s 2015 Lect 3 Capturing Customer Insight and Buying Behavior

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Lect. 2 Lect. 5

Lect. 5

Lect. 5

Lect. 5

Lect. 5

Lect. 6

Lect. 7

Lect. 8

Lect.5-8

Lect.5-8

Lect.5-8

Lect. 3 & 4

Lect. 3&4

Today’s Lecture

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4. Gaining Consumer Insights

Veronica Mak

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Objectives social networks

I. What is the importance of information in gaining insights about the marketplace and customers? What are the special issues some marketing researchers face, including public policy and ethics issues?

II. Define the marketing information system and discuss its parts.

III. What are the steps in the marketing research process?

IV. How companies analyze and use marketing information?

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Marketers must use the information to gain powerful customer and market insights.

Companies use such customer insights to develop competitive

advantage.

I. Why are Marketing Information and Customer Insights Important?

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I. Why are Marketing Information and Customer Insights Important?

Customer insightsFresh understandings of customers and the marketplace derived from

marketing information that become the basis for creating customer value

and relationships.

Marketing Information system (MIS)People and procedures for assessing information needs, developing the

needed information, and helping decision makers to use the information to

generate and validate actionable customer and market insights.

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II. What is Marketing Information System?

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Assessing Marketing Information Needs

A good marketing information system balances the information users would like to have against what they really need and what is feasible to offer.

By itself, information has no worth; its value comes from its use.

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- Developing Marketing Information Needs

Marketers can obtain the needed information from internal data, marketing intelligence, and marketing research.

Internal Data electronic collections of consumer and market information

obtained from data sources within the company network. Sources:

Marketing Department [information on customer transactions, demographics, psychographics, and buying behavior];

Customer service department [customer satisfaction or service problems];

Accounting department [financial data]; Operations reports [production schedules, shipments, and

inventories]; Sales force [information on resellers and competitors, and channel

partners provide point-of-sale data]

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A. Internal Data

Can be accessed more quickly and cheaply than other information sources

Ages rapidly and may be incomplete

Maintenance and storage of data is expensive

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Financial services provider USAA uses its extensive database to tailor its services to the specific needs of individual customers, creating incredible loyalty

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B. Competitive Marketing Intelligence Techniques include:

• Observing consumers • Quizzing the company’s own employees• Benchmarking competitors’ products• Monitoring Internet buzz• Actively monitoring competitors’ activities

Companies also take steps to protect their own information

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Sources annual reports, business publications, trade show

exhibits, press releases, advertisements, and Web pages.

Nielsen Online, Radian6 [client: Dell], Protrac

B. Competitive Marketing Intelligence

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C. Market Research- The 4 Steps

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(1) defining the problem and research objectives The hardest three types of objectives: exploratory research, descriptive

research, or causal research

(2) developing the research plan the research plan can call for gathering secondary data,

primary data, or both.

(3) implementing the research plan Collecting, processing, and analyzing the information. Data

collection can be carried out by the company’s marketing research staff or by outside firms.

(4) interpreting and reporting the findings.

III. What are the Steps in Marketing Research?

- The 4 Steps

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to gather preliminary information that will help define the problem and suggest hypotheses, e.g. new products concept or creative test

to describe things, such as the market

potential for or customers’ attitudes of a product.

to test hypotheses about cause‑and‑effect relationships

III. The 4 Steps in Marketing Research Process

1) Defining the problem and research objectives

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The Research Plan

Should be presented as a written proposal Should cover:

• The management problems addressed• Research objectives• Information to be obtained• How results will help decision-making• Estimated research costs• Type of data required (Primary or secondary)

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Secondary Data

Common sources of secondary data:• Internal company databases• Commercial online databases• Internet search engines

Cheaper to obtain than primary data Can be collected faster than primary data

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Primary Data

Designing a primary data collection plan involves making decisions about:• The research approach

Observation, survey, or experiment

• Contact methods Mail, telephone, personal, or online

• The sampling plan Sampling unit, sample size, and sampling procedure

• Research instruments

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Observational Research

Can obtain information that people are unwilling or unable to provide

Cannot be used to observe feelings, attitudes, and motives, and long-term or infrequent behaviors

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Ethnographic Research

Kraft Canada sent out high-level executives to observe actual family life in diverse Canadian homes. Videos of their experiences helped marketers and others across the company to understand the role Kraft’s brands play in people’s lives

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Marketing at Work

By entering the customer’s world, ethnographers can scrutinize how customers think and feel as it relates to their products

To better understand the challenges faced by elderly shoppers, this Kimberly-Clark executive tries to shop while wearing vision-impairment glasses and bulky gloves that simulate arthritis

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Contact Methods – Mail Questionnaires

Pros• Large amounts of information at a relatively low

cost per respondent• Enables more honest responses than interviews• Absence of interviewer bias

Cons• Inflexible, low response rate• Researcher has little control over sample

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Contact Methods - Telephone Interviewing

Pros• Gathers information fast, high response rate• Allows greater flexibility than mail surveys• Strong sample control

Cons• Higher costs than mail questionnaires• Interviewer may bias results• Limited quantity of data can be collected

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Contact Methods – Personal Interviewing

Pros• Highly flexible method that can gather a great

deal of data from a respondent• Good control of sample, speed of data

collection, and response rate Cons

• High cost per respondent• Subject to interviewer bias

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Focus Groups

Involve inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization

Lexus general manager Mark Templin hosts “An Evening with Lexus” dinners with luxury car buyers to figure out why they did or didn’t become Lexus owners

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Contact Methods – Online Marketing Research

Pros• Speed and low costs• Lowest cost per respondent of all contact

methods; offers excellent sample control• Good flexibility and response rate due to

interactivity Cons

• Difficulty in controlling sample

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Contact Methods – Online Marketing Research

The Internet is well suited to quantitative research

Its low cost puts online research well within the reach of almost any business, large or small

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Thanks to survey services such as Zoomerang, almost any business, large or small, can create, publish, and distribute its own custom surveys in minutes

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Online Focus Groups Gathering a small group

of people online with a

trained moderator to chat

about a product, service,

or organization and gain

qualitative insights about

consumer attitudes and

behaviorChannel M2 “puts the human touch back into online research” by assembling focus group participants in people-friendly “virtual interview rooms”

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Marketing at Work

Marketers watch what consumers say and do online, then use the resulting insights to personalize online shopping experiences

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Case Study: Del Monte Research Objectives

Primary Objective: To gauge consumers’ responses to the new Tetra

Recart package concept versus other packaging. To gauge the response to Del Monte’s new product

offering, including their comments on color, flavor, smell, “chunkiness” and potential usage of its tomato based pasta sauces.

To fine tune the direction and angle for marketing communications upon product launch.

Key strategic outputs from this piece of research will include:

Del Monte is about to launch this pasta sauce soon in the market. This research therefore acts as a disaster check before the actual launch.

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Sampling Plan

Sampling requires three decisions:• Who is to be studied (sampling unit)• How many people should be included

(sample size)• How should the people in the sample be

chosen (sampling procedure)

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Research Instruments

Questionnaires• Closed-end questions include all the possible

answers, and subjects make choices among them

• Open-end questions allow respondents to answer in their own words

Mechanical devices• People meters, checkout scanners,

neuromarketing

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To find out what ads work and why, Disney researchers use an array of devices to track eye movement, monitor heart rates, and measure other physical responses

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Mechanical instruments

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Implementing the Research Plan Collecting the data

• Most expensive phase• Subject to error

Processing the data• Check for accuracy• Code for analysis

Analyzing the data• Tabulate results• Compute statistical

measures

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Interpreting and Reporting Findings Interpret the findings Draw conclusions Report to management

• Present findings and conclusions that will be most helpful to decision making

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Customer Relationship Management (CRM) Managing detailed information about

individual customers and carefully managing customer touch points to maximize customer loyalty• Helps firms offer better customer service• Helps identify high-value customers • Enhances the firm’s ability to cross-sell products

and develop offers tailored to customers

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Distributing and Using Marketing Information Marketing information systems (MIS)

must make information readily available for decision-making:• Routine information for decision making• Nonroutine information for special situations

Intranets and extranets facilitate the information sharing process

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Other marketing considerations

Non-profit Organization International Marketing Research

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Understanding Consumer Behavior

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Objectives

I. Understand the consumer market and the major factors that influence consumer buyer behavior

II. Identify and discuss the stages in the buyer decision process

III. Describe the adoption and diffusion process for new products

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• I. Factors influencing Consumer Behavior

Model of Buyer Behavior

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Model of Consumer Behavior

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Culture is the set of basic values, perceptions, wants

and behaviors

learned

by a member

of society

from family

and other

important

institutions


Cultural Factors

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Subculture is a group of people with shared value

systems based on common life experience and

situations.


Cultural Factors

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Social Classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Social class is not determined by a single factor, but is measured as a combination of occupation, income, education, wealth, and other variables. HSBC

I. Factors influencing Consumer Behavior

Cultural Factors

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Social Classes

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Social Factors

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Groups and Social Networks. A person’s behavior is influenced by many small groups.

Group and Opinion Leader Opinion leaders are people within a reference group who,

because of special skills, knowledge, personality, or other characteristics, exert social influence on others.

These 10 percent of Americans are called the influentials or leading adopters.

Online social network are online spaces where people socialize or exchange information and opinions.

Marketers use buzz marketing to spread the word about their brands


Social Factors

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Marketing at Work

Mountain Dew runs “DEWmocracy” campaigns that invite avid Mountain Dew customers to participate at all levels in launching a new Mountain Dew flavor

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Mountain Dew’s DEWmocracycampaign

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Groups and Social Networks

Online social networks allow marketers to interact with consumers

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Blendtec has developed a kind of cult following for its flood of “Will It Blend?” videos on YouTube, resulting in a fivefold increase in Blendtec’s sales

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Family Ikea

The most important consumer buying organization in society.

70% women hold jobs outside the home. 65% men grocery shop regularly 36 million kids age 8 to 12 control an estimated $30

billion in disposable incomeRoles and Status. A role consists of the activities people are expected

to perform. Each role carries a status reflecting the general esteem given to it by society.


Social Factors

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Personal Factors

LV

Nike vs Addidas

CSL and One2Free

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A motive (or drive) is a need that is sufficiently pressing to direct the person to seek satisfaction of the need


Psychological Factors

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Perception is a process by which people select, organize, and interpret information to form a meaningful picture of the world.

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Learning describes changes in an individual’s behavior arising from experience



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Learning A drive is a strong internal stimulus that calls for action. A drive becomes a motive when it is directed toward a

particular stimulus object. Cues are minor stimuli that determine when, where, and

how the person responds. Beliefs and Attitudes. A belief is a descriptive thought that a person has about

something. Attitude describes a person’s relatively consistent

evaluations, feelings, and tendencies toward an object or idea.



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The Buyer Decision Process

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Need Recognition and Information Search Need recognition

can be triggered by internal or external stimuli• Advertising can

be very helpful in stimulating need recognition

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Postpurchase Behavior

Cognitive dissonance Discomfort caused by post-purchase

conflict, occurs in most major purchases.

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A new product is a good, service, or idea that is perceived by some potential customers as new.

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption.

Adoption is the decision by an individual to become a regular user of the product.

III. Adoption and Diffusion Process forNew Products[

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III. Adoption and Diffusion Process forNew Products[

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III. Adoption and Diffusion Process forNew Products

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Product Characteristics That Influence the Rate of Adoption

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Readings

Skip “Business Buying Decision”.

s 2015 Lect 3 Capturing Customer Insight and Buying Behavior

Documents

Transcript of s 2015 Lect 3 Capturing Customer Insight and Buying Behavior