Marketing test 2

2 parts of the business analysis

1. segment size (how big is it, is it big enough to stay viable? 2. Sales analysis: judging revenue and costts, are there enough customers and do they buy enough to cover the costs of serving them?

Under what conditions might a firm use multiple forecasting methods?

1. the product is sold to different markets 2. you might also want to use short term and long term forecasting 3. you might use multiple to check to see if they are the same

Ways to define the market? how do the market structures impact target markets?

1. undifferentiated: the market is the industry as a whole, all customers are created equal and all customers within the industry are the same. Doesn't happen very much anymore. 1 market, 1 marketing mix. There is only 1 product, 1 price, 1 way to distribute, and 1 way to promote. In this case, your target market is the industry as a whole. 2. differentiated: most prevelent. 2 or more target markets, 2 or more marketing mixes. Ex. sugar free cola vs regular cola. There are 2 different products, and 2 different promotions. Coke focuses on life style, while diet coke emphasizes low calories. In this case, you are targeting 2 different groups of people with 2 different values. There has to be atleast 1 element of the marketing mix different 3. Concentrated (niche, focus): there are 2 or more target markets in the industry, but you are going to focus only on 1 of them. In this case, you don't serve all of the possible customers, but just want to dominate 1 (like monopolistic markets)

suggest some ways to encourage respondents to cooperate in mail surveys

You could attach a personal note or some other incentive, like a coupon

Why are surveys good to make decisions

because you usually try to find a random sample, which would make it more representative of the entire population, so it allows you to make more educated decisions

Outline the five major steps in the target market selection process.

1. Come up with the appropriate targeting strategy: you shoud choose the strategy based on the characteristics of the target market, the attributes of the product, and the goals and resources of a company. 2. Define target market variables: segmentation variables are characteristics of individuals to divide a market into segments. You want to decide what variables are most relevent for your product/ industry and the market you are in (wouln't choose religion as a segmentation variable for a car company, etc.) 3. Come up with the target market profile: use the segmentation variables to come up with the similarities of customers in 1 segment and how they differ from people in a different segment 4. Business analysis: considering the size of the target market along with the costs and revenues that you could expect from them to see if the tm would cover the costs of serving them. 5. Select who we choose to serve: Pick out the ones that you think will be the most profitable and how to serve them

***Describe the 5 steps in the marketing research process

1. Locating and defining research problems: using swot analysis and figuring out where customers want us to improve or figuring out where it is in a firms best interest to go 2. design the research project: How do I approach the problem? you want to come up with how you are going to conduct your research to solve the problems that you need to solve. This first requires coming up with a hypothesis and then come up with a way to test it. You might first do exploratory research to get a deeper and better understanding of tthe problem and then do quantative research to get percise information to help you make decisions 3. Collect data: you can do this from surveys, interviews, observation, secondary research, etc. It is a lot harder to get people to participate and get responses and collect data nowadays. 4. Interpret research findings: a good researcher can not only collect data but be able to analyze the data and figure out what the information means and find connections to other things. What does the data mean and how can you utilze it? Market research is an art and a science 5, Report Research Findings: make the research understandable so it is easy for the decision makers and other people across the firm to use. If it isn't understandable it isn't actionable!

Why is research important?

1. Research can help the marketer fulfil the marketing concept. It can help you figure out what customers really want and value so you can produce a marketing mix that can satisfy them. It can help you figure out if what you are doing is working and what is not working and how customers want you to improve (strengths and weakness). You have to talk to people and communicate with your target market in order to do this! 2. Research can also help you identify opportunities and threats in the enviornment so you can take advantage of it 3. Research can give you a map/direction of what to do/where to go. It is a way to find your way in business If customers are happy that can help the company's performance.

Describe the important factors that marketers should analyze to evaluate market segments.

1. Segment size. They should look at how many people are in the target markets and if it is big enough to be viable. 2. Sales analysis: compare the revenues vs the costs. Will they spend enough to cover the costs of serving them? You need to take into factors like the upkeep of the store, buying the land, paying for the workers, etc. In general, you will wanttt to look at if there is enough of them . and if they spend enough money. Sales potential: how much sales might you get from ttargeting a target market. YOu will want to consider things like how much potential an industtry as a whole is, as that effects how much market share you can take. YOu will also consider how your competition impacts your sales potential, as if they are a big established company and you are a brand new business, you might have a hard time competing with them. You will also want to consider costs associated with the target market. In order to target a target market, you will have to pay for parts of the marketing mix, such as land for stores and for advertising and generous waranties. If it is too costly to implement your marketing strategy for those people and the amount they buy doesn't make up for the costts or if your costs are higher tthan your competitors, you will likely not be able to sustain the business.

Steps of building a target market

1. build a target market strategy: How do I define the market? This depends on TM characteristics, product atributes, and company objectives and characteristics 2. define target market variables? Figuring out what characteristics you are going to use to split up the market so you can make marketting mixes for each group you want 3. Develop market segment profiles: coming up with descriptions for different TM and listing the similarities of potential customers within a segment and explaining the differences among people in different segments 4. Business: analyzing a business segment and look at the size, and sales (revenues. and costs). Is it worth it trying to serve a particular target market? Will we be able to achieve our goals with this TM? 5. select who we choose to serve (pick out the ones that you think will be profitable)

What are the 2 traits that a survey must have to make them worthwhile and why are they important?

1. reliability: if you get similar results over repeated trials (don't have to be exact, but close) This is measurable. 2. validity: if the survey measures what you proport (what you think you are measuring) to measure. Face validity: Are the questions understandable? Discrimination Validity: that the things you are talking about are completely seperate (like benefits and sacrafices, quality and price have a very clear and distinct difference, they won't be confused as each other). YOu can't measure this, but there is evidence of it) Having them have these 2 things make the information you get more trustworthy so you can use them to make better educated decisions

4 target market variables and explain (how does it affect marketing mix?)

1. demographics: traits that physically describe someone, measureable. (age, income, gender, ethnicity). 2. geographic: where the product is mainly found/used (surfboards along the coast, salt is everywhere) 3. behavioral: How they behave regarding the product 1. usage: how much a person uses a product (light or heavy user) 2. benefit: what aspects of the product do people value differently? What are key benefits they want and what are they willing to give up? (ex. some people use toothpaste to freshen breath, some use it to reduce sensitivity, use it because it is socially acceptable (that group would likely prioritize price over quality, the 1st groups might prioritize quality over price) 4. psychographics: The experiences, outlooks of life, and lifestyles that people value that impact what they buy. 1. personality: Who we are imacts what we buy. we buy products to portray what we want to be, people buy coach products to show themselves as successful. influencers are like this, people want to keep up with them so they might buy the same products they do 2. motives: why we buy things (to make people think we are successful, for sentimental value) 3. Lifestyle: what do I want people to see me as? What kind of life do I want to live? The products you buy are affected by this!

Describe the different types of approaches to marketing research and indicate when each should be used.

1. exploratory research: this is using qualative data to figure out how to better serve a target market. This is stuff like through focus groups, observations, interviews, etc. Exploratory research is very deep and can give you a lot of incite about a problem and what people think about something, but the information isn't necessarily reflective of the entire group and shouldn't be used to make decisions, but can give you areas to do further research on and give you a better understanding of the situation. 2. conclusive research: this is quantative research that is used to draw conclusions, make desisions, and find answers. It is very wide and you can get more concrete and reliable answers, but it is very black and white and doesn't really let you get openended feedback from customers. This should be used in the final stages of research to verify your hypothesises or make decisions.

Identify and describe four major categories of variables that can be used to segment consumer markets. Give examples of product markets that are segmented by variables in each category.

1. geographic: considers where they live. if they live in the city, country, by the coast, up north, etc. depends on what their wants needs and desires are. 2. demographic: these are measurable traits about a person, such as gender, religion, family status, income, etc. 3. Behavioral relates to how a person behaves regarding a product. For example, usage: are they a heavy or light user? and benefit: why do tthey use a product and what benefit do they want to get from it? for example, do they buy toothpaste because they have to to be socially acceptable or because they want fresh breath? 4. psychographic: what they aspire to be. THis includes things like their lifestyle, motives of buying a product (what they want others to see them as) and personality

How should you chose a target market? How has this idea change?

1. what industry are you in 2. are their divisions in the industry? what is the product in? 3. what are the brand competitors Before, it was more 1 industry, then companies realized that all customers shouldn't be considered the same and have different wants needs and desires. THis was largely driven by enviornmental forces. oil producers decided to cut down the supply of gas, which raised prices. THe cars at the ttime were big and gas guzzling, but that enviornmenttal force split the market in 2, the people that needed a big family car and the people that value fuel economy and wanted a smaller fuel efficient car. Realizing that there are different segments of people that you can serve can open up opportunities for companies

Define Database. What is it's purpose and what does it include?

A database is a big collection of information that is organized in a way that makes it easy for marketers to access. (can include access to internal sales reports, company news releases, government economic reports, etc.) Databases can give marketers another way to learn about the enviornment they are working in. Marketers can also use databases to collect information for customer relaionship management, so they can have a database of current and potential customers and deliver different messages to them and figure out if that is working.

What is a market? What are the requirements for a market?

A market is a group of people that have a desire or need for a product in a product class. They must be willing, have the buying power, and have the authority to buy a product.

What is a marketing information system, and what should it provide?

A marketing information system is a way to get information on a regular basis from inside and outside the company. For example, facebook is connected with things like google so if you look something up, you might get a targeted ad relating to what you looked up. A marketing information system can give you lots of information about competition, sales, distribution, ads, prices, etc. that can help you better your business practices and help you provide a better marketing mix for your target market. Informattion data is all aboutt how do you cto create better expeiricens for your custtomers based on the abundance of information available to marketers

what is the difference between defining a research problem and developing a hypothesis?

A research problem is finding out that there is something wrong (sales are decreasing, expenses are increasing) and coming up with a researchable statement regarding the problem. You basically want to figure out percisely what you want to learn from the data A hypothesis comes after you figure out the problem and it is an informed guess about the problem that you can use the research to test to disprove or prove your hypothesis

What is a sales forecast? Why is it important?

A sales forecast is the amount of product a company expects to sell during a specific period att a specific level of marketting activity. For example, oreos mighttt have a sales forcastt of how much tthey expect to sell during the ttime of their mystery flavor promottion. A sales forecast is important because the success of the company relies on it, and if they overestimate the sales forecastt they might cause overbuying or having too high of costts. One of the biggest factors that cause businesses to fail is having inaccurate sales forcasts.

What is an undifferentiated strategy? Under what conditions is it most useful? Describe a present market situation in which a company is using an undifferentiated strategy. Is the business successful? Why or why not?

An undifferentiated strategy is when you assume that everyone in the market has the same wants, needs, and desires and you treat everyone the same. You only have 1 marketing mix for all of the customers. This would be good for companies that have basic and universal products and everyone has the same need for a product and want the same benefit from it (homogeneous market). An example is with a staple company.

Why is selecting appropriate target markets important for an organization that wants to adopt the marketing concept philosophy?

Because marketing strategy and the elements of the marketing mix is based around the selection of target markets. If you choose the wrong target markets, you won't benefit anyone involved. For example, you might have a store that sells things for farm use, such as tractors, seed, etc. An appropriate target market would likely consist of farmers, who often live in rural areas, so for the distribution variable of the marketing mix, you would likely put your stores in rural areas. If you choose to instead target people that live in the city, you might put the stores in the middle of the city because that appeals to your chosen target market. However, those people don't really benefit from it and the farmers that would benefit might not have access to getting there/it might not be convinient for them. If your targett markett doesn't appeal tto your products, company reveuues and success will suffer as well. This is an extreme and obvious example, but it shows the importtance of selecting target markets for to adopting the marketing concept.

What is big data? Why is it important to marketing research?

Big data are massive data files that are obtained from data bases. Because there is so much information, it is ablle to combine all the info to come up with unique and significant insights and patterns that a traditional data base might not be able to figure out, which can help tell marketers what their target market wants, needs, or desires, which can help give the company a competitive advanttage. By looking at the patterns and trends, marketers are able to better predictt tthe future custtomer behavior, which helps them come up with better marketing mixes to help serve them.

How does segmentation impact the marketing mix?

Depending on the segment, you might target different customers, use a different promotion, have different prices, have different products, or have different distribution. YOur target market for each of the segment should determine the marketting mix for it. For every tm tthere should be a different marketing mix! Differentt segments/target markets can create more opportunities for companies.

How does marketing research in other countries differ from marketing research in the United States?

Each country has different laws, customs and beliefs, ethical standards, wants needs and desires, etc. For example, in some countries it might be illegal to go door to door to interview people. It is important to learn about these things before you get started doing marketing research in other countires so you make sure you comply with any laws or customs that they might have

What role do ethics play in marketing research? Why is it important that marketing researchers be ethical?

Especially with the internet, ethics play a big role in marketing reseach. Their are a lot of ethical concerns about when it is ok to collect data about peoples online behavior (for targeted ads) or videotaping them in stores to see their behavior and reactions or selling any of that information to 3rd parties. Marketers need to be ethical because their customers are the ones with the privacy concerns, and it doesn't really make sense to be unethical towards someone that you are trying to serve.

Why should focus groups not be used to make decisions?

Focus groups are good to get the ball rolling and generate ideas, but they are not randomly selected. The things that you learn about in focus groups are not necessarily representatitve of the entire population, and basing decisions off of focus groups might lead to wrong and misguided decisions.

What is information data and what is the purpose of it?

How we collect data in order to create better experiences for customers. Everything that you click on online is data collected by companies to analyze so they know how to better serve them. People are giving these companies data all the time! All the companies are connected (targeted ads on facebook. They are trying to figure out how consumers behave and what their actions are so they can better serve them.

What is the difference between public and private goods?

How you design a study depends on if the goods are public and private. This definition has changed in the past 10 years because of the internet. Social media used to be very private, and now it is very public, which changes the way marketers need to collect data. Marketers need to understand their target market so they can figure out the best way to get that particular target market to give them answers (like finding people that are in the same demographic of the target market to ask the questions). Response rates are really low nowadays, and collecting data is much harder now than what it used to be.

Under what conditions are market tests useful for sales forecasting? What are the advantages and disadvantages of market tests?

Its good to test new products or new elements of the marketing mix or existing products in new geographic areas. Advantages: gives them an opportunity to test new ideas before offering it to everyone disadvantages: expensive and takes a long time, and you don't know if the results will apply to everyone.

What is market segmentation? Describe the basic conditions required for effective segmentation. Identify several firms that use market segmentation.

Market segmentation is splitting up your market based on segmentation variables such as demographics, geographics, behavioral, and psychographics so you can create a marketing mix to appeal to those specific needs. Using market segmentation recognizes that different groups of people have different wants, needs, and desires. To use market segmentation, must have clear and divisible segments that are seperated by certain traits, a market must be heterogenous, being able to compare the segments, and have atleast 1 segment that seems like it will be profitable enough to have a seperate marketing mix for. One example is coke.

How can marketers use online services and the internet to obtain information for decision making?

Marketers can use online systems to figure out what customers are searching for so they can better understand the customers and create marketing mixes that can satisfy them. It helps marketers to find out what kind of things customers value. For example, they can look at social media to see what customers are saying about them. Facebook also uses targeted ads to put ads infromt of a person that would likely be interested in their products based on their search history. Using things like big data and data analytics can combine a lot of information and find trends and patterns that they wouldn't be able to find without the internet. Looking at trends of people's behavior, such as what they search and buying history, on the internet gives marketers access to a lot of information about potential customers, they just need to know how to interpret it and utilize it to create a good marketing mix and take advantage of the opportunities that present themselves. They might also use it to see that a lot of people are searching for a specific type of product that doesn't really exist in the market, which can create an opportunity for marketers.

What is marketing research? Why is it important?

Marketing research is the systematic design, collection, interpretation and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities. It is important as it can help a marketer make better decisions. It can can give them new incites, such as show them suprising new trends that can show help marketers find opportunities and threats in the market place that they can take advantage of so the company can succeed. It also gives them an opportunitiy to better predict the success of new products. It also can give a firm a better understanding about what customer's wants, needs, and desires are so that they can see what they like and what they don't so they can better serve their customers. For example, how the cake mix company used marketing research to find out that customers want to add value to a product, so they changed it to make someone add oil and eggs. Marketing research can help a business fulfill the marketing concept to better serve the customers as well as improve company performance.

How does research relate to the marketing mix

Pepsi knew that most people couldn't tell the difference between coke and pepsi when it is served at room temperature, so they did an experiment as a blind taste test to try to convince coke drinkers that they really liked pepsi better. In this case, they used research to help the promotion variable, and showed people ads of people that thought they liked coke but chose pepsi instead. We use research to drive elements of the marketing mix (products: figure out what kind of products customers want, promotion: use research to convince people that their product is best, place/distribution: use research to figure out where TM shops, Price: use research to figure out what people are willing to pay, how our prices compares to the competition) Perception is really important for marketing!

What is the difference between probability sampling and nonprobability sampling? in what situation would random sampling be best? stratisfied sampling? quota sampling?

Probability sampling: everyone has a known chance of being selected to be studied Random sampling: everyone has equal chance (most reliable to represent an entire population stratisfied sampling: when population is divided into groups with a common attribute and a random sample is chosen within each group (to make sure people in each group is represented) nonprobability sampling: there is no way to calculate the likeliheed that a specific element of the population being studied will be chosen quota sampling: when researchers divide the population intto groups and then arbitrarily choose participantts in each group (good for exploraory studies and good for when some people share some common characteristics and are questioned about that topic of interest)

What is a market segment profile? Why is it an important step in the target market selection process?

They describe the similaritties among pottential customers with in a segment and explains the differences among customers in different segments. They can use tthese profiles to assess what products fit potential customer's needs and how they can use their resources to serve potential customer groups. They also can help marketers decide what segments will complement an organizations strengths, weaknesses, objectives, and resources (can help make marketing decisions!)

describe some marketing problems that could be solved through information gained from observation

Through Observation, you can solve problems that the solutions may be something that you never though of or a customer couldn't explain. For example, Duncan Hines used observation to see that customers understood how to use the cake mixes, but didn't like how they didn't add any value to the cake. This complettely revoulionized the cake mix industry. Through observation, you can also pick up nonverbal cues that people have, which might help you learn about what customers really feel about a product, but don't say outloud.

What is a sample?

a subset of the population

Why is a marketer concerned about sales potential when trying to select a target market?

because if you don't consider sales potential you might go ttthrough all the work and spend a lot of money trying to serve a target markett and then find out that their sales pottential is ttoo low and isn't enough to cover the costs of serving them. If they don't have a high enough sales potential to cover those costs, its not worth serving them

target market

groups of people a company chooses to serve

List the differences between concentrated and differentiated strategies, and describe the advantages and disadvantages of each.

concentrated strategy is when you recognize that their are different segments in a market, but you only focus on 1 of them. For example, in the soft drink industry, A and W focuses solely on rootbeer. This can be beneficial because you can put all of your energy and resources towards that 1 thing so it helps you do a better job with it in hopes in becoming an industry leader. However, you might be losing potential revenue from target markets you leave untouched. Differentiated strategy is when you recognize that there are different segments in a market, and you come up with multiple different marketing mixes to accomodate each segment. For example, coke tries to accomodate different people witth their water, pop, sugar free pop, iced tea, etc. This can help get more potential customers because your customer pool is bigger, but then you also have to divide your time and resources between the different target markets

What are the two primary types of surveys a company might use to forecast sales? Why would a company use an outside expert forecasting survey?

customer forcasting surveys: a survey of customers of customers regarding the types and quantities of products that they intend to buy during a specific period. This can be a good technique if you have relatively few customers. sales force forcastig survey: asking the sales people of the company what they expect to sale and compile ttheir resultts to come up with a forecast. This can be useful because the sales people are the people that work first hand with the customers and best know their wants, needs, and desires expert forecasting survey: sales forecasts prepared by experts outside the firm, such as economists, management consultants, ad execs or college professors. Companys might use this because it is relatively quick and inexpensive.

2 different types of research

exploratory: used to explore possible ideas of where it is to go and how you might be able to get there. It helps gives marketers a better understanding about the enviornment they are working under and what possible wants, needs, and desires of a target market might be. This is more about learning possible things to consider and give you pathways of further research or helps you form hypotthesises. They shouldn't be used to make decisions, as they aren't necessarily representative, they should be used to generate ideas and figure out what customers want and what they are looking for. qualative understanding deep conclusive: surveys, etc. decisions quantative wide (just touches the surface This helps you find answers and make decisions, it tis alittle less suggestive and alittle bit more reliable (if done well understanding vs concrete answers

2 types of exploratory research

focus groups: groups of 8-12 like people that get together to talk about a company. It is lead by a moderator who asks open ended questions about the company, such as what kinds of things do you like about this product? and what would you change about this product? What does value mean to you?These kind of groups can give you interesting or surprising responses that can give you an incite of what customers want that you wouldn't think about on your own. Observation (ethnographic research): go out and observe people on what they would do. For example, duncan hines went into people's homes and watched them bake cakes using their cake mixes. The cakes were really popular with the soldiers in WWII, but when they tried to sell them in stores, they weren't very popular. He thought that people didn't understand the instructions, but through observation, they found out that they could make it perfectly fine, they just didn't like that they didn't add value to the cake. Through this observation, they were able to change the formulation of the cake mix so someone has to add oil and eggs so they add value to it. This type of observation gave them insite that they never even thought of so they could adjust their marketing mix so they could better serve their target market and give them things that they want. another example is how maytag gave people prototypes went into homes to see that people liked how front loaded washers are more eco friendly, but they didn't like how they had to bend over. Now, they started selling a platform to raise it and tilted the drum so people don't have to bend over if they don't want to. Observation is helpful because you can figure out things that people think but can't explain. seeing it in action can help you understand the situation better.

how do generations impact marketing?

generations are based on a major events, so some values and lifestyles of people may be based on what generation we are in because that is when the world changed how people live. For example, my generation started with the rise of technology, so technology is really important in our lives as we don't know life without it. This impacts the wants, needs, and desireds of people in that generation, as they ttend to share general traits. For example, our generation relies a lot on social media so marketing tactics should reflect this. Times change, so companies want to change their marketing tactics based on the generations go on, but you don't want to change too much to isolate other target markets or change it to the wrong things that the new generation doesn't necessarily like, like applebees did.

Define geodemographic segmentation. Identify several types of firms that might employ this type of market segmentation, and explain why.

geodemographic segmentation is the idea that clusters people by zipcodes or neighborhood units based on lifestyle and demographic info. It allows company's to micromarket (focus marketing effors on specific neighborhoods or communities)

What dimensions are used to segment business markets?

geographic, type of company (influences productt features, price structures, distribution system), customer size (influences purchasing procedures, and types and quanities of products it wants), and product use (how they use raw materials)

where are data for marketing research obtained? give examples of internal and external data

primary: surveys, sampling, focus groups, observation, experimentation secondary: government publications, internal databases, internal sources (accounting records, etc.)

If a survey of all homes with listed telephone numbers is to be conducted, what sampling design should be used?

random

mall intercept interview

where researchers are in the mall looking for their target market and when they find people that fit that profile, bring them to a room in the mall to ask them questions. Must find someone that fits the profile to ask them questions about the product, as that can help build trust.