MGMT 311 Exam 2 w/ Jia Han

Marketing Research

Systematic design, collection, analysis, and reporting of data relevant to specific marketing situation of organization

Includes new products and modes of distribution

Market Research

Narrower concept of research into specific market

Why use Marketing Research

• Focuses and organizes marketing information, permitting…

  • Spotting current + upcoming problems

  • Reducing business risks

  • Identifying sales opportunities

  • Developing plans of action

• Measures effectiveness of 4 Ps

• Measures Market Potential, Share, and Extension

• Measures Consumer motivation, purchase behavior, and satisfaction

Marketing Research Process

1. Defining the problem + research objectives

2. Developing research plan

3. Implementing research plan

4. Interpreting and reporting findings

Market Research Process Step 1: Define marketing problems + research objectives

• Exploratory Research

  • Preliminary information

  • Define the problem and suggest hypothesis

  • “Please describe current level of your satisfaction to the restaurant”

• Descriptive Research

  • Describe marketing problems

  • “What do you think of the restaurant”

• Causal Research

  • Test hypothesis about cause-and-effect relationships

  • “What is the relationship between coffee price and customer repurchase price”

Market Research Process Step 2: Developing Research Plan

Outlines sources of existing data to spell out…

1. Research approaches

2. Contact methods

3. Sampling plans

4. Instruments

• Management problem

• Research Objectives

• Information Needed ←

• How the results will help management decisions

• Budget

Market Research Process Step 3: Collecting and Analyzing the Data (Implementing the Research Plan)

1. Primary Data

   1. Research Approaches

   2. Contact Methods

   3. Sampling Plan

   4. Research Instruments

2. Secondary Data

Secondary Data (Advantages and Disadvantages)

Advantages:

• Lower Cost

• Obtained quickly

• Cannot otherwise be collected

Disadvantages: Lack of…

• Relevance

• Accuracy

• Current-ness

• Impartiality

Examples:

• Government data

• Research institution reports and journals

• News; Magazines

Primary Research

1. Research Approaches

2. Contact Methods

3. Sampling Plan

4. Research Instruments

Examples":

• Direct-mail questionnaires

• Online or Telephone surveys

• Experiments; Panel Studies; Test Marketing; Behavior Observation

Step 3: Research Plan Implementation → Primary Research → Research Approaches (#1)

• Observational research (Watching people in their natural environment)

• Survey research

• Experimental research

Step 3: Research Plan Implementation → Primary Research → Contact Methods (#2)

• Mail

• Telephone

• Personal

• Online

• Focus Group Interviewing

• Online Marketing Research:

  • Online Survey

  • Online behavioral tracking

  • Online behavior targeting (ad targeting)

  • Online focus group

Step 3: Research Plan Implementation → Primary Research → Sampling Plan (#3)

Sample: Segment of population selected for marketing research to represent population as a whole

• Probability Samples:

  • Simple random samples

  • Stratified samples (represents equal % of each demographic)

• Nonprobability Samples:

  • Judgment samples

  • Convenience Samples (Most convenient group to sample)

  • Quota Samples (Hit Target # of sample size)

Step 3: Research Plan Implementation → Primary Research → Research Instruments (#4)

• Questionnaires

  • Most common

  • In person, telephone, online

  • Flexible

  • Researchers must be careful with wording

  • Useful in exploratory research

  • Use different formatting: scales, rankings, open/closed-ended questions

• Mechanical Instruments

  • People meters

  • Checkout scanners

  • Neuro-marketing

Market Research Process Step 4: Interpreting and Reporting the Findings

1. Clean data: Edit, code, tabulate

2. Present: Organized manner;

Brand

Capitalized value of trust between company and consumer

• Adds value

Role of Brand Image: Company Perspective

• Extension of feelings to new products

• Upcharging

• Customer loyalty

• More frequent purchases

• Positive word-of-mouth

• Greater channel power

• Attracts higher quality employees

• More favorable ratings

Brand Equity

Differential effect of know brand name for customer response to product and marketing

Counters/opposite of brand parity

Measured by…

• Financial value

• Stock value

• Revenue premium

• Consumer value

Steps to Brand Strategy

1. Brand Positioning

   1. Attributes

   2. Benefits

   3. Beliefs + Values

2. Brand Name Selection

3. Brand Sponsorship

   1. Licensing

   2. Co-Branding

4. Brand Development

   1. Line extensions

   2. Brand extensions

   3. Multi-brands

   4. New brands

Branding vs Positioning

Branding: What experience can I expect; Proof of successful positioning; Promises good user experiences; Owns a word/phrase

Positioning: Why buy me?; Comes before Branding; Establishes preference for brand relative to competitive offerings based on perception of unique + important difference

Brand Loyalty

• Ultimate Objective of Branding

• Only brand a consumer purchases

• Drivers:

  • Emotion

  • Value

Levels of Brand Loyalty

1. Brand Recognition

   1. Awareness

   2. Identification

2. Brand Preference

   1. Previous Experience

   2. Brand Choice

3. Brand Insistence

   1. Refuse Alternatives

   2. Ultimate Stage (Where Brand wants to be)

Types of Brands

• Generic Products

• Manufacturer’s Brand

• Private Brand

• Captive Brands

• Family Brand

• Individual Brand

Type of Brand: Generic Products

• Absence of brand

• Plain label

Type of Brand: Manufacturer’s Brand

Manufacturer = Brand

• HP

• Sony

• Dell

Type of Brand: Private Brand

• Wegman’s

• Member’s Mark

• Weiss

Popularity of this has fluctuated

Connotation of low price & quality w/ few differences

→

Value purchase with improved quality + higher loyalty toward retail outlets (low loyalty to specific brands); Differentiate private outlets + increased advertising of private brands + increased in-store display & packaging quality

Higher gross margins and lower prices for retailers of private labels, with greater loyalty and differentiation from national brands

Type of Brand: Captive Brands

• Spinoff or Private label

• Exclusivity

Type of Brand: Family Brand

Single name for related products (eg. Amazon)

Type of Brand: Individual Brand

• PepsiCo

• Frito Lay

• Unilever

• P&G

Co-Branding

Partnership of two brands for something

Licensing

Product that purchases licensing to use/display brand name of other company

Brand Strategies

Brand Dilution

Brand weakening from overuse, price-cutting, and ill-judged brand extensions

Promotion Mix

Specific blend of promotion tools used persuasively to communicate customer value + build customer relationships

The Promotional Mix: Advertising

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by identified sponsor

The Promotional Mix: Sales Promotion

Short-term incentive to encourage purchase/sale of product/service

The Promotional Mix: Personal Selling

Personal interaction by firm’s sales force for purpose of engaging customers, making sales, and building customer relationships

The Promotional Mix: Public Relations

Building good relations with company’s various publics by obtaining favorable publicity, building corporate image, and killing rumors

The Promotional Mix: Direct Marketing

Engaging Directly with carefully targeted individual consumers and customer communities for immediate response and lasting relationships

How Marketing Comms Environment is changing

• Mass markets have fragmentation → shift from mass to target marketing

• Information technology facilitates segmentation

• Less broadcasting, more narrowcasting

IMC Integrated Marketing Communications

Integrating + Coordinating comms. channels to deliver clear + consistent + compelling message about org. + products

The Comms Process: Encoding and Decoding messages (image)

Steps in Effective Marketing Comms.

1. ID Target Audience

2. Determine Comms. Objectives

3. Design Message

4. Choose Media

5. Select Message Source

6. Collect Feedback (sometimes step 5, for some reason smh)

Effective Marketing Comms. Step 2: Determining Comms. Objectives

Use 6 Buyer Readiness Stages

1. Awareness

2. Knowledge

3. Liking

4. Preference

5. Conviction

6. Purchase

Example: Domino’s “AnyWare” campaign to order on anything for delivery anywhere

• New CEO reworks crust

• New order tracking

• New easy means of order (one click, AnyWare, etc)

• Drones and new deliveries

• Scanning pizza for points

• No third-party delivery to avoid fees

• 2000+ stores (which steal profits from current ones) to achieve <30 mins delivery

Effective Marketing Comms. Step 3: Designing Message

• AIDA Framework

• Message content contains appeals/themes to produce desired results…

  • Rational Appeals — Statistics; facts

  • Emotional Appeals — Love, price, joy, humor, fear, guilt, shame

  • Moral Appeals — Moralty

Message Content: What to Say

Message Structure + Format: How to Say It

3 Message Structure Options:

1. Whether to draw a conclusion (Throw a fact out with no direction)

2. One vs Two Sided Arguments (Only favorable arguments vs both downs and ups)

3. Order of Argument presentation (Clear order of eg. challenge, solution, result)

Message Format

Design, layout, copy, color, shape, movement, words, sounds, voice, body language, dress, etc

AIDA Model

Describes consumer engagement with article, advertisement, offer, or product

AIDA: Attention

• Headline

• Visuals

• Layout

• Colors

• Size

• Electronic; Sound; Music; Animation

AIDA: Interest

• Drama/Story (Dos Equiss)

• Cartoons (M&Ms)

• Dialogue (“It’s a Diet Coke Thing)

AIDA: Desire

• Arouse desire

  • Unique selling proposition

  • Rationale

  • Convenience persuasion

AIDA: Action

• Ask consumers to do something

• Imperative: ‘drink coke’

• Facilitate: ‘1-800…’

• Direct Competitive: “supplies are limited”

Message Strategies

Primary tactic/approach to deliver message theme

• Cognitive

• Affective

• Conative

Messaging Strategies: Cognitive

1. Generic Messages

   1. No claim of superiority (PepsiCo)

2. Preemptive Messages

   1. Superiority by attribute before competition

3. Unique Selling Proposition

   1. Explicit, testable claim of uniqueness/superiority (Can be proven)

4. Hyperbole

   1. Untestable exaggeration

5. Comparative Advertising

   1. Compare against competition; use with care, can work against you

Messaging Strategies: Affective

Invoke feelings/emotions matched to product/service/company

Messaging Strategies: Conative

Support promotional efforts with…

• Coupons

• Phone-in promotions

• Sweepstakes

• Internet Promotions/coupons

Developing Effective Comms. Step 4: Choosing Media

• Personal Comms. Channels

  • Face-to-face, phone, mail, Internet

  • Word-of-mouth influence is critical

  • Buzz marketing cultivates opinion leaders

• Nonpersonal Comms. Channels

  • Media, atmosphere, events

Developing Effective Comms. Step 5: Selecting Message Source

• Celebrities, athletes, entertainers, professionals, health care providers

• Highly credible sources are more persuasive

• Poor spokespersons can tarnish brand

Developing Effective Comms. Step 6: Collecting Feedback

• Recognition, recall, and behavioral measures assessed

• May suggest changes in product/promotion

Digital Marketing

Promoting products/services with digital distribution channels

Clutter

Major problem; cost of selling tripled in past decades

Traditional media has broken trust with consumers

Digital Marketing Strategies

1. Internet Marketing

2. Mobile Marketing

3. Social Marketing

4. Viral Marketing

Digital Marketing Strategies: Internet Marketing

Gives consumers a voice, publishing platform, and forum to be heard, shared, and researched

Supports…

• Product Sales

• Sponsorship sales

• Service sales

• Additional revenue streams (banner ads)

• Community relations

• Brand-customer connection (blogs, chats, etc)

• General promotion

Digital Marketing Strategies: Mobile Marketing

Marketing on/with mobile device (text promos, push notifications, etc);

Massive potential growth

Mobile Apps:

• Engage consumers with brand

• Streamline business use

Action Codes:

• QR, watermarks, 2D Barcodes

• Engagement

Digital Marketing Strategies: Social Media

Online communities exchanging information, ideas, messages, other content (vids, music, etc); Social media platforms share messages quickly, and can cause…

• Purchase

• Subscription

• Registration to online community

• Participation in event

Social Media Platform: Software or tech allowing users to build, integrate, or facility community, interaction with users, and user-generated content

Social Networking Sites (Insta)

Bookmarking Sites (Pinterest)

Social News Sites (Sites linking other news/articles)

Online Forums: Message boards (quora)

Blogging Sites: Blogs

Microblogs (Twitter)

Social Media Marketing Plan

• Executive Summary

• Brief Overview

• Analysis of Competition

• Body of Plan

Phases:

• Set goals

• Target audience

• Develop strategies

• Produce content

• Implement plan

• Monitor

• Measure

Viral Marketing

Encourages individuals to pass on marketing message to others for exponential growth by word-of-mouth (ALS, Duolingo, Eyes, Lips Face song, etc)

Dell: Early Adopter of Social Media

• Leader in online frictionless commerce

• One of first to launch online discussion forum

• First company to hit $1M in one day in online revenue

• One of first to launch online support

Also #DellLove Personally thanking customers

Dell’s Social Media Services Group (SMSG)

Advisor in…

• Understanding what is being said about brand, industry, competitors, products, etc

• Improving customer relationships via social media

• Building their social media strategy

Public Policy Issues in Direct and Digital Marketing

• Irritation: Annoying + Offending Customers

• Unfairness: Taking unfair advantage of impulsive or less-sophisticated buyers

  • Staples pricing by geography down to a few miles

• Deception: “Heat merchants” design ads to mislead consumers

• Fraud: Identity theft + financial scams

• Consumer Privacy: Concerns marketers have too much information and use it for unfair advantages

The (New) Promotional Mix: Social Media

Two Interrelated promotional roles:

1. Enables companies to talk to customers

2. Enables customers to talk to one another

New Comms. Paradigm:

1. Information on products/services communicated by individual customers

2. Customer behavior influenced by social media

3. Customers reduce reliance on advertising as source of information

4. Marketers must learn to talk to customers instead of at them, with…

   1. Networking platforms (#MyBeautyMySay)

   2. Provide Customer Engagement

   3. Provide Information

   4. Provide Exclusivity

   5. Use Stories (Salvatore Ferragamo)

Inbound vs Outbound marketing

Outbound: Traditional Advertising Methods

Inbound: Marketing strategies focusing on pulling audiences in instead of going to get prospects’ attentions

Marketing Strategies Formation Process (Image)

Price

Amount of money charged for product/service, or sum of all values customers exchange for benefits of having/using product/service

• One of most flexible marketing mix elements

• Key strategic tool for creating customer value + building relationships

• Focus on customers, costs, and competitors to set prices

Major Pricing Strategies

• “Cost-Based Pricing” — Sets prices based on costs of product + fair rate of return for effort + risk (Price-Floor Strategy)

• “Value Based Pricing” — Using buyer's’ perceptions of value instead of sellers’ cost (eg. services, art, superior goods, etc) (Price-Ceiling Strategy); No demand above this price

• Competition-Based Pricing: Setting prices based on competitors’ strategies, costs, prices, and market offerings

Two Types of Customer “Value-Based Pricing”

• Good-Value Pricing: Offering right combo of quality + service @ fair price

  • Everyday Low Pricing

  • High-Low Pricing: High everyday prices with frequent promotions for temporarily lower prices

• Value-Added Pricing: Use value-added features/services to differentiate offerings to justify higher prices

Cost-Based Pricing Aspects

1. Cost-Plus Pricing: Adds standard markup to costs of product

   1. Benefits:

      1. Sellers certain of costs

      2. Price competition minimized

      3. Buyers feel it is fair

   2. Disadvantages: Ignores demand and competitor prices; thereby doesn’t make a lot of sense (not the best price)

2. Break-Even Pricing (Target Return Pricing): Setting price to break even on costs or make target return

• Fixed Costs: Nonvaried with production/sales levels (Rent, heat, interest, executive salaries, etc)

• Variable Costs: Vary with production levels (Raw materials, packaging, etc)

• Total Costs = Fixed Costs + Variable Costs

Types of Markets

Supply and Demand Curves

Inversely related 😀

Price Elasticity of Demand

Measure of sensitivity of demand to changes in price

• Inelastic Demand: Change in price → Barely changing demand (eg. necessities) E < 1

• Elastic Demand: Change in price → Significant change in demand; E > 1

• Unit Elastic Demand: Elasticity = 1

PED = %▲ in Quantity Demanded / %▲ In Price (WE USE ABSOLUTE VALUE)

Marginal Analysis

Examines change in one unit on costs and revenues

• Marginal Cost: Extra cost of producing one more unit

• Marginal Revenue: Extra revenue from sale of one more unit

MR > MC units add to profits; MR < MC units subtract from profits

Optimal Quantity: MR = MC

Product Mix Pricing Strategies

• Product Line Pricing: Price based on cost, differences, customer evaluations, and competitors’ prices between items in product line

• Optional Product Pricing: Considers optional/accessory products along with main product (automobiles)

• Captive Product Pricing: Set prices of products that are needed for main products (printer ink,

• Product Bundle Pricing: Combines several products at reduced total price (full makeup kit)

Price Adjustment Strategies

• Discount and Allowance pricing: Reduce prices to reward customer responses (volume purchases, early payments, engaging promotions)

• Segmented Pricing: Selling at multiple prices w/o difference in production costs

  • Markets must be legally segmentable, with different degrees of demand,

    • Customer-segment

    • Product-form

    • Location-based

    • Time-Based

• Promotional Pricing: Characterized by temporarily lower pricing (below listing and/or cost)

  • Special-event pricing

  • Limited-Time Offers

  • Cash Rebates

  • Low-interest financing, extended warranties, free maintenance

• Dynamic Pricing: Adjusting prices continually (airports)