LOOMER MARK EXAM 2

marketing research

- refers to the collecting, recoding, analyzing, and interpreting of data to aid in decision making related to selling goods and services

- often addresses business problems and seeks to answer questions critical to business growth and reduce risk

marketing research process:

1. Define the research objectives and needs

2. design the research

3. collect the data

4. analyze and develop insights

5. develop and implement action plan

defining research needs

- what information is needed to answer specific research questions?

- how should that information be obtained?

designing the research

- next researchers identify the type of data needed and determine the type of research necessary to collect it

- the objectives of the project drive the type of data needed

collect the data

differentiate between primary and secondary data

secondary data

- collected prior to the start of the research project

- sourced both internally and externally

- gaps identified can be addressed with primary data

pro: readily accessible

con: may not be specific or timely enough to meet the firms research objectives

- syndicated data is also secondary data: ex jd power, nielsen

primary data

- collected to address specific research needs through methods such as focus groups, in depth interviews, surveys etc

- sample chosen to represent target customers

syndicated scanner data

- data from scanner UPC labels

- ex: retailer, product, purchase, household

syndicated panel data

- research panel consists of groups of consumers organized by a shared characteristic

- often includes purchase records, consumption diaries and survey response

quantitative data

- involves structured responses that can be statistically tested

- summarized numerically

qualitative data

- broad open ended questions

- more informal than quantitative

- includes observation, interviews and focus groups

observation

examining purchase and comsumption behaviors

- personal or camera recordings

- tracking customers

survey research

most popular type of quantitative primary data collection

- set of questions to gather info from a larger sample size

- part art part science

experimental research

a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable.

in-depth interviews

- researchers ask a small group to come together for an in depth discussion about a particular topic

- gathers qualitative data about: reactions, opinions, marketing stimuli

analyze data and developing insights

- analyzing and interpreting data thoroughly and methodically

- raw numbers on their own have limited data

- dont tell me a weather report tell me if i need a jacket

develop and implement an action plan

- start with two page executive summary highlighting key insights

- body contains analysis and results

- closing includes managerial implications and conclusions

big data

- data sets too large and complex to analyze

- changed marketing research by: amounts of data people have access to, ability to connect data, collecting and storing data etc

the 5 V's of big data

Volume, Velocity, Variety, Veracity, Value

volume

inherent big data

variety

big data comes in a variety of forms including numeric and textual data and formats

velocity

refers to how quickly the data can be gathered and used

veracity:

refers to the different levels of accuracy and reliability firms must be aware of

value:

big data systems from the insight it provides

marketing analytics

refer to research and analytics methods and qualitative and quantitative to answer marketing questions

- comes from wide range of sources like psychology, stat, ecometrics, management info systems and computer science

analytic methods can be divided into 4 broad categories

descriptive

predictive

prescriptive

active

descriptive analytics

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

predictive analytics

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

product complexity

Products consist of more than their physical properties or basic functionality

core value

the problem being solved by the product, is made up of both actual product attributes and related, nonphysical aspects

consumer products

used by people for their personal use: classified by the way they are used and purchased: specialty, shopping, convience, unsought

speciality

customers express a strong subjective preference, consumers will expend effort to seek out the right one, unique characteristics luxury goods

shopping

those for which consumers will spend time shopping around, compare alternatives such as price and features

convenience

those for which the consumer is not willing to extend significant effort on, purchased frequently no need to evaluate alternatives, used immediately

unsought

the consumers either do not normally think of buying or dont know exist, do not address a current unmet need

product mix decisions

- complete set of all products and services offered by a firm

- portfolio of products

- groups of associated items

product mix and line decisions

- reflects breadth and depth of the company's product lines, number of product lines offered by firm

why increase breadth?

new product lines can capture growth from new or evolving categories

ex: new line of non dairy products for health conscious consumers

why decrease breadth?

poor sales, increased competition, shifting internal priorities or manufacturing inefficiencies

ex facing increased competition from talenti and others

why increase depth?

- adding new items can help maintain share while addressing changing consumer preferences

- preempt competitors

ex: adding chocolate pb pretzels to appeal to variety seekers

why decrease depth?

firms periodically review performance and delete products that are poor performing or an inefficient use of resources; sometimes referred to as SKU rationalization

ex: removing a flavor with low sales and unique ingredients

packaging:

more tangible benefits than other elements

- attract the consumers attention

- provides consumer needs

- allows products to appeal to diff markets

primary packaging

the one the consumer uses like toothpaste tube or a can of soda

secondary packaging

exterior that contains the primary package and provides the UPC label

packaging as an indentifier

product packaging can become synonymous with brand identity

product labeling

determined by regulations and labeling rules vary from country to country

- use terms such as "natural", "organic" "made in the USA" products must meet specific tests or thresholds

name of brand alluding to product offering

ex chickfila

leverage a word or term not related to the product

ex apple, regal

be an invented word

zillow, xerox

URL's and Domains

Consumers need to be able to easily find information about your brand or product online

- Squatting on brand account names and requiring payment to release them is a common problem

ex: peleton.com is owned by an oil and gas firm

logos and symbols

Visual branding elements help to quickly and memorably identify a brand to consumers

- Logos are typically a mix of words and iconography

- Symbols are icons or logos without words

ex: coca cola and pepsi

characters

Characters are brand symbols that seek to exemplify or personify characteristics or attributes about the brand

ex human, animal, animation

slogans

Slogans are short, memorable phrases that are used to describe elements of the brand offering or persuade consumers to consider the brand

ex: america runs on dunkin, im lovin it

jingles or sounds

memorable and distinctive audio clips comprised of music, messages or both

Why brands are valuable

- Facilitate purchases through awareness and associations

- Establish loyalty from consumers

- Protect from price competition through perceived value

- Serve as assets to the firm - Impact the market value of the firm

awareness

A company lives on dies based on brand awareness."

The more consumers are aware of a brand, the higher the likelihood of purchase

- Awareness is critical for convenience products that are bought without much evaluation (snacks, gum)

- also important for infrequently purchased items or those the consumer has never purchased before

associations

Brand associations reflect the mental and emotional links that consumers make between a brand and its key attributes

- Often the result of a firm's advertising and promotional efforts

Brands can develop personalities through their marketing efforts, can you think of any examples?

Consumers develop links between brands and their own identity

loyalty

Brand loyalty occurs when a consumer buys the same brand's product or service repeatedly instead of buying from multiple suppliers within the same category

- Brand-loyal customers are an important source of value

- Loyal consumers are less sensitive to price

- Marketing costs to loyal consumers are much lower

value

The perceived value of a brand is the relationship between a product's benefits and its costs

- Value is typically evaluated relative to a comparable set of competitors

market value

the value of a brand contributes to a firm's worth in terms of assets

national brands

National brands are owned and managed by manufacturers

- manufacturers can maintain control over the quality of their products and brand image

- The majority of consumer brands in the U.S. are national manufacturer brands

private label brands

products developed by and sold by retailers

- In some cases, retailers manufacturer their own products, but in most cases private label products are produced by the same manufacturers who produce national brand products

brand families

- Firms can choose to use their corporate name across all product lines, marketing products as a brand family

If the corporate brand reputation is strong, the individual products can benefit from awareness and quality perceptions

ex:

heinz family of products

individual brands

- establish unique identities

A firm like P&G offers many products across a wide variety of categories, including brands consumers may believe to be competitors

- This strategy can allow the firm to capture greater market share

ex: P&G brand

line extension

A line extension refers to a new product under the same brand name within the same product line (same category) Pro-Health and 3DWhite are Crest line extensions

brand extension

new product under the brand name but in different product line (product category) Mouthwash, whitening strips, and whitening pastes are brand extensions

- ability to leverage existing brand awareness

not all brand extensions are successful

evaluate:

- the fit between the product class of the core brand and the extension

- consumer perceptions of the attributes of the core brand and limit extensions to categories with similar attributes

- Refrain from extending the brand name to too many products to avoid brand dilution

co-branding

refers to marketing two or more brands together

- Potentially beneficial to the participating brands by attracting the consumers of one brand to the others

- Can enhance perceptions of quality through links between brands

licensing

- refers to a contractual agreement between firms allowing each other to leverage rights and marks for some mutual benefit

- Common for toys, apparel, accessories, and entertainment products such as video games

- can help increase brand visibility and attract consumers from each property to one another

repositioning

a strategy in which marketers change a brand's focus

- Can be done to target new markets or realign the brand's core emphasis with changing market preferences

- Can boost vitality of brands seen as "dated" or irrelevant, or be required for brands seen as culturally insensitive

- Is a high-cost, high-risk strategy not entered lightly

ex The Aunt Jemima brand was rebranded to the Pearl Milling Company after backlash regarding racial stereotypes of the character

innovation

the process by which firms transform ideas into new product and service offerings

what challenges does innovation address?

- changing consumer needs

- market saturation

- diversification of risk

- trend cycles

incremental innovation

represents small improvements to existing offerings

breakthrough innovation

has significant impact in either altering or creating a market

changing consumer needs

changing needs, preferences and habits over time

consumers grow bored of existing offerings

market saturation

when a product or service has reached its maximum potential within in a marketplace, everyone who is going to buy one has already bought one

diversification of risk

- Having a broad portfolio of products can help insulate a company from performance risk

- "Don't have all your eggs in one basket."

- Especially relevant for product categories that satisfy "wants" more than "needs"

trend cycles

- Firms seek to capitalize on trends for incremental sales

- Certain categories of consumer goods, such as apparel and entertainment, are more reliant on trend cycles

- To succeed, the trend needs to align with the brand image and firm's core competencies

innovation improves relationships

- Some product innovations are launched to make supply chain partners happy

-Manufacturers may release products as exclusives to certain retail partners to demonstrate commitment to the relationship

product development process

1. generate idea

2. concept testing

3. product development

4. market testing

5. product launch

6. evaluation of results

idea generation

Firms constantly scan the environment to generate new product ideas

- Depending on the resources and structure of the company, they leverage different sources for idea generation

internal R&D

Large firms often maintain their own internal research and development (R&D) department to generate new products that will lead the market

- associated with high product dev. costs but are often source of breakthrough

R&D corsotia

bring together manufacturers, small and medium businesses, researchers, and state and local governments to facilitate idea generation regarding a specific topic of interest

- lower costs and risks while benefiting

ex. many specialize in clean energy manufacturing, efficiency and decarbonation

licensing

Firms may purchase licenses to use technology or ideas from other research-intensive firms

- Small biotech firms frequently license their inventions to larger pharmaceutical firms

brainstorms

semi-structured, group approach for rapid idea generation, often to solve a problem

- meant to be expansive and open, no idea should be immediately accepted or dismissed

-best brainstorms are structured and moderated

outsourcing

Firms can hire outside consultants to help generate ideas and develop new products and services

- Design firms help clients generate new product and service ideas across a wide variety of industries

competitor products

It's not uncommon for firms to be "fast followers," copying the innovations of a competitive firm

- Reverse engineering involves taking apart a product, analyzing it, and trying to recreate it with your own resources

- Products with patents or other proprietary protections cannot be copied, so reverse engineered products must be substantively different from the original

customer input

essential for idea generation and throughout product development

- Another successful customer input approach is to analyze lead users, users of the product who modify existing products to their own specific needs

concept testing

- brief written description of the product, often with accompanying images or models

- presented to potential buyers or users to gauge their reactions

- Consumer responses to the various concepts trigger the marketing research process

product development

- an engineering team develops a product prototype based on consumer feedback from concept testing

- Product designers align consumer needs and wants for the product with their own knowledge about available materials and manufacturing capabilities and technology

cross functional efforts balance considerations across:

- supply chain engineering

- manufacturing

- marketing

- finance

protoypes

- allows consumers to interact physically with the product concept before it goes into production

- Some prototypes, such as concept cars revealed at auto shows, never actually go into production

- 3D printing technology has increased the speed with which firms can create prototypes for consumer testing

alpha testing

firm determines whether the product will perform according to its design and whether it satisfies the need for which it was intended

- internal team does

- rigorously structured

beta testing

potential consumers examine the product prototype in a real-use setting to determine its functionality and performance, and to identify potential issues specific to its use

- end users

- completely unstructured

market testing

- consumers are exposed to the product and surveyed on its various attributes

- Based on these results, the firm will decide if and how to move forward with the product launch

- It is estimated that roughly 50% of new product concepts are premarket tested using Nielsen's BASES test

with BASES how are concepts scored

- value rating

-purchase intent

-purchase frequency

-purchase volume

testing marketing

mini product launch used to estimate demand

- higher risk

- resource intensive

product launch

If the market testing returns with positive results, the firm is ready to introduce the product to the entire market

- most critical step in the product development process and requires tremendous financial resources and coordination of the marketing mix

- The firm confirms its target market(s), positioning, and budget

- Timing of the launch is critical

evaluation of the results

- Satisfaction of technical requirements

- Degree of customer acceptance

- Satisfaction of firm's financial requirements

- Is it working as expected?

- Do consumers like it?

- Is it profitable?

diffusion of innovation

the process by which the use of an innovation spreads throughout a market group

- happens over time and across various categories of adopters

- bell-shaped curve, where a few people buy the product or service at first, then more buy until a product becomes widely adopted