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2 Marketing (Subject) / -TOOLS (Lesson)
- Steps: Conjoint Analysis Create set of products (hypothetical and real) that are combinations of relevant product attributes Ask respondents to expess their preferences (e.g. rank, choice) for these product concepts Regression methods to decompose overall preference evaluations into part-worths (values a respondent implicitly assigns to each level of each attribute)
- Context: Adoption, New Product It is important to understand the adoption process and the factors affecting its speed as we develop marketing programs in support of new products and services The mental steps through which an individual passes from first hearing about an innovation to adopting Some individuals are inevitably more open to innovations than others.These individuals need less benefit to adoptions and pass it on The Diffusion process has a contagion effect.Segmentation as per innovativeness The number of Non-Adopters (Followers) is a function of how many innovators adopted. Innovators: Adopt the innovation at a rate independent of the number of adopters Need to understand the "Chasm" and the Cracks in the Bell curve There is a risk that we might not reach Early Majority if benefit for less risk was not well communicated
- Context: Understand Existing Products - Product Life Cycle We need to understand the life of our product, as reflected by its sales. It is said to have four stages: introduction, growth, maturity, decline. Each stage has different implications for marketing activity: information, distribution, pricing, advertising efficiency will change depending on the PLC-stage
- Context Pricing •The firm creates value for the customers primarily through the non-price elements of the marketing mix. Price is the firm’s attempt to capture some of that value and generate revenues (and profits).•Price affects sales volume, profit margin via price and costs, and customers’ perceptions of quality and value.•Given an understanding of consumer needs and benefits offered by the product, prices should be set relative to competition to provide superior value for the target customers and the company. •The price elasticity of demand is a summary measure of aggregate price sensitivity•We need to understand the interplay between price-induced changes in margin and price sensitivity•Understand the effects of experience on costs
- Steps - Segmentation Define purpose and scope Collect data Decide Segmentation variables Identify Segments using Factor analysis Profile the segments (using the rest of the data in the dataset) Effectiveness vs. Efficienct
- Context: Importance of Segmentation The process of grouping customers together in such a way that those who belong to the same group respond relatively similarly to a marketing offering and those in different groups respond relatively differently Less variation within groups than across groups on relevant customer characteristicsDivide heterogeneous group of customers with different needs into homogeneous subgroups with similar needs Enables to make more efficient and more effective use of scarce resources with focus on benefit preferences of specific customers (i.e. benefits sought, goals, media consumption, channel preferences, Willingness-to-Pay, Expertise) Design better offerings, produce superior products, align markcoms Better chance of providing superior value to customers (and therefore extracting more value for them Firms do not create segments, they uncover them; an analytical and creative "construction" exercise, not a search for underlying "truth"
- Tools: Descriptors Who Demographic: Gender, Age, Income, Generation, Occupation, Education Psychographic: Lifestyle, Personality, Activities, Interests, Environmental-friendly Geographic: Urban/rural, Climate (McDonalds) What Behavioral: Usage, Loyalty, Product knowledge, Involvement, Buying Stage CLV: Profitability Why Benefit sought: Convenience, Value, StatusDecision-Processes
- Steps - The Marketing Process Marketing Strategy FormationMarketing PlanningProgramming, Allocation, BudgetingImplementationMonitoring, AuditingResearch, Analysis
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