Market Analysis and Understanding Customers MKT 455 Marketing Strategy Introductory Comments Markets are groups of customers and potential customers. MKT 455 MKT 455 Marketing Strategy Knowledge of customers is essential for most marketing strategy endeavors: Marketing Strategy Identification of market segments and selection of target markets. Market Analysis Development of total market offerings (marketing mix). Projection of costs, sales, revenues. Anticipation of competitor responses. Market Analysis and Understanding Customers Market Analysis and Understanding Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Analyzing markets for marketing strategy purposes revolves around two assessments: Analyzing markets for marketing strategy purposes revolves around two assessments: The value of company’s The value of brand’s The value of company’s The value of brand’s Marketing Marketing products to customers Strategy customers to a company products to customers Strategy customers to a company Describing Customers Describing Customers MKT 455 MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Demographics age, sex, race, income, education, marital status, etc. Demographics Who Buys? Psychographics activities, interests, opinions Who Buys? Psychographics Geographics locations, location characteristics Geographics 1
Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Demographics Demographics Desired Desired Who Buys? Psychographics “What” They Buy Who Buys? Psychographics “What” They Buy Benefits Benefits Geographics Geographics Non-Compensatory Choice Models (unweighted) Text adds assortment, uses to list, but benefits are How They Choose far and away most important. Compensatory Choice Models (weighted) Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) n (Original) Fishbein Model A o = ∑ B i a i i =1 A o = Attitude toward some object (branded product) B i = the i th belief about the object a i = the i th evaluation of the belief n = the number of beliefs(attributes) considered 2
Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Measuring B i Measuring a i i1: The shoes should be less than $100. i1: The shoes should be less than $100. Predicting The Value of Products to Customers Predicting The Value of Products to Customers i2: The shoes must have high cushioning from impact. i2: The shoes must have high cushioning from impact. i3: The shoes must have plenty of room for my toes. i3: The shoes must have plenty of room for my toes. Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) i4: The shoes should perform well for over 300 miles. i4: The shoes should perform well for over 300 miles. How They Choose How They Choose Does Not Describe Describes Brand Not At All Very 1 2 3 4 5 1 2 3 4 5 Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) Brand At All Very Well Important Important n n (Original) Fishbein Model A o = ∑ (Original) Fishbein Model A o = ∑ B i a i B i a i i =1 i =1 A o = Attitude toward some object (branded product) A o = Attitude toward some object (branded product) B i = the i th belief about the object B i = the i th belief about the object a i = the i th evaluation of the belief a i = the i th evaluation of the belief n = the number of beliefs(attributes) considered n = the number of beliefs(attributes) considered Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Measuring a i Predicting The Value of Products to Customers Predicting The Value of Products to Customers less than $100. high cushioning from impact. plenty of room for toes. Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) How They Choose perform well for over 300 miles. How They Choose 100 Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) n n (Original) Fishbein Model A o = ∑ (Original) Fishbein Model A o = ∑ B i a i B i a i i =1 i =1 A o = Attitude toward some object (branded product) A o = Attitude toward some object (branded product) B i = the i th belief about the object B i = the i th belief about the object a i = the i th evaluation of the belief a i = the i th evaluation of the belief n = the number of beliefs(attributes) considered n = the number of beliefs(attributes) considered Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) (Original) Fishbein Model “Extended” Fishbein Model Improves on original by Evaluative Criteria Bi ai Bi x ai i1: less than $100 5 30 150 merging attitudes and actions with consequences. i2: cushioning 3 40 120 i3: room for toes 1 15 15 including reference group influences on behavior. i4: perform for 300 miles 4 15 60 focusing on predicting behavioral intentions and future behavior. Ao 345 3
Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Predicting The Value of Products to Customers Predicting The Value of Products to Customers Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) “Extended” Fishbein Model “Extended” Fishbein Model B ≈ BI = w 1 A act + w 2 SN B ≈ BI = w 1 A act + w 2 SN n A ACT = ∑ B = Behavior BI = Behavioral Intentions b i e i b i = Belief that action will produce consequence i. i =1 Aact = Attitude toward some action (purchase some branded product) e i = Evaluation of consequence i. SN = “Subjective Norms” about the action (influence of others) Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Measuring b i Measuring b i Predicting The Value of Products to Customers Predicting The Value of Products to Customers If I buy Olympiad running shoes. . . If I buy Olympiad running shoes. . . . . . they will effectively cushion my feet and legs when I run. . . . they will effectively cushion my feet and legs when I run. . . . they will last for at least 300 miles of running. . . . they will last for at least 300 miles of running. Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) etc. etc. How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) Strongly Disagree 1 2 3 4 5 Strongly Agree Strongly Disagree 1 2 3 4 5 Strongly Agree “Extended” Fishbein Model “Extended” Fishbein Model B ≈ BI = w 1 A act + w 2 SN B ≈ BI = w 1 A act + w 2 SN n n A ACT = ∑ A ACT = ∑ b i e i b i e i b i = Belief that action will produce consequence i. b i = Belief that action will produce consequence i. i =1 i =1 e i = Evaluation of consequence i. e i = Evaluation of consequence i. Describing Customers Describing Customers MKT 455 MKT 455 Marketing Strategy Marketing Strategy Measuring e i Predicting The Value of Products to Customers Predicting The Value of Products to Customers How important is it that your running shoes. . . . . . effectively cushion your feet and legs. . . . last for at least 300 miles of running. Non-Compensatory Choice Models (unweighted) Non-Compensatory Choice Models (unweighted) etc. How They Choose How They Choose Compensatory Choice Models (weighted) Compensatory Choice Models (weighted) Not At All Important 1 2 3 4 5 Very Important “Extended” Fishbein Model “Extended” Fishbein Model B ≈ BI = w 1 A act + w 2 SN B ≈ BI = w 1 A act + w 2 SN n n SN = ∑ A ACT = ∑ b i e i G j MC j G j = Belief that Group j favors b i = Belief that action will produce consequence i. i =1 j =1 performing an action e i = Evaluation of consequence i. MC j = Motivation to comply with Group j 4
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