Marketing Management
Week 4 (Class 7)
Professor. Hyejin Lee
Marketing Research
〮 Key Concepts
1. Marketing information systems
2. Where do you get data?
3. The marketing research process
〮 Know your customer
Customer Mindset
〮 Awareness
〮 Associations
〮 Attitudes
〮 Attachment
〮 Activity
Product Market
〮 Price Premiums
〮 Price Elasticities
〮 Market Share
〮 Expansion Success
〮 Cost Structure
Financial Market
〮 Intangible Asset Value
〮 Stock Price
〮 P/E Ratio
〮 Market Cap
〮 Our pizza tasted like cardboard
〮 How did Domino’s reinvent itself “from the crust up?”
〮 It sought to understand its customers needs and wants on a variety of metrics,
such as:
〮 Service, convenience, value for the money, and taste
〮 It found customers via:
〮 Social media channels
〮 Monitored consumer online chatter
〮 Solicited thousands of direct consumer feedback messages via Facebook,
Twitter, and other social media
〮 Finally, it launched focus groups to engage customers directly in face-to-face
conversations
〮 The Pizza Turnaround
〮 Domino’s Debrief
〮 What risks were involved in Domino’s approach to its turnaround effort?
〮 Admitting your product is gross could have been brand suicide
〮 Make the poor quality associations more salient
〮 Alienate its current customer base
〮 The Pizza Turnaround
〮 Domino’s Debrief
〮 What could they have done differently and how should they proceed going forward?
This is what we’re going to talk about today.
〮 Marketing Information Systems
〮 The Marketing Research Process: Exploratory, Descriptive, and Causal
〮 Marketing Information & Customer Insights
〮 Given the rich sources of information today (e.g., email, text messaging, blogging,
social media), the problem now isn’t getting more information – it’s getting better
information of which marketers can make better use.
〮 Marketing information by itself is of little value. It only turns to gold when it provides
valuable customer insights.
〮 Marketing Information System (MIS)
〮 Marketing Information System: People and procedures dedicated to assessing
information needs, developing the needed information, and helping decision
makers to use the information to generate and validate actionable customer and
market insights.
〮 Where to get marketing information
〮 Internal Databases: Electronic collections of consumer and market information
obtained from data sources within the company network (e.g., customer
characteristics, sales transactions, and website visits)
〮 The internal data of today:
〮 The internal data of tomorrow?
〮 Where to get marketing information
〮 Competitive Marketing Intelligence: The systematic collection and analysis of
publicly available information about consumers, competitors, and developments in
the marketing environment.
〮 There are many (free!) ways to collect competitive intelligence.
〮 Marketing research
〮 Marketing Research: The systematic design, collection, analysis, and reporting of
data relevant to a specific marketing situation facing an organization.
〮 Whereas marketing intelligence involves actively scanning the general marketing
environment, marketing research involves more focused studies to gain customer
insights relating to specific marketing decisions.
〮 Some large companies have their own research departments that work with
marketing managers on marketing research projects.
〮 The marketing research process
Defining the
problem &
research objectives
Developing the
research plan for
collecting
information
Implementation –
collecting &
analyzing data
Interpreting and
reporting the
findings
〮 The marketing research process
〮 This is often the most difficult step
〮 After the manager and researcher define the problem, they must set the research
objectives. A marketing research project might have one of three types of objectives:
〮 Exploratory research: Gather preliminary information that will help define the
problem and suggest hypotheses.
〮 Descriptive research: Describe marketing problems, situations, or markets. The
things which are described could include the market potential for a product or the
demographics and attitudes of the consumers who buy the product.
〮 Causal research: Test hypotheses about cause-and-effect relationships. For
example, would a 10% decrease in tuition at a private college result in an
enrollment increase sufficient to offset the reduced tuition?
〮 The marketing research process
〮 The research plan outlines sources of existing data and spells out the specific research
approaches, contact methods, sampling plans, and instruments that researchers will
use to gather new data. This is the stage when research objectives are translated into
specific information needs.
〮 To meet the manager’s information needs, the research plan can call for gathering
secondary data, primary data, or both.
〮 The marketing research process
〮 Primary Data: Information collected for the specific purpose at hand.
〮 Designing a plan for primary data collection calls for a number of decisions on:
〮 Research approaches
〮 Contact methods
〮 The sampling plan
〮 Research instruments
〮 The marketing research process
〮 Research approaches
1. Observational research: Gathering primary data by observing relevant people,
actions, and situations. Best suited for exploratory research.
〮 Ethnographic research: A form of observational research that involves sending
trained observers to watch and interact with consumers in their “natural
environments.”
〮 The marketing research process
〮 Research approaches
2. Survey research: Gathering primary data by asking people questions about their
knowledge, attitudes, preferences, and buying behavior. Best suited for descriptive
research.
〮 The marketing research process
〮 Research approaches
3. Experimental research: Gathering primary data by selecting matched groups of
subjects, giving them different treatments, controlling related factors, and checking
for differences in group responses. Best suited for gathering causal information.
Hula Burger
〮 The marketing research process
〮 Contact Methods
〮 These contact methods are best suited for survey research:
〮 Mail
〮 Telephone
〮 Personal Interview
〮 Group Interview (aka, “focus group”) – A trained moderator focuses the group’s discussion
〮 Online (includes both traditional low-cost surveys and online focus groups)
〮 Beware of interviewer influence (e.g., how they ask the question, their tone of voice,
etc.) or conformity effect (i.e., they tend to conform to others’ responses.)
〮 The marketing research process
〮 Clever Hans effect (interviewer influence)
〮 The marketing research process
〮 Sampling plan
〮 Sample: A segment of the population selected for marketing research to represent
the population as a whole.
〮 Designing the research sample requires three decisions:
〮 Who is to be studied (what sampling unit?)
〮 How many people should be included (what sample size)?
〮 How should be the people in the sample be chosen (what sampling procedure)?
〮 The marketing research process
〮 Research instruments
〮 In collecting primary data, marketing researchers have a choice of two main research
instruments: questionnaires & mechanical devices.
〮 Questionnaires: This is by far the most common instrument, and can be administered
in person, by phone, by email, or online.
〮 Mechanical Instruments:
〮 Examples include “people meters” on televisions to record watched programs and checkout
scanners to record purchases
〮 Also, neuromarketing is being used to measure brain activity in an effort to learn how consumers
feel and respond. This uses MRI scans and EEG devices to track brain electrical activity and
blood flow that can provide insights into what turns consumers on and off regarding their brands
and marketing.
〮 The marketing research process
〮 Example of using mechanical instruments
〮 The marketing research process
〮 This is when you actually put the marketing research plan into action.
It involves the following:
〮 Collecting the data
〮 Processing the data
〮 Analyzing the data
〮 Researchers and managers must guard the process carefully and make sure it is not
contaminated by inconsistent measurement, bias, or interaction with the respondents.
〮 The researchers then code the data, check for accuracy & completion. They then
tabulate the results and compute statistical measures.
〮 Marketing research process
〮 The project is primarily run by both the marketing manager and the researcher.
Who’s the best person to interpret the results?
〮 Both should take ownership of making inferences from the data.
〮 Marketing manager
: 1. knows more about the problem & actual processes
2. can be biased
〮 Researcher
: 1. keeps the manager honest
2. knows what claims can and cannot be made
3. may not fully understand the problem or the logistical challenges
〮 Marketing research process
〮 Reporting the findings
: The research team should not overwhelm managers with numbers and fancy
statistical techniques. Rather, the researcher should present important findings
and insights that are useful in the major decisions faced by management.
Product I: Managing
Existing Products
〮 The 4Ps model includes:
Product
Price
Place
Promotion
〮 Key Concepts
1. The complexity of “product”
2. The four levels of a product
3. Consumer products and Industrial products
4. Four questions for building great products
5. Good-Better-Best Product Approach
〮 Anything can be marketed
• Services: building sales and profit for a dry cleaner, a dentist, a lawyer, or an airline service
• Places: attracting people to a particular location
• Ideas: cultivating support for an idea (term limits, bi-lingual education, non-smoking)
Sources: http://www.newdaily.co.kr/site/data/html/2013/04/08/2013040800021.html
http://kfem.or.kr/?p=189491
http://m.newspim.com/news/view/20200608000081
〮 Anything can be marketed
• Organizations: building support for an organization (unions, universities)
• Events: building ticket sales for a concert or an art auction
• People: stimulating an interest in a political candidate or a celebrity
Sources: http://www.ngonews.kr/89085
https://artntip.com/159
https://joebiden.com/joes-story/
〮 Product
What is a Product?
A product is a good, service, or idea consisting of a bundle of
attributes that satisfies consumers and is received in exchange for money or some
other unit of value.
〮 Product
Physical goods
Services
Ideas
Places
〮 Goods-Services Continuum
〮 Product
How Managers See the Product
〮 Solution for customers
〮 Brand
〮 A cash machine
〮 A cost machine
〮 A signal of quality and value
〮 A promise
〮 A service obligation
〮 A marketing tool for future products
How Customers See the Product
〮 A tool to build sales (B2B)
〮 A tool to reduce costs (B2B)
〮 A solution to a pain point (B2C)
〮 A symbol
〮 A brand
〮 A mechanism for fun
〮 A mechanism to avoid others
〮 A mechanism to interact with others
How Society Sees the Product
〮 A tool to build customer & societal welfare
〮 A tool that has the potential to harm customers
& society
〮 Key Concepts
1. The complexity of “product”
2. The four levels of a product
3. Consumer products and Industrial products
4. Four questions for building great products
5. Good-Better-Best Product Approach
〮 Product Levels
〮 (1) The Core Product
〮 Actual benefits received by consumers. Theodore Levitt said, “buyers do not buy
quarter-inch drills; they buy quarter-inch holes.”
〮 What’s the core product for…
〮 A cup of coffee
〮 A car
〮 (2) The Actual Product
〮 The quality level, features, design, packaging, and brand name of the product.
〮 “This is how you dare” ad by Hyundai.
〮 (3) The Augmented Product
〮 Delivery and credit, warranty, and after-sale service associated with the product.
Non-physical aspects of a product.
〮 Volvo and Rolex offer excellent warranties.
〮 BMW offers complimentary service after the sale.
〮 Tiffany & Co offers free resizing and fixing of diamond rings.
〮 (3) The Augmented Product
〮 “Right Care” ad by Hyundai.
〮 (4) The Desired Product
〮 The product consumers really want or think they want.
〮 Great tasting desserts that possess almost no calories, fat, or carbs.
〮 Automobiles that use alternative fuel but possess the same power and driving range
as gas-powered cars.
〮 What’s your desired product?
Marketing Research reveals these types of products to marketers, and tells
them how to develop actual and augmented features into products desired
by consumers.
〮 (4) The Desired Product
〮 “Because of you” ad by Hyundai.
〮 Summary of the Four Product Layers
(1) _____________ is what the consumer needs from the product.
(2) _____________ delivers the core product to the consumer.
(3) _____________ differentiates the product.
(4) _____________ is what the consumer ideally wants.
〮 In-class Exercise
In-class
exercise
#1.
〮 Describe the four levels of a product for
(1) The core product
(2) The actual product
(3) The augmented product
(4) The desired product
Source: http://www.baskinrobbins.co.kr/
〮 In-class Exercise
〮 Describe the four levels of a product for
In-class
exercise
#2.
(1) The core product
(2) The actual product
(3) The augmented product
(4) The desired product
Sources: https://www.koreanair.com/kr/koc
〮 Key Concepts
1. The complexity of “product”
2. The four levels of a product
3. Consumer products and Industrial products
4. Four questions for building great products
5. Good-Better-Best Product Approach
〮 (1) Consumer Products (also called B2C)
〮 Product designed to satisfy individual needs (i.e., not organizational).
〮 Typically, one individual makes purchase decisions on a repetitive basis.
〮 Expenditures are relatively low for each individual transaction.
“Business-to-Consumer”
〮 (2) Industrial Products (also called B2B)
〮 Products sold by one business to another to serve organizational needs.
〮 Includes installations, accessories (tools), raw materials, components, and supplies.
〮 For example, Otis Elevator buying steel from a steel company
“Business-to-Business”
〮 Product Line and Product Mix
〮 A product line is a group of products that are closely related
〮 Example: P&G laundry detergents
Source: https://us.pg.com/brands/
〮 Product Line and Product Mix
〮 Product mix is the full set of products offered for sale by the organization.
〮 Example: P&G -- Household cleaners, dental products, and laundry detergents
Source: https://us.pg.com/brands/
〮 Product Mix: Breadth and Depth
〮 The product mix reflects the breadth and depth of the company’s product lines.
Breadth of product line - Refers to the variety of different items a firm carries.
Depth of product line – More depth means the firm carries a large assortment of items within that line.
〮 Product Mix: Breadth and Depth
〮 Key Concepts
1. The complexity of “product”
2. The four levels of a product
3. Consumer products and Industrial products
4. Four questions for building great products
5. Good-Better-Best Product Approach
〮 Building Great Products
Why are products offered by firms like Apple and Coca-Cola successful?
They provide superior and/or unique/differentiated benefits to the customer.
〮 4Qs for Building Great Products
〮 Critical questions for all products new and old:
1. What is the product’s competitive advantage (CA)?
Why would customers buy this product versus another?
2. Is this product’s CA something the target segment is seeking?
3. Is the CA sustainable?
4. Will customers pay a price that matches the value of the product with the CA?
〮 In-class Exercise
〮 Apply the four questions to the smart phone brand that you are currently using.
In-class
exercise
#3.
1. What is the product’s competitive advantage (CA)?
Why would customers buy this product versus another?
2. Is this product’s CA something the target segment is seeking?
3. Is the CA sustainable?
4. Will customers pay a price that matches the value of the product with the CA?
〮 Key Concepts
1. The complexity of “product”
2. The four levels of a product
3. Consumer products and Industrial products
4. Four questions for building great products
5. Good-Better-Best Product Approach
〮 Building Great Products: Good-Better-Best Approach
〮 Example: Good-Better-Best Approach
Source: https://www.netflix.com/signup/planform
〮 Building Great Products: Good-Better-Best Approach
If firms don’t position products in a distinct
way, consumers may get confused and get
a wrong product to solve problems.
☞ Can weaken brand value
〮 In-class Exercise
〮 Use the Good-Better-Best Approach to design a line of products for
tumblers.
1. Best products
2. Better products
3. Good products
In-class
exercise
#4.