Exam 2 Flashcards
What does marketing research fall under
Decision Support Systems
What is decision support systems
information acquired to give the company an advantage that allows more efficient use of resources and maximize profit and success
What can cause decision support systems lead to disaster
poor information/failure to use information appropriately
What is marketing research
focuses on assessing the effectiveness of a specific marketing tool or tactic to help managers make decisions
How to test marketing activities to see what works or doesn’t
price, features, packaging, promotions, location
How many steps are in the marketing research process
6
What are the market research process steps
- define the problem/opportunity
- develop a research plan
- collect data
- analyze the data
- prepare and present findings
- outline follow up and create an action plan
- Define the Problem
definition of a problem or opportunity that requires investigation; focus on problem not symptoms
- Develop a research plan; key decisions
- primary goals of research
- type of research
- information needed an how it will be collected
- how the data will be analyzed
- desired outcomes
- Collect data
data depends on goal and type of research, companies make a tradeoff in this step
- Analyze the data
related to data collection, different data analyzed differently
- Prepare and present the findings
determine how information should be presented and whom should they be presented
- Outline follow up and create an action plan
reflection by the manager(s), results allow the management team to solve a problem
How is data collected
- internet surveys
- focus groups
- web-based experiments
- tracking consumers’ online behavior
What starts off marketing research plan
research design
what are research goals
indicate how the project is carried out
three main research goals
- exploratory
- descriptive
- casual (cause and effect)
exploratory research
seeks to discover ideas and insights related to a problem or opportunity; go to get started/don’t know what’s going on
descriptive research
answers questions about who, what, when, and where something happened; survey based
casual research
seeks to determine the effect of one variable on another
brand trial rate
gives marketing managers an indication of a new-user acceptance; sampling
What signifies a product problem
low brand trial rates
brand trial rate (%)
= first-time trials in target group / Total population in target group
research approaches
qualitative and quantitative data
qualitative research
suitable for investigating underlying reasons customers do or don’t do something; difficult, time consuming, labor intensive
qualitative research key points
- specific questions/set of questions
- open-ended responses
- quality responses offer deeper insight
- difficult and usually time consuming
- collecting non-numerical data from customers
Qualitative collection methods
- observation
- ethnography
- focus group
- personal interview
quantitative research
used to count, classify, and measure things to answer descriptive marketing questions
Questions for quantitative research
how much, many, often?
quantitative collection methods
- surveys
- experiment
- field studies
- technological scanning
- data mining
- analytics
data sources
Primary and Secondary Data
primary data
information newly collected specifically for the research purpose; relevance, high costs and amount of time to collect
secondary data
data that already exists and collected for another purpose that can be used to address the research problem; less costly, quicker, relevance both in terms of content and timeliness
practical considerations for conducting marketing research
- ongoing
- conducted with a specific goal in mind
- get what you need and don’t overdo it
- think of research in marketing as an investment
Market Segmentation
categorizing groups of customers to divide the market into manageable pieces based on customer difference
select customers to serve
segmentation and targeting
decide on a value proposition
differentiation and positioning
Understanding Market Segmentation
creating segments provides a better value proposition for the customers in each group; better value increases the likelihood the customer will buy
Major segmentation variables for consumer markets
- geographic
- demographic
- psychographic
- behavioral
geographic segmentation variable
dividing the market into different geographical units
- nations, states, regions, counties, cities, neighborhoods
- climate, population density, metro type
demographic segmentation
divide a market into segments based on variables
- age
- life-cycle stage
- gender
- income
- occupation
- education
- religion
- ethnicity
psychographic segmentation
- values
- lifestyle
- personality
behavioral segmentation
divides a market into segments based on consumer knowledge, attitudes, uses, or responses to a product
- occasions
- benefit nights
- user status
- usage rate
- loyalty status
how do multiple segmentation bases help companies
- identify smaller, better-defined target groups
- identify and understand key customer segments
- reach customers more efficiently by tailoring market offerings and messages to customers’ specific needs
requirements for effective segmentation
- measurable
- substantial
- accessible
- differentiable
- responsive
segmenting business markets
use same basic process for segmentation business markets as they use for consumer markets, with exception of psychographic segmentation
target market
set of buyers sharing common needs or characteristics that the company decides to serve
How do companies evaluate segments
- attractiveness - size, growth, competition
- ethical or moral issues - kids, seniors
- consistent with the goals and objectives of the firm
- demarketing - discourage customers
target market strategies
- mass marketing
- micromarketing
- differentiated marketing/multisegment
- niche marketing
Mass marketing
idea that the market is just one big segment
micromarketing
companies would consider each customer as a segment, very expensive and not practical
differentiated marketing
multisegment; companies identify large distinct groups that share similar characteristics
niche marketing
narrow focused approach, sub-segment that is not large enough for the larger competitors to pursue
positioning
firms must decide which segments to target and on the value proposition
product position
creates a specific perception in the customer mind relative to other options
positioning statement
- we…brand/company with the offering
- target customer
- key benefit - unique selling proposition
- competitive reference
perceptual map
graphical/visual representation of customer perceptions of positioning
repositioning
company decides to change its positioning when it isn’t working well
- create different perception go the brand in the customer’s mind relative to competitors’ offerings
- risky
product
anything that can be offered to a customer in an exchange
What can be products
tangible goods and services
successful products
satisfy customer needs and deliver superior value relative to competitors
sensory benefits
appeal to one or more of the five senses
functional benefits
products that perform an intended task effectively and efficiently
benefit delivery systems
- sensory
- functional
- resource
- psychological
resource benefits
provide or save customers things that they value, primarily time and money
psychological benefits
affect how the customer responds emotionally to product purchases
three levels of products
- augmented product
- actual product
- core customer value
augmented product
- delivery and credit
- product support
- warranty
- after-sale service
actual product
- brand name
- quality level
- packaging
- design
- features
core customer value
reason why we purchase a product
four service characteristics
- intangibility
- variability
- inseparability
- perishability
intangibility
services cannot be seen, tasted, felt, heard, or smelled before purchase
variability
quality of services depends on who provides them and when, where, and how
inseparability
services cannot be separated from their providers
perishability
services cannot be stored for later sale or use
innovation
an improvement in a products ability to deliver its primary benefits to its customer
discontinuous innovations
large jumps in benefit-delivering abilities
continuous innovations
smaller incremental improvements to benefit-delivering abilities
innovative new products
not all successful innovations are groundbreaking, many are small but useful improvements to existing products
new product development process
- idea generation
- idea screening
- concept development and testing
- marketing strategy development
- business analysis
- product development
- test marketing
- commercialization
idea generation
systematic search for new product ideas
- internal and external idea sources
idea screening
screening new product ideas to spot good ones and drop poor ones as soon as possible
concept development
developing a new product into alternative product concepts
- find out how attractive each concept is
- choose the best one
concept testing
testing new products concepts with groups of target consumers
- presenting concepts to consumers symbolically or physically
- ask customers to answer questions about reactions to concepts
marketing strategy development
step 1: target market, planned value proposition, sales, market share, profit goals
step 2: price, distribution, marketing budget
step 3: long-run sales, profit goals, marketing mix strategy
business analysis
review of sales, costs, and profit projections for a new product
- do these factors satisfy company’s objectives
product development
developing the product concept into a physical product
- expensive
test marketing
introduce the product and its proposed marketing program into realistic market settings
- takes time and expensive
commercialization
must decide on timing, where to introduce, and develop market rollout plan
why do new products fail
- overestimation of market size
- product design problems
- incorrectly positioned, priced, or advertised
- pushed by high-level executive despite poor marketing research findings
- excessive development costs
- competitive reaction
diffusion of innovation
idea that new technology and the products that utilize the technology spread through markets over time
product life cycle
variations of product life cycle
- Fad
- Style
- Fashion
product brands and branding
strong brands are carefully built and managed over time
brand image
collection of images, thoughts, and feelings that are evoked when exposed to a brand name
How is a brand image built
through
- leadership
- key benefits
- low-price
- around your customers
- how or when product is used
brand equity
brand extension
placing the brand name on multiple products
in-category or near category extension
in same or very similar product categories as the original product
out of category extensions
brand extension is in a completely different category as the original brand
- risker
- connection between original is weaker
basic divisions of supply chains
upstream and downstream
upstream
partners supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service
downstream
partners serve as distribution channels that link the firm and its customers
structures of supply chain
indirect and direct
direct supply chain
indirect supply chain
when to use direct supply chains
- pre-purchase inspection not important
- purchase directly from brands we know and have experience
- effective online sales require producers to invest in websites that easily, attractively, and reliably display products; communicate terms of sale; and complete transactions
- viable when consumers do not need the product immediately (UPS, FedEx…)
value of supply chains to consumers
retailers help consumers save considerable time and money
what moves through supply chains
physically move materials and merchandise from supplier to producer and producer to consumer
- flow of money
- flow of information
- flow of promotional efforts
distribution intensity
level of availability for the product or servicei
intensive distribution
when producers wish to make their product easily obtainable and increase convenience
selective distribution
when producers place their brands in many but not all possible outlets; products consumers put forth some effort to find
exclusive distribution
placing product in few outlets; most often used for luxury or specialty products
retailer fit on three dimensions
- retailer reach
- retailer type
- retailer image
retailer reach
ability of a retailer to attract consumers in a producer’s target market or markets
retailer type
the store is still the key; online sales grow rapidly, 90% of retail sales still occur in physical stores
retailer types
- discount stores
- supermarkets/grocery
- department stores
- specialty stores
- category killers
bounce rate
estimates the percentage of visitors to a site who navigate away quickly without venturing beyond the landing page
bound rate formula
number of visitors who visit the only one page/visitors
conversion rate
percentage of visitors to a website who complete a requested task. usually the task is a purchase, but it could be giving contact information or other task
conversion rate formula
number of visitors who complete requested task/visitors
abandonment rate
percentage of visitors who begin but do not complete a task
abandoned rate formula
number of abandoned web interactions/visitors
retailer image
each retailer brings to mind a different set of images and there expectations of the kinds of merchandise carried, price and service levels, prestige, and in-store atmosphere
push strategy
producer uses it sales force and perhaps promotional incentives to convince wholesalers and retailers to carry the producer’s products
pull strategy
producer goes directly to the consumer, usually by advertising, and attempts to build demand for its brands
power
one party’s ability to get another member to do something that it would not have done otherwise
coercive power
when companies threaten another supply chain member
reward power
where one supply chain member offers positive incentives to another member to gain compliance
conflict in supply chain
- supply chain members have different goals; profit comes from expense of members
- differences in leadership roles
- see target market differently
relationship marketing
an orientation between seller and buyer that focuses on customer satisfaction, loyalty, and engagement built over the long term
discrete transactions
when two parties conduct business on a one-time basis with no set expectations of future business
relationship marketing between business partners
both committed, exhibit high levels of trust and cooperation, willing to invest, make sacrifices to achieve long-term success
vertical marketing systems
when producers, retailers, and wholesalers work together in a highly cooperative relationships to create an overall unified group go organizations whose goal is satisfying consumers
conventional distribution channel
produce -> wholesaler -> retailer -> consumer
vertical marketing system channel
produce, wholesaler, realtor -> consumer
types of vertical marketing systems
- corporate VMS - single ownership
- contractual VMS - franchise organization
- Administered VMS
