Marketing Research The Nature of Marketing Research Dr. Zafer Erdogan.
Marketing Research
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Transcript of Marketing Research
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Marketing ResearchAaker, Kumar, Day and LeoneTenth EditionInstructor’s Presentation Slides
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Chapter Twenty-six
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Emerging Applications of Marketing Intelligence: Database Marketing
and Relationship Marketing
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The Need for DatabasesTo test a program prior to rolling it out:
▫Define your target group▫Go into your database▫Create a matched set▫Expose the test variable▫Minimize other marketing efforts while the test is
going on▫Allow test program enough time to work▫Measure results by comparing the two groups’ sales▫Take action. If test results warrant going ahead, then▫ Implement it
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Elements of a Database
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Types of Databases• Active customers
• Inactive customers
• Inquiries
Modeling customers serves to:
▫ Identify most typical customers and so become more effective in prospecting.
▫ Identify best customers to prospect
▫ Identify niche markets to add to the marketing universe.
▫ Develop more effective marketing tools (materials and media).
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Ways to Gather Consumer Data• Rebate Cards
• Suggestion Cards
• Warranty Registration Cards
• Free Subscription Offer Cards
• Directly Ask Consumers
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Ways to Gather Consumer Data (Cont.)Guerilla Tactics
• Get the product right
• Use low-tech targeting and creative thinking
• Use other people’s data (OPD) first
• Buy new media
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Benefits of Database Marketing
▫ Customers are easier to retain than acquire
▫ Determine their “lifetime value” to decide whether or not to encourage greater lifetime duration
▫ Develop relationships with customers across a family of related products and services
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E-Commerce• E-commerce influence
▫The impact of the net on purchases made entirely off-line
• E-commerce ordering
▫Captures the orders that are placed on-line but paid for later via telephone or in-store
• E-commerce buying
▫Combines ordering and paying on-line
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E-Commerce (Contd.)
•Retailer responses to e-commerce are:▫ Selective price discounts
▫ Concentrating attention on late adopters of technology
▫ Creating and staging experiences
▫ Partially adapting the Internet into a hybrid system
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Shopping on the Internet
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Online Sales ($ billions)Quarter 2004 2003 % Change
Q1 $15.99 $12.61 26.9%
Q2 $16.76 $13.50 24.2%
Q3 $17.63 $14.42 22.2%
Q4 $18.61 $15.01 24.0%
Holiday* $17.29 $11.24 53.8%
Full Year $68.99 $55.54 24.2%
* Excludes Online auction and travel salesSource: Quarterly Retail E-Commerce Sales, 1st Quarter 2005, U.S. Census Bureau, May 2005
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E-Commerce Survey
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Reasons for shopping online Percent
Saves time 78%
Better prices 51%
More selection 43%
Easier shipping 40%
Ability to find a more personalized gift 28%
More information available about the products 20%
Other 8%
Source: clickz.com
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Relationship Marketing
Keys to Relationship Marketing:
• Identify and build marketing databases of present and potential purchasers.
• Deliver differentiated messages to targeted households.
• Track the relationship to make media expenditures more effective and more measurable.
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Customer Analysis
•Customer acquisition
•Customer cross-sell
•Customer up-sell
•Customer retention
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Customer DNA Model
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Legacy Systems & External Data
Reporting & KPIs
Single Customer View
Modeling & Analysis Capability
Customer Contact Management
Customer DNA
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Developments in Relationship Marketing•Customer lifetime value (CLV)
▫Calculated as the sum of cumulated cash flows —discounted using the Weighted Average Cost of Capital (WACC) or discount rate — of a customer over his or her entire lifetime with the company
•Customer equity (CE)▫The total of the discounted lifetime values
summed over all of firm’s current and potential customers
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Developments in Relationship Marketing (Contd.)• Aggregate-level approach
▫ CE framework can be used to:
Formulate firm/segment level strategies concerning investments in
acquisition, retention, and add-on selling.
As a surrogate measure of the market worth of most firms and for
comparing competing firms.
• Disaggregate-level approach
▫ CLVs of each customer can help to formulate customer-specific marketing
strategies for:
Customer selection
Customer segmentation
Optimal resource allocation
Purchase sequence analysis
Targeting profitable prospects based on CLV
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