Research the Market & Offer Superior Customer Value

JWI 518 Marketing, Week3 Summary, 10/28/12


This was another great week of training in marketing. I am receiving a solid foundation in marketing principles through this class. I can apply these principles gainfully in designing key surveys to understand customer needs, build a unique value proposition that is superior to the next best alternative and ultimately increase customer satisfaction.

I. Kotler Chapter4: Creating Customer Value, Satisfaction and Loyalty
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Total Customer Value = Total customer benefits - Total customer cost
    Total customer benefits = Benefits form (Image + Personnel + Services + Product )
    Total customer cost = Benefits from (Psychological + Energy + Time + Monetary)
Customers seek maximum value and will buy from a firm that offers it
Customer satisfaction - product's perceived performance - customer expectation
High satisfaction leads to customer loyalty
Customer Lifetime value (CLTV) is the net present value of stream of future profits over customer's purchases
CRM uses a database to mine trends, segments, individual customer needs


II. Anderson, Customer Value Proposition in Business Markets (HBR)
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Help customers understand and believe in the superior value of your offerings

Value proposition types:
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(a) Benefit - List all the benefits: "why should our firm purchase from your offering ?"
(b) Value - Focus on favorable points of difference with the next best alternative: "why should or firm purchase from you instead of the competitor?"
(c) Customer value research- Resonating Focus
Rally around top one or two differences that will deliver greatest value to customer:
"what is most worthwhile for the firm to keep in mind about your offering ?"

Go deeper to win
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Know the own market offering
Know the own market offering + next best alternative
Know how own market offering delivers superior value to customers vs next best alternative

Strengthen, demonstrate, document value proposition

III. Jack Welch video - Market Research
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Market research is an art and a science
Generally need to do some market research
But there are all kinds of products that don't make the test
GE Energy efficient light bulb, used less energy, lasted longer
market research - everyone in the market research test loved to be environmentalist and save energy
Then we told them What it cost - $12 vs $1.50 for the light bulb
Market research still never said they would not buy at that price..I would love to suport a product like that
so we went to market - it fell right on its face
Everybody is green until they have to pay for it
That is what we learned 12 years ago
That has changed quite a bit in last decade - people are spending more on green
perfect case of market research saying you got it made
"If you ask questions in market research that go to people's view of what they perceive themselves to be
- great environmentalist, great corporate citizens, great neighbors, great educators
they will tend to bias their answers around what they would like to be perceived as
if it goes right to their wallet and what they have to spend on - market research runs into trouble"
Disconnect - behaviors in market research contrasted vs opening up the wallet and paying excessively
Good market research is an important part of marketing in general

IV. Week3 Lecture1
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Conducting a Survey
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(i) Market Research Goal - Get to the truth, even if it hurts
(ii) Survey sample - unbiased; get people from the right market segment; 384 people for 10M 95% accuracy
(iii) Population - accurately define the population of customers in target market eg. affluent, magazine, zip codes highest incomes
(iv) Size of sample - not small; randomly select sufficient numbers from target population

(v) Survey questions - relevant; beware of bias and pay attention to the way the questions are written; do not make it long
 (a) Likert Scale Questions - Strongly agree, agree, neither agree nor disagree, disagree, strongly disagree
 Use this to find out what extent consumers agree with various statements about your product, service, competition or price
 (b) Semantic Differential Scale Questions
 Use this to reveal emotions that influence decisions
 gather details about how customers view and judge your product, likelihood of shopping at a particular store
 (c) Rank order scale questions
 Rank items in order of preference, enjoyment, importance, value, critera

(vi) Sample response rate - use timing, convenience of web and incentives as needed
(vii) Convert answers to numbers
(viii) Target market - segment of the market
(ix) marketing message - predict attitudes & behaviors; how they would behave when they read a message

4 ways to conduct survey
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Survey method decision - depends on Budget, Timetable
(i) Telephone - moderate cost, fast, hard to get enough qualified people to respond
(ii) in person - expensive, slow,hard to get responses, superior quality
(iii) mail - low cost, slow, poor response rate without incentives; built in bias as only some answer mail surveys
(iv) internet web & email- least expensive, responders may not be representative of target population; surveymonkey.com, zoomerang.com

Dr DP