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SARTA: How to do Marketing Research for Your Business Plan. February 2012.

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Presentation on theme: "SARTA: How to do Marketing Research for Your Business Plan. February 2012."— Presentation transcript:

1 SARTA: How to do Marketing Research for Your Business Plan. February 2012

2 TMTG propaganda VOC (Voice of Customer) Expert ResearchClient Defined Qualitative Quantitative Segmentation Analysis Customer Satisfaction and Loyalty Customer and Product Requirements Go To Market Planning Technology Assessment Product Concept Testing Pricing Opportunity Analysis Post Launch Acceptance Technology Sourcing Product Creation Launch Preparation Product Monitoring Pre-Launch Post-Launch Healthcare IT Device and Diagnostic Pharma and Biotech Medical Imaging February 15th 20122SARTA Leadership Series - Marketing Research

3 TMTG Clients (partial list) February 15th 20123SARTA Leadership Series - Marketing Research

4 Global coverage February 15th 20124SARTA Leadership Series - Marketing Research

5 Agenda A.Marketing 101: more than a brochure factory! B.Why bother : validate your marketing plan? C.Market vs. marketing research D.How to do this February 15th 20125SARTA Leadership Series - Marketing Research

6 A. Marketing 101 February 15th 20126SARTA Leadership Series - Marketing Research

7 Hard to do Years of academic training Cost money Must be protected The easy part A couple of brochures May not even need a salesman People will fight to get it A. Marketing 101: Classic thinking, the brochure factory! February 15th 20127SARTA Leadership Series - Marketing Research

8 Do not tell me you know everything about the customer “problem” you are trying to solve Do you have it? “solution” you bring This is really what you are after A. Marketing 101: Correct thought process February 15th 20128SARTA Leadership Series - Marketing Research

9 MARKETING Technology & Service to fulfill an unmet need or rather address a need better. Right time, right place, right price. A. Marketing 101: How do we go from product to demand? February 15th 20129SARTA Leadership Series - Marketing Research

10  We're doing it backwards: you should always start with a customer problem and find a technical solution to solve the problem –Often we start with technology and then we look for a problem –That's okay, just don't forget the problem! Without it, you will never get paid –There are lots of reasons to start a company, but if you don't get paid, your company will die A. Marketing 101: Sometimes we go the wrong way February 15th 201210SARTA Leadership Series - Marketing Research

11 A. Marketing 101: So you need to VALIDATE THE market Market Customer Competition Size Speed Who is the customer? Units vs. $? Who is the enemy? How bad will they want this? February 15th 201211SARTA Leadership Series - Marketing Research

12  STEP 1: to figure out the magnitude of the problem –How many potential customers have it? –How much do they care about the problem? (does the problem cost them lots of money, horrible disfiguration, or terrible distress?) Now you have a market A. Marketing 101: Size and speed … February 15th 201212SARTA Leadership Series - Marketing Research

13  STEP 2: target the customer segment Ok, but what is segmentation? “dividing customers into homogenous groups who will exhibit uniform purchasing behavior when exposed to the same marketing mix” Simply put : A. Marketing 101: Customer Segmentation February 15th 201213SARTA Leadership Series - Marketing Research

14 Technology products follow a predictable adoption cycle by customer type—these types often determine segments Innovators Early Adopters Late Majority Laggards Enthusiasts VisionariesSkepticsConservatives Time Early Majority Pragmatists A. Marketing 101: Customer Adoption Cycle February 15th 201214SARTA Leadership Series - Marketing Research

15 It does not allow work that way – so prioritize well. Innovators Early Adopters Late Majority Laggards Enthusiasts VisionariesSkepticsConservatives Time Early Majority Pragmatists $ $ $ $ $ $ $ $ Sometime like this February 15th 201215SARTA Leadership Series - Marketing Research

16 Look for their reaction and classify them by  Psychographics  Motivational drivers  Purchase behavior / decision making Be able to explain why a particular segment will be attacked first: use rationale like size, affinity for new solutions, or intensity of market need What are you going to do next? Develop your marketing plan to each segment Adjust your offering Determine the right price A. Marketing 101: Positioning February 15th 201216SARTA Leadership Series - Marketing Research

17  STEP 3: define your marketing mix Message Push / pull Benefits Value prop Channel Margin vs. speed Model Sensitivity / decision PricePlace PromoProduct A. Marketing 101: Marketing mix February 15th 201217SARTA Leadership Series - Marketing Research

18 All this is nice …. But why bother? February 15th 201218SARTA Leadership Series - Marketing Research

19 Market size: VCs focus on it right away, so be honest. –If you can multiply price by the # of potential customers, you can validate your assumptions about market size – It doesn't matter if you are wrong but if you don't pick a number, we are going to make our own assumptions Price vs. demand: “most contentious” with VC  Make sure you drop the anchor and pick a price –Cost plus, Competitive, EVC (Economic Value to Customer)  Make sure you can be profitable and yet create demand  Get paid now –paid pilot projects validate your market well B. Why bother: credibility for your investors February 15th 201219SARTA Leadership Series - Marketing Research

20 Product positioning: what is the value proposition?  Consider the different types of new product – Brand new, complement, line extension, brand extension  Define core benefits which make the product a "must buy"  Predict speed to market, product life cycle, and customer adoption patterns  Yes there is competition –Where is your product / service fit ? Which box do you fit in, which category? B. Why bother: define your marketing plan February 15th 201220SARTA Leadership Series - Marketing Research

21 B. Why bother: define your marketing plan Promo: Message, Medium, Budget  Consider the different methods and mockup material – PR, Ad, Sales Incentives (promo), Personal selling –Awareness is generated by your promotional plan February 15th 201221SARTA Leadership Series - Marketing Research

22 Channel: “go to market” is also looked at  Don't recreate the wheel –Don't build out your own channel capabilities if someone else's will be more effective  Don't be naive – Managing channels effectively is one of the hardest things to do and can be very costly. – If your assumptions about building out an indirect channel are too aggressive, you are going to look like an amateur  Remember the customer! – How do they want the product to be made available? – Availability is created by your channel plan B. Why bother: define your marketing plan February 15th 201222SARTA Leadership Series - Marketing Research

23 Market vs. Marketing Research February 15th 2012SARTA Leadership Series - Marketing Research23

24 Market research = secondary research – This is a market analysis (size, structure, etc.) – Data is already out there Examples? Marketing research = primary research –This is a VOICE of customer analysis (preference, perception) –The data do not exist: you need to collect that data –It is hard to do it right (unbiased) Examples? C. Market vs. Marketing Research February 15th 201224SARTA Leadership Series - Marketing Research

25 The role of research as a decision making tool – Be an investor, not a gambler But you need to be smart about this investment (time and money) – Follow a rigorous process just like you do it for engineering – Key Steps: 1.Define a problem and scope (why spending $?) 2.Design carefully (garbage-in/garbage-out) 3.Collect data (scientifically) 4.Interpret (define actions) 5.Act on findings (leverage your investment) C. Market vs. Marketing Research February 15th 201225SARTA Leadership Series - Marketing Research

26 26 C. Marketing Research Qualitative methodologies IN-DEPTH INTERVIEWS Description: 30-60 minute ONE-on-ONE interviews Value: Segmentation criteria. Purchase process and drivers Product needs and expectations Process: Recruitment with screener. Discussion guide: open ended question Interview scripts. Cognititian Talk-The-Talk Interactive Why us? Phone Face-To-Face Dyads Options February 15th 2012

27 SARTA Leadership Series - Marketing Research27 C. Marketing Research Qualitative methodologies OBSERVATIONAL FIELD WORK Description: Customer visit analysis. Value: Contextual knowledge Workflow and organizational behavior Understand product use. Process: Customer site selection Field observation..Interview and summaries Non-Intrusive Deep Focused Why us? Observation Cross-Review Forum Options February 15th 2012

28 SARTA Leadership Series - Marketing Research28 C. Marketing Research Qualitative methodologies FOCUS GROUPS Description: Consists of a moderated exchange among decision makers within a target customer segment Value: Consensus feedback. Product concept testing Group dynamics Process: Recruitment with screener Moderation guide (few open end) Summary of key points Knowledge Direct Fun Why us? Tryads Mini FG Mock-Up Trial Options February 15th 2012

29 SARTA Leadership Series - Marketing Research29 C. Marketing Research Quantitative methodologies SURVEYS Description: Close format questionnaire administered over the phone or self-administered. Objectives: Descriptive and causal research / perception/satisfaction Statistical validation Process (similar for all surveys): 1.Survey questionnaire 2.Sampling (randomized, stratified) & Pre-test. 3.Incentive scheme 4.Administration: email, Fax, Phone (CATI), Web-Based. 5.Coding and editing 6.Rule-based data entry and QA. 7.Presentation of results in graphic or tabulated format Design Rich On-Time Why us? Phone/Fax Web-Based Conference Options February 15th 2012

30 SARTA Leadership Series - Marketing Research30 V1 V2 V3 V4 C. Marketing Research Quantitative methodologies: perceptual maps

31 February 15th 2012SARTA Leadership Series - Marketing Research31 Vendor 1 Vendor 3 Vendor 4 Vendor 2 Best long-term magnet upgradeability program Reliable and dependable service Brand appeals to referring physicians Best value Technology innovator Dedicated accessible support teams Excellent spatial resolution Reliable abdominal imaging Fastest patient throughput Best coil design and/or handling Techs master scanners & produce high quality image Reduce patient anxiety C. Marketing Research Quantitative methodologies: brand perception

32 February 15th 2012SARTA Leadership Series - Marketing Research32 (Normalized to 100 pt scale) The 45 o line intersects the overall average price and brand rating value.  proportional to the product’s market share as estimated by Vendor 1. Number of Data Points: GE: 36 Philips: 7 Siemens Symphony: 35 Siemens Espree: 9 Siemens Avanto: 13 The number of data points is insufficient for meaningful statistical comparisons. (Normalized to 100 pt scale) P4 15% P5 20% P1 20% P3 30% P2 15% C. Marketing Research Quantitative methodologies: price-to-value

33 SARTA Leadership Series - Marketing Research33 C. Marketing Research Quantitative methodologies CONJOINT/ TRADE-OFF ANALYSES Description: Objective estimation of the value buyers place on the attributes or features which define products and services. Value Predictive rather than descriptive results. Demand curves, substitution effects, and cannibalization Quantification of product attribute value trade-offs Price sensitivity testing Process: 1.Definition of relevant product/service attributes/features 2.Selection of conjoint methodology 3.Experimental design to calculate main effects and key interactions 4.Utility / part-worth estimate per respondent 5.Simulation mode to predict the impact of changes in product or price Integration Expertise Consultative Why us? Choice-Based Adaptive Full-Profile Options February 15th 2012 A DERIVED MEASUREMENT OF YOUR CUSTOMER PREFERENCE SHARE

34 C. Marketing Research Quantitative methodologies: survey screenshot SARTA Leadership Series - Marketing Research34February 15th 2012

35 C. Marketing Research Quantitative methodologies: why conjoint SARTA Leadership Series - Marketing Research35 Ratings vs. Conjoint Trade-Off Methodology Self-explicated ratings tend to not discriminate enough Ratings can even provide wrong answers: in this example customers may state that they performance and they prefer a specific brand, … … but when confronted with reality and trade-off choices, they will clearly favor economic factors such as price and MPG. Stated Importance (Ratings-based) Derived Importance (Conjoint-based) February 15th 2012

36 SARTA Leadership Series - Marketing Research36 C. Marketing Research Quantitative methodologies MODELING / SIMULATION Description: A family of methodologies for simulating real-world market behaviors in order to predict expected outcomes. Value: Decision-support Forecast and prediction Pricing Data Access Health Economics Partnerships Why us? Decision Trees Markov Models Monte Carlo Simulation Options February 15th 2012

37 D. How to do this 1.Sizing the market TAM = from secondary data Unmet need = from voice of customer 2.Customer segmentation Behavior = from VOC 3.Value prop Competitive benchmarking SWOT 4.Pricing vs. adoption Elasticity Modeling February 15th 201237SARTA Leadership Series - Marketing Research

38 D. How to do this: Sizing the market Secondary analysis Market reports Web Gvt data Associations / trade groups Count the units first February 15th 2012SARTA Leadership Series - Marketing Research38 TAM Units x count Addressable 1 First YEAR Segment specific Adoption curve

39 D. How to do this: Need Assessment & Customer segmentation ASK the customer February 15th 2012SARTA Leadership Series - Marketing Research39 SEGMENTATION Segment 1 Segment 2 Segment 3 Customer untargeted, suboptimal sales potential cost effective, time efficient, standardized set of segments with identified requirements YOUR CUSTOMER MARKETING RESEARCH THE RESULT Customer Price is Key Service is Valued Product Quality

40 D. How to do this: Value proposition and positioning SWOTCompetitive table February 15th 2012SARTA Leadership Series - Marketing Research40 YOUComp 1Comp 2Comp 3 Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7 Feature 8 S: we are the best O: world is ours W: not bold enough T: uneducated customers Customer research will help correct any potential myopia

41 D. How to do this: Pricing vs. adoption Price sensitivityPreference model February 15th 201241 Market simulators SARTA Leadership Series - Marketing Research Price vs. adoption

42 1.Market sizing –TAM –Addressable Okay, let's try it… February 15th 201242SARTA Leadership Series - Marketing Research

43 2.Value proposition and customer segmentation  Let us define the top 10 questions we would ask a potential customer of the following product –Motivation: if you collect good information, you can learn valuable information to refine your business model –You probably won't learn everything with one or two customers, you need to decide how much data validity you need (directional vs. accurate) Okay, let's try it… February 15th 201243SARTA Leadership Series - Marketing Research

44 3.Competitive positioning –From customer data –From intelligence Okay, let's try it… February 15th 201244SARTA Leadership Series - Marketing Research

45 4.Price vs. demand (adoption) –You would need to decide if you want to spend money in a large scale survey Okay, let's try it… February 15th 201245SARTA Leadership Series - Marketing Research

46  Remember: Be open minded Accept study findings Interpret what this means Implement Measure again February 15th 2012SARTA Leadership Series - Marketing Research46

47 Contact Us February 15th 2012SARTA Leadership Series - Marketing Research47 USA 502 Mace Blvd, Suite 15 Davis, CA 95618 United States Phone: (+1) 530-792-8400 Fax: (+1) 530-792-8447 EUROPE / FRANCE 3, rue Emile Péhant 44 000 Nantes France Phone: +33 (0)2 72 01 00 80 Fax: +33 (0)2 40 48 29 40 BRASIL Rua Girassol 756-82 Sao Paulo, SP Brasil 05433-001 Phone: +55 (11) 8799-0507

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