3340%2BExam%2BReview%2B9.20.24 2.pdf

Today Chapter 1 - What is Marketing?  Key Concepts 1. AMA definition of marketing 2. 4 core aspects of marketing 3. The marketing concept and market orientation 4. Other orientations and eras in marketing 5. Evolution of 4P’s to a focus on value 6....

Today Chapter 1 - What is Marketing?  Key Concepts 1. AMA definition of marketing 2. 4 core aspects of marketing 3. The marketing concept and market orientation 4. Other orientations and eras in marketing 5. Evolution of 4P’s to a focus on value 6. The value equation Thought-starter What are all of the activities involved in “marketing” this can of Red Bull? What is Marketing? AMA official definition: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing is more than advertising. Traditionally, the 4 P’s of Marketing lay out the marketing mix. Marketing mix (4Ps): Product Price The balance of product, price, promotion, and place decisions that Place Promotion makes up a marketing plan. Product Price Place Promotion Product Price Place Promotion Product Price Place Promotion Product Price Place Promotion Key Takeaway What is the main reason for having 4 P’s? Your journey: Which of the 4 P’s did most of the items on my list fall under? The Marketing Concept What do your customers/consumers Two primary goals of marketing: want? 1. Discover needs and wants of customers 2. Satisfy them What product or service will meet their needs? 1-11 The Marketing Concept What do your customers/consumers Two primary goals of marketing: want? 1. Discover needs and wants of customers 2. Satisfy them What product or service will meet A focus on this concept their needs? makes a company Market Oriented 1-12 How companies’ “orientations” have evolved over time  Production Selling orientation: Product orientation: Market oriented; orientation: companies pushed companies focused on competing on value companies competed their products by product innovation. by reducing heavily emphasizing Customer is king. advertising and Value Era – 1990’s production costs. Focus on fulfilling selling. to now customers’ Marketing Eraneeds. – Mass produced Use of Selling Erapersuasion - 1920’s techniques 1950 to rise Gave 1990’s to the products Production at -a Era to post WWII to marketing era. Industrial minimum cost. convince Revolution to the consumers.  Gave rise to the 1920’s Price was production era. paramount. Gave rise to the selling era. The debate on where we are now - here are a few options  Value era: companies emphasize creating value for customers.  Customer-centric  One-to-one era: companies compete by building relationships with customers one at a time and seek to serve each customer’s needs individually.  Personalization  Transformative era: marketing is transforming complete companies and products to serve customers more completely. Key Takeaway What are the different eras or orientations, and what drove them? 1-16 Tanner and Raymond - Their definition lays out 4 core aspects of marketing, with value at the center, signifying what marketers are aiming to deliver or provide Value at the center is the first feature of the new construct. Matching the 4 Ps with the evolved components Communicating = Promotion Creating = Product Exchanging = Price Delivering = Place Value= Benefits buyers receive that meet their needs Part 2 of the new construct - the evolution of “products and services” to “offerings” PRICE Offering – The entire bundle of a tangible good, intangible service INTANGIBLE and price that composes SERVICE what a company offers to customers TANGIBLE GOOD Value at the Center: The Personal Value Equation VALUE = BENEFITS RECEIVED – (PRICE + HASSLE) Value: The benefits buyers receive that meet their needs. Ultimately determined by the customer. What the customer gets by purchasing and consuming a company’s offering. Hassle: The time and effort the consumer puts into the shopping process. Key Takeaway A value equation looks like: The top of the value equation is about - V = brand, eco system, app/price Exercise - How would you write the top of the value equation for these three products? V= V= V= Marketing Jobs and Marketing Disciplines ▪ Brand management ▪ Branding ▪ Customer satisfaction ▪ CX Strategy ▪ Pricing ▪ Strategic Planning ▪ Public relations ▪ Consumer Insights ▪ Strategy ▪ Customer Marketing ▪ Marketing research ▪ Shopper Marketing ▪ Merchandising ▪ Innovation ▪ Sales ▪ Advertising Planning ▪ Advertising ▪ Supply Chain Manager ▪ Product development ▪ Direct marketing ▪ Digital media ▪ Event marketing ▪ Non-profit marketing Key Takeaway What are two main things driving this new construct that’s an evolution of the 4 P’s? 1-25 Key Takeaways from Chapter 1 Marketing is much more than just advertising and selling. It is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Two primary goals of marketing are to 1) Discover the needs and wants of customers and then 2) Satisfy them. Focusing on these goals defines a market-oriented company. How companies are orientated have evolved over time, and this continues to evolve today.  Key Takeaways from Chapter 1 The text authors lay out a new construct for marketing with two key shifts – value at the center and offerings that encompass more than just a product. The focus has changed from the 4 P’s to a new construct with Value at the center Product is now about creating value. Price is now about exchanging value. Place is now about delivering value. Promotion is now about communicating value. Value includes The benefits an individual receives. The price the consumer paid. The time and effort the consumer expended.  Chapter 1 Vocabulary Words Marketing Value Personal Value Equation Marketing Concept Production Era Selling Era Marketing Era Value Era One-to-One Era Transformative Era Offering Marketing Plan  Marketing Strategy is all about the Strategic Planning Process – something near and dear to marketers. What is Strategic Planning and why do we do it? STRATEGIC PLANNING IS A PROCESS THAT HELPS AN ORGANIZATION ALLOCATE ITS RESOURCES TO CAPITALIZE ON OPPORTUNITIES IN THE MARKETPLACE  Situation analysis Key components:  Mission statement objectives  Value proposition  Strategies 4 Key Components in Strategic Planning What we’ll Who are we? Situation do Analysis Mission and Value Strategies Internal and Vision Proposition External Where are What do we we now? offer? Key Takeaway What are the components of strategic planning and what questions do they answer?  Situation Analysis – where are we now? A situation analysis involves analyzing: External factors, which can be macro and micro factors outside the organization that are affecting us. E.g. COVID-19 pandemic issues such as supply chain and business closures. Internal environments and factors Financial resources Technological resources Employee capabilities Situation Analysis and a SWOT A situation analysis involves taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization’s marketing plans and the external forces and trends affecting it. A SWOT is the structure for doing it 2-34 Breaking down a SWOT (SWOT) analysis quadrants Strengths Weaknesses Opportunities Threats Internal/External and Favorable/Unfavorable INTERNAL INTERNAL FAVORABLE UNFAVORABLE STRENGTH WEAKNESSES OPPORTUNITIES THREATS EXTERNAL EXTERNAL FAVORABLE UNFAVORABLE Breaking down a SWOT (SWOT) analysis quadrants SWOT Analysis actions: Strengths Build on a strength. Weaknesses Correct a weakness. Opportunities Exploit an opportunity. Threats Avoid a threat. Internal/External and Favorable/Unfavorable Build on these Correct these STRENGTH WEAKNESSES E.g. brand E.g. low name or product internal distribution resources OPPORTUNITIES THREATS E.g. high E.g. heavy demand in the competition category Exploit or Leverage Avoid or minimize EXAMPLE: Ben & Jerry’s SWOT analysis that serves as the basis for management actions regarding growth. 2-39 The Mission – Who are we? The Mission A mission is a statement of the organization’s function in society that often identifies its customers, markets, products, and technologies. The term is often used interchangeably with vision. It answers the questions – what is the purpose of our company and why do we exist? IOR, What’s our mission. 2-42 2-43 The Value Proposition – What do we offer? From the last chapter - Tanner and Raymond - Their definition lays out 4 core aspects of marketing, with value at the center, signifying what marketers are aiming to deliver or provide The Value Proposition THIRTY-SECOND “ELEVATOR SPEECH” STATING THE SPECIFIC BENEFITS A PRODUCT OR SERVICE OFFERING PROVIDES A BUYER  It shows why the good is superior to competing goods.  The value proposition answers the questions:  “why should I buy your product instead of others?”  “what will it do for me?” It’s a form of the Value Equation, just presented as a persuasive statement Things to consider about the value proposition Firms identify their target markets (groups of customers) when they are developing their value propositions. Can be different for different groups - The value proposition tells each group why they should buy a product or service. Feeds your strategy - Once the benefits are clear, firms must develop strategies that support the value proposition. Key Takeaway How is the value proposition related to the value equation? Strategies, Objectives and Tactics – how we’ll execute our plan Developing Objectives – guidelines and considerations Objectives are what organizations want to accomplish in a given time frame. Objectives should be realistic and measurable. Objectives help guide and motivate a company’s employees and give its managers reference points for evaluating marketing actions. A firm’s marketing objectives should be consistent with the company’s objectives at other levels, such as corporate and business.  Strategies are what a firm is going to do to achieve its objectives. strategy Tactics include specific actions taken to execute the strategy, such as: Coupons objective Television commercials Banner Ads tactic tactic Marketing strategy is the Marketing tactics are means by which a the detailed, day-to-day marketing goal is to be operational marketing achieved, usually actions for each element characterized by a of the marketing mix specified target market that contributes to the and a marketing program overall success of to reach it. marketing strategies. This is a statement These are actions 2-52 What Marketing strategy is What Marketing tactics laid out in the article are mentioned? about Cadillac? 2-53 What Marketing strategy is What Marketing tactics laid out in the article are mentioned? about Cadillac? Targeting “sneakerheads”, or younger, affluent Partnering with the Shoe consumers who want to Surgeon to create engage promotional sneakers Reinforcing the quality Sponsoring the U.S. message Open Commercial with the tennis star 2-54  Chapter 2, Part 2 Tools that marketers use as part of planning. There are growth strategies and those for managing the portfolio. Product/Market Entry Strategies, or call them Growth Strategies Product and Marketing Entry Strategies – cross new and existing products with new and existing markets  Breaking it down with Ben & Jerry’s Four ways to expand sales revenues for Ben & Jerry’s 1. Market penetration: Increase using growth strategies sales of current product in current markets. 2. Market development: Sell current products to new markets. 3. Product development: Sell new products to current markets. 4. Diversification: Develop new products to sell in new markets. 2-58 Tools for Managing the Portfolio What is Portfolio Planning? Analyzing a firm’s entire collection of businesses relative to one another. One of the most widely used portfolio planning approaches is the Boston Consulting Group (BCG) matrix It helps companies evaluate each of its strategic business units based on two factors: The market growth rate The SBU’s relative market share Why it works - Because the BCG matrix assumes that profitability and market share are highly related, it is a useful approach for making business and investment decisions. The Boston Consulting Group (BCG) Matrix Business Portfolio Analysis – Apple Example 1. Question marks: Low share of high-growth market. 2. Stars: High share of high-growth markets. 3. Cash cows: Generate large amounts of cash. 4. Dogs: Low share of slow-growth markets. Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets to analyze their firms’strategic business units (SBUs) as though they were a collection of separate investments. 2-63 Key Takeaway Why is using BCG matrix important and helpful to senior leadership? What actions would you take for brands or businesses in each of the quadrants?  Chapter 2 Vocabulary Words Value Proposition BCG Matrix Strategic Planning Process Star Situation Analysis Cash Cow SWOT Analysis Question Mark Mission Statement Dog Strategic Business Units Objectives Strategies Tactics Marketing Plan Market Penetration Strategies Product Development Strategies Market Development Strategies Diversification Strategy  Chapter 2 Key Concepts 1. The Strategic Planning Process 2. Situation Analysis and SWOT 3. Mission Statement 4. The Value Proposition 5. Objectives, Strategies and Tactics 6. Product/Market Entry Strategies or Growth Strategies 7. BCG Matrix Key Takeaways from Chapter 2 Why do strategic planning? Strategic planning helps an organization allocate its resources to capitalize on opportunities in the marketplace. The strategic planning process includes a company’s mission (purpose), objectives (end results desired), and strategies (means). A Situation Analysis is usually the first part of the process. A firm must analyze factors in the external and internal environments. These factors are inputs to the planning process. A SWOT is the tool used to conduct a situation analysis. A mission statement is a statement of the organization’s function in society that often identifies its customers, markets, products, and technologies. The term is often used interchangeably with vision. A value proposition is a thirty-second “elevator speech” stating the specific value a product or service provides to a target market. It is similar to a brand’s positioning statement. Firms may develop different value propositions for different groups of customers. The value proposition shows why the product or service is superior to competing offers and why the customer should buy it or why a firm should hire you. Key Takeaways from Chapter 2 Objectives are what organizations want to accomplish in a given time frame. Objectives should be realistic and measurable. Objectives help guide and motivate a company’s employees and give its managers reference points for evaluating marketing actions. Strategies are what a firm is going to do to achieve its objectives. They are statements Tactics include specific actions taken to execute the strategy. There are 4 different product market strategies, or growth strategies that firms pursue - market penetration, product development, market development, and diversification. They’re based on analyzing new vs existing products and new vs existing markets. A group of businesses is called a portfolio. Portfolio planning approaches help firms analyze the businesses relative to each other. Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets to analyze their firms’strategic business units (SBUs) as though they were a collection of separate investments. The BCG matrix involves categorizing a firms strategic business units, or brands in its portfolio into 4 quadrants based on high/low market share and high/low market growth. The quadrants are called Cash Cows, Stars, Question Marks and Dogs. Assessing the External Environment – Macro and Micro Macro environment Microenvironment Economic factors Competition Demographic trends Suppliers Marketing intermediaries Cultural and social trends (retailers, wholesalers) Political and legal regulations The public The company Technological changes Customers The price and availability of natural resources  Chapter 3 Key Concepts 1. What consumer behavior is 2. Stages in the Purchasing Decision Process 3. Low involvement vs high involvement purchases 4. Consumer touchpoints vs the consumer journey 5. Factors affecting the buying decision What is the study of Consumer Behavior? CONSIDERS THE MANY REASONS— PERSONAL, SITUATIONAL, PSYCHOLOGICAL, AND SOCIAL— WHY PEOPLE SHOP FOR PRODUCTS, BUY AND USE THEM, SOMETIMES BECOMING LOYAL CUSTOMERS, AND THEN DISPOSE OF THEM. Stages in the Consumer’s Purchasing Decision Process STAGE 1: Need RECOGNITION Perceiving a need Need, or Problem recognition starts with the difference between: 1. The consumer’s ideal situation and 2. The consumer’s actual situation Sometimes brands will plant an unknown perceived need. STAGE 2: INFORMATION SEARCH Seeking value Internal search – scanning your memory for previous experiences with products or brands External search – Personal sources – Public sources – Marketer-dominated sources STAGE 3: PRODUCT EVALUATION Assessing value Evaluative criteria are the factors that represent both the What’s most objective attributes of a brand and the subjective ones a important to me consumer uses to compare different products and brands. A consideration set is the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware. What brands will I consider at all STAGE 4: PRODUCT CHOICES AND PURCHASE Buying value Deciding from whom to buy and when to buy. Depends on how you feel about the seller and the brand simultaneously, plus your occasions and needs. STAGE 5: POSTPURCHASE USE AND EVALUATION Realizing value After buying, are you satisfied or dissatisfied? STAGE 6: DISPOSAL Becoming more and more important to consumers -Upcycling -Recycling -Circular packaging What is my unmet need? Where will I get information and decide what to evaluate? What’s most important to me, and what brands will I consider? Where and when will I buy? How will I feel afterwards? Key Takeaway What are the questions we ask ourselves at each stage of the purchase decision process? What happens at each stage? Consumer Decision-Making can be low involving or high involving Low involving High involving Impulse buying: purchases that occur High-involvement decisions: used for with no planning or forethought products that carry a high price tag or high level of risk Low-involvement decisions: used for products that carry a low risk of failure or have a low price tag What are some examples of low vs high involvement products for you? Low involving High involving Coffee – Max Austin – laptop Hudson - Gas Trevor – car Donato - colllege  Your advertising and communication strategy differs for high vs low involvement Low involving High involving Impulse buying: purchases that occur High-involvement decisions: used for with no planning or forethought products that carry a high price tag or high level of risk Low-involvement decisions: used for products that carry a low risk of failure or have a low price tag Break through the Highlight clutter and routine differentiating buying habits features and benefits Car Dealer Sticker – Highlight differentiating features and benefits Break through the clutter and routine buying habits Why does the Purchase Decision Process matter? It lays out the consumer journey, and you need to know how to map it for your brand. Putting the Purchase Decision Process into Practice: Consumer Touchpoints and Consumer Journey Maps Marketing practitioners today focus on the complete consumer purchase decision process and consumer experience. Their objective is ambitious: To be present at those moments in time and place that most influence what, when, where and how purchase decisions are triggered, information is sought and evaluated, purchase transactions are made and services are delivered, and postpurchase outcomes affect later consumer behavior (loyalty and repeat). Marketers call these moments in time and place “moments of truth” because each can form or change a consumer’s impression about a particular product, service or brand. Consumer Touchpoints and the Consumer Journey Consumer touchpoints are a Consumer Journey Map is a visual marketer’s product, service, or brand representation of all the touchpoints points of contact with a consumer from for a consumer who comes into contact start-to-finish in the purchase decision with a company’s products, services or process. brands before, during and after a purchase. Each touchpoint is a “moment of truth”, because each can form or change a consumer’s impression about a particular product, service or brand. Apple Consumer Journey Map and Consumer Touchpoints for Electronic Devices Sold in Apple Stores Variations in the Purchase Decision Process - Why does this matter? You (the marketer) need to know what level of information to give consumers, and where/how to communicate it. From touchpoints to journeys: Seeing the world as customers do. (McKinsey article) Key take-aways – There are the individual consumer touchpoints, and then there is the consumer’s end-to-end journey. Touchpoints—the individual transactions through which customers interact with parts of the business and its offerings. Vs Journeys can be long, stretching across multiple channels and touchpoints, and often lasting days or weeks. In the example, most customers weren’t fed up with any one phone call, field visit, or other individual service interaction—in fact, most customers didn’t much care about those singular touchpoint events. What was driving them out the door was something the company wasn’t examining or managing—the customers’ cumulative experience across multiple touchpoints, multiple channels, and over time. From touchpoints to journeys: Seeing the world as customers do. (McKinsey article) Key take-aways, cont’d. - The article listed six actions that are critical to managing customer- experience journeys. One of them is - Understand how customers navigate across the touchpoints as they move through the journey. Performance on journeys is substantially more strongly correlated with customer satisfaction than performance on touchpoints—and performance on journeys is significantly more strongly correlated with business outcomes. Thinking about customer journeys—instead of traditional touchpoints— can require an operational and cultural shift that engages the organization across functions and from top to bottom. (Getting departments out of their silos) Consumer Behavior Part 2 Factors affecting consumers’ purchasing behavior Situational Personal Societal Store location Personality Culture Atmosphere Self-concept Subculture Crowding Gender Social class Social situation Age Reference groups Time lifestyle Opinion leaders Reason for purchase Influencers Mood Psychological family Economic situation Motivation Perception Learning Factors affecting consumers’ purchasing behavior – what they add up to – key indicators Situational Personal Societal Store location Personality Culture Who’s in your life, Atmosphere Self-concept Subculture your family/friends, Crowding Gender Social class The culture Social situation Age Referenceoverall/the groups zeitgeist, Your communities Time lifestyle Opinion leaders Other influencers Reason for purchase Influencers(including MoodAspects of the Psychological family Influencers) Economic situation purchase situation Motivation that impact the consumer’s purchase Perception Explain the why and how consumers behave the decision process Learning way they do They also add up to the purchase occasion and need state Marketing terms that reflect how we measure purchase decision hierarchies. Situational Convenience – Personal Societal store location, Store location time Personality Culture Atmosphere Self-concept Subculture Customer Experience Crowding Gender (CX) – atmosphere, Social class Social situation crowding Age Life stages Reference groups Time lifestyle Opinion leaders Reason for purchase Influencers Mood Psychological family Economic situation Motivation Attitudes, beliefs, Occasions and need states – Perception values reason for purchase, mood, Learning motivation Motivation as a purchase driver Exercise Thinking Going back to your own purchasing decision hierarchy when you’re buying hair care products, what are the things that motivate your decisions? OR what motivations are behind the attributes you look for? People started to read and study about Abraham Maslow’s Hierarchy of Needs, in his 1954 book Motivation and Personality Maslow used the terms "physiological", "safety", "belonging and love", "social needs" or "esteem", and "self- actualization" to describe the pattern through which human motivations generally move. This means that in order for motivation to arise at the next stage, each stage must be satisfied within the individual themselves. https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_ needs Maslow Hierarchy of needs and his Theory of Motivation Maslow’s theory of motivation: Motivation comes from a need. If a need is met, it’s no longer a motivator, so a higher-level need becomes the motivator. Higher level needs demand support of lower-level needs. Also – one cannot reach self- actualization unless the needs below it are met and satisfied Why do we care about Maslow’s Hierarchy of needs and his Theory of Motivation? It serves as the basis for the core concept of brand pyramids and core value communication  Chapter 3 Vocabulary Words Consumer Behavior Psychographics Motivation Attitudes Culture Influencers Impulse Buying Low-involvement decisions High-involvement decisions What did we learn? Can you answer these questions? 1. What is consumer behavior? 2. What are the 6 stages of the consumer purchase decision process? Which one is new and why? 3. Which stage are advertisers trying to influence when they introduce a problem consumers may not have know about? 4. What’s the difference between evaluative criteria and a consideration set? 5. What is the difference between high-involvement and low-involvement purchases? Why is knowing where your product falls important to advertisers and marketers? 6. Why are consumer touchpoints and consumer journeys so important? Name two reasons. 7. What is the difference between consumer touchpoints and consumer journeys? Section 3.2 Key Takeaways  Consumer behavior looks at the many reasons why people buy things and later dispose of them. Consumers go through distinct buying phases when they purchase products:  realizing the need or wanting something,  searching for information about the item,  evaluating different products,  choosing a product and purchasing it,  using and evaluating the product after the purchase,  disposing of the product.  A consumer’s level of involvement is how interested he or she is in buying and consuming a product. Low-involvement products are usually inexpensive and pose a low risk to the buyer if he or she makes a mistake by purchasing them. High-involvement products carry a high risk to the buyer if they fail, are complex, or have high price tags. Limited-involvement products fall somewhere in between.  Section 3.2 Key Takeaways (Continued)  Instead of a process, marketers have begun to rethink a buyer’s purchase decision as a journey – that is, the customer’s journey. More companies are going so far as to develop customer “maps” to find out where the journey gets hard or breaks down for customers, and how to move them from merely being aware of a product to being a loyal customer. What is Marketing Research?  What is Marketing Research? What it does AMA official definition: Marketing research is the function that links the consumer, customer, and public to the marketer through information— information used to identify and define opportunities and problems; generate, refine, and evaluate actions; monitor performance; and improve understanding of it as a process. The process It specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. https://www.ama.org/the-definition-of-marketing-what-is-marketing/ 1-109  Marketing Research is the Link CONSUMER MARKETER Marketing Research  The marketing research team member is the voice of the consumer  If it’s you, it’s your job to come to every meeting prepared with data, research results and your expert opinion. Scenario You’re the marketing research manager of Doritos. How do you support the cross-functional team?  Doritos Spicy Nacho Marketing Cross-Functional Team Research Finance R&D Brand Manager Operations Nutritionals Packing and logistics 2-113 Marketing research studies can help you optimize all parts of the marketing mix. Price Product Place Promotion New product development and introduction. Concept testing, product testing and test markets can answer many questions. Product Price – Which new product idea has the most potential? – Does the new product meet expectations and deliver on the concept? – How does it perform in the Place Promotion marketplace? Also falling under product – Branding and positioning research Product Price Positioning test – testing different branding or positioning concepts to see which are most appealing to Place Promotion your target audience. In Marketing Research, we sometimes conduct Purchase Decision Hierarchy Research When you follow consumers throughout their journey to determine their process and the hierarchy of what they look for, evaluate and consider 1st, 2nd, 3rd, etc. For example - When shopping for cereal, do you look for price/deals, then brands, then flavors? When shopping for energy drinks, do you look for brands first, then size, then flavor? Shopper marketing - Gives manufacturers and retailers an understanding of who their shoppers are, and how they’re Product Price different from other shoppers Needs and occasions for different retailers Shopper experience studies In-store traffic patterns Place Promotion In-store display effectiveness  Promotion and Communications Research Promotional and advertising research Investigates the Product Price effectiveness of advertising, premiums, coupons, sampling, discounts, public relations, and other sales promotions Packaging research is used to Place Promotion make sure you’re communicating your brand and message through packaging  Pricing Studies can address - Product Price How sensitive is demand to changes in price levels? Price elasticity Place Promotion  Information that’s Actionable Data Information Action Marketers Need Information, but good marketing research gets to insights and implications  It is easy to confuse data with information  Data– the raw facts, recorded measures of certain phenomena  Information – transformed and organized facts in a form suitable for managers to base decisions  Information that’s Actionable Data Information Action Insights and Raw facts Organized facts Strategic implications  Insights Implications Designs B and C bubbled to the top The simpler the label, the more key elements get They both successfully communicate 1) important absorbed. attributes that drive the purchase decision and 2) brand essence traits We should go as far as we can on Less cluttered designs led to more elements being communicating local, whether it’s the location noticed and recalled of the dairy, how many miles the milk travels, making the dairy name prominent, etc. Communicating local is key, because it insinuates (or ladders up to) many other important attributes, including Gold and white space are both important direct pure, clean, taste and quality and indirect communicators of important attributes, and should be incorporated. Gold and White Space The use of gold is a subtle but very strong The 5 Point Promise should be – communicator of quality/premium 1) At minimum, the second or third thing Colorful images are bright and cheery, but consumers people notice on packaging are attracted to a clean design and white space. 2) Ideally, the most important point spelled out on front The 5 Point Purity Promise is a brand differentiator. It 3) Somehow direct consumers to the full encapsulates what consumers want to know about milk. information They want the details available in some way.  Insights Implications We should go as far as we can on Communicating local is key, because it insinuates (or communicating local, whether it’s the ladders up to) many other important attributes, location of the dairy, how many miles the including pure, clean, taste and quality milk travels, making the dairy name prominent, etc. What you learned What you should do about it There’s data, information, insights and implications. All are different.  Data – the raw facts, recorded measures of certain phenomena  Information – transformed and organized facts  Insights – what you learn from the information – key learning/key findings, etc.  Action, or implications are how it impacts what you’re doing and/or how it should influence your strategy Data Information Action Insights and Strategic Raw facts Organized facts implications The qualitative data said… Insights Implications Example in Communicating local is key, because it insinuates (or ladders up to) many other We should go as far as we can on communicating local, whether it’s the location of the dairy, how reporting important attributes, including pure, many miles the milk travels, making the dairy name clean, taste and quality prominent, etc. Consumers preferred these two milk labels because they communicate the idea of a local dairy.  Types of Data and How We Use It PRIMARY AND SECONDARY DATA SYNDICATED STUDIES AND SECONDARY RESEARCH BIG DATA, DATA MINING, DATA SCIENCE AI 15-127  Secondary versus Primary Data Secondary Data Primary Data Information not gathered for the immediate study at hand but for Information collected some other purpose Often gives good background specifically for the information and fills in some investigation at hand gaps in the researcher’s understanding 15-128 Types of DATA 8-129  Internal – looking for Types of DATA patterns and insights in what we have External – has anyone else already done research on this topic? I’m doing my own study to gather data 8-130  You pull past three years Types of DATA sales data by region on your products You pull data about household income from the census report; you pull a Mintel report on trends You set up a camera to watch how people shop your store’s cosmetic section You field an online survey You push out a social media poll 8-131 7 steps in the Research Process and 3 Types of Research Design 7 Steps of the Marketing Research Process 1. Define the problem (or opportunity) 2. Design the research 3. Design the data collection tools 4. Specify the sample 5. Collect the data 6. Analyze the data 7. Report and share the findings 3 Types of Research Design Many kinds of Research Studies  3 Types of Research Design EXPLORATORY DESCRIPTIVE CAUSAL Discover Ideas and Insights Compare Groups Establish Cause & Effect  3 Types of Research Design EXPLORATORY DESCRIPTIVE CAUSAL Different characteristics for different objectives Initial investigation of a Gather “hard” numbers. Examines cause-and-effect problem. Uses surveys to answer relationships. Less structured. questions. Answers “what if” Secondary data is often Answers who, what, questions. used where, when, and how Can include field Depth interviews, focus questions experiments and test groups, case studies, markets ethnographies Answers why, what, or how much questions  Types of Research Design EXPLORATORY DESCRIPTIVE CAUSAL Types of studies typically done Secondary research Online surveys Lab vs Field tests Depth Interviews Consumer panels Test Markets (One-on-ones) Shop-alongs Focus Groups Ethnography Market tours Sentiment analysis Exploratory Research  All about generating ideas and discovering key insights  What it DOES NOT DO  Does not provide conclusive evidence for making final business decisions. (Go/No-Go decisions) What Descriptive Research Does and Doesn’t Do Descriptive research Does: Describes characteristics of objects, people, groups, organizations, or environments  Addresses the who, what, when, where, why, and how questions  Needed when accuracy is important  Determines the proportion of people who behave in a certain way Descriptive research Does Not:  Does not provide direct evidence of causality Causal Research: In Consumer Research, Field Experiments are Test Markets  Test Markets involve the use of a controlled experiment done in a limited, but carefully selected, section of the marketplace  E.g. McDonald’s used test markets to determine that a market existed for its own higher-end coffee drinks before beginning large-scale distribution What are each good Types of Research Design for? EXPLORATORY DESCRIPTIVE CAUSAL Inventing, Innovation, Measure and Assess Predicting News Secondary research Online surveys Lab vs Field tests Depth Interviews Consumer panels Test Markets (One-on-ones) Shop-alongs Focus Groups Ethnography Market tours Sentiment analysis Macrotrends 3-142  Macrotrends come from everywhere Macrotrends are trends in consumption, attitudes and lifestyles that cross different industries and categories. 15-143  What Macrotrends Influence  New products being developed based on attributes that consumers have deemed important to them  Messages and core values that advertisers and brands are talking about – again reflecting what consumers value  Shopping/buying behavior that reflects consumers needs and wants (across multiple channels); E.g. sustainable packaging and shopping online 15-144  Industry trends vs Macrotrends Industry trends Macrotrends Ex: Coffee industry Sustainability and conservation New flavors and seasonal Social responsibility blends Healthy lifestyles Working from home Cold brew coffee Social justice Roastery tasting rooms DTC = online shopping Coffee bars Response to pandemic These are trends in your industry, or category 3-145  Marketing Research vs Market Intelligence MARKETING RESEARCH MARKET RESEARCH MARKET INTELLIGENCE The process of The process of Involves gathering collecting, analyzing, and researching a specific information on a regular, reporting marketing market to determine its ongoing basis to help a information. size and trends. firm’s decision-makers Used to improve a Helps a firm stay in touch company’s bottom line. with what’s happening in Solves a specific the marketplace. marketing problem at a point-in-time.  Customer Data Platforms (also referred to as Marketing Information Systems) became the way to corral a company’s data Marketing research data Data warehouses store data to create big data-sets Social media data Internal and Customer Data Incoming Data Data Platforms/CDP CRM data Analytics Sales data  Big data is a buzzword used to refer to the massive amounts of online and offline data being gathered today, such as:  Previous purchases  Marital status  Credit ratings  Eating/exercise habits  Preferred brands  Pastimes  Often big data is collected by Internet-connected devices such as mobile phones and fitness trackers. Ideally, a marketing information system should include not only transactional data, data about individual customers, and big data, it should include the following: 1. A system for recording internally and externally generated data and reports 2. Analytics functions to help managers with their marketing decision making 3. A system for collecting market intelligence on an ongoing basis 4. A system for conducting and recording marketing research  Agile Marketing is the practice of using data and analytics to continuously identify opportunities or solutions and conduct tests quickly  Chapter 10 Vocabulary Words Marketing Research Primary Data Market Research Secondary Data Market Intelligence Syndicated Research Customer Data Platform (CDP) Scanner-based Research Big Data Exploratory Research Design Data Warehousing Qualitative Research Predictive Analytics Ethnography AI Descriptive Research Design Sentiment Analysis Causal Research Design Agile Marketing  Key Learning Objectives – Chapter 10 1. Know what marketing research is and how it supports marketing. 2. Describe different types of research studies that support each of the 4 P’s. 3. Know the difference between primary and secondary data, internal vs external secondary data, and name some sources of secondary data 4. Understand the difference between data, information, insights and implications.  What did we learn? 1. What is marketing research ? 2. Data are _______, Information is ________, Insights are ________, and Implications are _________. 3. What are some types of studies that support the different parts of the marketing mix?  What did we learn? 1. What types of research problems are Exploratory, Descriptive and Causal designs each good for? 2. List the 7 stages of the Marketing Research Process.  What did we learn? 1. What are the pros and cons of using secondary data? 2. How is secondary data different from primary data? 3. Name two types of secondary internal data and two sources of secondary external data Suppose you have an idea for a great new offering you hope will become a hot seller. Before you quit your day job, you’ll need to ask yourself, “Does my idea satisfy consumers’ needs Targeting, and add value to existing segmenting and products?” “Who’s going to finding the right buy my product?” and “will audience there be enough of these people to make it worth my while?” Market segmentation: The process of breaking down all consumers into groups of potential buyers with similar characteristics. Why do we do it? In terms of potential buyers, not all of them are “created equal” 9-157 Market segmentation also is about aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Why? So that you can focus your marketing dollars 9-158 How do you determine the best target segments for your brand and product line? Example: A mattress company did research that matched the best type of pillows for people depending on how they sleep 9-159  A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions. So this market-product grid shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness. The biggest segment (majority of people) are side sleepers that prefer firm pillows. Where do I spend my mktg $$? 9-160  Mass, Targeted and One-to-One Marketing MASS MARKETING TARGETED MARKETING ONE-TO-ONE MARKETING Also know as undifferentiated Also known as differentiated Also called personalization marketing. marketing. It evolved along with mass You may differentiate some Forming close, personal production. aspect of marketing for relationships with customers different groups of customers and giving them exactly what selected. they want Involves selling the same Trend today is towards this Enabled through data, 3rd party product to everybody. data and CRM systems. There’s definitely a trend towards 1-1 these days 9-161  Mass, Targeted and One-to-One Marketing MASS MARKETING TARGETED MARKETING ONE-TO-ONE MARKETING These are all targeted marketing, plus promotional packaging and innovation 9-162 Mass, Targeted and One-to-One Marketing MASS MARKETING TARGETED MARKETING ONE-TO-ONE MARKETING For Everyone For households with kids 9-163 One-to-One Email Marketing 9-164 Personalized 9-165 Benefits of Segmenting and Targeting Markets Avoid head-on competition with other firms. Develop new offerings. Remarket older, less-profitable products. Identify early adopters. The ability to Focus on most profitable customers. focus your marketing and Retain “at-risk” customers. advertising dollars This is the most important one 9-166 Key Takeaway What is the #1 benefit of segmenting your consumers? What are two other benefits? What allows us to have personalized marketing campaigns? What tools can we use to get info for segmenting and targeting? Your data (internal secondary data) – your web analytics, your social media data 3rd party data – what Google Chrome, Facebook and other browsers or media companies provide, the searching behavior data Loyalty programs Marketing research! 9-168 Segmentation Bases  These are the criteria used to classify and divide buyers into different groups. Segmentation Bases - Ways to segment consumer markets 1. Geographic segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Behavioral segmentation 9-170 Segmentation by Behavior  Benefits: segmenting buyers by the benefits that they seek from the product.  Usage: segmenting buyers by the frequency that they use/buy products.  Application: segmenting buyers by the way in which they use products.  Marketers can tailor products to consumers for optimum results if they know:  The benefits that consumers seek  How often they purchase the product  Usage situation (daily, weekly, monthly, holiday, etc.)  The manner in which the product is used GameStop Behavioral Segmentation Usage - Understanding features and usage rates for different audiences – heavy, medium and light users Traders – those who traded their games By console users – Playstation vs Xbox 9-172 Segmentation by Demographics  Demographics are used to segment markets because demographic information is publicly available in databases.  The most popular type of segmentation.  Includes:  Age  Gender  Occupation  Income  Social class  Education  Ethnicity  Family life cycle and family size  Nationality  Religion Segmentation by Geography  Geographic segmentation divides buyers by where they are located. o World Region or Country: North America, Western Europe, European Union, Pacific Rim, Mexico, etc. o Country Region: Pacific, Mountain, Eastern, etc. o City or Metro Size: New York, Mexico City, São Paulo o Population Density: Urban, Suburban, Rural o Climate: northern, southern, tropical, semi-tropical, desert Ways to segment consumer markets: 1. Geographic segmentation Hotter salsa for southern regions 2. Demographic segmentation Family size 9-175 Segmentation by Psychographics  Questions include:  Why consumers behave the way they do?  What is of high priority to them?  How they rank the importance of specific buying criteria?  Psychographic information is frequently gathered via extensive surveys that ask people about their:  Activities  Interests  Opinions  Attitudes  Values  Lifestyles Ways to segment consumer markets: 1. Geographic segmentation 2. Demographic segmentation In marketing research, we use the term attitudinal segmentation, to combine 3. Psychographic segmentation demographic, 4. Behavioral segmentation psychographic and attitudes 9-177 Types of Segmentation Studies The basic segmentation… Is about collecting occasions, need states, attitudes and unmet needs. A VERY LONG SURVEY And studying how consumers cluster together. USING STATS TESTING FOR ANALYSIS Then evaluating segments that are “best fits” for a brand, or which ones should be a key target audience. FINDING THE “SIZE OF THE PIE” AND THE BEST SEGMENT TO TARGET  Segmentation vs 1-1 Marketing or Personalization Event Rider Task Rider Reliant Commu Corpor ter ate Commu ter Ability to focus on most profitable customers. Retain “at-risk” customers Leverages artificial Develop new offerings to attract intelligence and machine customers learning, to create uniquely tailored messages and offers that meet the exact needs, preferences and desires of individual customers. Usage occasions for personalization and traditional consumer segmentation Creating an ad campaign for TV, digital video and audio ❑ Personalization ❑ Segmentation Social media ads ❑ Personalization ❑ Segmentation Email and text messaging ❑ Personalization ❑ Segmentation For ideas for new product development ❑ Personalization ❑ Segmentation Chapter 5 Vocabulary Words Market Segmentation Targeted Marketing Mass Marketing One-to-one Marketing Segmentation Bases Behavioral Segmentation Benefits Segmentation Demographics Segmentation Geographic Segmentation Psychographic Segmentation Key Takeaways – 5.1 Choosing select groups of people to sell to is called target marketing, or differentiated marketing. Mass marketing, or undifferentiated marketing, involves selling the same product to everyone. The trend today is toward more precise, targeted marketing. Finding and attracting new customers is generally far more difficult and costly than retaining one’s current customers, which is why organizations try to interact with and form relationships with their current customers. The goal of firms is to do as much business with their most valuable customers as possible. Forming close, personal relationships with customers and giving them exactly what they want is a process called one-to-one marketing. It is the opposite of mass marketing. Section 5.2 Key Takeaways  Segmentation bases are criteria used to classify buyers. The main types of buyer characteristics used to segment consumer markets are behavioral, demographic, geographic, and psychographic.  Behavioral segmentation divides people and organization into groups according to how they behave with or toward products.  Segmenting buyers by personal characteristics such as their age, income, ethnicity, family size, and so forth is called demographic segmentation.  Geographic segmentation involves segmenting buyers based on where they live.  Psychographic segmentation seeks to differentiate buyers based on their activities, interests, opinions, attitudes, values, and lifestyles.  Oftentimes a firm uses multiple bases to get a fuller picture of its customers and create value for them. Marketing professionals develop consumer insight when they gather both quantitative and qualitative information about their customers.