dr. dawne martin mktg 241 feb. 7, 2012 marketing research

DR. DAWNE MARTINMKTG 241

FEB. 7 , 2012

Marketing Research

Administrative Things

Friday, Feb. 9 – Environmental Analysis Due (1-3 pages with citations)

Learning Objectives: Review and discuss elements of Customer and

Competitor Analysis section of paper Review and apply Marketing Research process and

approaches Begin to outline Market Research needed for

marketing plan and feasibility study

Customer Analysis: Preliminary Identification of Market

Market definition Who will be your likely potential customers How many are there? Trends in customer demographics? Geographic dispersion

Segmentation: Who are likely to be your biggest customers? The most profitable customers? The most attractive potential customers? Are there any logical groups based on needs, motivations or characteristics?

Segmentation Approach: How should be the market be segmented into groups, with relatively homogeneous needs, that would require a unique marketing strategy? Benefits sought Usage level Application Organizational type or size Geographic location Customer loyalty Price Sensitivity

Customer Analysis

What is the customer’s motivation for buying your product or service? What elements of the product or service are valued most? What are the customer’s objectives? What are they really buying? How do segments differ in their motivation priorities? Do these needs represent leverage points for competitors?

What are the customers unmet needs? Why are some customers dissatisfied? What are the severity and incidence of customer problems? What are the unmet needs that customers can identify and those of

which they are unaware? Do the unmet needs represent a leverage point for competitors?

Summary and implications for your businessBe sure to use citations for sources of information

Competitor Analysis

Competitor Definition: What types of business will be your competitors? Which are direct and which

indirect? Where are they likely to be located? Define the business of your competitors, including industry What are the sizes our your competitors (sales or number of employees)

Competitor Strategy: How are your competitors choosing to compete (price, service, technology, product quality, etc?)

Barriers to Entry & Exit: How easy is it to enter or exit the market? Are there barriers to entry or exit? Significant capital investments?

Top Competitors: Who are your top 5 competitors? For each competitor identify the following? Size (number of employees or sales revenue), profitability. Strategy to compete in the market What are their strengths and weaknesses Develop a competitive strength grid and identify opportunities for your business

Analysis of competitive environment and implications for your business

Competitive Analysis Grid (SCORE)

Factor Own Strength Weakness Comp A

Comp B

Comp C

Import-ance to Customer

Products

Price

Quality

Selection

Service

Reliability

Stability

Expertise

Reputation

Location

Appear

Rethinking Marketing, 1st Edition © 2009 Prentice Hall

4-7

What You Don’t Know Can Hurt You

When creating something new or different Decisions need to be made

Product features Target audiences Prices Communication Distribution approaches

Think about Day-to-day experiences of customers Customer are complicated Markets are complex Competitors are unpredictable Economic conditions fluctuate New often disruptive technologies emerge


4-8

Sometimes entrepreneurs can react quickly Learn from incorrect decisions Make appropriate adjustments

Just as often as not there is little room for error and the entrepreneur finds he or she is Out of time Out of money Out of business

There is a better way: Entrepreneurial Research


4-9

Marketing Research Is About Trade-offs

How much information is collected From which sources Collected in what manner At what cost Completed by what date

Time & cost constraints mean that many decisions are wrong

As a result Prices set too high Wrong customer is targeted A lot of money is wasted on advertisement in the wrong

medium


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They must be made under conditions of • Uncertainty• Ambiguity• Lack of control• Stress• Usually fairly quickly

Most critically there is almost never enough information to conclusively make a choice

Yet decisions have to be made.


4-11

Marketing Research Is About Trade-offs

How much information is collected From which sources Collected in what manner At what cost Completed by what date


4-12

Most Entrepreneurs Face Significant Time and Money Constraints

As a resultMany decisions are wrong

Prices set too high Wrong customer is targeted A lot of money is wasted on advertisement in the

wrong medium


4-13

Sometimes entrepreneurs can react quickly Learn from incorrect decisions Make appropriate adjustments

Just as often as not there is little room for error and the entrepreneur finds he or she is Out of time Out of money Out of business

There is a better way: Entrepreneurial Research


4-14

Start by Thinking Logically

“What is the decision we are facing?” Should I pursue this opportunity? How big is

the dollar potential? What’s the best way to position my company in

the marketplace? Does it make sense to advertise in the same

media used by competitors? Who are the likely early adopters that I should

target with my initial marketing efforts? How much should I charge, and should my

prices be different depending on the target audience?

Should I create a sales force or sell through distributors?


4-15

The Set-upRecognize and define managerial

problemSet research objectivesEstablish simple hypothesesIdentify information needed


4-16

The Measurement Perform secondary data search internal/external Pursue primary data research

Develop research design Determine sampling strategy

From where Selection process How large

Design questionnaire or measurement device Tabulate the data Analyze the data


4-17

The managerial decision Interpret results

Draw conclusions Make recommendations

Take action

When all is said and done, though, the reality is that far too many research projects

produce results that, while interesting, shed little light on the correct course of action to take.


4-18

Backward Marketing Approach

Improving the chances that research will be actionable is called “backward marketing research”

This approach can be especially powerful when taking bold actions such as the creation of entrepreneurial ventures

Research process done in reverse


4-19The Set-up

Determine the key managerial decision to be made

Specify information inputs that would lead to one decision alternative versus other decision alternatives

Prepare sample tables or short report containing the kinds of information that would best help make the managerial decisions


4-20The Set-up—cont.Determine the analysis that will be

necessary to fill in the tables or report

Determine what questions must be asked to provide the data required by the analysis

Ascertain whether needed questions have been answered already


4-21

The measurement Design sample

What kind of analysis would produce the desired result Implement research design Analyze data

The management decision Interpret results

Draw conclusions Make recommendations

Select the most appropriate decision alternative


4-22

Entrepreneurial Researcher

“Entrepreneurial marketing research” Often provide richer insights Less cost Recognizes customers are emotional

Tap into unconscious mind of buyer Explore their problems, needs, wants, desires, and

wishes Direct observation of consumer behavior


4-23

Entrepreneurial research methods are eclectic Indirect

A zoo determined its target audience by monitoring auto license plates for more than 2 monthsThen able to track target audience by

specific geographic locales Direct

Leslie Blodgett of Bare Escentuals uses QVC to market cosmetics, reach out to customersTell her what sells and what does not These viewers provide immediate feedback

on new products


4-24

Some Principles to Guide the Entrepreneurial Research Process

Think like a guerrilla Guerrilla warfare describes fighting

battles using nonconventional or unorthodox practices

Doing more with less Tapping into unutilized resources Collecting information in creative

ways


4-25

Make use of your surroundings Auto repair shop needed to find out what radio

station to advertise on As cars came in to be fixed, mechanics made note

of radio stations programmed on customers’ cars After 30 days able to determine top three radio

stations for target audience


4-26

Explore the unconscious Research questions that

Speak to unconscious brain Address the factors that stir emotions

Monitor nonverbal cues Build research into daily operations

Research should be 24/7 Every employee is a market researcher Create systems for recording and

tracking insights


4-27

Use technology creatively Tracking software

See exactly how a visitor to the firm’s website behaves• What features he or she examines• How long he or she is on the site

GPS tracking of shopping habits Offering customers incentive to wear

GPS tracking device in mall Research might explain how/way

people shop


4-28

Use Technology Creatively—cont. Cell phones

Allow customers to take pictures of things that interest them or that they do not like

Survey Monkey• Facilitate simple online surveys

Emerging observational methodologiesEye-tracking methodologies Virtual reality presentation

techniques


4-29

Create and mine databases Build databases on

Prospects Customers Product contribution margins Promotional efforts Sales force performance Price changes and their impacts


4-30

Create and mind databases—cont. Software packages to track

Characteristics of customers who• Buy• Buy more• Do not buy at all

Point of sale systemConnects a firm’s cash register to

• Inventory system• Financial statements• Financial institutions • Suppliers


4-31

Create and mind databases—cont. Creation of a regular stream of

managerial reports thatSummarize activity and performance of

productsCustomer segmentsTerritoriesMiddlemen Other units of analysis

This Creates a stronger position to identify

patterns/trends that lead to opportunity recognition


4-32

Less Costly, but Effective Measurement Approaches

Talk to lead users Talk to people who have needs for which no

solution exists and who often have ideas for effective products that have not yet been developed

Monitor Weblogs Valuable source of intelligence about customer

perceptions, needs, and behaviors Explore other ethnographic approaches

Use of field research to capture behavior and human reactions in natural settings or as they occur


4-33

Observe customers in action Obtrusive—the consumer knows his or her habits

are being observed Unobtrusive—the consumer is unaware that his or

her actions are being observed Create Web-based surveys

Easy to use tools for creating online surveys such as Survey Monkey

Use focus groups Small group of people (6–10) together 90 minutes or so for in-depth discussions Preliminary insights


4-34

Form consumer panels Usually consists of a large number of buyers Particular product category who have agreed to

participate in a research project Often on an ongoing basis Allows researchers to work with consumers who

are giving more thought to the product category Lends itself to experimentation, Internet-based

panels, and mobile phone–based panels that use SMS text messages

Check the garbage The study of a market by examining what it

discards


4-35

Build snowballs Initial contact is identified in an organization That person is asked to identify four people

inside the organization who make buying decisions

Those four people are asked to identify four key role players

Those 16 are contacted and again asked the same thing, the size of the group increases, in effect snowballing

The researcher identifies two or three names that are mentioned the most


4-36

Sift the archives A type of secondary information that can reveal

important insights An archive is a collection of records that has been

created or accumulated over time, such as newspapers, census records

Conduct simple experiments Using “living laboratories” researchers can test

certain variables against a constant to see what changes occur, such as changes in advertising, promotions, and pricing against total sales

Explore other ethnographic approaches Use of field research to capture behavior and

human reactions in natural settings or as they occur


4-37

Techniques that Tend to Be MoreQualitative

Natural observation Real-time observation Unobtrusive Obtrusive Protocols Trace studies Garbology

In-depth interviews Individual Focus groups

Projective techniques Collage Picture completion Metaphors and

analogies Psycho drawing Personalization


4-38

Techniques that Tend to Be More Quantitative

Survey Research Mail Telephone Face-to-face (e.g., mall intercepts) Internet surveys Consumer panels

Experimentation Laboratory experiments Field experiments Quasi-experiments

Archival Studies (secondary data) Internal archives (company records) External archives


4-39

Rethink Tool #4

Look beyond boundaries of self-limiting perspectives to create new alternatives by thinking sideways using the six thinking hats.

Basic Attributes of Questions

Basic attributes of questions Focus Brevity Clarity

Expressing questions Vocabulary Grammar

Bias and Error

Unstated criteria -- How important is it for stores to carry a large variety of different brands of this product?

Inapplicable questionsOver-demanding recall – What small appliances, such as

countertop appliances have you purchased in the past month?Over-generalization – should be a policy, strategy or habitual

behaviorOver-specificity – actual or precise response – When you buy

fast food, what percentage of the time do you order each of the following type of food?

Ambiguity of wording – using words that mean different things to different people – dinner vs. supper

Double-barreled questions – Do you regularly take vitamins to avoid getting sick?

dr. dawne martin mktg 241 feb. 7, 2012 marketing research

Documents

customers unmet needs

competitors sales

customers motivation

customers objectives

biggest customers

profitable customers

attractive potential

elements of customer