session 2 Flashcards
Statistics
Taking small samples and making accurate predictions
Product line extension
Company comes up with a new product in an existing product category that they are already in *** important
Up to 50% of new product launches are product line extensions
Ex: coolgate for regular teeth but also toothpaste for sensitive teeth
Brand extension
Entering a new product category that they arent in
Ex: dyson going into handbags
Ex: Golf club company sells clubs but now is also selling golf shoes
Why launch a new product within in an existing product category
Capturing new segments of consumers , satisfying a different consumer need or want
Market research process
6 steps involved
Step 1: translating a business problem into a research question → examining an element of the marketing strategy , think of four ps
Step 2: design research program to answer research questions
Step 3: collect data
Step 4: analyze research results
Step 5: interpret research findings and make recs
Step 6: communicate recs to business audiences
j crew
Struggling due to lowering sales in 2010
They were bankrupt and are recovering but have really fallen from where they used to be
reasons why j crew was struggling
Loss of brand focus (biggest issue)
increased prices
Regular sales with large discounts
Increased competition
how did j crew attempt to fix themselves
Brand partnerships
adding/ deleting product lines
Changing aesthetic
So far not able to recover
What is the fundamental issue with j crew
They are neither a discount retailer nor a luxury retailer
They were doing well because the market accepted businesses that were in the middle of luxury and discount
Consumer behaviour changed in 2010
There was a financial crisis before 2010 so people started to become cost conscious and wanted more value from brands and looked at brands that were more cost conscious→ j crew had the challenge to position themselves and show a different proposition from the discount brands and luxury brands , they didnt do this
They increased prices because they weren’t doing well but also engaged in deep discounts , so there are conflicting strategies
Consumers arent sure what j crew is about
It didnt adapt to the online market as well as other companies
If your a middle brand, super important to express your value proposition → can talk about how your brand is sustainable, inclusive (plus size), durability
major takeaway from the j crew case
When you see a problem you need to address it with marketing research, and understand your brand identity
Problem definition
Have to determine the business problem then translate it into a research problem then describe specific research objectives
determine the business problem
make sure the problem is clear
keep asking why until you reach the core problem
identify unit of analysis (company, division product line)
identify key variables (revenue, customer satisfaction, willingness to pay)
identify other key info
Business problem of j crew:
Loss of brand identity and decrease in sales revenue
research problem of j crew
Pricing is the research problem they need to focus on→ change their pricing strategy of deep discounting
research objectives of j crew
Evaluate each product line to see if the elimination of discounting is possible
Determine the target markets pricing preference
research vs business problem
A business problem is a problem that a business needs to solve, while a research problem is a task that researchers need to complete to help solve that proble (internet)
Independent variables:
variable that is manipulated by the researcher , influences the dependent variable . ex: price
dependent variables
variable that you are measuring, explained and influenced by the independent variable . ex: willingness to pay
hypotheses
explaining the relationship between the independent and depending variable
New coke case
Company engaging in market research but made a big mistake→ need to do good research not just research
Pepsi had a new edgy marketing strategy that was taking off which lead coca cola in trouble
business problem of new coke
losing market share to pepsi and need to appeal to a new customer segment (young generation)
research problem of new coke
Evaluate the current advertising strategy, and potentially target a younger segment, in terms of 4 ps its promotion we need to focus on
How did coke react?
The conducted extensive market research and found a formula that works and replaced the existing drink with “new coke” with a new taste
Its an issue to replace the existing drink because they have a loyal consumer base who liked the old cola
What led to the new coke
They did marketing research → 200,000 blond taste tests, focus groups, surveys and find that People had a distinct preference for new coke over old coke and new coke over pepsi → New coke was launched
what went wrong with new coke
Research was based on wrong assumptions: coca cola though that taste was a deciding factor but its not, emotional involvement and brand associations were key for when people bought coke not even the taste → branding is so important
The way they conducted the research: they did not adequately simulate experience of drinking coke, people would drink it in a can, in the blind taste test they didnt serve it in a can and small serving sizes→ this difference matters because the reward center in your brain goes crazy when it comes from a can and only slightly lights up when they drink it from a glass →therefore wrong conclusions were made
Always want to replicate the consumer experience
Third issue was that consumers were not told that only one product would be marketed , never told people that new coke would replace old coke
what did coke do Inr response to fix the situation
Launched a product line extension called cherry coke
Reintroduces coca cola classic
Launched a campaign → authenticity
Cokes product line extension
Benefits: satisfy new segments
Risks: cannibalizing the original product
To mitigate cannibalization, need good segmentation , find consumers that want your product but also want differentiation from the og product
Coke has regular coke but also diet coke (diet coke was more targeted towards weight conscious consumers)
Coca cola life was also launched for health conscious consumers → good bc targetting new customers but didnt work because people didnt associate coke with naturalness . make sure you know what associations consumers have with your brand
Why Study Marketing Research?
Drill deeper than surface observations
*Gather research-driven insights to understand the ever-changing marketplace
*Propose products/services that create value for targeted consumers
*Craftgood stories (=messaging strategy) thatcommunicatethe value proposition to targetedconsumers
marketing research should
Be anchoredin a deepunderstandingof the targetmarketGo beyondfacts/descriptive statisticsto explainthe WHYBringa new understandingor challenge existingbeliefsLead to strategicaction31
