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MSU / Marketing / MKT 327 / what are the basic consumer needs that reflect value dimensions?

what are the basic consumer needs that reflect value dimensions?

what are the basic consumer needs that reflect value dimensions?

Description

MKT 327


what are the basic consumer needs that reflect value dimensions?



Market creation involves creating or linking to communities  

o Co-produce shared consciousness and culture, link  community, and achieve successful  

commercialization

o A market: a place, location, physical or virtual,  selling products/ also a collection of individual with  a common need and the ability/desire to satisfy  

 o Requirement of a market to exist: 

 2 or more people with needs

 ability to satisfy the needs  

 communication  

 exchange or transaction (universal marketing  function)

∙ Channels physical access/connection

∙ Discover needs and wants for customer  

∙ Establish relationships of communication  

∙ Community- individuals with a common purpose, linked  experiences, proximity

Community centric: marketing strategy pursues an intimate  relationship with its current community of customers and  developing the market to tailor their needs.


what are the different types of value that drive consumer choice?



o Benefits:

 Reduces need for marketing costs

 Increases customers brand loyalty

 Solidifies authenticity

 Helps drive innovationIf you want to learn more check out bio 200 exam 2

∙ Nature of community

o Market space in virtual world: interact on same  website

∙ Community marketing:

o Access  

o Insight  

o Authenticity  

∙ Companies can build a community themselves or it can  identify an existing community of potential customers  

 ∙    Factors of successful marketing and branding 

o Shared consciousness- common purpose of  

members of the community  

o Meaning and rituals  

o Moral responsibility  

∙ Role of physical connections in distribution process  channels

o Proficiency in functions  

o Accelerates specialization  

o Channels increase transaction efficiency


in market creation what involves creating or linking to communities?



o Increase assortment efficiency

o Increase quality of buyers experience  

∙ A product that delivers tangible and emotional value is in essence delivering meaning

∙ A community-centric marketing strategy is most  effective when there is an economic or industry  downturn

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∙ From a customer perspective, customer value is what  the “get” (benefits) relative to what they have to give up (costs/sacrifices)  If you want to learn more check out acc305

∙ Customer value- fundamental basis for all marketing  activity, purpose of organizations, key to successful via  differential positioning, and a precursor to customer  satisfaction  

∙ Firms exist to create value for others where it is neither  efficient nor effective for buyers to attempt to satisfy  their needs

o Objective of marketing is to achieve personal,  organizational, and societal objectives by creating  superior customer value

∙ Customer value has 2 definitions  

o Value for the customer- customer perceived value

o Value for the firm- value of the customer- customer  lifetime value

o An interactive relativistic preference and experience ∙ 3 basic consumer needs that reflect value dimensions o functional needs

 motivate the search for products that solve  

consumption problems

o symbolic needs

 desires for products that fulfill internally  

generated needs for self-enhancement, group  membership, ego-identification  

o experimental needs

 desires for products that provide sensory  

please, variety or cognitive stimulation  

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∙ 5 types of value that drive consumer choice o functional value Don't forget about the age old question of chem 1007 class notes

 perceived utility of an alternative resulting  

from inherent and characteristic based ability  to perform its functional purposes  

o social value

 perceived utility of an alternative resulting  

from its image and symbolism with  

demographic, socioeconomic groups We also discuss several other topics like chapter 29 infection prevention and control
If you want to learn more check out bonus army significance

o emotional value

 perceived utility as a result of comfort,  

security, romance, fear

o conditional value

 specific situation or physical or social context  faced by decision maker

o epistemic value  

 utility resulting from an alternative to arouse  curiosity, provide novelty or satisfy knowledge  

types of value  

∙ functional/instrumental is the extent to which a product  has desired characteristics, is useful, or preforms a  desired function  

o 3M, Volvo, Nike- product innovation strategy ∙ experiential/hedonic is the extent to which a product  creates experiences, feelings, emotions to a customer If you want to learn more check out in comparison with teenagers in previous times, teenagers in contemporary societies spend ________ time with their peers ________ with their parents.

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o Disney, Nordstrom- customer responsiveness, good  customer service- emphasis on customer  

relationship  

∙ symbolic/expressive is concerned with the extent to  which customers attach or associate psychological  meaning to a product

o The Body Shop, Gap, Lexus- brand image, excel at  advertising and PR, customer service and support ∙ Superior cost/sacrifice value  

o Wal-Mart, Dell, Amazon- compete on price and  convenience typically focus on effectiveness goals,  top down emphasis on SOP and excel at  

manufacturing  

∙ Manufacturing companies create value by acquiring raw  materials and using them to produce something useful  ∙ Value that’s created and captured by a company is the  profit margin

o Value created-cost of value=margin

∙ A value chain is a set of activities that an organization  carries out to create value for its customers

∙ Porter’s value chain

o Focuses on systems and how inputs are changed  into the outputs purchased by consumers

 o Primary activities relate directly to the physical  creation, sale, maintenance and support of a  

product or service 

 Inbound logistics- process of receiving, storing,  distributing inputs internally- supplier  

relationships are key factor in creating value  

here

 Operations- transformation activities that  

change inputs into outputs that are sold to  

customers

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 Outbound logistics- deliver your product or  

service to your customer- collection, storage,  

distribution systems

 Marketing and sales- process used to persuade  client to purchase from you instead of  

competitors

∙ Service- activities related to maintaining the value of  your product or service to your customers once it’s  purchased  

o Procurement (purchasing) – This is what the  organization does to get the resources it needs to  operate. This includes finding vendors and  

negotiating best prices.

o Human resource management – This is how well a  company recruits, hires, trains, motivates, rewards,  and retains its workers. People are a significant  source of value, so businesses can create a clear  advantage with good HR practices.

o Technological development – These activities relate  to managing and processing information, as well as  protecting a company's knowledge base. Minimizing information technology costs, staying current with  

technological advances, and maintaining technical  excellence are sources of value creation.

o Infrastructure – These are a company's support  systems, and the functions that allow it to maintain  daily operations. Accounting, legal, administrative,  and general management are examples of  

necessary infrastructure that businesses can use to  their advantage.

o Companies use these primary and support activities as "building blocks" to create a valuable product or  service.

 ∙    Using Porter's Value Chain 

o To identify and understand your company's value  chain, follow these steps.

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Step 1 – Identify sub activities for each primary activity- 3 of  them:

1.Direct activities create value by themselves. For  example, in a book publisher's marketing and sales  activity, direct subactivities include making sales calls to bookstores, advertising, and selling online.

2.Indirect activities allow direct activities to run  smoothly. For the book publisher's sales and marketing  activity, indirect sub activities include managing the  sales force and keeping customer records.

3.Quality assurance activities ensure that direct and  indirect activities meet the necessary standards. For the  book publisher's sales and marketing activity, this might  include proofreading and editing advertisements.

Step 2- identify sub activities for each support activity  

Step 3- identify links- key to increasing competitive  advantage (ex- link between developing the sales force  and the sales volumes)

Step 4- look for opportunities to increase value

∙ The fundamentals of growth dictate, that a company  grows when they acquire customers while at the same  time retaining existing customers.  

o Thus an exchange can occur from a new customer (called acquisition activities), and from an  existing customer repurchasing (called  

retention activities).

 The customer acquisition process begins  with a marketer recognizing some unmet need  or problem.  

∙ Through providing economic and/or  

psychological these needs are converted  

into a want for company's product or  

service. When an individual or  

organization desires to address some  

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want, and has the ability (both physical  

and financial) to address that want; then a

demand occurs, exchange takes place,  

and customer is created/acquired.  

∙ The company uses its marketing mix to  

provide the required utilities and to  

enhance individual's or organization's  

desire and ability to address the want for  

company's product or service.

 The customer retention process begins  

when demand is fulfilled and satisfaction is  

provided consistently over a number of  

exchanges.

∙ After this period loyalty develops and  

eventually a relationship is established. A  

relationship exists when Product Takes On  

a ‘Persona, Product Becomes Part of  

Person’s Lifestyle; Product is part of  

conscious scenery of some image or  

nostalgic memory; Product is part of a  

tradition; and Product is customized to  

taste

∙ The organization uses its marketing mix to

build empathy with loyal customers, along

with trust, maintaining commitment, and  

rewarding their loyalty in order to develop  

relational exchange (interactive, ongoing,  

two-way connection where product  

becomes a critical aspect of customer’s  

lifestyle or manifestation of some image.

∙ Customer becomes partner with firm and  

its network to achieve some mutual goal)

o Thus relationship marketing is the  

development and maintenance of  

successful relational exchanges.

∙ Key marketing tasks:

o Market creation

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 Build community, discover needs/wants,  

building channels

 Core concepts: community, markets,  

customers, exchange  

o Customer creation  

 Select target segments, select position, create  value(product), communicate  

value(promotion), deliver value(distribution),  

capture value(price)

 Create value to bring about change:

∙ Needs, wants, demands, satisfaction,  

loyalty, relationships  

∙ Exchange- 2 or more parties bring value to each other ∙ Customer acquisition occurs through the use of  technology

An organizations ultimate goal:

∙ Survival- business organizations

∙ Fortune 1000 companies lost more than 25% of  shareholder wealth within one month  

o Due to recalls, operation issues, strategic issues  (ineffective)

Firms adapt thorough strategic planning 

∙ Strategy is the process of developing and maintaining a long term fit between organizations goals and  capabilities and its changing market opportunities and  threats

∙ How are we unique? What is our advantage

∙ Steps you take is not the strategy  

∙ How to create a clear strategy?

o Where do we compete?

o Why do customers choose our products? Unique value o How do we sustain that unique value?

o What recourses do we use?

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o Ikea example- in every country- sells furniture in a fun  showroom, inexpensive, good design capabilities,  products designed to be assembled by final customer low shipping costs  

3 mistakes in defining strategy: 

∙ Strategy is to internationalize/consolidate  

industry/outsource production  

Corporate Strategy addresses 4 questions:

1. Where does business compete?

∙ positioning

2. What unique value does business offer?

∙ Value proposition  

3. What resource capabilities will be used?

∙ Business model

4. How does business sustain itself and its value offered? ∙ Competitive advantage  

∙ With vision, corporate strategy guides adaptation  Marketing’s role in planning 

∙ Marketing is one of the primary forces that guides the  firms adaptation process

∙ Corporate level:

o Marketing helps establish culture, provides  

direction/vision/ promote customer orientation,  establish strategic direction

 ∙    SBU level 

o Select value creating opportunities

o Select taget segments

o Create and manage relationships across value chain

 ∙    Functional level 

o Details specific methods of executing creation,  delivery and capturing of value through marketing  mix and strategic alliances/networks

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∙   Marketing’s role in an org. is given by a marketing  concept- philosophy that firm holds key- more effective  than competitors in discovering customer needs and  wants to its target audience

∙   5 key elements of marketing concept

o discovery of customer needs and wants

o create customer driven marketing strategy  

o create communicate, delivery and capture customer value

o integrate marketing throughout organization to  deliver superior value and satisfaction  

 helps establish goals and vision  

∙ marketing can no longer be responsivity of a few  specialists, can’t be isolated  

∙ everyone in firm must have marketing concept

Marketing plays a role at the (with help via marketing  concept): 

∙ cultural level- who business is, what beliefs are, value  proposition, and identity

∙ SBU- who customers are(positioning), image will be  created (targeting), and partner selection  

∙ tactical level- what values best address customer  needs/wants (value creation), relationship management, and marketing mix

marketing ads survival process by adaptation  

ultimate responsibility is to create a customer value  marketing’s role is defined by marketing concept  

marketing at the corporate level: 

∙ helps establish culture  

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 ∙    corporate vision: series of decisions that answer  why the firm exists in the first place- elements: o why does it exist?

 Organizational foundation: mission  

statement, core value, objectives

o why does the firm do?

 Organizational direction: business definition,  value proposition  

o What will firm do?

 Organizational SBU strategies: growth  

strategy, business portfolio (how recourse  

will be allocated to achieve firm objectives)  

 ∙    maiden form- inventor of bra example 

o 1920’s created

o why does firm exist? - woman’s self-esteem women go out and vote commercial- everyone  had their clothes on, message was to make a  

stand, voice be heard  

o maiden forms performance- said just dropped  pervious advertising agency, got a new one

o they wanted to build off customers’ needs and  wants

o company’s mission- direct and motivate  

employees, this example was for empowering  women (reason for firm’s existence)

 main function in society- self-image of bras

 clean and concise long term statement “lift  

and separate”  

o statements descrying type of behavior (maiden  form)

∙ components:  

o expected behavior,  

o ethics  

o social responsibility  

mission is product oriented or market oriented 12

market: focuses on customer needs

product: focuses on technology used to produce product  

∙ business definitions are based on:

o focus:

 product oriented, market  

oriented

o scope

 broad, narrow

Microsoft is more broad scope- apple is specific to consumer  electronics  

Companies philosophy

∙ target level of achievement on selected  

performance measures

∙ the functional areas whose objective or  

goals has priority within an org. relative to  

other areas objectives reflects its  

corporate philosophy

value proposition

∙ the unique set of benefits org. provides to the market,  the singular reason a customer would purchase a  product or service  

growth strategies:  

identifies leadership position and measures of success in  existing products and existing markets = penetration  

new product growth strategy- new products and new  development  

new markets with existing products- new customers –  market development

portfolio strategies: diversify and spread out  if industry is growing above 10% its good corporate vision has 7 components:

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why it exists

what it provides

what it does to reach goals

societal marketing concepts seeks to balance the customer satisfaction, corp profits, and well-being of society  

what is not part of a company’s vision statement? Production philosophy  

Concepts of services

∙ services are intangible, ideas, tasks, experiences ∙ difference between a good and service is that services  usually involve suppliers connection directly with  consumers for performance of the service

∙ to service means to benefit a receiving party through  personal acts

marketing of nonprofit services 

∙ performed by an organization that is not motivated by  profit and is exempt from paying taxes on any excess  revenues over costs

∙ nonprofits usually use person marketing,  

entertainment and even marketing

∙ types of nonprofit service providers

o athletic directors, university presidents

∙ still have several reasons to generate more revenue  than cost  

o their revenues tend to fluctuate from year to year o organizations cant raise money if they are not  solvent

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 they need to have at least a 3-month safety  net- -setting aside a full quarters worth of  

expenses  

o nonprofits hire professionals to help the  

organizations grow  

 growth requires capital and the ability to  

access funds from financial institutions  

∙ nonprofits may raise revenue in 2 ways

o acquire funding from third parties like private and public agencies

o may expand into a number of business operations ∙ understanding donor profiles helps nonprofit groups  target fundraising efforts  

∙ in addition to fundraising, many organizations develop business ventures that provide substantial revenues  o carwash, candy sale, etc

∙ sometimes the revenue-generating venture fits nicely  with the core activity of the nonprofit

∙ membership fees represent a large source of revenue  providing positive social benefits  

∙ another challenge for nonprofits is to provide  maximum positive social benefits to the  

constituency  

o can be hard since they have differing  

objectives and needs

ethical issues surrounding nonprofit organizations  

∙ although nonprofits are taxed on income from  businesses unrelated to their function, fewer than  5% report such income

∙ nonprofit executives say they shift toward profit  making schemes  

key differences in nonprofit and for profit marketing  15

∙ product: nonprofit typically has a weaker unique selling  proposition (weaker direct benefits)

∙ price: amount donated to charities is often left to the  discretion of the donor  

∙ involvement: people either are really engaged or have  strong reactions toward it

∙ segmentation: may need to have a campaign that is  appealing to all people, not just a specific target ∙ need to check the marketing strategy against the  environment  

o for commercial org. the mission statement usually  revolves around being the best in a particular  

market place and consequently achieving high  levels of profit as a result

key characteristics of not for profit org. 

∙ the presence of multiple stakeholders

o the org. has a relationship which impact the  operations including shareholders, regulatory  

bodies, other charity or not for profit partners,  supply chain partners, employees, and  

customers

o in private companies, revenue id distributed  from customers to shareholders, converted into profits and rewarded with dividends

o mapping matrix used to distinguish between  interests and power of stakeholders  

o 4 types of stakeholders

 group A- highest power/interest

 group B- high interest but low power

 group C- high power, low interest

 group D- little power and no interest

∙ transparency in the org. mission and finance o source of money is traceable and understood  ∙ presence of multiple objectives in business and  social terms

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o investments based on return they will make

o profit is a measure of success  

o lobbying, raising funds, contacting customers ∙ different orientation compared with commercial org. o stronger market orientation the stronger the  org. market performance  

o focus is motivating and encouraging people to  become involved and identify with the aims of  the org.

∙ different customer perceptions  

o donors free to give to any charity or none at all

types of not for profit org.

∙ charities

o cause related marketing activities  

 commercial activity in which companies and  nonprofit org. form an alliance to market an  

image, product, service ofr mutual benefit

∙ social enterprise sector

o business with primarily social objectives whose  surpluses are principally invested for that purpose  in the business or community rather than being  driven by the need to maximize profit for  

shareholders

o not restricted in format- very diverse and holds  PLC’s, housing associations, etc  

∙ public sector

o local and central gov. services  

o concerned with satisfying social needs and benefit  society  

o operate in industrial, governmental, consumer, and  societal markets and driven by stakeholder’s  

relationship

o 3 main forces govern public sector  

 social

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 economic

 political  

o public sector approach if often based on terms such  as providers and users  

o distinguishing characteristic of the public sector  concerns the political tensions that arise between  various stakeholder groups

o governments use marketing to bring about social  change

 gov health departments encouraging healthy  eating

∙ political parties and campaigning organizations o used by campaigns to bring about change of  political support- votes, petitions, donations

o political marketing “product” could be said to  include political representation  

o lobbying  

o pressure groups

fundraising

∙ important role for marketing charitable organizations  ∙ common techniques used to solicit funds

o door drops- unaddressed mail is posted to an  address within specific locations

o press/magazine inserts- where details of charity  printed on looseleaf insert

o direct mail

o direct response tv

o face to face donor recruitment

soft skills

1. Communication Skills 

Communication skills are always top of the ‘essential skills’  list in any job advertisement. People with strong  communication skills can build relationships (from the  initial building rapport through to a longer-term  

18

relationship), listen well, and vary their communication to suit the circumstances.

If you spend time on nothing else, work on your  communication skills.

2. Making Decisions 

Valued by employers for many reasons, being able to make  decisions is key to getting on in life. Sometimes the actual  decision doesn’t even matter; what matters is that you have  made one and moved on.

3. Self Motivation 

People who are self-motivated get on by themselves. They  don’t need close supervision and they are good to work with  because they are generally positive about life and can be  counted upon to keep going. It also helps to work on your  personal resilience and adaptability to change.

4. Leadership Skills 

These are the set of soft skills that we least expect someone  to develop by themselves. There are many leadership  training courses available and much has been written about  how to develop your leadership skills.

Our leadership skills pages describe many of the skills  needed for effective leadership and how to develop your  leadership style.

5.Team-Working Skills 

Like leadership skills, there are many training courses to  teach you how to work well in a team. However, there is also  plenty of thinking to suggest that good communication skills,  particularly good listening skills, together with an ability  

19

to build rapport will go a long way to support your ability to  work well in a team.

6. Creativity and Problem Solving Skills 

Creativity and problem-solving skills are highly valued  because they are hard to develop. There are many people  who believe that creative thinkers are born, not made, and  there are certainly some people who find these skills much  easier. But, like other skills, you can develop them if you work to do so and our pages on these topics will give you some  ideas about how to do this.

7. Time Management and ability to work under pressure

Many would say that these two skills, which often go hand-in hand, are more an attitude than a skill. However they can  also be developed and honed, which is why we include them  as skills. Highly valued by employers, they are also very  useful for organizing a family or a team, and for making sure  that the job gets done.

All non-business professionals can benefit from training in marketing from either an ___value___ (institutional)

perspective, or from a 

___customer___ (personal)

perspective. 

Which of the following statements refers to social enterprise marketing? Gaining public support and financing in order to change or remedy a situation.

Marketing the capabilities of members of an organization to other members of that  organization.

Promoting an individual or idea in order to influence public policy

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Marketing efforts by an organization not motivated by profit to influence individuals or  organizations to donate financial resources.

Marketing efforts to generate profits from some product or service in order to change or remedy some situation.

*Exam 1*

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Part 2

∙ This module introduces the concept of knowledge  generation and its formalization within an organization  referred to as a marketing information system

∙ Knowledge generation is process of obtaining data and  information and transforming them into the  

understanding, or experience that enables tasks to be  done with maximum efficiency and effectiveness o Knowledge generation is a critical skill for  

marketers, but it is rapidly becoming second only to emotional intelligence as a soft skill sought be  employers across all disciplines.

Ch 4- concept of marketing information and research ∙ data used to learn about a company’s markets and  adjusting strategies

∙ Marketing information systems (MIS)

o Are computerized systems that collect and organize data on a timely basis to provide information for  decision making

∙ Marketing research is the formal assembly and analysis  of data about specific issues surrounding a marketing  strategy  

o Addresses a specific issue with a clearly defined  objective regarding marketing strategy  

 Once research is completed it is saved as part  if the MIS

∙ Marketing information systems include a Marketing  decision support system (MDSS)

o Allows decision makers to access raw data from the  MIS  

o Consists of database, data retrieval and modeling  software

 Ex: marketing manager wants to price of  

company’s skis compared to another company   MDSS performs this task quickly

o Data and information are NOT the same

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o Information is composed of data that have been  analyzed and put in useful form

∙ Types of data

o Data provides starting point from which marketing  information is derived

o Data can be any set of facts or statistics obtained  from outside or inside the company

o Primary data are those gathered for the first time  for an issue being addressed

o Secondary data are obtained from sources that  have already gathered the data

o External data comes from outside the company o Internal data include a company’s own sales and  accounting records and sales force call reports  Likely to reside in several different companies o Data analysis transforms material into a usable  form

 Statistics help describe data in more detail or  tell us how occurrences are relative to overall  

patterns  

∙ Good information helps executives make key marketing  decisions  

∙ Marketing information plays a key role in planning,  marketing mix decisions, and performance monitoring o Marketing planning requires input about  

customers, competitors, trends, channels of dist.  And economic conditions  

 helps decide which segments to target and  

how to position the organization in response to  competitors  

o marketing mx decision methods have developed for product, place, promotion, and price

 product decisions: marketing info monitors test markets, customer satisfaction

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 place decisions: determining the appropriate  distribution channel, identify specific  

distributers  

 promotion decision: deliver proper combo of  advertising, selling, and other approaches

∙ for advertising, decision makers determine

most effective numbers of internet,  

mobile, print, tv ads to reach targeted  

customers

 price decisions: prices send strong signals to  the market about value of product

∙ meet or beat competitors- monitor  

competitor’s ads

o performance monitoring- third area supported by  marketing information is performance marketing  helps managers make sure that plans and  

programs are progressing as scheduled

 info is required to track unexpected obstacles ∙ marketing research process  

o market research is key aspect of the organizations  ability to make good marketing decisions  

o starts with clear understating of the problem to be  addressed and ends with interpretation of findings  that aid in decision making

o Defining the problem: specify the problem

researcher asks probing questions to determine  extent of problem- isolate symptom from actual  problem  

o Research design: outline of what data will be  gathered, what sources will be used, how data will  be collected  

 2 types of research:

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∙ exploratory: clarifies the problem and  

searches for ways to address it

∙ quantitative research: provides info  

needed to select the best course of action  

and forecast probable results  

o a pilot study is a small scale project  

that allows researcher to refine test  

approaches  

 o exploratory research: enables investigators to  obtain a better understanding of the issues  

 seeks information that will enlighten marketers in the decision making process

 begins by finding and reviewing secondary  

data  

 helps define problem and identify symptoms o focus group

o depth interviews

o projective techniques

o observation  

o case anaylsis  

∙    common methods for collecting quantitative data are  experiments and surveys

∙   experiments used for casual research

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