Project Team Maclynn Kornreich Dejon Lofton Alexa Tanney Math 110 Final Report – December 2011 Survey and Analysis for “To Buy or Not to Buy a CD”

2Topics  Identify a business or social issue to which surveying will get to the mind of the consumer  Addressable Minds… what is it, and how it works  Review the study process and the results and conclusions

3 Purchasing of CD’s Issue  An increased number of people have begun to download music illegally off of the internet.  Many artist have begun to feel discouraged within their careers  Artist and record labels need to know how to hold their consumers interest and how to produce more sales of their CDs.

About Addressable Minds  Addressable Minds is a scientific, actionable form of “predictive consumer intelligence” for business and social issues accurately defining consumer attitudes and preferences both stated and unstated.  It has been described by Malcolm Gladwell and others as discovering the “DNA of the Consumers Mind”.  This patented science created by Dr. Howard Moskowitz, author of “Selling Blue Elephants” (Wharton Press) and the Wharton Business School has achieved critical acclaim and financial success across: ◦ product design and development, ◦ consumer messaging, ◦ more effective consumer engagement physically and digitally. 4

Dr. Howard Moskowitz. Addressable Minds Inventor, honored by the scientific community,... Is the Chairman of iNovum, a graduate of Queens College and holds a Ph.D. in Experimental Psychology from Harvard University. Won two of the most prestigious awards in market research 2005 Charles Coolidge Parlin Marketing Research Award The “Nobel Prize” of Market Research, received only by the pioneers of market research. Recipients include Arthur Nielsen, George Gallup, Michael Porter, David Ogilvy and Philip Kotler Walston Chubb Award for Innovation across all sciences, Sigma Xi, The Scientific Research Society, international Awarded for Mind Genomics: The science underlying the technology used in this Math 110 course. 5

Addressable Minds Psychographic Segmentation - Social Class - Lifestyle Type - Personality Type Behavioral Segmentation - Product Usage - Brand Loyalty - Attitudinal Demographic Segmentation - Age - Gender - Income Addressable Minds Cuts across traditional segmentation & detects hidden preferences

Create Addressable Minds messaging for sales 7 DEVELOP SURVEY QUESTIONS Potential buyers of CDs or illegal downloaders ANALYZED SURVEY RESULTS → Addressable Minds INTERNET IdeaMap™ SUY SURVEY IDENTIFY TARGET MARKET MARKET SEGMENTATIONSEGMENTATION WIZARD MARKETING PHRASES 10 – 15 minutes

Addressable Minds’ underlying science uses standard Science and Mathematics 8 DEVELOP SURVEY QUESTIONS Potential buyers of CDs or illegal downloaders ANALYZED SURVEY RESULTS → Addressable Minds INTERNET IdeaMap™ SUY SURVEY IDENTIFY TARGET MARKET Conjoint analysis Ordinary Least Squares Regression Discriminant Function Analysis Experimental Design – Stimulus/Response

9 A Survey Was Performed by the Team in the area of CD Sales  To serve as a learning vehicle for the application Addressable Minds to a practical business or social issue  Sufficient to show the power of the method

SURVEY OVERVIEW (1 of 2)  An Addressable Minds Survey is a survey of key ideas for CD sales and illegal downloading.  Survey conducted on November 6, 2011 : ◦ Population Ages 18 and over of Males/Females across the US  The team created key marketing and advertising messaging with the intent to entice the survey taker to purchase CDs instead of downloading music illegally. 10

SURVEY OVERVIEW (2 of 2)  51 Individuals responded  Assess two major aspects of messages ◦ Does it convince a prospect to purchase CDs? ◦ How does it make the prospect feel about illegal downloading?  Data reveals the mind-sets of respondents across the United States, as well as ‘what works, what doesn’t’ 11

12 The Survey begins with an orientation screen

13 Each respondent evaluates 48 unique combinations of elements First on overall interest

14 Then selects a single emotion

15 What convinces? What drives feelings?

16 Total Panel – Interested in purchasing the CD and not downloading music illegally 1) How likely are you to buy a CD based on this information? Sorted by Total Sample : Highlighted >+9 winners & <-9 losers Sorted by Total Sample Base Size51 Constant40 B1 When purchasing the latest CD by your favorite aritst, you will receive an autographed cover. 16 B4 One day, this CD will be a collectors item and be worth a lot of money. 14 C4 When you purchase the CD, you will receive a code for a free music video off of ITunes 12 B3 The CD includes lyrics to all of the songs on the disk 9 A1 Purchasing a CD by your favorite aritst helps better their career. -9 F6 Your ISP (Internet Service Provider) can ban you from internet access. -13

17 The Total Panel’s Interest is Different From That in Each of The Two Identified Segments 1) How likely are you to buy a CD based on this information? Sorted by Total Sample : Highlighted >+9 winners & <-9 losers Sorted by Total Sample Seg1 of 2Seg2 of 2 Base Size Constant When purchasing the latest CD by your favorite aritst, you will receive an autographed cover One day, this CD will be a collectors item and be worth a lot of money When you purchase the CD, you will receive a code for a free music video off of ITunes The CD includes lyrics to all of the songs on the disk 9615 The CD booklet includes many pictures of the aritst and fans Special CD packages contain bio features or other things of the artist choice Purchasing a CD by your favorite artist includes a track-list of all the songs on the CD 649 This CD is a limited addition and will not be available for a long period of time You encourage and enable the artist to continue producing CD's Music on CD’s have professional sounding tracks, as if you were in studio yourself Most songs when illegally downloaded are not even the song, but instead just a random person speaking Purchasing CD's by your favorite artist will boost their career financially Federal law states downloading music illegally can be a fine of $150,000 per song Hackers target those who download music illegally and they send viruses and can destroy your computer Purchasing a CD by your favorite aritst helps better their career Your ISP (Internet Service Provider) can ban you from internet access

There are two unique segments Messaging for one isn’t necessary going to appeal to the other…and could actually hurt 18 Extras/Promo Hunters 63% Realist/True Fans 37%

19 Extras/Promotion Hunters (Seg1)- Interested in the extra bonus features of the CD’s they purchase.

20 Realist/True Fans (Seg2)- Interested in not only bonus features, but also the artist themselves and the music.

The “Segmentation Wizard” is a 30 second shortcut survey that is extracted from the 15 minute survey and identifies the segment membership of that individual 21 DEVELOP SURVEY QUESTIONS Potential buyers of CDs or illegal downloaders ANALYZED SURVEY RESULTS → Addressable Minds INTERNET IdeaMap™ SUY SURVEY IDENTIFY TARGET MARKET SEGMENTATION WIZARD 10 – 15 minutes Segmentation Wizard consists of 3 or 4 elements identified in the in-depth 10 – 15 minute survey

22 The CD Project Segmentation Wizard– Online example The Segmentation Wizard is a short survey with the questions derived from the full survey to identify segment membership

23 The CD Project Segmentation Wizard– Online example

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27 Conclusions  The two segments created by the Addressable minds survey for CDs now allows music promoters to know what to use to entice customers.  Restating what the CD already comes with and then adding a legacy to it can effect the way people view the product.  You can improve CD sales, but you have to show consumers that there are benefits to spending their money rather than downloading illegally. ◦ Know the segmentation ◦ Give the right message to the right segment