MRKT 3301.Chapters 7-10
Segmentation variables-Psychographic
Personality, values (VALS 2), lifestyle (Claritas PRIZM NE), and neds
Screening & Evaluation (Stage 3)
Internal approach (3M-customer experience management (CEM) External approach (concept tests)
Stages of the Product Life Cycle (4)- Chapter 10
Introduction, growth, maturity & Decline
Customer contact audits
service encounters, customer contact audit, customer's car rental activities
Product grid sample
shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness
Newness-Legal terms
newness affects the amount of learning effort consumers exert to use the product
People based
UNSKILLED labor-Lawn care, security guards, janitorial services SKILLED labor-Appliance repair, plumbers, & caterers PROFESSIONALS- Management consultants, accountants & lawyers
Portals & Search Engines
USA.gov and Google
Step 4- Select target markets
Criteria to use in selecting target markets Two types of criteria a. Those that DIVIDE a market in to segments b. Those that actually PICK the target segments
Step 3- Develop a market-product grid and estimate the size of markets
Forming a market-product grid Estimating Market sizes
Assessing service quality
Gap analysis and monitoring service failure
New product process
Stage gate process (x and checks)
Product line
cell phones, iPad & iPods
Five step Marketing research approach
1-Define the problem 2- Develop the research plan 3-Collect relevant information 4- Develop findings 5- Take marketing Actions
Strategic role of most successful new products
EXTERNALLY DRIVEN-defend market share position, establish foothold in new market, preempt market segment INTERNALLY DRIVEN- maintain position as product innovator, exploit technology in a new way, capitalize on distribution strengths, provide a cash generator, and use excess or off-season capacity
Product positioning w/ perceptual maps
1. Identify impt attributes for a product or brand class 2. Customer's ratings of competing products or brands on these attributes. 3. Customer's ratings of the company's products or brands on these attributes 4. Reposition the company's products or brands in the minds of consumers 5. Perceptual map 6. Perceptual map to reposition Chocolate milk for adults (identify impt attributes for adult drinks, discover how adults see competing drinks, discover how customers see chocolate milk,reposition chocolate milk to make it more appealing to adults)
Five dimensions of service quality
1. Reliability-ability to perform the promised service dependability & accurately (Is my flight on time?) 2. Tangibles-appearance of physical facilities, equipment, personnel & communication materials (gate, plane & baggage area clean?) 3. Responsiveness- willingness to help customers & provide prompt service-(attendants willing to answer my questions?) 4. Assurance-knowledge & courtesy of employees & their ability to convey trust & confidence (everyone knowledgeable of their jobs?) 5. Empathy-caring, individualized attention provided to customers (employees determine special seating, meals, etc?)
Equipment based
Automated (self-service)-ATMs, online brokerage & automated car washes Operated by relatively UNSKILLED operators-Motion picture theaters, dry cleaners & Taxis Operated by SKILLED operators-Electric utilities, airlines and computer networks
Newness
Compared to existing products
Products classification
CONSUMER-convenience, shopping, specialty, unsought BUSINESS-Derived demand, components, and support products (installations, supplies, accessory equipment & industrial services)
Marketing strategy of degrees
CONTINUOUS-gain consumer awareness & wide distribution DYNAMICALLY CONTINUOUS-advertise points of difference & benefits to consumers DISCONTINUOUS-educate consumers through product trial & personal selling
Example of degrees
CONTINUOUS-new improved shaver, detergent & toothpaste DYNAMICALLY CONTINUOUS-electric toothbrush, compact disk player & auto flash unit for cameras DISCONTINUOUS-wireless router, digital video recorder & electric car
Definition of degrees
CONTINUOUS-requires new learning DYNAMICALLY CONTINUOUS-disrupts normal routine but not total learning DISCONTINUOUS-requires new learning & consumption patterns by consumers
Likert scale questions-Wendy's
Check one box that describes.... strongly agree, agree, don't agree, disagree, strongly disagree
Five step (3)
Collect relevant information: Obtain data; secondary data; obtain primary data; use information technology and data mining (Data-facts & figures pertinent to the problem) (SECONDARY DATA Facts & figures already recorded prior to the project)- (PRIMARY DATA-Facts and figures newly collected for the project)
Commercialization (Stage 7)
Commercialization-Regional roll-outs Burger King's french fries Risks with grocery products-slotting & failure fee Speed as a factor in new product success-time to market (TtM), parallel development and fast prototyping
Newness-consumer perspective
Continuous innovation, dynamically continuous innovation, & discontinuous innovation
Brand Loyalty-Types of consumer product
Convenience-aware of product but will accept substitutes Shopping-Prefer specific, but will accept substitute Specialty-very loyal, no substitute Unsought-will accept substitute
Purchase behavior-Types of consumer product
Convenience-frequent purchases-little time & effort spent Shopping-infrequent-need much COMPARISON shopping time Specialty-infrequent-need EXTENSIVE search & decision time Unsought-very infrequent- SOME comparison shopping
Products & services offering
Core and supplementary
Types of surveys-Individual interview & mall intercept
Cost-most expensive because of time and travel Ability to probe-Much, can show visuals, probe and establish rapport Opportunity for bias results-significant because of voice and facial expressions Anonymity- Little because of face-to-face contact
Attitudinal question-Wendy's
How important is it to you that a fast-food restaurant satisfies you-VIP, somewhat, impt, unimpt, somewhat unimpt, very impt
Five step (2)
Develop the plan: Specify constraints; identify data needed for marketing actions; determine how to collect data (concepts-new product concept; methods-sampling and statistical inference)
Development (Stage 5)
Development Example: Chobani Yogurt, service encounters and safety tests
Types of surveys-Telephone
Cost-Moderately expensive Ability to probe-some, since interviewer can probe and elaborate on questions Opportunity for bias results-some because of voice inflection of interviewer Anonymity-Some because of telephone contact
Types of surveys-Mail, online & fax
Cost-least expensive assuming adequate response rates Ability to probe-little, since self-administered Opportunity for bias results-none-form completed without interviewer Anonymity- complete, since no signature is required
Five step (1)
Define the problem: Set research objectives; Identify possible marketing actions (be specific, measurable & achievable; have clear research purpose; must lead to marketing actions; exploratory, descriptive and causal research)
Services Classification (Equipment based or people based)
Delivery by people or equipment, by business firms or nonprofit organizations, and Government agencies
Five step (4)
Develop findings: Analyze the data-How are sales? What factors contribute to sales trends?; Present the findings
Step 5-Take marketing actions to reach target markets-Apple
Ever changing segmentation strategy Market-product synergy analysis: a balancing act a. marketing synergies b. product/R&D-manufacturing synergies
Semantic differential scale question-Wendy's
For each of the characteristics listed below.... Check the space that describes the degree to which Wendy's is.....
Usage behavior question-Wendy's
How often do you eat out at each of the following fast-food restaurants? Once a week or more, 2-3 times a month, Once a month or less
Stages of the Product Life Cycle -Introduction
Gain awareness Stimulate trial, primary demand, selective demand, skimming strategy & penetrating pricing
Segmentation variables-Demographic
Gender, age, race/ethnicity, life stage, birth era, household size, marital status, income, education and occupation
Demographic question-Wendy's
Gender, marital status, children at home, age and income
Ways to segment organizational markets
Geographic (Global, Region or Country and Density), demographic (NAICS code and sector, number of employees and annual sales) & behavioral (number of locations, kind, where used, application, purchase location, who buys, and type of buy)
Segmentation bases (Chapter 8)
Geographic, demographic, psychographic and behavioral
Step 1-Group potential buyers into segments
Geographic, demographic, psychographic, and behavioral segmentation Behavioral (product features, usage rate or frequency marketing and 80/20 rule)
Segmentation variables-Geographic
Global, Region or Country, city size, statistical area, Media-television & density
Products
Goods-nondurable and durable goods
Stages of the Product Life Cycle - Decline
Harvesting Deletion Industry/product sales drop, environmental changes, deletion & harvesting
Dichotomous question sample-Wendy's
Have you eaten at a fast-food restaurant in the past month?
Two approaches to Product positioning
Head-to-head positioning Differentiation positioning
Media Behavior question-Wendy's
How important are each of the following sources.... VIP, somewhat impt, not at all impt
Five step (3)-Secondary Data-Facts & figures already recorded prior to the project ADVANTAGES-Time savings & inexpensive DISADVANTAGES-Out of date, definitions/categories are not right and not specific enough Data Warehouses (Internal & external databases)
INTERNAL DATA collected inside firm-inputs-budgets; financial statements; sales call reports; outside-actual sales & customer communications (Marketing input and outcome data)-CUSTOMERS, INVENTORY, SALES CALLS & PROMOTIONS EXTERNAL DATA-collected outside the firm-U.S. Census reports(2010 census & ACS); trade association studies (AMA); business periodicals (Bloomberg & Business Week); internet-based reports (syndicated Panel and scanner data)-SINGLE SOURCE SERVICES
Services
Ideas
Market Segmentation-Mixed actions
Identify needs-Link needs to actions-execute marketing program actions
Multiple choice question-Wendy's
If you answered yes to question 2, how often do you eat fast food (once a week, 2-3 times or Once a month)
Step 2- Group products into categories
Individual
Five categories and profiles of product adopters (diffusion of innovation)
Innovators- (venturesome; higher educated; use multiple info sources) Early majority- (deliberate; many informal social contacts) Laggards-(fear of debt; neighbors & friends are info sources) Early adopters- (leaders in social setting; slightly above average education) Late majority- (skeptical; below average social status)
Marketing reasons for new product failures
Insignificant points of difference, no economical access to buyers, incomplete market & product protocol before product development starts, not satisfying customer needs on critical factors, bad timing, poor product quality, too little market attractiveness, and poor execution of the marketing mix
Four I's of Services
Intangibility, inconsistency, Inseparability and inventory
Four Aspects-Charting the product life cycle
LENGTH, shape, life cycle of consumers & product/brand manager responsibilities SHAPE-generalized life cycle, high-learning, low-learning, fashion & fad LIFE CYCLE & CONSUMER-Diffusion of innovation-Barriers & adoption (usage, value, risk, & psychological) PRODUCT/BRAND MANAGER RESPONSIBILITIES (product life cycle, new product development, marketing program implementation & data analysis (CDI (Category Development Index) and BDI (Brand Development Index)
Typical problems when wording questions
Leading (favoring statement), Ambiguous (regularly), Unanswerable (Does it matter & who can remember), Two questions in one (How do you answer), Non-mutually exclusive (age sample-40 and over)
Market Segmentation
Links market needs to an organization's marketing program through marketing mix actions.
Stages of the Product Life Cycle - Maturity
Maintain brand loyalty Industry/product sales slow, profit declines, product differentiation, & fewer competitors
Step 4-Criteria to use in selecting target markets
Market size, expected growth, competitive position, cost of reaching the segment and compatibility with organizational objectives and resources
Step 5-Take marketing actions to reach target markets
Market-product concentration; market specialization, product specialization, selective specialization and full coverage
Segments of One
Mass communication & Built-to-Order (BTO)
Product class
Music
7 stages in the new product process leading to success
New product strategy development, idea generation, screening & evaluation, business analysis, development, market testing and commercialization
Organizational problems in new product failure
Not listening to the "voice" of the consumer, skipping stages int he new product process, marketing a poorly conceived product too quickly, encountering "groupthink" in meetings, not learning lessons from past failures and avoiding the "NIH problem"
Five step (3)-Primary Data-Facts and figures newly collected for the project TYPES OF QUESTIONS: Open ended, closed or fixed, dichotomous, semantic differential and likert scale questions ADVANTAGES-More specific to the problem DISADVANTAGES-Expensive and time consuming to collect
OBSERVATIONAL DATA (watching people-Mechanical, personal(Mystery Shopper, Videotaping, Ethnographic Research) & neuromarketing methods-(Nielsen's People Meeter & TV ratings) QUESTIONNAIRE DATA (asking people-Idea generation & evaluation methods-Idea generation methods-individual & in-depth interviews, focus groups, fuzzy front end Idea Evaluation methods-Surveys-Personal interview, telephone, mail/fax, online & Mall intercept interview surveys OTHER SOURCES OF DATA (social media-Carmex; panel & experiments-(Independent Variables- The Cause; Dependent Variable-The Result and Test Markets) information technology-Data Warehouses, Sensitivity Analysis and data mining-RFID Technology
Idea Generation (Stage 2)
Open innovation, employee & co-worker suggestions, customer & supplier suggestions (crowd sourcing), research & development laboratories (industrial design & outside labs), competitive products, smaller firms, universities, and inventors
Segmentation trade off (Synergies vs. Cannibalization)
Organizational synergy, cannibalization (The Loft) and Tiffany/Walmart strategies
Segmentation variables-Behavioral
Outlet type, direct, product features, usage rate, user status and awareness/intentions
Factors affecting product success rate (chapter 9)
Point of difference or uniquely superior product, well-defined product before actual development starts, quality execution of activities before actual development starts, synergy or fit with marketing mix activities, quality of execution of marketing mix activities and market attractiveness-ones with large markets, high growth.
Neweness-organization's perspective
Product line extension, jump in innovation, brand extension, and true innovation
Positioning the product
Product positioning and repositioning and writing a positioning statement
Business Analysis (Stage 4)
Prototype, business fit, capacity management and off-peak procing
Five step (3)-Data facts & figures pertinent to the problem
SECONDARY & PRIMARY DATA
Sales forecasting techniques Xerox uses Linear trend forecasting Apple uses Build-up forecast
Sales forecast; Judgments of the decision maker (direct forecast and lost-horse forecast); Surveys of knowledgeable groups (survey of buyer's intentions and salesforce survey forecast); Statistical Methods (trend and Linear trend extrapolation
Step 5-Take marketing actions to reach target markets-Wendy's
Segmentation strategy, keeping an eye on the competition, and future strategies for Wendy's.
Criteria to use in Forming the segments
Simplicity & cost effectiveness of assigning potential buyers to segments; potential for increased profit; similarity of needs of potential buyers within a segment; difference of needs of buyers among segments; and potential of a marketing action to reach a segment
iCloud
Stores your content and wirelessly pushes it to all your devices.
Stages of the Product Life Cycle - Growth
Stress Differentiation Rapid sales growth, more competitors, repeat purchasers, new features, & broad distribution
Forming Segments-Variables to use
Students: Dorms, Sororities & Fraternities-Day commuters Apartments-Night commuters Non-students: Faculty & Staff-Workers in area Residents in area
Product mix
TVs, computers, iPod, cell phones
Five step (5)
Take marketing actions: Make action recommendations; Implement action recommendations; Evaluate results-the decision itself and the decision process used
Market Testing (Stage 6)
Test marketing, standard, controlled, and simulated(STMs) test markets and when test markets don't work
Segmentation and targeting markets-5 Key Steps that link market needs to a firm's marketing program
To link needs to actions 1. Group potential buyers into segments 2. Group products sold in to categories 3. Develop a market-product grid and estimate size of markets (identify & then execute) 4. Select target markets 5. Take marketing actions to reach target markets
Statistical & Financial Data
Wall Street Journal; CNBC, Investors Business Daily, Fox Business News, STAT-USA, Census Bureau
Open-ended question sample-Wendy's
What things are most important to you when you decide to eat out and go to a fast-food restaurant?
Execute marketing program actions
a marketing mix in terms of product, price, promotion & place (distribution)
Degree of newness (see chart chapter 9)
affects the amount of learning effort consumers exert to use the product
Identify Market Needs
benefits in terms of product features, expense, quality & savings in time and convenience
Product form
records, cassette tapes, CDs & ipods
Product items
stock keeping unit (SKU)
New product strategy development (Stage 1)
strategic role defined, SWOT analysis/scanning conducted, protocol defined, and service development difficult
Links needs to actions
take steps to segment and target markets