Marketing Management

Unit 1

Market Segmentation

Meaning & Concept

• Market segmentation is the process of dividing a market of

potential customers into groups, or segments, based on

different characteristics. The segments created are composed

of consumers who will respond similarly to marketing

strategies and who share traits such as similar interests,

needs, or locations.

Why Market Segmentation

• Market segmentation makes it easier for marketers to personalize their marketing

campaigns.

• By arranging their company’s target market into segmented groups, rather than

targeting each potential customer individually, marketers can be more efficient

with their time, money, and other resources than if they were targeting consumers

on an individual level. Grouping similar consumers together allows marketers to

target specific audiences in a cost effective manner.

• Market segmentation also reduces the risk of an unsuccessful or ineffective

marketing campaign.

• Marketers can also us segmentation to prioritize their target audience.

Bases of Market Segmentation

Market segmentation is based on the assumption that all the potential customers are not identical and that the firm should address their needs with appropriate product Land other marketing strategies or else should concentrate on only one single segment and tailor the strategy accordingly.

• Gender: Gender is one of the most simple yet important bases of market

segmentation. The interests, needs and wants of males and females differ

at many levels. Thus, marketers focus on different marketing and

communication strategies for both. This type of segmentation is usually

seen in the case of cosmetics, clothing, and jewellery industry, etc.

• Age group: Segmenting market according to the age group of the

audience is a great strategy for personalized marketing. Most of the

products in the market are not universal to be used by all the age groups.

Hence, by segmenting the market according to the target age group,

marketers create better marketing and communication strategies and get

better conversion rates.

Bases of Market Segmentation

• Income: Income decides the purchasing power of the target audience. It is also

one of the key factors to decide whether to market the product as a need, want or

a luxury. Marketers usually segment the market into three different groups

considering their income. These are; High Income Group, Mid Income Group, Low

Income Group.

• Place: The place where the target audience lives affect the buying decision the

most. A person living in the mountains will have less or no demand for ice cream

than the person living in a desert.

• Occupation: Occupation, just like income, influences the purchase decision of the

audience. A need for an entrepreneur might be a luxury for a government sector

employee. There are even many products which cater to an audience engaged in

a specific occupation.

• Usage: Product usage also acts as a segmenting basis. A user can be labeled as

heavy, medium or light user of a product. The audience can also be segmented on

the basis of their awareness of the product.

• Lifestyle: Other than physical factors, marketers also segment the market on the

basis of lifestyle. Lifestyle includes subsets like marital status, interests, hobbies,

religion, values, and other psychographic factors which affect the decision making

of an individual.

1. Determining market opportunities: Market segmentation enables to

identify market opportunities. The marketer can study the needs of each

segment in the light of current offerings by the competitors. From such

study, the marketer can find out the current satisfaction of customers.

2. Developing marketing programmes: Companies can develop marketing

programmes and budgets based on a clearer idea of the response

characteristics of specific market segments. They can budget funds to

different segments depending on their buying response.

3. Designing a product: Market segmentation helps in designing products

that really match the demands of the target audience. Products with high

market potential can be designed and directed to meet the satisfaction of

the target market.

4. Media selection: It helps in selection of advertising media more

intelligently and in allocating funds to various media. The funds are

allocated to various media depending on the target audience, impact of

the media, competitor advertising, and so on.

Benefits of Market Segmentation

5. Timing of marketing efforts: It helps in setting the timings of the promotional efforts so that more emphasis is placed during those periods when response is likely to be at its peak. For instance, consumer goods can be heavily advertised

to Christians during Christmas season and to Hindus during Diwali time.

6. Efficient use of resources: By tailoring marketing programme to individual

market segments, management can do a better marketing job and make more efficient use of the marketing resources. For example, a small firm can effectively use its limited resources – money, sales force, etc. – in one or two

segmented markets rather than unsuccessfully aiming at a wider market.

7. Better service to customers: Market segmentation enables a company to concentrate its marketing efforts in a particular market area, thereby, providing

a better service to the target customers. Proper marketing segmentation can facilitate customer satisfaction.

8. Helps in fixing prices: The marketing segmentation also enables to fix prices of the goods and services. Since different market segments have different price perceptions, it is necessary to adopt different pricing strategies for the

markets. For instance, the prices for lower-income groups have to be lower and the product and promotional efforts are adjusted accordingly.

Benefits of Market Segmentation

Benefits of Market Segmentation

9. Assist in distribution strategies: Segmentation also assists in adopting

suitable distribution strategies. Different market segments may require

different distribution mix. For example, if the product is of very high

quality intended to target the upper class, then it must be distributed at

prestigious outlets located at selective places.

10. Adjustments in marketing appeals: Sellers can make best possible

adjustments of their product and marketing appeals. Instead of one

marketing programme aimed to draw in all potential buyers, sellers can

create separate marketing programmes designed to satisfy the needs of

different customers. Proper advertising and sales promotional appeals

can be made depending on the target audience.

Target Marketing

• Target Marketing involves breaking a market into segments and then

concentrating your marketing efforts on one or a few key segments

consisting of the customers whose needs and desires most closely

match your product or service offerings. It can be the key to attracting

new business, increasing sales, and making your business a success.

• The beauty of target marketing is that aiming your marketing

efforts at specific groups of consumers makes the promotion, pricing,

and distribution of your products and/or services easier and more cost

effective and provides a focus to all of your marketing activities.

• For instance, suppose a catering business offers catering services in

the client’s home. Instead of advertising via a newspaper insert that

goes out to everyone, the caterer would first identify the target

market for its services. It could then target the desired market with a

direct mail campaign.

Target Marketing

• Social media platforms, such as Facebook, LinkedIn, Twitter,

and Instagram, have sophisticated options to allow businesses

to target users based on market segments. A bed-and-breakfast

business, for example, could target married Facebook

followers with an ad for a romantic weekend getaway package.

LinkedIn, on the other hand, is more B2B oriented, so you can

target businesses using a variety of criteria such as number of

employees, industry, geographic location, and so on.

• Although you can approach market segmentation in many

different ways, depending on how you want to slice up the pie,

three of the most common types are demographic

segmentation, geographic segmentation, and psychographic

segmentation.

Positioning Strategy

• What key words come to your mind when you think about companies such as Apple, Wal-Mart and Disney? Most consumers would say that innovative products, competitive pricing and excellent service are synonymous with these companies. An important step in developing key operational strategies depends upon how a company positions itself in the marketplace. Every company can't satisfy every customer and also be competitive in areas like quality, cost, flexibility, speed, innovation and service.

• A positioning strategy is when a company chooses one or two important key areas to concentrate on and excels in those areas. A firm's positioning strategy focuses on how it will compete in the market. An effective positioning strategy considers the strengths and weaknesses of the organization, the needs of the customers and market and the position of competitors. The purpose of a positioning strategy is that it allows a company to spotlight specific areas where they can outshine and beat their competition.

Diversification Strategy

• A diversification strategy is the strategy that an organization adopts for the development of its business. This strategy involves widening the scope of the organization across different products and market sectors. The strategy is to enter into a new market or industry which the organization is not currently in, whilst also creating a new product for the new market.

• Diversification strategy is a form of growth strategy which helps the organizational business to grow. It opens up new possibilities for the organization. By adopting this strategy, the organization not only diversifies its products offerings in the target markets but also expands its business horizons. The strategy helps the organization to increase sales volume and revenues while keeping costs to minimum.

Diversification Strategy

• Diversification is part of the four main growth strategies defined by Igor

Ansoff’s Product/Market matrix (Fig 1). The other three strategies in this

matrix are market penetration, product development, and market

development. Ansoff pointed out that a diversification strategy stands

apart from the other three strategies. These other three strategies are

usually pursued with the same technical, financial, and merchandising

resources used for the original product line, whereas diversification

usually requires an organization to acquire new skills, new techniques and

new facilities.

Types of Diversification

• Concentric diversification: Organizations carry out concentric diversification through enlarging the production portfolio by adding new products with the aim of fully utilizing the potential of the existing technologies and marketing system. It occurs when the organization adds related products or markets. The goal of such diversification is to achieve strategic fit. Strategic fit allows the organization to achieve synergy. In essence, synergy is the ability of two or more parts of the organization to achieve greater total effectiveness together than would be experienced if the efforts of the independent parts were summed.

• Conglomerate diversification: It is also known as heterogeneous diversification. It relates to moving to new products or services that have no technological or commercial relation with current products, equipment, distribution channels, but which may appeal to new groups of customers. The major motive behind this kind of diversification is the high return on investments in the new industry. Furthermore, the decision to go for this kind of diversification can lead to additional opportunities indirectly related to further developing the main business of the organization such as access to new technologies, opportunities for strategic partnerships, etc

Types of Diversification

• Horizontal diversification: Horizontal integration occurs when an organization enters a new business (either related or unrelated) at the same stage of production as its current operations. It involves acquiring or developing new products or offering new services that could appeal to the organization´s current customer groups. In this case the organization relies on sales and technological relations to the existing product lines.

• Vertical diversification: Vertical diversification occurs when an organization goes back to previous stages of its production cycle (backward integration) or moves forward to subsequent stages of the same cycle (forward integration). This means that the organization goes into production of raw materials, distribution of its products, or further processing of the present end product.

• Corporate diversification: Corporate diversification involves production of unrelated but definitely profitable goods. It is often tied to large investments where there may also be high returns.

Types of Diversification

• Internal diversification: One form of internal diversification is to market existing products in new markets. An organization may elect to broaden its geographic base to include new customers. The organization can also pursue an internal diversification strategy by finding new users for its current product. Another form of internal diversification is to market new products in existing markets. Generally this strategy involves using existing channels of distribution to market new products.

• External diversification: External diversification occurs when an organization looks outside of its current operations and buys access to new products or markets. Mergers are one common form of external diversification. Mergers occur when two or more organizations combine operations. These organizations are usually of similar size. One goal of a merger is to achieve management synergy by creating a stronger management team. This can be achieved in a merger by combining the management teams from the merged firms.

Acquisitions, a second form of external growth, occur when the purchased organization loses its identity. The acquiring organization absorbs it. The acquired organization and its assets may be absorbed into an existing business unit or remain intact as an independent subsidiary within the parent organization. Acquisitions usually occur when a larger organization takes over a smaller organization.

References

• https://www.feedough.com/market-segmentation-definition-basis-types-

examples/

• http://www.economicsdiscussion.net/market-segmentation/bases-of-market-

segmentation/31458

• http://www.yourarticlelibrary.com/marketing/market-segmentation/market-

segmentation-top-10-benefits-of-market-segmentation/32298

• https://www.thebalancesmb.com/target-marketing-2948355

• https://study.com/academy/lesson/positioning-strategy-definition-examples.html

• https://www.ispatguru.com/diversification-strategy/

Marketing Management

Unit 2

Consumer Behavior

Meaning & Definition

• Consumer behaviour is the study of how individual customers,

groups or organizations select, buy, use, and dispose ideas,

goods, and services to satisfy their needs and wants. It refers to

the actions of the consumers in the marketplace and the

underlying motives for those actions.

• Marketers expect that by understanding what causes the

consumers to buy particular goods and services, they will be

able to determine—which products are needed in the

marketplace, which are obsolete, and how best to present the

goods to the consumers.

Meaning & Definition

• The study of consumer behaviour assumes that the consumers are

actors in the marketplace. The perspective of role theory assumes

that consumers play various roles in the marketplace. Starting from

the information provider, from the user to the payer and to the

disposer, consumers play these roles in the decision process.

• According to Engel, Blackwell, and Mansard, ‘consumer behaviour

is the actions and decision processes of people who purchase goods

and services for personal consumption’.

• According to Louden and Bitta, ‘consumer behaviour is the decision

process and physical activity, which individuals engage in when

evaluating, acquiring, using or disposing of goods and services’.

Need & Significance of Consumer Behaviour

(i) Realistic Implementation of the Marketing Concept: The modern

marketing concept is consumer-oriented. To give a realistic implementation

to this concept, a study of consumer behaviour is imperative. More

specifically, a study of consumer behaviour is a must for developing an

ideal marketing-mix; which is the cornerstone of the concept of marketing.

(ii) Planning Product Differentiation and Market Segmentation: For

planning product differentiation strategies (i.e. making the product so

differentiated and unique that consumer may be tempted to buy only that

product due to its unique features); a study of consumer behaviour is very

significant or necessary. Again, for designing schemes of market

segmentation (a process of dividing a potential market into distinct sub-

markets of consumers with common needs and characteristics), a study of

consumer behaviour is very necessary.

Need & Significance of Consumer Behaviour

(iii) Selection of Distribution Channels: A study of consumer behaviour not only includes what consumers buy; but also the source from where they buy’. For example, men of status in society may never buy things from ordinary shops and ordinary markets. They may prefer to buy from prestigious stores and markets; even though they may have to pay a higher price and so on for various categories of consumers.

(iv) Designing Promotional Techniques: Promotional techniques include advertising message and media, personal selling approaches and special sales promotional devices. Designing promotional techniques is much facilitated by a study of consumer behaviour; which may throw light on the psychology of people as to the factors which affect their buying decisions.

(v) Trade-Off between Price and Quality: A study of consumer behaviour is likely to reveal whether target consumers of the enterprise emphasize more on the price of the product or its quality. On this basis, the marketer can device suitable pricing strategies and programmes aimed at upgrading the quality of organisation’s products to suit the needs, habits and behaviour of consumers.

Factors affecting Consumer Behaviour

Social Factors (1) Culture: Culture is a complex of values, beliefs, attitudes and understandings which

are shared in common by aggregates of people, living in organized societies; and which shape human behaviour to a particular style. Since consumer behaviour is a part of human behaviour; culture has a profound effect on consumer behaviour. For example, the consumer behaviour of the Indians is much different from the consumer behaviour of people in other countries.

(2) Religion: Religion has a profound effect on consumer behaviour. For example, the consumer behaviours of the Hindus, the Muslims, and the Christians etc. are very radically different. In fact, some very traditional Hindus may not prefer leather goods; thinking it to be a sin to consume items made of the skin of animals.

(3) Family Consumption Patterns: Family consumption patterns and trends, too, have an effect on consumer behaviour. For example, the consumption habits and patterns of the head of the family may be transmitted in to or partially to his sons, daughters, wife, and brothers and so on.

Factors affecting Consumer Behaviour

(4) Reference Groups: Reference groups are social groups of friends, colleagues, relatives, neighbors, etc. with whom a person comes into interaction, quite frequently. These groups exercise a great impact on the consumer behaviour.

(5) Changing Social Values: Values, beliefs, attitudes etc. of people are changing in society, summarized in the phrase ‘changing social values’. These changing social values emerge due to factors like, technological advancements, demonstration effect, generation gaps etc.; and these shape consumer behaviour to a considerable extent.

Personal Factors

(6) Economic Conditions of Individuals: Economic conditions of people have a significant effect on consumer behaviour. There is no doubt that consumption habits, buying systems and other aspects of consumer behaviour of the upper class, the middle class and the poor class are considerably different.

Factors affecting Consumer Behaviour

(7) Educational Background: It is generally observed that educated persons let logic and intellect dominate their buying decisions and exhibit totally different consumer behaviour than uneducated or less educated people. The latter category of people follow buying behaviour of others whom they can in contact with and ordinarily use little logic in their behaviour as consumers, especially on items of luxurious consumption.

(8) Occupation and Status: Occupation and status of people are big determinants of consumer behaviour. Many persons buy things of the type which others in their occupation/profession are also consuming. Again men of status e.g. doctors, professors, judges etc. may not like to buy cheap items of consumption used by ordinary men, out of their prestige and status in society.

(9) Age: Age of an individual has a great effect on consumer behaviour. Buying habits and consumption behaviours of kids, adults and elderly persons are observed to be very different from one another’s.

Factors affecting Consumer Behaviour

(10)Gender: Males and females of society, belonging to different age groups, have very different buying habits and consumption patterns. Ladies of all strata of society are observed to be having a preference for saree, costly garments, jewellery etc.; while gents may prefer liquors, cigarette, books, items of comforts in their household etc.

(11)Marital Status: Married and unmarried people demonstrate different consumer behaviours. In the married class of people also, consumer behaviour of newly-weds may be much different from those who have experienced substantial periods of married life.

(12)Preference for Life Style: Some people have a preference for a modern Westernized style of life; while some may like to lead a simple Indian life style. Consumer behaviours of both these categories of people are substantially different.

Factors affecting Consumer Behaviour

Psychological Factors

(13)Motivation: Keeping in view Maslow’s need hierarchy as a theory of motivation, needs follow a hierarchical order towards their fulfillment. Accordingly, people have a tendency to satisfy first those needs which are unfulfilled at a particular level, before thinking of needs at higher levels.

(14)Perception: Perception is one’s own way of looking at things. One object may be perceived to be good by one; while some other may perceive that to be quite bad and undesirable. Accordingly, perception has a remarkable impact on consumer behaviour. People have a tendency to buy things which they perceive to be desirable. Since perception differs from persons to person; consumer behaviour also differs from person to person.

Factors affecting Consumer Behaviour

Psychological Factors

(13)Attitudes: An attitude is a psychological attribute which makes one feel or think about something- positively or negatively; and shapes one’s behaviour towards the ‘attitudes object’, accordingly. In fact, people have a preference for those items of consumptions towards which they have a positive attitude. Hence, attitudes of people are a big determinant of consumer behaviour.

(14)Learning: Learning here means a lesson learnt by an individual from his/her past actions. Consumer behaviour is much shaped by the learning process of people in that people prefer to buy things in respect of which their experience was good or encouraging; and avoid things in which of which their experience had been disheartening.

Stages in Buying Decision Making Process

• Far too often, retailers think that consumer buying is randomized. That

certain products appeal to certain customers and that a purchase either

happens or it doesn’t. They approach product and service marketing in the

same way, based on trial and error. What if there were a distinctive set of

steps that most consumers went through before deciding whether to make a

purchase or not? What if there was a scientific method for determining

what goes into the buying process that could make marketing to a target

audience more than a shot in the dark?

• The good news? It does exist. The actual purchase is just one step. In fact,

there are six stages to the consumer buying process, and as a marketer, you

can market to them effectively.

Stages in Buying Decision Making Process

1. Problem Recognition: Put simply, before a purchase can ever take place,

the customer must have a reason to believe that what they want, where

they want to be or how they perceive themselves or a situation is different

from where they actually are. The desire is different from the reality – this

presents a problem for the customer.

However, for the marketer, this creates an opportunity. By taking the

time to create problem for the customer, whether they recognize that it

exists already or not, you’re starting the buying process. To do this, start

with content marketing. Share facts and testimonials of what your product

or service can provide. Ask questions to pull the potential customer into the

buying process. Doing this helps a potential customer realize that they have

a need that should be solved.

Stages in Buying Decision Making Process

2. Information Search: Once a problem is recognized, the

customer search process begins. They know there is an issue

and they’re looking for a solution. If it’s a new makeup

foundation, they look for foundation; if it’s a new refrigerator

with all the newest technology thrown in, they start looking at

refrigerators – it’s fairly straight forward.

As a marketer, the best way to market to this need is to

establish your brand or the brand of your clients as an industry

leader or expert in a specific field. Methods to consider include

becoming a Google trusted store or by advertising partnerships

and sponsors prominently on all web materials and collaterals.

Stages in Buying Decision Making Process

3. Evaluation of Alternatives: Just because you stand out among the

competition doesn’t mean a customer will absolutely purchase your product

or service. In fact, now more than ever, customers want to be sure they’ve

done thorough research prior to making a purchase. Because of this, even

though they may be sure of what they want, they’ll still want to compare

other options to ensure their decision is the right one.

Marketing to this couldn’t be easier. Keep them on your site for the

evaluation of alternatives stage. Leading insurance provider Geico allows

customers to compare rates with other insurance providers all under their

own website – even if the competition can offer a cheaper price. This not

only simplifies the process, it establishes a trusting customer relationship,

especially during the evaluation of alternatives stage.

Stages in Buying Decision Making Process

4. Purchase Decision: Somewhat surprisingly, the purchase decision falls near

the middle of the six stages of the consumer buying process. At this point, the

customer has explored multiple options, they understand pricing and payment

options and they are deciding whether to move forward with the purchase or

not. That’s right, at this point they could still decide to walk away.

This means it’s time to step up the game in the marketing process by

providing a sense of security while reminding customers of why they wanted to

make the purchase in the first time. At this stage, giving as much information

relating to the need that was created in step one along with why your brand, is

the best provider to fulfill this need is essential.

If a customer walks away from the purchase, this is the time to bring

them back. Retargeting or simple email reminders that speak to the need for the

product in question can enforce the purchase decision, even if the opportunity

seems lost. Step four is by far the most important one in the consumer buying

process. This is where profits are either made or lost.

Stages in Buying Decision Making Process

5. Purchase: A need has been created, research has been completed and the

customer has decided to make a purchase. All the stages that lead to a

conversion have been finished. However, this doesn’t mean it’s a sure

thing. A consumer could still be lost. Marketing is just as important during

this stage as during the previous.

Marketing to this stage is straightforward: keep it simple. Test your

brand’s purchase process online. Is it complicated? Are there too many

steps? Is the load time too slow? Can a purchase be completed just as

simply on a mobile device as on a desktop computer? Ask these critical

questions and make adjustments. If the purchase process is too difficult,

customers, and therefore revenue, can be easily lost.

Stages in Buying Decision Making Process

6. Post-Purchase Evaluation: Just because a purchase has been made, the

process has not ended. In fact, revenues and customer loyalty can be easily

lost. After a purchase is made, it’s inevitable that the customer must decide

whether they are satisfied with the decision that was made or not. They

evaluate.

If a customer feels as though an incorrect decision was made, a return

could take place. This can be mitigated by identifying the source of

dissonance, and offering an exchange that is simple and straightforward.

However, even if the customer is satisfied with his or her decision to make

the purchase, whether a future purchase is made from your brand is still in

question. Because of this, sending follow-up surveys and emails that thank

the customer for making a purchase are critical.

Organisational Consumers

We need to understand the organizational market. For making a car, many

components are required, to market help of a distribution channel is required.

It is a chain. The area is very vast and heterogeneous. Organizational

marketing or “ghost” organizational customer, as the customer is huge and

unlimited. There are many types of organizations with different classifications.

These require different types of raw materials. In manufacturing a car one

needs all types of material. Iron sheets to wires, to screws, bolts, iron strips.

Electrical gadgets, battery, glass windows and screens, rubber goods,

aluminum goods and, hundred of other materials. The suppliers of these

materials also require raw materials for their use. Hence, there is an endless

chain of suppliers of raw materials. What is a finished product for an industry,

can become raw material for the other industry.

Organisational

Consumers’ Buying Decision

Making Process

1) Problem Recognition: The process begins when someone in the

organization recognizes a problem or need that can be met by acquiring a

good or service. Problem recognition can occur as a result of internal or

external stimuli. Internal stimuli can be a business problem or need that

surfaces through internal operations or the actions of managers or

employees. External stimuli can be a presentation by a salesperson, an ad,

information picked up at a trade show, or a new competitive development.

2) General Need Description: Once they recognize that a need exists, the

buyers must describe it thoroughly to make sure that everyone

understands both the need and the nature of solution the organization

should seek. Working with engineers, users, purchasing agents, and others,

the buyer identifies and prioritizes important product characteristics.

Armed with knowledge, this buyer understands virtually all the product-

related concerns of a typical customer.

3) Product Specification: Technical specifications come next in the process.

This is usually the responsibility of the engineering department. Engineers

design several alternatives, with detailed specifications about what the

organization requires. These specifications align with the priority list

established earlier.

4) Supplier Search: The buyer now tries to identify the most appropriate

supplier (also called the vendor). The buyer conducts a standard search to

identify which providers offer what they need, and which ones have a

reputation for good quality, good partnership, and good value for the

money. This step virtually always involves using the Internet to research

providers and sift through product and company reviews. Buyers may

consult trade directories and publications, look at published case studies

(written or video), seek out guidance from opinion leaders, and contact

peers or colleagues from other companies for recommendations.

5) Proposal Solicitation: During the next stage of the process, qualified suppliers

are invited to submit proposals. Depending on the nature of the purchase, some

suppliers send only a catalog or a sales representative. More complex purchases

typically require submission of a detailed proposal outlining what the provider

can offer to address the buyer’s needs, along with product specifications, timing,

and pricing. Proposal development requires extensive research, skilled writing,

and presentation. For very large, complex purchasing decisions, such as

the solution sale described above, the delivery of a proposal could be comparable

to a complete marketing strategy targeting an individual customer.

6) Supplier Selection: At this stage, the buyer screens the proposals and makes a

choice. A significant part of this selection involves evaluating the vendors under

consideration. The selection process involves thorough review of the proposals

submitted, as well as consideration of vendor capabilities, reputation, customer

references, warranties, and so on. Proposals may be scored by different decision

makers using a common set of criteria. Often the selection process narrows down

vendors to a short list of highest-scoring proposals. Then the short-listed vendors

are invited to meet with the buyer(s) virtually or in person to discuss the proposal

and address any questions, concerns, or gaps.

7) Order-Routine Specification: The buyer now writes the final order with the

chosen supplier, listing the technical specifications, the quantity needed, the

warranty, and so on. At this stage, the supplier typically works closely with the

buyer to manage inventories and deliver on agreement terms.

8) Performance Review: In this final stage, the buyer reviews the supplier’s performance and provides feedback. This may be a very simple or a very complex

process, and it may be initiated by either party, or both. The performance review

may lead to changes in how the organizations work together to improve efficiency,

quality, customer satisfaction, or other aspects of the relationship.

From a marketing perspective this stage provides essential information about

how well the product is meeting customer needs and how to improve delivery in

order to strengthen customer satisfaction and brand loyalty. Happy, successful

customers may be great candidates for published case studies, testimonials, and

references for future customers. Dissatisfied customers provide an excellent

opportunity to learn what isn’t working, demonstrate your responsiveness, and

improve.

References

• http://www.yourarticlelibrary.com/marketing/market-segmentation/consumer-

behaviour-meaningdefinition-and-nature-of-consumer-behaviour/32301

• https://bbamantra.com/determinants-factors-influencing-consumer-behaviour/

• https://www.business2community.com/consumer-marketing/six-stages-

consumer-buying-process-market-0811565

• https://www.wisdomjobs.com/e-university/consumer-behaviour-tutorial-

94/organisational-customers-10605.html

• https://courses.lumenlearning.com/clinton-marketing/chapter/reading-the-

organizational-buying-process/

• https://bbamantra.com/organizational-buying-process/

• https://courses.lumenlearning.com/clinton-marketing/chapter/reading-the-

organizational-buying-process/

Marketing Management

Unit 3

Customer Relationship Management

Concept Customer relationship management (CRM) refers to the principles, practices, and guidelines that an organization follows when interacting with its customers. From the organization's point of view, this entire relationship encompasses direct interactions with customers, such as sales and service-related processes, and forecasting and analysis of customer trends and behaviors. Ultimately, CRM serves to enhance the customer's overall experience.

Elements of CRM range from a company's website and emails to mass mailings and telephone calls. Social media is one way companies adapt to trends that benefit their bottom line. The entire point of CRM is to build positive experiences with customers to keep them coming back so that a company can create a growing base of returning customers.

Concept Increasingly, the term CRM is being used to refer to the technology systems companies can engage to manage their external interactions with customers at all points during the customer lifecycle, from discovery to education, purchase, and post-purchase.

CRM includes all aspects in which a company interacts with customers, but more commonly refers to the technology used to manage these relationships.

“Who is a customer?

A customer is the most important visitor on our premises. He is not dependent on us, we are dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an outsider on our business. He is a part of it. We are not doing a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

-Mahatma Gandhi , 1890

Ingredients of CRM

Loyalty

Value

Customer

Centric Profitability

Segmentation

CRM Human Management and Artificial Intelligence

All of the computer software in the world to help with CRM means nothing without proper management and decision-making from humans. Plus, the best programs organize data in a way that humans can interpret readily and use to their advantage. For successful CRM, companies must learn to discern useful information and superfluous data and must weed out any duplicate and incomplete records that may give employees inaccurate information about customers.

Despite this human need, industry analysts are increasingly discussing the impact that Artificial Intelligence applications may have on CRM management and the CRM market in the near future. AI is expected to strengthen CRM activities by speeding up sales cycles, optimizing pricing and distribution logistics, lowering costs of support calls, increasing resolution rates, and preventing loss through fraud detection.

Importance & Advantages of CRM

CRM systems provide businesses

with numerous strategic advantages. One of such is the capability to add

a personal touch to existing relationships between the business and the

customers. It is possible to treat each client individually rather than as a

group, by maintaining a repository on each customer’s profiles. This

system allows each employee to understand the specific needs of their

customers as well as their transaction file.

2) CRM systems are useful in

identifying potential customers. They keep track of the profiles of the

existing clientele and can use them to determine the people to target for

maximum clientage returns. New customers are an indication of future

growth. However, a growing business utilizing CRM software should

encounter a higher number of existing customers versus new prospects

each week.

Importance & Advantages of CRM

CRM data ensures effective co-ordination

of marketing campaigns. It is possible to filter the data and ensure the

promotions do not target those who have already purchased particular

products. Businesses can also use the data to introduce loyalty programs

that facilitate a higher customer retention ratio. No business enjoys

selling a similar product to a customer who has just bought it recently. A

CRM system coordinates customer data and ensures such conflicts do

not arise.

A CRM system helps in

closing faster deals by facilitating quicker and more efficient responses

to customer leads and information. Customers get more convinced to

turn their inquiries into purchases once they are responded to promptly.

Organizations that have successfully implemented a CRM system have

observed a drastic decrease in turnaround time.

Importance & Advantages of CRM

Cross selling

involves offering complimentary products to customers based on their

previous purchases. On the other hand, up selling involves offering

premium products to customers in the same category. With a CRM

system, both cross and up selling can be made possible within a few

minutes of cross checking available data.

A CRM system facilitates

development of better and effective communication channels.

Technological integrations like websites and interactive voice response

systems can make work easier for the sales representatives as well as

the organization. Consequently, businesses with a CRM have a chance

to provide their customers with various ways of communication. Such

strategies ensure appropriate delivery of communication and quick

response to inquiries and feedback from customers.

Importance & Advantages of CRM

Targeting clients with CRM software

is much easier since employees have access to order histories and

customer details. The software helps the organization’s workforce to

know how to deal with each customer depending upon their recorded

archives. Information from the software can be instantly accessed from

any point within the organization.

CRM software is useful in measuring

customer loyalty in a less costly manner. In most cases, loyal customers

become professional recommendations of the business and the services

offered. Consequently, the business can promote their services to new

prospects based on testimonials from loyal customers. Testimonials are

often convincing more than presenting theoretical frameworks to your

future prospects. With CRM, it could be difficult pulling out your loyal

customers and making them feel appreciated for their esteemed support.

Importance & Advantages of CRM

A CRM strategy is

effective in building up effective communication within the company.

Different departments can share customer data remotely, hence

enhancing team work. Such a strategy is better than working

individually with no links between the different business departments. It

increases the business’s profitability since staff no longer have to move

physically move while in search of critical customer data from other

departments.

CRM enables a business understand

the needs and behavior of their customers. This allows them to identify

the correct time to market their products to customers. The software

gives ideas about the most lucrative customer groups to sales

representatives. Such information is useful in targeting certain prospects

that are likely to profit the business. Optimized marketing utilizes the

business resources meaningfully.

Importance & Advantages of CRM

Better opportunity management for better sales

Decreased cost of sales

Expand the base of loyal customers

Deliver high customer service standard

Give a holistic-view of the activities in the organization

A higher hit rate by a systematic and scientific sales process

Better quality of business decisions due to better reporting

capability

Making the whole system process driven rather than

personality driven

Increased sales force productivity

Strategic CRM Tools & Measures

A brand can only be successful if it effective in maintaining its relationships with its customers and clients. A good brand is based on effective relationships with customer, this goes without saying. Relationships are a big aspect of any company and they have immense benefits other just satisfied and happy customers. With the spread of social media, it has become very easy for customers to vent their feeling about the products and services that they use, not just to their friends and families but to a wider audience as well. This, in turn, can enhance or tarnish the reputation of a brand in a matter of seconds.

Customer needs and expectations are changing at a rapid pace. That is why understanding them requires good and effective management. Effective customer relationship management process strategy can provide companies with important insights about how customer expectations can be met in a realistic fashion. Companies must remember that they must raise the expectations of the customers only if they are capable of fulfilling them in an effective manner. Raising the expectations of the customer and failing to meet them can have disastrous consequences for the brand, not just in the short term but in the long term as well.

Strategic CRM Tools & Measures

very brand offers something unique to the customers but convincing the consumer that this product is good is really important. However, more often than not, customers do not look for products that have innovative features but fulfill their needs in a better and simple manner customer relationship management tools. That is why brands must innovate and manufacture such products and services that are capable of meeting even the simplest needs of the customer. Every person has some requirements or the other be it lunch suggestions or help with fixing the WiFi at their homes, brands must learn to innovate so that they can fulfill all the needs of the customers with the least amount of hurdles.

As mentioned above, customers are the main asset of any company. Companies must keep a track of important details of customers like names, birthday and anniversaries dates among other relevant information so that campaigns can be personalized, thereby creating better engagement and empowerment. By sending personalized notes or cards on important days of your customer lives can help in making the connection with them stronger and effective in the true sense. With so many advancements done in the field of customer engagement, many brands still look only the address books or spreadsheets to track information about customers and clients.

Strategic CRM Tools & Measures

Getting honest customer feedback is the backbone for brands and companies that want to improve the overall experience of their customers. But capturing customer feedback is not easy because almost 91 percent of customers feel that brands do not consider their feedback as important. That is why brands must always be ready with quick responses as it can leave a lasting impact on the minds of the customer. Further, with the advancement of social media, keeping a track of customer feedback is extremely important because Customer Relationship Management benefit in the digital world can be destroyed in seconds.

Social media and digital marketing have created new dynamics in the field of marketing and in the process completely altered it. The first challenge that many companies face in this situation is making contact with the customers. In other words, companies must understand that it is important that they become an integral part of the journey of the customer. Companies need to focus on becoming an authority in their own respective field. If they cannot be a part of the customer’s journey, then in most cases they are going to be left behind in the race.

Strategic CRM Tools & Measures

salesforce.com: A leader in on-demand customer relationship management

types, Salesforce offers a wide range of CRM suite for small, mid-level and

enterprise organizations across sectors. With a focus on sales and support,

Salesforce offers vertical solutions for wealth management and financial

segments on one hand and a number of industry-specific solutions on the other

hand. Build on the force.com platform, all the applications on this tool provide

immense flexibility and scalability for companies of any size and category.

Salesforce help companies with a lot of tasks that includes management of

customer accounts, tracking of sales leads, conducting and monitoring

marketing campaigns among other functions customer relationship

management tools.

Infusionsoft: Built exclusively for small brands and business,

Infusionsoft brings together a whole range of solution for meeting sales and

marketing goals of a company. Featuring lead generation tools and marketing

automation, email and social media tools to engage and convert leads, this tool

aids brands in helping them to retain and engage client and customers in an

effective fashion. With e-commerce tools provided within this software, they

can help brands to grow and empower their brand in the digital scenario as

well.

Strategic CRM Tools & Measures

TeamSupport Software: A successful client support team, TeamSupport helps

brands to effectively meet the customer needs and expectations. By helping

teams to work together, this software is ideal for removing communications

hurdles, improving customer communication and addressing client needs in an

effective fashion. A full-service software suite, Team Support takes customer

service to the next level. With several key features that are unique and

innovative, Team Support delivers cohesive and impressive customer support,

something that sets it apart from other CRM software.

Pardot Marketing Automation Software: With a primary focus on business

to business companies, Pardot is a unique and sustainable solution. By offering

automated support for a long duration and multi-step decisions associated with

B2B sales, some of the products include lead management, batch email

marketing, automated drip marketing and sales alerts in real time. Recognised

for its lead scoring capability, the enterprise edition of this software also offers

a lot of advanced capabilities like custom security controls, bigger storage

space and dedicated IP address.

Strategic CRM Tools & Measures

Mhelpdesk: A field service solution that helps companies to

organize and manage service request, billing, reports and

customer relationships, Mhelpdesk was introduced in the

year 2007. It is currently used by over 6000 different

companies and helps them to manage all aspects of their field

service business through one centralized system. With

multiple features that support a field service oriented

business like integration with Quickbooks for accounting,

Mhelpdesk is entirely web-based making it extremely easy to

access on both desktops, laptops and mobile devices.

Role of CRM in Customer Retention

Increased customer retention

Increase in visits and orders made per customers

Increased sales

Increased cross sale

Increased up sale

Increased win back

Increased referrals

Revenue per sales person

Response rate increase

Increase in marketing return on investment

Service agreement renewal rate

Customer lifetime value

Increase in the number of sales call made

Sales cycle duration

References

• https://www.investopedia.com/terms/c/customer_relation_management.as

p

• https://crm.walkme.com/advantages-customer-relationship-management/

• https://www.educba.com/customer-relationship-management-tools/

• https://shodhganga.inflibnet.ac.in/bitstream/10603/97009/10/10_chapter1.

pdf

• https://www.predictiveanalyticstoday.com/the-crm-metrics-how-to-

measure-the-performance-of-crm/

Marketing Management

Unit 4

Marketing Research-I

Meaning & Definition

• Marketing management is nothing but marketing research.

With the expansion of business, marketing management

becomes complex. It has to rely heavily on marketing research

for solving problems in the field of marketing.

• “The systematic gathering, recording and analysis of data

about problems relating to the marketing of goods and

services” —The American Marketing Association.

• “The systematic objective and exhaustive research for and

study of the facts relevant to any problem in the field of

marketing.” —Richard Crisp

Meaning & Definition

• “Marketing research is the careful and objective study of

product design, markets, and such transfer activities as

physical distribution and warehousing, advertising and sales

management.” —Clark and Clark

• “Marketing research is the inclusive term which embraces all

research activities carried on for the management of marketing

work, the gathering, recording and analysing of all facts about

problems relating to the transfer and sale of goods and services

from producer to consumer.” —Harry Hapner

Marketing Research V/S Market Research:

• Marketing research is a broader term including market

research. Marketing research is concerned with all the major

functions of marketing. Market research is primarily

concerned with knowing the capacity of the market to absorb a

particular product. Marketing research is not only concerned

with the jurisdiction of the market but also covers nature of the

market, product analysis, sales analysis, time, place and media

of advertising, personal selling and marketing intermediaries

and their relationships etc.

Objectives of Marketing Research

(1) To Provide Basis For Proper Planning: Marketing and sales forecast research provides sound basis for the formulation of all marketing plans, policies, programmes and procedures.

(2) To Reduce Marketing Costs: Marketing research provides ways and means to reduce marketing costs like selling, advertisement and distribution etc.

(3) To Find Out New Markets for The Product: Marketing research aims at exploring new markets for the product and maintaining the existing ones.

(4) To Determine Proper Price Policy: Marketing research is considered helpful in the formulation of proper price policy with regard to the products.

(5) To Study in Detail Likes and Dislikes of the Consumers: Marketing research tries to find out what the consumers, (the men and women who constitute the market) think and want. It keeps us in touch with the consumers, minds and to study their likes and dislikes.

Objectives of Marketing Research

(6) To Know The Market Competition: Marketing research also aims at knowing the quantum of competition prevalent in the market about the product in question. The company may need reliable information about competitor’s moves and strategies which are of immense significance for further planning.

(7) To Study The External Forces: Marketing research provides valuable information by studying the impact of external forces on the organisation. External forces may include conditions developing in foreign markets, govt, policies and regulations, consumer incomes and spending habits, new products entering in the market and their impact on the company’s products.

(8) To Measure the Impact of Promotional Efforts: In modern days of changing marketing conditions, it is quite likely that a company may follow different strategies to promote a product of a service. Promotion-mix or the communication-mix today is consisting of three major elements, namely, advertising, personal selling and sales-promotion.

(9) To Design and Implement Marketing Control: Marketing control is the final or terminal job in the marketing management. It is the task of monitoring and feeding back the marketing performance and its measurement and evaluation against the planned performance standards so as to identify deviations, correct them as they occur and provide input for plan revision.

Importance of Marketing Research

1. Easily Spot Business Opportunities: After you’ve done your market

research, it'll be clear to you who you want to reach out to (your target

customers), where you can reach them (your marketing channels), and

what they're interested in. Once you’ve defined these, you’ll be able to

easily spot business opportunities. For example: Form partnerships with

other businesses, Create profitable order upgrades, Find new locations to

sell etc.

2. Lower Business Risks: Around half of businesses with employees don’t survive past the fifth year, according to data from the bureau of labour

statistics. The way to make sure that your business survives for longer is

to ensure that you've got a steady stream of sales and customers by

Testing new designs and products before launching, Finding out why

customers don’t come back, Getting insights on problem areas etc.

Importance of Marketing Research

3. Create Relevant Promotional Materials: If you’ve ever wondered what text or images to put on your fliers, website, or social media accounts, with thorough market research, you’ll know exactly what to do. Since target customers have already expressed all their wants, needs, and frustrations with you, you’ll know exactly what to address and how to address it when you start creating your marketing materials.

4. Know Where to Advertise: One of the problems that small business owners face is a limited budget. Because of this, your marketing budget should be optimized to give you the best returns possible. Your market research can help ensure that you’re reaching your intended audience in the channels where they’re most likely to see your message.

5. Outsell Competitors: The business that knows their customers more tends to win more. If you can beat your competitors at finding out your customers’ needs and you aim to fulfill those needs, you've got a better chance of standing out from the competition. Here are some ways you can use market research to outsell competitors: Target dissatisfied customers, Find an underserved customer segment, Identify unaddressed customer needs etc.

Importance of Marketing Research

6. Set Better Goals for Your Business: When business owners set goals for their

business, it’s typically related to growth in sales or customers. But without market

research, you won’t be able to know if your goal is achievable and how to achieve it

in the first place. With market research, you’ll be able to determine the specific

directions you want to grow your customer base.

7. Decision-Making Becomes Simple: The need for and importance of marketing

research frequently comes up when making tough business decisions. Instead of

having arbitrary criteria for the decisions you make as a business owner, you can

always go back to your market research report. Based on that report, will this

decision lead to more customers? Will you be able to reach more people who are

likely to buy from you? Will it be clear to them that your business can meet their

needs?

8. Business growth: Market research helps you comprehend the demands of your

customers, detect more business opportunities, plan the perfect marketing campaign,

minimize losses, and keep track of the competition. It allows organizations to

classify their objectives while following the current trends and take advantage by

reaching out to their target audience.

Importance of Marketing Research

9. Better understanding of customers: Who will buy your product? Who are your ideal customer personas? How often will they buy? What do they need? What do they want, expect? The more answers you have the more

understanding you’ll get. This will result directly in meeting the customer’s needs better than your competitors.

10. You won’t go out of business: “It is not the strongest or the most intelligent

who will survive but those who can best manage change.” — Charles Darwin

We all saw how giant brands like Nokia that still struggles to get back in the mobile game failed in their market predictions and are nearly forgotten by consumers today.

Netflix and Apple did their market research right prior to any other competitors and utilized every open gap in the movie shows and mobile phone segments.

So, in order to remain in business and stay relevant, you should not only anticipate change, but you need to be able to predict change too. That’s how good your market research needs to be!

Types of Marketing

Research

Quantitative

Research

Qualitative

Research

1. Exploratory Market Research: The researcher uses the exploratory research when he has a very little information about the research problem and needs to gain insights about it before finding the solutions to it. It requires the researcher to clear his concept, gain insights, formulate problems, eliminate impractical ideas and formulate a hypothesis to check the relevancy of the research design. This can be done by using the secondary data, i.e. information available both inside and outside the organization, conducting observational studies, consulting experts, and processing feedback from the marketplace and surveys.

2. Descriptive Market Research: The descriptive research is concerned with testing the hypothesis to find out the accurate answers of the research problem. Such as, who are the prospective buyers of the product?, How the products are consumed?, What fraction of the population uses the product?, What is the demand forecast? And who are the potential competitors? The objective of the descriptive market research is to measure the frequency with which the things occur and the extent to which the variables under study are correlated.

3. Quantitative Market Research deals with the hard facts and statistical data rather than the opinions, feelings, and attitudes of the individuals. Here, the data are quantified to draw inferences about the customer’s behavior, attitude and preferences in numerical terms that can be easily interpreted and compared with other data facts.

Types of Marketing Research

4. Qualitative Market Research deals with the feelings, attitudes, opinions, and thoughts of an individual to ascertain their underlying reasons for behavior. In other words, the research conducted to determine what people think or

feel about the situation and what are the factors that influence their behaviors is called qualitative market research.

5. Causal Market Research: The causal market research is conducted to establish the cause-and-effect relationship between the variables, such as if

the packaging of the product is changed then what will be its effect on the product durability? Thus, this research is carried out to explain the facts that why a certain change in one variable is observed due to the change in the

other.

6. Predictive Market Research: As the name suggests, the predictive research is conducted to forecast or predict certain market variable for which the research is designed. Such as predicting the future sales, projection of

growth, test market to predict the success of a new product, defining of firm’s product line, etc.

Types of Marketing Research

Scope of Marketing Research

• Product Research: roduct means the goods and services which are sold to

the consumers. It includes consumer products and industrial products.

Product research studies the individual product. It studies the making and

marketing of the product. It studies the colour, size, shape, quality,

packaging, brand name and price of the product. It also deals with product

modification, product innovation, product life cycle, etc. The product is

modified (changed) as per the needs and wants of the consumers.

Therefore, the product will not fail in the market.

• Consumer Research: Consumer is the person who purchases the

goods and services. The consumer is the king in the market.

Consumer research studies consumer behaviour. It studies the

consumers needs, wants, likes, dislikes, attitude, age, sex, income,

location; buying motives, etc. This data is used to take decisions

about the product, its price, place and promotion.

Scope of Marketing Research

• Packaging Research: Packaging research is a part of product

research. It studies the package of the product. It improves the

quality of the package. It makes the package more attractive. It

makes the package more convenient for the consumers. It

reduces the cost of packaging. It selects a suitable method for

packaging. It also selects suitable packaging material.

• Pricing Research: Pricing Research studies the pricing of the

product. It selects a suitable method of pricing. It fixes the

price for the product. It compares the companies price with the

competitor's price. It also fixes the discount and commission

which are given to middlemen. It studies the market price

trends. It also studies the future price trends.

Scope of Marketing Research

• Advertising Research: Advertising research studies the advertising of the product. It fixes the advertising objectives. It also fixes the advertising budget. It decides about the advertising message, layout, copy, slogan, headline, etc. It selects a suitable media for advertising. It also evaluates the effectiveness of advertising and other sales promotion techniques.

• Sales Research: Sales research studies the selling activities of the company. It studies the sales outlets, sales territories, sales forecasting, sales trends, sales methods, effectiveness of the sales force, etc.

• Distribution Research: Distribution research studies the channels of distribution. It selects a suitable channel for the product. It fixes the channel objectives. It identifies the channel functions like storage, grading, etc. It evaluates the competitor's channel.

Scope of Marketing Research

• Policy Research: Policy research studies the company's policies. It

evaluates the effectiveness of the marketing policies, sales policies,

distribution policies, pricing policies, inventory policies, etc. Necessary

changes, if any, are made in these policies.

• International Marketing Research: International marketing research

studies the foreign market. It collects data about consumers from foreign

countries. It collects data about the economic and political situation of

different countries. It also collects data about the foreign competitors. This

data is very useful for the exporters.

• Market Research: Market research studies the markets, market

competition, market trends, etc. It also does sales forecasting. It estimates

the demand for new products. It fixes the sales territories and sales quotas.

Scope of Marketing Research

• Motivation Research: Motivation research studies consumers' buying

motives. It studies those factors that motivate consumers to buy a product.

It mainly finds out, Why the consumers buy the product? It also finds out

the causes of consumer behaviour in the market.

• Media Research: Media research studies various advertising media. The

different advertising media are television (TV), radio, newspapers,

magazines, the internet, etc. Media research studies the merits and demerits

of each media. It selects a suitable media for advertising. It does media

planning. It also studies media cost. It helps in sales promotion and to avoid

wastage in advertising.

Scope of Marketing Research

Process of Marketing Research

1. Define the Problem-The foremost decision that every firm has to undertake is to find out the problem for which the research is to be conducted.The problem must be defined adequately because if it is too vague, then it may result in the wastage of scarce resources and if it is too narrow, then the exact conclusion cannot be drawn.In order to define the problem appropriately, each firm must have a clear answer to the questions viz. What is to be researched (content and the scope)? And Why the research is to be done (decisions that are to be made)?

2. Develop the Research Plan– This step involves gathering the information relevant to the research objective. It includes:

i. Data Sources: The researcher can collect the data pertaining to the research problem from either the primary source or the secondary source or both the sources of information.The primary source is the first-

hand data that does not exist in any books or research reports whereas the secondary data is the secondary data which is available in the books, journals, reports, etc.

Process of Marketing Research

ii. Research Approaches: The Secondary data are readily available in

books, journals, magazines, reports, online, etc. But the primary data

have to be collected trough Observational Research, Ethnographic

Research, Focus Group Research, Survey Research, Behavioral Data,

Experimental research etc.

iii. Sampling plan: Once the research approach is decided, the researcher

has to design a sampling plan and have to decide on the following:

The sampling Unit i.e. whom, shall we survey? The sample size, i.e.,

How many units in the population shall be surveyed? The sampling

procedure, i.e. How the respondents shall be chosen?

iv. Contact Methods: The researcher has to choose the medium through

which the respondents can be contacted. The respondents can be

reached via emails, telephone, in person or online.

Process of Marketing Research

3. Collect the Information: This is one of the most expensive methods of marketing research. At this stage, the researcher has to adopt the methods to collect the information, he may find it difficult to gather the correct information because of the respondent’s biasedness, unwillingness to give answers or not at home.

4. Analyze the Information: Once the information is collected the next step is to organize it in such a way that some analysis can be obtained. The researchers apply several statistical techniques to perform the analysis, such as they compute averages and measures of dispersion. Also, some advanced decision models are used to analyze the data.

5. Present the Findings: Finally, all the findings and the research are shown to the top management level viz. Managing director, CEO, or board of directors to make the marketing decisions in line with the research.

6. Make the Decision: This is the last step of the marketing research, once the findings are presented to the top level management it is up to them either to rely on the findings and take decisions or discard the findings as unsuitable.

References

• http://www.yourarticlelibrary.com/marketing/marketing-research-meaning-

definition-and-objectives-explained/25862

• https://businessjargons.com/marketing-research.html

• https://business.tutsplus.com/articles/why-is-marketing-research-important--cms-

31593

• https://medium.com/@BizzBeeSolution/5-reasons-why-market-research-is-

crucial-for-your-business-a27b77fa8264

• https://businessjargons.com/types-of-marketing-research.html

• https://kalyan-city.blogspot.com/2011/07/scope-of-marketing-research-mr-

branches.html

Marketing Management

Unit 5

Marketing Research-II

Research Design

Research design is a set of advance decisions that make up the master plan specifying the methods and procedures for collecting and analysing data.

Research design is defined as a framework of methods and techniques chosen by a researcher to combine various components of research in a reasonably logical manner so that the research problem is efficiently handled. It provides insights about “how” to conduct research using a particular methodology. Every researcher has a list of research questions which need to be assessed – this can be done with research design.

The sketch of how research should be conducted can be prepared using research design. Hence, the market research study will be carried out on the basis of research design.

The design of a research topic is used to explain the type of research (experimental, survey, correlational, semi-experimental, review) and also its sub-type (experimental design, research problem, descriptive case-study). There are three main sections of research design: Data collection, measurement, and analysis.

Types Research Design

Research

Design

Essential elements of research design

• Accurate purpose statement of research design

• Techniques to be implemented for collecting details for research

• Method applied for analyzing collected details

• Type of research methodology

• Probable objections for research

• Settings for research study

• Timeline

• Measurement of analysis

Research Design Characteristics • Neutrality: The results projected in research design should be free from

bias and neutral. Understand opinions about the final evaluated scores and conclusion from multiple individuals and consider those who agree with the derived results.

• Reliability: If a research is conducted on a regular basis, the researcher involved expects similar results to be calculated every time. Research design should indicate how the research questions can be formed to ensure the standard of obtained results and this can happen only when the research design is reliable.

• Validity: There are multiple measuring tools available for research design but valid measuring tools are those which help a researcher in gauging results according to the objective of research and nothing else. The questionnaire developed from this research design will be then valid.

• Generalization: The outcome of research design should be applicable to a population and not just a restricted sample. Generalization is one of the key characteristics of research design.

Data Collection

• Data collection is defined as the procedure of collecting,

measuring and analyzing accurate insights for research using

standard validated techniques. A researcher can evaluate their

hypothesis on the basis of collected data. In most cases, data

collection is the primary and most important step for research,

irrespective of the field of research. The approach of data

collection is different for different fields of study, depending

on the required information.

• The most critical objective of data collection is ensuring that

information-rich and reliable data is collected for statistical

analysis so that data-driven decisions can be made for

research.

Data Collection Methods

• In-Person Interviews Pros: In-depth and a high degree of confidence on the data Cons: Time consuming, expensive and can be dismissed as anecdotal

• Mail Surveys Pros: Can reach anyone and everyone – no barrier Cons: Expensive, data collection errors, lag time

• Phone Surveys Pros: High degree of confidence on the data collected, reach almost anyone Cons: Expensive, cannot self-administer, need to hire an agency

• Web/Online Surveys Pros: Cheap, can self-administer, very low probability of data errors Cons: Not all your customers might have an email address/be on the internet, customers may be wary of divulging information online.

Data Availability

• The term “data availability” refers to the ability to ensure that

required data is always accessible when and where needed

within an organization’s IT infrastructure, even when

disruptions occur. The reality is that data that’s not accessible

when needed is worthless. In fact, it’s worse than useless

because if systems have been set up based on that availability,

a catastrophic chain reaction of failure can occur; data that was

counted on to be there is missing, or worse, it’s there but

outdated or otherwise compromised.

How To Ensure High Data Availability

• Have a plan – Maintaining data availability should be a central element in your company’s disaster recovery/business continuity plan. This should include RPO (recovery point objective) and RTO (recovery time objective) targets that define, respectively, exactly which data must be restored, and when it must be accessible, for operations to resume after a disruption.

• Employ redundancy – Having backup copies of your data ensures that the failure of a storage component, or the deterioration of stored data over time, won’t result in permanent loss of the information.

• Eliminate single points of failure –You should not only have multiple copies of your data, but also multiple access routes to it so that the failure of any one network component, storage device, or even server won’t make the data inaccessible.

How To Ensure High Data Availability

• Institute automatic failover – When an operational disruption occurs, automatic failover can ensure continuous data availability by instantly swapping in a backup to replace the affected component.

• Take advantage of virtualization – The software-defined model for storage infrastructure helps maximize data availability. Because storage system functionality is accessed through software and is independent of the underlying hardware, you are less vulnerable to component failures or operational disruptions in a local facility.

• Use the right tools – Rather than attempting to increase data availability in your IT infrastructure through home-grown ad hoc measures, employ tools specifically designed for that purpose. A good example is Syncsort’s MIMIX Availability, which delivers high availability and disaster recovery, including highly aggressive RPO and RTO targets, for IBM i servers. It replicates data changes on production servers to recovery servers in real time, with the ability to copy between different server models, storage types and OS versions.

Data Collection Procedure

• Proceeding from general to specific research questions, makes the research activities in any project more focused - in terms of data needed to answer the research questions. Hence questions associated with data collection are some of the most important in any research enquiry.

• It is fairly common for a Research Plan to be divided into two stages: Pre-empirical and empirical stages. The first stage is where you start with the research question, go through what others have done, modify your own research question(s) and set some kind of hypothesis or theory. The second stage is that part of your research where you decide on your research design i.e. qualitative or quantitative or a combination of both and assemble your conceptual framework. These stages will be informed by such decisions like:

What kind of data is required to test the hypothesis/theory?

From whom to collect the data? and

What procedures need to be followed to collect that data?

Data Collection Procedure

We need to answer some questions before data collection procedures:

1) How is the data collected?

2. When the data will be collected?

3. Who is responsible for collecting and recording the data?

4. Where the collected data will be stored?

5. How do we ensure that the data is correct?

Data Collection Procedure

The most common procedures used for data collection are:

a) Primary Data Collection • Questionnaires

Self Administered questionnaire

Interview administered questionnaire

• Open ended interviews

• Focus group discussion

• Observations

b) Secondary Data Collection: Secondary data collection is basically collecting data from documents, records and reports of others.

• It is also important to compare all these procedures, find out their comparative advantages and disadvantages before you finally settle for a particular data collection procedure.

• However whichever procedure you use, certain guidelines regarding ethics in data collection, management of data collection and designing of data collection instruments will have to be kept in mind. These are referred as privacy issues.

Questionnaire Design

Scaling Techniques

• Definition: Scaling technique is a method of placing

respondents in continuation of gradual change in the pre-

assigned values, symbols or numbers based on the features of

a particular object as per the defined rules. All the scaling

techniques are based on four pillars, i.e., order, description,

distance and origin.

• The marketing research is highly dependable upon the scaling

techniques, without which no market analysis can be

performed.

Scaling Techniques

Primary Scaling Techniques

o Nominal Scale

o Ordinal Scale

o Interval Scale

o Ratio Scale

Other Scaling Techniques

o Comparative Scales

o Non-comparative Scales

o Conclusion

Nominal Scale

• Nominal scales are adopted for non-quantitative (containing

no numerical implication) labelling variables which are unique and different from one another.

• Types of Nominal Scales:

• Dichotomous: A nominal scale that has only two labels is called ‘dichotomous’; for example, Yes/No.

• Nominal with Order: The labels on a nominal scale arranged in an ascending or descending order is termed as ‘nominal with order’; for example, Excellent, Good, Average, Poor, Worst.

• Nominal without Order: Such nominal scale which has no sequence, is called ‘nominal without order’; for example, Black, White.

Ordinal Scale

• The ordinal scale functions on the concept of the relative position of the objects or labels based on the individual’s choice or preference.

• For example, At Amazon.in, every product has a customer review section where the buyers rate the listed product according to their buying experience, product features, quality, usage, etc.

• The ratings so provided are as follows:

• 5 Star – Excellent

• 4 Star – Good

• 3 Star – Average

• 2 Star – Poor

• 1 Star – Worst

Interval Scale

• An interval scale is also called a cardinal scale which is the numerical labeling with the same difference among the consecutive measurement units. With the help of this scaling technique, researchers can obtain a better comparison between the objects.

• For example; A survey conducted by an automobile company to know the number of vehicles owned by the people living in a particular area who can be its prospective customers in future. It adopted the interval scaling technique for the purpose and provided the units as 1, 2, 3, 4, 5, 6 to select from.

In the scale mentioned above, every unit has the same difference, i.e., 1, whether it is between 2 and 3 or between 4 and 5.

Ratio Scale

• One of the most superior measurement technique is the ratio scale. Similar

to an interval scale, a ratio scale is an abstract number system. It allows

measurement at proper intervals, order, categorization and distance, with an

added property of originating from a fixed zero point. Here, the comparison

can be made in terms of the acquired ratio.

• For example, A health product manufacturing company surveyed to

identify the level of obesity in a particular locality. It released the following

survey questionnaire: Select a category to which your weight belongs to:

• Less than 40 kilograms

• 40-59 Kilograms

• 60-79 Kilograms

• 80-99 Kilograms

• 100-119 Kilograms

• 120 Kilograms and more

Comparative Scales For comparing two or more variables, a comparative scale is used by

the respondents. Following are the different types of comparative scaling techniques:

Paired Comparison

A paired comparison symbolizes two variables from which the respondent needs to select one. This technique is mainly used at the time of product testing, to facilitate the consumers with a comparative analysis of the two major products in the market.

To compare more than two objects say comparing P, Q and R, one can first compare P with Q and then the superior one (i.e., one with a higher percentage) with R.

• For example, A market survey was conducted to find out consumer’s preference for the network service provider brands, A and B. The outcome of the survey was as follows: Brand ‘A’ = 57% Brand ‘B’ = 43% Thus, it is visible that the consumers prefer brand ‘A’, over brand ‘B’.

Rank Order

• In rank order scaling the respondent needs to rank or arrange the given

objects according to his or her preference.

• For example, A soap manufacturing company conducted a rank order

scaling to find out the orderly preference of the consumers. It asked the

respondents to rank the following brands in the sequence of their choice:

Soap Brands Rank

Brand V 4

Brand X 2

Brand Y 1

Brand Z 3

The above scaling shows that soap ‘Y’ is

the most preferred brand, followed by soap

‘X’, then soap ‘Z’ and the least preferred

one is the soap ‘V’.

Constant Sum • It is a scaling technique where a continual sum of units like dollars, points,

chits, chips, etc. is given to the features, attributes and importance of a

particular product or service by the respondents.

• For example, The respondents belonging to 3 different segments were

asked to allocate 50 points to the following attributes of a cosmetic product

‘P’:

Attributes Segment 1 Segment 2 Segment 3

Finish 11 8 9

Skin Friendly 11 12 12

Fragrance 7 11 8

Packaging 9 8 10

Price 12 11 11

From the above constant sum

scaling analysis, we can see

that:

Segment 1 considers product

‘P’ due to its competitive price as a major factor.

But segment 2 and segment

3, prefers the product

because it is skin-friendly.

Q-Sort Scaling

• Q-sort scaling is a technique used for sorting the most appropriate objects

out of a large number of given variables. It emphasizes on the ranking of

the given objects in a descending order to form similar piles based on

specific attributes.

• It is suitable in the case where the number of objects is not less than 60 and

more than 140, the most appropriate of all ranging between 60 to 90.

• For example, The marketing manager of a garment manufacturing

company sorts the most efficient marketing executives based on their

past performance, sales revenue generation, dedication and growth.

• The Q-sort scaling was performed on 60 executives, and the marketing

head creates three piles based on their efficiency as follows:

In the above

diagram, the

initials of the

employees are

used to denote

their names.

Non-Comparative Scales

• A non-comparative scale is used to analyse the performance of

an individual product or object on different parameters.

Following are some of its most common types:

Continuous Rating Scales

• It is a graphical rating scale where the respondents are free to

place the object at a position of their choice. It is done by

selecting and marking a point along the vertical or horizontal

line which ranges between two extreme criteria.

• For example, A mattress manufacturing company used a

continuous rating scale to find out the level of customer

satisfaction for its new comfy bedding. The response can be

taken in the following different ways (stated as versions here):

The above diagram shows a non-comparative analysis of one

particular product, i.e. comfy bedding. Thus, making it very

clear that the customers are quite satisfied with the product

and its features.

Itemized Rating Scale • Itemized scale is another essential technique under the non-comparative scales.

It emphasizes on choosing a particular category among the various given categories by the respondents. Each class is briefly defined by the researchers to facilitate such selection.

• The three most commonly used itemized rating scales are as follows:

Likert Scale

• In the Likert scale, the researcher provides some statements and ask the respondents to mark their level of agreement or disagreement over these statements by selecting any one of the options from the five given alternatives. For example, A shoes manufacturing company adopted the Likert scale technique for its new sports shoe range named Z sports shoes. The purpose is to know the agreement or disagreement of the respondents. For this, the researcher asked the respondents to circle a number representing the most suitable answer according to them, in the following representation:

1 – Strongly Disagree

2 – Disagree

3 – Neither Agree Nor Disagree

4 – Agree

5 – Strongly Agree

Semantic Differential Scale

A bi-polar seven-point non-comparative rating scale is where the

respondent can mark on any of the seven points for each given attribute of

the object as per personal choice. Thus, depicting the respondent’s attitude

or perception towards the object.

For example, A well-known brand for watches, carried out semantic

differential scaling to understand the customer’s attitude towards its

product. The pictorial representation of this technique is as follows:

From the above diagram, we

can analyze that the customer

finds the product of superior

quality; however, the brand

needs to focus more on the

styling of its watches.

Stapel Scale

A Stapel scale is that itemized rating scale which measures the response,

perception or attitude of the respondents for a particular object through a

unipolar rating. The range of a Stapel scale is between -5 to +5 eliminating

0, thus confining to 10 units.

For example, A tours and travel company asked the respondent to rank their

holiday package in terms of value for money and user-friendly interface as

follows:

With the help of the above

scale, we can say that the

company needs to improve

its package in terms of

value for money. However,

the decisive point is that the

interface is quite user-

friendly for the customers.

Conclusion

• Scaling techniques provide a clear picture of the Product Life

Cycle and the market acceptability of the products offered. It

facilitates Product Development and benchmarking through

rigorous market research.

Sampling Designs

• Sampling design is a mathematical function that gives you the

probability of any given sample being drawn.

• Since sampling is the foundation of nearly every research

project, the study of sampling design is a crucial part of

statistics, and is often a one or two semester course. It involves

not only learning how to derive the probability functions

which describe a given sampling method but also

understanding how to design a best-fit sampling method for a

real life situation.

Non-Probability Sampling Design

• Convenience sampling: A convenience sample is simply one where the units that are selected for inclusion in the sample are the easiest to access. In our example of the 10,000 university students, if we were only interested in achieving a sample size of say 100 students, we may simply stand at one of the main entrances to campus, where it would be easy to invite the many students that pass by to take part in the research.

• Judgmental Sampling: Judgmental is also known as selective, purposive or subjective sampling which reflects a group of sampling techniques that rely on the judgment of the researcher when it comes to selecting the units (e.g., people, cases/organisations, events, pieces of data) that are to be studied. These purposive sampling techniques include maximum variation sampling, homogeneous sampling, typical case sampling, extreme (or deviant) case sampling, total population sampling and expert sampling. Each of these purposive sampling techniques has a specific goal, focusing on certain types of units, all for different reasons. The different purposive sampling techniques can either be used on their own or in combination with other purposive sampling techniques

Non-Probability Sampling Design

• Quota sampling: With proportional quota sampling, the aim is to end up with a sample where the strata (groups) being studied (e.g., males vs. females students) are proportional to the population being studied. If we were to examine the differences in male and female students, for example, the number of students from each group that we would include in the sample would be based on the proportion of male and female students amongst the 10,000 university students.

• Snowball sampling: Snowball sampling is particularly appropriate when the population you are interested in is hidden and/or hard-to-reach. These include populations such as drug addicts, homeless people, individuals with AIDS/HIV, prostitutes, and so forth.

Probability Sampling

Simple Random Sampling: In simple random sampling, all samples within the region have an equal chance of being selected. A simple random selection of points can be made using either the sp sample () function within the sp R package or the Create Random Points tool in Arc GIS.

Advantages

• Simplicity

• Requires little prior knowledge of the population

Disadvantages

• Lower accuracy

• Higher cost

• Lower efficiency

• Samples may be clustered spatially

• Samples may not be representative of the feature attribute(s)

Systematic: In systematic sampling, a sample is taken according to a regularized pattern. This approach ensures even spatial coverage. Patterns may be rectilinear, triangular, or hexagonal. This sampling strategy can be inaccurate if the variation in the population doesn’t coincide with the regular pattern (e.g., if the population exhibits periodicity).

Advantages

• Greater efficiency

• Lower cost

Disadvantages

• Lower precision

Probability Sampling

Stratified Random: In stratified random sampling, the sampling

region is spatially subset into different strata, and random sampling is applied to each strata. If prior information is available about the study area, it can be used to develop the strata. Strata may be sampled equally or in proportion to area; however, if the target of interest is rare in the population, it may be preferable to sample the strata equally (Franklin and Miller, 2009).

Advantages

• Higher accuracy

• Lower cost

Disadvantages

• The existing knowledge used to construct strata may be flawed.

Probability Sampling

Cluster: In cluster sampling, a cluster or group of points is

selected at one or more sites. The transect is an example of this

strategy, although other shapes are possible (e.g., square, triangle,

or cross shapes). It is common to orient the transect in the

direction of greatest variability.

Advantages

• Greater efficiency

• Lower cost

Disadvantages

• Lower precision

Probability Sampling

Multistage Probability Sampling

Stratified Random: In multistage random sampling, the region is separated into different subsets that are randomly selected (i.e., first stage), and then the selected subsets are randomly sampled (i.e., second stage). This is similar to stratified random sampling, except that with stratified random sampling each strata is sampled.

Advantages

• Greater efficiency

• Lower cost

Disadvantages

• Lower precision

• Stronger clustering than simple random sampling

Data Collection, Processing & Analysis

Acquiring data: Acquisition involves collecting or adding to the data holdings. There are several methods of acquiring data: collecting new data, using your own previously collected data, reusing someone others data, purchasing data or acquired from Internet (texts, social media, photos)

Data processing: A series of actions or steps performed on data to verify, organize, transform, integrate, and extract data in an appropriate output form for subsequent use. Methods of processing must be rigorously documented to ensure the utility and integrity of the data.

Data Analysis: involves actions and methods performed on data that help describe facts, detect patterns, develop explanations and test hypotheses. This includes data quality assurance, statistical data analysis, modeling, and interpretation of results.

Results: The results of above mentioned actions are published as a research paper. In case the research data is made accessible, one has to prepare the data set for opening up.

Methods of data processing

• Manual data processing: In this method data is processed manually without the use of a machine, tool or electronic device. Data is processed manually, and all the calculations and logical operations are performed manually on the data.

• Mechanical data processing – Data processing is done by use of a mechanical device or very simple electronic devices like calculator and typewriters. When the need for processing is simple, this method can be adopted.

• Electronic data processing – This is the modern technique to process data. This is the fastest and best available method with the highest reliability and accuracy. The technology used is latest as this method used computers and employed in most of the agencies. The use of software forms the part of this type of data processing. The data is processed through a computer; Data and set of instructions are given to the computer as input, and the computer automatically processes the data according to the given set of instructions. The computer is also known as electronic data processing machine.

Data Analysis

• Data that is processed, organized and cleaned would be ready for the analysis. Various data analysis techniques are available to understand, interpret, and derive conclusions based on the requirements. Data Visualization may also be used to examine the data in graphical format, to obtain additional insight regarding the messages within the data.

• Statistical Data Models such as Correlation, Regression Analysis can be used to identify the relations among the data variables. These models that are descriptive of the data are helpful in simplifying analysis and communicate results.

• The process might require additional Data Cleaning or additional Data Collection, and hence these activities are iterative in nature.

Methods of Data Analysis

• Text Analysis: Text Analysis is also referred to as Data Mining. It is a method to discover a pattern in large data sets using databases or data mining tools. It used to transform raw data into business information. Business Intelligence tools are present in the market which is used to take strategic business decisions. Overall it offers a way to extract and examine data and deriving patterns and finally interpretation of the data.

• Statistical Analysis: Statistical Analysis shows "What happen?" by using past data in the form of dashboards. Statistical Analysis includes collection, Analysis, interpretation, presentation, and modeling of data. It analyses a set of data or a sample of data. There are two categories of this type of Analysis - Descriptive Analysis and Inferential Analysis.

Methods of Data Analysis

• Diagnostic Analysis: Diagnostic Analysis shows "Why did it happen?" by finding the cause from the insight found in Statistical Analysis. This Analysis is useful to identify behavior patterns of data. If a new problem arrives in your business process, then you can look into this Analysis to find similar patterns of that problem. And it may have chances to use similar prescriptions for the new problems.

• Predictive Analysis: Predictive Analysis shows "what is likely to happen" by using previous data. The simplest example is like if last year I bought two dresses based on my savings and if this year my salary is increasing double then I can buy four dresses. But of course it's not easy like this because you have to think about other circumstances like chances of prices of clothes is increased this year or maybe instead of dresses you want to buy a new bike, or you need to buy a house!

• Prescriptive Analysis: Prescriptive Analysis combines the insight from all previous Analysis to determine which action to take in a current problem or decision. Most data-driven companies are utilizing Prescriptive Analysis because predictive and descriptive Analysis are not enough to improve data performance. Based on current situations and problems, they analyze the data and make decisions.

Report Preparation and Presentation

• A professional marketing research report must focus on several issues

including (a) effective communication of findings to the manager; (b)

provide sound and logical recommendation on the basis of the findings; and

(c) develop report in a manner that it serves for future reference.

• As the client needs, research problem definition, research objectives and

methods very for each situation, every marketing research report is unique

in its own sense. However, many parts of the basic format of any marketing

research report remains generic. Following provides the format for a

generic marketing research report.

1. Title page

2. Table of contents

3. Executive summary a. Research objectives b. Brief discussion on methodology c. Major findings d. Conclusion e. Recommendations

4. Introduction a. Problem definition

5. Research design a. Type of design used b. Data collection c. Scaling techniques d. Questionnaire development and pilot testing e. Sampling f. Fieldwork

6. Data analysis and findings a. Analysis techniques employed b. Results

7. Conclusion and recommendation 8. Limitations and future directions

9. Appendices a. Questionnaire and forms b. Statistical output

Report preparation and presentation

Format For A Generic Marketing Research Report

References

• https://www.slideshare.net/nbairstow/marketing-research-

design?from_action=save

• https://www.questionpro.com/blog/research-design/

• https://blog.syncsort.com/2018/06/data-availability/data-availability-101/

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hp

• https://www.google.com/search?q=questionnaire+design&tbm=isch&source=univ

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bih=632#imgrc=SZfz4OwYlPbDmM:

• https://theinvestorsbook.com/scaling-techniques.html

• https://www.statisticshowto.datasciencecentral.com/sampling-design/

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tech.github.io/stats_for_soil_survey/chapters/3_sampling/3_sampling.html

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