August 2008 MARKETING STRATEGIES: PLANNING AND RESEARCH January 23, 2001 Northeast Center for Food Entrepreneurship

August 2008 My Role Processing Apple Industry Marketing Research –New Products –New Markets –Strategic Analysis

August 2008 Overview Marketing Approach Marketing Research My Research Consumer Motivators Mature Markets

August 2008 Production Concept Consumers will favor products that are widely available and low in cost. Managers of production-oriented organizations concentrate on achieving high production efficiency and wide distribution coverage.

August 2008 Product Concept Consumers favor products that offer the most quality or performance. Managers focus energy on making good products and improving them.

August 2008 Selling Concept Consumers, if left alone, will ordinarily not buy enough of the organization’s products. The organization must therefore undertake an aggressive selling and promotion effort.

August 2008 Marketing Concept “ There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available…” - Peter Drucker

August 2008 Marketing Concept The key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

August 2008 Marketing Concept Find wants and fill them. Move what will sell instead of trying to sell what you can make. Love the customer, not the product. Have it your way.

August 2008 Marketing Concept “Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.” - Theodore Levitt

August 2008 Marketing Concept Market Focus Customer Orientation Coordinated Marketing Profitability

August 2008 Marketing Research Stage 1: Opportunity Identification –Seek holes in market –Customers = source of information

August 2008 Marketing Research Stage 2:Concept Screening –Test the idea –“Would you buy this product?”

August 2008 Marketing Research Stage 3: Marketing Strategy Development –Define the marketing mix (4P’s) Product Price Place Promotion

August 2008 Marketing Research Stage 4: Product Development –Create the physical product –Test performance and consumer reactions

August 2008 Marketing Research Stage 5: Market Testing –Last check –Evaluate advertising, awareness, and usage (AAU)

August 2008 Marketing Research Stage 6: Product Introduction –Test distribution

August 2008 Marketing Research Tradeoff: Risk of product failure vs. Cost of Market Research Costs include not only money, but also time Goal: Learn how to delight the customer by studying their needs and behaviors

August 2008 Qualitative vs. Quantitative Qualitative –Concept testing –Fast input needed –Limited budget –Client observation –Probe behavior deeply Quantitative –Snapshot of market –Representative data –Participants are geographically dispersed or difficult to reach –Large amount of information needed from each participant

August 2008 Marketing Research Consultants Referrals Client list/references Clearly define research goals Don’t overqualify sample Expensive

August 2008 Marketing Research Consultants: Costs Focus groups (2)$3, ,000 Telephone interview $7,000-20,000 Mall intercept (300) $16,000 - $25,000 Product placement (50) $9,000 - $12,000

August 2008 Inexpensive Marketing Research Customer feedback –Interviews –Surveys (300) –Comment cards Competitor activity –Scan shelves –Advertisements –Other categories Publicly available data –Cornell Libraries –Internet –Trade publications –US Census –Trade associations –Chambers of Commerce

August 2008 Resources: Books AMA Complete Guide to Marketing Research for Small Business by Holly Edmunds (1996) Handbook for Focus Group Research by Thomas Greenbaum (1993) Practical Marketing Research by Jeffrey Pope (1981)

August 2008 Resources: Internet Sites American Demographics: USDA: (see NASS and ERS) US Census: Trade Associations: example:

August 2008 Resources: Cornell Libraries Kalorama (Networked Resource) Choices II

August 2008 My Research Story Secondary research Interviews –Strategic analysis –Research goals Research plan New Products Workshop (handout)

August 2008 My Research Story (cont.) Quantitative –Telephone survey –School foodservice mail survey –Two packaging design surveys Qualitative –Focus groups Consumers Foodservice –Foodservice telephone interviews Primary research:

August 2008 My Research Story (cont.) Surveys to follow-up on focus groups –Product design –Promotion –Ethnic marketing Secondary research –Eco-labels –Ethnic markets

August 2008 Mature Markets Slow/no growth Competition intensifies –Price competition –Advertising and promotion increases –Product improvements and line extensions –Private label growth Profit erosion

August 2008 Mature Markets Structure: Dominant firms (high volume/low cost) and Niche firms (higher margin) Niche firms must differentiate to be successful: –Service –Focus –Quality –Innovation Biggest reason for market failure: “me-too” products (6.7% innovative in 1999)

August 2008 Conclusion Mistakes –lack of marketing approach –failure to use research –failure to define market research goals –lack of innovation Marketing research –learn how to delight your customer –tradeoffs

August 2008 Resource: Smart Marketing arme/hortmgt/pubs/ Click on “Smart Marketing Series”