MRKT 3301.Chapters 7-10

Segmentation variables-Psychographic

Personality, values (VALS 2), lifestyle (Claritas PRIZM NE), and neds

Screening & Evaluation (Stage 3)

Internal approach (3M-customer experience management (CEM) External approach (concept tests)

Stages of the Product Life Cycle (4)- Chapter 10

Introduction, growth, maturity & Decline

Customer contact audits

service encounters, customer contact audit, customer's car rental activities

Product grid sample

shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness

Newness-Legal terms

newness affects the amount of learning effort consumers exert to use the product

People based

UNSKILLED labor-Lawn care, security guards, janitorial services SKILLED labor-Appliance repair, plumbers, & caterers PROFESSIONALS- Management consultants, accountants & lawyers

Portals & Search Engines

USA.gov and Google

Step 4- Select target markets

Criteria to use in selecting target markets Two types of criteria a. Those that DIVIDE a market in to segments b. Those that actually PICK the target segments

Step 3- Develop a market-product grid and estimate the size of markets

Forming a market-product grid Estimating Market sizes

Assessing service quality

Gap analysis and monitoring service failure

New product process

Stage gate process (x and checks)

Product line

cell phones, iPad & iPods

Five step Marketing research approach

1-Define the problem 2- Develop the research plan 3-Collect relevant information 4- Develop findings 5- Take marketing Actions

Strategic role of most successful new products

EXTERNALLY DRIVEN-defend market share position, establish foothold in new market, preempt market segment INTERNALLY DRIVEN- maintain position as product innovator, exploit technology in a new way, capitalize on distribution strengths, provide a cash generator, and use excess or off-season capacity

Product positioning w/ perceptual maps

1. Identify impt attributes for a product or brand class 2. Customer's ratings of competing products or brands on these attributes. 3. Customer's ratings of the company's products or brands on these attributes 4. Reposition the company's products or brands in the minds of consumers 5. Perceptual map 6. Perceptual map to reposition Chocolate milk for adults (identify impt attributes for adult drinks, discover how adults see competing drinks, discover how customers see chocolate milk,reposition chocolate milk to make it more appealing to adults)

Five dimensions of service quality

1. Reliability-ability to perform the promised service dependability & accurately (Is my flight on time?) 2. Tangibles-appearance of physical facilities, equipment, personnel & communication materials (gate, plane & baggage area clean?) 3. Responsiveness- willingness to help customers & provide prompt service-(attendants willing to answer my questions?) 4. Assurance-knowledge & courtesy of employees & their ability to convey trust & confidence (everyone knowledgeable of their jobs?) 5. Empathy-caring, individualized attention provided to customers (employees determine special seating, meals, etc?)

Equipment based

Automated (self-service)-ATMs, online brokerage & automated car washes Operated by relatively UNSKILLED operators-Motion picture theaters, dry cleaners & Taxis Operated by SKILLED operators-Electric utilities, airlines and computer networks

Newness

Compared to existing products

Products classification

CONSUMER-convenience, shopping, specialty, unsought BUSINESS-Derived demand, components, and support products (installations, supplies, accessory equipment & industrial services)

Marketing strategy of degrees

CONTINUOUS-gain consumer awareness & wide distribution DYNAMICALLY CONTINUOUS-advertise points of difference & benefits to consumers DISCONTINUOUS-educate consumers through product trial & personal selling

Example of degrees

CONTINUOUS-new improved shaver, detergent & toothpaste DYNAMICALLY CONTINUOUS-electric toothbrush, compact disk player & auto flash unit for cameras DISCONTINUOUS-wireless router, digital video recorder & electric car

Definition of degrees

CONTINUOUS-requires new learning DYNAMICALLY CONTINUOUS-disrupts normal routine but not total learning DISCONTINUOUS-requires new learning & consumption patterns by consumers

Likert scale questions-Wendy's

Check one box that describes.... strongly agree, agree, don't agree, disagree, strongly disagree

Five step (3)

Collect relevant information: Obtain data; secondary data; obtain primary data; use information technology and data mining (Data-facts & figures pertinent to the problem) (SECONDARY DATA Facts & figures already recorded prior to the project)- (PRIMARY DATA-Facts and figures newly collected for the project)

Commercialization (Stage 7)

Commercialization-Regional roll-outs Burger King's french fries Risks with grocery products-slotting & failure fee Speed as a factor in new product success-time to market (TtM), parallel development and fast prototyping

Newness-consumer perspective

Continuous innovation, dynamically continuous innovation, & discontinuous innovation

Brand Loyalty-Types of consumer product

Convenience-aware of product but will accept substitutes Shopping-Prefer specific, but will accept substitute Specialty-very loyal, no substitute Unsought-will accept substitute

Purchase behavior-Types of consumer product

Convenience-frequent purchases-little time & effort spent Shopping-infrequent-need much COMPARISON shopping time Specialty-infrequent-need EXTENSIVE search & decision time Unsought-very infrequent- SOME comparison shopping

Products & services offering

Core and supplementary

Types of surveys-Individual interview & mall intercept

Cost-most expensive because of time and travel Ability to probe-Much, can show visuals, probe and establish rapport Opportunity for bias results-significant because of voice and facial expressions Anonymity- Little because of face-to-face contact

Attitudinal question-Wendy's

How important is it to you that a fast-food restaurant satisfies you-VIP, somewhat, impt, unimpt, somewhat unimpt, very impt

Five step (2)

Develop the plan: Specify constraints; identify data needed for marketing actions; determine how to collect data (concepts-new product concept; methods-sampling and statistical inference)

Development (Stage 5)

Development Example: Chobani Yogurt, service encounters and safety tests

Types of surveys-Telephone

Cost-Moderately expensive Ability to probe-some, since interviewer can probe and elaborate on questions Opportunity for bias results-some because of voice inflection of interviewer Anonymity-Some because of telephone contact

Types of surveys-Mail, online & fax

Cost-least expensive assuming adequate response rates Ability to probe-little, since self-administered Opportunity for bias results-none-form completed without interviewer Anonymity- complete, since no signature is required

Five step (1)

Define the problem: Set research objectives; Identify possible marketing actions (be specific, measurable & achievable; have clear research purpose; must lead to marketing actions; exploratory, descriptive and causal research)

Services Classification (Equipment based or people based)

Delivery by people or equipment, by business firms or nonprofit organizations, and Government agencies

Five step (4)

Develop findings: Analyze the data-How are sales? What factors contribute to sales trends?; Present the findings

Step 5-Take marketing actions to reach target markets-Apple

Ever changing segmentation strategy Market-product synergy analysis: a balancing act a. marketing synergies b. product/R&D-manufacturing synergies

Semantic differential scale question-Wendy's

For each of the characteristics listed below.... Check the space that describes the degree to which Wendy's is.....

Usage behavior question-Wendy's

How often do you eat out at each of the following fast-food restaurants? Once a week or more, 2-3 times a month, Once a month or less

Stages of the Product Life Cycle -Introduction

Gain awareness Stimulate trial, primary demand, selective demand, skimming strategy & penetrating pricing

Segmentation variables-Demographic

Gender, age, race/ethnicity, life stage, birth era, household size, marital status, income, education and occupation

Demographic question-Wendy's

Gender, marital status, children at home, age and income

Ways to segment organizational markets

Geographic (Global, Region or Country and Density), demographic (NAICS code and sector, number of employees and annual sales) & behavioral (number of locations, kind, where used, application, purchase location, who buys, and type of buy)

Segmentation bases (Chapter 8)

Geographic, demographic, psychographic and behavioral

Step 1-Group potential buyers into segments

Geographic, demographic, psychographic, and behavioral segmentation Behavioral (product features, usage rate or frequency marketing and 80/20 rule)

Segmentation variables-Geographic

Global, Region or Country, city size, statistical area, Media-television & density

Products

Goods-nondurable and durable goods

Stages of the Product Life Cycle - Decline

Harvesting Deletion Industry/product sales drop, environmental changes, deletion & harvesting

Dichotomous question sample-Wendy's

Have you eaten at a fast-food restaurant in the past month?

Two approaches to Product positioning

Head-to-head positioning Differentiation positioning

Media Behavior question-Wendy's

How important are each of the following sources.... VIP, somewhat impt, not at all impt

Five step (3)-Secondary Data-Facts & figures already recorded prior to the project ADVANTAGES-Time savings & inexpensive DISADVANTAGES-Out of date, definitions/categories are not right and not specific enough Data Warehouses (Internal & external databases)

INTERNAL DATA collected inside firm-inputs-budgets; financial statements; sales call reports; outside-actual sales & customer communications (Marketing input and outcome data)-CUSTOMERS, INVENTORY, SALES CALLS & PROMOTIONS EXTERNAL DATA-collected outside the firm-U.S. Census reports(2010 census & ACS); trade association studies (AMA); business periodicals (Bloomberg & Business Week); internet-based reports (syndicated Panel and scanner data)-SINGLE SOURCE SERVICES

Services

Ideas

Market Segmentation-Mixed actions

Identify needs-Link needs to actions-execute marketing program actions

Multiple choice question-Wendy's

If you answered yes to question 2, how often do you eat fast food (once a week, 2-3 times or Once a month)

Step 2- Group products into categories

Individual

Five categories and profiles of product adopters (diffusion of innovation)

Innovators- (venturesome; higher educated; use multiple info sources) Early majority- (deliberate; many informal social contacts) Laggards-(fear of debt; neighbors & friends are info sources) Early adopters- (leaders in social setting; slightly above average education) Late majority- (skeptical; below average social status)

Marketing reasons for new product failures

Insignificant points of difference, no economical access to buyers, incomplete market & product protocol before product development starts, not satisfying customer needs on critical factors, bad timing, poor product quality, too little market attractiveness, and poor execution of the marketing mix

Four I's of Services

Intangibility, inconsistency, Inseparability and inventory

Four Aspects-Charting the product life cycle

LENGTH, shape, life cycle of consumers & product/brand manager responsibilities SHAPE-generalized life cycle, high-learning, low-learning, fashion & fad LIFE CYCLE & CONSUMER-Diffusion of innovation-Barriers & adoption (usage, value, risk, & psychological) PRODUCT/BRAND MANAGER RESPONSIBILITIES (product life cycle, new product development, marketing program implementation & data analysis (CDI (Category Development Index) and BDI (Brand Development Index)

Typical problems when wording questions

Leading (favoring statement), Ambiguous (regularly), Unanswerable (Does it matter & who can remember), Two questions in one (How do you answer), Non-mutually exclusive (age sample-40 and over)

Market Segmentation

Links market needs to an organization's marketing program through marketing mix actions.

Stages of the Product Life Cycle - Maturity

Maintain brand loyalty Industry/product sales slow, profit declines, product differentiation, & fewer competitors

Step 4-Criteria to use in selecting target markets

Market size, expected growth, competitive position, cost of reaching the segment and compatibility with organizational objectives and resources

Step 5-Take marketing actions to reach target markets

Market-product concentration; market specialization, product specialization, selective specialization and full coverage

Segments of One

Mass communication & Built-to-Order (BTO)

Product class

Music

7 stages in the new product process leading to success

New product strategy development, idea generation, screening & evaluation, business analysis, development, market testing and commercialization

Organizational problems in new product failure

Not listening to the "voice" of the consumer, skipping stages int he new product process, marketing a poorly conceived product too quickly, encountering "groupthink" in meetings, not learning lessons from past failures and avoiding the "NIH problem"

Five step (3)-Primary Data-Facts and figures newly collected for the project TYPES OF QUESTIONS: Open ended, closed or fixed, dichotomous, semantic differential and likert scale questions ADVANTAGES-More specific to the problem DISADVANTAGES-Expensive and time consuming to collect

OBSERVATIONAL DATA (watching people-Mechanical, personal(Mystery Shopper, Videotaping, Ethnographic Research) & neuromarketing methods-(Nielsen's People Meeter & TV ratings) QUESTIONNAIRE DATA (asking people-Idea generation & evaluation methods-Idea generation methods-individual & in-depth interviews, focus groups, fuzzy front end Idea Evaluation methods-Surveys-Personal interview, telephone, mail/fax, online & Mall intercept interview surveys OTHER SOURCES OF DATA (social media-Carmex; panel & experiments-(Independent Variables- The Cause; Dependent Variable-The Result and Test Markets) information technology-Data Warehouses, Sensitivity Analysis and data mining-RFID Technology

Idea Generation (Stage 2)

Open innovation, employee & co-worker suggestions, customer & supplier suggestions (crowd sourcing), research & development laboratories (industrial design & outside labs), competitive products, smaller firms, universities, and inventors

Segmentation trade off (Synergies vs. Cannibalization)

Organizational synergy, cannibalization (The Loft) and Tiffany/Walmart strategies

Segmentation variables-Behavioral

Outlet type, direct, product features, usage rate, user status and awareness/intentions

Factors affecting product success rate (chapter 9)

Point of difference or uniquely superior product, well-defined product before actual development starts, quality execution of activities before actual development starts, synergy or fit with marketing mix activities, quality of execution of marketing mix activities and market attractiveness-ones with large markets, high growth.

Neweness-organization's perspective

Product line extension, jump in innovation, brand extension, and true innovation

Positioning the product

Product positioning and repositioning and writing a positioning statement

Business Analysis (Stage 4)

Prototype, business fit, capacity management and off-peak procing

Five step (3)-Data facts & figures pertinent to the problem

SECONDARY & PRIMARY DATA

Sales forecasting techniques Xerox uses Linear trend forecasting Apple uses Build-up forecast

Sales forecast; Judgments of the decision maker (direct forecast and lost-horse forecast); Surveys of knowledgeable groups (survey of buyer's intentions and salesforce survey forecast); Statistical Methods (trend and Linear trend extrapolation

Step 5-Take marketing actions to reach target markets-Wendy's

Segmentation strategy, keeping an eye on the competition, and future strategies for Wendy's.

Criteria to use in Forming the segments

Simplicity & cost effectiveness of assigning potential buyers to segments; potential for increased profit; similarity of needs of potential buyers within a segment; difference of needs of buyers among segments; and potential of a marketing action to reach a segment

iCloud

Stores your content and wirelessly pushes it to all your devices.

Stages of the Product Life Cycle - Growth

Stress Differentiation Rapid sales growth, more competitors, repeat purchasers, new features, & broad distribution

Forming Segments-Variables to use

Students: Dorms, Sororities & Fraternities-Day commuters Apartments-Night commuters Non-students: Faculty & Staff-Workers in area Residents in area

Product mix

TVs, computers, iPod, cell phones

Five step (5)

Take marketing actions: Make action recommendations; Implement action recommendations; Evaluate results-the decision itself and the decision process used

Market Testing (Stage 6)

Test marketing, standard, controlled, and simulated(STMs) test markets and when test markets don't work

Segmentation and targeting markets-5 Key Steps that link market needs to a firm's marketing program

To link needs to actions 1. Group potential buyers into segments 2. Group products sold in to categories 3. Develop a market-product grid and estimate size of markets (identify & then execute) 4. Select target markets 5. Take marketing actions to reach target markets

Statistical & Financial Data

Wall Street Journal; CNBC, Investors Business Daily, Fox Business News, STAT-USA, Census Bureau

Open-ended question sample-Wendy's

What things are most important to you when you decide to eat out and go to a fast-food restaurant?

Execute marketing program actions

a marketing mix in terms of product, price, promotion & place (distribution)

Degree of newness (see chart chapter 9)

affects the amount of learning effort consumers exert to use the product

Identify Market Needs

benefits in terms of product features, expense, quality & savings in time and convenience

Product form

records, cassette tapes, CDs & ipods

Product items

stock keeping unit (SKU)

New product strategy development (Stage 1)

strategic role defined, SWOT analysis/scanning conducted, protocol defined, and service development difficult

Links needs to actions

take steps to segment and target markets