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chapter 3-5

MASY-1 GC 1230 Strategic Marketing Mini Quiz 2, Fall ’21 Student Name and Date: _______________________________________________________________________________________Instructions : As with your previous assignment, this quiz consists of a combination of multiple choice and short answer questions. Please note that, versus Mini Quiz 1, the point values for both the multiple choice and short answer questions have changed.Type your name and the date above. As shown in class on Wednesday, for each multiple-choice question please do two things: (1) highlight (in color) the letter and response that you think best answers the question; and (2) type the letter of the response that you are selecting on the line provided for each question. For each short answer question, type your answers in the space provided.Be sure to read the questions carefully, and to answer them completely. Good Luck!!Multiple Choice Questions: 6 points each1) The Fromm Company operates in the highly competitive dog food market. The firm aims to obtain early warnings of opportunities and threats caused by the actions of other firms that are doing well in the industry. Which of the following sources would best serve Fromm’s purpose? __________A) sales data from exclusive Fromm dog food retailersB) archival data on company performanceC) research on demographics of its existing customersD) marketing intelligence on leading dog food brandsE) internal survey on employee performance2) A natural haircare company’s ads feature Mickey Guyton, a crossover country/R&B music artist. Sulfate-free shampoo sales for the company have increased significantly among her fans. From the fans’ viewpoint, Mickey is a __________.A) membership groupB) reference groupC) laggardD) subcultureE) late-majority adopter3) The Brooklyn Nets are planning to build a new practice facility that would require the partial acquisition of a nearby public park. Prospect Unite, a local park enthusiast group, challenges the plan citing environmental destruction. In response to the demands of Prospect Unite, The Brooklyn Nets promise to build a huge park-like walkway around the facility. Prospect Unite is an example of a(n) __________ in this scenario.A) financial publicB) government publicC) media publicD) internal publicE) citizen-action public4) Hallmark’s classic slogan “When you care enough to send the very best” appeals to which need category in Maslow’s hierarchy? __________A) physiologicalB) esteemC) socialD) self-actualizationE) safety5) Which of the following is considered to be part of a company’s marketing microenvironment?__________A) building close relationships with its extensive network of suppliersB) a set of laws that require the company to scale down its telemarketing calls to customersC) a changing demographic picture that requires the firm to make product adaptationsD) a new technology that would ensure significant cost-cutting if implemented in the firmE) a set of environmental sustainability laws that significantly impact the company’s production processes6) Izzy and Liv, an online boutique plans to launch a new casual clothing line. For this purpose, the firm first conducts a survey to understand its target audience and identify the demographics of potential buyers. It then conducts experimental research to test whether customers associate discounted prices with lower product quality. Which types of research has the boutique employed in this case? __________A) exploratory followed by causalB) descriptive followed by causalC) descriptive followed by exploratoryD) exploratory followed by descriptiveE) causal followed by descriptive7) Secure is a financial services and insurance company. The company’s most profitable division is one that sells the Secure Future Plan. The Secure Future Plan targets customers who are entering retirement and want long-term savings so they can remain financially independent in the later years of their life. The marketing team at Secure has most likely targeted the plan to __________.A) MillennialsB) Silent GenerationC) Generation XersD) Generation ZersE) Baby Boomers8) Corning produces Gorilla Glass screens that are used in the production of laptops, tablets, and smartphones. Corning promotes its product to final consumers to increase business demand for digital devices made with the specialized, toughened glass. This illustrates __________.A) types of decisionsB) market structureC) derived demandD) the decision processE) nature of the buying unit9) The marketing manager of DeCamp Bus Lines has noticed a sharp decrease in ridership over the last two months. The manager decides to conduct marketing research to identify potential causes for the drop in riders. Which of the following should the manager do first? __________A) develop a research planB) determine a research approachC) select a research agency to collect dataD) define the problem and objectivesE) conduct exploratory and descriptive research10) Vtech, a kids’ electronics company has decided to work with a children’s charity foundation that helps feed and educate children in poor countries. Vtech has decided that a percentage of revenue from every kids’ electronic device it sells this year will go to the charity. Their line of devices will be marketed this year by conveying this message to customers. Which of the following marketing techniques describes Vtech’s association with the children’s charity foundation? __________A) cause-related marketingB) joint venture marketingC) niche marketingD) green marketingE) test marketing
 11) Wellmont Cosmetics decides to launch a cream with a claim that it makes skin “nine times smoother.” The claim is based on a study of 30 respondents who used products of other brands as well. However, a second study on a larger sample reveals only a mild correlation between the use of the cream and smoother skin. In these circumstances, which of the following is the most ethical approach that Wellmont Cosmetics can follow? __________A) It should market the product as planned with the promotional line of “nine times smoother.”B) It should modify the results of the study to depict a strong correlation.C) It should report the result as it is, or improve the product to match its claim.D) It can continue to claim a high correlation and add a tag line saying “results may vary.”E) It should feature a testimonial from a satisfied user in an advertisement to support its claim.

12) Bertram thought he had received the best deal on his leaf blower. Shortly after the purchase, Bertram started to notice certain disadvantages of his new leaf blower, as he learned more about other leaf blowers available in the same price range. Bertram is in which of the following stages of the buyer decision process? __________

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A) purchase decision

B) need recognition

C) alternate evaluation

D) information search

E) post purchase behavior

Short Answer Questions: maximum of 7 points each

13) (Maximum of 7 points) Revelry https://shoprevelry.com/ is a bridesmaid’s dress company that only sells products online. Orders are taken through an interactive website, and goods are shipped out through a small warehouse the company owns. Revelry employees also handle the shipment of goods to desired destinations. How could marketing intermediaries help Revelry expand its business?

14) (Maximum of 7 points) Marketers can obtain needed information from internal data, marketing intelligence, and marketing research. Describe some common sources of each, and assuming that you are marketing the Georgia Aquarium https://www.georgiaaquarium.org/ to encourage visitation as the country continues to open up post-pandemic, provide examples for each.

15) (Maximum of 7 points) Assume you are the marketing manager for Build Tiny, a New Zealand – based tiny home construction company and are considering fielding marketing research to help you successfully introduce their Autumn model to the Orange County, NY market. https://www.springwise.com/innovation/property-construction/build-tiny-house-autumn-netting

Differentiate between the three types of marketing research objectives for the Autumn model that available to you: exploratory research, descriptive research, and causal research. Provide a brief example of each.

16) (Maximum of 7 points) Identify the product characteristics that influence the rate of adoption of a product. Using the Samsung Galaxy Z Fold3 5G smartphone as an example, explain how each characteristic affects the rate of adoption. https://www.samsung.com/us/smartphones/galaxy-z-fold3-5g/

MASY

1 GC 1230 Strategic Marketing Mini Quiz

2

,

Fall

2

1

Student

Name

and Date

:

__________________________________________________

_____________________________________

Instructions

:

As with your previous assignment,

this quiz consists of a combination of multiple choice and

short answer questions.

Pleas

e note that

, versus Mini Quiz 1,

the point va

lues for both th

e multiple choice

and short answer questi

ons have changed

.

Type your name and the date above.

As shown in c

las

s o

n

Wednesday, f

or each multiple

choice question

please

do two things:

(1)

highlight (in color) the letter and response that

you think best answers the

question

; and (2)

type the letter of the response that you are selecting on the line provided for each question.

For each short answer question, type your answers in the space provided

.

Be sure to read the questions carefully

,

and to answer them completely.

Good Luck!!

Multiple Choice Questions

:

6

points each

1

)

The Fromm Company

operates in the highly

competitive

dog food

market. The firm aims to obtain early

warnings of

opportunities and threats caused by the actions of other firms that are doing well in the industry.

Which of the following sources would best serve

Fromm

‘s purpose?

__________

A) sales data from exclusive

Fromm dog food

retailers

B) archival data on company per

formance

C)

research on demographics of its existing customers

D)

marketing intelligence

on leading dog food br

ands

E) internal survey on employee performance

2

)

A

natur

al

haircare

company’s ads feature

Mick

e

y Guyton

, a

crossover country

/R&B

music artist

.

S

ulfate

free s

hampoo

sales

f

or

t

he company have

i

ncrease

d

significantly among

her

fans. From the fans’ viewpoint,

Mickey

is a

__________

.

A

) membership group

B) reference group

C) laggard

D) subculture

E) late

majority adopter

3

)

The Brooklyn Nets are

planning to build a new

practice facility

that would require the partial acquisition of a

nearby public park.

Prospect Unite

, a

local park enthusiast

group, challenges the plan citing environmental

destruction. In response to the demands of

Prosp

ect Unite

,

The Brooklyn Nets

promise

to build a huge park

like walkway around the

facility

.

Prospect Unite

is an example of a(n)

__________

in this scenario.

A) financial public

B) government public

C)

media public

D) internal public

E)

citizen

action public

4

)

Hallmark’s classic

slogan

“When you care enough to send the very best” appeals to which need category

in Maslow’s hierarchy?

__________

A) physiological

B)

esteem

C)

social

D) self

actualization

E) safety

MASY-1 GC 1230 Strategic Marketing Mini Quiz 2, Fall ’21

Student Name and Date:

_______________________________________________________________________________________

Instructions: As with your previous assignment, this quiz consists of a combination of multiple choice and

short answer questions. Please note that, versus Mini Quiz 1, the point values for both the multiple choice

and short answer questions have changed.

Type your name and the date above. As shown in class on Wednesday, for each multiple-choice question

please do two things: (1) highlight (in color) the letter and response that you think best answers the

question; and (2) type the letter of the response that you are selecting on the line provided for each question.

For each short answer question, type your answers in the space provided.

Be sure to read the questions carefully, and to answer them completely. Good Luck!!

Multiple Choice Questions: 6 points each

1) The Fromm Company operates in the highly competitive dog food market. The firm aims to obtain early

warnings of opportunities and threats caused by the actions of other firms that are doing well in the industry.

Which of the following sources would best serve Fromm’s purpose? __________

A) sales data from exclusive Fromm dog food retailers

B) archival data on company performance

C) research on demographics of its existing customers

D) marketing intelligence on leading dog food brands

E) internal survey on employee performance

2) A natural haircare company’s ads feature Mickey Guyton, a crossover country/R&B music artist. Sulfate-

free shampoo sales for the company have increased significantly among her fans. From the fans’ viewpoint,

Mickey is a __________.

A) membership group

B) reference group

C) laggard

D) subculture

E) late-majority adopter

3) The Brooklyn Nets are planning to build a new practice facility that would require the partial acquisition of a

nearby public park. Prospect Unite, a local park enthusiast group, challenges the plan citing environmental

destruction. In response to the demands of Prospect Unite, The Brooklyn Nets promise to build a huge park-

like walkway around the facility. Prospect Unite is an example of a(n) __________ in this scenario.

A) financial public

B) government public

C) media public

D) internal public

E) citizen-action public

4) Hallmark’s classic slogan “When you care enough to send the very best” appeals to which need category

in Maslow’s hierarchy? __________

A) physiological

B) esteem

C) social

D) self-actualization

E) safety

Chapter 5-UNDERSTANDING CONSUMER AND BUSINESS BUYER BEHAVIOR

Strategic Marketing, MASY1-GC 1230

Shinola: Nobody’s Confusing Sh*t with Shinola Anymore

“Built in Detroit”: Shinola is selling gritty Detroit, authentically American values, emotions, and a roll-up-our-sleeves lifestyle.

Premium watches, high-end bicycles, apparel, leather accessories, and audio equipment

$125 million in sales

1,000 stores worldwide, including high-end department stores such as Nordstrom, Neiman Marcus, and Saks Fifth Avenue

“We’re starting with the reinvigoration of a storied American brand, and a storied American city,” says the company. Shinola “is a brand committed to turning out high-quality products in America with…American suppliers and American labor.”

Shinola is selling much more than just watches or bikes or leather accessories. It’s selling gritty Detroit, authentically American values, emotions, and a roll-up-our-sleeves lifestyle, things that lie at the heart consumers’ feelings and behavior toward the brand.

2

Consumer Buyer Behavior and Consumer Markets

Consumer buyer behavior

Buying behavior of final consumers

Consumer market

All the individuals and households that buy or acquire goods and services for personal consumption

Consumer buyer behavior refers to the buying behavior of final consumers who are the individuals and households that buy goods and services for personal consumption. All of these final consumers combine to make up the consumer market.

3

The Model of Buyer Behavior

This figure shows that marketing and other stimuli enter the consumer’s “black box” and produce certain responses. Marketers must figure out what is in the buyer’s black box. The whats, wheres, and whens of consumer buying behavior can be measured. But it’s very difficult to figure out the whys of buying behavior (that’s why it’s called the black box). Marketers spend a lot of time and money trying to figure out what makes customers tick.

4

Factors Influencing Consumer Behavior

Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics, as shown in this figure. For the most part, marketers cannot control such factors, but they must take them into account. The following slides will discuss these characteristics in more detail.

5

Cultural Factors

Culture

Set of basic values, perceptions, wants, and behaviors learned by an individual from family and other important institutions

Subculture

Group of people with shared value systems based on common life experiences and situations

Total market strategy integrates ethnic themes and cross-cultural perspectives within a brand’s mainstream marketing.

Social class

Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors

Culture is the most basic cause of a person’s wants and behavior. Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.

A subculture is a group of people with shared value systems based on common life experiences and situations.

A total market strategy integrates ethnic themes and cross-cultural perspectives within a brand’s mainstream marketing, appealing to consumer similarities across subcultures rather than differences.

A social class is the relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors. It is measured as a combination of occupation, income, education, wealth, and other variables.

6

TikTok SUBCULTURES 2021

Dark Academia – Like a high fashion version of Harry Potter, revolves around the literary classics, beautiful libraries, plenty of starched collars, tweed jackets, and perfectly worn-in leathers.

Scene Kids – the early Aughts are back. Recreation of old MySpace photos from the original scene kid era, big hair and all. Think of the scene kid as a cross between a punk and raver.

Grunge -Patchwork sweaters, ripped jeans, and grown-out roots, with unexpected touches like pearls and a more Goth approach to makeup.

DARK ACADEMIA

SCENE KIDS

GRUNGE

Social Factors

Groups

Word-of-mouth (WOM) influence

Opinion leaders

Online social networks

Family

Roles and status

A consumer’s behavior is also influenced by social factors.

Groups that have a direct influence and to which a person belongs are called membership groups. Reference groups serve as direct or indirect points of comparison or reference in forming a person’s attitudes or behavior. An aspirational group is one to which the individual wishes to belong.

Word-of-mouth influence refers to the impact of the personal words and recommendations of trusted friends, associates, and other consumers on buying behavior. Rather than leaving it to chance, marketers can help to create positive conversations about their brands.

An opinion leader is a person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others. Opinion leaders are also referred to as influentials or leading adopters. Buzz marketing involves enlisting or even creating opinion leaders to serve as brand ambassadors who spread the word about a company’s products.

Online social networks are online communities where people socialize or exchange information and opinions.

Family members can strongly influence buyer behavior. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.

A person’s position in each group can be defined in terms of both role and status. People usually choose products appropriate to their roles and status.

8

Personal Factors

Occupation

Age and family life-cycle

Economic situation

Lifestyle

Personality and self-concept

A buyer’s decisions also are influenced by personal characteristics of the buyer. A person’s occupation affects the goods and services bought. Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can specialize in making products needed by a given occupational group.

Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle. One of the leading life-stage segmentation systems is the Nielsen PRIZM Lifestage Groups system. PRIZM classifies every American household into one of 66 distinct life-stage segments, which are organized into 11 major life-stage groups.

A person’s economic situation will affect his or her store and product choices. Marketers watch trends in spending, personal income, savings, and interest rates.

Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves measuring consumers’ major AIO dimensions – activities, interests, and opinions. The lifestyle concept can help marketers understand changing consumer values and how they affect buyer behavior.

Personality refers to the unique psychological characteristics that distinguish a person or group. It can be useful in analyzing consumer behavior for certain product or brand choices. A person’s self-concept is also made use of by marketers. The idea is that people’s possessions contribute to and reflect their identities.

9

Personal Factors (CONT’D)

MINI owners—who times call themselves “MINIacs”—have a strong and emotional connection with their cars.

Brand personality: MINI markets to personality segments of people who are “adventurous, individualistic, open-minded, creative, tech-savvy, and young at heart”—anything but “normal”—just like the car.

10

SIXTEEN COVID-19 PERSONALITY TYPES

PERSONALITY TYPEDESCRIPTION
1. DeniersDownplay the viral threat, promoting business as usual
2. SpreadersWant the virus to spread, herd immunity to develop, and normality to return
3. HarmersTry to harm others, e.g. by spitting or coughing at them
4. RealistsRecognize the reality of the potential harm and adjust their behaviors
5. WorriersStay informed and safe to manage their uncertainty and fear
6. ContemplatorsIsolate and reflect on life and the world
7. HoardersPanic-buy and hoard products to quell their insecurity
8. InvinciblesOften young, who believe themselves to be immune

Source: “Research Says There Are 16 Covid-19 Personality Types. Leaders Have to Plan for Them All”, Inc., 2.12.21

SIXTEEN COVID-19 PERSONALITY TYPES (CONT’D)

PERSONALITY TYPEDESCRIPTION
9. RebelsDefiantly ignore social rules restricting their individual freedoms
10. BlamersVent their fears and frustrations onto others
11. ExploitersExploit the situation for power, profit or brutality
12. InnovatorsDesign or re-purpose resources to fight the pandemic
13. SupportersShow their solidarity in support of others
14. AltruistsHelp the vulnerable, elderly, and isolated
15. WarriorsLike the front-line health care workers, combat its grim reality
16. VeteransExperienced SARS or MERS and willingly comply with restrictions

Source: “Research Says There Are 16 Covid-19 Personality Types. Leaders Have to Plan for Them All”, Inc., 2.12.21

Psychological Factors

Motivation

Perception

Learning

Beliefs and Attitudes

A motive (or drive) is a need that is sufficiently pressing to direct a person to seek satisfaction. Many companies employ teams of psychologists, anthropologists, and other social scientists to carry out motivation research.

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Selective distortion describes the tendency of people to interpret information in a way that will support what they already believe. Selective retention means that consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands. Some consumers worry that they will be affected by marketing messages without even knowing it—through subliminal advertising.

Learning describes changes in an individual’s behavior arising from experience. The practical significance of learning theory for marketers is that they can build up demand for a product by associating it with strong drives by using motivating cues and providing positive reinforcement.

A belief is a descriptive thought that a person holds about something. Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behavior. Attitudes put people into a frame of mind of liking or disliking things, of moving toward or away from them.

13

Maslow’s Hierarchy of Needs

Abraham Maslow sought to explain why people are driven by particular needs at particular times. Why does one person spend a lot of time and energy on personal safety and another on gaining the esteem of others? Maslow’s answer is that human needs are arranged in a hierarchy, from the most pressing at the bottom to the least pressing at the top. They include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.

14

Buyer Decision Process

This figure shows that the buyer decision process consists of five stages.

The first stage is need recognition. The need can be triggered by internal stimuli when one of the person’s normal needs rises to a level high enough to become a drive. A need can also be triggered by external stimuli.

The second stage is information search. Consumers can obtain information from several sources like personal, commercial, public, and experiential sources.

The third stage is the evaluation of alternatives, that is, how consumers process information to choose among alternative brands.

The fourth stage is the purchase decision. Two factors can come between the purchase intention and the purchase decision: the attitudes of others and unexpected situational factors.

The last stage is postpurchase behavior. Determining if the consumer is satisfied or dissatisfied with the purchase lies in the relationship between the consumer’s expectations and the product’s perceived performance. However, all major purchases result in cognitive dissonance, or discomfort caused by postpurchase conflict.

15

Postpurchase Behavior

Postpurchase customer satisfaction is a key to building profitable customer relationships.

Postpurchase customer satisfaction is a key to building profitable customer relationships. Most marketers go beyond merely meeting the customer expectations—they aim to delight customers.

16

Stages in the Adoption Process

Awareness

Interest

Evaluation

Trial

Adoption

The adoption process is the mental process through which an individual passes from first learning about an innovation to final adoption. Consumers go through five stages in the process of adopting a new product, which is a good, service, or idea that is perceived by some potential customers as new.

The first stage is awareness. In this stage the consumer becomes aware of the new product but lacks information about it.

The second stage is interest, which involves the consumer seeking information about the new product.

The third stage is evaluation, where the consumer considers whether trying the new product makes sense.

The fourth stage is trial. In this stage, the consumer tries the new product on a small scale to improve his or her estimate of its value.

The final stage is adoption where the consumer decides to make full and regular use of the new product.

17

Adopter Categories Based on Relative Time of Adoption of Innovations

People can be classified into the adopter categories shown in Figure 5.5. The curve illustrates that after a slow start, an increasing number of people adopt the new product.

The five adopter groups have differing values. Innovators try new ideas at some risk. Early adopters are opinion leaders in their communities and adopt new ideas early but carefully. Early mainstream adopters adopt new ideas before the average person. Late mainstream adopters adopt an innovation only after a majority of people have tried it. Finally, lagging adopters adopt the innovation only when it has become something of a tradition itself.

18

Characteristics Influencing an Innovation’s Rate of Adoption

Relative advantage

the degree to which the innovation appears superior to existing products.

Compatibility

the degree to which the innovation fits the values and experiences of potential consumers.

The characteristics of the new product affect its rate of adoption.

Relative advantage is the degree to which the innovation appears superior to existing products.

The second characteristic is compatibility, which is the degree to which the innovation fits the values and experiences of potential consumers.

The third characteristic is complexity, which refers to the degree to which the innovation is difficult to understand or use.

The fourth characteristic is divisibility, which is the degree to which the innovation may be tried on a limited basis.

The fifth characteristic is communicability. This refers to the degree to which the results of using the innovation can be observed or described to others.

Other characteristics that influence the rate of adoption include initial and ongoing costs, risk and uncertainty, and social approval.

19

Characteristics Influencing an Innovation’s Rate of Adoption (CONT’D)

Complexity

the degree to which the innovation is difficult to understand or use.

Divisibility

the degree to which the innovation may be tried on a limited basis.

Communicability

the degree to which the results of using the innovation can be observed or described to others.

The characteristics of the new product affect its rate of adoption.

Relative advantage is the degree to which the innovation appears superior to existing products.

The second characteristic is compatibility, which is the degree to which the innovation fits the values and experiences of potential consumers.

The third characteristic is complexity, which refers to the degree to which the innovation is difficult to understand or use.

The fourth characteristic is divisibility, which is the degree to which the innovation may be tried on a limited basis.

The fifth characteristic is communicability. This refers to the degree to which the results of using the innovation can be observed or described to others.

Other characteristics that influence the rate of adoption include initial and ongoing costs, risk and uncertainty, and social approval.

20

Business Buyer Behavior

Business buyer behavior

Purchasing goods and services are used in the production of other products and services

Business-to-business (B-to-B) marketers must understand business markets and business buyer behavior

Business buying process: Determining which products and services to purchase

Finding, evaluating, and choosing among alternative suppliers and brands

Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others.

Business-to-business (B-to-B) marketers must do their best to understand business markets and business buyer behavior. Then, like businesses that sell to final buyers, they must engage business customers and build profitable relationships with them by creating superior customer value.

The business buying process is the decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands.

21

Business Markets

Business markets are huge and involve more money and items than consumer markets.

Differ from consumer markets in terms of

Market structure and demand

Nature of the buying unit

Types of decisions and the decision process

The business market is huge and involves more dollars and items than do consumer markets. Business markets differ from consumer markets in terms of market structure and demand, the nature of the buying unit, and the types of decisions and the decision process involved.

22

Market Structure and Demand

Business market structure and demand

Fewer but larger buyers

Derived demand: Business demand that comes from the demand for consumer goods

Inelastic and fluctuating demand

The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. Even in large business markets, a few buyers often account for most of the purchasing. Further, business demand is derived demand. It ultimately derives from the demand for consumer goods. Finally, many business markets have inelastic and more fluctuating demand. The total demand for many business products is not much affected by price changes, especially in the short run.

23

Nature of the Buying Unit

Nature of the business market buying unit

More decision participants

More professional purchasing effort

Compared with consumer purchases, a business purchase usually involves more decision participants and a more professional purchasing effort. Business buying is done by trained purchasing agents who spend their working lives learning how to buy better. Buying committees composed of technical experts and top management are common in the buying of major goods. B-to-B marketers now face a new breed of higher-level, better-trained supply managers. Therefore, companies must have well-trained marketers and salespeople to deal with these well-trained buyers.

24

Types of Decisions

Business purchases

More complex buying decisions

Large sums of money

Complex technical and economic considerations

Interactions among people at many levels of the buyer’s organization

Business buyers usually face more complex buying decisions than do consumer buyers. Business purchases often involve large sums of money, complex technical and economic considerations, and interactions among people at many levels of the buyer’s organization.

25

Decision Process

Buying processes

Longer and more formalized procedures

Buyer and seller more dependent on each other

Supplier development: Systematic development of networks of supplier-partners to ensure a dependable supply of products and materials

The business buying process tends to be longer and more formalized. Large business purchases usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. In the business buying process, the buyer and seller are often much more dependent on each other. In the short run, sales go to suppliers who meet buyers’ immediate product and service needs. In the long run, however, business-to-business marketers keep customers by meeting current needs and by partnering with them to help solve their problems.

Supplier development refers to the systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others.

26

A Model of Business Buyer Behavior

Types of Buying Situations

Straight rebuy

Buyer routinely reorders something without any modifications

Modified rebuy

Buyer wants to modify product specifications, prices, terms, or suppliers

New task

Buyer purchases a product or service for the first time

Systems selling (or solutions selling)

Buying a packaged solution to a problem from a single seller

Avoids the separate decisions involved in a complex buying situation

There are three major types of buying situations: straight rebuy, modified rebuy, and a new task situation.

In a straight rebuy, the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers.

A company buying a product or service for the first time faces a new task situation. The marketer not only tries to reach as many key buying influences as possible, but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new task situation.

Systems selling (or solutions selling) refers to buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation.

28

Types of Buying Situations (CONT’D)

Solutions selling: IBM works with Six Flags to provide a complete solution.

Delivering a fun and safe experience for Six Flags guests requires careful and effective management of thousands of park assets across its 19 regional theme parks. IBM works hand in hand with Six Flags to provide not just software but a complete solution.

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Participants in the Business Buying Process

Buying center: All the individuals and units that play a role in the purchase decision-making process

Actual users of the product or service

People who make the buying decision

People and units influencing the buying decision

People who do the actual buying

Individuals and units controlling the buying information

The buying center consists of all the individuals and units that play a role in the purchase decision-making process. This group includes the actual users of the product or service, those who make the buying decision, those who influence the buying decision, those who do the actual buying, and those who control buying information.

The buying center is not a fixed and formally identified unit within the buying organization. It is a set of buying roles assumed by different people for different purchases. Within the organization, the size and makeup of the buying center will vary for different products and for different buying situations.

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Major Influences on Business Buying Behavior

Figure 5.7 illustrates that business buying behavior is influenced by a complex combination of environmental, organizational, interpersonal, and individual factors.

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Stages of the Business Buyer Decision Process

Figure 5.8 lists the eight stages of the business buying process. The buying process begins with problem recognition. Problem recognition can result from internal or external stimuli. Having recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed items or solutions. Once the buying organization has defined the need, it develops the item’s technical product specifications, often with the help of a value analysis engineering team. Product value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production.

In the next buying process step, the buyer conducts a supplier search to find the best vendors. In the proposal solicitation stage, the buyer invites qualified suppliers to submit proposals. The buyer next reviews the proposals and selects a supplier or suppliers. During supplier selection, the buyer will consider many supplier attributes and their relative importance. The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers. Many large buyers now practice vendor-managed inventory, in which they turn over ordering and inventory responsibilities to their suppliers. The final stage of the business buying process is the supplier performance review, in which the buyer reviews the supplier performance. The seller’s job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction.

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E-Procurement and Online Purchasing

Purchasing through electronic connections between buyers and sellers—usually online

E-procurement occurs through

Reverse auctions

Online trading exchanges

Company buying sites

Extranet links with key suppliers

Advances in information technology have dramatically affected the face of the B-to-B buying process. Online purchasing, often called e-procurement, refers to purchasing through electronic connections between buyers and sellers—usually online.

Companies can do e-procurement in any of several ways. They can conduct reverse auctions, in which they put their purchasing requests online and invite suppliers to bid for the business. They can engage in online trading exchanges, through which companies work collectively to facilitate the trading process. Companies also can conduct e-procurement by setting up their own company buying sites. Companies can also create extranet links with key suppliers.

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Benefits of E-Procurement

Benefits

Cuts transaction costs

Results in efficient purchasing for both buyers and suppliers

Reduces the time between order and delivery

Helps an organization keep better track of all purchases

Frees buyers from a lot of paperwork

Business-to-business e-procurement yields many benefits. First, it shaves transaction costs and results in more efficient purchasing for both buyers and suppliers. E-procurement reduces the time between order and delivery, and eliminates the paperwork associated with traditional requisition and ordering procedures. It helps an organization keep better track of all purchases. Finally, e-procurement frees purchasing people from a lot of drudgery and paperwork.

However, the rapidly expanding use of e-procurement also presents some problems. At the same time that the Internet makes it possible for suppliers and customers to share business data and even collaborate on product design, it can also erode decades-old customer-supplier relationships. Buyers now use the power of the Internet to pit suppliers against one another and search out better deals, products, and turnaround times on a purchase-by-purchase basis.

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Problems WITH E-Procurement

Problems

Can affect the customer-supplier relationship

Pits suppliers against one another

Business-to-business e-procurement yields many benefits. First, it shaves transaction costs and results in more efficient purchasing for both buyers and suppliers. E-procurement reduces the time between order and delivery, and eliminates the paperwork associated with traditional requisition and ordering procedures. It helps an organization keep better track of all purchases. Finally, e-procurement frees purchasing people from a lot of drudgery and paperwork.

However, the rapidly expanding use of e-procurement also presents some problems. At the same time that the Internet makes it possible for suppliers and customers to share business data and even collaborate on product design, it can also erode decades-old customer-supplier relationships. Buyers now use the power of the Internet to pit suppliers against one another and search out better deals, products, and turnaround times on a purchase-by-purchase basis.

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Business-to-Business Digital and Social Media Marketing

B-to-B marketers are now using a wide range of digital and social media marketing approaches.

Compared with traditional media and sales approaches, digital and social media can create greater customer engagement and interaction.

B-to-B marketers are now using a wide range of digital and social media marketing approaches—from Web sites, blogs, mobile apps, e-newsletters, and proprietary online networks to mainstream social media such as Facebook, LinkedIn, YouTube, Google+, and Twitter—to engage customers and manage customer relationships anywhere, any time.

Compared with traditional media and sales approaches, digital and social media can create greater customer engagement and interaction. B-to-B marketers know that they aren’t really targeting businesses, they are targeting individuals in those businesses who affect buying decisions. Today’s business buyers are always connected via their digital devices—whether it’s PCs, tablets, or smartphones.

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B2B SOCIAL MEDIA MARKETING EXAMPLES

Hiscox Insurance – offers insurance for small businesses.

Ted Talk: What Consumers Want

Chapter 3 -Analyzing the Marketing Environment
Strategic Marketing, MASY1-GC 1230

First Stop: Microsoft: Adapting to the Fast-Changing Marketing Environment
Microsoft dominated the computer software world throughout the 1990s and much of the 2000s but struggled in the fast changing technology environment.
Microsoft has a new mission with a different focus.
“to empower every person and every organization on the planet to achieve more.”
Microsoft, the technology giant dominated the computer software world throughout the 1990s and much of the 2000s. Its Windows and Office products have long been must-haves in the PC market. But with the decline in stand-alone personal computers and the surge in digitally connected devices—everything from smartphones and tablets to internet-connected TVs—mighty Microsoft found itself struggling to find its place in a fast-changing environment. However, the tech giant has now reinvented itself as a relevant brand that consumers can’t live without in the post-PC era.

The new mission focuses not on devices and services but on outcomes. Rather than chasing competitors in mobile devices and operating systems, Microsoft now intends to lead them in productivity tools.
2
Marketing Environment
Outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers
Microenvironment: Actors close to the company that affect its ability to serve its customers
Macroenvironment: Larger societal forces that affect the microenvironment
Marketing environment refers to the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. The marketing environment consists of a microenvironment and a macroenvironment.

The microenvironment consists of the actors close to the company that affect its ability to serve its customers.

The macroenvironment consists of the larger societal forces that affect the microenvironment.
3
The marketing environment
MACROENVIRONMENT
MICROENVIRONMENT
Actors in the Microenvironment

This figure shows the major actors in the marketer’s microenvironment.

Each of these actors are discussed in greater detail in the following slides.
5
The Company
Interrelated groups in a company form the internal environment
Departments share the responsibility for understanding customer needs and creating customer value.
In designing marketing plans, marketing management takes other company groups into account—groups such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting. All of these interrelated groups form the internal environment.

With marketing taking the lead, all departments—from manufacturing and finance to legal and human resources—share the responsibility for understanding customer needs and creating customer value.
6
Suppliers
Provide the resources needed by the company to produce its goods and services
Supplier problems seriously affect marketing
Supply shortages or delays
Labor strikes
Price trends of key inputs
Suppliers form an important link in the company’s overall customer value delivery network. They provide the resources needed by the company to produce its goods and services.

Supplier problems can seriously affect marketing. Marketing managers must watch supply availability and costs. Supply shortages or delays can cost sales in the short run and damage customer satisfaction in the long run. Rising supply costs may force price increases that can harm the company’s sales volume.
7
Suppliers (CONT’D)
Home furnishings retailer IKEA knows the importance of building close relationships with its extensive network of suppliers.
“To us, our suppliers and service providers are some of our most important partners for development. Together we grow and expand our businesses, and explore new ways to do it in a socially and environmentally responsible way. We share the responsibility to make sure that the unique IKEA range is produced at the right time, right volume,
right quality, and at a low cost to an ever-expanding customer base. Thanks to our ambitious growth plans, we are always on the look-out for new partners that share our values and our ambitions to become people and planet positive.”
IKEA Supplier Statement, 2021
IKEA’s mission is to create a better everyday life for customers by offering trendy but simple and practical home furnishings at prices so low that as many people as possible can afford them. But before it can sell the billions of dollars’ worth of products its customers covet, IKEA must first develop a robust and reliable network of supplier–partners who can help it design and make all those products.
8
Marketing Intermediaries
Marketing intermediaries help the company to promote, sell, and distribute its products to final buyers.
Resellers (aka wholesalers and retailers)
Physical distribution firms
Marketing services agencies
Financial intermediaries
Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers.
 
Physical distribution firms help the company stock and move goods from their points of origin to their destinations.
 
Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets.
 
Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.
9
Marketing Intermediaries (CONT’D)
Coca-Cola provides its retail partners with much more than just soft drinks. It also pledges powerful marketing support.


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Competitors
Direct and indirect competition
Marketers must gain strategic advantage by positioning products strongly against competitors.
No single strategy is best for all companies.
Product
Direct Competition
Indirect Competition
Delta Shuttle


Kindle Reader


World Cup Soccer


Heineken Beer


The marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt to the needs of target consumers. They also must gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the minds of consumers.

No single competitive marketing strategy is best for all companies. Each firm should consider its own size and industry position compared with those of its competitors. Large firms with dominant positions in an industry can use certain strategies that smaller firms cannot afford. However, small firms can also develop winning strategies.
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Publics
Publics: any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives
Financial
Media
Government
Citizen action
Local
General
Internal
Financial publics influence the company’s ability to obtain funds.

Media publics carry news, features, and editorial opinions.

Government publics: Management must take government developments into account.

Citizen-action publics: A company’s marketing decisions may be questioned by consumer organizations, environmental groups, etc.

Local publics include neighborhood residents and community organizations.

General public: The general public’s image of the company affects its buying.

Internal publics include workers, managers, volunteers, and the board of directors.
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Customers
Five types of customer markets
Consumer markets
individuals and households that buy goods and services for personal consumption.
Business markets
buy goods and services for further processing or for use in their production process.
Reseller market
buy goods and services to resell at a profit.
Consumer markets consist of individuals and households that buy goods and services for personal consumption.

Business markets buy goods and services for further processing or use in their production process.

Reseller markets buy goods and services to resell at a profit.

Government markets consist of government agencies that buy goods and services to produce public services.

International markets consist of buyers in other countries, including consumers, producers, resellers, and governments.
13
Customers
Five types of customer markets (cont’d)
Government markets
government agencies that buy goods and services to produce public services.
International markets
buyers in other countries, including consumers, producers, resellers, and governments
Consumer markets consist of individuals and households that buy goods and services for personal consumption.

Business markets buy goods and services for further processing or use in their production process.

Reseller markets buy goods and services to resell at a profit.

Government markets consist of government agencies that buy goods and services to produce public services.

International markets consist of buyers in other countries, including consumers, producers, resellers, and governments.
14
Major Forces in the Company’s Macroenvironment

This figure shows the six major forces in the company’s macroenvironment.

Each of these forces are discussed in greater detail in the following slides.
15
Demographic Environment
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Marketers analyze:
Changing age and family structures
Geographic population shifts
Educational characteristics
Population diversity
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Marketers analyze several important factors that affect the marketing environment.

The first factor is the changing age and family structures. The U.S. population contains several generational groups. These include the Baby Boomers, Generation X, Generation Y or Millennials, and Generation Z. These are discussed in more detail on the next slide.

The second factor is the changing American household. More people are divorcing or separating, choosing not to marry, marrying later, or marrying without intending to have children. Marketers must increasingly consider the special needs of nontraditional households because they are now growing more rapidly than traditional households. Each group has distinctive needs and buying habits.

The third factor is geographic shifts in population. Population shifts interest marketers because people in different regions buy differently. For example, people in the Midwest buy more winter clothing than people in the Southeast.

And the final factor is increasing diversity. Marketers face increasingly diverse markets as their operations become more international in scope. Some major companies also explicitly target gay and lesbian consumers.
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Demographic Environment (CONT’D)
The U.S. population contains several generational groups:
Baby Boomers: 1946-1964
Generation X: 1965-1976
Millennials (or Generation Y): 1977-2000
Generation Z: after 2000
The U.S. population contains several generational groups. These include the Baby Boomers, Generation X, Generation Y or Millennials, and Generation Z.

Baby boomers: The 78 million people born during the years following World War II and lasting until 1964.

Generation X: The 49 million people born between 1965 and 1976 in the “birth dearth” following the baby boom.

Millennials (or Generation Y): The 83 million children of the baby boomers born between 1977 and 2000.

Generation Z: People born after 2000 (although many analysts include people born after 1995) who make up the kids, tweens, and teens markets
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February 12, 2021
Demographic Environment (CONT’D)
Targeting Gen Xers:
Lowe’s markets heavily to Gen X homeowners with ideas and advice on home-improvement projects and problems, urging them to “Never Stop Improving.”

With so much potential, many brands and organizations focus on Gen Xers as a prime target segment. For example, a full 82 percent of Gen Xers own their own homes, making them an important segment for home-and-hearth marketers. Home-improvement retailer Lowe’s markets heavily to Gen X homeowners, urging them to “Never Stop Improving.” Through ads, online videos, and a substantial social media presence, Lowe’s provides ideas and advice on a wide range of indoor and outdoor home-improvement projects and problems, providing solutions that make life simpler for busy Gen X homeowners and their families.
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Economic Environment
Economic factors affect consumer purchasing power and spending
Changes in consumer spending
Differences in income distribution
The economic environment consists of economic factors that affect consumer purchasing power and spending patterns.

Economic factors can have a dramatic effect on consumer spending and buying behavior. Consumers have now adopted a back-to-basics sensibility in their lifestyles and spending patterns that will likely persist for years to come. They are buying less and looking for greater value in the things they do buy. In turn, value marketing has become the watchword for many marketers. Marketers in all industries are looking for ways to offer today’s frugal buyers greater value.

Marketers should pay attention to income distribution as well as income levels. Over the past several decades, the rich have grown richer, the middle class has shrunk, and the poor have remained poor. This distribution of income has created a tiered market. Many companies aggressively target the affluent, while other firms target those with more modest means. Still other companies tailor their marketing offers across a range of markets, from the affluent to the less affluent.
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Economic environment: UNPRECEDENTED impact of Covid-19 pandemic
Economy comes to a full stop in March 2020, in an effort to slow the spread of the coronavirus
“Wallet” recession: consumers hang onto their savings, or eat through them
Driven by 17% unemployment and 40 million American jobs either furloughed or disappeared
Not the same level of demand that drives upward of 2/3 of the U.S. economy (lag effect)
Unprecedented $2 trillion stimulus plan approved to bolster the US economy
Included relief for small business loans, expanded unemployment benefits, and direct payments to households: uneven dispersion throughout the economy
Additional $1.4 trillion stimulus plan currently under consideration, for consumers
Source: “How the Impact of COVID-19 Is Changing Marketing”, Target Marketing, 6.22.20
Economic environment: UNPRECEDENTED impact of Covid-19 pandemic (CONT’D)
Densely populated urban centers may look and feel different for some time
Impact on these innovation centers that accelerate the economy may damper national and global growth
Strong growth in housing demand and prices in smaller metropolitan markets
Recessionary, savings-conscious mindset prevails
Consumers focused on more pricing benefits from brand loyalty, and less VIP experiences
Source: “How the Impact of COVID-19 Is Changing Marketing”, Target Marketing, 6.22.20
Source: “COVID-19 and the Great Reset”, McKinsey & Co., 9.10.20
Source: “COVID-19 and the Great Reset”, McKinsey & Co., 9.10.20
Natural Environment
Physical environment and natural resources needed as inputs by marketers or affected by marketing activities
Environmental sustainability concerns have grown steadily over the past three decades.
Trends:
Shortages of raw materials
Increased pollution
Increased government intervention
The natural environment involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends in the natural environment.

The first involves growing shortages of raw materials. Firms making products that require scarce resources face large cost increases, even if the materials remain available. The second trend is increased pollution. The third trend is increased government intervention in natural resource management. The governments of different countries vary in their concern and efforts to promote a clean environment.

Today, enlightened companies adopt practices that support environmental sustainability. This refers to the effort to create a world economy that the planet can support indefinitely.
25
Technological Environment
New technologies create new markets and opportunities.
Digital Technology
Radio-frequency identification (RFID) is technology to track products through various points in the distribution channel.
Government agencies investigate and ban potentially unsafe products.
New technologies can offer exciting opportunities for marketers. Many firms use radio-frequency identification, or RFID, technology to track products through various points in the distribution channel. New technologies create new markets and opportunities. Companies that do not keep up will soon find their products outdated.

Government agencies investigate and ban potentially unsafe products. Regulations have resulted in much higher research costs and longer times between new product ideas and their introduction. Marketers should be aware of these regulations when applying new technologies and developing new products.
26
Technological Environment (CONT’D)
Disney is taking RFID technology to new levels with its cool new MagicBand RFID wristband.

Wearing a MagicBand at The Walt Disney World Resort opens up a whole new level of Disney’s famed magic. After registering for cloud-based MyMagic+ services, with the flick of your wrist you can enter a park or attraction, buy dinner or souvenirs, or even unlock your hotel room.
27
Political Environment
Forces that influence or limit various organizations and individuals in a society
Laws, government agencies, and pressure groups
The political environment refers to laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
28
Major U.S. Legislation Affecting Marketing
Legislation regulating business is intended to protect
companies from each other
consumers from unfair business practices
the interests of society against unrestrained business behavior
Business legislation has been enacted for a number of reasons. The first is to protect companies from each other. The second purpose of government regulation is to protect consumers from unfair business practices. The third purpose is to protect the interests of society against unrestrained business behavior
29
Major U.S. Legislation Affecting Marketing: 1990–2010
Legislation
Purpose
Children’s Television Act (1990)
Limits the number of commercials aired during children’s programs
Nutrition Labeling and Education Act (1990)
Requires that food product labels provide detailed nutritional information
Telephone Consumer Protection Act (1991)
Establishes procedures to avoid unwanted telephone solicitations
Americans with Disabilities Act (1991)
Makes discrimination against people with disabilities illegal
This table lists legislation enacted from 1990 – 2010 that affects marketing.

A complete list of laws, starting with the Sherman Antitrust Act of 1890, can be found in Table 3.1 of this chapter.


30
Major U.S. Legislation Affecting Marketing: 1990–2010 (CONT’D)
Legislation
Purpose
Children’s Online Privacy Protection Act (2000)
Prohibits online collection of information from children without parental consent Allows parents to review information collected from their children
Do-Not-Call Implementation Act (2003)
Collects fees from telemarketers for the enforcement of a Do-Not-Call Registry
CAN-SPAM Act (2003)
Regulates the distribution and content of unsolicited commercial e-mail
Financial Reform Law (2010)
Created the Bureau of Consumer Financial Protection: Writes and enforces rules for the marketing of financial products to consumers
This table lists legislation enacted from 1990 – 2010 that affects marketing.

A complete list of laws, starting with the Sherman Antitrust Act of 1890, can be found in Table 3.1 of this chapter.
31
Socially Responsible Behavior
Socially responsible companies actively seek out ways to protect the long-run interests of consumers and the environment.
Companies develop policies, guidelines, and other responses to complex social responsibility issues.
Socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment. Almost every aspect of marketing involves ethics and social responsibility issues. Companies are now developing policies, guidelines, and other responses to complex social responsibility issues.

Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply “do the right thing.”
32
Cause-Related Marketing
Companies use cause-related marketing to
Exercise their social responsibility
Build more positive images
Primary form of corporate giving
Controversy—strategy for selling more rather than a strategy for giving
To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. Cause-related marketing has become a primary form of corporate giving.

Critics worry that cause-related marketing is more a strategy for selling than a strategy for giving. Thus, companies using cause-related marketing might find themselves walking a fine line between increased sales and an improved image and charges of exploitation.
33
Cause-Related Marketing (CONT’D)
Ben & Jerry’s three-part “linked prosperity” mission drives it to make fantastic ice cream.
Economic Mission: manage our Company for sustainable financial growth.
Social Mission: use our Company in innovative ways to make the world a better place
Product Mission: make fantastic ice cream – for its own sake

Under its three-part mission, Ben & Jerry’s wants to make fantastic ice cream (product mission), manage the company for sustainable financial growth (economic mission), and use the company “in innovative ways to make the world a better place” (social mission). Ben & Jerry’s backs its mission with actions.
34
Caramel Non-Dairy Frozen Dessert With Fudge Chips, Graham Cracker Swirls & Chocolate Cookie Swirls
Colin Kaepernick is serving up sweet justice with the non-dairiest compilation of cookies & caramel. This flavor honors Colin’s activism in pursuit of racial justice & his portion of the proceeds from Change the Whirled™ go to Know Your Rights Camp. Learn more at Know Your Rights Camp

Cultural Environment
Institutions and other forces that affect a society’s basic values, perceptions, and behaviors
Persistence of cultural values
Core beliefs and values have a high degree of persistence.
Secondary beliefs and values are more open to change.
The cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. Society shapes basic beliefs and values. People grow up in a particular society that shapes their basic beliefs and values. They absorb a worldview that defines their relationships with others. Cultural characteristics can affect marketing decision making.

People in a given society hold many beliefs and values. Their core beliefs and values have a high degree of persistence and are passed on from parents to children and are reinforced by schools, churches, businesses, and government. For example, most Americans believe in individual freedom, hard work, getting married, achievement, and success. These beliefs shape more specific attitudes and behaviors found in everyday life.

Secondary beliefs and values are more open to change and include people’s views of themselves, others, organizations, society, nature, and the universe. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. Marketers have some chance of changing secondary values but little chance of changing core values.
36
Cultural Environment (CONT’D)
Shifts in secondary cultural values of people’s views about
Themselves
Others
Organizations
Society
Nature
Universe
Cultural characteristics that can affect marketing decision making are the persistence of cultural values and shifts in secondary cultural values, such as people’s views of themselves, others, organizations, society, and nature.

People’s views of themselves: People vary in their emphasis on serving themselves versus serving others.
People’s views of others: More “cocooning” – staying home, eating home-cooked meals
People’s views of organizations: Decline of loyalty toward companies
People’s views of society: Patriots defend it, reformers want to change it, and malcontents want to leave it.
People’s views of nature: Some feel ruled by it, in harmony with it, or seek to master it.
People’s views of the universe: Renewed interest in spirituality and development of more permanent values—family, community, earth, faith
37
Cultural Environment (CONT’D)
Riding the natural and organic foods trend, Annie’s is out to create a happier and healthier world with nourishing products that are “forever kind to the planet.”

Annie’s is out to create a happier and healthier world with nourishing foods and responsible conduct that is “forever kind to the planet.” Annie’s products are made from simple, natural ingredients grown by its farm partners. The products contain “no artificial anything,” says the company. “If it’s not real, it’s not Annie’s.” The company works closely with its food-supply-system
partners to jointly raise the bar for sustainability and organics. Annie’s also makes sustainable practices a top priority with its packaging—more than 90 percent of Annie’s packaging by weight is recyclable.
38
CULTURAL ENVIRONMENT – SOCIAL JUSTICE, 2020
https://youtu.be/drcO2V2m7lw
https://youtu.be/pcSP1r9eCWw
CULTURAL ENVIRONMENT – SOCIAL JUSTICE, 2021
TrainersForHire.com
Responding to the Marketing Environment
Reactive firms passively accept the marketing environment and do not try to change it.
Proactive firms develop strategies to change the environment.
They take aggressive actions to affect the publics and forces in their marketing environment.
Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. They passively accept the marketing environment and do not try to change it.

Other companies take a proactive stance toward the marketing environment. Rather than assuming that strategic options are bounded by the current environment, these firms develop strategies to change the environment. These firms take aggressive actions to affect the publics and forces in their marketing environment.

Marketing management cannot always control environmental forces. In many cases, it must settle for simply watching and reacting to the environment. For example, a company would have little success trying to influence geographic population shifts, the economic environment, or major cultural values. But whenever possible, smart marketing managers take a proactive rather than reactive approach to the marketing environment.
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PROCTER & GAMBLE, RESPONDING TO THE 2020 MARKETING ENVIRONMENT
Multimillion dollar push to address racial equality that also includes sponsoring two films from the Queen Collective on BET and a Time 100 Talks virtual event
P&G also set four benchmarks for itself:
Achieving 40% multicultural representation in the U.S.;
Accelerating its investments in Black-owned and -operated media companies, agencies and marketing suppliers;
Enacting reviews to ensure Black people — and all people — are represented fairly in its marketing and advertising;
Taking steps, including withholding budgets, to ensure its advertising doesn’t appear near hateful or discriminatory content.
Source: “9 pivotal campaigns that show how marketing transformed in H1”, MarketingDive.com, 7.13.20
https://youtu.be/U7bnS8R994I
Ted talk: the covid-19 crisis is a chance to do capitalism differently
https://www.ted.com/talks/mariana_mazzucato_the_covid_19_crisis_is_a_chance_to_do_capitalism_differently

Chapter 4 -Managing Marketing Information to Gain Customer Insights

Strategic Marketing, MASY1-GC 1230

Marketing Research at P&G: Creating Innovative Brands that provide “Irresistibly Superior Experiences”

To gain deep consumer insights, P&G employs a wide range of marketing research.

Art and science of consumer immersion research—“Living It”—in which small teams of P&G staffers live, work, and shop with consumers to gain deep insights into what they think, feel, need, and do

Traditional surveys and focus groups

Digital research platforms: online panels, web tracking, mobile surveys to big data collection and analytics

P&G uses innovative marketing research—lots and lots of it—to dig out deep and fresh consumer insights and then uses the insights to create transformational brands and marketing that deliver irresistibly superior experiences for consumers.

To gain deep consumer insights, P&G employs a wide range of marketing research approaches—from traditional large-scale surveys and small-scale focus groups to real-time social media listening, mobile surveys, and big data analytics.

3

Marketing Information

Customer needs and motives for buying are difficult to determine.

Required by companies to obtain customer and market insights

Provides competitive advantage

Generated in great quantities with the help of information technology and online sources

Most marketing managers are overloaded with data and often overwhelmed by it. Marketers don’t need more information; they need better information. And they need to make better use of the information they already have.

The real value of marketing research and marketing information lies in how it is used—in the customer insights that it provides.

4

Today’s “Big Data”

Big data refers to the huge and complex data sets generated by today’s sophisticated information generation, collection, storage, and analysis technologies.

Big data presents marketers with both big opportunities and big challenges. Companies that effectively tap this glut of big data can gain rich, timely customer insights.

Far from lacking information, most marketing managers are overloaded with data. Accessing and sifting through so much data is a daunting task. For example, when a large consumer brand such as Coca-Cola or Apple monitors online discussions about its brand in Tweets, blogs, social media posts, and other sources, it might take in a stunning 6 million public conversations a day, more than 2 billion a year.

5

Customer Insights

Fresh marketing information-based understandings of customers and the marketplace

Become the basis for creating customer value, engagement, and relationships

Customer insights teams collect customer and market information from a wide variety of sources.

Many companies are now restructuring their marketing research and information functions. They are creating customer insights teams which collect customer and market information from a wide variety of sources, ranging from traditional marketing research studies to mingling with and observing consumers to monitoring consumer online conversations about the company and its products. This information is then used to develop important customer insights from which the company can create more value for its customers.

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Customer Insights (CONT’D)

PepsiCo’s various marketing research departments are integrated “customer insights teams”.

Consumer insights: PepsiCo’s “consumer insights teams” wring actionable insights out of the glut of marketing data. They have even developed a consumer insights app to share custom designed content with brand decision makers.

Beyond just transmitting data and findings through traditional fact based presentations, reports, and spreadsheets, the Consumer Insights teams share their insights in more engaging, accessible, and digestible ways.

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Marketing Information System (MIS)

Consists of people and procedures to

Assess information needs

Develop the needed information

Help decision makers use the information to generate and validate actionable customer and market insights

It is essential for companies to design effective marketing information systems that give managers the right information, in the right form, at the right time and help them to use this information to create customer value, engagement and stronger customer relationships.

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The Marketing Information System

This figure shows that the MIS begins and ends with information users.

The information users are marketing managers, internal and external partners, and others who need marketing information. Marketers start by assessing user information needs. Next, they develop needed information using internal company databases, marketing intelligence activities, and marketing research. Finally, the MIS helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer engagement and relationships.

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Assessing Marketing Information Needs

A good MIS balances the information users would like to have against

What they really need

What is feasible to offer

Obtaining, analyzing, storing, and delivering information is costly.

Firms must decide whether the value of the insight is worth the cost.

Too much information can be as harmful as too little. Some managers will ask for whatever information they can get without thinking carefully about what they really need. Other managers may omit things they ought to know, or they may not know to ask for some types of information they should have.

The MIS must monitor the marketing environment to provide decision makers with information they should have to better understand customers and make key marketing decisions. It is important for firms to decide whether the value of the insights gained from the additional information is worth the cost of providing it. However, it is difficult to assess the value and cost.

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Developing Marketing Information

Information needed can be obtained from

Internal databases

Competitive marketing intelligence

Marketing research

Marketers can obtain the needed marketing information from internal data, marketing intelligence, and marketing research. Each of these sources are discussed in greater depth in the following slides.

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Internal Databases

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

USAA provides financial services to U.S. military personnel and their families, largely through direct marketing via the phone, the internet, and mobile channels. It maintains a huge customer database built from customer purchasing histories and information collected directly through customer surveys, transaction data, and browsing behavior at its web and social media sites. USAA uses the database to tailor direct marketing offers to the needs of individual customers.

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Internal Databases (CONT’D)

Internal databases are collections of consumer and market information obtained from data sources within the company network.

Internal databases usually can be accessed more quickly and cheaply than other information sources, but they also present some problems. Because internal information is often collected for other purposes, it may be incomplete or in the wrong form for making marketing decisions. Data also ages quickly; keeping the database current requires a major effort. Finally, managing and mining the mountains of information that a large company produces requires highly sophisticated equipment and techniques.

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Competitive Marketing Intelligence

Systematic monitoring, collection, and analysis of information

About consumers, competitors, and developments in the marketing environment

Techniques

Observing consumers first-hand

Quizzing the company’s own employees

Benchmarking competitors’ products

Conducting online research

Monitoring social media buzz

The goal of competitive marketing intelligence is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors’ actions, and providing early warnings of opportunities and threats.

Good marketing intelligence can help marketers gain insights into how consumers talk about and engage with their brands. Many companies send out teams of trained observers to mix and mingle personally with customers as they use and talk about the company’s products. Other companies, like MasterCard, have set up sophisticated digital command centers that routinely monitor brand-related online consumer and marketplace activity.

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Competitive Marketing Intelligence (CONT’D)

Offers insights about consumer opinions and their association with the brand

Provides early warnings of competitor strategies and potential competitive strengths and weaknesses

Helps firms to protect their own information

Raises ethical issues

Companies can monitor competitors’ Web sites and use the Internet to search specific competitor names, events, or trends and see what turns up. Tracking consumer conversations about competing brands is often as revealing as tracking conversations about the company’s own brands.

Companies can obtain important intelligence information from suppliers, resellers, and key customers. Intelligence seekers can pour through any of the thousands of online databases. For example, the U.S. Security and Exchange Commission’s database provides a huge stockpile of financial information on public competitors, and the U.S. Patent Office and Trademark database reveals patents that competitors have filed.

Some intelligence gathering techniques may involve questionable ethics. With all the legitimate intelligence sources now available, a company does not need to break the law or accepted codes of ethics to get good intelligence.

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Marketing Research

Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

Approaches followed by firms:

Use own research departments

Hire outside research specialists

Purchase data collected by outside firms

Companies use marketing research in a wide variety of situations. For example, marketing research gives marketers insights into customer motivations, purchase behavior, and satisfaction. It can help them to assess market potential and market share or measure the effectiveness of pricing, product, distribution, and promotion activities.

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The Marketing Research Process

Marketing research follows a process that has four steps: defining the problem and research objectives; developing the research plan; implementing the research plan; and interpreting and reporting the findings. Each of these stages is discussed in detail in the following slides.

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Defining the Problem and Research Objectives

Exploratory research

Used to gather preliminary information

Helps to define problems and suggest hypotheses

Descriptive research

Used to better describe the market potential for a product or the demographics and attitudes of consumers

Causal research

Used to test hypotheses about cause-and-effect relationships

Marketing managers and researchers must work together closely to define the problem and agree on research objectives. The manager best understands the decision for which information is needed, whereas the researcher best understands marketing research and how to obtain the information. Defining the problem and research objectives is often the hardest step in the research process.

After the problem has been defined carefully, the manager and the researcher must set the research objectives.

Managers often start with exploratory research and later follow with descriptive or causal research. The statement of the problem and research objectives guides the entire research process. The manager and the researcher should put the statement in writing to be certain that they agree on the purpose and expected results of the research.

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Research Plan

Outlines sources of existing data

Spells out

Specific research approaches

Contact methods

Sampling plans

Instruments that researchers will use to gather new data

Once researchers have defined the research problem and objectives, they must determine the exact information needed, develop a plan for gathering information efficiently, and present the plan to management.

Research objectives must be translated into specific information needs. For example, suppose that Chipotle Mexican Grill wants to know how consumers would react to the addition of drive-thru service to its restaurants. The proposed research might call for the following specific information:

Demographic, economic, and lifestyle characteristics of current Chipotle customers

Characteristics and usage patterns of the broader population of fast-food and fast-casual diners

Impact on the Chipotle customer experience

Chipotle employee reactions to drive-thru service

Forecasts of both inside and drive-thru sales and profits

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Research Plan (CONT’D)

Should be presented in a written proposal

Topics covered in a research plan:

Problems and research objectives

Information to be obtained

How results will help decision making

Estimated research costs

Type of data required

The research plan should be presented in a written proposal. A written proposal is important when the research project is large and complex or when an outside firm carries it out.

The proposal should cover the management problems addressed, the research objectives, the information to be obtained, and how the results will help management’s decision making. The proposal should also include estimated research costs.

To meet the manager’s information needs, the research plan can call for gathering secondary data, primary data, or both.

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Secondary Data

Information that already exists

Collected for another purpose

Sources:

Company’s internal database

Purchased from outside suppliers

Commercial online databases

Internet search engines

Researchers usually start by gathering secondary data. The company’s internal database provides a good starting point. Companies can buy secondary data from outside firms that supply high-quality data to suit a wide variety of marketing information needs.

The company can also utilize the wide assortment of external information sources. Using commercial online databases, marketing researchers can conduct their own searches of secondary data sources. Internet search engines can also help in locating relevant secondary information sources. However, they can also be very frustrating and inefficient.

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Secondary Data (CONT’D)

Advantages

Low cost

Obtained quickly

Cannot collect otherwise

Disadvantages

Potentially Irrelevant

Inaccurate

Dated

Biased

Secondary data can usually be obtained more quickly and at a lower cost than primary data. Also, secondary sources can sometimes provide data an individual company cannot collect on its own, like data that is not available directly or would be too expensive to collect. For example, it would be too expensive for Red Bull’s marketers to conduct a continuing retail store audit to find out about the market shares, prices, and displays of competitors’ brands.

However, secondary data can also present problems. Researchers can rarely obtain all the data they need from secondary sources. For example, Chipotle will not find existing information regarding consumer reactions about new drive-thru service that it has not yet installed. Even when data can be found, the information might not be very usable.

The researcher must evaluate secondary information carefully to make certain it is relevant, accurate, up-to-date, and impartial.

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Planning Primary Data Collection

Research ApproachesContact MethodsSampling PlanResearch Instruments
ObservationMailSampling unitQuestionnaire
SurveyTelephoneSample sizeMechanical instruments
ExperimentPersonalSampling procedure
Online

This table shows that designing a plan for primary data collection calls for a number of decisions on research approaches, contact methods, the sampling plan, and research instruments. The following slides discuss each of these decisions in detail.

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Research Approaches

Observational research

Gathering primary data by observing relevant people, actions, and situations

Ethnographic research: Sending trained observers to watch and interact with consumers in their natural environments

Survey research

Asking people questions about their knowledge, attitudes, preferences, and buying behavior

Experimental research

Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

Observational and ethnographic research yield the kinds of details that don’t emerge from traditional research questionnaires or focus groups. For instance, Fisher-Price has established an observation lab in which it can observe the reactions children have to new toys.

A wide range of companies now use ethnographic research. For example, Coors insights teams frequent bars and other locations in a top-secret, small-town location—they call it the “Outpost”—within a day’s drive of Chicago. The researchers use the town as a real-life lab.

Survey research is the approach best suited for gathering descriptive information. The major advantage of survey research is its flexibility. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, in person, or online. The disadvantages of survey research are that people may be unwilling to respond to unknown interviewers or answer questions about topics they consider private.

Whereas observation is best suited for exploratory research and surveys for descriptive research, experimental research is best suited for gathering causal information. Experimental research tries to explain cause-and-effect relationships. For example, before adding a new sandwich to its menu, McDonald’s might use experiments to test the effects on sales of two different prices it might charge.

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Primary Data

Landor researchers visit families, peeking into their refrigerators and diving deeply into their food shopping behaviors and opinions.

Landor researchers also shop with the families at their local supermarkets and look over their shoulders while they shop online. The families furnish monthly online reports detailing their shopping behaviors and opinions.

The Landor Families study provides rich behavioral insights for Landor clients such as Danone, Kraft Foods, and Procter & Gamble.

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Mail, Telephone, and Personal Interviewing

Mail questionnaires are used to collect large amounts of information at a low cost per respondent.

Telephone interviewing gathers information quickly, while providing flexibility.

Personal interviewing methods include

Individual interviewing

Group interviewing

Mail questionnaires can be used to collect large amounts of information at a low cost per respondent. Respondents may give more honest answers to more personal questions on a mail questionnaire than to an unknown interviewer. However, mail questionnaires are not very flexible.

Telephone interviewing is one of the best methods for gathering information quickly, and it provides greater flexibility than mail questionnaires. Interviewers can explain difficult questions and, depending on the answers they receive, skip some questions or probe on others. However, the method introduces interviewer bias, which is the way interviewers talk, how they ask questions, and other differences that may affect respondents’ answers.

Personal interviewing takes two forms: individual interviewing and group interviewing. Individual interviewing involves talking with people in their homes or offices, on the street, or in shopping malls. Such interviewing is flexible. Group interviewing consists of inviting 6 to 10 people to meet with a trained moderator to talk about a product, service, or organization. Group interviewing is also referred to as focus group interviewing.

Some companies use immersion groups, which are small groups of consumers who interact directly and informally with product designers without a focus group moderator present. For example, The Mom Complex uses “Mom Immersion Sessions” to help brand marketers understand and connect directly with their “mom customers” on important brand issues.

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Online Marketing Research

Data is collected through

Internet surveys

Online focus groups

Web-based experiments

Tracking consumers’ online behavior

Increasingly, researchers are collecting primary data through online marketing research. The Internet is especially well suited to quantitative research. Advantages of Internet-based surveys are speed and low costs. Researchers can quickly and easily distribute surveys to thousands of respondents and responses can be almost instantaneous. Internet-based surveys also tend to be more interactive and engaging, easier to complete, and less intrusive.

A primary qualitative Internet-based research approach is online focus groups. For example, FocusVision’s InterVu service lets focus group participants at remote locations see, hear, and react to each other in real-time, face-to-face discussions.

Both quantitative and qualitative Internet-based research have some drawbacks. One major problem is controlling who’s in the online sample. To overcome such sample and context problems, many online research firms use opt-in communities and respondent panels. Alternatively, many companies are now developing their own custom social networks and using them to gain customer inputs and insights.

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Online Behavioral and Social Tracking and Targeting

Online listening

Provides valuable insights into what consumers are saying or feeling about a brand

Behavioral targeting

Uses online consumer tracking data to target advertisements and marketing offers to specific consumers

Social targeting

Mines individual online social connections and conversations from social networking sites

Tracking consumers online might be as simple as scanning customer reviews and comments on the company’s brand site or on shopping sites such as Amazon.com. Or, it might mean using sophisticated online-analysis tools to deeply analyze the mountains of consumer brand-related comments and messages found in blogs or on social media sites. Online listening provides the passion and spontaneity of unsolicited consumer opinions.

In a practice called behavioral targeting, marketers use online data to target ads and offers to specific consumers. For example, if you place an Apple iPad in your Amazon.com shopping cart but don’t buy it, you might expect to see some ads for that very type of device the next time you visit your favorite ESPN site to catch up on the latest sports scores. Whereas behavioral targeting tracks consumer movements across online sites, social targeting mines individual online social connections and conversations from social networking sites. Instead of just having a Zappos.com ad for running shoes pop up because you’ve recently searched online for running shoes (behavioral targeting), an ad for a specific pair of running shoes pops up because a friend that you’re connected to via Twitter just bought those shoes from Zappos.com last week (social targeting).

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Sampling Plan

A sample is a segment of the population selected to represent the population as a whole.

Decisions required for sampling design:

Sampling unit – People to be studied

Sample size – Number of people to be studied

Sampling procedure – Method of choosing the people to be studied

Marketing researchers usually draw conclusions about large groups of consumers by studying a small sample of the total consumer population. The sample should be representative of the population so that the researcher can make accurate estimates. Designing the sample requires three decisions. First, who is to be studied (unit)? Second, how many people should be included (size)? Finally, how should the people in the sample be chosen (procedure)?

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Types of Samples

Table 4.2Types of Samples
Probability Sample
Simple random sampleEvery member of the population has a known and equal chance of selection.
Stratified random sampleThe population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group.
Cluster (area) sampleThe population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview.
Nonprobability Sample
Convenience sampleThe researcher selects the easiest population members from which to obtain information.
Judgment sampleThe researcher uses his or her judgment to select population members who are good prospects for accurate information.
Quota sampleThe researcher finds and interviews a prescribed number of people in each of several categories.

The different types of samples fall under two basic categories: probability samples and nonprobability samples.

Probability samples include the following.

Simple random sample: Every member of the population has a known and equal chance of selection.

Stratified random sample: The population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group.

Cluster (area) sample: The population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview.

Nonprobability samples include the following.

Convenience sample: The researcher selects the easiest population members from which to obtain information.

Judgment sample: The researcher uses his or her judgment to select population members who are good prospects for accurate information.

Quota sample: The researcher finds and interviews a prescribed number of people in each of several categories.

When probability sampling costs too much or takes too much time, marketing researchers take nonprobability samples, even though their sampling error cannot be measured. The best method to use depends on the needs of the research project.

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Research Instruments

Questionnaires can be administered in person, by phone, by e-mail, or online.

Closed-ended questions

Open-ended questions

Mechanical instruments include

People meters

Checkout scanners

Neuromarketing

In collecting primary data, marketing researchers have a choice of two main research instruments: questionnaires and mechanical instruments.

A questionnaire is by far the most common instrument used for research. Closed-ended questions include all the possible answers, and subjects make choices among them. Open-ended questions allow respondents to answer in their own words. Open-ended questions are especially useful in exploratory research, when the researcher is trying to find out what people think but is not measuring how many people think in a certain way. Closed-ended questions, on the other hand, provide answers that are easier to interpret and tabulate. Researchers should use care in the wording and ordering of questions.

Mechanical instruments are used to monitor consumer behavior. For example, Time Warner’s MediaLab uses high-tech observation to capture the changing ways that today’s viewers are using and reacting to television and Web content.

Some researchers are applying neuromarketing, which involves measuring brain activity to learn how consumers feel and respond. For example, PepsiCo’s Frito-Lay worked with Nielsen’s NeuroFocus to assess consumer motivations underlying the success of its Cheetos snack brand.

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Research Instruments (CONT’D)

Using neuroscience methods, Nielsen charted how people’s brains responded to an existing Shelter Pet Project public service ad and the ad’s canine star, Jules the dog.

In collecting primary data, marketing researchers have a choice of two main research instruments: questionnaires and mechanical instruments.

A questionnaire is by far the most common instrument used for research. Closed-ended questions include all the possible answers, and subjects make choices among them. Open-ended questions allow respondents to answer in their own words. Open-ended questions are especially useful in exploratory research, when the researcher is trying to find out what people think but is not measuring how many people think in a certain way. Closed-ended questions, on the other hand, provide answers that are easier to interpret and tabulate. Researchers should use care in the wording and ordering of questions.

Mechanical instruments are used to monitor consumer behavior. For example, Time Warner’s MediaLab uses high-tech observation to capture the changing ways that today’s viewers are using and reacting to television and Web content.

Some researchers are applying neuromarketing, which involves measuring brain activity to learn how consumers feel and respond. Neuromarketing helped improve the effectiveness of ads for the Shelter Pet Project, increasing viewer attention, emotional engagement, and memory recall and more than doubling traffic to the organization’s website.

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Implementing the Research Plan

Data collection

Researchers should guard against various problems.

Techniques and technologies

Data quality

Timeliness

The researcher next puts the marketing research plan into action. This involves collecting, processing, and analyzing the information. Data collection can be carried out by the company’s marketing research staff or outside firms. Researchers make sure that the plan is implemented correctly and must guard against problems with data collection techniques and technologies, data quality, and timeliness.

Researchers must also process and analyze the collected data to isolate important information and insights. They need to check data for accuracy and completeness and code it for analysis. The researchers then tabulate the results and compute statistical measures.

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Implementing the Research Plan (CONT’D)

Processing the data

Check for accuracy

Code for analysis

Analyzing the data

Tabulate results

Compute statistical measures

The researcher next puts the marketing research plan into action. This involves collecting, processing, and analyzing the information. Data collection can be carried out by the company’s marketing research staff or outside firms. Researchers make sure that the plan is implemented correctly and must guard against problems with data collection techniques and technologies, data quality, and timeliness.

Researchers must also process and analyze the collected data to isolate important information and insights. They need to check data for accuracy and completeness and code it for analysis. The researchers then tabulate the results and compute statistical measures.

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Interpreting and Reporting Findings

Responsibilities of the market researcher:

Interpret the findings

Draw conclusions

Report findings to management

Responsibilities of managers and researchers:

Work together closely when interpreting research results

Share responsibility for the research process and resulting decisions

The market researcher must interpret the findings, draw conclusions, and report them to management. The researcher should present important findings and insights that are useful in the major decisions faced by management.

The best research means little if the manager blindly accepts faulty interpretations from the researcher. In many cases, findings can be interpreted in different ways, and discussions between researchers and managers will help point to the best interpretations. Thus, managers and researchers must work together closely when interpreting research results, and both must share responsibility for the research process and resulting decisions.

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Customer Relationship Management (CRM)

Managing detailed information about individual customers

Carefully managing customer touch points to maximize customer loyalty

Consists of software and analysis tools that

Integrate customer information from all sources

Analyze data in depth

Apply the results

Customer relationship management (CRM) is used to manage detailed information about individual customers and carefully manage customer touch points to maximize customer loyalty. CRM consists of sophisticated software and analysis tools from companies such as Salesforce.com, Oracle, Microsoft, and SAS that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships.

By using CRM to understand customers better, companies can provide higher levels of customer service and develop deeper customer relationships. CRM provides a 360-degree view of the customer relationship. Firms can use CRM to pinpoint high-value customers, target them more effectively, cross-sell the company’s products, and create offers tailored to specific customer requirements.

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Big Data and Marketing Analytics

Marketing analytics consists of the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance.

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Customer Relationship Management (CRM) (CONT’D)

While avid Netflixers are busy watching Netflix videos, Netflix is also busy watching them.

Netflix tracks and parses member data on tens of millions of searches, ratings, and “plays.” The company’s bulging database contains every viewing detail for each individual subscriber—real-time data on what shows they watch, at what times, on what devices, at what locations, even when they hit the pause, rewind, or fast-forward buttons during programs.

Such analytics employ artificial intelligence (AI), technology by which machines think and learn in a way that looks and feels human but with a lot more analytical capacity.

Using this rich base of big data, Netflix builds detailed individual subscriber profiles and then uses these profiles to tailor each customer’s viewing experience and make personalized recommendations.

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Distributing and Using Marketing Information

MIS must make information readily available for decision making.

Routine information for decision making

Non-routine information for special situations

Intranets and extranets facilitate the information-sharing process.

The marketing information system must make information readily available to managers and others who need it, when they need it. In some cases, this means providing managers with routine information such as performance reports, intelligence updates, and reports on the results of research studies. But, marketing managers also require non-routine information to make on-the-spot decisions. For example, a sales manager having trouble with a large customer may want a summary of the account’s sales and profitability over the past year.

Many firms use company intranet and internal CRM systems to facilitate the distribution and use of marketing information. Companies are also increasingly allowing key customers and value-network members to access account, product, and other data on demand through extranets.

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Marketing Research in Small Businesses and Nonprofit Organizations

Obtaining good marketing insights

Secondary data collection

Observation

Surveys

Experiments

Responsibility of managers

Think carefully about the research objectives

Formulate questions in advance

Recognize the biases introduced by smaller samples and less skilled researchers

Conduct the research systematically

Just like larger firms, small organizations need market information and the customer insights that it can provide. Many marketing research techniques can be used by smaller organizations in a less formal manner and at little or no expense.

Small businesses and not-for-profit organizations can obtain good marketing insights through observation or informal surveys using small convenience samples. They can collect a considerable amount of information at very little cost online. They can scour competitor and customer Web sites and use Internet search engines to research specific companies and issues.

Although these informal research methods are less complex and less costly, they still must be conducted with care. Managers must think carefully about the objectives of the research, formulate questions in advance, recognize the biases introduced by smaller samples and less skilled researchers, and conduct the research systematically.

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International Marketing Research

The problems faced include

Dealing with diverse markets

Finding good secondary data in foreign markets

Developing good samples

Reaching respondents

Handling differences in culture, language, and attitudes toward marketing research

The cost of research is high, but the cost of not doing it is higher.

International researchers follow the same steps as domestic researchers, from defining the research problem and developing a research plan to interpreting and reporting the results. However, they often face more and different problems.

In many foreign markets, the international researcher may have a difficult time finding good secondary data. Because of the scarcity of good secondary data, international researchers must collect their own primary data, and reaching respondents is not always easy in other parts of the world.

Cultural differences from country to country cause additional problems for international researchers. Language is the most obvious obstacle. Consumers in different countries also vary in their attitudes toward marketing research. Customs in some countries may prohibit people from talking with strangers.

Although the costs and problems associated with international research may be high, the costs of not doing it might be even higher. Once recognized, many of the problems associated with international marketing research can be overcome or avoided.

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Intrusions on Consumer Privacy

Failure to address privacy issues results in

Angry, less cooperative consumers

Increased government intervention

Best approaches for researchers:

Asking only for the information needed

Using the information responsibly to provide customer value

Avoiding sharing the information without the customer’s permission

Even though many customers feel positive about marketing research and believe that it serves a useful purpose, there are others who strongly resent or even mistrust marketing research.

Failure to address privacy issues could result in angry, less cooperative consumers and increased government intervention. As a result, the marketing research industry is considering several options for responding to intrusion and privacy issues. One example is the Marketing Research Association’s “Your Opinion Counts” and “Respondent Bill of Rights” initiatives to educate consumers about the benefits of marketing research and distinguish research from telephone selling and database building.

Most major companies have now appointed a chief privacy officer (CPO), whose job is to safeguard the privacy of consumers who do business with the company. If researchers provide value in exchange for information, customers will provide it. For example, Amazon.com customers do not mind if the firm builds a database of products they buy as a way to provide future product recommendations. The best approach is for researchers to ask only for the information they need, use it responsibly to provide customer value, and avoid sharing information without the customer’s permission.

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Intrusions on Consumer Privacy (CONT’D)

Target made some customers uneasy by using their buying histories to figure out “private” things about them.

By studying the buying histories of women who’d previously signed up for its baby registries, Target found that it could develop a “pregnancy prediction” score for each customer based on her purchasing patterns across 25 product categories. It used this score to start sending personalized books of coupons for baby-related items to expectant parents, keyed to their pregnancy stages.

However, the strategy hit a snag when an angry man showed up at his local Target store, complaining that his high school–aged daughter was receiving Target coupons for cribs, strollers, and maternity clothes. “Are you trying to encourage her to get pregnant?” he demanded. The Target store manager apologized. But when he called to apologize again a few days later, he learned that Target’s marketers had, in fact, known about the young woman’s pregnancy before her father did.

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Misuse of Research Findings

Few advertisers rig their research designs or deliberately misrepresent the findings.

Solutions:

Development of codes of research ethics and standards of conduct

Companies must accept responsibility to protect consumers’ best interests and their own.

Research studies can be powerful persuasion tools. But in some cases, research surveys appear to have been designed just to produce the intended effect. Few advertisers openly rig their research designs or blatantly misrepresent the findings. Most abuses are subtle stretches so as to avoid disputes over the validity and use of research findings.

Recognizing that surveys can be abused, several associations—including the American Marketing Association, the Marketing Research Association, and the Council of American Survey Research Organizations (CASRO)—have developed codes of research ethics and standards of conduct. For example, the CASRO Code of Standards and Ethics for Survey Research outlines researcher responsibilities to respondents, including confidentiality, privacy, and avoidance of harassment. Each company must accept responsibility for policing the conduct and reporting of its own marketing research to protect consumers’ best interests and its own.

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TED TALK: The Human Insights Missing from Big Data

Your Digital Footprint Matters! (InternetSociety.org Tutorial)

https://www.internetsociety.org/tutorials/your-digital-footprint-matters/

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