MKT 705 - (Chapter 4)

Story Completion

"I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings." Now complete the story.

Sentence Completion

"When I choose _____ it is important to consider..."

Online Research- International

A company can embed a questionnaire on its Web site and offer an incentive to answer it, or it can place a banner on frequently visited sites such as Yahoo!, inviting people to answer some questions and possibly win a prize. Research suggests that Latin American respondents may be uncomfortable with the impersonal nature of the internet and prefer interactive elements in a survey to feel like they are talking to a real person. Asian respondents are more reliable online as they are subject to group conformity in focus groups

Focus Group Research Approach

A focus group consists of 6-10 people carefully selected by researchers based on certain demographic, psychographic characteristics. Moderators typically record and manage the sessions. Sample size should be large and randomly selected

Importance Scale

Airline food service is _____ to me. Extremely important Very important Somewhat important Not very important Not at all important

Rating Scale

American Airlines food service is: excellent very good good fair poor

The Marketing Research Process Scenario

Assume that American Airlines wants to cater to its first class passengers who pay most of the freight costs. Among the best ideas presented is an internet connection to check emails in flight with limited access to Web pages Market forecasts estimate revenues of $70 billion from in-flight internet access over 10 years, if enough first class passengers pay the extra $25. Making the connection available would cost the airline $90,000 per plane.

Behavioral Research Approach

Behavioral- Actual purchases reflect consumer preferences and often are more reliable than statements they offer to market researchers. Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and customer databases. §Unobtrusive measures (listening to conversations of passengers in first class lounges as they talk about different carriers and their services or placing mystery passengers on flights to engage fellow passengers) Actual purchases reflect consumers' preferences and are more reliable than statements they offer to researchers. Grocery shopping data shows that high income consumers don't necessarily buy expensive brands although they say they do.

Causal Research

Causal research attempts to identify cause and effect relationships. "How much advertising is needed to jumpstart sales growth?" 1)Experiments test predicted relationships among variables in a controlled environment (no external factors such as other customers, retail environment, etc.) The only way to suggest true causality is through experiments or longitudinal data. Why?

Descriptive Research

Descriptive research seeks to quantify demand, such as "How many first class passengers would purchase in-flight internet service for $25?" 1)Cross sectional designs use responses obtained from consumer survey instruments at one point in time. 2)Longitudinal designs track the responses of same sample of respondents over time.

Marketing Metrics (Continued)

EXTERNAL Customer Awareness Market share Relative price Number of complaints Customer satisfaction Distribution channels Loyalty INTERNAL Awareness and commitment to goals Resource adequacy Staffing levels Willingness to change Autonomy

Likert Scale

Example: Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.

Semantic Differential

Example: American Airlines Experienced...Inexperienced Large...Small Modern...Old Fashioned

Dichotomous Question

Examples: In arranging this trip did you contact American Airlines? With whom are you traveling with on this trip?

Exploratory research

Exploratory research - results tend to be qualitative, nonnumeric information about consumers' attitudes, feelings and buying behavior. §Consumer interviews -one on one discussions in which an individual shares his/her thoughts in person with a researcher §Projective techniques - provide an incomplete stimulus and ask respondents to complete it, or give them an ambiguous stimulus and ask them to make sense of it. Generally used to get at people's underlying feelings, especially when people are unwilling to express true reactions (Brawny) §Ethnography - "living with subjects" (TV ad campaign for Orville Redenbacher- "Spending Time Together: That's the Power of Orville Redenbacher")

Intentions to Buy

How likely are you to purchase tickets on American Airlines if in-flight internet access were available? Definitely Buy Probably Buy Not sure Probably not buy Definitely not buy

Online Research Example

Local Motors (small scale Massachusetts automaker) lets anyone upload design ideas to their website. The site hosts annual competitions for cash prizes of up to $10,000 in which design engineers vote on the design they like best. The winning ideas are designed into actual cars which are built by Local Motors. Participants offer feedback throughout the car's development.

Survey Research Approach

Mail questionnaires- Adv. (Anonymity, low cost); Disadv. (time delays, low response rates, incentives, unclear who is responding, social desirability) Telephone interviews- Adv. (Fast, low cost); Disadv. (lack of cooperation, negative image-do not call list) Telemarketing image? Face-to-face interviews- Adv. (flexibility, control); Disadv. (expensive, interviewer bias, time consuming) Mall intercept (self selection, not heterogenous) Online research- Adv. (instantaneous, respondents are more open b/c of sense of privacy); Disadv. (can be expensive, length is based on cost, internet access)

Marketing Dashboard

Marketing dashboards are like the dashboard in a car or plane, visually displaying real-time indicators to ensure proper functioning. Included in a marketing dashboard are: 1)A customer-performance scorecard records how well the company is doing on customer-based measures annually(market share) 2)A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the company's performance: employees, suppliers, banks, distributors, retailers, and stockholders. Marketing management should take action only when one or more groups register increased or above-normal levels of dissatisfaction

Step 3: Collect the Information

Marketing managers must ensure that they minimize the following problem areas when collecting information: A narrow conception of the research (myopia) Researcher bias Poor framing of the problem Respondent anonymity and nonresponse

Marketing Metrics

Marketing metrics are the set of measures which help marketers quantify and compare marketing performance. Mary Kay Cosmetics focuses on long term brand strength metrics (brand awareness, consideration, trial) as well as short term metrics (web site traffic, ad impressions) Virgin America focuses more on online metrics (cost per click, cost per thousand page impressions, total dollars driven by online ads) Marketing managers should consistently gauge internal marketing metrics, i.e. their employees, since miserable employees lead to poor service and dissatisfied customers (Google)

Sampling Plan

Sampling unit: Who is to be surveyed? Sample size: How many people should be surveyed? (larger samples give more reliable results, but a huge sample is not necessary to achieve reliable results) Sampling procedure: How should the respondents be chosen?

The Marketing Research Process

Step 1: Define the problem What type of first class passengers would respond most to using the service? How many are likely to use the service at different price points? How much goodwill is likely to be added to American's image? How many new first class passengers (internal or external) might upgrade or choose American because of this service? How important is the service to passengers relative to other entertainment services? Marketing managers must be careful not to define the problem too broadly or too narrowly for the marketing researcher. A marketing manager who says, "Find out everything you can about first class passenger needs," will collect a lot of unnecessary information.

Steps 4 and 5

Step 4: Analyze the information through measures of dispersion, variance levels, and structural equations modeling Step 5: Presentation of the Findings Passengers' main motive for using in flight internet is to stay connected and send emails. Business travelers said their companies would cover the cost for such a service. At $25, about 5 out of 10 first class passengers would use the service; about 6 would use it at $15.Therefore, a fee of $15 would produce less revenue ($90----6x$15) than a fee of $25 ($125—5x$25).Assuming the flights take place 365 days a year, American could collect $45, 625 ($125x 365).Given an investment of $90,000, it would take 2 years to break even per plane.

Step 2: Develop the Research Plan

Suppose American Airlines estimates that the service "as is" would yield a long term profit of $50,000. If the manager believes that doing the marketing research to improve promotions would increase profits to $90,000, then he should be willing to spend up to $40,000 (maximum) on research. Data sources- Primary data (freshly gathered for a specific reason) and secondary data (existing data collected for another purpose- A car dealership could purchase info from J.D. Power and Associates on who buys specific brands and the best places to advertise). Pros and cons?

Marketing Measurement Pathway

There are four common measurement "pathways".: Customer metrics pathway - examines how prospects become customers and how the customer experience contributes to the perception of value and competitive advantage. Unit metrics pathway - examines how much is sold by product line and/or by geography and where and how profit margins are optimized . Cash-flow metrics pathway - examines how well marketing expenditures are achieving short-term returns. ROI models measure the immediate impact or net present value of profits expected from promotional campaigns. Brand metrics pathway - examines the long term impact of marketing through brand equity (perceptual health of the brand to customers as well as the overall financial health of the brand)

Garbage In, Garbage Out

Three key considerations include: Validity- extent to which research actually measures what is intended. (service vs. product quality; experiments) Reliability - extent to which the research measurement technique is consistent (attractiveness of interviewer for gender sensitive products; children research) Representativeness- extent to which sampled consumers are similar to the wider audience (entire customer base)

Word Association

What is the first word that comes to mind when you hear the following? Airline American Travel

Qualitative Techniques

Word associations involve asking subjects what words come to mind when they hear the brand's name (top of the mind awareness) Brand personification- ask subjects what kind of person they think of when the brand is mentioned (John Deere- rugged Midwestern male who is hardworking and trustworthy) Laddering- asking a series of increasingly more specific "why" questions that reveal deeper motivations and abstract goals (1)Why did you buy a Nokia phone? "They look well built"—attribute (2)Why is it important the phone is well built? "Means it's more reliable"—functional (3)Why is reliability important? "Because my friends/family need to reach me"—emotional (4)Why must you be available to them at all times? "I can help them if they're in trouble" BRAND ESSENCE

Completely unstructured

what is your opinion of American Airlines?

Marketing research:

§ Marketing Research - Collecting, analyzing, and interpreting data about the marketing environment relevant to a specific situation facing the company §Syndicated research-general research collected by firms on a regular basis, and then sold to other firms (Simmons Market Research Bureau has a database of over 25,000 consumers who complete monthly logs detailing ALL purchases. The company sells this information to companies that want to identify heavy users and untapped markets-Nielsen) §Custom research -conducted by a single firm to provide answers to specific research (insource vs. outsource) §Specialty line research- sell specialized research services (e.g. companies selling field interviewing services to other firms)

Sample Customer-Performance Scorecard Measures

§% of new customers to average # §% of lost customers to average # §% of win-back customers to average # §% of customers in various levels of satisfaction §% of customers who would repurchase §% of target market members with brand recall