Marketing Final Exam

Marketing Research

is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.

5 Step Marketing Research

Step 1: Define the problem, set research objectives and identify possible marketing actions

Step 2: Develop Research Plan, specify constraints, identify data needed for marketing actions, and determine how to collect data

Step 3: Collect relevant information, obtain primary and secondary data

Step 4: Develop findings, analyze the data, and present the findings

Step 5: Taking marketing actions, make action recommendations, implement action recommendations, and evaluate the results

STEP 1: DEFINE THE PROBLEM

Set the Research Objectives/Goals

– Have a Clear Research Purpose

– If too broad, may not be feasible

– If too narrow, may not be worth it

STEP 2: DEVELOP THE RESEARCH PLAN

DETERMINE HOW TO COLLECT DATA

Determine How to Collect Data

– Concepts

• Verbal or picture explanation of concepts

– Methods

• Sampling

• Statistical inference

Constraints

restrictions placed on potential solutions to a proble

Measures of sucess

critera/standards used to evaluate proposes solutions

Secondary Data

– Internal

• Marketing inputs

• Marketing outcomes

– Advantages

• Save time

• Low cost*

– Disadvantages

• May be outdated

• May not be relevant

Primary data

Observational

• Mechanical

– TV Ratings

• Personal

– Asking People

» Idea generation

» Idea evaluation

– Mystery Shopper

– Ethnographic

• Neuromarketing

– Brain scans

Social Media

• Panels/Experiments

Advantages of primary data: More flexible

and specific to the problem under study.

Disadvantages of primary data are costly

and time-consuming.

Big data

Describe large amounts of data collected from a variety of

sources.

Information Technology

includes all of the computing resources that collect,store, and analyze data

Intelligent Enterprise

an organization that converts data into

information

Data Mining

the extraction of hidden predictive infor from large databases to find statistical links between consumer purchasing patterns and marketing actions

Predictive modeling

statistical models that use data mining and probablitay analysis to foretell outcomes

Sales forecast

total sales of the product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts

3 Forecasting Technique’s

1. Judgement of decision maker, the judgement of the person who must act on the results of the forecast

2. Surveys of knowledge groups

3. Statistical methods

Market segmentation

Aggregating buyers into groups that have

common needs and will respond similarly to marketing.

Product differentiation

Use marketing mix to help consumers view product as different and

better than competitors.

Market-product grid

a framework to relate the market segments of potential buyers to products offered/potential marketing actions

One product multiple segments

produces a single product or service and attempts to sell to 2 or more segments

Multiple products and multiple segments

selling different lines targeted at differnt types of customers

Mass customization

tailoring products/services to the tastes of individual customers on a high volume scale

Organizational synergy

the increased customer value achieved through performing organizational functions such as marketing/manufacturing

Canniblization

are the new products/chains stealing customers and sales from older existing ones

5 Steps in segmenting and targeting

1. Group potential buyers into segments

2. Groups products to be sold into categories

3. Develop a market-product grid and estimate size of markets

4. Select target markets

5. Take marketing actions to reach target markets

Ways to segment markets

1. Geographic, region city

2. Demographic, gender,race,age,income

3. Psychographic, lifestyle, aspiration

4. Behavioral, action or attributes

Usage rate

the quantity consumed/store visits during a specific period

80/20

80% of the firms sales are obtained from 20% of its customers

Customer lifetime value

the financial worth of a customer to a company over the course of their relationship

Personas

character descriptins of a brands typical customers

Decisions on target market

1. Market size

2. Expected growth

3. Competitive position

4. Cost of reaching the segement

5. Compatibility with organizations objectives and goals

Product positioning

refers to the place a product occupies in the consumers minds based on important attributes relative to competitive products

Product repositioning

changing the place a product occupies in consumer minds realtive to competitive products

Two approaches to product positions

1. Head-to-head positioning involves competing directly with competitors on similar product attributes in the same target market

2. Differentiation positioning involves seeking less competitive,smaller market niche in which to locate a brand

Perceptual maps

displaying in two dimensions the location of products/brands in the minds of consumers

How to make a Perceptual Map

1. Identify important attributes for a product of brand class

2. Discover how target customers rate competing products/brands with respect to these attributes

3. Discover where the company’s product/brand is on these attributes in the minds of potential customers

4. Reposition the company’s product/brand in the minds of potential customers

Promotional Mix

Combination of communication tools.

• Inform prospective buyers about the benefits.

• Persuade them to try products.

• Remind them of the benefits they enjoyed.

Integrated marketing communications (IMC)

the concept of designing marketing communications programs that coordinate all promotion activities—advertising, personal selling, sales promotion, public relations, and direct marketing—to provide a consistent message across all audiences

Encoding

the process of having the sender transform an idea into a set of symbols.

Decoding

is the reverse, or the process of having the receiver take a set of symbols, the message, and transform the symbols into an idea.

Noise

includes extraneous factors that can work against effective communication by distorting a message or the feedback received (ex. printing mistake, misunderstood sales message)

Personal selling (Customized)

Two-way flow of communication between buyer and seller.

Beware of wasted coverage (not in target market).

Usually face to face

Advantages: control, reduced waste in coverage, seller can hear and see reactions

Disadvantages: flexibility, consistent messages aren’t given, costly

Advertising (Mass selling)

any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.

Advantages: attention getting and communicates about an org.

Disadvantages: costly, lack of direct feedback

Public relations (Mass selling)

a form of communication that seeks to influence the feeling, opinions, or beliefs held by customer, prospective customers, stockholders, suppliers,employees,etc

Advantages: credibility

Disadvantages: lack of control

Sales promotion(Mass selling)

a short-term inducement of value offered to arouse interest in buying a product/service

Advantages: short-term (like a coupon) often stimulates sales for their duration, gains are temporary

Direct marketing (customized)

direct communication with consumers to generate a response in the form of an order, a request for further infor, or a visit to a retail outlet

Advantages, customization to target audiences

Disadvantages: expensive and time consuming, up to date databeases on target audiences, privacy concerns

Push stategy

directing the promotion mix to channel members to gain their cooperation in ordering and stocking the product.

Ex. Car dealerships

Pull strategy

directing its promotion mix at ultimate consumers to encourage them to ask the retailer for a product.

Ex. Prescription drugs

Product life cycle

1. Introduction: to inform

2. Growth: to persuade

3. Maturity: to remind

4. Decline: to phase out

Consumer journey

1. Prepurchase stage: advertising, sales promotion, and public relations are more helpful, because they inform the potential customer of the existence of the product and the seller.

2. Purchase stage: importance of personal selling is highest. Sales promotion and direct marketing can help increase demand, often through social media.

3. Postpurchase stage: advertising and personal selling help reduce the buyer’s postpurchase anxiety coupons, and direct marketing reminders can help encourage repeat purchases.

Promotion decision process

1. Planning: Developing the promotion program. Identifying the Target Audience, Specifying Promotion Objectives, Set budget, select right promotion tools, design the promotion, schedule the promotion

2. Implementation: Executing the promotion program

3. Evaluation: Assessing the promotion plan

Direct Orders

are the result of offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.

Lead generation

is the result of an offer designed to generate interest in a product or service and a request for additional information

Traffic generation

is the outcome of an offer designed to motivate people to visit a business.

Product

good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs is received in exchange for money or something else of value.

Good

has a tangible attributes that a consumers 5 senses can percieve. It may also have intangible attributes consisting of its delivery /warranties embody more abstract concepts such as becoming healthier wealthier

Non durable goods

an item consumed in one/a few uses such as food or fuel

Durable goods

one that usually lasts over many uses like appliances

Services

are intangible activities/benefits that an organization provides to satisfy consumers' needs in exchange fir money / something else of value

Idea

a thought that leads to a product/action, such as a concept for a new invention

Consumer products

products purchased by the ultimate consumer

Business products

are products organizations buy that assist in providing other products for resale

Conscience products

items that the consumer purchases frequently, conveniently, and with a minimum of shopping efforts

Shopping products

items that the consumer compares several alternatives on criteria such as price,quality, and style

Specialty Products

items the consumer makes special effort to search out and buy

Unsought products

items that the consumer doesn’t know about but doesn’t initially want

Derived demand

sales of business products frequently result or are derived from the sale of consumer products

Intangibility

services can’t be touched/seen before the purchase decision. tend to be a performance rather than an object

Inconsistency

quality varies with each persons capabilities day to day job performance

Inseparability

the consumer cannot distinguish the service provider from the service itself

Inventory

many goods have inventory handing costs that relate to their stage, perishability, and movement

Gap analysis

asks consumers to assess their expectations and experiences in dimensions of service quality

product item

specific product that has a unique brand, size, or Price

Product line

a group of product/service items that closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed

Product mix

consists of all the product lines offered by an organization

Continuous innovation

requires no new leaming by consumers.

Dynamically continous

innovation, only minor changes in behavior are required

Discontinuous innovation

involves making the consumer learn entirely new consumption patterns to use a product

Protocol

statement that, before product development begins Identifies

1. a well defined target market:

2. Specific customer needs, wants, preferences; and

3. What the product will be and do to satisfy consumers

Newness in legal terms

"new" has to be limited to use a product up to 6 months after it enters regular distribution

Reasons for new product failure

1. Insignificant point of difference

2. Incomplete product market and product protocol before development starts

3. Failure to satisfy consumer needs on critical factors

4. Bad timing

5. No economical access to buyers

6. Poor extension of the marketing mix

7. Too little market attractiveness

8. Poor product quality

Open innovation

consists of practices and processes that encourage the use of external as well as internal ideas and internal and external collaboration when conceiving, producing,: marketing new products

and services

New Product Development Process

Stage 1: New product strategy development. Defines the role for a new product in terms of the firms overall objectives

Stage 2: Idea innovation

Stage 3: Screening and Evaluation, internally and externally evaluated new product ideas to eliminate those that warrant no further effort

Stage 4: Business analysis, specifies the features of the product/service and the marketing strategy needed and make financial projections

Stage 5: Development, prototyping

Stage 6: Market testing

Stage 7: Commercialization, positions and launches a new product in full scale production and sales

Product Lifecycle

stages a new product goes through in the market place

Product Lifecycle stages

Introduction, Growth, Maturity, Decline

Simulate trial

the initial purchase of a product by a consumer

Primary demand

desire for the product class rather than specific brand

Selective demand

preference for a specific brand

Skimming strategy

high initial price to help the company recover costs of develompent

Penetration pricing

pricing low to help build unit volume

Product deletion

dropping the product from the companys line

Harvesting

company retains the product but reduces marketing costs

High learning

significant customer education and an extended introduction

Low learning

starts right away b/c little learning is required by the consumer and benifits of purchase are readily understood

Fashion product

style of the times, they are intoduced,decline, then return

Fad product

experiences rapid sales on intro then rapidly decline

Product class

entire product category/industry (ex. prerecorded music)

Product form

varations of a product within the product class (ex: CDS)

Diffusion of innovation

a product diffuses or spreads through a population

Product modification

altering one or more of products characteristics, such as quality,performance, or appearance

Market modification

a company trys to find new customer,increase a products use among existing customers, or create new situations