SARTA:
How to do Marketing
Research for Your Business
Plan.
February 2012
TMTG propaganda
Qualitative
VOC
(Voice of
Customer)
Expert Research
Client Defined
Quantitative
Segmentation Analysis
Healthcare
Customer Satisfaction
and Loyalty
Customer and
Product Requirements
IT
Go To Market Planning
Technology
Assessment
Device
and
Diagnostic
Medical
Imaging
Product Concept Testing
Pricing
Opportunity Analysis
Post Launch
Acceptance
Technology Sourcing
Product Creation
Pre-Launch
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Launch
Preparation
Product Monitoring
Pharma
and
Biotech
Post-Launch
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TMTG Clients (partial list)
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Global coverage
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Agenda
A. Marketing 101: more than a brochure factory!
B. Why bother: validate your marketing plan?
C. Market vs. marketing research
D. How to do this
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A. Marketing 101
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A. Marketing 101:
Classic thinking, the brochure factory!
Hard to do
Years of academic training
Cost money
Must be protected
The easy part
A couple of brochures
May not even need a
salesman
People will fight to get it
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A. Marketing 101:
Correct thought process
Do not tell me you
know everything about
the customer
“problem” you are
trying to solve
Do you have it?
“solution” you bring
This is really what
you are after
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A. Marketing 101:
How do we go from product to demand?
Technology & Service to
fulfill an unmet need or
rather address a need
better.
Right time, right place,
right price.
MARKETING
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A. Marketing 101:
Sometimes we go the wrong way
We're doing it backwards: you should always
start with a customer problem and find a
technical solution to solve the problem
– Often we start with technology and then we look
for a problem
– That's okay, just don't forget the problem! Without
it, you will never get paid
– There are lots of reasons to start a company, but if
you don't get paid, your company will die
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A. Marketing 101:
So you need to VALIDATE THE market
Speed
Customer
Who is the
customer?
Market
Competition
Who is the
enemy?
How bad will they
want this?
Size
Units vs. $?
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A. Marketing 101:
Size and speed …
 STEP 1: to figure out the magnitude
of the problem
– How many potential customers have it?
– How much do they care about the problem?
(does the problem cost them lots of money, horrible
disfiguration, or terrible distress?)
Now you have a
market
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A. Marketing 101:
Customer Segmentation
STEP 2: target the customer segment
• Ok, but what is segmentation?
“dividing customers into homogenous groups who will
exhibit uniform purchasing behavior when exposed to the
same marketing mix”
• Simply put:
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A. Marketing 101:
Customer Adoption Cycle
Time
Innovators
Early
Adopters
Early
Majority
Late
Majority
Laggards
Enthusiasts
Visionaries
Pragmatists
Conservatives
Skeptics
Technology products follow a predictable adoption cycle
by customer type—these types often determine segments
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Sometime like this
$$$
$
$
$
$
$
Time
Innovators
Early
Adopters
Early
Majority
Late
Majority
Laggards
Enthusiasts
Visionaries
Pragmatists
Conservatives
Skeptics
It does not allow work that way – so prioritize well.
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A. Marketing 101:
Positioning
Look for their reaction and classify them by
 Psychographics
 Motivational drivers
 Purchase behavior / decision making
• Develop your marketing plan to each
segment
• Adjust your offering
• Determine the right price
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• Be able to explain why a particular segment will
be attacked first: use rationale like size, affinity
for new solutions, or intensity of market need
• What are you going to do next?
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A. Marketing 101:
Marketing mix
STEP 3: define your marketing mix
• Model
• Sensitivity
/ decision
• Channel
• Margin vs.
speed
Price
Place
Product
Promo
• Benefits
• Value prop
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• Message
• Push / pull
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All this is nice ….
But why bother?
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B. Why bother:
credibility for your investors
• Market size: VCs focus on it right away, so be honest.
– If you can multiply price by the # of potential customers, you can
validate your assumptions about market size
– It doesn't matter if you are wrong but if you don't pick a number, we
are going to make our own assumptions
• Price vs. demand: “most contentious” with VC
 Make sure you drop the anchor and pick a price
– Cost plus, Competitive, EVC (Economic Value to Customer)
 Make sure you can be profitable and yet create demand
 Get paid now
– paid pilot projects validate your market well
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B. Why bother:
define your marketing plan
• Product positioning: what is the value proposition?
 Consider the different types of new product
– Brand new, complement, line extension, brand extension
 Define core benefits which make the product a "must buy"
 Predict speed to market, product life cycle, and customer
adoption patterns
 Yes there is competition
– Where is your product / service fit ? Which box do you fit in, which
category?
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B. Why bother:
define your marketing plan
• Promo: Message, Medium, Budget
 Consider the different methods and mockup material
– PR, Ad, Sales Incentives (promo), Personal selling
– Awareness is generated by your promotional plan
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B. Why bother:
define your marketing plan
• Channel: “go to market” is also looked at
 Don't recreate the wheel
– Don't build out your own channel capabilities if someone else's will
be more effective
 Don't be naive
– Managing channels effectively is one of the hardest things to do
and can be very costly.
– If your assumptions about building out an indirect channel are too
aggressive, you are going to look like an amateur
 Remember the customer!
– How do they want the product to be made available?
– Availability is created by your channel plan
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Market vs. Marketing Research
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C. Market vs. Marketing Research
• Market research = secondary research
– This is a market analysis (size, structure, etc.)
– Data is already out there
Examples?
• Marketing research = primary research
– This is a VOICE of customer analysis (preference,
perception)
– The data do not exist: you need to collect that data
– It is hard to do it right (unbiased)
Examples?
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C. Market vs. Marketing Research
• The role of research as a decision making tool
– Be an investor, not a gambler
• But you need to be smart about this investment (time
and money)
– Follow a rigorous process just like you do it for engineering
– Key Steps:
1. Define a problem and scope (why spending $?)
2. Design carefully (garbage-in/garbage-out)
3. Collect data (scientifically)
4. Interpret (define actions)
5. Act on findings (leverage your investment)
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C. Marketing Research
Qualitative methodologies
IN-DEPTH INTERVIEWS
Description:
30-60 minute ONE-on-ONE interviews
Phone
Options
Value:
• Segmentation criteria.
•Purchase process and drivers
•Product needs and expectations
Face-To-Face
Dyads
Process:
• Recruitment with screener.
Cognititian
• Discussion guide: open ended question
Why us?
• Interview scripts.
Talk-The-Talk
Interactive
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C. Marketing Research
Qualitative methodologies
OBSERVATIONAL FIELD WORK
Description:
Customer visit analysis.
Value:
•Contextual knowledge
• Workflow and organizational behavior
•Understand product use.
Options
Observation
Process:
•Customer site selection
•Field observation.
•.Interview and summaries
Cross-Review
Forum
Why us?
Non-Intrusive
Deep
Focused
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C. Marketing Research
Qualitative methodologies
FOCUS GROUPS
Description:
Consists of a moderated exchange among decision makers within a target
customer segment
Options
Value:
•Consensus feedback.
•Product concept testing
•Group dynamics
Tryads
Mock-Up Trial
Knowledge
Why us?
Process:
•Recruitment with screener
•Moderation guide (few open end)
• Summary of key points
Mini FG
Direct
Fun
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C. Marketing Research
Quantitative methodologies
SURVEYS
Description:
Close format questionnaire administered over the phone or self-administered.
Process (similar for all surveys):
1.
Survey questionnaire
2.
Sampling (randomized, stratified) & Pre-test.
3.
Incentive scheme
4.
Administration: email, Fax, Phone (CATI), Web-Based.
5.
Coding and editing
6.
Rule-based data entry and QA.
7.
Presentation of results in graphic or tabulated format
Options
Web-Based
Conference
Design
Why us?
Objectives:
• Descriptive and causal research / perception/satisfaction
• Statistical validation
Phone/Fax
Rich
On-Time
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C. Marketing Research
Quantitative methodologies: perceptual maps
V e n d o r P e rc e p tio n M a p
( Ratings bas ed on the c ombined top tw o highes t s c ores )
B est lo n g -ter m m ag n et u p g r ad eab ility p r o g r am
R ed u ce p atien t an xiety
Tech n o lo g ists m aster scan n er s p r o d u ce h ig h q u ality
im ag in g
50
R eliab le an d d ep en d ab le ser vice
40
B r an d ap p eals to r efer r in g p h ysician s
30
20
10
R eliab le ab d o m in al im ag in g
R ep r esen ts excellen t in vestm en t (b est valu e)
0
B est co il d esig n an d /o r h an d lin g
Tech n o lo g y in n o vato r
F astest p atien t th r o u g h p u t fo r m y stu d ies
B est so lu tio n fo r r ed u cin g m o tio n ar tifacts
D ed icated , accessib le clin ical ap p licatio n su p p o r t team s
E xcellen t sp atial r eso lu tio n
GV1
E
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P hilips
V2
S iem
V3ens
TosV4
hiba
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C. Marketing Research
Quantitative methodologies: brand perception
Technology innovator
Best coil design and/or handling
Vendor 4
Vendor 1
Excellent spatial resolution
Reliable abdominal imaging
Vendor 3
Fastest patient throughput
Vendor 2
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C. Marketing Research
Quantitative methodologies: price-to-value
Number of Data
Points:
$1,800
$1,700
P1
20%
Mid Price in Thousands
$1,600
GE: 36
Philips: 7
Siemens Symphony: 35
Siemens Espree: 9
Siemens Avanto: 13
The number of data points is
insufficient for meaningful statistical
comparisons.
P4
15%
$1,500
P3
30%
$1,400
$1,300
GE Signa Excite HD 1.5T
Philips Achieva 1.5T
Siemens Symphony 1.5T
Siemens Espree 1.5T
Siemens Avanto 1.5T
P2
15%
$1,200
$1,100
The 45o line intersects the
overall average price and
brand rating value.
P5
20%
$1,000
$900
proportional to the
$800
product’s market share as
estimated by Vendor 1.
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
(Normalized
100 pt scale)
Averageto Brand
Ratings
(Normalized to 100 pt scale)
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C. Marketing Research
Quantitative methodologies
CONJOINT/ TRADE-OFF ANALYSES
Description:
Objective estimation of the value buyers place on the attributes or features which
define products and services.
Process:
1. Definition of relevant product/service attributes/features
2. Selection of conjoint methodology
3. Experimental design to calculate main effects and key interactions
4. Utility / part-worth estimate per respondent
5. Simulation mode to predict the impact of changes in product or price
A DERIVED MEASUREMENT OF YOUR
CUSTOMER PREFERENCE SHARE
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Options
Predictive rather than descriptive results.
Demand curves, substitution effects, and cannibalization
Quantification of product attribute value trade-offs
Price sensitivity testing
Adaptive
Full-Profile
Integration
Why us?
Value
•
•
•
•
Choice-Based
Expertise
Consultative
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C. Marketing Research
Quantitative methodologies: survey screenshot
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C. Marketing Research
Quantitative methodologies: why conjoint
Ratings vs. Conjoint Trade-Off Methodology
• Self-explicated ratings tend to not discriminate enough
• Ratings can even provide wrong answers:
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.8
4.6
4.5
4.7
Importnace
Importnace
• in this example customers may state that they performance and they prefer a
specific brand, …
• … but when confronted with reality and trade-off choices, they will clearly
favor economic factors such as price and MPG.
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.6
3.5
Derived Importance
(Conjoint-based)
Stated Importance
(Ratings-based)
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2
1.5
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C. Marketing Research
Quantitative methodologies
MODELING / SIMULATION
Description:
A family of methodologies for simulating real-world market behaviors in order to
predict expected outcomes.
Options
Decision Trees
Value:
• Decision-support
• Forecast and prediction
• Pricing
Markov Models
Monte Carlo
Simulation
Why us?
Data Access
Health
Economics
Partnerships
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D. How to do this
1. Sizing the market
•
•
TAM = from secondary data
Unmet need = from voice of customer
2. Customer segmentation
•
Behavior = from VOC
3. Value prop
•
•
Competitive benchmarking
SWOT
4. Pricing vs. adoption
•
•
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Elasticity
Modeling
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D. How to do this:
Sizing the market
• Secondary analysis
•
•
•
•
• Count the units first
Market reports
Web
Gvt data
Associations / trade groups
Units x count
Segment
specific
TAM
Adoption
curve
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Addressable
1
First
YEAR
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Addressable
1
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D. How to do this:
Need Assessment & Customer segmentation
• ASK the customer
YOUR
CUSTOMER
untargeted,
suboptimal sales
potential
Customer
MARKETING
RESEARCH
THE
RESULT
cost effective,
time efficient,
standardized
set of segments
with identified
requirements
SEGMENTATION
Price is
Key
Segment 1
Service
is
Valued
Product
Quality
Segment 3
Segment 2
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D. How to do this:
Value proposition and positioning
• SWOT
• Competitive table
YOU
S: we are
the best
W: not
bold
enough
O: world is
ours
T:
uneducated
customers
Feature 1

Feature 2

Feature 3

Feature 4

Feature 5

Feature 6

Feature 7

Feature 8

Comp 1
Comp 2
Comp 3









Customer research will help correct any potential myopia
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D. How to do this:
Pricing vs. adoption
• Price sensitivity
• Preference model
Market simulators
Price vs. adoption
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Okay, let's try it…
1. Market sizing
– TAM
– Addressable
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Okay, let's try it…
2. Value proposition and customer segmentation
 Let us define the top 10 questions we would ask a potential
customer of the following product
– Motivation: if you collect good information, you
can learn valuable information to refine your
business model
– You probably won't learn everything with one or
two customers, you need to decide how much
data validity you need (directional vs. accurate)
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Okay, let's try it…
3. Competitive positioning
– From customer data
– From intelligence
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Okay, let's try it…
4. Price vs. demand (adoption)
– You would need to decide if you want to spend
money in a large scale survey
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 Remember:
•
•
•
•
•
Be open minded
Accept study findings
Interpret what this means
Implement
Measure again
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Contact Us
www.themarketechgroup.com
USA
502 Mace Blvd, Suite 15
Davis, CA 95618 United States
Phone: (+1) 530-792-8400
Fax: (+1) 530-792-8447
February 15th 2012
EUROPE / FRANCE
3, rue Emile Péhant
44 000 Nantes France
Phone: +33 (0)2 72 01 00 80
Fax: +33 (0)2 40 48 29 40
SARTA Leadership Series - Marketing Research
BRASIL
Rua Girassol 756-82
Sao Paulo, SP Brasil
05433-001
Phone: +55 (11) 8799-0507
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