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267 Cards in this Set
- Front
- Back
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Marketing Research
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defining a marketing problem and opportunity
systematically collecting and analyzing information recommending actions |
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Decision
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a conscious choice from among two or more alternatives
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Decision Making
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the act of consciously choosing from alternatives
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Research Objectives
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specific, measurable goals the decision maker seeks to achieve in conducting the marketing research
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Main types of marketing research
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exploratory
descriptive causal |
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Exploratory research
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provides ideas about a relatively vague problem
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Descriptive research
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involves trying to find the frequency that something occurs or the extent of a relationship between two factors
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Causal research
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most sophisticated
tries to determine the extent to which the change in one factor changes another one |
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Measures of success
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criteria or standards used in evaluating proposed solutions to the problem
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Constraints
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the restrictions placed on potential solutions to a problem
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Concepts
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ideas about products or services
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New-product concept
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a picture or verbal description of a product or service the firm might offer for sale
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Five-Step Marketing Research Approach
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Step 1: define the problem
Step 2: develop the research plan Step 3: collect relevant information Step 4: develop findings Step 5: take marketing actions |
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Define the Problem
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set the research objectives
identify possible marketing actions |
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Develop the Research Plan
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specify constraints
identify data needed for marketing actions determine how to collect data |
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Methods
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the approaches that can be used to collect data to solve all or part of a problem
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Sampling
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technique to select a group of distributors, customers, or prospects and treating the information they provide as typical of all those in whom they are interested
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Statistical inference
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generalizing the results from the sample to much larger groups of distributors, customers, or prospects to help decide on marketing actions
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Data
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the facts and figures related to the problem
divided into secondary and primary |
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Secondary data
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facts and figures that have already been recorded before the project at hand
splits into internal and external |
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Syndicated Panel
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economically answer questions that require consistent data collection over time
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advantages of secondary data
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the tremendous time savings because the data have already been collected and published or exist internally
the low cost |
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disadvantages of secondary data
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secondary data may be out of date
the definitions or categories might not be quite right for a researcher's project because data are collected for another purpose, they may not be specific enough for the project |
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Primary Data
types of primary data? |
facts and figures that are newly collected for the project
divided into observational, questionnaire, and other sources |
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Observational Data
ways of collection? |
facts and figures obtained by watching, either mechanically or in person, how people actually behave
can be collected by mechanical, personal, or neuromarketing |
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Ethnographic research
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specialized observational approach in which trained observers seek to discover subtle behavioral and emotional reactions as consumers encounter products in their "natural use environment"
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advantages and disadvantages of personal observation
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useful and flexible
costly and unreliable; observers may report different conclusions can't determine why people do things |
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Questionaire data
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facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors
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Idea generation methods
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individual interview
depth interview focus group |
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depth interviews
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researchers ask lengthy, free-flowing kinds of questions to probe for underlying ideas and feelings
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idea evaluation
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researcher tries to test ideas discovered earlier to help the marketing manager recommend marketing actions
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mall intercept interviews
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personal interviews of consumers visiting shopping centers
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dichotomous question
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simplest form of a fixed alternative question that allows only a "yes" or "no" response
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semantic differential scale
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five-point scale in which the opposite ends have one- or two-word adjectives that have opposite meanings
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Likert scale
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the respondent indicates the extent to which he or she agrees or disagrees with a statement
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Other sources of primary data
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social networks
panels and experiments information technology and data mining |
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panel
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sample of consumers or stores from which researchers take a series of measurements
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marketing drivers
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the independent variables of interest in marketing experiments
often one or more of the marketing mix elements |
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Information technology
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involves operating computer networks that can store and process data
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Data Mining
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the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions
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advantages and disadvantages of primary data
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advantage: more specific to problem being studied
disadvantage: more costly and time consuming |
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Develop findings
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analyze the data
present the findings |
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Take Marketing Actions
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make action recommendations
implement the action recommendations evaluate the results |
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evaluate the results
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evaluate the decision itself: involves monitoring the marketplace to determine if action is necessary in the future
evaluating the decision process used |
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Sales forecast
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the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts
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main sales forecasting techniques
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judgments of the decision maker
surveys of knowledgeable groups statistical methods |
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direct forecast
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estimating the value to be forecast without any intervening steps
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lost-horse forecast
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starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast
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survey of buyers' intentions forecast
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asking prospective customers if they are likely to buy the product during some future time period
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salesforce survey forecast
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asking the firm's salespeople to estimate sales during a coming period
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trend extrapolation
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extending a pattern observed in past data into the future
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linear trend extrapolation
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pattern is described with a straight line
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Market Segmentation
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aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action
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Market segments
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the homogeneous groups of prospective buyers that result from the market segmentation process
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Product differentiation
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using different marketing mix activities to help consumers perceive the product as being different and better than competing products
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effective market segmentation does two key things
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forms meaningful groupings
develops specific marketing mix actions |
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three segmentation strategies
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one product and multiple market segments
multiple products and multiple market segments "segments of one" or mass customization |
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mass customization
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tailoring goods or services to the tastes of individual customers on a high-volume scale
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build-to-order
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manufacturing a product only when there is an order from a customer
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organizational synergy
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the increased customer value achieved through performing organizational functions more efficiently
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cannibalization
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new products or new chain stealing customers and sales from the older, existing ones
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Steps in segmenting and targeting markets
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group potential buyers into segments
group products to be sold into categories develop a market-product grid and estimate size of markets select target markets take marketing actions to reach target markets |
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Criteria to use in forming the segments
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simplicity and cost-effectiveness of assigning potential buyers to segments
potential for increased profit similarity of needs of potential buyers within a segment difference of needs of buyers among segments potential of a marketing action to reach a segment |
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ways to segment consumer markets
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geographic
demographic psychographic behavioral |
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geographic segmentation
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based on where prospective customers live or work (region, city size)
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demographic segmentation
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based on some objective physical, measurable, or other classification attribute of prospective customers
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psychographic segmentation
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based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers
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behavioral segmentation
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based on some observable actions or attitudes by prospective customers
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Usage rate
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the quantity consumed or patronage-store visits-during a specific period
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80/20 rule
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concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers
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market-product grid
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a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization
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criteria to select target markets
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market size
expected growth competitive position cost of reaching the segment compatibility with the organization's objectives and resources |
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Product Positioning
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the place a product occupies in consumers' minds on important attributes relative to competitive products
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product repositioning
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changing the place a product occupies in a consumer's mind relative to competitive products
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two approaches to product positioning
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head-to-head positioning
differentiation positioning |
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head-to-head positioning
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competing directly with competitors on similar product attributes in the same target market
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differentiation positioning
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seeking a less-competitive, smaller market niche in which to locate a brand
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Steps to positioning product
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identify the important attributes for a product or brand class
discover how target customers rate competing products or brands with respect to these attributes discover where the company's product or brand is on these attributes in the minds of potential customers reposition the company's product or brand in the minds of potential customers |
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perceptual map
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a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand
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Product
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a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value
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Good
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tangible attributes that a consumer's five senses can perceive
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nondurable good
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item consumed in one or few uses
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durable good
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one that usually lasts over many uses
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services
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intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value
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idea
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thought that leads to an action
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consumer products
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products purchased by the ultimate consumer
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business products
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products that organizations buy that assist in providing other products for resale
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convenience products
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items that consumer purchases frequently, conveniently, and with a minimum of shopping effort
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shopping products
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items for which the consumer compares several alternatives on criteria
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specialty products
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items that the consumer makes a special effort to search out and buy
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unsought products
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items that the consumer does not know about or knows about but does not initially want
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components
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items that become part of the final product
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support products
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items used to assist in producing other goods and services
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product item
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specific product that has a unique brand, size, or price
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stock keeping unit (SKU)
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a unique identification number that defines an item for ordering or inventory purposes
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product line
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group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
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product mix
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consists of all of the product lines offered by an organization
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continuous innovation
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requires no new learning by consumers
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dynamically continuous innovation
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disrupts consumer's normal routine but does not require totally new learning
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discontinuous innovation
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requires new learning and consumption patterns by consumers
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protocol
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statement that identifies a well-defined target market, specific customers' needs, wants, and preferences, and what the product will be and do
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Marketing reasons for new-product failures
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insignificant point of difference
incomplete market and product protocol before product development starts not satisfying customer needs on critical factors bad timing too little market attractiveness poor product quality poor execution of the marketing mix: brand name, package, price, promotion, distribution no economical access to buyers |
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Organizational problems in new-product failure
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not really listening to the "voice of the consumer"
skipping stages in the new-product process pushing a poorly conceived product into the market to generate quick revenue encountering "groupthink" in task force and committee meetings not learning critical takeaway lessons from past failures |
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New-product process
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the seven stages an organization goes through to identify business opportunities and convert them to a salable good or service
new-product strategy development idea generation screening and evaluation business analysis development market testing commercialization |
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new-product strategy development
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the stage of the new-product process that defines the role for a new product in terms of the firm's overall objectives
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idea generation
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stage of the new-product process that develops a pool of concepts as candidates for new products, building upon the previous stage's results
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open innovation
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organization finds and executes creative new-product ideas by developing strategic relationships with outside individuals and organizations
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screening and evaluation
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the stage of the new-product process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort
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customer experience management (CEM)
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the process of managing the entire customer experience within the firm
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concept tests
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external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product
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business analysis
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specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections
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prototype
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a full-scale operating model of the product
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capacity management
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integrating the service component of the marketing mix with efforts to influence consumer demand
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off-peak pricing
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charge different prices for different times of the day or week to reflect the variations in demand for their services
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development
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the stage of the new-product process that turns the idea on paper into a prototype
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market testing
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the stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy
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test marketing
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offering a product for sale on a limited basis in a defined area
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simulated test markets (STM)
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a technique that simulates a full-scale test market but in a limited fashion
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commercialization
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the stage of the new-product process that positions and launches a new product in full-scale production and sales
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regional rollouts
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introducing the product sequentially into geographical areas of the United States to allow production levels and marketing activities to build up gradually to minimize the risk of new-product failure
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slotting fee
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a payment a manufacturer makes to place a new item on a retailer's shelf
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failure fee
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a penalty payment a manufacturer makes to compensate a retailer for sales its valuable shelf space failed to make
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parallel development
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cross-functional team members who conduct the simultaneous development of both the product and the production process stay with the product from conception to production
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fast prototyping
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"do it, try it, fix it"
encouraging continuing improvement even after the initial design |
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product life cycle
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the stages a new product goes through in the marketplace
introduction, growth, maturity, and decline |
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primary demand
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the desire for the product class rather than for a specific brand
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selective demand
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the preference for a specific brand
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penetration pricing
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lowering prices to discourage competitive entry
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deletion
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dropping the product from the company's product line
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harvesting
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when a company retains the product but reduces marketing costs
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four aspects of the product life cycle
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length
shape of salves curves how they vary with different levels of products rate at which consumers adopt products |
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high-learning product
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significant customer education is required and there is an extended introductory period
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low-learning product
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little learning is required by the consumer and the benefits of purchase are readily understood
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fashion product
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a style of the times
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fad
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experiences rapid sales on introduction and then an equally rapid decline
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product class
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the entire product category or industry
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product form
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variations within the product class
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diffusion of innovation
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product diffuses through the population
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common reasons for resisting a product in intro stage
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usage barriers (the product is not compatible with existing habits)
value barriers (the product provides no incentive to change) risk barriers (physical, economic, or social) psychological barriers (cultural differences or image) |
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brand manager (product manager)
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manages the marketing efforts for a close-knit family of products or brands
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product modification
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altering a product's characteristic to increase the product's value to customers and increase sales
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market modification
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a company tries to find new customers, increase a product's use among existing customers, or create new use situations
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product repositioning
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changes the place a product occupies in a consumer's mind relative to competitive products
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four factors that trigger the need for a repositioning action
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reacting to a competitor's position
reaching a new market catching a rising trend changing the value offered |
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trading up
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adding value to the product (or line) through additional features or higher-quality materials
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trading down
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reducing the number of features, quality, or price
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downsizing
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reducing the package content without changing package size and maintaining or increasing the package price
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branding
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an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors
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brand name
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any word, device, or combination of these used to distinguish a seller's goods or services
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trade name
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a commercial, legal name under which a company does business
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trademark
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identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it
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brand personality
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a set of human characteristics associated with a brand name
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brand equity
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the added value a brand name gives to a product beyond the functional benefits provided
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four steps for creating brand equity
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develop positive brand awareness and an association of the brand in consumers' minds with a product class or need to give the brand an identity
establish a brand's meaning in the minds of consumers elicit the proper consumer responses to a brand's identity and meaning create a consumer-brand connection evident in an intense, active loyalty relationship between consumers and the brand |
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brand licensing
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contractual agreement whereby one company (licensor) allows its brand name or trademark to be used with products or services offered by another company (licensee) for a royalty or fee
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criteria for selective a good brand name
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the name should suggest the product benefits
the name should be memorable, distinctive, and positive the name should fit the company or product image the name should have no legal or regulatory restrictions the name should be simple and emotional |
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multiproduct branding (family branding, corporate branding)
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a company uses one name for all its products in a product class
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product line extensions
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the practice of using a current brand name to enter a new market segment in its product class
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subbranding
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combines a corporate or family brand with a new brand
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brand extension
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the practice of using a current brand name to enter a different product class
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co-branding
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the pairing of two brand names of two manufacturers on a single product
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multibranding
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giving each product a distinct name
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fighting brands
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new product brands introduced as defensive moves to counteract competition
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private branding (private labeling, reseller branding)
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manufacturing products and selling them under the brand name of a wholesaler or retailer
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mixed branding
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firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market
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packaging
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any container in which it is offered for sale and on which label information is conveyed
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label
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identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients
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packaging and labeling challenges
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the continuing need to connect with customers
environmental concerns health, safety, and security issues cost reduction |
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warranty
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a statement indicating the liability of the manufacturer for product deficiencies
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express warranties
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written statements of liabilities
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limited-coverage warranty
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states the bounds of coverage and areas of noncoverage
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full warranty
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has no limits of noncoverage
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implied warranties
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assign responsibility for product deficiencies to the manufacturer
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services
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intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value
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four I's of services
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unique elements to services
intangibility inconsistency inseparability inventory |
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idle production capacity
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when the service provider is available but there is no demand
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service continuum
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what companies bring to the market
ranges from tangible to the intangible or good-dominant to service-dominant offerings |
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how to classify services
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delivered by people or equipment
profit or nonprofit if government sponsored |
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search properties
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can be determined before purchase
for tangible goods ex. color, size, and style |
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experience properties
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can be discerned only after purchase or consumption
for services |
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credence properties
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characteristics that the consumer may find impossible to evaluate even after purchase and consumption
for services provided by specialized professionals |
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gap analysis
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identifies differences between the consumer's expectations and experience
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customer contact audit
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a flowchart of the points of interaction between consumer and service provider
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eight Ps of services marketing
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product (service)
price place (distribution) promotion people physical environment process productivity |
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off-peak pricing
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charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service
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internal marketing
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service organization must focus on its employees, or internal market, before successful programs can be directed at customers
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customer experience management (CEM)
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process of managing the entire customer experience with the company
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capacity management
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integrating the service component of the marketing mix with efforts to influence consumer demand
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price
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the money or other considerations exchanged for the ownership or use of a product or service
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barter
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practice of exchanging products and services for other products and services rather than for money
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value
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the ratio of perceived benefits to price
perceived benefits/price |
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value-pricing
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the practice of simultaneously increasing product and service benefits while maintaining or decreasing price
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profit equation
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total revenue - total cost
(unit price x quantity sold) - (fixed + variable costs) |
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steps to set prices
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identify pricing objectives and constraints
estimate demand and revenue determine cost, volume, and profit relationships select an approximate price level set list or quoted price make special adjustments to list or quoted price |
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pricing objectives
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specifying the role of price in an organization's marketing and strategic plans
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managing for long-run profits
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companies give up immediate profit by developing quality products to penetrate competitive markets over the long term
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pricing constraints
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factors that limit the range of prices a firm may set
demand for the product class, product, and brand newness of the product: stage in the product life cycle single product vs. product line cost of producing and marketing the product cost of changing prices and time period that apply type of competitive market competitors' prices |
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demand curve
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graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price
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three factors to estimate demand
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consumer tastes
price and availability of similar products consumer income |
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demand factors
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factors that determine consumer's willingness and ability to pay for products and services
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total revenue
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the total money received from the sale of a product
price x quantity |
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average revenue
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the average amount of money received for selling one unit of a product, or simply the price of that unit
total revenue/quantity |
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marginal revenue
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the change in total revenue that results from producing and marketing one additional unit of a product
change in TR/change in quantity |
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price elasticity of demand
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the percentage change in quantity demanded/percentage change in price
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elastic demand
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elasticity greater than 1
increases sales revenue |
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inelastic demand
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elasticity less than 1
decreases sales revenue |
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unitary demand
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elasticity is 1
revenue remains the same |
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marginal analysis
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a continuing, concise trade-off of incremental costs against incremental revenues
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break-even analysis
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technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output
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break-even point (BEP)
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the quantity at which total revenue and total cost are equal
fixed cost/(unit price - unit variable cost) |
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break-even chart
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graphic presentation of the break-even analysis
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Four approaches to finding approximate price level
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demand-oriented
cost-oriented profit-oriented competition-oriented |
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demand-oriented pricing approaches
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skimming
penetration prestige price lining odd-even target bundle yield management |
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skimming pricing
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setting the highest initial price that customers really desiring the product are willing to pay
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conditions favoring skimming pricing
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enough prospective customers are willing to buy the product immediately at the high initial price to make these sales profitable
the high initial price will not attract competitors lowering price has only a minor effect on increasing the sales volume and reducing the unit costs customers interpret the high price as signifying high quality |
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penetration pricing
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setting a low initial price on a new product to appeal immediately to the mass market
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conditions favoring penetration pricing
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many segments of the market are price sensitive
a low initial price discourages competitors from entering the market unit production and marketing costs fall dramatically as production volumes increase |
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prestige pricing
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setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it
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price lining
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setting the price of a line of products at a number of different specific pricing points
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odd-even pricing
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setting prices a few dollars or cents under an even number
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target pricing
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consists of (1) estimating the price that ultimate consumer would be willing to pay for a product, (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers
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bundle pricing
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the marketing of two or more products in a single package price
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yield management pricing
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the charging of different prices to maximize revenue for a set amount of capacity at any given time
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Cost-oriented approaches
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standard markup
cost-plus experience curve |
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standard markup pricing
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adding a fixed percentage to the cost of all items in a specific product class
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cost-plus pricing
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summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price
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Cost-plus percentage-of-cost pricing
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fixed percentage is added to the total unit cost
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cost-plus fixed-fee pricing
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the supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project
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experience curve pricing
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the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles
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Profit-oriented pricing approaches
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target profit
target return on sales target return on investment |
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target profit pricing
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setting an annual target of a specific dollar volume of profit
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target return-on-sales pricing
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set typical prices that will give them a profit that is a specified percentage of the sales volume
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target return-on-investment pricing
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method of setting prices to achieve this target
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Competition-Oriented pricing approaches
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customary
above, at, or below market loss leader |
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customary pricing
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setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors
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above-, at-, or below-market pricing
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setting a market price for a product or product class based on a subjective feel for the competitors' price or market price as the benchmark
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loss-leader pricing
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deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well
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one-price policy
(fixed pricing) |
setting one price for all buyers of a product or service
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flexible-price policy
(dynamic pricing) |
setting different prices for products and services depending on individual buyers and purchase situations
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product-line pricing
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the setting of prices for all items in a product line
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price war
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successive price cutting by competitors to increase or maintain their unit sales or market share
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marketers should consider price cutting if:
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the company has a cost or technological advantage over its competitors
primary demand for a product class will grow if prices are lowered the price cut is confined to specific products or customers and not across the board |
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marginal analysis
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a continuing, concise trade-off of incremental costs against incremental revenues
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Special adjustments to quoted prices
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discounts
allowances geographical adjustments |
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discounts
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reductions from the list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller
quantity seasonal trade (functional) cash |
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quantity discounts
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reductions in unit costs for a larger order
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noncumulative quantity discounts
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based on the size of an individual purchase order
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cumulative quantity discounts
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apply to the accumulation of purchases of a product over a given time period
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trade functional discounts
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reductions off the list or base price offered to resellers in the marketing channel on the basis of (1) where they are in the channel and (2) the marketing activities they are expected to perform in the future
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allowances
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reductions from list or quoted prices to buyers for performing some activity
trade-in allowances promotional allowances |
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trade-in allowance
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price reduction given when a used product is part of the payment on a new product
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promotional allowances
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cash payments or an extra amount of "free goods" awarded sellers in the marketing channel for undertaking certain advertising or selling activities to promote a product
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everyday low pricing (EDLP)
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the practice of replacing promotional allowances with lower manufacturer list prices
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Geographical adjustments
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adjustments to reflect the cost of transportation of the products from seller to buyer
FOB origin pricing uniform delivered pricing |
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FOB origin pricing
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involves the seller's naming the location of this loading as the seller's factory or warehouse
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uniform delivered pricing
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the price the seller quotes includes all transportation costs
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four kinds of delivered pricing methods
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single-zone pricing
multiple-zone pricing FOB with freight-allowed pricing basing-point pricing |
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single-zone pricing
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all buyers pay the same delivered price for the products, regardless of their distance from the seller
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multiple-zone pricing
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a firm divides its selling territory into geographic areas or zones
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FOB with freight-allowed pricing
(freight absorption pricing) |
the price is quoted by the seller as "FOB plant-freight allowed"; the buyer is allowed to deduct freight expenses from the list price of the goods, so the seller agrees to pay or "absorb" the transportation costs
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basing-point pricing
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involves selecting one or more geographical locations from which the list price for products plus freight expenses are charged to the buyer
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price fixing
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a conspiracy among firms to set prices for a product
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horizontal price fixing
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when two or more competitors explicitly or implicitly set prices
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vertical price fixing
(resale price maintenance) |
involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price
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price discrimination
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the practice of charging different prices to different buyers for goods of like grade and quality
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deceptive pricing
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price deals that mislead consumers
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predatory pricing
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the practice of charging a very low price for a product with the intent of driving competitors out of business
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