Market Research & The 5 C s JENNIFER DEBOER The Marketing Plan 2 Marketing Mix Market Research Marketing Strategy Product Price Place Promotion Customer Company Competition Context/Climate Collaboration Marketing Plan 1
Market Research 3 Different types of market research: 1. Exploratory Research to connect to your market; to gain ideas and insights; often qualitative research (e.g. marketing artist ) 2. Descriptive Research to provide numerical information; often quantitative approach (e.g. marketing scientist ) 3. Causal Research to establish causality; may be qualitative, quantitative, or mixed methods Marketing Artists v. Marketing Scientists 4 Recently, technology has driven marketing to become far more accountable, data driven, and innovative. Ideally, each group will combine/balance marketing artistry with marketing science. http://www.infographicszone.com/business/ marketing-artists-vs-marketing-scientists 2
Connecting the 5 C s Context (social, cultural, technological, demographics, political, etc.) Customers Competitive Needs Environment 5 Company s Capabilities (including collaboration) Adapted from http://idea-sandbox.com/blog_images/strategic_sweet_spot.png Connecting the 5 C s Context (social, cultural, technological, demographics, political, etc.) Customers Needs 6 Competitors Offerings Sweet Spot! Company s Capabilities (including collaboration) Adapted from http://idea-sandbox.com/blog_images/strategic_sweet_spot.png 3
Market Research Sources 7 Review relevant websites (e.g. competitor websites, industry websites, google scholar, etc.), online reports, advertisements, brochures Consult experts, managers, sales staff, customers, trade associations Speak to people with first-hand technical knowledge (i.e. foresters, carpenters, builders, architects, developers, renovators, etc.); conduct surveys, utilize focus groups Explore government publications/statistics, forest sector associations data/media, university data/media, industry/trade publications Visit retailers, big box stores, department stores, trade shows, home shows 5 C s of Market Research 8 5 C s of Market Research Customer: customer needs, customer segments, target markets, and market positioning Company: name, image, strengths, weaknesses, opportunities, and threats Competition: market environment, competitive rivalry (e.g. Porter s Five Forces) Context/Climate: political, economic, social, and technological environment Collaboration: outside sources that may benefit the company 4
1. The Customer 9 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 of our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. - Mahatma Gandhi, 1890 Customer Research 10 Market Segmentation: Identify bases for segmenting the market; develop segment profiles Target Market: Develop measures of market attractiveness; select target markets Market Positioning: Develop positioning for target market; develop a marketing mix 5
Market Segmentation Geographic Local Cities Regions Province State Nation Country Continent Demographic Age Gender Family Education Income Religion 11 Psychographic Behavioral Lifestyle Social Class Personality Hobbies Interests User Status Usage Rate Benefits Sought Loyalty Occasions Attitudes Segmentation Strategies Target Market Target Market = specific group of consumers at which a company aims its products and services. 12 Total Available Market Total Available = market population Potential Market = how many can you reach Target Market = who will be the most likely customers? Potential Market Target Businesses must have a clear definition of their target market as this can help reach its target consumers and analyze what their needs and suitability are. Market 6
Market Positioning 13 Positioning refers to the place that a brand occupies in the mind of the customer and how it is distinguished from products from competitors. In order to position products or brands, companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.). Marketing Myopia: https://hbr.org/video/3590615227001/the-explainer-marketing-myopia Think-Pair-Share #1 14 Discuss (1) your perceived market segment(s), target market, and market positioning strategies as well as (2) how/where you will conduct customer research. Marketing Segmentation Strategies (Choose 1-2): Geographic Local Cities Regions Province/State Nation/Country Continent Demographic Age Gender Family Education Income Religion Psychographic Lifestyle Social Class Personality Hobbies Interests Behavioral User Status Usage Rate Benefits Sought Loyalty Occasions Attitudes Target Market = specific group of consumers at which a company aims its products and services; who will be the most likely customer? Positioning: emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.). 7
2. The Company 15 The company analysis studies an organization s mission, vision, strategies, capabilities, product line, technology, culture, and objectives. It is useful in understanding the existing and potential problems with the company s business. SWOT Analysis 16 Strengths: Weaknesses: What do you do well? Which areas need improvement to compete with competitors? How do you stand apart from you competitors? What tangible and intangible assets/resources do you have? What does your business lack? Opportunities: Threats: What opportunities exist in your market? Who are your potential competitors? How can these opportunities benefit your business? Which risks are associated with your business/market? What market changes might you anticipate? Are resources limited? What threatens your marketing efforts? 8
Internal SWOT Example STRENGTHS 17 WEAKNESSES Good log supply Lower log costs Part of financially strong group with a long history Sawmills are well invested Too operationally focused Large scale production capacity with a wide product range Too little management capacity Lack of entrepreneurship There are no synergies between divisions Low yield compared to competitors Slow decision making and implementation Limited value-added production capacity Lack of a clear strategic plan o Management is currently done ad hoc ( fighting fires ) o No clear market strategy External SWOT Example OPPORTUNITIES Develop a strategy based upon control of the whole supply chain (forest to market) Consolidation of sawmills 18 THREATS Owners lose faith / patience Raw material supply declines if prices drop Follow through with development of internal distribution organization Increased competition for small logs from the fiber industry Enhance value-added capacities that match raw materials Competent people leave the organization More selective production matching sales with individual mill s capabilities Efficiency gains improve yield Rationalization would result in being unable to supply the assortment that merchants desire Knowledge gap don t have the inhouse capacity to develop a valueadded market strategy 9
Think-Pair-Share #2 19 Work with your partner or group to develop 1-2 strengths, weaknesses, opportunities, and threats facing your business. 3. The Competition 20 Determine not only who competes with your company in meeting the customer s needs, but how competitive the market/environment is. Is the competition active competitors or is potential threats? What are competing products? What are competitors strengths and weaknesses? 10
Porter s Five Forces 21 Porter's five forces analysis is a framework that attempts to analyze the level of competition within an industry and business strategy development. Group Exercise 3 22 Work with your group to discuss and assign levels of low, medium, or high to each of the five forces (threat of new entry, competitive rivalry, supplier power, threat of substitution, and buyer power). Low Low Then, assign a level of low, medium, or high to your overall competitive rivalry. High Low-Medium? Medium 11
4. The Context/Climate 23 The context/climate analysis is the evaluation of the macroenvironmental factors affecting the business. The primary factors to consider include political, economic, social/cultural, technological (PEST), however, some models add legal and environmental (PESTLE). PEST Research 24 Political = legislation (current and future), taxes, subsidies, grants, and general political climate Economic = industry factors, interest and exchange rates, local economic climate, global economic climate, market and trade cycles Social = consumer attitudes and opinions, ethical issues, lifestyle trends, demographics, media views, customer spending patterns, major events and influences Technological = competing technologies, innovation potential, research funding opportunities, maturity of technology, intellectual property issues 12
Think-Pair-Share #4 25 Political = legislation (current and future), taxes, subsidies, grants, and general political climate Work with your group to discuss one relevant macro-environmental factor from each PEST category. Economic = industry factors, interest and exchange rates, local economic climate, global economic climate, market and trade cycles Social = consumer attitudes and opinions, ethical issues, lifestyle trends, demographics, media views, customer spending patterns, major events and influences Technological = competing technologies, innovation potential, research funding opportunities, maturity of technology, intellectual property issues 5. The Collaborator Collaborators are the external stakeholders who team up with the organization in a mutually beneficial partnership. Agencies, suppliers, distributors, referrals, and business partners are typical collaborators; it is important to understand their capabilities, performances, and issues to better identify business opportunities and problems. 26 13
Think-Pair-Share #5 27 Discuss a potential, beneficial collaboration relevant to your product or business. 28 Questions? 14
Quiz! 29 Describe one method of market research: (1) identify one specific method and (2) describe how you could use this method to conduct market research relevant to your Dragon s Den assignment. 15