Chapter 2

Question 1

Mistakes made by companies that do not understand customer needs

Answer 1

• creating products that consumers do not want
• each function operates independently
• thinking you need more money to have an impact in marketing
  1. waste money on marketing 2. drop-price to sell product
  3. focus on technology
  4. Not cohesive

Question 2

organizational silos

Answer 2

each function does it’s own thing with negative consequences

Question 3

Tesco

Answer 3

• used data from loyalty card programs to determine what consumers were buying and where
• used survey research to determine what they weren’t buying
• launched the Baby & Toddler club to cater to parents (grew to 24% sales in baby products in 3 years)

Question 4

Southwest Airlines

Answer 4

• 35 years of consecutive profitability
• increase in passengers despite industry decline
• customers don’t like high fares, don’t like lines, want to get places on-time
  UNDERSTAND: focus on low prices, no frills, only flies Boeing 737, can only buy tickets directly from company

Question 5

How to develop a deep understanding of customers

Answer 5

1. Talk to your customers whenever and wherever you can
2. Use data you already have
3. Establish clear standards for research

Question 6

Sony

Answer 6

“smart companies are not happy to understand customer needs – they create them!”

• boombox into walkman

Question 7

Danone

Answer 7

• created a market for tasty and healthy yogurt in Ireland

- increased market share from 4.9%-14.8%

Question 8

Marketing Research Techniques

Answer 8

1. Secondary Research (free)
2. Qualitative Techniques (focus groups, depth interviews, ethnography)
3. Quantitative Techniques
   (surveys)

Question 9

Exploratory Research

Answer 9

aka qualitative research

- explore dimensions of a problem and generate ideas

Question 10

Focus Group

Answer 10

• flexible technique, can change course based on answers
• can see their customers in action (behind a one-way mirror)
• great way to explore the dimensions of a problem

Question 11

In-Depth Interviews

Answer 11

• hour long question session

- gain insights and perspectives on decision matrix of each individual

Question 12

buying centre

Answer 12

the group of customers involved in the decision making

Question 13

ethnography

Answer 13

participant observation, researcher becomes the presenter

i.e. DeWalt and Harley Davidson

Question 14

Surveys

Answer 14

involves quantitative data collection through a questionnaire
- validates ideas rather than generate

Question 15

basic care variables

Answer 15

the price of entry for any industry (basic needs, often all a consumer can articulate)

Question 16

Ready, Fire, Aim

Answer 16

• by the time research has finished, the opportunity may have passed and marketchanged
• Launch and Tweak approach is better

Question 17

Co-create Value with the Customer

Answer 17

• getting the customer to do the research for them

- challenges the firm-centric view (they know best) and the product-centric view

Question 18

Build-A-Bear

Answer 18

• customizable teddy bears for children, lets customers do the innovating (co-create value)

Question 19

Treat the Whole World as Your Research Firm

Answer 19

• ideas can come from anywhere
• outsource ideas and experts
  i. e. P&G: Pringles

Question 20

Create New Market Space

Answer 20

1. Substitute Industries
   - provide opp. for innovation
   - Home Depot was in retail and Service
2. Diff. Customer Roles
   - customer focus is too narrow
   - FedEx focused on not just contract but front desk people (acquisition of printing company)
3. Complementary Goods & Services
   - consumption does not take place in a vacuum
   - Movie theatres
4. Broadening Appeal
   - Starbucks, changing coffee from a commodity to an experience

Question 21

Arbol [PT. 2]

Answer 21

• teach sales people marketing
• required sales people to meet with customers
• found ways to provide more value to customers (drill grooves into wood etc.)