Market Research Essentials, CRM, Big Data, Marketing Analytics, and STP Process

Market Research Essentials (Module 4 - 10% of Grade)

Importance of Research:

• Crucial first step before designing/launching a new product.

• Avoids costly mistakes and assumptions.

• Gains insights into current customers (e.g., ability to afford the product). What is the appropriate price point to maximize profit?

• Identifies new opportunities and emerging markets.

Market Information System (Lesson 9):

• Definition: A collection of tools and resources used to collect and analyze data; not necessarily a single software platform.

• Can include multiple software platforms and even paper files.

• Example: Data captured at Target checkout (name, address, card number, purchase details).

• Data informs marketing decisions (e.g., product launch timing, pricing, market response).

• Aids in making data-driven marketing decisions at the appropriate time.

Why Use Market Research and Data Collection?

• Essential for marketing planning.

• Supports ethical and sustainable marketing decisions.

• Utilizes internal/external, existing/new data.

• Analyzes:

  • Consumer behavior (why people buy).

  • Marketplace conditions (people, location, affordability).

  • Helps develop decision-making goals.

Biggest Issue with Data Collection:

• Maintaining privacy and confidentiality (data breaches, hacking).

Steps in the Research Process (Lesson 10) - DESCAR Acronym:

• DESCAR is a made-up acronym to help remember the steps: Define, Establish, Search, Collect, Analyze, Report

1. Define the Research Problem (D):

• Identify and further define the problem to guide research.

• Research often starts with a general problem or issue.

• Underlying factors or symptoms may be the real problem. What appears at first as the problem, often is not.

• Involves:

  • Management Research Deliverable: What management wants to know.

  • Problem Statement: An in-depth detailed description of the problem, forming the foundation of research.

    • Example: "The problem is the sale of coffee makers among the 18 to 25-year-old male and female demographic has decreased by x amount of percent since whatever date."

    • The entire research is designed to answer the problem statement.

2. Establish a Research Design (E):

• Five key aspects:

  • Type of Research:

    • Exploratory: Initial exploration to identify the problem.

    • Descriptive: In-depth description of the problem.

    • Causal: Explaining the cause of the problem to fix it.

  • Nature of the Data:

    • Primary: Directly relevant and readily available data.

    • Secondary: Journals, books, internet research.

    • Quantitative: Numerical data.

    • Qualitative: Words and feelings, gathered from interviews.

  • Nature of Data Collection:

    • Focus groups (6-12 people).

    • In-depth interviews.

    • Surveys.

    • Behavioral/Observational: Observing employee behavior vs. consumer behavior.

    • Mechanical: Time studies in a factory setting.

  • Information Content:

    • Related to the problem statement (history, cause, solution).

    • Open-ended (why, how) vs. closed-ended (yes/no) questions.

    • Qualitative focused on open-ended questions, which evoke a response.

  • Sampling Plan:

    • Census data.

    • Group sampling/focus groups.

    • Probability (everyone) vs. non-probability (random selection).

3. Search Secondary Sources (S):

• Not readily available or directly related, but helpful.

• Government sources (census, Bureau of Economic Analysis, BLS, CDC).

• Market research organizations (companies that sell data to third parties).

• Internet (caution: verify source viability).

• Word-of-mouth.

4. Collect the Data (C):

• Engage with many participants for reliable outcomes.

• Qualitative studies: ~20 participants for in-depth interviews; transcribe every word to find common themes/keywords.

• Surveys can be qualitative or quantitative; Likert scales (always, sometimes, etc.) are quantitative.

• Most costly part (travel, payment).

• Potential for error (transcription, data collection).

• Risk of bias (skewing data).

5. Analyze the Data (A):

• Coding: Identifying themes and code words in qualitative data.

• Reliability: Data's consistency if research is repeated (95% threshold).

• Potential for errors and bias continues here.

6. Report the Findings (R):

• Reports often range from 50-200 pages in length.

• Managers often focus on the executive summary and findings.

• All pages must be perfect because research projects are publishable and require citations.

Market Research Considerations (Lesson 11):

Technology:

• Software: NVivo (qualitative data analysis), IBM SPSS & SAS (quantitative data).

• Online tools: databases, focus groups, blogs (responses), sampling.

• WebEx for online interviews (automatic transcription).

Global Issues/Challenges in Global Markets:

• Obtaining data is difficult (time zones, travel, language barriers) and expensive.

• Lack of research guidelines in some countries (unlike APA/MLA in the US).

• Data comparability issues.

• Unwillingness to respond (political, legal reasons).

• Language translation issues.

CRM, Big Data, and Marketing Analytics (Module 5 - 8% of Grade)

Customer Relationship Management (CRM):

• Definition: Process for managing all organizational interactions with customers, including every touch point.

• Captures data, auto-emails, and links to other departments.

• Purpose of the program is to maintain proper contact with our customers using marketing. The program is designed to help retain customers so they return and make more purchases.

• Addresses buyer’s remorse with auto-generated emails.

• Increases customer lifetime value leads to repeat purchases over many years.

• Customer Lifetime Value = (How long with company) + (How much spent) - (Acquisition and retention costs).

CRM Process Cycle:

• Knowledge Discovery: Data capture (e.g., card payment at Target).

• Market Planning: Using data to make marketing decisions and strategies.

• Customer Interaction: Auto-emails and point-of-sale communications.

• Analysis and Refinement: Using CRM to refine marketing plans (e.g., low sales in a zip code).

Touch Points:

• Every interaction with a customer (email, face-to-face, phone, texts, website clicks, click-to-action button).

• Magic number is six to eight interactions needed to generate a sale.

• Every touch point is captured by the CRM system.

Big Data and Marketing Decision Making (Lesson 13):

Categories of Data:

• Structured: Organized data (Excel spreadsheet).

• Unstructured: Unorganized data (pile of papers, raw internet search results).

  • Big ol’ pile of paper in the middle of your office floor that you had to use to create an excel spreadsheet. The excel spreadsheet (structured data), what you had to use to create the spreadsheet (unstructured data).

  • Think of going to the internet and coming up with 200 sources, this is unstructured data. You have to now organize these results in something useable.

  • Still the most used form of data.

Sources of Data:

• Business systems/Point of sale (e.g., Target card reader).

• Social media platforms (ratings/reviews).

• Interconnected devices (mobile apps, restaurant searches on Google).

• Commercial entities (data resellers).

• Government agencies (Bureau of Labor Statistics, census data).

Marketing Analytics (Lesson 14):

• Know these four types. What happened, Why did it happen, What’s likely to happen, What should we do to fix it?

Four Key Types:

• Descriptive: What happened?

• Diagnostic: Why did it happen?

• Predictive: What is likely to happen?

• Prescriptive: What should we do to fix it?
  Example: A concrete example would be the November sales in the fourth quarter were way down (Descriptive). Diagnostic, why were November’s sales down? We try to predict, if we make this change we might see positive impacts in the future. Prescriptive, we need to create a solution to ensure that November’s sales do not fall down again.

Marketing Dashboard:

• Keeps everyone aligned and informed.

• Provides up-to-the-minute information.

• Increases up-to-the-moment data that anyone in the company has access to. Prevents gossip.

• Enhances alignment of other departments.

• Example of metrics: Website visitors, click-through rates, conversion rates, sales, social media followers.

Segmentation, Targeting, and Positioning (Module 6 - 7% of Grade)

Segmentation:

• Breaks down the total market into smaller, manageable segments (pizza analogy).

• Why we segment is because the market (everyone) is way too big to deal with. Segmentation creates slices of people will probably buy our products.

• Segments consist of groups of people likely to buy the product.

• Consumer Persona: Representation of the perfect customer, using variables.

Segmentation Variables:

• Geographic

• Demographic

• Psychographic

• Product-related

Use elements of each of these to create the perfect representation of the ideal customer. Example: Coffee makers. The demographic would be men and women between ages 25-50 who earn more than $40,000 a year. Household size of five. Geography is Great Northwest. Considers themselves coffee connoisseurs.

Targeting:

• Analyzing segments and selecting an approach. What targeting approach you want to take.

• McDonald's Example: Kids and adult meal segments require different marketing.

Targeting Strategies:

• Undifferentiated: One segment or mass marketing (laundry detergent, toilet paper, goods that everyone buys). Mass marketing

• Differentiated: More than one segment (McDonald's example). More than one segment available to be used.

• Concentrated: Niche marketing; a small group of like-minded people. Small group of like-minded people.

• Customized: Micro-marketing; made for one individual (greeting cards). Made for one single person.

Positioning:

• Marketing in a way that evokes emotion in potential customers.

• Looking different from the competition, positioning against competition.

Positioning Strategies:

• Product attributes

• Price (economy brands)

• Quality (Ritz Carlton)

• Against competition (Android vs. iPhone)

• Application

• User categories (baby products)

• Product categories (electric cars)
  *Create two or three hundred buzzwords to attach to one of these strategies to create marketing materials.

Consumer Decision-Making Process:

• Six steps

Steps:

• Recognize Problem/Need.

• Search

• Evaluate Alternatives

• Purchase Decision

• Act or Buy

• Post-Purchase Evaluation
  Marketers focus on pushing people from stage 1 down to stage 5/6 as quickly as possible. Marketers think about how they can reach out to a consumer as many times and effectively to go to those 6-8 touch points quickly. Television commercials show emotion, they create a product positioning statement, push marketing toward customers. Consumers have to make the decision for themself. The marketers want to get them there quickly.

Example: There’s a gigantic billboard with 4 new tires for $299 with a guaranteed warranty. 80,000 mile warranty. Tire shop website, phone numbers. That company put that billboard up and knew that there would be several thousand cars a day that might likely need new tires. So the billboard eliminates the search and eliminates the need to do any evaluations. Because all the information and action is present on the billboard.
Thinking like a marketer vs thinking like a consumer is very different. A consumer takes it one step at a time, the marketer tries to push the customer as far down that list and as fast a possible. It is two different perspectives. Think about it when reviewing.