Quiz #2 : Weeks 4-7

total budget competition

Consumers have limited financial resources and therefore must make choices about which products to consume and which to forgo. In this sense, organisations are competing against all alternative ways the consumer can engage in an exchange of value. Example: A university student would like to attend a concert and the tickets are $120. The concert is competing with all other possible uses of the student's $120 — refueling the car, weekly rent, food and other bills, leaving it in the bank, and so on.

generic competition

Consumers often have alternative ways to meet their product needs. The same want or need can be satisfied by quite different products. This is known as substitutability. example: Sydney Buses competes with CityRail and Black and White Taxis for the business of consumers needing to get from A to B. Bus, train and taxi rides are quite different, but meet the same need.

action plans

Implementable plans with specific actions, schedules and goals that direct managers and staff that are not directly involved in strategic decisions.

product structure

In a business with a diverse array of products, it may make more sense to have separate units dedicated to particular products or product lines. It would not really make sense for the marketing department at Wesfarmers to adopt a functional structure which would see its advertising team respon-sible for advertising clothes to Kmart shoppers and fertilisers, chemicals and energy to farmers.

functional structure

In a marketing department organised along functional lines, there will be separate units dedicated to functions such as market research, sales and advertising. This structure is most suited to large organisations with established and relatively homogeneous customers.

Computer‐assisted personal interviews (CAPI) (Interviewer-led survey)

In‐person survey administered by an interviewer, e.g. door‐to‐door, shopping centre. Advantages: • Comparatively high response rate • Interviewer can ask more questions based on the responses given Disadvantages • Lack of anonymity can distort responses, e.g. respondents may be reluctant to honestly answer questions about sensitive topics

legal forces

Laws and regulations are intimately tied to politics. Elected officials and the bureaucracy that works for them are ultimately responsible for making legislation; that is, for creating and changing laws. Regulations are made under conditions established by legislation and tend to deal with more minor or more specific issues than legislation.

marketing mix strategy

Product The product component of the strategy needs to be outlined, including an explanation of how the product offers value to the target market. A discussion of branding should also be included. While you might not include a total product concept analysis of the product in your marketing plan (see chapter 7 of this text), it may be a useful exercise to inform the product strategy that is outlined in the plan. Price Pricing objectives (e.g. cash flow, positioning and market share) and the pricing method(s) used to determine prices for your product/s should be stated as part of the marketing mix strategy. Competitors' pricing should also be discussed. Pricing is discussed in chapter 8 of this text. Promotion The promotion mix (advertising, public relations, sales promotions, and personal selling) that the organisation wishes to pursue should be explained as part of its marketing strategy. Consideration should also be given to additional marketing communication options, such as guerrilla marketing, sponsorship and viral marketing, if appropriate for the organisation. Chapter 9 of this text explains the various elements of the promotion mix. Distribution (place) Distribution is a further aspect of the marketing mix strategy that should be outlined in order to explain how the organisation's products will be available to customers where and when they want them. The distribution discussion should address the use of marketing intermediaries, if applicable. Chapter 10 of this text explains key distribution issues that need to be considered by organisations. People For services products, a people strategy should be discussed as part of the marketing mix strategy, including how the organisation will address the specific service product characteristics of intangibility, inseparability, heterogeneity and perishability. These characteristics are explained in chapter 11. The people strategy should also outline how the organisation will ensure that its staff are technically competent, able to deliver high standards of customer service and able to promote products through personal selling. Process The systems and procedures, particularly for services products, that will be used to create the organisation's product offering should be discussed in the marketing plan. Physical evidence For service products, the organisation should provide tangible cues as to the quality it offers. The organisation's physical evidence strategy may address issues such as shop fittings, background music and staff uniforms.

observation (qualitative)

Recorded notes describing actual events. Advantages • Potentially higher insight into actual behaviour patterns • Can be unobtrusive Disadvantages • Expensive • Time‐consuming • Can be difficult to implement ethically (e.g. privacy concerns)

macro-environmental factor: technological

Technology is vital for competitive advantage. Marketers must consider: 1. whether offerings can be made more cheaply and to a better standard of quality using new technologies 2. whether technology can be used to innovate 3. whether distribution or communication can be improved using technology.

monopsony

The market situation where there is only one buyer. Example: Until the start of the twenty‐first century, De Beers had almost total control over the diamond trade. Their power over this industry meant that the company was not only a monopoly as a seller of processed diamonds, but was also somewhat of a monopsony as the main purchaser of rough diamonds.

Corporate Social Responsibility

The obligation of businesses to act in the interests of the societies that sustain them.

Mail surveys Online surveys Mobile surveys (self response surveys)

-A survey form is mailed to potential respondents along with instructions on how to complete and return the form. -Email or web‐based surveys, completed and returned online. -Android, Blackberry or iPhone survey, completed and returned on a handheld device. Advantages: • Comparatively cheap • May provide a lot of information • Suited to obtaining closed responses, e.g. yes/no • Potential anonymity can lead to less respondent bias • Wide geographic reach • Convenient for respondents • Speed of response (for online surveys and mobile surveys). A consumer can be sent a mobile survey as they leave the bank. Disadvantages • Poor response rate — easy for potential respondents to ignore • Delay in receiving responses (for mail surveys) • Email surveys may be intercepted by spam filters • Poor response rate can lead to an unrepresentative sample • Mobile surveys have to be short

market research

A business activity that discovers information of use in making marketing decisions.

factors that need to be understood before accepting a market research project:

-relevance -timing -availability of resources -need for new information -cost-benefit analysis

5 major components to market research

1. defining the research problem 2. designing the research methodology 3. collecting data in accordance with the research design 4. analysing data and drawing conclusions 5. presenting the results and making recommendations.

Focus Group (Qualitative)

A group of respondents are brought together, introduced to an idea, concept or product, and their interactions observed. Advantages • Provides multiple perspectives • Elicits rich, deep and detailed information • Focus groups often give rise to responses or issues not foreseeable in survey design — the researcher/mediator can explore these issues by asking additional questions Disadvantages • Expensive • Can be difficult to obtain participants • Time‐consuming • Group setting makes it difficult to use for sensitive topics • Researcher/moderator can bias results • Cannot necessarily generalise results to the wider population

sampling error

A measure of the extent to which the results from the sample differ from the results that would be obtained from the entire population.

customer lifetime value

A metric of the dollar value of a customer relationship based on the present value of the projected future cash flows from the business/customer relationship. Expected net cash fl ow to company from a customer. This formula assumes a constant customer defection rate, a constant net margin and a discount rate. CLTV = m / (k + d) where m = constant net margins (profits - retention costs); k = discount rate; d = constant defection rate.

probability sampling

A sampling approach in which every member of the population has a known chance of being selected in the sample that will be studied.

non-probability sampling

A sampling approach that provides no way of knowing the chance of a particular member of the population being chosen as part of the sample that will be studied.

market research brief

A set of instructions and requirements that generally states the research problem and the information required, and specifies the timeframe, budget and other conditions of the project. -executive summary -introduction -background -problem definition -time and budget -reporting scheduling -appendices

oligopoly

A small number of competitors offer similar, but somewhat differentiated, products. There are significant barriers to new competitors entering the market. Example: The US mass media and news industry is an example; i.e. 90 per cent of this industry is owned by six corporations: Comcast, The Walt Disney Company, 21st Century Fox, Time Warner, CBS Corporation and Viacom.

Corporate Strategy

A specific, but high‐level plan to achieve objectives that reflect the overall mission of the organisation.

mission statement

A summary statement of the overarching goals of the organisation.

Hypothesis

A tentative explanation that can be tested.

Computer‐assisted telephone interviews (CATI) (Interviewer-led survey)

Administered by an interviewer over the telephone. Advantages: • Props and visual aids can be used (when survey is conducted in‐person) • May be the best option for long or detailed surveys • Speed Disadvantages: • There is potential for interviewer and respondent bias • Comparatively expensive

population

All of the things (often people) of interest to the researcher in the particular research project.

SMART model

An approach to determining effective marketing objectives that requires they be Specific, Measurable, Actionable, Realistic and Time bound.

marketing planning

An ongoing process that combines organisational objectives and situation analyses to formulate and maintain a marketing plan that moves the organisation from where it currently is to where it wants to be.

AMSRS

Australian Market and Social Research Society

primary data

Data collected specifically for the current market research project. Primary data only comes about through a dedicated market research effort. Marketers should always assess whether their research questions can use secondary data before embarking on primary data collection.

secondary data

Data originally gathered or recorded for some purpose other than to address the current market research problem.

Biometrics (quantitative)

Determining a participant's physiological response to certain stimuli. Examples include heart rate, respiration (breathing), muscle activity, brain activity (e.g. neuromarketing), and oculometric (e.g. eye tracking) activity. Advantages: • Measures actual response as opposed to intended or reported behaviour. Disadvantages: • Cannot explain 'how' a consumer thinks or what they remember • The science is still evolving • Very expensive • Can be uncomfortable for respondents

empowerment

Enabling employees to make decisions to do their job properly and ensuring they have the necessary resources to make effective use of their power to make decisions.

Main principles of the AMSRS and MRSNZ codes of practice for market research:

General rules Research must be objective, based on scientific methods, and conducted in compliance with the law. Responsibilities to respondents • Respondents' identities must not, without their consent, be revealed to anyone not directly involved in the market research project or used for any non‐research purpose. • Nobody shall be adversely affected or harmed as a direct result of participating in a market research study. • Respondents must be able to check without difficulty the identity and good faith of researchers. • Respondents' cooperation in a market research project is entirely voluntary at all stages; they must not be misled when being asked for their cooperation. • No child under 14 years shall be interviewed without parents'/guardians'/responsible adults' consent. Researchers' professional responsibilities • Researchers must not, whether knowingly or negligently, act in any way that could bring discredit on the market research profession or lead to a loss of public confidence. • Researchers must always strive to design research that is cost‐efficient and of adequate quality, and then to carry this out. • Researchers must not undertake non‐research activities (e.g. telemarketing or list building) and research activities simultaneously.

experiments (quantitative)

Manipulation of variables of interest while holding everything else constant in a bid to determine just what and how particular things affect behaviour. The variable of interest is known as the independent variable and the variable it influences is known as the dependent variable. Advantages: • Allows researchers to establish cause and effect • Tracks actual behaviour (e.g. what people do) rather than relying on consumers' self‐reports Disadvantages: • The artificial setting may not truly refl ect real‐life settings • Variables other than the one being studied could be infl uencing the outcome

MRSNZ

Market Research Society of New Zealand

macro-environmental factor: environmental

Marketers need to understand environmental influences including ecological and environmental aspects such as weather, climate and climate change.

macro-environmental factor: legal

Marketers need to understand legal and regulatory influences such as: 1. laws including the Competition and Consumer Act, the Privacy Act, the Spam Act, the Sale of Goods Act and the Prices Surveillance Act 2. regulations from industry bodies such as the Advertising Standards Bureau.

macro-environmental factor: economic

Marketers need to understand the economy in the short and long terms. Marketers must consider: Economic 1. interest rates, economic growth (gross domestic product) and consumer confidence 2. income levels, savings, credit and spending levels 3. the level of inflation, employment and unemployment 4. exchange rates and balance of trade.

monopolistic competition

Numerous competitors offer products that are similar, prompting the competitors to strive to differentiate their product offering from others. Example: The market for laptop computers exhibits monopolistic competition. Acer, DELL, Lenovo, Apple, Toshiba and many others all sell versions of essentially similar products, though the products are differentiated by colour packaging, price, memory, processing speed and so on.

pure competition

Numerous competitors offer undifferentiated products. No buyer or seller can exercise market power. Example: Markets for agricultural goods such as sugar and for fi nancial securities such as shares are the closest real‐world approximations to pure competition. In reality, pure competition does not exist.

customer structure

Organisations with distinctly different groups of customers may organise the marketing department by customer type. For example, most car dealers have separate sales people for fl eet sales and personal sales.

exploratory research

Research intended to gather more information about a loosely defined problem.

qualitative research

Research intended to obtain rich, deep and detailed information about the attitudes and emotions that underlie the behaviours that quantitative research identifies.

casual research

Research that assumes that a particular variable causes a specific outcome and then, by holding everything else constant, tests whether the variable does indeed effect that outcome.

quantitative research

Research that collects information that can be represented numerically.

descriptive research

Research used to solve a particular and well‐defined problem by clarifying the characteristics of certain phenomena.

depth interview (qualitative)

Researcher-driven, with questions to guide the interview. Major advantages • Elicits rich, deep and detailed information • The interviewer can explore responses with further questioning to ensure as much information is gained from the process as possible Disadvantages • Expensive • Can be difficult to obtain participants • Time‐consuming • Difficult to use for sensitive topics • Interviewer can bias results • Cannot necessarily generalise results to the wider population

SWOT analysis

SWOT is short for strengths, weaknesses, opportunities and threats. - A SWOT analysis is often used to help frame marketing thinking. A SWOT analysis can help mar-keters to identify ways to minimise the effect of weaknesses in their business, while maximising their strengths. Ideally, marketers will seek to match their strengths against market opportunities that result from competitors' weaknesses or voids.

macro-environmental factor: sociocultural

Social and cultural influences have a large influence on businesses. Marketers must understand: 1. religion, culture, subcultures, values, attitudes and beliefs 2. population trends including age, household size and composition, marriage and divorce trends, places lived, ethnicity and health.

product competition

Some products are broadly similar, but have different benefits, features and prices that distinguish them from competing products. example: Soft drinks, water, alcohol, coffee and juice are all beverages that people could purchase to drink.

brand competition

Some products are very similar, offering the same benefits, features and price to the same target market. Example: Westpac, ANZ, the Commonwealth Bank and the National Australia Bank all offer savings accounts with similar minimum balances, interest rates, internet banking facilities, distribution of ATMs, fees and so on. There is not a lot to intrinsically distinguish these products from each other. This is in contrast to other options for investing savings, such as buying shares, debentures, real estate or artworks.

Business Unit Strategy

Strategies for the various business areas within an organisation to guide their contribution to achieving the overall corporate objectives.

Observation (quantitative)

Studying people's behaviour and the circumstances surrounding it. Advantages: • Measures actual behaviour as opposed to intended or reported behaviour Disadvantages: • Can be expensive • Results can be significantly affected by the subjectivity of the observer • May provide 'shallow' data (e.g. it may reveal a lot of descriptive information, but little about the motivation or cause of observed behaviours)

marketing cycle

The cyclical and interrelated process of understanding, creating, communicating and delivering value, refi ned by continuous evaluation.

research design

The detailed methodology created to guide the research project and answer the research question.

emergent approach

The development of marketing strategy in response to changing market conditions.

saturation

The existence of so many competitive offerings in the marketplace that it becomes virtually impossible to differentiate an offering or create a competitive advantage.

organisational structure

The formal arrangement of business functions within an organisation

sample

The group chosen for the study.

fragmentation

The increasing division of the market into ever-smaller niches with increasingly specific needs.

marketing management

The management task of understanding the market, and planning, implementing and evaluating marketing activities.

macro-environmental factor: political

The political arena has a huge influence upon businesses and the spending power of consumers. Marketers must consider: 1. the stability of the political environment 2. the influence of government policy, laws and regulation 3. government trade agreements such as ASEAN 4. taxation and government rebate policies.

contingency planning

The process of putting in place plans for unforeseen or uncertain eventualities to ensure managers think ahead and can respond to emerging problems and opportunities.

customer relationship management (CRM)

The processes and practices put in place to identify, track and use customer information and preferences to provide superior customer service and sustain long‐term relationships.

research problem

The question that the market research project is intended to answer.

marketing information system (MIS)

The structure put in place to manage information gathered during the usual operations of the organisation. - Market intelligence ● Sales representative reports ● Customer service reports ● Customer complaints/compliments ● Competitor actions ● Environmental changes -Market research ● Problem (opportunity/threat/issue) ● Research design ● Data collection ● Data analysis ● Findings -Internal reports ● Accounting reports ● Sales reports ● Production reports ● Distribution reports

organisational culture

The values and behaviours shared throughout the organisation.

monopoly

There is only one supplier and there are substantial, potentially insurmountable, barriers to new entrants. Example: Many government services are essentially monopoly industries, such as the provision of roads and rail. These are maintained as monopolies when it is considered inefficient or somehow undesirable to have competition. This position can change, however, with some governments choosing to open up some of their monopoly markets to private competition (e.g. electricity supply in Queensland).

sociocultural forces

a term used to describe the social and cultural factors that affect people's attitudes, beliefs, behaviours, preferences, customs and lifestyles. They comprehensively and pervasively influence the value people put on different product offerings.

threats

are factors that are potentially harmful to the organisation's efforts to achieve its objectives. Like opportunities, threats are beyond the organisation's direct control, but require an effective response by the organisation.

opportunities

are factors that are potentially helpful to achieving the organisation's objectives. Note the emphasis on the word 'potentially' in the previous sentence. Opportunities are only of benefit if the organisation responds effectively to them. Opportunities are factors that are beyond the organisation's direct control, though the organisation may be able to have some influence over them.

marketing metrics

are measures that are used to assess marketing performance. Four key elements: - return on marketing investment -customer satisfaction -market share in targeted segments -brand equity.

secondary data

comprise information originally gathered or recorded for some purpose other than to address the current market research problem. The information may be held by the organisation (e.g. sales records or customer profiles generated from business docu-ments) as part of its MIS (discussed earlier), or by some external organisation (e.g. a market research company such as the Nielsen Company or a statistics organisation such as the Australian Bureau of Statistics or Statistics New Zealand).

external environment

concerned with things that are outside of the organisation. The external environment encompasses the people and processes that the organisation cannot directly control. Marketers can only seek to influence the external environment.

micro environment

consists of customers, clients, partners and competitors. Unlike the internal environment, the micro environment is not directly controllable by the organisation. The organisation can, however, exert some influence on the customers, clients, partners, competitors and other parties that make up its industry.

macro-environmental factors

political, economic, sociocultural, technological, environmental, legal

political forces

describe the infl uence of politics on marketing decisions. Politics is directly relevant to the marketing organisation through: • lobbying for favourable treatment at the hands of the government • lobbying for a 'light touch' approach to regulation •the very large market that the government and its bureaucracy comprise -the ability of political issues to affect efforts at international marketing.

Macro environment

encompasses the factors out-side of the industry that influence the survival of the organisation. In practice, the macro environment can be at any geographic level including local, state, country or regional (e.g. the Asia-Pacific or the European Union). In some cases it is possible for marketers to influence macro‐environmental factors. However, these factors will always remain beyond a marketer's control .

internal marketing

is a cultural framework and a process to achieve strategic alignment between front‐line employees and marketing. More specifically, internal marketing is a collection of activities, processes, policies and procedures that treat employees as members of an internal market who need to be informed, educated, developed and motivated in order to serve clients more effectively. Companies that provide and practise internal marketing are more likely to satisfy their employees.

environmental analysis

is an analytical approach that involves breaking the marketing environment into smaller parts to better understand it.

Exploratory Research

is research intended to gather more information about a loosely defined problem.

economic forces

refer to all of those factors that affect how much money people and organisations can spend and how they choose to spend it. The obvious components of this are income, prices, the level of savings, the level of debt and the availability of credit. - Economic forces and conditions can change quickly and dramatically, and marketers can fi nd them-selves facing a very different economic environment within a short period of time.

marketing environment

refers to all of the internal and external forces that affect a marketer's ability to create, communicate, deliver and exchange offerings of value.

internal environment

refers to the parts of the organisation, the people and the processes used to create, communicate, deliver and exchange offerings that have value. The internal environment is directly controllable by the organisation. A thorough understanding of the internal environment ensures that marketers understand the organisation's strengths and weaknesses. Strengths and weaknesses are internal factors that positively and negatively affect the organisation's ability to compete in the market-place. Typically marketers seek to minimise weaknesses and maximise strengths.

technological forces

technology is a broad concept based on fi nding better ways to do things. That is, the electronic gadgetry of a satnav device is not really the technology; the technology is that a satnav is a better way (than a map) to navigate to your destination. Technology is advancing at an unprecedented rate.

environmental forces

term used to describe the environmental factors that affect individuals, companies and societies. There is a wide range of environmental factors that companies need to be mindful of, including ecological and environmental aspects such as weather, climate and climate change.

strengths

those attributes of the organisation that help it achieve its objectives: competitive advantages and core competencies. (internal factor, controllable by the organisation)

weaknesses

those attributes of the organisation that hinder it in trying to achieve its objectives. (internal factor, controllable by the organisation)

convenience sampling method

type: non-probability Participants are selected on the basis of convenience. The simplicity of this approach makes it a tempting option, but the fi ndings cannot be generalised. example: Fans at a cricket game are surveyed on their beverage preference.

Quota sampling method

type: non-profitability Divides the population into groups based on a number of characteristics and then arbitrarily chooses participants from each group. The findings cannot be generalised. example: A study seeks 50 female and 50 male participants. People are approached to participate in the study until the quota is reached.

stratified sampling method

type: probability The population is divided into different groups based on some characteristic (e.g. age, sex, home state) and then from each of those groups a random sample is chosen. Stratified sampling is used when you expect there to be variations in characteristics between groups within the population. Example: If you were conducting research on your marketing class to find out whether tutorials should be held during the middle of the day or in the evening, you might expect that opinions would differ between those members of the class that have children and those that do not. Therefore you could divide the class according to whether the members have children and then choose a sample from each group, thus ensuring that the opinions of population members with those characteristics are included in the sample.

random sampling method

type: probability Each member of the entire population to be studied has an equal opportunity of being selected for the sample. Example: If the population of interest is the members of your marketing course, then a random sample of every 10th student from an alphabetical list of all students enrolled in the course is needed.

main parts of a typical organisation include the following:

• Senior management is responsible for making decisions about the overall objectives and strategy of the organisation. • Middle management is typically responsible for a department or a geographic region. Middle management makes decisions about the overall objectives and strategy of the department or geographic region for which they have responsibility. Their aim is to make sure the objectives for their department or region are aligned with the objectives of the organisation as a whole. • Functional departments , where organisations are structured around specific functions and/or regions. If you are a business student you will study many of these functions during your degree. Functional departments may include: - marketing - sales - research and development - customer service - distribution/logistics - manufacturing - finance - human resources - administration.

market share

● % market share ● % market share growth/decline ● Performance relative to competitors

brand equity

● Awareness — % of target market ● Preference — % of target market ● Loyalty — share of category purchases

customer satisfaction

● Churn — % of customers lost ● Number of complaints received/resolved ● % on-time delivery ● Retail queue waiting times

return on investment

● Sales (volume, or number value, ($), % to plan) ● Marketing investment (costs, share of voice) ● Bottom line (profit, share of industry profit)