Marketing Research & Product Strategy

Transcription

1 6 Marketing Research & Product Strategy PowerPoint Presentation by Ian Anderson, Algonquin College

2 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. 6-2

3 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. 6-3

4 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 6-4

5 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. 6-5

6 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 6-6

7 Market Opportunity Assessment Industry analysis Competitive Analysis Market segmentation Customer market research: primary & secondary Estimating the opportunity based on a sales forecast 6-7

8 Creation of the Marketing Mix A Market Opportunity Assessment leads to the creation of: The marketing mix Product strategy Pricing strategy Promotion strategy Distribution strategy 6-8

9 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? continued 6-9

10 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 6-10

11 Methods for Collecting Primary Data Observational Methods In person Video Focus Groups Test Marketing Questioning Methods Surveys Mail, , Web Telephone Personal interviews Experiments 6-11

12 Ingredients of a Market Ingredient 1 Customers: People or businesses Ingredient 2 Purchasing power: Money/credit Ingredient 3 Unsatisfied needs 6-12

13 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 6-13

14 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) 6-14

15 Dimensions of Forecasting Difficulty Figure

16 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 6-16

17 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 6-17

18 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 6-18

19 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 6-19

20 Customer Relationship Management (CRM) CRM programs focus on keeping existing customers happy Economic benefits of CRM: 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 6-20

21 Successful CRM Program Exhibit

22 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. 6-22

23 Ways to Provide Extraordinary Naming Names Greet customers by name. Custom Care Service Know what your customers want. Keeping in Touch Communicate frequently with your customers. Boo-Boo Research Ask lost customers why they went elsewhere. 6-23

24 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 6-24

25 Using Technology to Support CRM CRM software programs are designed to help companies gather all customer contact information into a single data management program Interpersonal contact s, letters, faxes Phone calls Internet communication FAQ, live chats 6-25

26 Simplified Model of Consumer Behaviour Exhibit

27 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: Change in financial status Change in household characteristics Normal depletion of a resource Product or service performance Past decisions Availability of products 6-27

28 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. 6-28

29 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. 6-29

30 Post-Purchase Activities of Consumers Post-Purchase Dissonance "Did I buy the right one?" Negative Evaluation Doesn't work well." Consumer Complaints "I'm calling the store." Purchase "This is the one I want." Usage "I found another use for Product Disposal "Can I trade this in?" No Repurchase Repurchase Positive Evaluation It works great." Exhibit

31 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 6-31

32 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 6-32

33 Sociological Factors Culture Behavioural pattern and values that characterize Social class a group of consumers in a target market. 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. 6-33

34 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 6-34

35 Service Marketing versus Goods Marketing Characteristics Pure Services Marketing Pure Goods Marketing Tangibility Intangible goods Tangible goods Production/ Consumption Standardization Occur at the same time Less standardization Hybrid Services/ Goods Marketing Occur at different times More standardization Perishability Greater perishability Less perishability Exhibit

36 Product Strategy Product strategy alternatives: One product / one market One product /multiple markets Modified product / one market Modified product / multiple markets Multiple products / one market Multiple products / multiple markets Growth tactics: Convincing nonusers to become customers Persuading current customers to use more Alerting customers to new uses for the product 6-36

37 Business Analysis Product s relationship to existing line Costs of Development and Introduction Available Personnel and Facilities Competition and Market acceptance 6-37

38 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. 6-38

39 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. Vinnie s Villa 6-39

40 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 6-40

41 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 6-41