MKGT 409 Exam 1
Service
(intangible products)= what we buy is the benefit of what the service does for us (hair cut, oil change)
Goods
(tangible products) = the things we think about shopping (shampoo, cars)
Responding to Environmental Forces
- Marketers take two approaches to Environmental Forces 1. Uncontrollable - passive: accepting them as uncontrollable -reactive: see what happens and respond appropriately 2. Controllable - (pro)active: you anticipate to shape them and fit the organization's needs -reactive: after the event has happened and diffuse the situation Ex= Lobbying, actively trying to shape the external environment through controllable Depends on the organization, management, and the situation
Ethnography
- ethnographic research watching consumers with products •Extended, in-depth observation •In their natural environments
Observation
- watching and interpreting behaviors or objects - no direct interaction
Special Issues in Research Design and Data Collection
-Defining and measuring constructs -Writing survey questions -Sampling procedures -Designing experiments
Sources of Bias in Data Interpretation
-Incorrect analysis tool -Human error -Personal biases in qualitative interpretation
Interviews
-Individual participation -In-depth, open-ended questions
Evolution of the Marketing Concept
-Product Orientation= (1850s-1930s) by hand, one at a time, product made by artisanal fashion, "if you build it, they will come" Industrial Revolution, assembly line, mass manufactured, products were now affordable to Americans HUGE SURGE IN SALES -Sales Orientation= (1930s- 1960s) Sales began to decline, so pushed into buying products the "pushy salesman" for cars -Marketing Orientation= researching and responding to customers needs
What should you be careful in Step 1 and 2?
-Reliability and validity -Inferring causality
Bolt Bus video
-from Dallas -targeting adventurous people like college students -real time feedback Organization should try to provide products satisfying customers NEEDS through a COORDINATED set of ACTIVITIES to achieve its GOALS (market concept) So Bolt Bus took time to understand needs like free wifi and communication
Focus Groups
-small group participation -especially useful for product and feedback ideas testing out new products and getting feedback OR small group of 8 to 12 people who are brought together to participate in an interview that is often conducted informally, without a structured questionnaire, to observe interaction when members are exposed to an idea or a concept
When to Conduct Marketing Research
-what are the Time constraints? -Availability of data if it already exists, just look at it vs going out to find it -Nature of the decision is this a critical decision with a major impact? -Benefits versus costs do the benefits of the research results outweigh the conducting in both time and money?
Potenital Bias
-word choice -source of research in qualification, potential bias
4. Technological 5. SocioCultural
1. Competitive 2. Economic 3. Political/ Legal and Regulatory
Characteristics for Marketting Research
1. Fast 2. Accurate 3. Inexpensive (Desirable but can't be all three) so which one do you trade off? not accurate!! Ex= AT&T video -needed the research quickly for the law change -wanted it to be accurate -had to spend money on the project BUT they saved tons of money in loss of revenue!!!
A Conceptual Model of Marketing (THINK CIRCLE-3 RINGS)
1. Focus= Customer (inside CENTER) 2. Marketing mix= Product, Price, Promotion, Place (Distribution) 3. Environmental forces= Sociocultural forces, Technological forces, Legal and Regulatory forces, Political forces, Economic forces, Competitive forces
Key Qualitative Methods?
1. Interviews 2. Focus Groups 3. Observation 4. Ethnography 5. Experiential
Stages in the Research Process
1. Locating and defining issues/ problems 2. Designing the research project 3. Collecting data 4. Interpreting research findings 5. Reporting research findings
Selected Competitive Structure (go look at the figure 3.1 )
1. Monopoly 2. Oligopoly 3. Monopolistic competition 4. Pure Competition
Components of Strategic Planning
1. Organizational Mission and Goals 2. Corporate/ business Unit Strategies 3. Analyze strengths, weaknesses, opportunities, and threats THROUGH Marketing, Production, Finance, Human Resources -Objectives, Strategy, Plan
Types of Data/Information
1. Primary= go out and collect for yourself 2. Secondary= been collected for some other purpose but serves OUR purpose
Legislation
1. Pro-competitive legislation •Preserves competition 2. Consumer Protection legislation •Protect people from harm which includes •Prohibit hazardous products •Information disclosure •Particular marketing activities
Summary on step 1 and 2?
1. Problem statement leads to Hypothesis 2. Type of data needed? -Availability of data -Type of study
Major Federal Laws (table 3.2)
1. Sherman Antitrust Act (1890) 2. Clayton Act (1914) 3. Federal Trade Commission Acts (1936) 4. Robinson-Patman Act (1936) 5. Wheeler-Lea Act (1938) 6. Lanham Act (1946) 7. Celler- Kefauver Act (1950)
Competitive Growth Strategies
3. market penetration 1. market development 4. product development 2. diversification x= product (present, new) y= market (new, present)
Strategy: How to Grow Your Business? Part of Corporate/ business Unit Strategies (2)
A business unit operates as a whole business subsidiary owned by a corporate entity . If a corporate only owns 1 business, the strategies are the same. First, the firm must make sure they aren't loosing customers
Oligopoly
A competitive structure in which a few sellers control the supply of a large proportion of a product ex= postal service systems (they deliver packages all the same)
Monopolistic Competition
A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product ex= Wrangler and Levi Jeans
Monopoly
A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply ex= water utilities
Market
A group of people who, as individuals or organizations, have needs for products and the ability, willingness and authority to purchase such products. ex= teenagers who want to buy alcohol but you cant in the US so not a market
Customer Lifetime Value (CLV)
A key measurement that forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts
Pure Competition
A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply ex= agricultural corn market
Target Market
A specific group of customers on whom an organization focuses its marketing efforts Ex= Home Depot, targets a number of markets with thousands of items. It provides home improvement products for both household consumers and contractors.
3. Promotion
Activities that inform individuals or groups about the organization and its products Like ads
Industry groups
Advantage •Less expensive •More realistic Disadvantage •Nonmember firms do not have to abide •Lack of enforcement tools
Secondary Observation
After the action has happened
1. Competitive Forces
All businesses compete with one another for customer's dollars Types of Competitors: ex= Diet Coke 1. Brand= Diet Pepsi 2. Product= Milk, Gatorade, Ice Tea 3. Generic= water fountains or going home to get a drink 4. Total Budget= purchasing newspaper instead of water bottle (as you go down, they are less similar)
Valid but not reliable
All over the dart board is valid but not reliable.
Hypothesis?
An informed guess/ assumption about a problem
Reliable but not valid
Around an area not at the bulls eye is reliable but not valid.
2. Price
Barter system, non profits, price does not have to be money Def= value that is exchanged for a product
both reliable and valid
Bullseye
Reliability= repeated
CONSISTENCY of results each time -survey questions: asking some questions again -study results: when we conduct the same study over and over again , did we find the same things? think same results over and over
What is abused the most?
Causality
Neuromarketing Example
Cheetos Humans get a sense of giddy subversion that consumers enjoy over the messiness of the product Subversive behavior with cheeto fingers
What is Step 3?
Collect Data 1. Primary -go out and collect yourself -comes directly from respondents -addresses a specific problem 2. Secondary -already been collected for another purpose -internal collection or external collection
Defining Constructs
Construct= what the study is about! •The concept of interest •Defining validity •Example construct: Healthy Diet •Defining: what is "healthy?" •Measurement options: Do you eat a healthy diet? ___ yes ___ no How healthy is your diet on a scale of 1-10?
Types of Markets
Consumer markets and Business markets
What do we do well as a business?
Core Competencies and Competitive Advantage
Federal Trade Commission Act (1914)
Created the Federal Trade Commission to investigate illegal trade practices prevents unfair methods of competition
marketing decision support system (MDSS)
Customized computer software that aids marketing managers in decision making
Data vs. Information
Data = raw facts and figures. Long list of numbers or long script from interview Information = meaningful interpretation of data. manipulated, organized ex= a long list of sales number but into a graph
Sampling
Definition •Selecting representative units from a total population •"Whom do we talk to?" Related concepts •Census: Surveying ever individual in a population •Population: All elements of interest to researchers for a specific study •Sample: A limited number of units chosen to represent the total population
The Lesson
Demand Evidence and Think Critically
Demographic and Diversity Characteristics
Demographics= measurable characteristics of a population like age, gender, race, martial status U.S. Census Bureau Quick Facts Page (taken every 10 years)= fast and easy access to population by state
Step 2. Design Research
Designing the research project coming up with an overall plan to obtain what we need
Relationship marketing
Establishing long-term, mutually satisfying buyer-seller relationships
Product
Firms that compete in the same product class but market products with different features, benefits, and prices (not direct subsitute)
Brand
Firms that market products with similar features and benefits to the same customers at similar prices (direct substitute)
Generic
Firms that provide very different products that solve the same problem or satisfy the same basic customer need
What are the components of strategic planning?
Focus, Marketing Mix, Environmental forces
5. Sociocultural
Forces -Demographic and Diversity Characteristics -Cultural Values -Consumerism
Example Regulatory Issue
GMO= Genetic Modified Organism "we have the right to know what's in our food" Tell the FDA to label GE (genetically engineered) foods. Food Drug Admin GMO Labeling Status 2019
Experiential (role playing)
Get in consumer's situation ex= view from hospital bed
Identifying Causality
Impossible to prove in social sciences •Evidence •Temporal sequence •Systematically related •Non-spurious ex= Eating ice cream at the beach causes drowning
Why Study Marketing Research?
In your job and daily life: •Know if a study is flawed and how •Understand a study's limitations •Know if a study is interpreted correctly •Decide if you should make a decision based on a study
Step 4: Data Interpretation
Interpreting research findings driven by data type and research method 1. Qual 2. Quan turn that raw data into something you can use and report
What branch of study does marketing come from?
It does come from psychology and sociology, but it came from ECONOMICS (1930s)
What is the problem for secondary data?
It was gathered for a different purpose So even if we try to apply some meaning to it, may not be relevant
Step 1. Problem definition
Locating and defining issues/ problems sometimes problem are clear or previous research. be careful to not make assumptions.
Chapter 3
Marketing Environment (outer ring)
Chapter 5
Marketting Research Materials
Measuring Constructs
Measurement •The assignment of numerals to objects or events according to rules. •Determining how much of a property is possessed by an object. ex= asking to rate your healthiness
Diversification (2)
NEW PRODUCT x NEW MARKET a strategy of increasing sales by introducing new products into new markets there is always a overlap Ex= Virgin brand was always a record label. But now Virgin energy and transportation
Product Development (4)
NEW PRODUCT x PRESENT MARKET company growth by offering modified or new products to current/same market share they already have expertise on their product and customers Ex= Rice Cakes by Quakers bc they had instant oatmeal etc
Example of cultural in 30 years later
New York Times article culture values have changed very little
Cultural example
Nine nations of North America based on cultural values 1. New England 2. Foundry 3. Breadbasket 4. Islands 5. Mexamerica 6. Ecotopia 7. Empty Quarter 8. Quebec
Market Development (1)
PRESENT PRODUCT x NEW MARKET company growth by identifying and developing NEW MARKET segments for current/ same company products Ex= Mane and Tail shampoo, only used for horses but now for human -all the product stayed the same but Place (distribution) was changed
Market Penetration (3)
PRESENT PRODUCT x PRESENT MARKET a marketing strategy that tries to increase market share among existing customers Ex= orange juice, not just for breakfast
AT&T
Primary environmental force= Political Regulatory bc the law 800 was changing AT&T didn't respond by trying to control instead actively making marketting changes by anticipating diff scenarios in advanced (controllable and active) Other forces=Competitors were also expected to react, so competitive forces Advantage= technology with the "loss calls" and able to redirect them to a diff line
Marketing
Process of creating, distributing, promoting and pricing goods, services and ideas to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment
A college student wants a snack and stops at a convenience store to buy a bag of Ranch Flavored Doritos. The store is out of stock and rather than buy another brand of ranch-flavored chips, the student bought a bag of pretzels instead. The pretzels are an example of a __________ competitor for Doritos Ranch flavored chips.
Product bc pretzel and chips arent the same brand but they are the product competitors as they are in the same general class category of "snacks"
What are the 3 evolutions of the marketing concept?
Product Orientation Sales Orientation Marketing Orientation
Celler-Kefauver Act (1950)
Prohibits any corporation engaged in commerce from acquiring the whole or any part of the stock or other share of the capital assets of another corporation when the effect would substantially lessen competition or tend to create a monopoly
Robinson-Patman Act (1936)
Prohibits any form of price discrimination that has the effect of reducing competition among wholesalers or retailers Prohibits producers from giving disproportionate services/ facilities to large buyers
Clayton Act (1914)
Prohibits specific practices such as price discrimination, exclusive-dealer arrangements, and stock acquisitions whose effect may noticeably lessen competition or tend to create a monopoly
Wheeler-Lea Act (1938)
Prohibits unfair and deceptive acts and practices regardless of whether competition is injured; places advertising of foods and drugs under the jurisdiction of the FTC
2. Economic Forces- The Business Cycle
Prosperity, Recession, Depression, Recovery U shape
Lanham Act (1946)
Provides protections for and regulation of brand names, brand marks, trade names, and trademarks
Exchange
Provision/ transfer of goods, services or ideas in return for something of value
Methods of Collecting Primary Data?
Qualitative and Quantitate
Sheryl works at Southwest Airlines as a digital marketer. A major part of her job is communicating with customers, answering questions and letting them know about how the airline offers them the best in customer value. Sheryl is working to create long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges with customers. This is an example of _______.
Relationship marketing
What is related to each other?
Reliability and Validity
Presenting Findings
Reporting Key Insights Level of detail depends on audience
Marketing leads to what?
SALES AND GROWTH
Seller and Buyer
SELLER has goods and services and ideas, but looking for BUYERS to exchange it for money, credit, labor, goods
The Goal
Satisfaction for both parties
A mission statement is not a?
Slogan/ ad It guides employees and managers
Chapter 1
Strategic Marketing Materials
Key Quantitative Methods
Surveys - most widely used - very flexible Experiments - consumer preferences and opinions - test markets Observation - can also be quantitative
Chapter 6
Target Markets and Segmentation
A group of customers toward which a company directs a set of marketing efforts...?
Target market
Organizations generally focus their marketing efforts on a specific group of customers...?
Target markets
Environmental Scanning
The process of collecting information about forces in the marketing environment Formal= subscribing to a data service and looking at trends Informal= reading a Wall street journal
Customers
The purchasers of organizations' products; the focal point of all marketing activities
Primary observations
The researcher notes what happened or what was said.
Marketing Research
The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities
marketing analytics
The use of tools and methods to measure and interpret the effectiveness of a firm's marketing activities
Bias in Reporting
Thought Question: How can you present your results so that you bias your reader yet what you say is still true? •What is reported •What is not reported •How it is reported
Exploratory= "explain a problem"
To clarify problems, discover ideas, or make a hypothesis OR research conducted to gather more information about a problem or to make a tentative hypothesis more specific
Conclusive= help make decisions
To describe characteristics or verify insights •Descriptive •Experimental/Causal* •* cause-and-effect
Marketing Concept
To provide products that •satisfy customers' needs •through a coordinated set of activities •allows the organization to achieve its goals. Think Needs, Coordinated Activities, Goals
4. Technological
Turbulent and rapidly changing 1. Must keep up with the changes even if they arent in high tech industries
Writing Survey Questions
Types of surveys •Mail, telephone, digital, in-person Types of questions •Open-ended, dichotomous, multiple choice Avoiding bias in question wording
3. Political/ Legal and Regulatory Forces
US System works by... •Politicians enact legislation •Courts interpret •Regulatory agencies operate •Marketers •Adjust to conditions •Influence through contributions
Customer Relationships Management (CRM)
Use info about customers to create marketing strategies that develop and sustain customer relationships Lifetime value of a customer 80/20 rule
But if a firm is satisfy with keeping their customers happy and want to grow...
What businesses do we want to be in?
For assumption validity... Definitions and Measurements
What is an "outlet?" How are outlets measured?
1. Product
a good, service, or idea (sellers have products)
Competitive Advantage
a set of unique features of a company and its products that are perceived by the target market as SUPERIOR to those of the competition •Can our competency be copied? •Is it valuable?
Ideas
abstract concepts that we want others to believe in and act upon (politics= they want us to buy their policies through votes)
Consumer (watchdog) groups
another group for self regulation consumers who disapprove of a org's marketing tactics can voice their concern and join together to communicate more broadly can turn into private non profit orgs Ex= Natural News by Consumer Wellness Center (non-profit org), investigates deceptive health not using real blueberries but artificial color, sugar, etc
Self Regulatory Forces
attempt to be good corporate citizen as well as prevent govt intervention or limiting, some businesses try to regulate themselves or join trade associations to regulate its members Industry Groups -Better Business Bureau= regulate deceptive or false advertising -Chipotle (trying to use natural raised meat)
Types of Competitors?
brand, product, generic, total budget
Types of Marketing Research (type of study)
exploratory and conclusive it is decided based on the availability of data
random sampling
form of probability sampling in which all units in a population have an equal chance of appearing in the sample, and the various events that can occur have an equal or known chance of taking place
Marketing Research
gathering and analyzing info in order to solve a specific problem or make a particular decision
4. Place/Distribution
making products available at the right time and place through a retail store, online/ internet, or directly from manufacture
Honda conducts extensive consumer research and discovered that Latinos are reportedly 15% more likely to buy a Japanese auto brand, like Nissan, Honda, or Toyota, than any other group ethnic group. Honda is interested in the Latino market since it represents 20% to 30% of the brands' overall consumers. Due to its extensive use of research and customer insight, Honda has been the top-selling brand for Latinos for over 10 years thanks to effective marketing, like its partnership with the "La Reina de la Cancion" singing competition and an advertising campaign on Spanish-language TV. Based on this information, which orientation best applies to Honda?
market orientation
Sara Lee introduced a new bread made with light whole wheat and packaged in smaller loaves as a response to the number of health-conscious customers who live alone. In this case, Sara Lee was most likely following the ________.
marketing concept
What does primary data cost?
more time and money
Total budget
not solving the same problem, but competing for a consumer's limited budget
Bias
occurs when sample are collected in such a way that some members of the intended population are less likely to be included than others.
Market Orientation
organization-wide commitment to researching and responding to customer needs
Scanning and Analysis
part of the external environment that directly or indirectly influences marketting activities
Sampling Techniques
probability and non probability methods
Environmental Analysis
process of assessing and interpreting information obtained in scanning
What are the 4 P's?
product, price, promotion, place (distribution)
Sherman Antitrust Act (1890)
prohibited any "contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce." establishes a misdemeanor monopolizing or attempting to monopolize
Cultural Values
shapes consumer preferences •Products •Promotions •Prices •Distribution= where they expect to purchase products hard to change over time
Environmental Forces (5)
sociocultural political and regulatory economic competitive technological
Buying Power
strength of a person's buying power depends economic conditions as well as the size of person's resources- income, credit, wealth Gen Y Buyers more willing to spend money on technology
SWOT analysis
strengths, weaknesses, opportunities, threats
Validity
the extent to which a test measures or predicts what it is supposed to MEASURE WHAT WAS INTENDED think did our study measure what it was suppose to?
stratified sampling
type of probability sampling in which the population is divided into groups with a common attribute, and a random sample is chosen within each group
sampling
type of sampling in which every element in the population being studied has a KNOWN CHANCE of being selected for study
probability sampling
type of sampling in which every element in the population being studied has a known chance of being selected for study
Core Competencies
what a company does best
Other ways to look at it... to keep customers internally happy for the company
•2% increase in retention = cutting costs by 10% •The average company loses 10% of customers yearly •A 5% reduction in customer loss can increase profits by 25-125% (reducing the customer loss can increase profits) Customer profitability increases over the life of a retained customer
Designing Experiments
•A research investigation in which conditions are controlled •One independent variable (or more) is manipulated •Its effect on a dependent variable is measured (our main construct of interest) •To test a hypothesis
Mission Statement Part of Organizational Mission and Goals (1)
•A statement of what the organization wants to be •A long, awkward sentence that demonstrates management's inability to think clearly by Scott Adams •Clear, concise, meaningful, inspirational, and long-term •Guides business strategies •Internal more than external
Summary of Special Issues in Research Design and Data Collection
•Bias can come from many sources •Intentional or not •Would you pay big bucks for the research? •Would you make an important personal decision based on it?
Surveys
•Can measure attitudes, feelings, preferences etc. •Flexible •Widely used
Summary on Causality
•Can't prove, only find evidence •All 3 criteria must be confirmed •Association does not equal causation
QuaNtitative
•CoNclusive research design •Large samples •Assigns numerical value to questions •Statistical analysis
Collecting Data: Summary
•Data can come from primary or secondary sources •Data can be qualitative (Interviews, focus groups, ethnography, observation, etc.) •Data can be quantitative (Surveys, experiments, observation, etc.)
What is Marketing Research About?
•Decision making •Making predictions •Dealing with uncertainty •Making future uncertainty more certain (not absolute) •Understanding how data can be manipulated (to someone's advantage)
Qualitative
•Exploratory research design •Small samples •Broad unstructured questions •Subjective interpretation
Why study marketing?
•Firm success •Economic growth •Nonprofits •Consumer awareness •Personal skills •Career opportunities
Consumer Markets
•Intend to consume or benefit from purchased products •Do not buy to make profits Personal reason!!!
Experiments
•Manipulate an independent variable and measure the changes in a dependent variable •Causal •E.g., test markets cities
Technology's Impact on Marketing Research
•Marketing information systems=framework for managing and structuring information gathered regularly from sources inside and outside the organization •Databases=A collection of information arranged for easy access and retrieval •Big Data= Massive data files that can be obtained from both structured and unstructured databases •Single source data= Information provided by a single marketing research firm
Quantitative Methods Summary
•Measurable •Statistical interpretation •Can make inferences, forecast, etc.
Some type of Observation technique
•Measuring by observing rather than asking •Behaviors •When can't easily answer •Content •May be mechanical •Checkout scanners •Eye cameras •Neuromarketing
Consumerism
•Organized efforts by individuals, groups, and organizations to protect consumers' rights •E.g., "watchdog" groups •Marketing critics think that consumers are being exploited in the marketplace.
Technology also impacts
•Place/ Distribution processes ex= Cyber Monday for Amazon using drones •Communication processes ex= skype, document sharing services General ability to do business
Technology impact on Marketing
•Products offered •Manufacturing processes •Prices and Promotion Ex= pocket time watch is now an Apple watch
Business Markets
•Purchase for resale, use in producing other products or use in general daily operations
Valuable Data/Information
•Relevant •High Quality •Timely •Complete
Qualitative Methods Summary
•Subjective=observer interpretation (its open) E.g., are participants enjoying themselves? •Deep insights but no conclusions
Benefits of Customer Retention •Cost of acquiring new customers can be significant
•Travel: Priceline.com: $7 •Telecom: Sprint PCS: $315 •Retail: Barnesandnoble.com: $10 Financial: TD Waterhouse: $175 keeping current customers happy
Marketing Requires
•Two or more parties with unsatisfied needs •Desire and ability to satisfy the needs •A way for the parties to communicate •Something to exchange
Summary: Interpretation Bias
•What is being said and how • %'s and absolute numbers not being reported •switching between the two •What is not being said? •"Apples to Apples" comparisons •Scales of charts