Download Chapter 6 Marketing Research and Product

6
Marketing Research
& Product Strategy
PowerPoint Presentation by
Ian Anderson, Algonquin College
Chapter 6
Copyright © 2010 by Nelson Education Ltd.
Looking Ahead
After studying this chapter, you should be able to:
1. Describe small business marketing.
2. Discuss the nature of the marketing research process.
3. Explain the term market and methods of forecasting sales.
4. Identify the components of a formal marketing plan.
5. Define customer relationship management (CRM) and
explain its importance to a small firm.
6. Discuss the significance of providing extraordinary
customer service.
Chapter 6
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Looking Ahead
After studying this chapter, you should be able to:
7. Illustrate how technology, such as the Internet, can
improve customer relationships.
8. Identify the key characteristics of consumer behaviour.
9. Explain product strategy and related concepts.
10. Describe the components of a firm’s total product
offering.
Chapter 6
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What is Small Business Marketing?
• Marketing
 Activities directing the flow of goods and services from
producer to consumer or user.
• Small business marketing consists of those
business activities that relate directly to:
 Identifying a target market
 Determining target market potential
 Preparing, communicating, and delivering a bundle of
satisfaction to the target market
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Essential Marketing Activities
• Market Analysis
An evaluation process that encompasses market
segmentation, marketing research, and sales
forecasting
• Marketing Mix
The combination of product,
pricing, promotion, and
distribution activities.
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Marketing Philosophies Make a
Difference
• Consumer-Oriented
 All marketing efforts begin and end with the customer;
focus is on the consumer’s needs—
this philosophy is the most consistent with long-term
success of the firm
 Production-Oriented
 Emphasizes development of the product and production
efficiencies over other activities
• Sales-Oriented
 Favours product sales over production efficiencies and
customer preferences
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Market Opportunity Assessment
•
•
•
•
Industry analysis
Competitive Analysis
Market segmentation
Customer market research:
– primary & secondary
• Estimating the opportunity based on a sales
forecast
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Creation of the Marketing Mix
• A Market Opportunity Assessment leads to
the creation of:
• The marketing mix
–
–
–
–
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Product strategy
Pricing strategy
Promotion strategy
Distribution strategy
Copyright © 2010 by Nelson Education Ltd.
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The Nature of Marketing Research
• Steps In the Marketing Research Process
1. Identifying the informational need
Why do we need to know this?
2. Searching for secondary data
Who has researched this topic already?
3. Collecting primary data
Who do we ask and what do we ask them?
4. Interpreting the data
Got the information, now what does it mean?
Chapter 6
Copyright © 2010 by Nelson Education Ltd.
…continued
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The Nature of Marketing Research
• Marketing Research
 The gathering, processing, reporting, and interpreting of
market information
• Secondary Data
 Market information that has been previously compiled by
others
 May be internal or external
• Primary Data
 New market information that is gathered by the firm
conducting the research
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Methods for Collecting Primary Data
• Observational
Methods
• Questioning
Methods
In person
Video
Surveys
• Focus Groups
• Test Marketing
Chapter 6
• Mail, Email, Web
• Telephone
Personal interviews
Experiments
Copyright © 2010 by Nelson Education Ltd.
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Ingredients of a Market
Ingredient 1
Customers:
People or
businesses
Ingredient 2
Purchasing
power:
Money/credit
Ingredient 3
Unsatisfied
needs
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Estimating Market Potential
• The Sales Forecast
 A prediction of how much (in units and/or dollars) of a
product or service will be purchased within a market during a
specified period of time
 Must be based on specific target market segments
 An essential component of a business plan that:
• Assesses the new venture’s feasibility.
• Assists in planning for product
scheduling, setting inventory
levels, and personnel decisions
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Segmentation Variables
• Divide total market into segments
• Benefit variables
Benefits consumers look for in products/services
• Geographic variables
Location, size, composition, etc.
• Demographic variables
Age, sex, education, income, occupation, etc.
• Psychographic variables
How people think and behave (i.e. lifestyle trends)
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Dimensions of Forecasting Difficulty
Figure 6-3
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The Forecasting Process:
Two Dimensions of Forecasting
• The Starting Point
Breakdown (top down)
Buildup process (bottom up)
• Calculate market size
• Calculate potential market share
– Production or retail capacity
– Competitive data
• Develop sales forecast
• Adjust to reflect competitive advantage
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The Formal Marketing Plan
• Market Analysis
 Customer profile
• A description of potential customers in a target market
 Sales forecasts
• “most likely,” “pessimistic,” and “optimistic”
• The Competition
 Identify industry leader(s)
 Clarify industry key success factors (competitive factors)
 Research individual competitors (strengths, weaknesses)
 Analyze potential for success (Porter’s Five Forces)
…continued
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The Marketing Plan
• Marketing Strategy
Total product/service plan
• Decisions affecting the total product
Distribution plan
• Decisions regarding product delivery to customers
Pricing plan
• Setting an acceptable value on the product
Promotional plan
• Communicating information to the target market
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6-18
Customer Relationship Management
(CRM)
• CRM is a company-wide business strategy
designed to optimize profitability and customer
satisfaction by focusing on highly defined and
precise customer groups
• Modern CRM focuses on:
– Customers instead of products
– Changes in company processes, systems and culture
– All channels and media involved in the marketing effort
Chapter 6
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Customer Relationship Management
(CRM)
• CRM programs focus on keeping existing
customers happy
• Economic benefits of CRM:
–
–
–
–
–
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Acquisition costs for new customers are huge
Long-time customers spend more money than new ones
Happy customers refer their friends and colleagues
Order-processing costs are higher for new customers
Old customers will pay more for products
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Successful CRM Program
Exhibit 6-6
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Components of Customer Satisfaction
1. The most basic elements of the product/service
that customers expect all competitors to deliver.
2. General support services, such as customer
assistance.
3. A recovery process for counteracting bad
experiences.
4. Extraordinary services that excel in meeting
customers’ preferences and make the product or
service seem customized.
Chapter 6
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Ways to Provide Extraordinary
Service
• Naming Names
 Greet customers by name.
• Custom Care
 Know what your customers’ want.
• Keeping in Touch
 Communicate frequently with
your customers.
• Boo-Boo Research
 Ask lost customers why they went elsewhere.
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Evaluating Customer Service
• Customer service problems are the main source
of customer complaints.
• Popular approaches to creating customer
service strategies:
 Providing an exceptional experience
 Respond promptly to customers’ requests and concerns
 Listen to customers and respond accordingly
 Stand behind products/services
 Treat customers as family members and stay in their
hearts and minds
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Using Technology to Support CRM
• CRM software programs are designed to
help companies gather all customer contact
information into a single data management
program
–
–
–
–
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Interpersonal contact
Emails, letters, faxes
Phone calls
Internet communication – FAQ, live chats
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Simplified Model of
Consumer Behaviour
Chapter 6
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Exhibit 6-8
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Stage 1 in
Consumer Decision Making
• Problem Recognition
The current state or a change in current state is
not the ideal state of affairs due to:
•
•
•
•
•
•
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Change in financial status
Change in household characteristics
Normal depletion of a resource
Product or service performance
Past decisions
Availability of products
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Stage 2 in
Consumer Decision Making
• Information Search and Evaluation
Evaluation criteria
• The features of a product or service that customers use
to compare brands.
Evoked set
• A group of brands that a customer
is both aware of and willing to
consider as a solution to a
purchase problem.
Chapter 6
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Stages 3 & 4 in
Consumer Decision Making
• Purchase decision
Deciding how and where to make the purchase
decision:
• Store versus nonstore (catalogue, TV, and the Internet)
• Post-purchase evaluation
Cognitive dissonance
• The anxiety that occurs when a
customer has second thoughts
immediately following a purchase.
Chapter 6
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Post-Purchase Activities of Consumers
Post-Purchase
Dissonance
Negative
Evaluation
“Doesn't work well."
"Did I buy the
right one?"
Purchase
Usage
"This is the one
I want."
"I found another
use for…”
Product
Disposal
"Can I trade this in?"
Consumer
Complaints
"I'm calling
the store."
No Repurchase
Repurchase
Positive
Evaluation
“It works great."
Exhibit 6-9
Chapter 6
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Psychological Factors
Needs
• Physiological, social, psychological, and spiritual.
• Consumers’ needs are rarely completely satisfied.
• A service or product can satisfy more than one need.
Perceptions
• The individual processes that give meaning to the stimuli
confronting consumers.
• Perceptual categorization – grouping things together
– Brand loyalty (a perceptual barrier) makes it difficult
for competing brands to reach the loyal consumer. …continued
Chapter 6
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Psychological Factors
Motivations
• Goal-directed forces that organize and give direction to the
tension caused by unsatisfied needs.
• Provide the behavioural impetus for consumers to act to
fulfill a need.
• Marketing is motivation and does not create needs.
Attitudes
• An enduring opinion based on knowledge, feeling, and
behavioural tendency.
…continued
Chapter 6
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Sociological Factors
 Culture
• Behavioural pattern and values that characterize
a group of consumers in a target market.
 Social class
• Societal divisions that have different
levels of social prestige.
 Reference groups
• Groups that an individual allows to influence his or her
behaviour.
 Opinion leaders
• A group leader who plays a key communications role.
Chapter 6
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Product Strategy
• Product Strategy
 The way the product component of the marketing mix is
used to achieve a firm’s objectives.
 Product item
• The lowest common denominator in the product mix—the
individual item
 Product line
• The sum of the related individual product items
 Product mix consistency
• The similarity of product lines in a product mix
Chapter 6
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Service Marketing versus Goods Marketing
Characteristics
Tangibility
Production/
Consumption
Standardization
Perishability
Pure Services
Marketing
Pure Goods
Marketing
Intangible
Tangible
goods
goods
Occur at the
same time
Less
Hybrid
Services/
Goods
Marketing
Occur at
different times
More
standardization
standardization
Greater
Less
perishability
perishability
Exhibit 6-11
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Product Strategy
Product
strategy
alternatives:
Growth
tactics:
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• One product / one market
• One product /multiple markets
• Modified product / one market
• Modified product / multiple markets
• Multiple products / one market
• Multiple products / multiple markets
• Convincing nonusers to become customers
• Persuading current customers to use more
• Alerting customers to new uses for the product
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Business Analysis
Product’s
relationship to
existing line
Costs of
Development and
Introduction
Available
Personnel and
Facilities
Competition and
Market
acceptance
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Building the Total Product Offering
• Branding
 A verbal and/or symbolic means of identifying a product.
• Rules for Naming a Product:
 Select a name that is easy to pronounce and remember.
 Choose a descriptive name.
 Use a name that can have legal protection.
 Select a name with promotional properties.
 Select a name that can be used on several product lines of a
similar nature.
Chapter 6
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Protecting a Product Offering
• Trademark
An identifying feature used to distinguish a
manufacturer’s product
• Service Mark
A legal term indicating the
exclusive right to use a
brand to identify a service.
Chapter 6
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Vinnie’s
Villa™
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Packaging, Labelling, and Warranties
• Packaging
 Colour, design, and protection for the product.
• Labelling
 Shows the brand and informs the consumer.
• Warranties
 A promise that the product will perform at a certain level or
meet certain standards.
• Implied and written warranties
• Policy considerations: Cost, service capability, competitive
practices, customer perceptions, legal implications
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Business Marketing
• Shorter distribution channels
• Greater emphasis on personal selling
– Buyer-seller relationship is closer
• Greater reliance on promotion such as tradeshows
• Greater Web integration with key business clients
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