MKT 300 Exam 2

1) CHAPTER 10: Marketing Research and Analytics

1) CHAPTER 10: Marketing Research and Analytics

Marketing Research

• consists of a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decisions makers involved in marketing goods, services, or ideas

Marketing Research Process

• 5 step process

MRP Step 1: defining the objectives & research need

• first sign is a departure from normal or expected results

• to determine whether to conduct research, two questions must be addressed

  • what info is needed to answer specific research questions

  • how should that info be obtained

MRP Step 2: designing the research

• hypothesis: an informed guess or assumption about a certain problem or set of circumstances

  • accepted or rejected hypotheses act as conclusions for the research effort

• identify type of data needed

MRP Step 3: collecting the data

• includes secondary & primary data

Secondary Data

• collected prior to the start of the research project

• includes external & internal data

• pros: inexpensive & fast access

External Data

• includes government sources, trade associations and shows, periodicals, and corporate info

Internal Data

• Includes organization’s own databased

Primary Data

• collected to address specific research needs

• includes focus groups, in-depth interviews, and surveys (sample)

• pros: tailored & relevant

Sample

• choose a group of customers who represent the customers of interest and generalize their opinions to the market segment

MRP Step 4: analyzing the data & developing insights

• converting data into information that is useful in making more effective marketing decisions

• data requires careful interpretation

• managers must understand the research results & relate them to a context that permits effective marketing decisions

• what insights can you develop by analyzing this data?

MRP Step 5: developing & implementing an action plan

• executive summary

• body of the report

• conclusions

• limitations

• supplements, including tables, figures, and appendices

Secondary Research

• a marketing research project often begins with a review of the relevant secondary data

Inexpensive Secondary Data

• quickly accessed at relatively low cost

• ex) US Bureau of the Census

Syndicated Data

• and their services

• generally more detailed, but can be very costly

• ex) Nielsen!!! + more

Scanner Data

• data from scanner reading of UPC labels at checkout

• information helps firms assess what is happening in the marketplace

Panel Data

• information collected from a group of consumers, organized into panels, over time

• data collected from panelists often include records of purchases & responses to survey questions

Primary Research

• collection techniques include qualitative data & quantitative data

Qualitative Data

• yields descriptive non-numerical information

• observation entails examining purchase and consumption behaviors

• includes in-depth & focus group interviews

In-Depth Interviews

• trained researchers ask questions one-on-one with a consumer

• expensive and time-consuming

Focus Group Interviews

• small group of 8 to 12 people with a trained moderator

• now often take place online

• unstructured

• about new or existing products or services

Quantitative Data

• yields empirical information that can be communicated through numbers

• includes surveys, panel (and scanner based), and experimental research

Surveys

• most popular type of quantitative data

• questionnaires: a document that features a set of questions designed to gather information from respondents that will lead to more effective marketing decisions

• structured vs unstructured response

  • close ended vs open ended

• what to avoid when designing a questionnaire???

Panel (and Scanner Based Research)

• can you either secondary or primary data

• ex) new balance tester community

Experimental Research

• experiment: a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on other variables

• can also be used on social media

Secondary Pros & Cons

• pros: saves time since readily available, free or inexpensive (except for syndicated data)

• cons: maybe not precisely relevant, maybe not timely, sources maybe not original, sources may be biased

Primary Pros & Cons

• pros: specific to immediate data needs & topics at hand, offers behavioral insights

• cons: costly, time-consuming, requires more training & experience

Big Data

• data sets that are too large or complex to analyze with conventional data management and data mining software

• enormous changes in recent years

• accesses from numerous sources

  • sales transactions, customer relationship management (CRM) systems, websites, social media, blogs, locational devices, wearables

Data Warehouse

• stored in large computer files

Data Mining

• a variety of statistical tools used to analyze big data to uncover previously unknown patterns or relationships among variables stored in the data warehouse

5 V’s of Big Data

• volume, variety, velocity, veracity, and value

Marketing Analytics (1)

• used to make sense out of these data

• firms can access big data that contain billions of pieces of customer information and purchase histories from many different sources in a variety of types and sizes

Marketing Analytics (2)

• used to make marketing decisions that span all the elements of a firm’s current or planned marketing strategy, including:

  • how to determine marketing mix (4 P’s) data

  • how to determine which segments to target

  • how to understand and manage those customer segment

  • how to create micro-segmentation strategies at a local level

Descriptive Analytics Tools

• helps firms organize, tabulate, and depict their available data, usually in easy-to-understand reports, tables, and charts

Predictive Analytics Tools

• rely on historically available data to forecast the future, such as what is predicted to happen to a firm’s product sales in the next month, next quarter, next year, and so on

Prescriptive Analytics Tools

• analyses that use simulations, which ask a series of what if type questions, and optimization techniques to find the most effective or best result, which helps firms better understand what they should do

Active Analytics Tools

• artificial intelligence algorithms used to analyze input gathered from various data bases including data from the Internet of Things (IoT)

Ethics of Using Customer Information (privacy)

• strong ethical orientation must be an integral part of a firm’s marketing strategy and decision making

• extremely important for marketers to adhere to ethical practices when conducting marketing research

2) CHAPTER 9: Segmentation, Targeting, and Positioning

2) CHAPTER 9: Segmentation, Targeting, and Positioning

STP Process (Segmentation, Targeting, and Positioning)

• markets generally employ a 5 step process for target market selection

Step 1: Establish the Overall Strategy or Objectives

• derived from mission & objectives

• consistent with SWOT

Step 2: Use Segmentation Methods

• segmentation variables: characteristics of individuals, groups, or organizations used to divide a market into segments

• multiple segmentation methods: often employ a combination of segmentation methods

Variables for Segmenting Consumer Markets

• geographic, demographic, psychographic, benefit, and behavioral segmentation

Geographic Segmentation

• organized customers into groups on the basis of where they live

• Geographic Information Services (GIS)

• area within region (state, city, neighborhoods, zip codes) most useful for companies whose products satisfy needs

Demographic Segmentation

• most commonly use include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class

  • easy to identify and measure

Psychographic Segmentation

• allows people to describe themselves using characteristics that help them choose how they occupy their time and what underlying psychological reasons determine these choices

  • self-values

  • lifestyle

    • VALS (Values, Attitudes, and Lifestyles): developed by SRI Consulting Business Intelligence, classifies consumers based on psychological characteristics that are correlated with purchase behavior and key demographics

  • self-concept

Benefit Segmentation

• group of consumers on the basis of the benefits they derive from products or services

• powerful tool

Behavioral Segmentation

• occasion segmentation: heavy, moderate, or light use and nonusers

• loyalty segmentation: loyal customers most profitable in the long term

Step 3: Evaluate Segment Attractiveness

• 5 factors: identifiable, sustainable, reachable, responsive, and profitable

Identifiable

• who is in their market?

• are the segments distinct from one another?

• does each segment require a unique marketing mix?

Substantial

• how large is the market segment in terms of size and buying power?

Reachable

• can the market be reaches through persuasive communication and product distribution?

Responsive

• customer must react similarly and positively to the firm’s offering

Profitable

• assess potential profitability of each segment, both current and future

  • key factors to determine profitability:

    • current market growth

    • future market growth

    • market competitiveness

    • market access costs

Step 4: Select a Target Market

• 4 strategies

• key factor is the marketer’s ability to pursue the market

Undifferentiated Targeting Strategy

• customers have similar needs for a product

• a single marketing mix directed at the entire market (mass marketing)

Differentiated Targeting Strategy

• heterogeneous market

• different offering for each market

Concentrated Targeting Strategy

• targeting a single market segment using one marketing mix

Micromarketing or One to One

• firms tailors a product or service to suit an individual customer

Step 5: Identify and Develop Positioning Strategy

• market positioning: defining marketing mix variables so target customers have a clear, distinctive, desirable understanding of what the product does

Value Proposition

• communication the customer benefits to be received from a product or service

• 4 value proposition components:

  • target market

  • offering name or brand

  • product/service category or concept

  • unique point of difference/benefits

4 Positioning Methods

• value

• salient attributes

• symbols

• competition

Positioning using Perceptional Mapping

• displays in two or more dimensions

• the position of products or brands in the consumers’ minds

• ideal points: where a particular market segment’s ideal product would lie on the map

6 Positioning Steps to Derive a Perception Map

• 1) determine consumers’ perceptions & evaluations in relation to competitors

• 2) identify the market’s ideal points and size

• 3) identify competitors’ positions

• 4) determine consumers preferences

• 5) select the position

• 6) monitor the positioning strategy

3) CHAPTER 11: Product, Branding, and Packaging Decisions

3) CHAPTER 11: Product, Branding, and Packaging Decisions

Product

• a good, service, or idea received in an exchange

Core Customer Value

• basic problem-solving benefits that customers are seeking

Actual Product

• brand name, quality level, packaging, features/design

Associated Services

• financing, product warranty, product support

Consumer Products

• products and services used by people for their personal use

• 4 types within this

  • convenience, shopping, specialty, and unsought products

Convenience Products

• relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort

Shopping Products

• items where buyers are willing to extend considerable effort in planning and making purchases

• more extensive search, available substitutes, and less frequent purchase

Specialty Products

• items with unique characteristics that buyers are willing to expend considerable effort to obtain

• require extensive search, generally higher price points, and no ready substitutes

Unsought Products

• products purchased to solve a sudden problem

• products that customers are unaware

• products that people do not necessarily think of buying

• no search, price is not important and purchase compelled

Business Products

• not a consumer product!

• products bought to use in a firm’s operations to resell or to make other products

• purchased to satisfy the goals of the organization

Product Item

• a specific version of a product that is distinct offering among an organizations line of products

Product Line

• a group of closely relation product items viewed as a unit because of marketing, technical, or end-use considerations

Product Mix

• total group of products that an organization makes available to customers

Depth of Product Mix

• the number of products within a product line

• change in depth

  • firms may add items to address changing consumer preferences or to preempt competitors while boosting sales

  • occasionally, it is also necessary to delete products to realign resources

Breadth of Product Mix

• the number of product lines offered by the firm

• change in breadth

  • firms often add new product lines to capture new or evolving markets

  • sometimes necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities

Brands

• increase awareness and provides a way to differentiate from competitors

• consists of brand name, URLs, logos & symbols, characters, slogans, and jingles/sounds

Value of Branding for Customer & Firm

• facilitate purchasing

• establish loyalty

• protect from price competition

• are assets

• affect market value

Brand Equity

• the marketing and financial value associated with a brand’s strength in a market

• 4 elements of brand equity: brand name awareness, perceived value, brand associations, brand loyalty

Brand Name Awareness

• the more aware consumers are with a brand, the higher the chances of purchase

Perceived Value

• the relationship between a product’s benefits and its costs (quality)

Brand Associations

• the mental and emotional links that consumers make between a brand and its key attributes

Brand Loyalty

• occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category

• brand-loyal customers are important source of value

Branding Strategies

• includes brand ownership, naming brands/product lines, brand and line extension, co-branding, brand licensing, and brand repositioning

Brand Ownership

• manufacturer or natural brands: initiated by producers to ensure that producers are identified with their products at the point of purchase

• private distributor brands: initiated and owned by a reseller, manufacturers are not identified

Naming Brands and Product Lines

• family brands: corporate name used across brands and product lines

  • ex) Heinz and Kraft

• individual brands: products have individual identities

  • ex) General Mills has Bisquick, Gold Medal, Wheaties, and Yoplait

Brand and Line Extension

• brand extensions: same brand name in different product line

• line extensions: same brand name within the same product line

• brand dilution: a brand is only as good as its last extension (too much)

Co-Branding

• marketing two or more brands together

• can enhance perceptions of quality through links between brands

Brand Licensing

• common for toys, apparel, accessories, and entertainment products such as video games

Brand Repositioning

• change in a brand’s focus

• not without costs and risks

Packaging

• come in different types and offer a variety of benefits to consumers, manufacturers, and retailers

• important brand element that has more tangible or physical benefits than other brand elements have

• primary and secondary packaging

Key Roles of Packaging

• attracts the consumers’ attention

• enables products to stand out from their competitors

• allows for the same product to appeal to different markets with different sizes

• a recent development is sustainable packaging

Labeling

• label information is determined by regulations, varying country to country

• requirements typically come from various laws

• is a communication tool

4/5) CHAPTER 14/15: Pricing Concepts for Capturing Value

4/5) CHAPTER 14/15: Pricing Concepts for Capturing Value

5 C’s of Pricing