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Promotion mix and Market Research
Week-10Lecture Hour
04/21/23 Dr. Yuvaraj 1
Marketing Communications Mix
The marketing communications mix comprises:
AdvertisingSales promotionPublic relations & publicityPersonal sellingDirect marketing
04/21/23 Dr. Yuvaraj 2
Why?
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Includes:TVnewspapersmagazines & periodicals
cinema radiobillboards & posters Internetother media
eg buses, taxis, petrol pumps
Advertising
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Best use of the media
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TV large audience see product-in-use sound and vision relaxing environment cable, satellite and digital provide scope to segment
expensive consumers may find commercials irritating
PVRs can screen out
Media Choice
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What fits in?
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Find the taste!
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Jingle stays longer….!
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Guerilla Marketing
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Internet growth medium consumers actively seeking information
can be interactive sound, pictures and words
segmentation possibilities
on-line shopping ‘pop-ups’ irritate
Media Choice
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Media SelectionCharacteristics of target audience
Media usage behaviour, exposure
BudgetCreative constraints
Best presentation of the message eg visuals, colour
Timing Seasonality of offering; cost of media at different times
Reach and frequency How wide message needs to be spread, and how often
Media Choice
04/21/23 Dr. Yuvaraj 13
Sales Promotion
Generally short term incentives to stimulate sales people to sell, customers to buy/use
Growing in popularity: Quick response Easier targeting Consumers increasing deal-orientation Often easier to evaluate Aims to break down brand loyalty
e.g. Encourage product trial, brand switching Encourage new product trial
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Best combo!!!
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Potential Disadvantages
Frequent offers may ‘cheapen’ the brand image
Encourages consumer promiscuity Consumers wait for the special offer and stockpile
Often used to meet ‘year end’ targets Reduces subsequent sales
Subsidises those who would have purchased anyway
04/21/23 Dr. Yuvaraj 16
Internet Transactions
Business
Consumer
Business Consumer
B2B
e.g. auto industry
C2B
e.g. Priceline
B2C
e.g. Amazon
C2C
e.g. eBay
Source: The Economist04/21/23 Dr. Yuvaraj 17
Publishing One-way provision of information
Interaction, e.g On-line customer service Games, promotions
Transaction On-line purchasing
Integration Automated management of supply chain
Levels of On-Line Marketing
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Product What products, customer service to offer
Price Same, cheaper or higher than off-line Delivery charges
Promotion Internet only or include traditional Marketing communications mix decisions Affiliate marketing
Place In-house or outsource distribution logistics
The On-Line 4Ps
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B2B and B2C Electronic Commerce
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E-Commerce Business Models
Online direct marketing
Electronic tendering system
Name-your-own-price
Find-the-best-price
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E-Commerce Business Models
Affiliate marketing
Note the Sony logo at the top of this Web page www.howstuffworks.com
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E-Commerce Business Models
Viral marketing
Group purchasing
Online auctions
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E-Commerce Business Models
Product customization
Deep discounters
Membership
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E-Commerce Business Models
Bartering
online
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Benefits of E-Commerce
Benefits to organizations Makes national and international markets more
accessible Lowering costs of processing, distributing, and
retrieving information
Benefits to customers Access a vast number of products and services
around the clock (24/7/365)
Benefits to Society Ability to easily and conveniently deliver
information, services and products to people in cities, rural areas and developing countries.
04/21/23 Dr. Yuvaraj 26
Limitations of E-Commerce
Technological Limitations Lack of universally accepted security standards Insufficient telecommunications bandwidth Expensive accessibility
Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers
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consumers are multitasking
Source: PiperJaffray
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And…consumers don’t like ADS
Source: PiperJaffray
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Eight Types of Web sites for Advertising
Portals: most popular; best for reach but not targeting
Search: second largest reach; high advertising value
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Eight types of sites (continued)
Commerce: high reach; not conducive to advertising
Entertainment: large reach; strong targetability
Mall of Hawai’i
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Eight types of sites (continued)
Community: emphasize being a part of something; good for specific advertising
Communications: not good for branding; low targetability
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Eight types of sites (continued)
News/weather/sports: poor targetability
Games: good for very specific types of advertising
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What it is not: Forcing people to buy things they do not want Having ‘the gift of the gab’ Cheating, conning and lying
The interpersonal arm of the promotional mix: Two-way Communicate with end customers, channels, intermediaries
Represent the company to customers Represent customers to the company
Increasing emphasis on the concept of relationship marketing
Personal Selling
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The Selling Process
Prospecting and qualifying Pre-approach Approach Presentation and demonstration Overcoming objections Closing Follow-up and maintenance
04/21/23 Dr. Yuvaraj 35
Salesforce Management
Structure / deployment e.g. Geographical, product, market
Compensation Usually fixed + variable (OTE) e.g. Revenue, profit, product mix
Recruitment, selection, training Motivating & managing Evaluating performance
04/21/23 Dr. Yuvaraj 36
Sales Force
Pros Two-way communication with customer
Build relationships
Speedy feedback
Often essential Flexible focusing/targeting
Cons Expensive Requires managerial infrastructure
Focus on volume / revenue can lead to short term, less profitable, approach
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Market Research Market Information System
04/21/23 Dr. Yuvaraj 38
Sources of information
Internal recordsMarketing intelligenceCompetitor intelligenceMarketing research
04/21/23 Dr. Yuvaraj 39
Marketing information system (MIS)
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Information and conclusionsDecision-makingSolving a particular problem Continuous improvementTest:
Ideas and conceptsMarketing mix components
Why Market Research?
04/21/23 Dr. Yuvaraj 41
Limitations
Does not make decisionsNot a substitute for judgementCannot accurately predict the futureLess useful for very innovative, unique ideas
Can be wrong…..
04/21/23 Dr. Yuvaraj 42
The Sony Walkman (1979)
“Sony co-founders Akio Morita and Masaru Ibuka came up with the idea, but their own product development team almost rejected it, predicting sales of just 5,000 units per month. Two months after its launch 50,000 units had been sold….sales reached 100 million in spring 2000”
Source: Marketing magazine, 13 July 2000
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MR Process Problems
Unclear objectives Inappropriate methodologyData entry errorsShallow analysisBias…
04/21/23 Dr. Yuvaraj 44
Bias
Highly precise but wrong resultsSystematic error – cannot be measured
Unrepresentative sample Sample size Questionnaire design Nature of question Interview environment Interviewer bias
04/21/23 Dr. Yuvaraj 45
The Survey Process
Problem definition & objectives (FUNDAMENTAL)
Data (qualitative and/or quantitative)SamplingQuestionnaire designData collection (fieldwork)Data input & processingAnalysis & reporting
04/21/23 Dr. Yuvaraj 46
New Coke
Coca-Cola’s failed flavour re-formulation in the 1980s
Research problem defined as ‘taste not as good as Pepsi’ being the issue
Problem was actually ‘why losing sales to Pepsi’
Conclusion: C-C defined the problem & research objectives incorrectly and thus collected interesting but useless (in fact – damaging) MR data
See ‘Marketing Mistakes’ (6th Ed) by Robert Hartley
04/21/23 Dr. Yuvaraj 47
Data Sources
Secondary data - already exists Internal and external
Primary data – collected first-hand e.g. Your survey project
Always review Secondary Data first
04/21/23 Dr. Yuvaraj 48
Qualitative Research
No imposed structure, can explore issues in detail
Engages respondents in discussion Useful for uncovering attitudes and opinions Provides depth - the ‘why’
BUT
Relies on interviewer skills Results are interpreted Cannot analyse statistically More expensive to analyse
04/21/23 Dr. Yuvaraj 49
Qualitative Collection Methods
Depth interviewFocus groupSelf-completion questionnaireObservation Projective techniques
04/21/23 Dr. Yuvaraj 50
Qualitative Questions
Engage respondents in conversationSemi-structured
Topic list with some order of questions
Unstructured Topic prompts for discussion
Broad, open questions Who, what, why, when, where, how, why, how
Relies on interviewer understanding of the objectives & questioning / probing skills
04/21/23 Dr. Yuvaraj 51
Interpreting Qualitative Results
InterpretativeResponses cannot be aggregated and computed: not ‘like with like’
General theme(s) may emerge which can provide useful clues
e.g. “around 50% of respondents mentioned problems with computing facilities”
Transcribe conversations etc. and include as Appendix in report
04/21/23 Dr. Yuvaraj 52
Quantitative versus Qualitative
ComplementaryNot mutually exclusive
In the same project Within the same questionnaire
04/21/23 Dr. Yuvaraj 53
Quantitative Research
Questionnaire with pre-scribed options Aggregated answers Objective / computation Infer to a population based on statistics Provides breadth - the ‘what’ Cheap to collect and analyse sizeable sample
BUT
‘Tick box’ options may result in omissions Tells ‘what’ but not ‘why’ Often no scope to clarify the question
04/21/23 Dr. Yuvaraj 54
Questionnaire Design
Layout & space
Clear questions
Clear instructions
Concise as possible
Relate to data entry & computation
Always pilot
EVERY QUESTION MUST PAY ITS WAY
04/21/23 Dr. Yuvaraj 55
Instructions: An Example
What was your main reason for joining the club? (select one only)
To play tennis competitively
To play tennis recreationally
To play tennis & for social events
For social events only
Other family members / partner are members
My children play tennis
Other, please state:
_________________________________________________________________________________________
04/21/23 Dr. Yuvaraj 56
Questionnaire Design
Logical order of questions
Related Qs grouped together
Build on previous questions
Use ‘filters’
‘Other, please state..’ Useful but expensive to analyse
Instead: ‘Don’t know’ ‘none of these’
04/21/23 Dr. Yuvaraj 57
Tennis Survey Topics
A LITTLE ABOUT YOU Demographics / membership status etc.
CLUB FACILITIES AND SERVICES Buildings, courts, tennis, social
COURTS AND PLAY Condition, availability, usage etc.
COMMUNICATIONS Newsletters, website, committee etc.
MEMBERSHIP Information, payment methods, joining process
etc.
ANY OTHER COMMENTS
04/21/23 Dr. Yuvaraj 58
Filter Questions
8. Are you a member of any other tennis club?
Yes
Please state which club___________________
Now please go to Question 9
No Now please go to Question 10
9. Do you use other tennis club(s) more regularly than Ealing?
Yes
No
04/21/23 Dr. Yuvaraj 59
Types of Question
Multiple choice answers
Yes/no/don’t know (closed questions)
Rating / ranking scales Decide whether Odd or Even scale e.g. 1 - 5 or 1 - 4 Highest number is best (e.g. Very Good) Relate criteria to objectives
Open (qualitative)
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Rating Scale Example (1)1. How important are the following facilities and services to you, on a scale where
5 is Very Important and 1 is Very Unimportant.
Very Important
Important Neither Important Nor Unimportant
Unimportant Very Unimportant
5 4 3 2 1
Buildings:
Clubhouse seating area
Bar
Changing rooms & showers
Car park
04/21/23 Dr. Yuvaraj 64
1. How satisfied are you with the following facilities and services, on a scale where 5 is Very Satisfied and 1 is Very Dissatisfied.
Very Satisfied
Satisfied Neither Satisfied Nor Dissatisfied
Dissatisfied Very Dissatisfied
Don’t Know/No Opinion
5 4 3 2 1 0
Buildings:
Clubhouse seating area
Bar
Changing rooms & showers
Car park
Rating Scale Example (1)
04/21/23 Dr. Yuvaraj 65
Sampling
Who do you invite to participate? The larger the sample the better Trade off: Accuracy, Cost, Speed
Methodologies: Simple Random Stratified Cluster Quota Judgement
04/21/23 Dr. Yuvaraj 66
Random
Everyone has an equal (and calculable) chance of being selected, e.g:
The balls in the National lottery draw Rolling an ‘unloaded’ dice
Not generally used in commercial market research
04/21/23 Dr. Yuvaraj 67
Stratified
Groups of mutually exclusive characteristics, random sample drawn from each
E.g: Employee survey on budgeting process
Want to distinguish between views of different job categories
E.g. Director, Service Manager, Officer, Team Leader, Clerical, Front-line etc.
Need a sizeable sample from each category
Not the same as proportion of job category in company as a whole
04/21/23 Dr. Yuvaraj 68
Cluster
Representative geographical areas (clusters) selected, random sample drawn from each
E.g. See ‘New Coke’ (Marketing Mistakes)
04/21/23 Dr. Yuvaraj 69
Quota
Interviewers select people to be interviewed against pre-determined numbers and strata (characteristics)
Extremely common in commercial market research
Risks bias
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Judgement
Sample selected according to researcher’s judgement
Common in B-to-B market research, e.g:
Research into UK mobile phone industry would need to include the five operators - 02, Vodafone, Orange, T-Mobile and 3
Might also include branded service distributors and equipment suppliers to UK market, such as Virgin, Tesco, Nokia, Motorola etc.
04/21/23 Dr. Yuvaraj 71
Quantitative Data Analysis
Excel MS Access + SPSS SPSS alone Various combinations of above SET UP ANALYSIS TOOL AT QUESTIONNAIRE DESIGN STAGE
04/21/23 Dr. Yuvaraj 72
Analysing Quantitative Data
Look for Overall outcome Similarities and differences between different characteristics
‘Cross-tabulations’ (e.g. favourite perfumes by age group, income etc.)
Correlations not always ‘cause and effect’
High correlation between birth rate in the US population and the price of pigs (Ferber)
04/21/23 Dr. Yuvaraj 73
Market Research Conclusion
Key points to remember for practical MR:
Define problem and MR objectives carefully and clearly
Every question must pay its way Configure analysis tool at questionnaire design stage
Pilot on a small scale before you ‘go live’ with larger sample size
04/21/23 Dr. Yuvaraj 74
Demand estimation
04/21/23 Dr. Yuvaraj 75
Measuring market demand
The total market demand is the total volume of a product or service that would be bought by a defined consumer group in a defined geographic area, in a defined time period in a defined marketing environment under a defined level and mix of industry marketing effort.
04/21/23 Dr. Yuvaraj 76
Estimating market demand
Q= n x q x p Where
Q = total market demand n = number of buyers in the market q = quantity purchased by an average buyer
per year p = price of an average unit
04/21/23 Dr. Yuvaraj 77
Forecasting future demand
Common sales forecasting techniques
04/21/23 Dr. Yuvaraj 78
Forecasting future demand
Environmental forecast Inflation, Unemployment, Interest rates,
Consumer spending and saving, Business investment, Government expenditure.
Industry forecast What is currently happening?
Company sales forecast Buyers’ intentions, Composite of sales force
opinions, Expert opinion. Test market method. Time series analysis, Leading indicators,
Statistical demand analysis, Information analysis.
04/21/23 Dr. Yuvaraj 79
Questions?
04/21/23 Dr. Yuvaraj 80