Marketing Flashcards - Sheet1

Question 1

How do you develop marketing information?

Answer 1

1. internal data
2. marketing intelligence
3. marketing research

Question 2

How do you get internal data?

Answer 2

• INTERNAL DATABASES: electronic collections of consumer and marketing information obtained from data sources within the company’s network.
• data can come from CUSTOMER DEMOGRAPHICS, PSYCHOGRAPHICS, SALES TRANSACTIONS, WEB SITE VISITS.
• also financial records, customer service issues, operation production reports, etc.
• PROS: can be accessed MORE QUICKLY and CHEAPLY than other info sources
• CONS: the internal information is collected for other purposes usually, making it INCOMPLETE or in the WRONG FORM
• CONS: data also ages quickly, making it hard/alot of effort to keep database current.
• CONS: managing the information requires highly sophisticated equipment and techniques.

Question 3

What is Competitive Marketing Intelligence?

Answer 3

• systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace.
• GOAL: to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors’ actions, providing early warnings of opportunities and threats.
• TACTICS: snooping on the competitors, monitoring Internet buzz, competitors often reveal intelligence information through annual reports, publications, press releases, and Web pages, tracking consumer conversations about brands, as well as online databases about public competitors and patents.
• CON: a company should not break the law to get good intelligence.

Question 4

What is Marketing Research?

Answer 4

• SYSTEMATIC design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.
• helps to assess market potential and market share or measure the effectiveness of pricing, product, distribution, and promotion activities.
• has 4 steps: DEFINING PROBLEM/RESEARCH OBJECTIVES, DEVELOPING the research plan, IMPLEMENTING the research plan, INTERPRETING and REPORTING findings

Question 5

MARKETING RESEARCH: defining problem/research objective

Answer 5

• EXPLORATORY RESEARCH: gather preliminary information to help define the problem and suggest hypotheses
• DESCRIPTIVE RESEARCH: describe things (i.e. market potential for product, demographics, attitudes about products)
• CAUSAL RESEARCH: test hypotheses about cause-effect relationships

Question 6

MARKETING RESEARCH: developing research plan

Answer 6

• outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data.
• should be presented in a WRITTEN PROPOSAL, especially if the research project is large and complex, covering the problems addressed, objectives, information to be obtained, and how results will help management decision making.
• research plan can call to gather SECONDARY DATA, PRIMARY DATA, or both.
• SECONDARY DATA: information that already exists somewhere, having been collected for another purpose.
• PRIMARY DATA: consists of information collected for the specific data at hand.

Question 7

MARKETING RESEARCH: secondary data

Answer 7

• starting point for research projects, usually internal database.
• also can use commercial data services, government sources (free, also bought) EXAMPLE: Simmons, Nielsen
• COMMERCIAL ONLINE DATABASES: collections of information available from online commercial sources or accessible via the Internet (i.e. ProQuest, LexisNexis, government agencies, business publications, news, etc.)
• INTERNET SEARCH ENGINES - although helpful, can be frustrating and inefficient
• PRO: obtained more quickly and lower cost, provide data individual companies cannot collect on its own because too direct or too expensive
• CON: information may not exist, may not be usable
• NECESSARY: relevant, accurate, current, impartial

Question 8

MARKETING RESEARCH: primary data

Answer 8

• must decide on RESEARCH APPROACHES, CONTACT METHODS, SAMPLING PLAN, and RESEARCH INSTRUMENTS

Question 9

MARKETING RESEARCH: primary data, observational research

Answer 9

• gathering primary data by observing relevant people, actions, and situations.
• PROS: gleaning customer insights not readily available by asking, obtain information people are unwilling or unable to provide
• CONS: feelings/attitudes/motives/private behavior, long-term or infrequent behavior also difficult to observe, hard to interpret.

Question 10

MARKETING RESEARCH: primary data, ethnographic research

Answer 10

• form of observational research that involves sending trained observers to watch and interact with customers in their “natural environments”
• EXAMPLE: anthropologists, psychologists, company researchers, managers.
• ALSO, webnography research
• GENERATES FRESH CUSTOMER AND MARKET INSIGHTS.

Question 11

MARKETING RESEARCH: primary data, survey research

Answer 11

• SURVEY RESEARCH: most widely used method for primary data collection, approach best suited for gathering descriptive information, questions ask people about knowledge, attitudes, preferences, and buying behavior.
• PRO: flexibility, can obtain many types of information in situations
• CON: people can be unable to answer questions, unwilling to respond due to privacy or others, give nonsense answers, give pleasing answers due to what they think the marketer wants, may not take time or resent intrusion.

Question 12

MARKETING RESEARCH: primary data, experimental research

Answer 12

• EXPERIMENTAL RESEARCH: gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors and checking for differences in group responses.

Question 13

MARKETING RESEARCH: CONTACT METHODS

Answer 13

• MAIL, TELEPHONE, PERSONAL INTERVIEW, or ONLINE.

Question 14

MARKETING RESEARCH: contact methods, telephone

Answer 14

• TELEPHONE: PRO: best for getting quick information, greater flexibility than mail with interviewers able to explain questions, skip questions or probe others, response rates are higher, targeted interviewees, CONS: cost/respondent is higher than with mail/online, people may not want to discuss personal questions, INTERVIEWER BIAS (how they talk, etc.), survey respondents hanging up rather than talking.

Question 15

MARKETING RESEARCH: contact methods, mail

Answer 15

• MAIL: PRO: low cost/respondent, can be more honest because it is not in person, CON: it is not flexible, questions in same order, take longer to finish, response rate is LOW, hard to control WHO fills it out.

Question 16

MARKETING RESEARCH: contact methods, personal interviewing

Answer 16

• two forms: INDIVIDUAL interviewing, and GROUP interviewing
• INDIVIDUAL: talking with people in their homes or offices, on the street, shopping malls; PRO: flexible, hands on, CONS: cost 3-4x more than telephone interviews.
• GROUP: inviting 6-10 people to meet with a trained moderator to talk about a product/service/organization, with a “focused” discussion on important issues, researchers/marketers watch from behind one-way glass, is now MAJOR QUALITATIVE MARKETING RESEARCH TOOL, HOWEVER is a small sample to keep time/costs down, hard to generalize, and focus group consumers arent necessarily open/honest about real feelings/behavior/intentions.
• companies are toying with the idea of focus group design to make people feel more at ease and less in contact with designers to have people act more naturally, also employing less traditional questionnaire formats

Question 17

MARKETING RESEARCH: contact methods, online marketing research

Answer 17

• ONLINE MARKETING RESEARCH: collecting primary data online through INTERNET SURVEYS, ONLINE FOCUS GROUPS, WEB-BASED EXPERIMENTS, or TRACKING CONSUMERS’ ONLINE BEHAVIOR.
• these experiments (A/B testing) as well as online virtual shopping experiences allow researchers to track clicks and mouse movements.
• PRO: good for QUANTITATIVE research, speed, low costs, quickly and easily distribute surveys to people, instantaneous responses, large sample size has no effect on cost, good for all types of businesses big and small, more interactive and engaging, less intrusive, easier to complete THEREFORE more response rates
• finding more QUALITATIVE web-based approaches (i.e. online depth interviews, focus groups, blogs, social networks), ALSO low cost
• ONLINE FOCUS GROUPS: gathering small group of people online with trained moderator to chat about products/service/organization and gain QUALITATIVE insights about consumer attitude/behavior
• PROS of online focus groups: easy to access (computer + internet), can have many different types of people, easy to monitor, results are immediate, CONS: lack real-world dynamics, although people are adding audio/video.
• CONS OF ONLINE MARKETING: controlling the online sample, consumer privacy
• best ways to look at customer information is by looking at customer reviews, comments, social networking sites,

Question 18

MARKETING RESEARCH: sampling plan

Answer 18

• SAMPLE: a segment of the population selected for marketing research to represent the population as a whole, should be representative o the population to make accurate estimates of thoughts/behaviors
• 3 decision to make sample: WHO, HOW MANY (sample size), and HOW (what sampling procedure - probability samples vs. nonprobability samples) - depends on the needs of the research project
• PROBABILITY SAMPLES: each member has known chance of being included, but can be very expensive and time consuming
• NONPROBABILITY SAMPLES: sampling error cannot be measured

Question 19

MARKETING RESEARCH: research instruments

Answer 19

• QUESTIONNAIRE vs. MECHANICAL DEVICES
• QUESTIONNAIRE: most common, very flexible (close (how many) vs. open ended (what) question), close ended are easier to interpret and tabulate, important to care about WORDING and ORDERING of questions (logical, simple, direct, unbiased)
• MECHANICAL INSTRUMENTS: used to monitor consumer behavior (i.e. meters to see who does what, physical responses, neuromarketing with MRI and EEG to measure brain activity), PRO: measure consumer involvement and emotional responses, CON: difficult to interpret, USUALLY used WITH other approaches to get a complete picture.

Question 20

MARKETING RESEARCH: implementing the plan and interpreting/reporting the findings

Answer 20

• IMPLEMENTING: important to look out for problems with interacting with respondents, quality of responses, and with interviewers who make mistakes/short cuts, should isolate information, check data for accuracy and completeness, then tabulate results and compute statistical measures
• INTERPRETING/REPORTING: present the most important findings, should be a good medium between researcher/marketing manager doing the interpretation because while the marketing manager knows more about the problem and is more focused, the researcher could be biased and be looking for specific results.

Question 21

ANALYZING and USING marketing information: CUSTOMER RELATIONSHIP MANAGEMENT

Answer 21

• CRM (customer relationship management): managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty
• TOUCH POINT: best places to capture information of customers - each contact btween a customer and company
• usually consists of sophisticated software and analytical tools that integrate custoer information from all sources, analyze it in depth, and apply results to build stronger customer relationships, integrating sales/service/marketing information about customers
• data warehouses –> data mining techniques to figure out information from a central accessible location.
• allows companies to provde higher levels of customer service and develop deeper customer relationships (i.e. pinpoint high-value customers, target more effectively, cross-sell company’s products)
• IMPORTANT not to see it as just technology and software solution but also should be aware that it is only one part of an effective overall customer relationship management strategy.

Question 22

ANALYZING and USING marketing information: DISTRIBUTING and USING marketing information

Answer 22

• marketing information has no value until it is used to gain customer insights
• information should be updated on a regular, timely manner for marketing managers to use
• internal intranets/internal CRM systems to facilitate the marketing information process with contact information, reports, work documents, etc.
• key customers and value-network members can access their account, products, and other data as well now through EXTRANETS

Question 23

MARKETING RESEARCH in small businesses and non-profits

Answer 23

• although large scale marketing campaigns are really expensive, it can be used by smaller organizations in a less formal manner and at little expense.
• through observation, informal surveys using smaller samples, and free customer insight information, smaller groups can be used effectively. it should still be done especially if a company wants to grow
• managers must think carefully about objectives of the research, formulate questions in advance, recognize biases introduced by smaller samples, and less skilled researchers, and conduct research systematically

Question 24

MARKETING RESEARCH on the INTERNATIONAL scale

Answer 24

• same process, but there are more/different problems (i.e. diverse markets with different people in terms of economy, cultures, customs, and buying patterns)
• hard to find secondary data, therefore primary data collection must be done
• reaching respondents is not so easy in other countries
• language barriers are high (translating, missing original meaning, etc.)
• varying responses to marketers

Question 25

PUBLIC POLICY AND ETHICS in marketing research

Answer 25

• intrusions on consumer privacy: ruse to sell products, therefore research industry is trying to educate consumers about benefits of marketing research, distinguish it from telephone selling and database building. also there is a code that outlines researchers responsibilities to respondents and the general public.
• also if researchers provide value in exchange for information, customers are more likely to provide it.
• misuse of research findings: research studies could be just a pitch to advertise products, therefore it seems that some advertisers openly rig research designs to misrepresent findings, therefore many research associations have developed codes of research ethics and standards of conduct. HOWEVER this is hard to just be regulated and each company should take full responsibitliy.

Question 26

What is taret marketing?

Answer 26

• identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each
• 4 MAJOR STEPS: (1) Market Segmentation (2) Market Targeting (3) Differentiation (4) Positioning

Question 27

MARKET SEGMENTATION

Answer 27

• dividing a market into smaller segments with distinct needs, characteristics,or behavior that might require separate marketing strategies or mixes
• MAJOR VARIABLES: geographic segmentation, demographic (includes AGE & LIFE-CYCLE, GENDER, INCOME), psychographic, behavioral (includes occasions, benefits sought, user status, usage rate, loyalty status)
• marketers use multiple segments allows many different tools and helps identify/better understand key segments
• each group/person is very different, and although it is possible to build a product/service for everyone’s needs, not everyone can afford the service/product
• NOT ONLY people with common needs but also what makes them DISTINCT

Question 28

How do you segment BUSINESS MARKETS?

Answer 28

(1) operating characteristics
(2) purchasing approaches
(3) situational factors
(4) personal characteristics

Question 29

How do you segment INTERNATIONAL MARKETS?

Answer 29

(1) geographic location
(2) economic
(3) political/legal
(4) cultural factors
- INTERMARKET (CROSS-MARKET) segmentation: forming segments of consumers who have SIMILAR NEEDS and BUYING BEHAVIOR even though they are located in different countries (i.e. teens vs. middle class vs. etc.)

Question 30

WHY do you segment?

Answer 30

• since all people are different, there are benefits to the firm and the customer
• FIRM BENEFITS: identification of the most profitable and most effective ways to get value from the customers or to give to the customers from a CUSTOMER LIFETIME VALUE standpoint
• CUSTOMER: customized products and services

Question 31

What makes a GOOD SEGMENT?

Answer 31

(1) MEASURABLE (size, purchasing power, profiles) (2) ACCESSIBLE (effectively reachable/servable) (3) SUBSTANTIAL (must be big enough or profitable) (4) DIFFERENTIABLE (different conceptually and respond differently) (5) ACTIONABLE (effective programs can be designed)
- must also be STABLE
- combination of WHO (demograpic), WHAT (behavior), WHY (motivations)
- example: BUDGET CONSCIOUS vs. DEAL SENSITIVE (constrained by income vs. more psychological)
- ALSO relevance vs. observability - more relevant it is, the harder it is to observe

Question 32

How do you EVALUATE market segments?

Answer 32

3 factors:

(1) segment SIZE and GROWTH (relative, largest, fastest-growing ones are not always most attractive, especially if smaller company, segment is too competitive, or others are more profitable)
(2) segment STRUCTURAL ATTRACTIVENESS (segment may be less attracive if too many competitors, substitute products may limit prices/profits, power of buyers, or power suppliers can control/reduce prices)
(3) COMPANY OBJECTIVES and RESOURCES (if segment doesnt mesh with long-run objectives, or lack skills/resources)

Question 33

How do you SELECT target market segments?

Answer 33

• TARGET MARKET: set of buyers who share common needs or characteristics that the company decides to serve.
• UNDIFFERENTIATED/MASS marketing vs. DIFFERENTIATED/SEGMENTED marketing vs. CONCENTRATED/NICHE marketing vs. MICROMARKETING/LOCAL or INDIVIDUAL marketing

Question 34

UNDIFFERENTIATED marketing

Answer 34

• also known as MASS MARKETING
• ignoring market segment differences and go after the whole market with one offer
• focuses on what is COMMON in consumer needs rather than what is DIFFERENT
• appealing to MOST buyers
• most marketers doubt this strategy

Question 35

DIFFERENTIATED marketing

Answer 35

• also known as SEGMENTED marketing
• targeting several market segments, design separate offers for each
• hoping for higher sales and strong position within each segment
• differentiated marketing creates more sales than undifferentiated marketing, HOWEVER there are most costs of doing business because it is more expensive to produce and develop (more research, experimentation, advertising, promotions, etc.)
• IMPORTANT to weigh increased sales against increased costs

Question 36

CONCENTRATED marketing

Answer 36

• also known as NICHE marketing
• going for a LARGE SHARE of one of the FEW SEGMENTS or niches
• strong market position because of greater knowledge of consumer needs in the niches it serves and the special reputation it acquires. (market MORE EFFECTIVELY)
• smaller niche/segment = less competitors
• also Internet allows microniches to pop up as well.
• ALTHOUGH profitable, it has higher than normal risks because relying on one or a few segments for all business is similar to putting all of one’s eggs in one basket, THEREFORE one should diversify into several market segments.

Question 37

MICROMARKETING

Answer 37

• practice of tailoring products and marketing programs to suit tastes of SPECIFIC individuals and location
  (1) LOCAL marketing - tailoring brands and promotions to needs/wants of local customer groups (cities/neighborhoods/stores)
• although TAILORING is good for knowing customers, it can drive up marketing/manufacturing costs significantly by reducing economies of scale, also creating logistical problems when meeting so many varied requirements, ALSO brand image could be diluted if products are so varied
  (2) INDIVIDUAL marketing (one-to-one marketing, mass customization) - tailoring products and marketing programs to the needs and preferences of individual customers
• with technology it is easier to mass customize things (design products and services tailor-made to individual needs)
• makes relationships much more important than ever, although VERY expensive.