MKT 3305 Baylor University Mrs. David

The Research Design Powerpoint Definition

A research design is a set of advance decisions that makes up the master plan specifying the methods and procedures for collecting and analyzing the needed information. Powerpoint Definition

Evaluation Alternatives

Evaluative Criteria: The dimensions consumers use to compare competing product alternatives Examples: power, Comfort, price, the style of the care and safety Yes, evaluative criteria is how they advise

The survey data collection budget

Internet is generally the cheapest

Experimental Design Field Experiments

It happens in the really work and you take a store with your demographics Example Waco with HEB reward program

The Problem Definition

List the Symptoms List the Possible Causes List Some solutions List Your objectives

Market Segmentation: Geographics

Local national, international, and regional

Consumer Decision Making Process

Need Recognition Search for information Evaluation of Alternatives Purchase Decision Post Purchase Evaluation

Non-probability Sampling convenience Sample

No control Non-representative Exploratory E.g., snowball sampling (you see them and you survey them )

Influences on Consumer Decision Making Internal Influences

Perception: people select, organize and interpret information from the outside world Motivation: internal state that drives us to satisfy needs Learning: is a change in behavior caused by information or experience Attitudes: is lasting evaluation of person, object, or issue Personality: is the set of unique psychological characteristics that consistently influences the way a person responds to situations in the environment Age Group: Lifestyle:

Segmentation Based on

PsychographicsLECTURE NOTES: The best known general psychographic segmentation system is named VALS, which stands for values and lifestyles. The VALS system segments U.S. consumers into eight unique groups based on 1) their primary motivation and 2) their level of resources and innovation. Primary motivations include ideals (meaning consumers are motivated by knowledge and principles); achievement (purchases reflect status and achievement to their peers), and self-expression, (purchases reflect a desire for social/physical activity, variety, and risk. According to the VALS website, "A person's tendency to consume goods and services extends beyond age, income, and education. Energy, self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness, leadership, and vanity play a critical role. These psychological traits in conjunction with key demographics determine an individual's resources. Various levels of resources enhance or constrain a person's expression of his or her primary motivation."

Secondary Research External Sources

Published research trade organization Syndicated research Government Sources

Non-probability Sampling Quota Sampling

Purposefully selecting sample to mirror the population Demographics Similar to stratified but non-probability

Do you have to find and collect new information for your project?

Research with Primary data

Does the information they require to make a decision already exist?

Research with secondary data

How to choose which research design

The choice of the most appropriate design depends largely on the objectives of the research and how much is known about the problem and research objectives.

Determine the Research Design

determine whether secondary data are available determine whether primary data are required Exploratory research Descriptive research Causal research

Experimental Design Laboratory Experiments

everything is control by the company disadvantage: we will not know how it will work in the really world Example: Mock store

Focus Group Exploratory Research

flexible, group discussion of a product, ad or concept Moderator- Focus group leader (Moderator, should not talk only keep the time and stay focus) Size of Groups 6-12 prefer small 6

Probability Samples Systematic Sampling

select a random starting and then choose every ith element.

Define the research Problem

specify the research objective identify the consumer population of interest place the problem in an environmental context

Observation Methods Exploratory Research

systematically recording the behavioral patterns of people, objects, and events in order to obtain marketing information. Answers: what, where, how, when, who

Probability Samples Stratified Sampling

two steps: - Divide population into strata. - Randomly choose elements from each stratum.

Research design Textbook Definition

which specifies exactly what information marketers will collect and what type of study they will do Textbook Definition

Joint Demand

Business demand is often Joint demand Demand for two or more goods that are used together to create a product

Level of involvement

Pack of Gum no

Data from research conducted to help make a specific decision

Primary Data

Sampling Design Probability

SRS Systematic Stratified

Information Search Step Consideration Set

The alternative brands a consumer seriously considers in making a decision

Research Report

Write in English Summarize Hypotheses Visuals Examples

Causal

identifies cause and effect between variables. experiments we are INFERING.

Step 1: Market Segmentation

Can't be all things to all people Divide a market into defined groups based on a group of customers who share similar needs and wants Focus on building value for segments Example: P&G website

Design the sample

Choose between probability sampling and non probability sampling

Secondary Research Internal Sources

Company reports Previous company research salesperson feedback customer feedback

Sampling Designs Non-probability

Convenience Quota

Special considerations

If respondent must see, feel, taste...use some form of personal interview...mall intercept

The survey data collection time horizon

If speed needed use telephone or online; online surveys becoming more popular due to speed

Selecting Segment to target

A viable market segment should: have members with similar wants and needs that are different from those in other segments. be measureable in size and purchasing power. be large enough to be profitable. be reachable by marketing communications. have needs the marketer can address. Viable segments display each of the characteristics shown here. Without a real difference in consumer needs, a firm might just as well mass market their brand. Determining the size and purchasing power of a potential segment allows the marketer to forecast sales, and based on forecasts, determine if pursing the segment is worth the time and effort. Trends pertaining to growth in the segment and must also be considered, as it is critical that the segment be large enough now, and in the future, to justify targeting. Sometimes segments determined by unique psychographics prove less than useful when purchasing media time and space. Marketing communications must be able to reach the segment. Finally, it goes without saying that the marketer must be able to satisfy the needs of the segment by means of superior resources or expertise, compared to the competition.

Market Segmentation: Psychographics:

Activities, Personality, and values, and attitudes

Information Search Step Evoked Set

All of the alternative brands a consumer is aware of when making a decision

prepare the research report

An executive summary A description of research methods A discussion of the results of the study Limitations of the study Conclusions and recommendations

Demand Elasticity

Business Demand is often more Inelastic (i.e., less elastic) than consumer demand Changes in price have little or no effect on quantity sought LECTURE NOTES: Inelastic demand Demand in B2B markets is mostly inelastic because what a firm sells often is just one of the many parts or materials that go into producing the consumer product. It is not unusual for a large increase in a business product's price to have little effect on the final consumer product's price. Fluctuating demand: Small changes in consumer demand can result in large changes in B2B demand. As an example, consider air travel. A rise in jet fuel prices causes higher ticket prices and a shift by some consumers from flying to driving vacations, which may cause airlines to postpone or cancel orders for new equipment. This change in turn creates a dramatic decrease in demand for planes from manufacturers such as Boeing and Airbus. Another cause of fluctuating demand is product life expectancy. Business customers tend to purchase certain products, such as manufacturing equipment, on a somewhat infrequent basis. They may need to replace some types of large machinery only every 10 or 20 years. Thus, demand for such products fluctuates. DISCUSSION NOTES: Can students think of other examples of joint demand? A classic example of joint demand in a goods context is razors and blades. The demand for razor blades is a function of the number of razors in use. This is why razors are often sold at a loss - in order to increase demand for the higher-margin blades. Printers and ink cartridges would be another. Joint demand also is present in digital environments. For instance, Apple offers the iTunes app for free while charging for downloads of music and other content.

Primary Research Descriptive Research

Cross-sectional Longitudinal

Primary Data Exploratory Research

Customer Interviews Focus Groups Projective Techniques Case Studies Ethnographies

Post Purchase Evaluation

Customer Satisfaction: overall feelings, or attitude, a person has about a product after he or she purchases it Cognitive Dissonance: reject after purchasing a product or second-guess our decision Can marketers negate cognitive dissonance? Yes, follow-up communications and promotion with products.

Secondary data

Data that have been collected for some purpose other than the problem at hand

Exploratory Research

Describes less structured data collection methods used to clarify the research problem used to gain background info used to test, discover new products used to generate insights for future studies

Choose the Method to collect Primary data

Determine which survey methods are most appropriate mail questionnaires telephone interviews face-to-face interview online questionnaires Determine which observational methods are most appropriate personal observation unobtrusive measures Mechanical observation

Probability Sampling Simple Random Sampling:

Each sampling frame element is assigned a number and then randomly selected...there are 5,000 U.S. Universities.

Positioning

Goal: locate the brand in the minds of consumers to maximize the potential benefit to the firm- how target customers should view the firm Positioning helps clarify the brand's essence, identify the goals it helps the consumer achieve, and show how it does so in a unique way

Business to Business Markets

LECTURE NOTES: Aside from the fact that purchases are made for some purpose other than personal consumption, business to business markets differ from consumer markets in several key ways: Decisions are frequently made by multiple buyers, called buying groups, and the final decision maker is typically someone other than the user of the product. The decision making process also differs, as it is made after careful weighing of alternatives based on rational criteria, according to precise technical specifications based on product expertise. There are also a limited number of large buyers; in fact, products are frequently purchased directly from the producer. Once a decision has been made, long-term relationships typically develop between buyers and sellers unless dissatisfaction occurs. A third key difference is that unlike consumers who are literally spread out through the U.S. organizational buyers are often geographically concentrated in certain areas. Finally, purchases frequently involve high risk and high cost. The process may involve competitive bidding, price negotiations, and complex financial arrangements. This, and the fact that buyers are geographically concentrated makes personal selling the best marketing communications choice. Indeed, the vast majority of B2B marketers emphasize personal selling over advertising.

Business Demand is Derived

LECTURE NOTES: Demand for B2B products also differs from demand for consumers demands. One of the most important differences is the fact that B2B demand is derived, meaning that it stems directly or indirectly for consumer demand for another good or service. The example shown here illustrates how consumer's demand for an education influences derived demand for a number of goods, including textbooks, paper, pulp, and forestry products. Thus demand for a single consumer product may contribute to the derived demand of many B2B goods. DISCUSSION NOTES: The threat of substitution is always present when dealing with business demand, and probably should be addressed during the discussion of this slide. For example, you might point to the exhibit on this slide and ask students to consider what substitutes exist for paper textbooks (digital books, online learning centers, or course, etc.). Obviously, if demand were to shift radically toward digital books, it would influence the derived demand for forestry products in a negative manner. (Which might not be a bad thing when considered from a sustainability perspective.)

Segmentation based on Behaviors

LECTURE NOTES: One way to segment on the basis of behavior is to divide the marketing into users and non-users. While this can be helpful, further segmenting the market according to usage status (heavy, medium, and light users) allows for more effective targeting, as the 80/20 rule dominates the majority of situations. The 80/20 rule suggests the 20% of the purchasers (a small portion of the target market) account for 80% (or the majority) of the volume. This underscores the importance of targeting heavy users, as it implies that the majority of purchases are made by a minority of the consumers. The long tail concept takes the opposite approach to segmentation. This approach is based on the idea that firms can make money by selling small amounts of items that only a few people want (e.g., targeting small volume segments), provided that they sell enough different items. Examples of firms that have embraced the long tail form of segmentation include Amazon.com (3.7 billion titles, many of which will only sell a few hundred or thousand copies) and Netflix (infrequently rented older, foreign, and obscure films are kept in inventory in addition to blockbusters). Finally, usage occasions represent a final type of behavioral segmentation. Many products such as Christmas cards and Easter egg coloring kits are associated with holidays. Other products are associated with specific times of the day (orange juice/breakfast), business functions (party platters/catering by restaurants), or casual get-togethers. The Biltmore Estate in Asheville, NC (pictured on this slide), increased attendance during its annual Christmas celebration as part of a strategy to segment on the basis of usage occasion. As part of this strategy, heavy users (defined as families who have made the Christmas pilgrimage an annual event) received a different invitation and a customized package design to appeal to them which differed from that sent to the other three segments. By catering to the differences between these segments, visits increased by 300% in a single season.

Steps in a Positioning Decision

LECTURE NOTES: The first stage in developing a positioning strategy (or repositioning strategy) is to analyze the positions held by competitors. This is important because if a competitive brand is already strongly associated with a particular benefit or advantage, it will be difficult to convince consumers to perceive your brand as being superior with respect to the same benefit or advantage unless you have compelling proof. In addition, to analyze how direct competitors are positioned, it is also important to analyze the positions of indirect competitors. Indirect competitors provide similar benefits but often compete in different product categories. For example, if marketers of a soft drink beverage are considering positioning the product on the basis of its ability to quench thirst, they would analyze not only other soft drinks but other beverages in general including bottled water, sports drinks, teas, lemonade products, etc. The second step requires that the marketer define and select a specific competitive advantage to use in the positioning strategy. Competitive advantages are desired because they demonstrate the brand's superiority over the competition and give consumers a reason to buy the brand. However, to be effective as a positioning strategy, the particular competitive advantage chosen must be important to consumers and ideally relate to the primary benefits of the product. A more prestigious image, better quality product, superior warranty, or better customer service are just some of the competitive advantages which may be valued by consumers for many types of products. Competitive advantages based on price (lower price) are generally not sustainable unless lower prices stem from truly lower costs which are realized due to efficiencies in the production process or cheaper access to raw materials which the competition cannot match. Once a competitive advantage has been identified and selected as the basis of the positioning strategy, the marketing mix is adapted as necessary. The brand's positioning strategy should come through clearly in all marketing communications, and the product itself must provide the benefits promised at a price the consumer is willing to pay. Finally, the product must be made available in locations where consumers shop. After implementation of the positioning strategy, it is important that marketers conduct or commission market research to ascertain whether or not consumers are actually perceiving the product in the same way that marketers intended. If not, the marketing mix needs to be adapted or the positioning strategy needs to be changed. Over time, even successfully positioned products may need to change their positioning strategy. Act of designing a company's offering and image to occupy a distinctive place in the minds of the target market Positioning requires Determining a frame of reference by identifying the target market and relevant competition Identifying the optimal points of parity and points of difference in brand associations given that frame of reference / value proposition Creating a brand mantra to summarize the positioning and essence of the brand Supporting with reasons-to-believe Positioning results in a customer-focused value proposition

Primary Research Causal Research

Laboratory Research Field Studies

Marketing Plan

Segmentation- identify and profile distinct groups of buyers who differ in needs/wants Target - select one or more segments to enter Positioning - establish and communicate the offerings distinctive benefits (not in this chapter)

Influences on Consumer Decision Making External Influences

Situational influences: Physical environment:: Time: Social influences: culture: subculture: social class: Group memberships: opinion leaders: Gender roles:

Defining the problem has three components

Specify the research objectives: what questions will the research attempt to answer? Identify the consumer population of interest: what are the characteristics of the consumer group(s) of interest? Place the problem in an environmental context: what factors in the firm internal and external business environment might influence the situation?

analyze and interpret the data

Tabulate and cross-tabulate the data interpret or draw conclusions from the results

Problem Recognition

The process that occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state, this recognition initiates the decision-making process.

Collect the data

Translate questionnaires and responses if necessary combine data from multiple sources (if available)

Perceptual Map

a visual aid allows marketers to identify consumers' perceptions of their brand in relation to the competition LECTURE NOTES: Recall that one way of positioning a brand is by means of creating a superior brand image. This implies that part of the marketer's job is to create a brand personality that consumers will prefer over competing products. First, we need to ask consumers what personality characteristics are important, then we need to identify how various brands are perceived compared to one another on the basis of these important characteristics. Perceptual maps, such as the one shown in Figure 7.7, are often used to visually describe where products/brands are "located" in consumers' minds relative to competing brands. The perceptual map can sometimes help marketers understand where to position a new brand. The marketer might decide to compete directly with the upscale fashion magazines, shown in the upper right-hand quadrant, or locate an underserved area, such as upscale service magazines (or downscale fashion magazines). Generally speaking, underserved segments represent great opportunities AS LONG as the market segment in question meets the tests for viability discussed earlier.

Market Segmentation: Demographic

age, gender, income, marital status, and ethics background

Case Studies Exploratory Research

analysis of a business situation similar to the one at hand. benchmarking Harvard Crisis Management Recall: on peanut butter

Market Segmentation: Behavioral

benefits, usage rates, and patterns

Product Choice

heuristics: A mental rule of thumb that leads to a speedy decision by simplifying the process brand loyalty: a pattern of repeat product purchases Price = quality ( if it cost more than it will have better quality) Country of origin: a product has a certain characteristics if it comes from a certain country

Consumer behavior

is the process individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas or experiences to satisfy their needs and desires

Descriptive Research: Surveys

is undertaken to describe answers to questions of who, what, where, when, and how Two-basic classifications: Cross-sectional studies Longitudinal studies