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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?
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