Exam 2 Study Guide - Kimberly Grantham PDF

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MARK 3000: Exam 2 Study Guide Marketing Research Marketing Research: a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision making involved in marketing goods/services/ideas  help segmentation/positioning/marketing mix 4Ps decisions  Reduces uncertainty  Links between firms and environment  Allows firm to anticipate and respond to competitions The Research Process: 1. Defining Objectives and Research Needs: “what information needed is needed to answer specific research questions?”; “how should that information be obtained?” 2. Designing the Research: Type of data (secondary and primary) vs Type of research (qualitative and quantitative) 3. Collecting the Data: a. Types of Data: i. Secondary: “pre-cursor” to primary data; pieces of information collected prior to this research project; “looking things up”; pieces of info that have already been collected from other sources and usually are readily available (external and internal) 1. External: a. Government sources (census) b. Syndicated Data: have to pay to get access (AC Nielsen “TV Rating”, IR, JP Power’s “auto, electronic, home, financial rating…; Simmon’s “consumer preferences, rating” i. Scanner Research/data: syndicated data used in quantitative research that is obtained from scanner readings of UPC Codes at check-out counters ii. Panel data: Info collected from a group of consumers (record of what they purchased/responses to survey from primary data) 2. Internal: “day-to-day operations” data a. Data warehouses: large computer files that store millions and even billions of pieces of individual data b. Data mining: the use of a variety of statistical analysis too;s to uncover previously unknown patterns in the data stored in data bases or relationships among variables i. “touch points”  making sense of the collected data; Andrew Poe’s “Target prediction buyer’s behavior”  know shopper’s pregnancy

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ii. Reduces “churn level”: number of participants who discontinue use of a service divided by the average number of total participants ii. Primary: data collected specifically for this research; creating new information (focus groups, in-depth interviews, and surveys) 1. Qualitative methods: provides initial information “precursor to quantitative/ unstructured, free-response format”; generally indepth and unstructured; Includes observation, in-depth interviews, focus groups, social media research a. Observation: an exploratory research method that entails examining purchases and consumption behaviors through personal/video camera scrutiny (observe customers while stopping…) -Ex: Microsoft’s Kinect sensors: track the amount of time people spend in front of a shelf  touch/pick  purchase -Manual, Mechanical, Ethnographic: eye-tracking for packaging and self-placement “where are you looking at?” “how long?” “how often?” -Ethnographic: Elizabeth Harshman’s 1st use in marketing research in flea market b. Social media research: booming source of data marketers (building online communities, monitoring blog, sentiment mining) i. Virtual community: online networks of people who communicate about specific topics (loosing weight community…) ii. Sentiment mining: data gathered by evaluating customer comments and posted through social media sites such as Facebook/Twitter iii. Ex: 2020 Superbowl ads c. In-depth interviews: exploratory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue i. Limited number; somewhat unstructured; time consuming and costly d. Focus groups: research technique in which a small group of persons (8-12) comes together for intensive discussion about a particular topic with the conversation guided by a trained moderator using unstructured method of inquiry (CANNOT GENERALIZE) 2. Quantitative methods: large numbers of respondents, statistically valid, can generalize 2

a. Experiments: type of conclusive, quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable i. Changing a variable and analyzing results; usually change on of the 4 Ps’ and look at either sale or awareness; Field or Lab b. Surveys: systematic means of collecting information from people that generally uses a questionnaire (document that features a set of questions designed to gather information from respondents and thereby accomplish the researcher’s objectives; questions can be either unstructured or structured) i. Ex: telephone interviews, mail surveys, internet surveys, mall intercept interviews, in-person interviews ii. Issues: 1. Interview bias: presence of interviewer may change responses 2. Consumer unwillingness to participate  need some sort of incentives to increase level and willingness of participant 3. Questionnaire issues: types of questions, ordering of questions, wording of questions iii. Types of Questions: 1. Structured: close-ended questions whom a discrete set of response alternatives, or specific answers, is provided for respondents to evaluate -Likert Scale: “wendy’s food was excellent”  SA A Uncertain D SD -Semantic Differential: “the food at Wendy’s was:” Excellent ….. Awful, old ….. fresh 2. Unstructured: open-ended questions that allow respondents to answer in their words; choices are not provided -Fill in the blank: “what is most important reason you selected UGA?” -Projective technique: “If a Wendy’s hamburger could talk to a McDonald’s or a Burger King hamburger, what would it say?” c. Scanner/Panel (can either be primary or secondary):

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i. Panel data: always collected over some time (ex: observing 3-5 days the use of coupon; having to do certain set of survey within a month period…); Information collected from a group of consumers (record of what they purchased/responses to survey from primary data) ii. Scanner data: syndicated data used in quantitative research that is obtained from scanner readings of Universal Product Code (UPC) at check-out counters. b. Questions to avoid: “approved to research” i. Leading: “Don’t you agree…?” ii. Double barreled: “2 questions in 1 question: Gas and Trump’s statement?” iii. Jargon or inappropriate terminology: “caveat emptor not mentioned on survey” iv. Consumer unable to answer c. Ordering of questions: i. Sensitive, personal questions at end ii. More difficult questions at end d. Sampling issues for primary data: -Qualitative data can be used to generalize large population -Quantitative data can be used to probability population -Who is the population? -What will be used for the sampling frame? Device or list from which the potential respondents are selected -How do you know who is in the universe (the population of interest)? -What type of sample will be used? (1) Probability: people have a known and same probability of being selected -Simple random: using generator -Systematic random: “every 4th person on the list” -Stratified random: (every 4th in-state student and every 4th out-of-state student) (2) Non-probability: -Convenience sample: we do it because we have access Clotaire Rapaille “3 Stages”: -Stage 1: -Stage 2: “Rectaliant Hot Button” -Stage 3: 4. Analyzing Data and Developing Insights: Converting data into information to explain, predict and/or evaluate a particular situation 4

5. Action Plan and Implementation: a. Report: summary, report (objectives, methods, detailed findings), conclusions, limitations, appropriate supplemental tables, appendixes b. Domino’s “Turn Around”: show public its criticism, admit changes, and show changes  “we want people to love our pizza” Advantages and Disadvantages: -Secondary research (census data, sales invoices, internet information, books, journal articles, syndicated data) -Advantages: -Saves time in collecting data because they are readily available -Free or inexpensive (except for syndicated data) -Disadvantages: -May not be precisely relevant to information needs -Information may not be timely -Sources may not be original, and therefore usefulness is an issue -Methodologies for collecting data may not be appropriate -Data sources may be biased -Primary research (observed consumer behavior, focus group interviews, surveys, experiments) -Advantages; -Specific to the immediate data needs and topic at hand -Offers behavioral insights generally not available from secondary research -Disadvantages: -Costly -Time-consuming -Requires more sophisticated training and experience to design and collect data Ethics of Using Customer Information: -American Marketing Association: (1) prohibits selling or fundraising under the guise of conducting research; (2) supports maintain research integrity by avoiding misrepresentation or the omission of pertinent research data; (3) encourages the fair treatment of clients and suppliers -Biometric Data: digital scanning of the physiological or behavioral characteristics of individuals as a mean of identification (Ex: Facebook’s automatic facial recognition) -Neuromarketing: ability to read consumer’s minds using wireless; Electroencephalogram (EEG) scanners that measure the involuntary brain waves that occur when they view a product, advertisement, or brand images  “NEUROFOCUS” is using this method Ethical question: “Do any consumers want marketers reading their brain waves and marketing goods and services to them in a manner by passes their conscious thoughts?”

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Product -Product: anything that is of value to a consumer and can be offered through voluntary marketing exchange (goods, services, places, ideas, organizations, people and communities) -Complexity: -Core customer value: basic problem-solving benefits that consumers are seeking -Actual product: physical attributes of a product including the brand name, features, design, quality level, and packaging -Associated level/Augmented product: the non-physical attributes of the product including product warranties, financing, product support, and after-sale service -Types of product: need to look at context to categorize, some overlap with supply chain 1. Specialty: products/service toward which consumer shows a strong preference and for which he/she will expend considerable effort to search for the best suppliers (luxury cars, legal/medical professionals, designed apparels) Ex: Mont Blanc Pen 2. Shopping: products that consumer will spend time comparing alternatives, such as apparel, fragrances, and appliances; Ex: BIC Velocity Pen 3. Convenience: products/services that consumer is not willing to spend any effort to evaluate prior to purchase (common beverages, bread, soap…) Ex: Dollar Tree Pen 4. Unsought: products/services consumers either do not normally think of buying or do now know about; we kind of need to be “forced” to think about it, a lot of “push communication” (insurance, fire extinguishers, dictionary, medical supplies…) -Product Mix/Product Line: -Product mix: complete set of all products offered by a firm, consist of product line -Product lines: groups of associated items, such as those that consumers we together or think of as part of a group of similar products, reflects depth and breadth -Breadth: number of product lines offered by a firm (variety) / product mix -Depth: number of categories within a product line Changing breadth and depth: -Increase depth: address changing consumer preferences/preempt competitors while boosting sales -Band-Aids over 40 products to heal cut; Oreo’s different size/flavor cookies -Decrease depth: realign the firm’s resources; eliminate unprofitable/low margin items, refocus their marketing efforts on their more profitable items -McCormick spices eliminates dozens of products each year -Increase breadth: capture new/evolving markets, increases sales -Listerine expand beyond mouthwash to oral care products; True Religion beyond jeans to swimwear -Decrease breadth: address changing market conditions/meet internal strategic priorities -Product line decision: -How is this changing the product mix? -Does it increase breadth or depth? -Is this research or advertising? 6

Branding: a brand can use name, logo, symbols, characters, slogans, jingles and even distinctive packages -Elements: 1. Brand name: spoken component of branding/can describe product/service characteristics and/or be composed of words invented or derived from colloquial or contemporary language (Apple, Comfort Inn…) 2. URL (uniform resource locators)/domain name: location of page on Internet (www.google.com) 3. Logos/symbols: visual branding elements that stand for corporate names or trademarks (McDonald’s arch) 4. Characters: brand symbols that could be human, animal, or animated (Energizer Bunny) 5. Slogans: short phrases used to describe the brand or persuade consumers about the same characteristics of the brand (State Farm’s “Like a Good Neighbor”) 6. Jingles/Sounds: audio messages about the brand that are composed of words/distinctive music -Value of branding: -Facilitate purchase -Establish loyalty -Protect from competition and price competition -Are assets -Affect market value -Brand History in Marketing: Pepsi shows the connection between brands and popular culture -Brand Equity: set of assets (valuable to the owner) and liabilities linked to a brand that to or subtract from the value provided by the product/service -Brand Awareness: measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements in the firm’s communications to consumer; good indicator is Interbrand.com; Ex: Kleenex -Perceived Value: relationship between a product’s or service’s benefits and costs; “How do discount retailers like Target, TJ Maxx, and H&M create value for customers?” -Brand Association: the mental links that consumers make between a brand and its key product attributes (involve logo/slogan/famous personality); using celerity to establish image; “when we think of Ariana Grande, we think of Reebok” -Brand Loyalty: occurs when a customer buy the same brand’s product or service repeatedly over time rather buying from multiple suppliers within the same category (CRM programs); Consumers are often less sensitive to price; marketing costs are much lower; firm insulated from the competition “Love Mark” – brand love: term coined by Kevin Robert “can’t find a substitution” -Meet Me at Starbucks: Starbucks first attempts to the global market; not focus on selling beverages; capture different emotions/ what people do/ happen inside Starbucks shop in different locations across the world. Capture the 3rd Space 7

However, incident in Philadelphia disappointed the CEO as 2 African American was arrested for not doing anything the year following the campaign. The CEO expressed emotion in public and attempted to fix the problem Brand Ownership: 1. Manufacturer brands “national brand”: brands owned and managed by the manufacturer (Nike, Coca Cola) 2. Retailer/Store or Private Label brands: brands/products developed and marketed by a retailer and available only from that retailer -Family Brands: a firm’s own corporate name used to brand its product lines and products (Kellogg’s Special K) -Individual Brands: Kellogg’s “Cheeze it” -Naming Brands and Product: -Corporate or family brand (GE) -Corporate and product line brands (Kellogg’s Corn Flakes) -Individual lines (Mr. Clean of P&G) -Brand extension: use of the same brand for new products being introduced to the same or new markets “Do I want to offer another version?”  Increase product line depth; existing brand name by offering different product categories; Ex: State Farm has insurance, investment, bank … -Brand dilution: occurs when a brand extension adversely affects consumers perceptions about attributes the core brand is believe to hold; Ex: Shag’s endorsement for The Carnival, Papa Jones, and Ring -Evaluate the fit between the product class of the core brand and the extension -Evaluate consumer perceptions of the attributes of the core brand and seek out extensions with similar attributes -Refrain from extending the brand name to too many products -Is the brand extension distanced enough from the core brand? -Co-branding: practice of marketing 2 or more brands together on the package or promotion; Ex: Yum’s KFC and Taco Bell -Brand Licensing: a contractual agreement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee -Brand Repositioning “Rebranding”: strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences; As consumer, our tendency to hold on our habit is a challenge for brand repositioning Packaging: Marketer’s have the last 3-5 seconds to attempt to get customers to purchase the product -Primary package: the packaging the consumer uses, such as the toothpaste tube, from which he/she typically seeks convenience in terms of storage, use, and consumption -Secondary package: wrapper/exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package 8

-Sustainable packaging: product packaging that is ecologically responsible -Product labeling: compliance with general, industry-specific laws and regulations (FDA…) Why Do Firms Create New Product? 1. Changing Customer Needs 2. Market Saturation: longer product exist  more saturated 3. Managing Risk through Diversity 4. Fashion Cycles (for fashion/trends / quick cycle industry) 5. Improving Business Relationship -Product Mix is constantly changing: consumers adopt products at different speeds, products remain viable for different time periods Diffusion of Innovation: process by which the use of an innovation, whether a product/service, spreads throughout a market group overtime and over various categories of adopters -Pioneers/breakthroughs: new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market 1. Innovator: those buyers who want to be the first to have new product/service; “highly knowledgeable”; “venturesome,” “obsessive trying,” “outliers; “do not care what other people think”; help product gain market acceptance 2. Early adapters: use a product/service innovation; don’t like to take as much risk as innovators but instead wait and purchase the product after careful review; “leader,” “oriented to the community,” “respect of other” 3. Early majority: members don’t like to take much risk and therefore tend to wait until bugs are worked out of a particular product/service…; “deliberate” 4. Late majority: last group of buyers to enter a new market  when they do, the product has achieved its full market potential; “skepticism” 5. Laggards: consumers who like to avoid change and rely on traditional products until they are no longer available; “tradition,” heavily influenced from the past, outdated, often ignored by marketers Using the Diffusion of Innovation Theory, marketers can understand the following: 1. Relative advantage: if a product/service is perceived to be better than substitutes, then the diffusion will be relatively quick 2. Compatibility: Diffusion process can be faster/slower depending on various consumers features, including international cultural differences 3. Observability: when products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process 4. Complexity and trialability: relative less complex/easy to try  diffuse more quickly and lead to greater/faster adoption a. Company can influence by “Lifetime Warranty,…” to induce a risk-free product

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How Firms Develop New Product: 1. Idea Generator: a. Internal Research and Development: “blockbuster”-extremely successful new product b. R&D Consortia: R&D investment come from the group as a whole and the participating and institutions share the results c. Licensing: buying rights to use the technology/ideas from the other researchintensive firms through licensing agreement d. Brainstorming: a group works together to generate ...