Week 5 – February 9, 2004 Market Research (Review) Why People Buy Product Life Cycle FM20611 –...
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Transcript of Week 5 – February 9, 2004 Market Research (Review) Why People Buy Product Life Cycle FM20611 –...
Week 5 – February 9, 2004
Market Research (Review)
Why People Buy
Product Life Cycle
FM20611 – Marketing II
February 9, 2004 FM20611 – Marketing II 2
Basics of Market Research
• Collect– Gather from sources
• Analyze– Statistics
• Interpret– Theorize
• Systematic– Consistent
– Random
• Relevant!
Collect, analyze, and interpret in a systematic manner data relevant to a particular marketing
question
February 9, 2004 FM20611 – Marketing II 3
Primary Data
• Original information (usually)
• Collected for a specific study
• Can be very expensive
February 9, 2004 FM20611 – Marketing II 4
Survey Methods: Telephone Study• Most popular method• Expensive
– People– Computers– Tolls
• Very fast and accurate (+- 3%)• Missing: Unlisted phone numbers
– May be an important part of market
• TV overnights – nightly polls
February 9, 2004 FM20611 – Marketing II 5
Survey Methods: Personal Survey
• In person, at location – often at a mall
• Can be least expensive– Do it yourself
• Very focused – single location
• Bias problems– People can be suspicious– Answer what they think you want to hear– Make up answers
February 9, 2004 FM20611 – Marketing II 6
Survey Methods: Focus Groups• Gather small representative group to ask detailed questions
• Log session – get to know better
• Usually compensate participants
• Sponsor is frequently not known
• Observers hidden behind one-way mirror
February 9, 2004 FM20611 – Marketing II 7
Survey Methods: Mail Survey• Much slower
– 10 days to get 80% of those who respond
• Single-digit % response rate typical– Most people throw away– Payment doesn’t help– Selfish reasons increase response rates
• e.g. after-stay hospital survey
• Questions must be worded very carefully• Anonymous and non-threatening
February 9, 2004 FM20611 – Marketing II 8
Sample
• Representative number of people from a specific universe
• Everyone has equal chance of selection – (i.e. it must be random to be useful)
• Can be surprisingly small and still be useful
February 9, 2004 FM20611 – Marketing II 9
Other Sources of Primary Data• Customer check-out
– Supermarket discount cards– Radio Shack
• In-store observation– Successful buyers always on floor
• Post-sale survey forms– Warranty forms– Packed with delivery
• Crutchfield
• Negative form “why didn’t you buy”• Newsletter “feedback” forms
February 9, 2004 FM20611 – Marketing II 10
Secondary Data
Already existing or published data gathered by someone else or for another purpose
February 9, 2004 FM20611 – Marketing II 11
Secondary Sources: Census Bureau
• Part of U.S. Dept of Commerce
• Population Census (every 10 years)– Constitutional requirement
• Apportionment
– Short or long form– Info by locale
• Website: http://www.census.gov/
February 9, 2004 FM20611 – Marketing II 12
Business Census• Every 5 years ending in “2” & “7”• NAICS (North American Industry Classification
System– As of 2002
• SIC (Standard Industrial Classification)– Old System– 233-Women’s & Juniors’ Outerwear Mfg– 234-Women’s & Children’s Undergarments– 236-Girls & Infants Outerwear– 562-Womens RTW Retailers
• One business may fall into multiple categories
February 9, 2004 FM20611 – Marketing II 13
Prospect/Mailing Lists
• zapdata.com – prospect lists, mailing lists
• infousa.com – mailing lists
February 9, 2004 FM20611 – Marketing II 14
Other Sources of Secondary Data
• Trade Associations
• Local Planning Authority– Zoning
• Online Search
February 9, 2004 FM20611 – Marketing II 15
Test MarketingSmall batch of product produced specifically to test
sales, advertising, pricing, and dealer/customer reaction in a typical setting
• Arrangement with retailers– Guaranteed profit
• “Slotting fees”
• Peoria, Illinois, Marion, Indiana– Demographics mirror entire country
• Downside of Test Marketing– Competitors learn of product
• May try to spoil test
February 9, 2004 FM20611 – Marketing II 16
Prototypes
• Hand-built samples of product
• Solicit early opinions
• Take orders at trade shows
February 9, 2004 FM20611 – Marketing II 17
Consumer Behavior (i.e. Why People Buy)
• Maslow’s Hierarchy of Needs (Loosely)
February 9, 2004 FM20611 – Marketing II 18
Meeting Needs• Basic Drives:
– Hunger– Thirst– Sex
– Shelter– Protection– Gainful Employment
• Reward Motives– Comfort– Ease– Pleasure
• Ego Motives– Self-image– Status– Fitness– Education
– Ownership– Imitation– Power
– Something new– Ecology considerations
February 9, 2004 FM20611 – Marketing II 19
Consumer Attitudes
• Formed by– Past personal experiences– Information from others
• Close friends
• Opinion leaders– Sports
– Celebrities
– Reviews
– Experts
February 9, 2004 FM20611 – Marketing II 20
Consumer Attitudes II• Strongly Held
– Avoid conflicting information• Competitors
– Related to• Ego• Value System/Religion• Family
• Weakly Held– Little ego relationship to item– Changed more easily
February 9, 2004 FM20611 – Marketing II 21
Attitude Revisited
• ABC Model– Affect
• How a consumer feels about a product
– Behavior• An intention to do something (buy)
– Cognition• Beliefs a consumer has about a product
February 9, 2004 FM20611 – Marketing II 22
Attitude Hierarchies• The Standard Learning Hierarchy
Beliefs Affect Behavior
Beliefs AffectBehavior
BeliefsAffect Behavior
• The Experiential Hierarchy
• The Low-Involvement Hierarchy
February 9, 2004 FM20611 – Marketing II 23
Consumer Problems“All selling is problem solving”
• Small Problems– More likely for consumer to identify with personally
• Antiperspirants• Cleaning
• Large Problems– Harder for people to relate– “Happens to other people”– Slowly increasing
• Insurance Ads• “I’ve fallen and I can’t get up”
February 9, 2004 FM20611 – Marketing II 24
Consumer Decisions: Expensive Items
• Decision usually made at home
• Consult with partner
• More complex– Time consuming– Several visits– Take-home materials/brochures– Decision-oriented website
February 9, 2004 FM20611 – Marketing II 25
Consumer Decisions:Regular Purchases
• Decision made at shelf– Or at coupons
• Without much thought
• No other materials
• Informational website
February 9, 2004 FM20611 – Marketing II 26
Consumer Decisions: Impulse Purchases
• Decision made at point of sale
• Influenced by– Display– Price– Convenience– Novelty
February 9, 2004 FM20611 – Marketing II 27
Product Adoption Stages• Awareness
– Can’t buy what you don’t know about
• Interest– Seek more information
• Evaluation– Weigh pros & cons– Consider effectiveness
• Fulfill a need?• Solve a problem?
February 9, 2004 FM20611 – Marketing II 28
Product Adoption - continued
• Trial– Buy if inexpensive– Try if expensive
• May not buy if can’t try
• Decision– Return– Purchase
February 9, 2004 FM20611 – Marketing II 29
Product Adoption - continued
• Confirmation– Consumer usually supports decision by not
paying attention to negatives– Reminders on packaging and even product
• 800 numbers
• Website
• Hangtags
• Labels
February 9, 2004 FM20611 – Marketing II 30
Product Life-Cycle
February 9, 2004 FM20611 – Marketing II 31
BCG Matrix
February 9, 2004 FM20611 – Marketing II 32
Next Class
• Feb 16th:– Midterm Review– Midterm