Download - Bmgt 411 week3
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BMGT 411: Week #3
Kottler: Chapter 3 - Collecting Information and Forecasting DemandChapter 4 - Creating Long Term Loyal RelationshipsWood:Chapter 2 - Analyzing the current situation
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Kottler Chapter 3: Collecting Information and Forecasting Demand
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BMGT 411: Chapter 3
• Marketing Information System: Consists of people, equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely information to marketing decision makers
• Internal Company Records: CRM Systems are an effective system for marketers
• Marketing Intelligence: Competitive and Industry Analysis
• Marketing Research: Primary and Secondary
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American Eagle Outfitters
Types of Internal Sales Tools
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BMGT 411: Chapter 3• Examples of Internal Sales Tools at American Eagle Outfitters
• Raw Sales Data
• Cost per Transaction or Basket Size
• Conversion
• Repeat Visits
• STS Sales
• Seasonal Sales
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Marketing Research
def: Systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation
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The Marketing Research Process
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BMGT 411: Chapter 3• Step #1: Justify the need for marketing research. If there is no need, kill the project
here.
• How will this marketing research help you improve sales?
• How will the marketing research help solve a problem?
• How will the marketing research identify a target market?
Four Considerations
1. Potential usefulness of the results
2. Management attitudes towards marketing research
3. Resources available for implementation
4. Costs vs. benefits8
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BMGT 411: Chapter 3• Step #2: Define the problem and research objectives
• Problem and objectives should be very clear
• Problem or objectives should help define what type of research is needed
Types of Research
1. Exploratory: To investigate a general problem and possible solutions
2. Descriptive: Very specific to help forecast demand or likeness
3. Causal: To test a cause and effect relationship when adding variables
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BMGT 411: Chapter 3• Step #3: Identify data needs
• What type of information are you looking for
• Scrutinize the research purpose
• List the types of data that will fulfill this purpose
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BMGT 411: Chapter 3• Step #4: Identify data sources. If the data can be acquired using existing
secondary research, you may be able to skip to step #9
• Primary Data
• Data obtained directly from consumer to fulfill a specific purpose
• More expensive approach
• Secondary Data
• Data that are readily available from other sources
• Internal or external
• Often less expensive to use11
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BMGT 411: Chapter 3• Step #5: Choose an appropriate research design and data collection method
Research Proposal
• Serves as a blueprint for the execution of the product
• Explains
• Purpose and scope of the project
• The specific design of the project
• Sample design
• Data collection procedures
• The data analysis plan
• The project timetable
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BMGT 411: Chapter 3• Step #5: Main Types of Marketing Research Approaches
Quantitative:
• Survey Research
• Behavioral Data
• Experimental research
Qualitative:
• Observation
• Focus Groups13
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BMGT 411: Chapter 3• Step #6: Design the Research Instrument of Form
1. Questionnaires: Most common due to flexibility
2. Qualitative Measures: Unstructured and often revealing
3. Technological Devices: Often measures body’s reactions to applied stimulation
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BMGT 411: Chapter 3• Step #7: Identify the sample
1. Sampling Unit: Whom should we survey?
2. Sample Size: How many people should we survey?
3. Sampling Procedure: How should respondents be chosen?
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BMGT 411: Chapter 3• Step #8: Collect the Data
• In Person: Very expensive and time consuming
• Phone: Still popular, assisted by computers
• Mail: Dying form of collection
• Online: Popular and inexpensive (www.surveymonkey.com)
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BMGT 411: Chapter 3• Step #9: Analyze and Interpret the Data
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BMGT 411: Chapter 3• Step #10: Present Research Findings and
Recommendations
• Often the Most important part of the process
• Should be visual and easy to understand
• Recommendations should tie back to research objective
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Visual Marketing Research
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Forecasting Measures of Market Demand
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Forecasting:The art of estimating future demand by anticipating what buyers are likely to do under a given set of conditions.
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BMGT 411: Chapter 3• Potential Market: Set of consumers with a sufficient level of interest in a market
offer
• Available Market: Set of consumers who have interest, income, and access to a particular offer
• Target Market: The part of the available market the company decides to pursue
• Penetrated Market: The set of consumers who are buying the companies product
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BMGT 411: Chapter 3• Methods to Grow Sales:
1.Attract more buyers from the target market
2. Lower qualifications for potential buyers
3. Expand it’s market by adding stores, lowering price, or repositioning itself to attract more buyers
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BMGT 411: Chapter 3• Total Market Demand Equation:
Q = n x q x p
Q = total market demandn = number of buyers in the marketq = quantity purchased by an average buyer per year
p = price of an average unit
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BMGT 411: Chapter 3• US Car Total Market Potential
Q = n x q x p
Q = total market demandn = 20,000,000
q = 1
p = $25,000
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BMGT 411: Chapter 3• US Car Total Market Potential
Q = 20,000,000 x 1 x 25,000
Q = 500,000,000
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Ford’s Goal: 25% $125,000,000 Forecast
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BMGT 411: Chapter 3
• Key Variables in Forecasting:
• Demographics
• Population Growth
• Population Age Mix
• Diversity
• Education
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BMGT 411: Chapter 3
• Key Variables in Forecasting:
• Economics
• Consumer Psychology (Groupon Effect)
• Income Distribution
• Income, Savings, Debt, Credit
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BMGT 411: Chapter 3• Key Variables in Forecasting:
• Sociocultural
• Views of ourselves: Today, many gen y’ers are showing behaviors similar to the greatest generation (Saving, etc)
• Views of others
• Views of organizations
• Views of Society
• Views of nature
• Views of the universe
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TechnologyIncreased innovation makes forecasting difficult, and changes quickly compared to the past
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BMGT 411Chapter 4: Creating Long Term Loyalty Relationships
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Apple33
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Kohl’s34
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Walmart35
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Zappos.com36
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Building Customer Value and Satisfaction
• Customer perceived value (CPV)—the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
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Determinants of Customer Perceived Value (CPV)
• Total customer value
• Product value
• Services value
• Personnel value
• Image value
• Total customer cost
• Monetary cost
• Time cost
• Energy cost
• Psychic cost
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Loyalty
• A deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior
• What product are you loyal to?
• Why?
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New Balance 99040
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Satisfaction
• A person’s feelings of pleasure or disappointment that result from comparing a product’s perceived performance (or outcome) to expectations.
• What products or services exceed your expectations?
• What would you do if a product or service did not meet your expectations?
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Wegmans42
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Product and Service Quality
• Quality (or grade) is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
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Marketers’ Roles in Delivering Quality
• Correctly identifying customers’ needs and requirements
• Communicate customer expectations properly to product designers
• Be sure orders are filled correctly and on time
• Provide customers with proper instructions, training, and technical assistance
• Stay in touch with customers after the sale
• Gather customer ideas for improvements and convey them to the appropriate departments
• Who do you feel is managing quality performance good today?
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@comcastcares45
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Customer Profitability
• A profitable customer is one that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream for attracting, selling, and servicing that customer.
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Goal is to Maintain Profitable Customers Shift Low Profit Customers Into Higher Profit Products Over Time
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Customer Profitability Analysis (CPA)
• Best conducted with an accounting technique called Activity-Based Costing (ABC).
• Estimate all revenue coming from the customer, less all costs that go into serving that customer.
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Customer Lifetime Value (CLV)
• Describes the net present value of the stream of future profits expected over the customer’s lifetime purchases.
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CLV Equations50
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CLV Importance
• Example: Grocery Store
• Average Yearly Spend: $5,200 (a)
• Average LifeSpan: 30 Years (t)
• Using the simple equation, what is the average Customer Life Time Value of a Grocery Store Customer?
• CLV = (a x t)
• 15,000 Customers in this segment
• Segment CLV = $2,340,000,00051
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Cultivating Customer Relationships
• Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer “touch points” to maximize customer loyalty.
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CRM Best Practices
• Identify Prospects and Customers: Don’t go after everyone. Build and mine a customer database with information from all channels and customer touch points
• Differentiate customers in terms of (1) their needs and (2) their value to the company: Defend aggressively your most valuable customers, while trying to grow relationships with less profitable customers
• Interact with individual customers to improve your knowledge about their individual needs and to build stronger relationships
• Customize products, services, and marketing messages to each customer
• Who do you feel is doing this well for you?
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Traditional Marketing Funnel
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Traditional Marketing Funnel
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Customer Database and Database Marketing
• Customer database—an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for marketing purposes.
• Database marketing—the process of building, maintaining, and using customer databases and other databases to make contact, facilitate transactions, and build customer relationships.
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Data Warehouse and Datamining
• Data warehouse—organized data where marketers can capture, query, and analyze it to draw inferences about an individual customer’s needs and responses.
• Datamining—statisticians extract useful information about individuals, trends, and segments from the mass of data.
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Database Uses
• Identify the best prospects
• Match a specific offer with a specific customer as a way to sell, cross-sell, and up-sell
• Deepen customer loyalty by remembering preferences and offering relevant incentives and information
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Downside of Database Marketing and CRM
• Large investment
• Difficulty in getting everyone to be customer oriented
• Not all customers want an ongoing relationship
• Assumptions behind CRM may not always hold true
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Wigle Whiskey
• What kind of ideas do you have to increase long term loyalty?
• How should Wigle use the CLV equation?
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BMGT 411: Week #3
Wood: Chapter 2: Analyzing the Current Situation
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http://www.youtube.com/watch?v=STuR40eiss4
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Environmental Scanning and Analysis
Involves the analysis of :
Internal Factors,
External Factors, and
Competitive Factors.
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The Macro- and Microenvironments To formulate a flexible and practical marketing plan, one needs to
properly track and differentiate between macroenvironmental and microenvironmental factors: Macroenvironmental factors are broad forces that impact overall marketing strategy
and performance. Microenvironmental factors more directly influence marketing strategies and activities.
Macroenvironmental factors: political-legal, economic, social-cultural, technological, and ecological forces.
Microenvironmental factors: customers, competitors, channel members, partners, suppliers, and employees.
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SWOT Analysis SWOT stands for:
Strengths Weaknesses Opportunities Threats
A common way of organizing what you have learned from the environmental scanning process.
Should be conducted for both your own firm and for key competitors.
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Internal Factors
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Internal Analysis: Resources
Human
Financial
Informational
Supply
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Internal Analysis: OfferingsExamining what the firm is currently offering in the way of
goods and services:
Affirm the role of each line and item.
Consider how the offerings contribute to relationships with distributors and customers.
Assess fit with mission and resources.
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Internal Analysis: Previous Results Includes:
Sales (dollars and units) Profitability Other financial results
Helpful to look for trends in the data.
Helps separate the effective programs from the less-effective programs.
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Internal Analysis: Business Relationships
Includes relationships with: Suppliers
Distributors
Other business partners
Examine: Capacity
Quality
Value provided
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Keys to Success:
Identify special factors most crucial to success.
Maintain focus on key priorities.
Warning Signs
Indicate potential problems with leveraging the keys to success and performing as planned.
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External Factors2-12
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External Analysis: Political-Legal Trends
International, federal, state, and local laws and regulations:
Competitive behavior
Pricing
Taxation
Promotion
Distribution
Product liability
Labeling
Product purity, and
Other issues…
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External Analysis: Economic Trends Must keep an eye on
global, national, regional, and local economic trends.
Some measures typically monitored:
Buying power
Income
Debt
Credit Usage
Consider foreign exchange trends.
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External Analysis: Social-Cultural Trends Consumer Demographics
Business Demographics
Cross-Cultural Influences
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External Analysis: Demographic Trends
Key consumer demographic trends include:
Population growth
Population composition: Age Gender Ethnic background Religious background Education Occupation Household size Income
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External Analysis: Bus. Demographic Trends Size and growth of industries
Number of companies
Number of locations or branches
Number of employees
Sales revenues
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External Analysis: Cross-Cultural Influences Due to globalization, social and cultural trends may begin
in one market and then spread to others.
Cross-cultural trends represent potential opportunities for marketers.
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External Analysis: Technological TrendsKey trends include:
The Internet
Smartphones and mobile technology
Digital media
Incorporation of electronic capabilities into a wider range of products
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External Analysis: Ecological TrendsPotential impacts:
Availability of raw materials
Government regulations
Social attitudes
“greenwashing”: positioning goods and services as ecologically friendly, even when they are not.
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External Analysis: Competitors Better understand market dynamics.
Anticipate competitor activities.
Identify:
Current competitors
Possible future competitors
Learn about the unique competitive advantages of each competitor.
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BMGT 411: Week 4
• Study for Test #1
• Kottler Chapters 1-4
• Wood Chapters 1-2
• Read Chapters:
• Kottler: Chapters 5, 6, 7
• Wood: Chapters: 3, 4
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