Chapter 4

Define the six steps to the marketing research plan.

1. Define the problem and research objectives.

-Be careful when defining the problem, making sure it is not too narrow or too broad. The you can
define what the specific research objectives will be.

2. Develop the research plan.

-Develop the most efficient plan for gathering the information. Decisions must be made on the data
sources, research approaches, research instruments, sampling plan, and contact methods.

3. Collect the information.

-This is the most expensive and error prone part of the process.

4. Analyze the information.

-Extract the findings from the collected data using statistical analysis.

5. Present the findings.

-Present the relevant findings for the marketing decisions to be made.

6. Make a decision.
-Weighing the confidence in the findings. Some companies now use a marketing decisions support
system.

What are the 7 characteristics of good market research?

1. Scientific method – Careful observation, formulation of hypotheses, prediction, and testing.

2. Research creativity – Innovative ways to solve a problem.

3. Multiple methods – Value in using multiple methods to increase confidence in results.

4. Interdependence of models and data – Data is interpreted from underlying model that guide the type
if information sought.

5. Value and cost of information – Managers are concerned with estimating the value of the research
against its cost.

6. Healthy scepticism – Alert to marketing myths.

7. Ethical marketing – Misuse of marketing research can harm or annoy customers, causing customers
to regard it as invasions of privacy or disguised sales pitch.
Measuring marketing productivity.

An important task of marketing research is to assess the efficiency and effectiveness of marketing
activities. Two complementary approaches to measure marketing productivity are: marketing metrics to
assess marketing effects and marketing-mix modelling to estimate causal relationships and how
marketing activity affects outcomes.

Marketing metrics is the set of measures that helps firms to quantify, compare, and interpret their
marketing performance. Marketing metrics can be both internal and external to the company.

Measuring marketing plan performance.

Marketers have four tools to check on plan performance:

1. Sales Analysis – Measuring actual sales in relation to goals. Sales variance analysis and micro-
sales analysis are two examples.
2. Market share analysis – How well the company is doing compared to competitors. Overall
marketing share, served market share, and relative market share are all measures.
3. Marketing expense-to-sales analysis – This is used to make sure a company is not overspending
to achieve its goals.
4. Financial Analysis – To identify the factors that affect the company's rate of return on net worth.
This is the product of two ratios, ROA and Financial Leverage.

Profitability Analysis

Companies can benefit from deeper financial analysis, and should measure the profitability of their
products, territories, customer groups, segments, trade channels, and order sizes.

Marketing-Mix Modeling

Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company
shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of
specific marketing activities. To deepen understanding, multivariate analyses are conducted to sort
through how each marketing element influences marketing outcomes of interest such as brand sales or
market share.

Chapter 5

Explain what is meant by customer orientation/focus.

A customer orientation is a focus on customers. The customers are the most important part of the
business, followed by front-line staff, middle management, and top management. This is used so that
customers can be served well. Product marketing is using the 4p's, service marketing is using the 7p's.

Customer 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
behaviour.

Customer satisfaction - is a person's feelings of pleasure or disappointment resulting from comparing

a product's perceived performance (or outcome) in relation to his or her expectations.
Value Proposition - the value proposition is a statement about the resulting experience customers will
gain from the company's market offering and from their relationship with the supplier.

Quality - is the totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs.

TQM - is an organization-wide approach to continuously improving the quality of all the organization's
processes, products, and services.

Customer Perceived Value (CPV) - is the difference between the prospective customer's evaluation of
all the benefits and all the costs of an offering and the perceived alternatives.

Total Customer Value (TCV) - is the perceived monetary value of the bundle of economic, functional,
and psychological benefits customers expect from a given market offering.

Total Customer Cost (TCC) - is the bundle of costs customers expect to incur in evaluating,
obtaining, using, and disposing of the given market offering, including monetary, time, energy, and
psychic costs.

How do we deliver value to our customers?

A company must design a competitively superior value proposition aimed at a specific market segment,
backed by a superior value-delivery system.

Profitable Customer- is a person, household, or company that over time yields a revenue stream that
exceeds by an acceptable amount the company's cost stream of attracting, selling, and servicing that
customer.

Customer lifetime value (CLV) - Describes the net present value of the stream of future profits
expected over the customer's lifetime purchases.

Competitive Advantage - is a company's ability to perform in one or more ways that competitors
cannot or will not match.

Brand Equity - is the customer's subjective and intangible assessment of the brand, above and beyond
its objectively perceived value. The sub-drivers of brand equity are customer brand awareness,
customer attitude toward the brand, and customer perception of brand ethics.

Basic Marketing - The salesperson simply sells the product.

Reactive Marketing - The salesperson sells the product and encourages the customer to call if he or
she has questions, comments, or complaints.

Accountable Marketing - The salesperson phones the customer to check whether the product is
meeting expectations. The salesperson also asks the customer for any product or service improvement
suggestions and any specific disappointments.

Proactive Marketing - The salesperson contacts the customer from time to time with suggestions
about improved product uses or new products.

Partnership Marketing - The company works continuously with its large customers to help improve
their performance.

What is PRM and CRM?

A partner relationship management system is a set of processes or activities that improve

communications and relationships with a companies partners.

A customer relationship management system is the process of managing detailed information about
individual customers and carefully managing all customer touch points to maximize customer loyalty.

How can we build customer loyalty and reduce customer defection?

Build customer loyalty:

A personal approach is needed to manage each customer. Continuous contact between customer and
company is needed to ensure all their needs are met. Companies are using e-mail, Web sites, call
centres, databases, and database software to foster continuous contact between company and customer.
Companies are also recognizing the importance of the personal component to CRM and what happens
once customers make actual contact.

Reducing Customer defection:

1. Must define and measure the retention rate.
2. The company must distinguish the causes of customer attrition and identify those that can be
better managed.
3. The lost profit each time it loses a customer.
4. How much it would cost to reduce the defection rate.
5. Listen to its customers.

How is customer lifetime value determined?

It is a measure of the annual customer revenue, average number of loyal years, and company profit
margins, which gives the customer lifetime value.

Chapter 6

How consumers make a purchasing decision:

1. Problem Recognition - The buying process starts when the buyer recognizes a problem or need.
The need can be triggered by internal or external stimuli.
2. Information Search - An aroused consumer will be inclined to search for more information. We
can distinguish between two levels of arousal. The milder search state is called heightened
attention. At this level a person simply becomes more receptive to information about a product.
At the next level, the person may enter an active information search: looking for reading
material, phoning friends, going online, and visiting stores to learn about the product.
3. Evaluation of Alternatives - First, the consumer is trying to satisfy a need. Second, the
consumer is looking for certain benefits from the product solution. Third, the consumer sees
each product as a bundle of attributes with varying abilities for delivering the benefits sought to
 satisfy this need.
4. Purchase Decision – The customer chooses a model to base their decision off of and chooses a
product based on this.
5. Post-purchase Behaviour - Marketing communications should supply beliefs and evaluations
that reinforce the consumer's choice and help him or her feel good about the brand. Marketers
must monitor postpurchase satisfaction, postpurchase actions, and postpurchase product uses.

Is the same purchase model used for all types of purchases? Why or why not?

No, there are different models. Not all decisions making proceeds in a carefully planned way. That
means that all the steps are not always followed carefully.

Five factors that affect our purchasing behaviour:

1. Beliefs
2. Attitudes
3. People (Family, Friends)
4. Personal
5. Culture

Expectancy-value model.

The expectancy-value model of attitude formation posits that consumers evaluate products and services
by combining their brand beliefs—the positives and negatives—according to importance. We look at
the attributes that matter most to us for each alternative and assign these a weight, after assigning the
scores for each attribute the alternative and multiplying with the weight, the highest total score will be
chosen.