Marketing Exam 2

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

Secondary data pros and cons

Advantages -Tiime savings -Inexpensive Disadvantages -Out of date -Potential for incorrect definitions/categories -Not specific enough

Step 4: Develop Findings

After collecting relevant information for rational, informed marketing decisions, you need to convert the data into information that can explain, predict, and/or evaluation a particular situation

People

Almost indistinguishable from the service itself (for people-based service)

Place (distribution)

Almost inseparable from the service.producer itself, who is delivering the service

Why products/services succeed or fail

Avoiding the "not-invented-here" problem (NIH) Encountering "groupthink"

Product

Cannot be patented --> issues with mimicry, consider your points of difference and competitive advantage

Step 3: Collect Relevant Information

Collect information for rational, informed marketing decisions

Promotion

Communicate the value of the service --> emphasize availability, location, quality, consistency, efficiency, courteous customer service

Positioning

Create product positioning and marketing ix that is most likely to appeal to the selected audience [Positioning yourself to appeal to that target]

Cross Sectional study

Data collected at one point in time

Longitudinal (panel) study

Data collected from the same sample over time

Step 2: Group Potential Buyers into Segments

Demographic (age, gender, income) Psychographic (lifestyle, values, self-image) Geographic (Region - continent, country, state) Behavioral (Occasion, loyalty, usage rate)

Targeting

Determine which customer group (segment) to focus your marketing efforts on [Choosing which segment to target]

Differences in consumer products

Differ in the terms of: -The effort the consumer spends on the decision -The attributes used in making the decision -The frequency of purchase

Concentrated marketing

Firm selects one segment & focuses all its efforts on this segment

Product consists of

Ideas, Services, and Goods

Loyalty / switching rates:

If you're already strong in a segment, high loyalty rates make it more attractive. If you want to move into a new segment, high switching rates make it more attractive.

Price

Impacts consumer perceptions --> price can be signal of quality

Data

a collection of values that convey information about something, but may necessitate analysis & further interpretation

80/20

a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers

Decline Stage

a long-run drop in sales

Maturity Stage

a period during which sales increase at a decreasing rate

Data mining:

analyzing data from extensive databases to find statistical relationships between consumer purchasing patterns and marketing actions -reveals personal information -collected via tracking devices -enables personalization and targeting for marketing

Predictive modeling:

based on statistical models that use data mining and probability analysis to predict outcomes

Components

become part of the final product

Intangibility

can't be touched or seen pre-purchase - tend to be a performance in the moment

Feature fatigue

complex products that do not maximize satisfaction

Decision

conscious choice among alternatives

Inseparability

consumer can't distinguish the service provider from the service itself

4 types of Segmentation

demographic, geographic, psychographic, behavioral

Product positioning statement

derived from the company's customer value proposition

Product Life Cycle

describes the stages a new product goes though in the marketplace: introduction, growth, maturity, & decline

Qualitative Data

descriptive data that cannot be easily captured with numerical values

Scanner data

digital transaction data recorded at the cash registers of retail shops which inform about turnover, sales and the types of items sold

Segmentation

divide market into distinct groups of customers (segments) using segmentation practices [Categorizing customers (into segments]

Deletion:

dropping the product from your firm's product line

Undifferentiated or mass marketing

everyone is considered a potential customer

differentiated marketing

firm targets several market segments with different offerings

Products

good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value

Growth Rate

growing segments are more attractive

Goods

have tangible attributes that a consumer's 5 senses can perceive

Four I's of Services

intangibility, inconsistency, inseparability, inventory

Service Dominance

integrates the product, price, and services of an offering

Market segmentation

involves aggregating prospective buyers into groups, or segments, that: (1) have common needs, and (2) will respond similarly to a marketing action

Repositioning

involves changing the place a brand or product occupies in a consumer's mind relative to competitive products

Head-to-head positioning

involves competing directly with competitors on similar product attributes in the same target market

Differentiated Positioning

involves seeking a less competitive, smaller market niche in which to locate a brand

Product Differentiation

involves using different marketing mix actions (4P's) to help consumers perceive your product as different and better than competing products

Perceptual Map

is a means of displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm's own product or brand.

Product positioning

is the place a product occupies in consumers' minds based on important attributes relative to competitive products. Your target customer should have a clear understanding of what the product or service does and represents with respect to the competition.

Step 5: Take Marketing Actions

make action recommendations, implement action recommendations, evaluate results

Inventory

more subjective costs (as opposed to costs associated with goods)

Inconsistency

often dependent on people (who vary in capabilities & performance) delivering the service

Business products

products organizations buy that assist in providing other products for resale - also called B2B products or industrial products

Consumer products

products purchased by the ultimate consumer

Cannibalization

New product growth is often gained at the expense of an existing product

Quantitative Data

Numerical, countable data

Micromarketing

Offering is tailored to each customer individually

STP Marketing

segmenting, targeting, positioning

Level of competitor strength:

segments where you're already strong or growing are more attractive

Step 1: Define the Problem

set research objectives, identify possible marketing actions

Step 2: develop the research plan

specify constraints, identify data needed for marketing actions, determine how to collect data

Skimming pricing strategy

starts with higher prices (ex: Tesla)

Decision-making

structured approach to choosing

Unsought products

Products that buyers may not be aware of, or don't want to shop for until they need them

Step 3: Evaluate Segment Attractiveness

substantial, reachable, responsive, profitable, identifiable

Customer Patronage

the act of repeat buying by consumers

Observational Data

the facts and figures obtained by watching how people actually behave, using mechanical, personal, or neuromarketing data collection methods

Questionnaire data:

the facts, figures, and information obtained by asking people about their attitudes, awareness, intentions, and behaviors

SMART Goals

Specific, Measurable, Attainable, Relevant, Time-based

penetration pricing strategy

Starts with lower prices (Ex: G-Wagon)

Process

The actual procedure, mechanisms & flow of activities by which the service is created & delivered

Step 1: Establish Overall Strategy or Objectives

the first step in the segmentation process is to articulate the vision or objectives of the company's marketing strategy clearly. The segmentation strategy must be consistent with and derived from the firm's mission and objectives, as well as its current situation - its strengths, weaknesses, opportunities, and threats (SWOT).

Services

the intangible activities or benefits that an organization provides

Data visualization:

the presentation of analysis results

Marketing Research

the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions

Usage rate

the quantity consumed or patronage (store visits) during a specific period

Physical environment /evidence

The tangible proof that establishes credibility

The Marketing of services

The use of the 7Ps of product, price, place, promotion, process, people, and physical environment/evidence in the marketing mix.

Growth Stage

the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy

Step 4: Selecting a Target Market (Segmentation Strategy)

there are several targeting strategies you could employ: undifferentiated or mass marketing, differentiated, concentrated, micromarketing

Ideas

thoughts that lead to a product or action

Feature Bloat

unnecessary features or functions

Support products

used to assist in producing other products & services

STP Marketing Steps

[Segmentation/ Step 1: Strategy or Objectives, Step 2: Segmentation Methods] [Targeting/ Step 3: Evaluate Segment Attractiveness, Step 4: Select Target Market] [Positioning/ Step 5: Identify and Develop Positioning Strategy]

Secondary Data

(existing data); the facts and figures that have already been recorded prior to the project

Primary Data

(new data); the facts and figures that are newly collected for the project

Types of Business Products

-Business products are typically either components or support products -Often based on derived demand

Role of Marketing Research

-Develop a better understanding of your consumers -Learn about your competitors -Test your product before you launch them -Identify areas for business growth -Make inventory decisions

Specialty Products

-Highly differentiated offerings -Available through limited channels

Shopping Products

-Make an effort to compare products and select accordingly -Consumers often care about brand names

introduction stage

-Motivate trial: the initial purchase of a product by a consumer -Stimulate primary demand: the desire for the product class rather than for a specific brand -As more competitors enter the market, you should start shifting your focus to creating selective demand: the desire for a specific brand

Product Dominance

-Started with the industrial revolution -Focus was on producing products cheaply

External Data

-Trade associations -Universities -Business periodicals -U.S. Census Bureau -Syndicated panels

Methods of positioning

-Value (price relative to quality) -Salient attributes (those which are more important for your target market) -Symbolism & Associations -How your competition is perceived

Step 5: Develop Positioning Strategy

-What is your mission / vision? -What does your brand stand for? -What does your target segment value most? -What makes you stand out from the rest of the market?

Internal Data

-Your existing marketing input data: Effort expended to make sales -Your existing marketing outcome data: Results of marketing efforts

Convenience products

-little effort in shopping --consumers see little difference between competing brands

Other primary data sources:

-social media -scraping data online -focus groups & panels