Class 14
Importance of Earned Social
-70% of brand conversation takes place on earned channels -Earned audiences more fully reflect the Voice of the Customer -Earned social is 40% more likely to spur consumers to action than owned (Twitter)
Collect Relevant Information: Primary data: ASKING people (questionnaire data)
-Interviews: individual; in-depth; focus group -Questionnaires: personal, mail, phone, on line -Open-ended questions: collect ideas, opinions -Closed questions: fixed choices -Dichotomous (binary) Questions :yes/no -Semantic Differential Questions:5-point scale -Likert Scale Questions: extent agree/disagree SurveyMonkey has worked with 100% of the Fortune 100 companies; started in 1999 SurveyMonkey is "the world's leading provider of web-based survey solutions ... Literally millions of people use SurveyMonkey for everything from customer satisfaction and employee performance reviews, to course evaluations and research of all types."
Collect Relevant Information: Secondary data: INTERNAL sources
-Sales Reports -Customer Inquiries/ Complaints
Common problems with wording of questions
1) leading question 2) ambiguous question 3)unanswerable question 4)two questions in one 5)non mutually exclusive answers
Develop Findings
1)Analyze the data -interpret results -draw conclusions 2)Present findings -keep it simple (K.I.S.S.) -keep it objective -offer different interpretations where relevant Graph: Findings presented to marketing manager of Tony's pizza restaurant
How BIG DATA Creates Value
1)BIG DATA can make information transparent & usable at much higher frequency. 2)As organizations create & store more data digitally, they can collect more accurate & detailed performance information, to boost performance. 3)BIG DATA enables finer segmentation of markets and better tailoring of products & services. 4)Sophisticated analytics can improve decision-making. 5)Development of next-generation products & services can be improved.
Social Media in Market Research
1)Track trends with social media for real-time insights. 2)Improve marketing communication by learning the language used by customers. 3)Use real-time advantages of social media research to short-cut feedback about marketing effectiveness. 4)Social media can broaden the scope of market research. 5)Discover unnoticed trends & insights by engaging rather than than leading. 6)Improve cost efficiency.
BIG DATA Issues
1)Volume (increasing amount of data) 2)Velocity (speed of data in and out) 3)Variety (range of data types and sources) 4)Veracity (accuracy) Gartner's 3Vs + a new V
BIG DATA & Analytics
BIG DATA = collection of huge, complex data sets -difficult to capture, archive, manage & process using traditional tools & methods of analysis ANALYTICS = discovery and interpretation of meaningful patterns in data -helps organizations make better decisions using new insights from volume & variety of BIG DATA BIG DATA + ANALYTICS= businesses make smarter decisions + improve productivity + make better predictions The increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the Internet of Things will fuel exponential growth in data for the foreseeable future. Archive data = maintain and store data so it is available for later use and preservation ACTIONABLE INTELLIGENCE
Collect Relevant Information: Secondary data: EXTERNAL sources
Census Bureau: -U. S. 2010 Census -American Community Survey -Trade Associations -Business Periodicals -Syndicated Panel Data -Scanner Data Syndicated panel data - requires consistent data collection over time, usually using electronic diary, e.g. Nielsen Media Research; JD Power & Associates
Earned Media
Earned Social Media: -Conversations everywhere else -What people are saying ABOUT you -Engaged audiences Earned social media = anyone's electronic discussions or remarks about your product/service
Take Marketing Actions
Effective marketing research will be translated into marketing actions, which in turn will be implemented, and finally evaluated -analytical models for sensitivity analysis (what ifs) -evaluate decision -evaluate decision process
Sales Forecasting
Forecasting is often a key goal of marketing research. 3 main techniques: 1)Decision-maker's judgment - most common 2)Knowledgeable sources - prospective buyers, e.g. Boeing (limited number of buyers) - sales force 3)Statistical methods - trend extrapolation
BIG DATA = Competitive Advantage
Future challenges associated with BIG DATA: -shortage of talent with analytic skills -privacy, security, intellectual property, liability "There will be a shortage of talent necessary for organizations to take advantage of big data. By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions."
BIG DATA example
Hotel Chain Uses Big Data to Increase Bookings Bad weather reduces travel, which then reduces overnight lodging. That's not good news if you're in the hotel business. However, Red Roof Inn turned this trend on its head. The hotel chain recognized that cancelled flights leave travelers in a bind and in need of a place to sleep overnight. The company sourced freely available weather and flight cancellation information, organized by combinations of hotel and airport locations, and built an algorithm which factored weather severity, travel conditions, time of the day and cancellation rates by airport and airline among other variables. With its big data insights, and recognition that travelers will be using mobile devices for this use case, the company used Search, PPC and SoLoMo mobile campaigns to deliver targeted mobile ads to stranded travelers and make it easy for them to book a nearby hotel. This big data payback is compelling. Flight cancellations average 1-3% daily, which translates into 150 to 500 cancelled flights or around 25,000 to 90,000 stranded passengers each day. With its big data and geo-based mobile marketing campaigns Red Roof Inn achieved a 10% business increase from 2013 to 2014.
No-one's too big to make mistakes
In 1985 Coca Cola made an all-time classic marketing mistake. After 99 successful years, Coke broke its own cardinal rule, and dropped its original formula Coke recipe. In its place came NEW Coke, with a sweeter, smoother taste. New Coke was launched with intense advertising (including Bill Cosby New Coke Commercial, endorsement ad) and in the beginning, it looked like it would be well accepted. But sales soon collapsed, and the public reacted with fury. Coke received sacks of protest mail every day, in addition to some 1,500 angry phone calls per day. One furious consumer addressed his letter of concern to "Chief Dodo, The Coca-Cola Company". Coke's CEO was less distressed about the letter's contents than the fact that the letter was actually delivered to him. Consumers panicked. Some stockpiled old Coke. One group threatened a lawsuit unless old Coke was brought back. Pepsi was so delighted with all the ruckus that it made April 23, 1985, New Coke's launch date, a corporate holiday. After only 3 months, Coke brought back old Coke, now called "Coke Classic". Both formulae would be sold in supermarkets. It was front-page news everywhere. By the end of 1985, Classic was outselling New Coke in supermarkets 2:1. Coke Classic regained its role as the company's flagship brand, and even regained its #1 soft drink status in the US. Current market share = 17%. New Coke became the company's 'attack brand', its 'Pepsi-stopper'. It is now known as Coke II, and sells in only a few markets. Current market share = 0.1%. What happened? Coke's market share had been shrinking for decades: from 60% just after World War II to 24% in 1983. Meanwhile Pepsi had been steadily growing its market share, and Coke felt it had to do something bold. Many analysts blame this whole Coke debacle on poor marketing research. At the time, Pepsi was running the "Pepsi Challenge", televised taste tests that showed consumers preferred the sweeter taste of Pepsi. Coke began the biggest new-product research project in its history. The company spent 2 years and $4 million on research before settling on a new formula. 200,000 taste tests were conducted. In blind tests, 60% of consumers preferred the new Coke over the old, and 52% preferred it to Pepsi. Clearly, consumer taste tests showed that New Coke would be a winner. What was wrong with the research? Coke defined its marketing research problem too narrowly. The research looked only at taste. It did not consider the intangibles - Coke's name, history, packaging, cultural heritage, and image. No-one thought to ask research subjects what they thought of Coke's plan to drop old Coke and replace it with the new version. To many people, Coke is an iconic brand, standing alongside baseball, hot dogs and apple pie as an American institution. To many such consumers, Coke's taste was just one part of the package. Marketing managers interpreted the 60% preference rate as an indication that the whole market would prefer New Coke, like majority decision prevailing. They ignored the 40% who preferred old Coke. Big mistake. These were loyal Coke-drinkers who were trampled. In retrospect, Coke should have left old Coke alone, and introduced New Coke as a brand extension, as the company did later successfully with Cherry Coke. The Coca-Cola Company has one of the biggest, best-managed and most advanced marketing research operations in North America. Good marketing research has served the company very well for years in the tough soft drink market for decades. Marketing research is not an exact science. If the mighty Coca-Cola can make a major marketing research mistake, any company can.
Collect Relevant Information: Primary data: WATCHING people (observational data)
Mechanical methods: Nielsen's TV Ratings -what about TiVo? -people skipping commercials? Personal methods -Mystery shopper -Ethnographic research Neuro-marketing methods -brain scanning
How BIG DATA Creates Value
Organizations create and store more transactional data digitally, so they can collect more accurate and detailed performance information on "everything from product inventories to sick days, and therefore expose variability and boost performance. Leading companies are using data collection and analysis to conduct controlled experiments to make better management decisions; others are using data for basic low-frequency forecasting to high-frequency nowcasting to adjust their business levers just in time." Big data can be used to improve the development of the next generation of products and services, e.g. manufacturers are using data obtained from sensors embedded in products to create innovative after-sales service offerings such as proactive maintenance (preventive measures that take place before a failure occurs or is even noticed).
Owned Media
Owned Social Media: -Conversations on Social Media you control -What people are saying TO you -Fans / critics Owned social media = your company web site, your Facebook page, your Twitter handle
Types of marketing information
Primary Data: OBSERVATIONAL DATA watching people: -mechanical methods -personal methods -neuro-marketing methods QUESTIONNAIRE DATA asking people: -idea generation methods -idea evaluation methods OTHER SOURCES: -social networks -data mining panels & experiments Secondary Data: INTERNAL DATA inside the organization: -financial statements -research reports -records -customer correspondence -sales call reports -customer records EXTERNAL DATA outside the organization: -US Census reports -trade association studies, magazines, web sites
Issues in Social Media Mining
Privacy concerns -Anonymized data -Facebook etc. make most money from selling advertisements Geo-location options = where are you posting from -filter by location -only 20% of data is geo-located now Customer Lifetime Value (CLV) -relationship management -e.g. airline passengers prioritization
Collect Relevant Information
SECONDARY data: -facts & figures: already recorded inside or outside the company -advantages: already exists + low cost -disadvantages: out of date; categories can be 'off' for project. PRIMARY data: -facts & figures: specifically collected for this project -advantage: customized -disadvantages: expensive + time-consuming Online databases, e.g. Google; USA.gov (portal to all US government web sites)
Define the Problem
Set research objectives 1)Exploratory research -helps define problem and suggest hypothesis 2)Descriptive research -describe market potential or demographics of consumers 3)Causal research -how change in one factor causes change in another factor, e.g. Would a 10% reduction in tuition at a private college boost enrollment enough to offset the reduced tuition?
Social Media in Market Research Continued
Social media = "the many relatively inexpensive and widely accessible electronic tools that enable anyone to publish and access information, collaborate on a common effort, or build relationships." Murthy, Dhiraj (2013). Twitter: Social Communication in the Twitter Age. Cambridge: Polity. pp. 7-8. Track trends with social media for real-time insights - search latest posts, use popular terms, get insight into trends; see what customers are talking about; e.g. use hashtag search on Twitter and receive instant notifications when customers, clients and competitors use key words. Improve marketing communication by learning the language used by customers - listen to what customers are saying about value, quality and other important terms; create brand/image customized to your target market. Use real-time advantages of social media research to short-cut feedback about marketing effectiveness. Traditional market research methods (surveys, study groups) can take months to plan and execute. Social media research can be done in minutes or hours. Social media can broaden the scope of market research. A Nielson report (2011) on the state of social media found that ±80% of people with Internet access use social media. This makes it possible to conduct market research with an audience many times bigger than any other media source. Social media is casual and easy, making its information useful, accurate and honest. Discover unnoticed trends & insights by engaging rather than leading. A significant weakness of conventional market research is that its driven by questions. So accurate questioning is crucial. Your market research is only as good as your questions. When social media is the source of information, the researcher can just observe, or interact, either way not leading the discussions. Otherwise hidden insights may come to the fore. Improve cost efficiency. Conventional market research (focus groups, panels, studies and surveys) is expensive, due to the time and cost of trained people needed to perform the research. Free tools exist for many social media platforms to help gather and scrutinize information.
Develop the Research Plan
Specify CONSTRAINTS: -Time -Money Identify DATA needed: -e.g. It might be nice to know children's favorite colors, if they prefer wood or plastic material, but rather focus on main problem, i.e. which design? Data collection METHOD: -Sampling methods
5-step marketing research approach leading to marketing actions
Step 1: define the problem Step 2: develop the research plan Step 3: collect relevant information Step 4: develop findings Step 5: take marketing actions
BIG DATA example
Target's pregnancy prediction model -revenues grew from $44 billion (2002) to $67 billion (2010) -Guest ID number is linked to demographic info. -predictive analytics department -major life event leads to flexible shopping habits -predictable -potential gold mine for retailers
Nielsen web site: "Audience Measurement: Telemetry
The Seven Steps of the AGB Nielsen Media Research Audience Measurement system guarantees the production of reliable, independent and transparent television audience measurement data"
Forecasting
art of estimating future demand by anticipating what buyers are likely to do under a given set of future conditions
BIG DATA
collection of huge, complex data sets
Marketing information system
consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute useful and accurate information to marketing decision makers in a timely manner. With today's information technologies, companies can easily and often cheaply generate vast amounts of information. Today's managers often receive way more information than they need, and can reasonably process
Earned social media
conversations about you
Owned social media
conversations you control
ANALYTICS
discovery and interpretation of meaningful patterns in data
Primary data
facts and figures collected specifically for this project
Secondary data
facts and figures that have been collected and recorded before the current project, and usually by other parties Secondary data can be internal (culled from records inside the company) or external (from sources outside the company)
Questionnaire data
from people's responses about attitudes, awareness, intentions, behaviors.
Structured data
is highly organized, mechanized, manageable information.
Unstructured data
is raw and unorganized, e.g. email
Marketing research
process of defining a marketing problem and opportunity, then systematically collecting and analyzing information, and recommending actions. Marketing research can help understand customer satisfaction & purchase behavior, assess market potential & market share, & measure the effectiveness of pricing, product, distribution and promotion activities.
Research objectives
specific measurable goals of marketing research Old or new phone design? Fisher Price introduced the Chatter Telephone in 1962. It is a pull-toy for children ages 2-6, and was the company's most successful toy through the 1970s. It has a rotary dial that was modernized to push-buttons in 2000, but consumers objected, and the company changed back.
Sales forecast
total sales of a product that a company expects to sell during a specific time period, under specific conditions.
Ethnographic research
trained observers endeavor to discover subtle behavioral and emotional reactions as consumers use products in their natural environments, like homes/cars. Personal observation is useful but expensive; being very specific is useful but limiting.
Neuromarketing methods
using brain scanning to analyze consumer responses