Promotion mix and Market Research Week-10 Lecture Hour 10/15/2015Dr. Yuvaraj 1.

Promotion mix and Market Research

Week-10Lecture Hour

04/21/23 Dr. Yuvaraj 1

Marketing Communications Mix

The marketing communications mix comprises:

AdvertisingSales promotionPublic relations & publicityPersonal sellingDirect marketing


Why?


Includes:TVnewspapersmagazines & periodicals

cinema radiobillboards & posters Internetother media

eg buses, taxis, petrol pumps

Advertising


Best use of the media


TV large audience see product-in-use sound and vision relaxing environment cable, satellite and digital provide scope to segment

expensive consumers may find commercials irritating

PVRs can screen out

Media Choice


What fits in?



Find the taste!


Jingle stays longer….!

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Guerilla Marketing

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Internet growth medium consumers actively seeking information

can be interactive sound, pictures and words

segmentation possibilities

on-line shopping ‘pop-ups’ irritate

Media Choice

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Media SelectionCharacteristics of target audience

Media usage behaviour, exposure

BudgetCreative constraints

Best presentation of the message eg visuals, colour

Timing Seasonality of offering; cost of media at different times

Reach and frequency How wide message needs to be spread, and how often

Media Choice

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Sales Promotion

Generally short term incentives to stimulate sales people to sell, customers to buy/use

Growing in popularity: Quick response Easier targeting Consumers increasing deal-orientation Often easier to evaluate Aims to break down brand loyalty

e.g. Encourage product trial, brand switching Encourage new product trial

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Best combo!!!

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Potential Disadvantages

Frequent offers may ‘cheapen’ the brand image

Encourages consumer promiscuity Consumers wait for the special offer and stockpile

Often used to meet ‘year end’ targets Reduces subsequent sales

Subsidises those who would have purchased anyway

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Internet Transactions

Business

Consumer

Business Consumer

B2B

e.g. auto industry

C2B

e.g. Priceline

B2C

e.g. Amazon

C2C

e.g. eBay

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Publishing One-way provision of information

Interaction, e.g On-line customer service Games, promotions

Transaction On-line purchasing

Integration Automated management of supply chain

Levels of On-Line Marketing

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Product What products, customer service to offer

Price Same, cheaper or higher than off-line Delivery charges

Promotion Internet only or include traditional Marketing communications mix decisions Affiliate marketing

Place In-house or outsource distribution logistics

The On-Line 4Ps

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B2B and B2C Electronic Commerce

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E-Commerce Business Models

Online direct marketing

Electronic tendering system

Name-your-own-price

Find-the-best-price

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Affiliate marketing

Note the Sony logo at the top of this Web page www.howstuffworks.com

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Viral marketing

Group purchasing

Online auctions

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Product customization

Deep discounters

Membership

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Bartering

online

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Benefits of E-Commerce

Benefits to organizations Makes national and international markets more

accessible Lowering costs of processing, distributing, and

retrieving information

Benefits to customers Access a vast number of products and services

around the clock (24/7/365)

Benefits to Society Ability to easily and conveniently deliver

information, services and products to people in cities, rural areas and developing countries.

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Limitations of E-Commerce

Technological Limitations Lack of universally accepted security standards Insufficient telecommunications bandwidth Expensive accessibility

Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers

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consumers are multitasking

Source: PiperJaffray

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And…consumers don’t like ADS

Source: PiperJaffray

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Eight Types of Web sites for Advertising

Portals: most popular; best for reach but not targeting

Search: second largest reach; high advertising value

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Eight types of sites (continued)

Commerce: high reach; not conducive to advertising

Entertainment: large reach; strong targetability

Mall of Hawai’i

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Community: emphasize being a part of something; good for specific advertising

Communications: not good for branding; low targetability

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News/weather/sports: poor targetability

Games: good for very specific types of advertising

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What it is not: Forcing people to buy things they do not want Having ‘the gift of the gab’ Cheating, conning and lying

The interpersonal arm of the promotional mix: Two-way Communicate with end customers, channels, intermediaries

Represent the company to customers Represent customers to the company

Increasing emphasis on the concept of relationship marketing

Personal Selling

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The Selling Process

Prospecting and qualifying Pre-approach Approach Presentation and demonstration Overcoming objections Closing Follow-up and maintenance

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Salesforce Management

Structure / deployment e.g. Geographical, product, market

Compensation Usually fixed + variable (OTE) e.g. Revenue, profit, product mix

Recruitment, selection, training Motivating & managing Evaluating performance

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Sales Force

Pros Two-way communication with customer

Build relationships

Speedy feedback

Often essential Flexible focusing/targeting

Cons Expensive Requires managerial infrastructure

Focus on volume / revenue can lead to short term, less profitable, approach

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Market Research Market Information System

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Sources of information

Internal recordsMarketing intelligenceCompetitor intelligenceMarketing research

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Marketing information system (MIS)

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Information and conclusionsDecision-makingSolving a particular problem Continuous improvementTest:

Ideas and conceptsMarketing mix components

Why Market Research?

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Limitations

Does not make decisionsNot a substitute for judgementCannot accurately predict the futureLess useful for very innovative, unique ideas

Can be wrong…..

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The Sony Walkman (1979)

“Sony co-founders Akio Morita and Masaru Ibuka came up with the idea, but their own product development team almost rejected it, predicting sales of just 5,000 units per month. Two months after its launch 50,000 units had been sold….sales reached 100 million in spring 2000”

Source: Marketing magazine, 13 July 2000

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MR Process Problems

Unclear objectives Inappropriate methodologyData entry errorsShallow analysisBias…

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Bias

Highly precise but wrong resultsSystematic error – cannot be measured

Unrepresentative sample Sample size Questionnaire design Nature of question Interview environment Interviewer bias

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The Survey Process

Problem definition & objectives (FUNDAMENTAL)

Data (qualitative and/or quantitative)SamplingQuestionnaire designData collection (fieldwork)Data input & processingAnalysis & reporting

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New Coke

Coca-Cola’s failed flavour re-formulation in the 1980s

Research problem defined as ‘taste not as good as Pepsi’ being the issue

Problem was actually ‘why losing sales to Pepsi’

Conclusion: C-C defined the problem & research objectives incorrectly and thus collected interesting but useless (in fact – damaging) MR data

See ‘Marketing Mistakes’ (6th Ed) by Robert Hartley

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Data Sources

Secondary data - already exists Internal and external

Primary data – collected first-hand e.g. Your survey project

Always review Secondary Data first

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Qualitative Research

No imposed structure, can explore issues in detail

Engages respondents in discussion Useful for uncovering attitudes and opinions Provides depth - the ‘why’

BUT

Relies on interviewer skills Results are interpreted Cannot analyse statistically More expensive to analyse

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Qualitative Collection Methods

Depth interviewFocus groupSelf-completion questionnaireObservation Projective techniques

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Qualitative Questions

Engage respondents in conversationSemi-structured

Topic list with some order of questions

Unstructured Topic prompts for discussion

Broad, open questions Who, what, why, when, where, how, why, how

Relies on interviewer understanding of the objectives & questioning / probing skills

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Interpreting Qualitative Results

InterpretativeResponses cannot be aggregated and computed: not ‘like with like’

General theme(s) may emerge which can provide useful clues

e.g. “around 50% of respondents mentioned problems with computing facilities”

Transcribe conversations etc. and include as Appendix in report

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Quantitative versus Qualitative

ComplementaryNot mutually exclusive

In the same project Within the same questionnaire

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Quantitative Research

Questionnaire with pre-scribed options Aggregated answers Objective / computation Infer to a population based on statistics Provides breadth - the ‘what’ Cheap to collect and analyse sizeable sample

BUT

‘Tick box’ options may result in omissions Tells ‘what’ but not ‘why’ Often no scope to clarify the question

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Questionnaire Design

Layout & space

Clear questions

Clear instructions

Concise as possible

Relate to data entry & computation

Always pilot

EVERY QUESTION MUST PAY ITS WAY

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Instructions: An Example

What was your main reason for joining the club? (select one only)

To play tennis competitively

To play tennis recreationally

To play tennis & for social events

For social events only

Other family members / partner are members

My children play tennis

Other, please state:

_________________________________________________________________________________________

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Questionnaire Design

Logical order of questions

Related Qs grouped together

Build on previous questions

Use ‘filters’

‘Other, please state..’ Useful but expensive to analyse

Instead: ‘Don’t know’ ‘none of these’

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Tennis Survey Topics

A LITTLE ABOUT YOU Demographics / membership status etc.

CLUB FACILITIES AND SERVICES Buildings, courts, tennis, social

COURTS AND PLAY Condition, availability, usage etc.

COMMUNICATIONS Newsletters, website, committee etc.

MEMBERSHIP Information, payment methods, joining process

etc.

ANY OTHER COMMENTS

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Filter Questions

8. Are you a member of any other tennis club?

Yes

Please state which club___________________

Now please go to Question 9

No Now please go to Question 10

9. Do you use other tennis club(s) more regularly than Ealing?

Yes

No

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Types of Question

Multiple choice answers

Yes/no/don’t know (closed questions)

Rating / ranking scales Decide whether Odd or Even scale e.g. 1 - 5 or 1 - 4 Highest number is best (e.g. Very Good) Relate criteria to objectives

Open (qualitative)

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Rating Scale Example (1)1. How important are the following facilities and services to you, on a scale where

5 is Very Important and 1 is Very Unimportant.

Very Important

Important Neither Important Nor Unimportant

Unimportant Very Unimportant

5 4 3 2 1

Buildings:

Clubhouse seating area

Bar

Changing rooms & showers

Car park

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1. How satisfied are you with the following facilities and services, on a scale where 5 is Very Satisfied and 1 is Very Dissatisfied.

Very Satisfied

Satisfied Neither Satisfied Nor Dissatisfied

Dissatisfied Very Dissatisfied

Don’t Know/No Opinion

5 4 3 2 1 0

Buildings:

Clubhouse seating area

Bar

Changing rooms & showers

Car park

Rating Scale Example (1)

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Sampling

Who do you invite to participate? The larger the sample the better Trade off: Accuracy, Cost, Speed

Methodologies: Simple Random Stratified Cluster Quota Judgement

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Random

Everyone has an equal (and calculable) chance of being selected, e.g:

The balls in the National lottery draw Rolling an ‘unloaded’ dice

Not generally used in commercial market research

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Stratified

Groups of mutually exclusive characteristics, random sample drawn from each

E.g: Employee survey on budgeting process

Want to distinguish between views of different job categories

E.g. Director, Service Manager, Officer, Team Leader, Clerical, Front-line etc.

Need a sizeable sample from each category

Not the same as proportion of job category in company as a whole

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Cluster

Representative geographical areas (clusters) selected, random sample drawn from each

E.g. See ‘New Coke’ (Marketing Mistakes)

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Quota

Interviewers select people to be interviewed against pre-determined numbers and strata (characteristics)

Extremely common in commercial market research

Risks bias

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Judgement

Sample selected according to researcher’s judgement

Common in B-to-B market research, e.g:

Research into UK mobile phone industry would need to include the five operators - 02, Vodafone, Orange, T-Mobile and 3

Might also include branded service distributors and equipment suppliers to UK market, such as Virgin, Tesco, Nokia, Motorola etc.

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Quantitative Data Analysis

Excel MS Access + SPSS SPSS alone Various combinations of above SET UP ANALYSIS TOOL AT QUESTIONNAIRE DESIGN STAGE

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Analysing Quantitative Data

Look for Overall outcome Similarities and differences between different characteristics

‘Cross-tabulations’ (e.g. favourite perfumes by age group, income etc.)

Correlations not always ‘cause and effect’

High correlation between birth rate in the US population and the price of pigs (Ferber)

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Market Research Conclusion

Key points to remember for practical MR:

Define problem and MR objectives carefully and clearly

Every question must pay its way Configure analysis tool at questionnaire design stage

Pilot on a small scale before you ‘go live’ with larger sample size

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Demand estimation

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Measuring market demand

The total market demand is the total volume of a product or service that would be bought by a defined consumer group in a defined geographic area, in a defined time period in a defined marketing environment under a defined level and mix of industry marketing effort.

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Estimating market demand

Q= n x q x p Where

Q = total market demand n = number of buyers in the market q = quantity purchased by an average buyer

per year p = price of an average unit

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Forecasting future demand

Common sales forecasting techniques

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Forecasting future demand

Environmental forecast Inflation, Unemployment, Interest rates,

Consumer spending and saving, Business investment, Government expenditure.

Industry forecast What is currently happening?

Company sales forecast Buyers’ intentions, Composite of sales force

opinions, Expert opinion. Test market method. Time series analysis, Leading indicators,

Statistical demand analysis, Information analysis.

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Questions?

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Promotion mix and Market Research Week-10 Lecture Hour 10/15/2015Dr. Yuvaraj 1.

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