Marketing Research & Product Strategy · PDF file& Product Strategy 6 PowerPoint Presentation by ... •The marketing mix –Product strategy ... Product Strategy

Chapter 6 Copyright © 2010 by Nelson Education Ltd.

Marketing Research

& Product Strategy

6

PowerPoint Presentation by

Ian Anderson, Algonquin College


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


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


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


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


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


Market Opportunity Assessment

• Industry analysis

• Competitive Analysis

• Market segmentation

• Customer market research:

– primary & secondary

• Estimating the opportunity based on a sales

forecast

6-7


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


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


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


Methods for Collecting Primary Data

• Observational

Methods

In person

Video

• Focus Groups

• Test Marketing

• Questioning

Methods

Surveys • Mail, Email, Web

• Telephone

Personal interviews

Experiments

6-11


Ingredients of a Market

Ingredient 1

Customers:

People or

businesses

Ingredient 2

Purchasing

power:

Money/credit

Ingredient 3

Unsatisfied

needs

6-12


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


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


Figure 6-3

Dimensions of Forecasting Difficulty

6-15


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


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


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


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


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


Successful CRM Program

Exhibit 6-6

6-21


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


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.

6-23


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


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

– Emails, letters, faxes

– Phone calls

– Internet communication – FAQ, live chats

6-25


Simplified Model of

Consumer Behaviour

Exhibit 6-8

6-26


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


Stage 2 in


• 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


Stages 3 & 4 in


• 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


Purchase "This is the one

I want."

Post-Purchase

Dissonance

"Did I buy the

right one?"

Usage "I found another

use for…”

Product

Disposal "Can I trade this in?"

Positive

Evaluation

“It works great."

Negative

Evaluation “Doesn't work well."

Consumer

Complaints "I'm calling

the store."

No Repurchase

Repurchase

Post-Purchase Activities of Consumers

Exhibit 6-9

6-30


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


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


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.

6-33


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


Service Marketing versus Goods Marketing

Characteristics Pure Services

Marketing

Pure Goods

Marketing

Tangibility

Production/

Consumption

Standardization

Perishability

Intangible

goods

Occur at the

same time

Less

standardization

Greater

perishability

Tangible

goods

Occur at

different times

More

standardization

Less

perishability

Hybrid

Services/

Goods

Marketing

Exhibit 6-11

6-35


Product Strategy

• One product / one market

• One product /multiple markets

• Modified product / one market

• Modified product / multiple markets

• Multiple products / one market

• Multiple products / multiple markets

Product strategy

alternatives:

• Convincing nonusers to become customers

• Persuading current customers to use more

• Alerting customers to new uses for the product

Growth tactics:

6-36


Business Analysis

Product’s

relationship to

existing line

Costs of

Development and

Introduction

Available

Personnel and

Facilities

Competition and

Market

acceptance

6-37


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


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


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


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

Marketing Research & Product Strategy · PDF file& Product Strategy 6 PowerPoint Presentation by ... •The marketing mix –Product strategy ... Product Strategy

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