal detailed attitudes, behaviors, needs, and issues researchers did not anticipate.

Focus group disadvantage

Can be distorted by dominant, shy, confrontational, dishonest, or socially influenced participants.

Social listening

Monitoring social media conversations and trends related to a brand, competitors, or an industry.

Customer advisory board

A small group of actual customers that provides ongoing feedback and advice about products and marketing strategy.

In-depth interview

A longer one-on-one interview designed to provide deep insight into an individual's perceptions.

Descriptive research

Research used to describe characteristics of a phenomenon or market.

Experimental research

Research that manipulates variables to make causal inferences about relationships between variables.

Independent variable

The variable manipulated by the researcher in an experiment.

Dependent variable

The outcome measured to determine whether it changes in response to the independent variable.

Causation

A relationship in which a change in one variable produces a change in another.

Dove Dry Spray textbook example

Dove used marketing research from Nielsen to support its positioning as a best-selling deodorant.

Nielsen

Information/data company used in the textbook's Dove Dry Spray example.

Oscars textbook example

The textbook uses declining Oscars viewership and a younger audience as a trend that could trigger additional research.

Windex textbook example

Sustainable packaging can create concern if consumers think the product may perform worse than the traditional version.

Columbia + Salvation Army textbook example

A clothing company donating to a clothing-related nonprofit illustrates strong brand congruence.

Patagonia + Alzheimer's Association textbook example

A clothing company donating to a medical research nonprofit illustrates weaker brand congruence because the connection is less obvious to consumers.

Adobe customer advisory board example

Adobe uses customer advisory boards to let customers use products, collaborate with experts/executives, and provide feedback.

Disney focus-group example

Disney uses kid-centric focus groups with young children to learn which characters, TV content, toys, and videos appeal to them.

Nike/Reebok descriptive research example

Nike and Reebok could survey young women about workout frequency, athletic-shoe use, and purchases to describe the market.

Market

A group of individuals and/or organizations with a need/desire for a product class and the ability, willingness, and authority to purchase.

Four requirements of a market

Need/desire, ability, willingness, and authority to purchase.

Consumer market

A group of customers who buy products/services for personal use or sharing rather than business purposes; also called B2C.

Business market

A market involving products/services sold to other businesses for resale or for use in making other products/services; also called B2B, industrial, or organizational.

Product can be consumer or business depending on end use

The same product can belong to a consumer or business market based on who buys it and how it is used, such as a chair for a home versus an office.

Target market

A group of people or organizations for which a business creates and maintains a marketing mix designed to satisfy their needs.

Target market selection process

The five steps: identify targeting strategy; choose segmentation variables; develop segment profiles; evaluate segments; select target markets.

Step 1 of target market selection

Identify the appropriate targeting strategy.

Step 2 of target market selection

Determine which segmentation variables to use.

Step 3 of target market selection

Develop market segment profiles.

Step 4 of target market selection

Evaluate relevant market segments.

Step 5 of target market selection

Select specific target markets.

Undifferentiated targeting strategy

One marketing mix directed at the entire market for a product.

Homogeneous market

A market in which a large proportion of customers have similar needs.

Heterogeneous market

A market made up of customers with diverse needs.

When undifferentiated targeting works

It works best when customers have sufficiently similar needs and a single marketing mix can satisfy most of them.

Undifferentiated targeting textbook examples

Commodities and staple foods such as flour, salt, and conventionally raised produce.

Universal car example

An undifferentiated strategy would struggle with a universal car because car buyers have diverse needs.

Concentrated targeting strategy

One marketing mix aimed at one specific market segment.

Concentrated targeting advantage

Specialization; a firm can serve one distinct group very well and compete with larger firms using limited resources.

Concentrated targeting disadvantage

Dependence on one segment creates risk if that segment's demand declines.

Ironman textbook example

Ironman uses concentrated targeting toward people interested in challenging/rugged athletic experiences.

Differentiated targeting strategy

Two or more market segments served with different marketing mixes.

Differentiated targeting advantage

Can increase total-market sales and help absorb excess production capacity.

Differentiated targeting disadvantage

Usually requires more production processes, materials, people, and higher costs.

Omega + Swatch textbook example

Omega and Swatch created the Moonswatch to reach a lower-price watch segment, illustrating differentiated targeting/new segment expansion.

Nike lecture example

Nike was used as a differentiated-targeting example because it serves multiple target segments simultaneously.

Market segmentation

The process of dividing a broad consumer or business market into subgroups based on common characteristics.

Market segment

Individuals, groups, or organizations sharing characteristics that cause them to have similar product needs.

Seth Godin lecture quote

“Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t.”

Demographic segmentation

Segmenting customers by characteristics such as age, gender, race/ethnicity, income, education, occupation, family size, household life cycle, religion, and social class.

Demographic segmentation lecture advantages

Easy to define, easy to measure, and often quickly/free available.

Demographic segmentation lecture disadvantages

Limited insight and risk of overgeneralization.

Facebook lecture example

Facebook's ad-settings panel was used to illustrate demographic targeting.

Geographic segmentation

Segmenting customers by location-related variables such as region, urban/suburban/rural status, city size, county size, market density, climate, and terrain.

Geographic segmentation lecture advantages

Local-market relevance and logistical efficiency.

Geographic segmentation lecture disadvantages

Can depend on assumptions and has limited scope.

McDonald's Italy lecture example

McDonald's location-specific menu items, including tomato-and-mozzarella Panzerotti in Italy, illustrate geographic segmentation.

Psychographic segmentation

Segmenting customers by personality, motives, values, lifestyles, attitudes, interests, opinions, and similar psychological/lifestyle characteristics.

Psychographic segmentation lecture advantages

In-depth understanding, personalization, and emotional communication.

Psychographic segmentation lecture disadvantages

Time-consuming, expensive, and subjective.

Psychographic data sources lecture

Focus groups, interviews, and conversations with sales teams.

Jeep Wrangler textbook example

Jeep Wrangler targets consumers who embrace an outdoor/adventure lifestyle, illustrating psychographic/lifestyle segmentation.

Behavioristic/behavioral segmentation

Segmenting customers by how they behave toward or use a product, such as usage level, end use, occasion, loyalty, benefits sought, and price sensitivity.

Behavioral segmentation lecture advantages

Actionable insights and predictive power.

Behavioral segmentation lecture disadvantages

Data-intensive, potentially expensive, and dynamic as behavior changes.

Behavioral segmentation data sources

Browsing metrics, CRM systems, billing systems, e-commerce stores, email metrics, point-of-sale data, and transaction data.

CRM examples from lecture

Salesforce, HubSpot, and Zoho.

Benefit segmentation

Dividing a market according to the benefits consumers want from a product.

Conditions for effective benefit segmentation

Benefits must be identifiable; people can be divided into recognizable benefit-based segments; and at least one segment must be accessible to the firm.

Business-market segmentation variables

Geographic location, type of organization, customer size, and product use.

Business geographic segmentation example

Lumber producers may segment by geographic region because customer needs differ by location.

Business type-of-organization example

A carpet producer may distinguish automobile makers, home builders, commercial carpet contractors, wholesalers, and retail carpet outlets.

Business customer-size segmentation

Large and small business buyers may require different prices, quantities, purchasing procedures, and service levels.

Business product-use segmentation

Business customers can be segmented by what they use a product for, such as computers used for engineering, scientific research, accounting, or telecommunications.

La Croix textbook example

La Croix illustrates consumer-market marketing that emphasizes fun and healthy brand attributes.

Supermicro textbook example

Supermicro illustrates business-market marketing by emphasizing practical data-center performance and efficiency.

Zara/H&M/Express textbook example

These retailers are used as examples of age-based segmentation toward teens and very young adults.

Hilton Tru textbook example

Hilton's Tru brand targets younger travelers with flexible, smaller rooms, lower prices, and access to trendy restaurants/bars.

IMAN Cosmetics textbook example

IMAN Cosmetics illustrates race/ethnicity/skin-tone considerations in segmentation.

OGX textbook example

OGX's Renewing + Argan Oil of Morocco is shown as an example of advertising designed to appeal to women.

Dollar General textbook example

Dollar General is an example of geographic targeting centered historically on smaller towns.

Weather Channel textbook example

The Weather Channel combines sales data and microclimate/weather information to help advertisers target specific local conditions.