Marketing 3310

Safety Needs

Freedom from harm, Financial Security

Crosstabs

look at relationships between two variables

Share of Wallet

percentage of a customer's category/industry spending that they spend with a company

Subordinate Goals

"How can I achieve that for which I strive" (Exercising, Dieting)

Focal Goals

"What is it for which I strive" (Self Confidence)

Superordinate Goals

"Why do I want to achieve that for which I strive" (Feel and Look good, Live longer)

How does the buying center overlap?

-A decider could also be a gatekeeper -Users and initiators can be the same -sole proprietorship will be doing all of these things -Can be different depending on the purchase

Microsoft Vista Case Study

-Microsoft made huge promises about how great Windows Vista would be before it rolled out. These PR stunts created customer expectations that were not met by the final product. -Customers felt like Windows Vista hostages. New PCs came with Windows Vista pre-installed. Customers like to feel as if they're in control and able to make the choices that meet their needs. Forcing products down customers' throats does create happy customers. -As the market leader who had previously rolled out one product after another that customers were, for the most part, satisfied with, Microsoft became pompous. Instead of putting customers first and making sure the new products it rolled out met customers' needs and expectations, Microsoft put its own agenda first and rolled out a product that met its own needs but not its customers' needs.

Criteria used in creating segments

-Simplicity and cost effectiveness of assignment -Potential for increased profit -Similarity of needs within a segment -Difference of needs of buyers -Potential of a marketing action to reach a segments

Five step approach to marketing research

1. Define the problem 2. Develop a plan 3. Collect Data 4. Analyze the data 5. Take Action

Stages of Goal Setting

1. Goal setting- what pertains to me and my life, determining what goals I should pursue 2.Goal Intention- what is it for which I strive 3.Action planning- how can I achieve my goal 4. Action and control- am I making progress?

Five Steps to Segmenting

1. Group potential buyers into segments 2.Group products to be sold into categories 3. Develop a market-product grid and estimate the size of markets 4. Select target market 5. Take marketing actions to reach target markets

Three frameworks to understand how consumers decision processes are influenced:

1. Purchase decision process 2. Purchase funnel metaphor 3. Goal Setting formation

How prevalent is the idea of segmentation

58% think they do segmentation well so it is pretty prevalent

The Purpose of Segmentation

A business group segments its marketing so it can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits

Purchase Decision

After evaluating different solution or products available now the buyer will be able to choose the product most appropriate for their need (who do you make the purchase from and when do you make the purchase?)

The funnel metaphor

Awareness --> Familiarity --> Preferences--> Purchase--> Loyalty (Consumer start with a set of potential brand and methodically reduce them to make a purchase)

What is the long tail enabled by?

Breaking free of the constraints of physical space, finding ways to talk to markets segments economically and new distribution systems

Does all marketing research focus on customer and or consumers

Can be unique actionable insights about customers, environments, trends....

Potential problems with segmenting

Cannibalization, Redling, Segment Bleed

Primary Data

Data that you collect and look at yourself (social media, questionnaire, focus groups, surveys, and interviews)

Alternative Evaluation

Evaluating the brand and their respective attributes to see if they can deliver the problem/need (How well does it do the job?)

Physiological Needs

Food, Water, Shelter, Oxygen

Social Needs

Friendship, Belonging, Love

Variables of Segmentation

Geographic, Demographic, Psychographic, Behavioral, Behavioral 2

External Data

Government Stats, Trade Associations, Commercial Services, National and International Institutions

Marketing Forecasts are based on:

Historic Data

Segmentation

Involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action. It links market needs to an organizations marketing program. The purpose of segmentation is that is leads to tangible marketing actions that can increase sales and profitability. Two things are stressed. 1.) Meaningful groups 2.) Customized marketing mix

Consumer Purchasing

Irrational (making a decision on economic decisions)

Psychographic

Lifestyle, personality, needs (people of similar lifestyles tend to leave bar one another, have similar interests, and buy similar offerings)

Cross Tab

Looks at two different variables and the relationships between them (understanding how two different items on a survey interrelate)

Consideration Set

Made up of the brands that are taken seriously

Marketing the funnel metaphor

Marketing takes place throughout the funnel metaphor as companies try to direct their spending a messaging at the maximum point of influence

Three types of buying situations

New buy, Straight re-buy, Modified re-buy

Long Tail

Nice Products (a good or service with features that appeal to a particular market subgroup)

Decision Process for Organizational Buying

No different that the consumer section process

Influencers

Ones that have influence on the buying center; can be someone inside or outside of the organization

Deciders

Ones that make the purchase (can be gatekeepers)

Difference organizational purchasing and consumer

Organizational purchase typically are larger, more formalized, involves more people and emphasizes service more than consumer purchases

Which variable of segmentation is the best predictor of future behavior

Past behavior and geographic behavior

Type of data that is more time consuming

Primary

Purchase Decision Process Stages:

Problem Recognition Information Search Alternative Evaluation Purchase Decision Post-Purchase

Behavioral

Product features (groups us by what we want)

Which is the hardest variable of segmentation to collect?

Psychographics because its in peoples head you actually have to ask them about it

Problem Recognition

Purchase transaction cannot be completed unless a need for an item is first desired (develops a need that people didn't know they had)

Organizational Purchasing

Rational (whether B2B or B2C)

Internal Data

Sales data, Financial data, Transport Data, Storage Data

Type of data companies use first?

Secondary

Type of data that is cheaper?

Secondary

Type of data that is typically timelier?

Secondary

Type of data which provides more accurate data?

Secondary

Levels of Maslow's Hierarchy

Self actualization Personal Needs Social Needs Safety Needs Physiological Needs

Self-actualization Needs

Self-fulfillment

Information Search

Stage where the buyer searches for the best answer to the need. So gathering as much information as possible about the problem or need (Internal info- information that is already present in the consumer memory) (External info-information received and obtained by friends, family, reviews and other sources)

Personal Need

Status, Respect, Prestige

What does the long tail concept mean for marketing? where does the majority of potential revenue fall, in the head or tail?

The long tail concept for marketing argues that products that are in low demand or have low sales volume can collectively make up a marketing share that rivals or exceeds the relatively few current bestsellers or blockbusters, but only if the store or distribution channel is large enough. Long tail marketing involves more inventory management than product promotion, by providing a greater variety of inventory (extending the long tail), businesses hope to reach more customers and generate more total sales. The distribution and inventory cost of businesses successfully applying this strategy all them to realize significant profit out of selling small volumes of hard to find times to many customers instead of only selling large volumes of reduced number of popular items

What is the problem with demographic variables?

The problem is that the descriptions can apply to a lot of different people, it tends to make groups that are not homogenous, a lot of variability inside your segment

People in the buying center

Users, Gatekeepers, Initiators, Deciders, Influencers

A Market Product Grid

a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization

Why the funnel metaphor characterized as a funnel?

because buyers are funneling out the companies that they don't want (each stage decreases as it goes down)

Which variable of segmentation do companies typical utilize the least?

behavioral and psychographics

Panel Data

behaviors of entities are observed across time (balanced, and unbalanced panel

Potential for increased profit

best segment approach is the one that maximizes the opportunity for future profit and return on investment

Self-concept

composite of ideals, attitudes, feelings, that a person has about their own identity, worth, capabilities, and limitations

Secondary Data

data that already exists and you go observe it (balance sheet, sales figures, inventory records)

Why are psychographic variable dangerous?

deal with an individual's lifestyle and personality. This can be dangerous because in order for this to work you must be under the assumption that people with similar lifestyles tend to live near one another and have similar interests

Peripheral Route Involvement

decision making criteria that can be very fast but not necessarily always true; low involvement, quick way to making decisions

Mystery Shopping is what type of research

descriptive research

Exploratory Research

don't have a very well defined plan so you need to go out and assess, sometimes the answer you get can be misleading, it can give you direction on where to go

Post-Purchase

evaluate the quality of original needs and decide if the right choice was made (How satisfied are you with the purchase?)

Which is the easiest variable of segmentation to collect?

geographic (zip codes, are very easy to get)

The Tail

has become more economically feasible to reach, There's more potential sales that you can reach than there is in the head

Demographic

household size, gender, race, age, life stage (ex. Campbell packages meals with one or two servings since more than half the household in the U.S are made up of only one or two people)

Actual self-concept

how a person really is

Ideal self-concept

how a person would like to be

Simplicity and cost effectiveness of assignment

identifying the characteristics of potential buyers in market and then cost-effectively assigning them to a segment

Difference of needs of buyers

if the needs of the various segments are't very different, combine them into fewer segments

Descriptive Research

involves trying to find the frequency that something occurs or the extent of a relationship between two factors (provide an accurate description for something that is occurring)

Attitude

learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way

Central Route Involvement

logically think about the product, think of weaknesses and strengths, spend a lot of time of decisions

Segment Bleed

marketing communications we make for one segment that actually get viewed by another one

Initiators

ones that start the process; start the need, sometimes inside or outside the organization

Users

ones that will actually y use the product in some way, shape or form (MIGHT NOT BE BUYERS)

Gatekeepers

ones who allow information in and out for that purchase (people who control flow of info through business, secretaries, office managers

Similarity of needs within a segment

potential buyers within a segment should be similar in terms of common needs that in turn lead to a common marketing action

New buy

purchases to serve a need that has no been served before in any way; long decision time

Potential of a marketing action to reach a segment

reaching a segment requires a simple but effective marketing action. If no such action exist, don't segment

Geographic

region, city size, statistical area, density (ex. Campbell Soup company produced different flavors for different parts of the country)

What happens with the long tail?

sales are made for goods not commonly sold. These goods can return a profit through reduced marketing and distribution cost . It is a term used in online business.

Critical Incident

something outside the norm that is very bad or very good, when we take account of critical incident our thoughts become malleable again ONLY WAY WE CAN CHANGE ATTITUDE

What is the problem with demographic variables?

the descriptions can apply to a lot of different people, a lot of variability inside of your segments

Involvement

the personal, social, and economical significance of a purchase to a consumer. Consumers tend to have involvement when purchases are expensive, have personal consequence and reflect ones social image (level of involvement reflects how personally interested in the product you are and how much info you need to make a decision about the product)

Redlining

the practice of denying, or chaining more for, service uch as banking, insurance, access to health care, or even supermarkets to resident in particular,often racially determine areas

Forecasting

the use of historic data to determine the direction of future trends

What is the goal of most marketing research?

uncover unique and actionable insight

Behavioral 2

usage rate; the quantity consumed or patronage-store visit- during specific period (how many times we use something)

Hard to change attitudes

we aren't open to change attitude all the time

Pareto Principle

when 80% of your results come from 20% of your inputs and 80% of revenue comes from 20% of your customers

Modified re-buy

when a slight need has changed, causes you to go out into the market and buy a different product; moderate decision time

Cannibalization

when new products steal customers and sales from existing ones. Can be planned or unplanned

Straight re-buy

when you are purchasing something and you run out and you are just going to re-buy it; short decision time

Casual Research

why they are buying the product and seeing how actions will affect a business in the future Causation: one action causes another Correlation: relationship seemingly