Promotion mix and Market Research Week-10 Lecture Hour 10/15/2015Dr. Yuvaraj 1

Marketing Communications Mix  The marketing communications mix comprises:  Advertising  Sales promotion  Public relations & publicity  Personal selling  Direct marketing 10/15/2015Dr. Yuvaraj 2

Why? 10/15/2015Dr. Yuvaraj 3

 Includes:  TV  newspapers  magazines & periodicals  cinema  radio  billboards & posters  Internet  other media  eg buses, taxis, petrol pumps Advertising 10/15/2015Dr. Yuvaraj 4

Best use of the media 10/15/2015Dr. Yuvaraj 5

 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 10/15/2015Dr. Yuvaraj 6

What fits in? 10/15/2015Dr. Yuvaraj 7

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Find the taste! 10/15/2015Dr. Yuvaraj 9

Jingle stays longer….! 10/15/2015Dr. Yuvaraj 10

Guerilla Marketing 10/15/2015Dr. Yuvaraj 11

 Internet  growth medium  consumers actively seeking information  can be interactive  sound, pictures and words  segmentation possibilities  on-line shopping  ‘pop-ups’ irritate Media Choice 10/15/2015Dr. Yuvaraj 12

Media Selection  Characteristics of target audience  Media usage behaviour, exposure  Budget  Creative 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 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 14

Best combo!!! 10/15/2015Dr. Yuvaraj 15

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 10/15/2015Dr. 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 Economist 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 18

 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 10/15/2015Dr. Yuvaraj 19

B2B and B2C Electronic Commerce 10/15/2015Dr. Yuvaraj 20

E-Commerce Business Models Online direct marketing Electronic tendering system Name-your-own-price Find-the-best-price 10/15/2015Dr. Yuvaraj 21

E-Commerce Business Models Affiliate marketing Note the Sony logo at the top of this Web page 10/15/2015Dr. Yuvaraj 22

E-Commerce Business Models Viral marketing Group purchasing Online auctions 10/15/2015Dr. Yuvaraj 23

E-Commerce Business Models Product customization Deep discounters Membership 10/15/2015Dr. Yuvaraj 24

E-Commerce Business Models Bartering online 10/15/2015Dr. Yuvaraj 25

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. 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 27

consumers are multitasking Source: PiperJaffray 10/15/2015Dr. Yuvaraj 28

And…consumers don’t like ADS Source: PiperJaffray 10/15/2015Dr. Yuvaraj 29

Eight Types of Web sites for Advertising Portals: most popular; best for reach but not targeting Search: second largest reach; high advertising value 10/15/2015Dr. Yuvaraj 30

Eight types of sites (continued) Commerce: high reach; not conducive to advertising Entertainment: large reach; strong targetability Mall of Hawai’i 10/15/2015Dr. Yuvaraj 31

Eight types of sites (continued) Community: emphasize being a part of something; good for specific advertising Communications: not good for branding; low targetability 10/15/2015Dr. Yuvaraj 32

Eight types of sites (continued) News/weather/sports: poor targetability Games: good for very specific types of advertising 10/15/2015Dr. Yuvaraj 33

 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 10/15/2015Dr. Yuvaraj 34

The Selling Process  Prospecting and qualifying  Pre-approach  Approach  Presentation and demonstration  Overcoming objections  Closing  Follow-up and maintenance 10/15/2015Dr. 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 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 37

Market Research Market Information System 10/15/2015Dr. Yuvaraj 38

Sources of information  Internal records  Marketing intelligence  Competitor intelligence  Marketing research 10/15/2015Dr. Yuvaraj 39

Marketing information system (MIS) 10/15/2015Dr. Yuvaraj 40

 Information and conclusions  Decision-making  Solving a particular problem  Continuous improvement  Test:  Ideas and concepts  Marketing mix components Why Market Research? 10/15/2015Dr. Yuvaraj 41

Limitations  Does not make decisions  Not a substitute for judgement  Cannot accurately predict the future  Less useful for very innovative, unique ideas  Can be wrong….. 10/15/2015Dr. 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 /15/2015Dr. Yuvaraj 43

MR Process Problems  Unclear objectives  Inappropriate methodology  Data entry errors  Shallow analysis  Bias… 10/15/2015Dr. Yuvaraj 44

Bias  Highly precise but wrong results  Systematic error – cannot be measured  Unrepresentative sample  Sample size  Questionnaire design  Nature of question  Interview environment  Interviewer bias 10/15/2015Dr. Yuvaraj 45

The Survey Process  Problem definition & objectives (FUNDAMENTAL)  Data (qualitative and/or quantitative)  Sampling  Questionnaire design  Data collection (fieldwork)  Data input & processing  Analysis & reporting 10/15/2015Dr. 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’ (6 th Ed) by Robert Hartley 10/15/2015Dr. 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 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 49

Qualitative Collection Methods  Depth interview  Focus group  Self-completion questionnaire  Observation  Projective techniques 10/15/2015Dr. Yuvaraj 50

Qualitative Questions  Engage respondents in conversation  Semi-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 10/15/2015Dr. Yuvaraj 51

Interpreting Qualitative Results  Interpretative  Responses 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 10/15/2015Dr. Yuvaraj 52

Quantitative versus Qualitative  Complementary  Not mutually exclusive  In the same project  Within the same questionnaire 10/15/2015Dr. 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 10/15/2015Dr. 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 10/15/2015Dr. 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:  _____________________________________________ ____________________________________________ 10/15/2015Dr. 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’ 10/15/2015Dr. 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 10/15/2015Dr. 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 Do you use other tennis club(s) more regularly than Ealing? Yes  No  10/15/2015Dr. 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 or  Highest number is best (e.g. Very Good)  Relate criteria to objectives  Open (qualitative) 10/15/2015Dr. Yuvaraj 60

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Rating Scale Example (1) 10/15/2015Dr. Yuvaraj 64

Rating Scale Example (1) 10/15/2015Dr. 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 10/15/2015Dr. 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 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 68

Cluster  Representative geographical areas (clusters) selected, random sample drawn from each  E.g. See ‘New Coke’ (Marketing Mistakes) 10/15/2015Dr. Yuvaraj 69

Quota  Interviewers select people to be interviewed against pre-determined numbers and strata (characteristics)  Extremely common in commercial market research  Risks bias 10/15/2015Dr. Yuvaraj 70

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. 10/15/2015Dr. Yuvaraj 71

Quantitative Data Analysis  Excel  MS Access + SPSS  SPSS alone  Various combinations of above  SET UP ANALYSIS TOOL AT QUESTIONNAIRE DESIGN STAGE 10/15/2015Dr. 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) 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 74

Demand estimation 10/15/2015Dr. 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. 10/15/2015Dr. 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 10/15/2015Dr. Yuvaraj 77

Forecasting future demand Common sales forecasting techniques 10/15/2015Dr. 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. 10/15/2015Dr. Yuvaraj 79

Questions? 10/15/2015Dr. Yuvaraj 80