MKT 230 Exam 2 Study Guide Rick Wills

Market Research

The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities

Importance of Market Research

Facilities strategic planning
Assesses opportunities/threats
Ascertains potential for success
Helps determine feasibility of a strategy
Improves marketer's ability to make decisions

Process/Steps of Market Research

1. Locating/Defining issues or problems
2. Designing the research project
3. Collecting data
4. Interpreting research findings
5. Reporting research Findings

Research Design

an overall plan for obtaining the info needed to address a research problem/issue

Hypothesis

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

Primary Data

observed, recorded, or collected directly from respondents. It is collected to address a specific problem.

Secondary Data

compiled both inside and outside the organization. It is for some purpose other than the current investigation.

Interpreting research findings

First step is drawing conclusions from most research is displaying the data in table format

The data must be analyzed
Data requires careful interpretation

Managers must understand the research results and relate them to a context that permits effective decisions making

Reporting Research findings

Prepare a formal, written document

Determine level of detail

Clear and objective presentation

Clear and objective presentation

Consider the intended audience

Point out deficiencies in the data

Summary/recommendations first

Validity/reliability

When a research method measures what it is supposed to be

Survey types

Mail
Telephone
Online
Personal interview

Marketing Information Systems

A framework for managing and structuring information gathered from internal and external sources

Importance of Marketing Information Systems

Essential professional standards be established

Standards are necessary because ethical and legal issues develop

Target Market

A group of people or organizations which a business creates and maintains a marketing mix specifically designed to satisfy the needs of group members

Market Segmentation

The process of dividing a total market into groups with relatively similar products needs to design a marketing mix that matches those needs

Undifferentiated Targeting

Should be a homogeneous market (customers have similar needs for a product)

A single marketing mix directed as the entire market

Differentiated Tageting

Heterogeneous market (individuals or organizations with diverse needs for products in the same class)

Targeting two or more segments with a market mix for each

Psychographic Variables

Personality attributes
Motives
Lifestyles

Business Segmentation Variables

Geographic location

Product use

Type of organization

Customer size

5 Steps to Target Marketing

Identify the appropriate targeting strategy

Determine which segmentation variables to use

Develop market segment profiles

Evaluate relevant market segments

Select specific target markets

Product Positioning

Creating and maintaining a certain concept of a product in customers minds

Marketers seek to position a product so that it appears to have the characteristics the target market most desires

Repositioning

Positioning decisions are for all products, existing and new

Changing price, changing distribution, changing image through promotion, changing packaging, changing benefits

Sales forecasting

The amount of a product a company expects to sell during a specific period at a specified level of marketing activities

Customer Forecasting

Surveying customers

Regarding types/quantities of products

They tend to buy during a specific time period

Sales Force Forecasting

Surveying a firm's sales force regarding anticipated sales

Expert Forecasting

Prepared by people outside the firm such as economists, consultants, etc.

Market Tests

Making a product available to buyers in one or more test areas and measuring purchases and consumer responses

Info about customers actual rather than intended purchase behavior

Effective at estimating sales of new products

Time-consuming and expensive

Buying Behavior

The decision processes and actions of people involved in buying and using products

Stages off buying behavior

1. Problem recognition
2. Information search
3. Evaluation of alternatives
4. Purchase
5. Post Purchase evaluation

Categories of situational influence

o Physical surroundings
o Social surroundings
o Time
o Purchase reason
o Buyer's mood and condition

Psychological influences

o Perception
o Motives
o Learning
o Attitudes
o Personality and self-concept
o Lifestyle
o Operate on buyers internally, but are acted on by outside forces

Perception Process

1. Selective exposure
2. Selective distortion
3. Selective retention

Patronage Motives

Influence where a person purchases products on a regular basis

Self Concept

Ones view of oneself

Closely linked to personality types

Lifestype

an individuals pattern of living expressed though activities, interests, opinions

Strongly influenced the buying decision process

Marketers segment markets by lifestyle

Dalphi Technique

creating initial forecasts submitting them for averaging then refining

Enduring Involvement

Ongoing and long-term involvement with a product or product category

High-Involvement Prodcuts

Products that are visible to others and or are expensive

EX: car, computer, home

Situational Involvement

Temporary or dynamic involvement resulting from a particular set of circumstances

Low-involvement products

Products that tend to be less expensive and have less associated social risk

EX: grocery items, t shirt

Routinized Response

Used when buying frequently purchased, low-cost items that require very little search and decision efforts

Extended problem solving

Occurs when purchasing unfamiliar, expensive, or infrequently bought products

Limited problem solving

Utilized when buying products occasionally or when one needs to obtain information about an unfamiliar brand in a familiar product category

Impulse buying

Involves no conscience planning, a powerful urge to buy something immediately

Social Influences

The forces other people exert on ones buying behavior

Family influences: have a direct impact on the buying decision process

Culture

The accumulation of values, knowledge, beliefs, customs, objects and concepts that a society uses to cope with its environment and passes on to future generations

B2B Marketing (Business Markets)

Individuals, organizations or groups that purchase a specific kind of product for resale

Direct use in producing other products, or use in general daily operations

Types of B2B Marketing

Producer markets
Reseller markets
Government markets
Institutional markets

Reciprocity

An arrangement in which 2 organizations agree to buy from each other

Reciprocal agreement that threaten competition are ILLEGAL

Attributes of Business Customers

Well-informed about products purchased

Demand detailed info and technical specifications

Help the firm achieve organizational objectives

Engage in rational buying behavior

Often form partnerships with suppliers

Description Method of business buyers

When products are highly standardized a buyer can order by describing quantity, grade, and other attributes

Inspection Method of business buyers

used with some products that have unique characteristics and vary in regard to condition

Sampling Method of business buyers

Entails taking a specimen of the product and evaluating it for suitability before purchase

Negotiation Method of business buyers

Some purchases are based on negotiated contracts wherein buyers describe what they need and sellers submit bids

New task purchase (type of business purchase)

an item is purchased to be used to perform a new job or solve a new problem

modified rebuy purchase (type of business purchase)

a new task purchase that is changed on subsequent orders or when straight rebut requirements are modified

straight rebuy purchase (type of business purchase)

A routine purchase of the same products under approximately the same terms

Inelastic Demand

Demand that is not significantly altered by a price increase or decrease

Derived Demand

Demand for business products that is the result of demand for consumer products

Joint Demand

When 2 or more items are used in combination to produce a product

Demand for the product drives demand for both items

Fluctuating Demand

The demand for any given business product can change in response to consumer demand changes

Environmental Influences of business buying decisions

Include competitive and economic factors, political forces, legal and regulatory forces, technological changes and sociocultural issues

Individual Influences of business buying decisions

Personal characteristics (age, education, personality, tenure of position) of participation in the buying center

Organizational Influences of business buying decisions

Include company objectives, purchasing policies and resources and size and composition of buying center

Interpersonal Influences of business buying decisions

The relationship between people in the business, trust, and collaboration are important

Why market internationally?

Provides growth opportunities

Many countries offer assistance and research to encourage international business

CIBERS: Centers for International Business Educational Research

Environmental forces

o Uncontrollable forces that affect marketing decisions
o Research to: understand the needs/desires of international customers is crucial to global marketing success
o May be dramatically different in international markets

Sociocultural Forces

Marketing activities are influenced by beliefs and values regarding family, religion, education, health and recreation

Consumer preference for products depends on their impression of the country of origin

Faster acceptance of a product or service through sensitivity and understanding of cultural differences and cultural similarities

Economic Forces

o Standards of living
o Availability of credit
o Buying power
o Income distribution
o National resources
o Exchange rates

Political, legal, & regulatory forces

Nation's legal and regulatory infrastructure reflect its political situation

Import tariff: any duty levied by a nation on goods bought outside its border and brought in to the country

Quota: a limit on the amount of goods an importing country will accept for certain product categories in a specific period of time

Embargo: a government's suspicion of trade in a particular product or with a given country is generally directed at a specific country or product

Trade Control Types

Exchange control: government restrictions on the amount of particular currency that can be bought or sold that can affect international trade

Import tariff, quota, embargo

Ethical Forces

Accepted business practices vary from country to country

Differences exist in ethical standards

Bribes

Intellectual property protection

Different modes of operations

Bribes are an entrenched part of the business culture in many nations

Self-Reference Criterion (SRC)

The unconscious reference to one's own cultural values, experiences and knowledge

Usually includes the sense that your culture is best

Cultural Relativism

The concept that morality varies from one culture to the next

Concerns on Competitive forces

Be aware of the competitive forces in the countries they target

Identify the interdependence of countries and the global competitors in those markets

Be mindful of a new breed of consumers (ex: the global customer)

Nations establish the infrastructure and rules for the types of competition that can take place

NAFTA

Agreement that eliminates most tariff restrictions on agricultural and manufactured products to encourage trade among the US, Canada, and Mexico

1994 it was established

EU

union of European nations established in 1958 to promote trade among its members

27 countries; one of the largest single markets

WTO

International organization dealing with the rules of trade between nations

Founded in 1995

Successor to GATT

153 members representing

95% of global trade

Licensing

An alternative to direct investment that requires a license to pay commission or royalties on sales or supplies used in manufacturing

Franchising

A form of licensing in which a franchiser, in exchange for a financial commitment, grants the franchisee the right to market a product in accordance with the franchiser's standards

Importing

the purchase of products from a foreign source

Exporting

the sale of products to foreign markets

Outsourcing

Contracting noncore operations with an organization that specializes in that operation

Digital Media

Electronic media that functions using codes (rather than film or magnetic media)

Use multiple digital media in their marketing strategies

Be aware of rapid changes in technology

Digital Marketing

Uses digital media to develop communications and exchanges with customers

Communicate with consumers

Reach new markets

Target markets more precisely

E Marketing

Refers to the strategic process of distributing, promoting, pricing products, and discovering the desires of customers using digital media and digital marketing

Ability to share information between marketers and consumers among employees with suppliers

Addressability

Ability to obtain digital information
Allows consumers to find information about competing products, prices, and reviews and become more informed about a firm and the relative value of its products

Interactivity

Allows customers to express their needs and wants directly to the firm in response to its communications

In contrast to the one-way communications of traditional marketing media

Many digital media allows for on-going real-time, conversations between marketers and consumers

Accessibility

The ability to obtain digital information on competing products, prices, reviews and details on firms

Mobile marketing allows marketers to offer promotions via customers mobile devices

Connectivity

Keeps customers and businesses connected with each other

Online social network sites help improve connectivity with large diverse audiences

Social Networks

2/3 of consumers have visited online social networking sites

There are many different sites and that number is growing (myspace, facebook, linkedin, twitter)

Facebook

The largest social networking site in the world

Appeals to a broad demographic, fastest growing demographic is women over 55

Encourages consumer interaction with companies and products

Good resources for marketers

Market research: Low-cost means of advertising; reach new markets

Twitter

A hybrid social networking and micro-blogging

Companies announce sales, promotions and product updates via tweets

Can help (re)build customer relationships

LinkedIn

A social network for professions

A profile resembles a resume

Facilitates professional networking, job, searches and recruiting

Companies use the site to familiarize people with their business

Virtual Realities

Simulated environments where users select an avatar

Can involve many thousands of players

Many programs have their own currency (convertible to the dollar)

Lets users buy and sell goods and own property in the virtual

Many real businesses have set I virtual stores to take advantage of the popularity

Changes/Challenges of Digital Media

Requires constant effort to stay on top of technological change

Customers' habits and consumption patterns change

Learning how to use new media can be daunting for many marketers

Creators of digital media

Create their own media outlets

Critics of digital media

Comment, post ratings & reviews

Collectors of digital media

Collect and organize content generated by creators and critics

Joiners of digital media

Includes anyone who becomes a user of social networking sites