MK201 Test #2 (chp 7-10)

Marketing Research Process

(1) define the problem (2) develop the research plan (3) collect relevant information (4) develop findings (5) take marketing action

STEP 2: segmentation, targeting, and positioning

(1) group potential buyers into segments (2) group products into categories (3) develop a market-product grid and estimate the size of markets (4) select target markets (5) determine product positioning

Steps in segmenting, targeting, and positioning

(1) identify market needs (2) segmentation, targeting, and positioning (3) develop marketing mix

data analytics

- Analytical tool: organize, manipulate, analyze, present - Results - Researcher - Data queries

challenges in conducting marketing research

- Difficult for consumers to accurately figure out purchase intentions for a completely new product. - Consumers are reluctant to answer very personal questions. - Challenging for consumers to accurately remember and report past behaviors. Marketing researchers must overcome difficulties like these to obtain the information needed to make informed decisions.

common sources of external secondary data

- Government reports (census) - Subscription databases - Syndicated panel data - Academic publications - Trade association reports - News reports

present the findings

- Include an explanation of the research approach and a presentation of the key findings and insights. - Explain the significance of the findings and provide actionable recommendations. - Use visuals to make complex information more accessible and memorable. - Explain the significance of the findings in broader industry or market trends. - Note limitations of the research. - Provide additional materials and follow up with stakeholders to address any concerns. - Empower stakeholders to make informed choices.

common sales forecasting techniques

- Judgments of the decision-maker - Surveys of knowledgeable groups - Statistical methods

examples of internal secondary data

- Marketing campaign budgets - Customer databases - Inventory records - Information about the supply chain - Sales records - Customer service logs

Disadvantages of secondary data

- May not be specific enough or match the research question - May be out of date

personal observation *don't need for test

- Mystery shoppers: Trained researchers hired by companies to shop at their stores and the stores of competitors. - Ethnography: Systematic observation of people in their natural settings. STRENGTHS: Flexible; Can reveal actual behaviors LIMITATIONS: Can be unreliable without adequate training and adherence to research protocols; Cannot easily determine why behaviors occur

mechanical observation

- Nielsen "People Meter": TV ratings - AI-enabled video monitoring: "Dwell" time and store traffic - GPS-enabled mobile apps: Customer movements and locations STRENGTHS: More objective and precise data than personal observation LIMITATIONS: Not flexible; Devices engineered for a single purpose

three segmentation strategies

- One product for multiple market segments - Multiple products for multiple market segments - Mass customization (or segments of one)

descriptive methods

- Personal interviews - Mail surveys - Telephone surveys - Online surveys

value of internal secondary data

- Readily accessible - Cost-effective - Specific to the company's operations

Criteria to Use in Forming the Segments

- Simplicity and cost-effectiveness. - Potential for increased profit. - Similarity of needs of buyers within a segment. - Difference of needs of buyers among segments. - Potential of a marketing action to reach a segment.

STEP 4: develop findings

- analyze the data - present the findings

exploratory methods

- depth interviews - focus groups

Disadvantages of primary data

- higher cost - time-intensive

Advantages of secondary data

- lower cost (or free) - available quickly

STEP 5: take marketing actions

- make recommendations - implement recommendations - evaluate results

STEP 3: collect relevant information

- obtain secondary data - obtain primary data

question formats

- open-ended questions - closed-end (or fixed alternative) questions

STEP 3: develop marketing mix

- product - price - place - promotion

STEP 1: identify market needs

- product features - quality - convenience - cost savings - time savings

STEP 1: define the problem

- set the research objectives - identify possible marketing actions terms: research objectives & measures of success

other sources of data

- social media intelligence - web scraping

Advantages of primary data

- specific to the problem - current information

STEP 2: develop the research plan

- specify constraints - identify data needed - determine how to collect data terms/concepts: constraints, concepts, research methods, data collection methods, data analysis and interpretation

Surveys of knowledgeable groups

- survey of buyers' intentions forecast - salesforce survey forecast

One Product for Multiple Market Segments

1 product for multiple markets allows a company to spare the expense of developing and producing additional variants or versions of the product - Microsoft 365→ it is a product for multiple markets because there is a bunch of different target audiences it could reach

Steps in a lost-horse forecast:

1) Start with the last known value. 2) List the factors that could affect the forecast. 3) Estimate the degree of impact for each factor. 4) Adjust the base level to reflect the estimates of impact.

Cannibalization

A decline in the sales of one of a company's products resulting from an increase in the sales of another of its products.

Lost-horse forecast (Judgements of the decision maker)

A forecast made by starting with the last known value of the item, listing the factors that could cause changes in that value, estimating the degree of impact that each of those factors would have, and adjusting the base level to arrive at the final amount.

product differentiation

A marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products.

new-product concept

A picture or verbal description of a potential product.

focus group

A qualitative research method that involves bringing together a small group of individuals—typically 6 to 10 participants—for a structured discussion led by a moderator. - The purpose is to gather insights, opinions, and perceptions about a research topic.

syndicated panel data

A third-party market research company periodically surveys a panel of consumers about various aspects of consumer behavior and the data is made available for sale to other firms. - IRI: Consumer purchases - Nielsen: TV viewership - ComScore: Online behavior

information technology

All the computing resources used to collect, store, and analyze data. - Marketing researchers are faced with an exponentially increasing amount of data. - The challenge is efficiently transforming a huge amount of data into useful information. - Data is transformed into useful information through data analytics.

questionaires

Asking people about their attitudes, awareness, intentions, and behaviors.

predictive modeling

Based on statistical models that use data mining and probability analysis to foretell outcomes.

Behavioral Segmentation

Behaviors (product features and usage rate): Observable actions (e.g., such as where customers shop, what benefits they seek, and how frequently they purchase a product). - Whole Foods Market: Organic and non-GMO products; Sustainable and ethical sourcing. - ALDI Grocery Stores: Quality over brand image and selection.

Intelligent marketing enterprise platform

Big data - internal data sources - external data sources - cloud environmnet - data warehouse

measures of success

Criteria or standards used in evaluating proposed solutions to the problem.

internal secondary data

Data collected by the individual company for accounting purposes or marketing activity reports - inputs: budgets, customer databases, inventory records

Demographic Segmentation

Demographic: Physical characteristics (e.g., sex or race), measurable characteristics (e.g., age or income), or other classification attributes (e.g., occupation or marital status) of potential customers. - Whole Foods Market: Upper-middle to high-income; Highly-educated individuals. - ALDI Grocery Stores: Low to middle income; Families with children.

U.S. Census

Detailed information on American households, including the number of people per household, and the age, sex, race, ethnic background, income, occupation, and education of individuals within the household.

questionnaire data

Facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors. - exploratory methods - descriptive methods

observational data

Facts and figures obtained by watching how people behave, using personal observation, mechanical methods, or neuromarketing techniques.

subscription-based databases

Fee-based service providing industry-specific data, market research reports, and consumer profiles. - Euromonitor's Passport - Statista - IBISWorld

Neuromarketing

Field of marketing research that focuses on understanding how the brain responds to nonconscious, marketing stimuli. - Eye tracking - Biometric monitoring - Emotional-response facial coding

Survey of buyers' intentions forecast

Forecast based on asking prospective customers if they are likely to buy the product during some future time period.

salesforce survey forecast

Forecast based on asking the firm's salespeople to estimate sales during a future time period.

trend extrapolation

Forecasting sales by extending a pattern observed in past data into the future.

Multiple Products for Multiple Market Segments

Gain, Tide, Draft detergents→ different products for multiple target audiences

Geographic Segmentation

Geography: Where prospective customers live or work (e.g., region of the country or urban vs. rural area). - Whole Foods Market: Northeast and West Coast; Concentration on urban areas. - ALDI Grocery Stores: East Coast, Midwest, and California; Urban and suburban areas; Often choose locations near competitors.

Bases of Segmentation for Organizational Markets

Geography—where businesses are located (e.g., region, statistical area). Demographics—measurable characteristics (e.g., number of employees, sales volume, length of time in business) and other classification attributes of (e.g., NAICS code, industry). Behaviors—observable actions. Psychographics are not used to segment organizational markets.

Bases of Segmentation for Consumer Markets

Geography—where prospective customers live or work. Demographics—physical characteristics, measurable characteristics, and other classification attributes of individuals and households. Psychographics—subjective mental or emotional attributes of prospective customers. Behaviors—observable actions.

Organizational synergy

Increased value created through performing organizational functions such as marketing or manufacturing more efficiently.

Market segmentation

Involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

categories of internal secondary data

Marketing input data: Relate to the effort expended to make sales Marketing outcome data: Relate to the results of the marketing efforts.

wording questions

Marketing research questions must be worded precisely so that all respondents interpret the same question similarly.

Economic Census

Number firms in the United States that produce a particular product along with sales volume—categorized geographically, by industry sector, and NAICS code.

Psychographic Segmentation

Psychographic: Subjective mental or emotional attributes, aspirations, and needs of prospective customers. - Whole Foods Market: Healthy lifestyle; Environmentally conscious. - ALDI Grocery Stores: Budget-conscious.

depth interview (or in-depth interview)

Qualitative research method that involves conducting a one-on-one, open-ended, and structured interview with a participant to gather in-depth insights, opinions, and information on a specific topic. - Commonly used to explore complex issues, attitudes, and behaviors.

open-ended questions

Questions that allow respondents to express opinions and ideas or describe behaviors in their own words. - Open-ended questions allow marketers to capture the "voice" of respondents, which is useful in understanding consumer behavior, identifying product benefits, or developing advertising messages.

closed-end (or fixed alternative) questions

Questions that require respondents to select one or more response options from a set of predetermined choices. - Dichotomous questions. - Semantic differential questions. - Likert scale questions.

constraints

Restrictions placed on potential solutions to a problem—often time or money.

segmentation strategies

Segment markets when the extra expense and effort will increase its sales, profit, and return on investment.

sampling

Selecting a group of research participants.

"Tiffany/Walmart" strategy

Selling to high-end and low-end segments.

research objectives

Specific, measurable goals the decision maker seeks to achieve in conducting the marketing research.

observation

Surveillance of behaviors in person or through mechanical means.

research methods

Techniques and processes used to collect, analyze, and interpret data.

experiments

Testing cause and effect relationships by manipulating factors under tightly controlled conditions. - Independent variables are often one or more of the marketing mix elements. - Dependent variable is a marketing outcome, often purchase amount.

data mining

The practice of examining large databases to find statistical relationships between consumer purchasing patterns and marketing actions.

marketing research

The process of defining a marketing problem or opportunity, systematically collecting and analyzing information, and recommending actions.

usage rate

The quantity of a product consumed (or number of visits to a store) during a specific period. - Frequency marketing focuses on usage rate.

sales forecast

The total sales of a product that a firm expects during a specified time period under specified conditions and its own marketing efforts.

social media intelligence

Tracking and analyzing online conversations, mentions, and discussions related to a specific brand, product, topic, or keyword to understand the sentiments, trends, and opinions expressed within the social media landscape.

statistical inference

Using statistical methods to generalize the results from a sample to the population of interest.

Big data

Vast amount of data collected from various sources and analyzed with an increasingly sophisticated set of technologies.

linear trend exploration

When the pattern is described with a straight line

Primary data

facts and figures newly collected for the project - observational data - questionnaire data

secondary data

facts and figures recorded prior to the project - internal secondary data - external secondary data

data

facts and figures related to the project

external data sources

government publications, social media intelligence, web scraping, subscription databases, syndicated panel data, academic publications

Dichotomous Question

have only two possible response options—usually "yes" or "no".

concepts

ideas about products or services.

Likert Scale questions

measure respondents' attitudes, opinions, or perceptions by asking them to rate statements on a scale from "Strongly Agree" to "Strongly Disagree".

Semantic differential questions

measure the perceptions associated with a concept using pairs of opposing adjectives.

data collection methods

observation questionaires

data visualization

presentation of your results

external secondary data

published data from outside the organization

internal data sources

sales records, marketing budgets, customer databases, inventory records, supply chain data, customer

data analysis and interpretation

sampling statistical inference

sources of data

secondary data primary data questionnaire data

cloud environment

storage, computing

mass customization

the next step beyond build-to-order (BTO), which involves manufacturing a product only when there is an order from a customer

Statistical Methods

trend extrapolation - linear trend exploration