Ch. 04 - Market Research, Ch. 05 - Marketing Analytics and CRM, Ch. 06 - B2C and B2B Markets, Ch. 07 - STP

Marketing Research (department)

The firm's formal information gathering link to the environment (most often consumers and competitors)

Internal Company Data

Information generated from within the company, most often customer "behavioral" data found in operational systems.

Marketing Intelligence

External data gathered from readily available sources about sales channels, vendors, competitors, etc.

Marketing Research (data type)

Collecting and analyzing data about the market. May be purchased.

Acquired Databases

Externally sourced databases can be used to collect a variety of information, often data about customers.

Data

Raw, often unorganized and unanalyzed facts. Facts without context.

Information

Data interpreted to add meaning.

Define the Research Problem (step 1)

-specify the research objectives (what questions are we trying to answer?)

-identify the consumer population of interest (who are we interested in and what defines them?)

-place the problem in an environmental context (what factors might influence the situation?)

Secondary Research

Research previously performed for another purpose (that may be reusable for your purpose). Advantage: faster and less expensive, but may not be exactly what you want.

Primary Research

Original research being gathered here for this first time. Advantage: can get exactly what you need but may be costly and time consuming. Two broad categories

- Survey

- Observation

Exploratory Research

Usually quick, inexpensive, small research studies designed to help you understand what questions to ask or how to form better hypotheses.

Data / Measurement Quality

Defined by three characteristics:

1) Representative. Does the data fairly represent the group being studied?

2) Reliable. Is the data consistent when gathered over time?

3) Valid. Is the data correct?

Population

The entire group of whom we would like to study. The population could be large (all women in the U.S.) or small (all students taking MAR 3023).

Census

When data are collected about every member of the population.

Sample

A subset of the population

Probability Sampling

Each member of the population has a known, non-zero chance (probability) of being selected. Does not need to be random chance and does not need to be an equal chance.

Simple Random Sample

Every member of the population has a known, non-zero, and equal chance of being selected. The "gold standard" of sample selection.

Non-probability Sampling

Each member of the population has an unknown chance (probability) of being selected. Since the chance is unknown, we can't calculate reliability of the responses.

MR Process (short version)

1) Problem Definition

2) Data Collection

3) Data Analysis

4) Results Communication

Research Design

A plan that says what data will be collected and what type of study will be done.

Data Collection (step)

A step in the market research process where we gather the needed data to address the research defined problem. The data can be secondary or primary.

Data Analysis (step)

A step in the market research process where we discover meaningful patterns to address the defined research problem.

Results Communication (step)

A step in the market research process where we communicate the results found to address the defined problem.

Analytics

Finding patterns in data.

Attribution

Identifying which factor (channel, ad, etc.) is responsible (or contributed) to bringing in a sale or new customer.

Efficiency

How much you get out for what you put in. For example, in marketing, the cost (input) per sale (output).

Effectiveness

That the result is appropriate and desirable. Getting a new customer for low cost may be efficient, but if the customer always returns what they buy, s/he is not a desirable customer, therefore, the effort to get the customer is ineffective.

Digital Channels (major)

1. Social Media

2. Digital Ad Networks

3. Email

4. Search Engines

5. SMS (text messages)

Click-through Rate (CTR)

An efficiency measure of how many times an ad is clicked compared to how many impressions the ad got (times it was shown)

Conversion Rate

An efficiency measure of how many met the goal compared to how many started. Example: 10 people bought out of 100 saying they would. We have a 10% conversion rate.

Rate

In business, most often a rate is expressed as a percentage and is the ratio of one thing compared to another. To get it, we divide. 10 sales / 100 prospects = 10% conversion rate.

Churn Rate

How fast we're losing customers. Number of customers who stop using or purchasing products during a period of time. An indicator of growth (or lack thereof).

CRM (Customer Relationship Management)

The basis of "relationship marketing" and is the tracking of consumers' preferences and behaviors over time to tailor individual value propositions.

Value Proposition

The value a product provides to its customers and how it is better than and different from those of competitors.

Marketing Database

a collection of data about customers (current and past) and prospect (future customers, hopefully) that is stored in a large database and used for marketing purposes.

Share of Customer (Wallet Share)

The portion of the customer's budget for your product category that is spent with you. Example: customer budgets $100 a week for groceries and spends $30 with you. You have a 30% wallet share.

Market Share

The portion of all customers for a product that your company can claim as customers. Example: there are 100 consumers in the market that buy widgets, 40 of those are customers of yours. Your market share is 40%.

Customer Lifetime Value (CLV)

The present value of the expected future profit and equity from a customer that the company gets. Do not confuse with "Customer Value" (what the customer gets).

Big Data

A broad (and often incorrectly used) term for datasets so large or complex that traditional data processing applications are inadequate.

Demographics

Relatively identifiable characteristics that describe a population (e.g., of consumers), such as age, income, gender, etc.

Behavioral Data

Data about actions of a person based on direct observation.

Psychographics

Quantifiable description of consumers lifestyles, usually based on activity, interest, and opinion statements (in surveys) or events (observed) or estimated.

Attitudinal Data

expression (often in a survey) of favor or disfavor toward a person, place, thing, or event.

Data Brokers

Companies that collect and sell personal information about consumers and businesses.

Table (database term)

Stores data elements in named columns and unlimited rows, each row having a unique identifier called the primary key with all data in that table directly relating to the primary key. Example: customer table may have your first name, last name, age, etc. But your address(es) would be stored in an address table.

Database

A software system designed to store and retrieve data.

Operational Database

A database used in processing business transactions. Often is the source of original data about the company's operations and called "the system of record."

Data Warehouse

An aggregation of data from operational databases.

Database Marketing

Marketing that relies on a database of customer and prospect profiles to create a targeted offering.

GLB - Gramm-Leach-Bliley Act

Restricts financial institutions in order to protect consumers' data and rights. Similar to HIPAA

HIPAA - Health Insurance Portability and Accountability Act

Restricts healthcare institutions in order to protect consumers' data and rights. Similar to GLB.

FCRA - Fair Credit Reporting Act

Ensures consumers can challenge and update incorrect credit records.

COPPA - Children's Online Privacy Protection Act

Provides additional privacy restrictions for those under 13 years of age.

Consumption Process-CVF

1. Need

2. Want

3. Exchange

4. Costs and Benefits

5. Reaction

6. Value

Consumer Behavior

The set of value-seeking activities that take place as people go about addressing their real needs.

Consumption

Process where products (goods, services or ideas) are used and transformed into value.

Consumer

The entity (person or business) in the role of converting the product to value.

Costs

Negative results of consumption.

Benefits

Positive results of consumption.

Decider

The person in the role of determining part or all of the buying decision.

Purchaser

The person in the role of actually buying the product specified by the decider.

Habitual Decision

Due to low involvement, a purchase decision process made with little conscious effort.

Limited Decision

Due to moderate involvement, a purchase decision process made with moderate conscious effort.

Extended Decision

Due to high involvement, a purchase decision process made with significant conscious effort. Also called a "considered purchase."

Involvement

The amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior and based on the consumer's perceived risk (or interest) in the purchase.

Problem Recognition-Extended Decision

A need is discovered. Marketers may try and help consumers understand the benefits of their product, stimulating need.

Information Search-Extended Decision

After identifying a need, if consumers don't have sufficient information, they seek it out externally. Marketers try and inform consumers in this decision stage.

Evaluation-Extended Decision

After gathering information, consumers create three evaluation sets: the inept, awareness, and consideration. Marketers work hard to understand and meet (or change) evaluative and determinant criteria so they fit in the consideration set.

Choice-Extended Decision

The last step in extended decision, a consumer selects a product. At some point information overload, or other stress, may cause a simplified choice method such as price = quality, brand loyalty, or country of origin.

Inept Set

Brands that are unacceptable when making a decision.

Awareness Set

All brands a consumer is aware of.

Consideration Set

Brands a consumer views as alternatives for purchase.

Consumer Value Framework (CVF)

Consumer behavior theory that describes what shapes consumption behaviors and determines the value associated with consumption.

Internal Influences-CVF

Psychological and personal factors that influence the consumers' thoughts and feelings around a purchase.

External Influences-CVF

Factors outside a consumer (e.g., culture, social, family, seasons) that influence the consumers' purchase.

Relationship Quality-CVF

Degree of "connectedness" either emotionally ("I like that brand") or operationally ("It's a pain to switch phone companies") between a consumer and a retailer.

Utilitarian Value

A type of value obtained when a product helps the consumer solve problems and accomplish tasks.

Hedonic Value

A type of value derived from immediate gratification provided by the product.

Cognition

Mental activity that occurs as we process and store things that can become knowledge. Often related to utilitarian value assessment.

Affect

Pleasant or unpleasant feelings experienced during consumption activities products. Often related to hedonic value assessment.

Motivation

Internal state driving us to satisfy all needs (utilitarian and hedonic) by activating goal-oriented behavior. Motivation can be strong or weak, depending on the need.

Learning

A change in behavior resulting from the intentional or unintentional interaction between a person and a stimulus.

Perception

A consumer's awareness and interpretation of reality.

Elements of Perception

1. Exposure

2. Sensation

3. Attention

4. Interpretation

Prospect Theory

Consumers are more likely to take risks to avoid loss than take risks to obtain gain. We hate losing things.

JND

Just Noticeable Difference. When one stimulus is sufficiently stronger than another so that a consumer can actually notice the two are different but no behavior change occurs.

JMD

Just Meaningful Difference. The smallest amount of change in a stimulus that would change the consumer's behavior.

Personality

The consistency of an individual's behaviors and reactions to [all] surrounding stimuli. (Compare to attitude being response to an aspect vs. all stimuli.)

Identity-Self Concept

How you perceive yourself.

Intended Image-Self Concept

How you'd like others to perceive you.

Construed Image-Self Concept

How you think others perceive you.

Reputation-Self Concept

How others actually perceive you (external).

Attitude

Consistent motivations, emotions, perceptions, and thoughts with respect to an aspect of a person's environment. (Compare to personality as being all stimuli vs an aspect.)

Lifestyles

How consumers spend their time and money.

Demographics

Statistics about a population. Typically stable and relatively observable. For example, age, ethnicity, income.

Psychographics

Quantifiable description of consumers lifestyles usually based on statements (often in surveys) about: activities, interests, and opinions, "AIO Statements."

Social Influences

Others' influence on consumers' behavior, many of these can be cultural.

Situational Influences

Things unique to a place or time that can influence consumers' behavior.

Producers-Business Category

Business that create products (goods or services).

Resellers-Business Category

Businesses that move products from the producer to the consumers, can be wholesalers or retailers.