Marketing Research
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Marketing Research DR. DAWNE MARTIN MKTG 241 FEB. 7, 2012 Administrative Things Friday, Feb. 9 – Environmental Analysis Due (1-3 pages with citations) Learning Objectives: Review and discuss elements of Customer and Competitor Analysis section of paper Review and apply Marketing Research process and approaches Begin to outline Market Research needed for marketing plan and feasibility study Customer Analysis: Preliminary Identification of Market Market definition Who will be your likely potential customers How many are there? Trends in customer demographics? Geographic dispersion Segmentation: Who are likely to be your biggest customers? The most profitable customers? The most attractive potential customers? Are there any logical groups based on needs, motivations or characteristics? Segmentation Approach: How should be the market be segmented into groups, with relatively homogeneous needs, that would require a unique marketing strategy? Benefits sought Usage level Application Organizational type or size Geographic location Customer loyalty Price Sensitivity Customer Analysis What is the customer’s motivation for buying your product or service? What elements of the product or service are valued most? What are the customer’s objectives? What are they really buying? How do segments differ in their motivation priorities? Do these needs represent leverage points for competitors? What are the customers unmet needs? Why are some customers dissatisfied? What are the severity and incidence of customer problems? What are the unmet needs that customers can identify and those of which they are unaware? Do the unmet needs represent a leverage point for competitors? Summary and implications for your business Be sure to use citations for sources of information Competitor Analysis Competitor Definition: What types of business will be your competitors? Which are direct and which indirect? Where are they likely to be located? Define the business of your competitors, including industry What are the sizes our your competitors (sales or number of employees) Competitor Strategy: How are your competitors choosing to compete (price, service, technology, product quality, etc?) Barriers to Entry & Exit: How easy is it to enter or exit the market? Are there barriers to entry or exit? Significant capital investments? Top Competitors: Who are your top 5 competitors? For each competitor identify the following? Size (number of employees or sales revenue), profitability. Strategy to compete in the market What are their strengths and weaknesses Develop a competitive strength grid and identify opportunities for your business Analysis of competitive environment and implications for your business Competitive Analysis Grid (SCORE) Factor Products Price Quality Selection Service Reliability Stability Expertise Reputation Location Appear Own Strength Weakness Comp A Comp B Comp C Importance to Customer What You Don’t Know Can Hurt You 4-7 When creating something new or different Decisions need to be made Product features Target audiences Prices Communication Distribution approaches Think about Day-to-day experiences of customers Customer are complicated Markets are complex Competitors are unpredictable Economic conditions fluctuate New often disruptive technologies emerge Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-8 Sometimes entrepreneurs can react quickly Learn from incorrect decisions Make appropriate adjustments Just as often as not there is little room for error and the entrepreneur finds he or she is Out of time Out of money Out of business There is a better way: Entrepreneurial Research Rethinking Marketing, 1st Edition © 2009 Prentice Hall Marketing Research Is About Trade-offs 4-9 How much information is collected From which sources Collected in what manner At what cost Completed by what date Time & cost constraints mean that many decisions are wrong As a result Prices set too high Wrong customer is targeted A lot of money is wasted on advertisement in the wrong medium Rethinking Marketing, 1st Edition © 2009 Prentice Hall Yet decisions have to be made. 4-10 They must be made under conditions of • • • • • Uncertainty Ambiguity Lack of control Stress Usually fairly quickly Most critically there is almost never enough information to conclusively make a choice Rethinking Marketing, 1st Edition © 2009 Prentice Hall Marketing Research Is About Trade-offs 4-11 How much information is collected From which sources Collected in what manner At what cost Completed by what date Rethinking Marketing, 1st Edition © 2009 Prentice Hall Most Entrepreneurs Face Significant Time and Money Constraints 4-12 As a result Many decisions are wrong Prices set too high Wrong customer is targeted A lot of money is wasted on advertisement in the wrong medium Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-13 Sometimes entrepreneurs can react quickly Learn from incorrect decisions Make appropriate adjustments Just as often as not there is little room for error and the entrepreneur finds he or she is Out of time Out of money Out of business There is a better way: Entrepreneurial Research Rethinking Marketing, 1st Edition © 2009 Prentice Hall Start by Thinking Logically 4-14 “What is the decision we are facing?” Should I pursue this opportunity? How big is the dollar potential? What’s the best way to position my company in the marketplace? Does it make sense to advertise in the same media used by competitors? Who are the likely early adopters that I should target with my initial marketing efforts? How much should I charge, and should my prices be different depending on the target audience? Should I create a sales force or sell through distributors? Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-15 The Set-up Recognize and define managerial problem Set research objectives Establish simple hypotheses Identify information needed Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-16 The Measurement Perform secondary data search internal/external Pursue primary data research Develop research design Determine sampling strategy From where Selection process How large Design questionnaire or measurement device Tabulate the data Analyze the data Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-17 The managerial decision Interpret results Draw conclusions Make recommendations Take action When all is said and done, though, the reality is that far too many research projects produce results that, while interesting, shed little light on the correct course of action to take. Rethinking Marketing, 1st Edition © 2009 Prentice Hall Backward Marketing Approach 4-18 Improving the chances that research will be actionable is called “backward marketing research” This approach can be especially powerful when taking bold actions such as the creation of entrepreneurial ventures Research process done in reverse Rethinking Marketing, 1st Edition © 2009 Prentice Hall The Set-up Determine 4-19 the key managerial decision to be made Specify information inputs that would lead to one decision alternative versus other decision alternatives Prepare sample tables or short report containing the kinds of information that would best help make the managerial decisions Rethinking Marketing, 1st Edition © 2009 Prentice Hall The Set-up—cont.204 Determine the analysis that will be necessary to fill in the tables or report Determine what questions must be asked to provide the data required by the analysis Ascertain whether needed questions have been answered already Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-21 The measurement Design sample What kind of analysis would produce the desired result Implement research design Analyze data The management decision Interpret results Draw conclusions Make recommendations Select the most appropriate decision alternative Rethinking Marketing, 1st Edition © 2009 Prentice Hall Entrepreneurial Researcher 422 “Entrepreneurial marketing research” Often provide richer insights Less cost Recognizes customers are emotional Tap into unconscious mind of buyer Explore their problems, needs, wants, desires, and wishes Direct observation of consumer behavior Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-23 Entrepreneurial research methods are eclectic Indirect A zoo determined its target audience by monitoring auto license plates for more than 2 months Then able to track target audience by specific geographic locales Direct Leslie Blodgett of Bare Escentuals uses QVC to market cosmetics, reach out to customers Tell her what sells and what does not These viewers provide immediate feedback on new products Rethinking Marketing, 1st Edition © 2009 Prentice Hall Some Principles to Guide the Entrepreneurial Research Process 424 Think like a guerrilla Guerrilla warfare describes fighting battles using nonconventional or unorthodox practices Doing more with less Tapping into unutilized resources Collecting information in creative ways Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-25 Make use of your surroundings Auto repair shop needed to find out what radio station to advertise on As cars came in to be fixed, mechanics made note of radio stations programmed on customers’ cars After 30 days able to determine top three radio stations for target audience Rethinking Marketing, 1st Edition © 2009 Prentice Hall 426 Explore the unconscious Research questions that Speak to unconscious brain Address the factors that stir emotions Monitor nonverbal cues Build research into daily operations Research should be 24/7 Every employee is a market researcher Create systems for recording and tracking insights Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-27 Use technology creatively Tracking software See exactly how a visitor to the firm’s website behaves • What features he or she examines • How long he or she is on the site GPS tracking of shopping habits Offering customers incentive to wear GPS tracking device in mall Research might explain how/way people shop Rethinking Marketing, 1st Edition © 2009 Prentice Hall 428 Use Technology Creatively—cont. Cell phones Allow customers to take pictures of things that interest them or that they do not like Survey Monkey • Facilitate simple online surveys Emerging observational methodologies Eye-tracking methodologies Virtual reality presentation techniques Rethinking Marketing, 1st Edition © 2009 Prentice Hall 429 Create and mine databases Build databases on Prospects Customers Product contribution margins Promotional efforts Sales force performance Price changes and their impacts Rethinking Marketing, 1st Edition © 2009 Prentice Hall 430 Create and mind databases—cont. Software packages to track Characteristics of customers who • Buy • Buy more • Do not buy at all Point of sale system Connects • • • • a firm’s cash register to Inventory system Financial statements Financial institutions Suppliers Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-31 Create and mind databases—cont. Creation of a regular stream of managerial reports that Summarize activity and performance of products Customer segments Territories Middlemen Other units of analysis This Creates a stronger position to identify patterns/trends that lead to opportunity recognition Rethinking Marketing, 1st Edition © 2009 Prentice Hall Less Costly, but Effective Measurement Approaches 4-32 Talk to lead users Monitor Weblogs Talk to people who have needs for which no solution exists and who often have ideas for effective products that have not yet been developed Valuable source of intelligence about customer perceptions, needs, and behaviors Explore other ethnographic approaches Use of field research to capture behavior and human reactions in natural settings or as they occur Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-33 Observe customers in action Create Web-based surveys Obtrusive—the consumer knows his or her habits are being observed Unobtrusive—the consumer is unaware that his or her actions are being observed Easy to use tools for creating online surveys such as Survey Monkey Use focus groups Small group of people (6–10) together 90 minutes or so for in-depth discussions Preliminary insights Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-34 Form consumer panels Usually consists of a large number of buyers Particular product category who have agreed to participate in a research project Often on an ongoing basis Allows researchers to work with consumers who are giving more thought to the product category Lends itself to experimentation, Internet-based panels, and mobile phone–based panels that use SMS text messages Check the garbage The study of a market by examining what it discards Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-35 Build snowballs Initial contact is identified in an organization That person is asked to identify four people inside the organization who make buying decisions Those four people are asked to identify four key role players Those 16 are contacted and again asked the same thing, the size of the group increases, in effect snowballing The researcher identifies two or three names that are mentioned the most Rethinking Marketing, 1st Edition © 2009 Prentice Hall 4-36 Sift the archives Conduct simple experiments A type of secondary information that can reveal important insights An archive is a collection of records that has been created or accumulated over time, such as newspapers, census records Using “living laboratories” researchers can test certain variables against a constant to see what changes occur, such as changes in advertising, promotions, and pricing against total sales Explore other ethnographic approaches Use of field research to capture behavior and human reactions in natural settings or as they occur Rethinking Marketing, 1st Edition © 2009 Prentice Hall Techniques that Tend to Be More Qualitative 4-37 Natural observation Real-time observation Unobtrusive Obtrusive Protocols Trace studies Garbology In-depth interviews Projective techniques Rethinking Marketing, 1st Edition Individual Focus groups Collage Picture completion Metaphors and analogies Psycho drawing Personalization © 2009 Prentice Hall Techniques that Tend to Be More Quantitative Survey Research Mail Telephone Face-to-face (e.g., mall intercepts) Internet surveys Consumer panels 438 Experimentation Archival Studies (secondary data) Rethinking Marketing, 1st Edition Laboratory experiments Field experiments Quasi-experiments Internal archives (company records) External archives © 2009 Prentice Hall Rethink Tool #4 4-39 Look beyond boundaries of self-limiting perspectives to create new alternatives by thinking sideways using the six thinking hats. Rethinking Marketing, 1st Edition © 2009 Prentice Hall Basic Attributes of Questions Basic attributes of questions Focus Brevity Clarity Expressing questions Vocabulary Grammar Bias and Error Unstated criteria -- How important is it for stores to carry a large variety of different brands of this product? Inapplicable questions Over-demanding recall – What small appliances, such as countertop appliances have you purchased in the past month? Over-generalization – should be a policy, strategy or habitual behavior Over-specificity – actual or precise response – When you buy fast food, what percentage of the time do you order each of the following type of food? Ambiguity of wording – using words that mean different things to different people – dinner vs. supper Double-barreled questions – Do you regularly take vitamins to avoid getting sick?
