MKTG 302 Test 2

Steps in the market research process

Define/Formulate problem

Determine research design

Determine data collection method

Design data collection forms

Design sample and collect data

Analyze and interpret the data

Prepare the research report

Make decision

Research Problem

A restatement of the decision problem in research terms, from the researcher’s perspective.

the Research Problem - questions to ask when defining it

What decision do you need to make?

What information do you need to know to make that decision?

What is the best way to get that information?

Qualitative Research Techniques

These techniques rely on subjective data that reports opinions rather than exact historical data.

Quantitative Research Techniques

This method uses statistical computations such as trend extensions, computer simulations, and economic models.

Individual Interviewing

Pros:

Highly flexible method that can gather a great deal of data from a respondent.

Good control of sample, speed of data collection, and response rate.

Cons:

High cost per respondent.

Highly subject to interviewer bias and related interviewer effects.

Telephone Surveying

Pros:

Gathers information fast

Greater flexibility than mail surveys

Interviewers can explain or skip questions

Better response rates than mail surveys


Cons:

Higher costs than mail

Interviewer may bias results

Limited quantity of data can be collected

Low response rate and bias

Mail Survey

Pros:

Can collect large amounts of information at a relatively low cost per respondent

Generates more truthful responses than phone interviews


Cons:

Not flexible; study takes longer to finish

Low response rate

Little control over sample

Steps in the information-processing model and when they occur

Exposure: when stimulus come within range of sensory receptor nerves (vision)

Attention: when stimulus is “seen”

Interpretation: the assignment of meaning to received sensations

Memory: short term use of the meaning for immediate decision making or the longer term retention of the meaning.

Purchase & consumption decisions

Short term memory

portion of the total memory that is currently activated or in use

Short lived, limited capacity, elaborative activities (analysis, categorization, interpretation)

Long term memory

portion of total memory devoted to permanent information storage
(semantic & episodic)

Semantic memory

The basic knowledge and feelings an individual has about a concept

Episodic memory

the memory of a sequence of events in which a person participated

Chunking

Organizing individual items into groups of related items that can be processed as a single unit

Maintenance rehearsal

the continual repetition of a piece of information in order to hold it in current memory for use in problem solving or transferal to LTM

Operant conditioning

rewarding desirable behaviors such as brand purchases with a positive outcome that serves to reinforce the behavior

Classical conditioning

using an established relationship between one stimulus (music) and response (pleasant feelings) to bring about the learning of the same response (pleasant feelings) to a different stimulus

Strength of learning is determined by

Importance

Message Involvement

Mood

Reinforcement

Repetition

Dual Coding

Stimulus factors (physical characteristics of the ad) that influence attention

Size

Intensity

Attractive visuals

Color

Movement

Format

Contrast and expectations

Interestingness

Information quantity

Position

Isolation

Brand equity

the ability to benefit form a brand image

Brand image

what people think of and feel when they hear or see a brand name.

Brand personality

a set of human characteristics that become associated with a brand and are a particular type of image that some brands acquire.

Perceptual mapping

consumers’ perceptions of how similar various brands or products are to each other and relates these perceptions to product attributes

Brand Position

how a brand is different from competitors and where/how it sits in the minds of the target market.

Motivation

the reason for behavior. Consumers do not buy products; instead they buy motive satisfaction or problem solutions

Personality

individual’s characteristic response tendencies across similar situations; personality of the consumer guides the behavior chosen to accomplish goals in different situations.

Emotions

strong, relatively uncontrolled feelings that affect behavior. Strongly linked to needs, motivation, and personality. (Pleasure, arousal, dominance)

Attitude

an enduring organization of motivational, emotional, perceptual, and cognitive processes with respect to some aspect of our environment.

Manifest motives

motives that are known and freely admitted.

Latent motives

either unknown to the consumer or they are reluctant to admit them.

Components of attitude

Affective: feelings

Cognitive: beliefs

Behavioral: response tendencies

How to change attitudes, ad strategies (fear, humor, etc)

Change attitudes by changing cognitive component – shift beliefs – or by changing affective component – classical conditioning or by changing behavioral component through operant conditioning

Self-concept

the totality of the individual's thoughts and feelings about themselves

actual self-concept

how I actually see myself, how others actually see me

ideal self-concept

how I would like to see myself & how I would like others to see me

interdependent

obedient, sociocentric, holistic, connected, and relation oriented

independent

individualistic, egocentric, autonomous, self-reliant & self contained

extended self

self + possessions (ppl define themselves in part w their possessions)

disposition situation

Disposal can create significant social problems as well as opportunities for marketers. Some consumers consider ease of disposition an important product attribute.

expanded usage situation

expanded usage situation strategies can produce major sales gains. (ex: baking soda)

ritual situations

a socially defined occasion that triggers specific behaviors that often have symbolic meaning. Ex: Christmas, Graduation, March Madness, Weddings

physical surroundings

colors, aromas, music, crowding

social surrounding

tend to comply w social expectation, especially when behavior is visible

temporal perspective

effect of time on consumer behavior (ex: pressure for time has made people turn towards online shopping more)

task definition

the reason the consumption activity is occurring.

Self vs. gift

social expectations

ritualized situations

to elicit return favors

antecedent states

states are features of the individual person that are not lasting characteristics

Moods: feeling states that are generally not tied to a specific event of object.

Momentary Conditions: Temporary states of being (tired, ill, having extra money, etc.)

Stages of the consumer decision process, what affects the intensity of the process

Nominal decision making

habitual decision making, involves basically no decision. (bralind loyal purchases & repeat purchases)

limited decision making

internal and limited external search, few alternatives, simple decision rules on a few attributes, and little post-purchase evaluation

Extended decision making

extensive internal and external search followed by a complex evaluation of multiple alternatives.

How Information Search is done by consumers (internal and external searches)

What alternatives exits to evaluate

What are the criteria to help evaluate the alternatives

How does each alternative perform on each criteria

Awareness set

alternatives the customer is aware of

Evoked set

alternatives given consideration

Inert set

backup alternatives

Inept set

avoided alternatives

Maintenance marketing strategy

If the brand is purchased habitually (nominal) by the target market, the marketer’s strategy is to maintain that behavior. This requires consistent attention to product quality, distribution, and a reinforcement advertising strategy.

Disrupt marketing strategy

If the brand is not part of the evoked set and the target market engages in nominal decision making, the marketer’s first task is to disrupt the existing decision pattern. Tactics: free samples, coupons, striking package designs, comparative advertising.

Capture marketing strategy

Limited decision making generally involves a few brands evaluated on
only a few criteria. Brand is in evoked set. Search occurs mainly at the point-of-purchase or in readily available media. Objective is to capture as large a share as practical.

Intercept marketing strategy

If limited decision making and brand is not part of evoked set, objective will be to intercept the consumer during search. Emphasis will be on local media, point-of-purchase displays, shelf space, package design, etc. Coupons can also be effective.

preference marketing strategy

Extended decision making with the brand in the evoked set requires a preference strategy. marketer needs to structure information so brand stays preferred
by target market.

acceptance marketing strategy

Similar to preference strategy, but complicated by fact that target market is not seeking information about the brand. Beyond preference strategy, marketer must attract consumer attention or motivate brand learning. Incentives to try product, long-term advertising to enhance low-involvement learning and use of the Internet are useful for gaining acceptance.

Rational choice theory

Rational choice theory assumes the consumer has sufficient skills to calculate which option will maximize his/her value and will choose on this basis. The task is to identify the one optimal choice.

Bounded rationality and Metagoals in Decision Making:

Maximize accuracy of decision by providing all the info available

Minimize cognitive effort (don’t think just do it)

Minimize experience of negative emotion by eliminating conflict and stress

Maximize the ease of justifying the decision by keeping people happy (choose iBM)

Affective Choice

tend to be more holistic. Product is not broken down into distinct components for separate evaluation. Evaluations generally focus on how they will make the user feel as they are used.

Attitude-Based Choice

Involves the use of general attitudes, summary impressions, intuitions, no attribute-by-attribute comparisons are made at the time of choice.

Attribute-Based Choice

Requires the knowledge of specific attributes at the time the choice is made, and it involves attribute-by-attribute comparisons across brands.

Perceptual Mapping

researcher uses judgment to determine dimensions underlying consumer evaluations of brand similarity

What is a Surrogate indicator?

Consumers can have difficulty judging competing brands on complex criteria such as quality or durability. So, often a Surrogate indicator is used to indicate another attribute. For example, consumers often use the following factors as surrogate indicators of quality (a.k.a. quality signals):

price

advertising intensity

warranties

brand

country of origin

Decision Rules for Attribute-Based Choices

Conjunctive decision rules

Establishes minimum required performance for each evaluative criterion.

Disjunctive decision rules

Establishes a minimum required performance for each important attribute (often a high level). All brands that meet or exceed the performance level for any key attribute are acceptable.

Elimination decision rules

First, evaluative criteria ranked in terms of importance. Second, cutoff point for each criterion is established. Finally (in order of attribute importance) brands are eliminated if they fail to meet or exceed the cutoff.

Lexicography decision rule

Consumer ranks the criteria in order of importance. Then selects brand that performs best on the most important attribute. If two or more brands tie, they are evaluated on the second most important attribute.

Compensatory Rules

the brand that rates highest on the sum of the consumer’s judgments of the relevant evaluative criteria will be chosen

What is churn and why do companies what to minimize it?

Churn is a term used to refer to turnover in a firm’s customer base. Companies want to minimize churn because it typically costs more to obtain a new customer than to retain an existing one.

Describe Relationship marketing

An attempt to develop an ongoing, expanding exchange relationship with a firm’s customers.

CARU

a special self-regulatory unit created by the Advertising Division of the Better Business Bureau to review advertising aimed at children.

CARU rules

Communicate in truthful manner using understandable language

Address advertising to positive social behaviors

Present positive role models

Contribute positively to the parent-child relationship

Avoid marketing inappropriate products directly to children

Two major issues relating to comprehension in reference to marketing:

Research suggests younger children have difficulty understanding the selling intent of commercials

Some words and phrases difficult for children to understand

Health and safety advertising rules

Cannot include children participating in dangerous activities

Products advertised as “keep out of reach of children” not aired during children's programming

Be aware that advertising not directed at children can have potentially harmful consequences

CARU is active against...

Including characters on packaged boxes to promote “fun”

Ideal body types portrayed leading to eating disorders

More revealing clothing being promoted to children

COPPA

Online privacy relates to collection and use of information from websites (up to age 13)

Prior parental consent

Collection of personal info

Parents access to info

FTC issued Children’s Online Privacy Protection Rule in 1999