Market Research and Consumer Behavior

• Consumers today possess more power, using social media and online reviews to influence brand success.
• Companies must be transparent and responsive to customer needs.
• Entrepreneurs adjust marketing to align with modern consumer habits.

Market Research and Development

• Market research assesses a new product/service's potential, determining viability and marketing strategies.

Types of Market Research

• Primary research involves direct interaction with consumers or third-party entities to gather data and insights into consumer preferences
• Secondary market research uses existing data for product positioning and decision-making.

Quantitative Research

• A systematic research approach, that analyzes numerical data using statistical methods to establish cause-and-effect relationships, enabling researchers to make objective, data-driven decisions
• Customer surveys via various channels offer valuable insights with quantitative surveys using formats like yes/no questions or rating scales
• Binary or rating scale questionnaires gather valuable information from participants using binary choices or rating scales
• Random or probability sampling in a study helps increase reliability and validity of research results by minimizing bias and increasing the likelihood of unbiased estimates while ensuring diversity in the sample, in order to conclude facts about the larger population.

Qualitative Research

• Qualitative research explores the "why" behind behaviors to uncover complexities of the human experience
• Focus group discussions gathers insights from small groups responding to online surveys to remotely collect data from 6-10 participants
• Individual interviews consist of researchers interacting with respondents by asking questions to collect data, relying on their skills to elicit information with specific, open questions
• Ethnographic research entails thorough research in the environments where respondents are situated, this observation provides comfortable environment, though time-intensive
• Case study research helps explain an issue or event in detail within its real-life context
• Open-ended questionnaires cannot be answered with yes/no, but require more extended responses.

Secondary Research Sources

• Public sources, such as government departments and public libraries, conveniently provide vast info for free
• Commercial sources like newspapers, magazines, television and journals offer excellent commercial information
• Company websites make business data accessible,
• Other sources include market studies, analyst reports, customer emails/feedback, interviews, and blogs.

Market Research Development Process

• 1. Define the Problem: Identify and clearly outline the specific problem or objective for effective research
• 2. Define Buyer Persona: Create a fictional representation of an ideal customer to understand potential behaviors
• 3. Prepare Questions and Conduct Research: Prioritize questions and manage time to ensure structure for comprehensive understanding
• 4. List Major Competitors: Should include strengths, weaknesses, financial situations, and reputations to allow for identifying opportunity areas
• 5. Analyze the Results: Conduct a solutions-oriented analysis, noting interviews yield limited quantitative data (age, profession, gender, interview count.)
• 6. Develop a Research Report: Results should be shared with the team, including marketing managers and executives
• 7. Make Decisions: Base them on careful consideration of the market status.

Customer Requirements

• Service requirement is an intangible provision that fulfills the customer, considering timely delivery, friendly service and payment options
• Output requirements are the physical goods with the characteristics consumers expect like performance, quality, size, and warranty

Product and Service Development (PSD) Considerations

• PSD encompasses research, design, testing toward innovative offerings
• PSD uses market research data to understand competition, customer demand and market shift
• There are phases to validate potential

Steps in Product and Service Development (PSD)

• 1. Trend analysis and real-world observations- Identify gaps and combine them with emerging trends
• 2. Consumer and market research- Identify correct needs and desires, including satisfying features
• 3. Actionable insights- Requires brainstorming and creative thinking to generate new ideas
• 4. Concept development and refinement
  • Ideation- Evaluate the idea with potential for success
  • Prototyping- Create prototype of proposed product or service
  • Testing- Determine the functionality of the product as well as appeal to the target audience
  • Refinement- Enrich the prototype with analysis feedback, craft and deliver the final services
• 5. Implementation and launch- Conduct market testing and necessary adjustments for official release
• 6. Result assessment- Gather customer input and sales data for areas of improvement for future launches

Product and Service Development (PSD) Flowcharts

• Flowcharts use symbols and arrows for steps, decisions, and information flow allowing for bottleneck identification.
• Using correct symbols facilitates clear communication among stakeholders and improves clarity.

Product Costing

• Product cost includes direct material, direct labor, and manufacturing overhead.
• Direct materials are raw materials in the final product. Examples include wood, metal, plastic, fabric, and chemicals
• Direct labor is wages/benefits for labor involved in producing a product
• Overhead costs include machinery costs and manufacturing indirect costs:
  • Indirect materials are supplies used in production. Examples include glue, oil, tape, and cleaning supplies
  • Indirect labor includes wages and benefits for security guards, drivers, and legal advisors
  • Other overheads include factory costs that are in other categories, such as factory/equipment depreciation and utility costs
• Product Cost = Direct Materials + Direct Labor + Overhead Costs
• Product Cost per Unit = Total Product Cost / Number of Units Produced
• Calculating product costs include organizing expenses, then totaling costs and dividing by units.

Service Costing

• Service costing identifies all the costs to provide a service, common in lodging, service, and food industries
• Fixed Costs: Expenses that do not change are rent, salaries, utilities, insurance, and loan payments
• Semi-variable costs have attributes of both, such as labor costs to employees paid a salary, and hourly employees
• Variable Costs depend on units produced such as materials, labor, supplies, commissions, delivery/packaging, and card fees
• Unit of measurement indicates measurements for services. Examples can vary with time (hours/minutes), task (electricity), and activity (logistics)
• Total Service Cost = Total Fixed Cost + Total Semi-Variable Cost + Total Variable Cost
• Total Service Unit = (Variables 1) x (Variable 2) x (Variable 3) x (Variable 4)
• Service Cost per Unit = Total Costs for the Period / Total Service Unit
• To calculate the service cost, identify the total service unit, then costs; total, then divide total service cost.

Pricing Factors

• Pricing requires analyzing the business's nature, competition, positioning, and target market for profitability

Objectives of Pricing

• Competition-Based Objective - Pricing strategy is directly linked to the competitive intensity within a specific industry
• Cost-Based Objective - Pricing is established by considering the total production costs for a product or service
• Customer-Value Objective - Setting prices according to the perceived value customers attribute to the product or service, and what benefits the may feel they get in using these things.
• Market Share Objective - The approach prioritizes market share expansion and strengthening both customer loyalty and brand recognition among consumers
• Sales Orientation Objective - Pricing is strategically set to drive sales volume and maximize profit within a defined period
• Customer-Driven Objective - Pricing is determined by evaluating consumers' willingness to pay for a product.

Combining Costing with Pricing

• Cost-Plus Pricing (Markup) calculates all costs + predetermined markup.
• Selling Price = Cost per unit x (1 + Predetermined markup percentage)
• Predetermined markup percentage is added to a product or service's cost.
• Desired profit is profit level that business aim to achieve overtime, with the formula of Desired Revenue subtracted by Total Cost
• Predetermined markup percentage = (Desired profit / Total Cost of the product or service) * 100

Common Pricing Strategies

• Premium Pricing creates a perception of higher quality.
• Economy Pricing helps maximize profits through high sales volumes.
• Price Skimming generates maximum consumer interest early on, reducing prices over time.
• Penetration Pricing attracts customers and generating sales by initially setting a low price.
• Psychological Pricing influences consumer perception using specific price points.
• Bundle Pricing offers multiple products/services at a discount.
• Dynamic Pricing adjusts to changing market conditions

Facility Management

• Facilities Management coordinates people, places, and processes for better productivity and maintainence of assets
• Hard services are physical modifications such as fire safety and mechanical systems
• Soft services enhance the workplace environment such as landscaping, cleaning, and pest control.

Business Location Factors

• Controllable factors are proximity to the market and supply of materials, transport and infrastructure systems along with knowledge of the labor wage laws.
• Non-controllable factors are government policies and awareness of all labor laws, climate/environment conditions, and relationships with supporting businesses

Workplace Structure

• Workplace Structure clarifies roles and promotes efficient communication.
• Virtual Office enhances efficiency and lowers costs through flexibility.
• Physical Office promotes collaboration, productivity, and employee satisfaction:
  • Open Office Design promotes teamwork.
  • Cellular Office Design incorporates private workspaces.
  • Co-Working Space Design fosters collaboration at shared desks.
  • Combination Office Design tailors layout for productivity.

Manufacturing Plant Layouts

• Product or line layout standardizes products in large quantities from raw materials to the finished product
• Process or functional layout positions machinery by operation type based on low production need
• Fixed position layout builds products in a fixed location
• Combination type of layout mixes layouts for different products or sizes

Marketing Goals

• Marketing differentiates products and integrates activities to meet customer needs to achieve long-term goals.

Target Market

• A target market helps customize and improve products/services.
• Segmentation includes:
  • demographics of age, gender, income
  • geographics of country, state, region
  • psychographics of personality, values, and attitude
  • technographics of mobile and desktop use
  • behaviors of tendencies and product use
  • needs-based for specific groups
  • value-based customer groups
  • firmographics of shared organization attributes.

Marketing Mix

• Marketing mix promotes brand or product with price, product, promotion, and place
• Other Ps are increasingly important like packaging, positioning, people, and process
• The 8 P's are Product, Price, Place, Promotion, Packaging, Positioning, People, and Process
• Promotions generate demand using advertising, selling, direct marketing, sales promotion, and public relations.
  • Advertising uses mass communication such as print and broadcast
  • Selling builds customer trust through interpersonal skills
  • Direct marketing communicates directly to customers like email and telemarketing
  • Sales promotion creates short-term interest
  • Public relations manages information disseminated to the public

Media Framework

• Paid media are public relations and marketing.
• Earned media includes news coverage and blogs.
• Owned media include online platforms.
• People include key executives and marketing teams.
• Physical Evidence helps build customer trust.
• Process helps businesses solve customer problems.
• Positioning helps to alter how consumers perceive a brand

Value Proposition (VP)

• VP is why consumer should purchase product or service.
• Value Proposition conveys compelling reasons to choose it over others.

Unique Selling Proposition (USP) and Branding

• USP differentiates itself from competitors.
• Branding creates a brand identity that has a tagline, the design and tone of voice.