Chapter 2 Flashcards
Mistakes made by companies that do not understand customer needs
- 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
organizational silos
each function does it’s own thing with negative consequences
Tesco
- 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)
Southwest Airlines
- 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
How to develop a deep understanding of customers
- Talk to your customers whenever and wherever you can
- Use data you already have
- Establish clear standards for research
Sony
“smart companies are not happy to understand customer needs – they create them!”
- boombox into walkman
Danone
- created a market for tasty and healthy yogurt in Ireland
- increased market share from 4.9%-14.8%
Marketing Research Techniques
- Secondary Research (free)
- Qualitative Techniques (focus groups, depth interviews, ethnography)
- Quantitative Techniques
(surveys)
Exploratory Research
aka qualitative research
- explore dimensions of a problem and generate ideas
Focus Group
- 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
In-Depth Interviews
- hour long question session
- gain insights and perspectives on decision matrix of each individual
buying centre
the group of customers involved in the decision making
ethnography
participant observation, researcher becomes the presenter
i.e. DeWalt and Harley Davidson
Surveys
involves quantitative data collection through a questionnaire
- validates ideas rather than generate
basic care variables
the price of entry for any industry (basic needs, often all a consumer can articulate)
Ready, Fire, Aim
- by the time research has finished, the opportunity may have passed and marketchanged
- Launch and Tweak approach is better
Co-create Value with the Customer
- getting the customer to do the research for them
- challenges the firm-centric view (they know best) and the product-centric view
Build-A-Bear
- customizable teddy bears for children, lets customers do the innovating (co-create value)
Treat the Whole World as Your Research Firm
- ideas can come from anywhere
- outsource ideas and experts
i. e. P&G: Pringles
Create New Market Space
- Substitute Industries
- provide opp. for innovation
- Home Depot was in retail and Service - Diff. Customer Roles
- customer focus is too narrow
- FedEx focused on not just contract but front desk people (acquisition of printing company) - Complementary Goods & Services
- consumption does not take place in a vacuum
- Movie theatres - Broadening Appeal
- Starbucks, changing coffee from a commodity to an experience
Arbol [PT. 2]
- teach sales people marketing
- required sales people to meet with customers
- found ways to provide more value to customers (drill grooves into wood etc.)
