PlayStation 4 Target Market 4-5 pages

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Machine generated alternative text: LEARNING OBJECTIVES After reading this chapter you should be able to: Identity the reason for conducting marketing researcm Describe the five-step marketing research approach that leads to marketing actions Explain how marketing uses secondary and primary data. Discuss the uses or observations. questionnaires panels, experiments. and nc•vcr data collection methods Explain how data analytics and data mining lead to marketing actions. Describe three approaches to developing a company's sales forecast Marketing Research: From to Actions Hollywood Loves Marketing Research! Avatar. Titanic. and S'nr Wars: The Force Anokens are blockbuster movies that generated each exceeded S2 billion, well above million budgets needed produce them. Unrnrtunalely, every movie has such favorable results. Movies such as 47 Ronin, Mars Needs Moms, each lost more than S 100 million. So what can studios do to try to reduce the risk that a movie will be a Box-office flop? Marketing research! A Film Industry Secret Bad titles. poor scripts. temperamental stars. costly special effects. competing movies. and ever-changing consumers are just a few Of the risks studio ex- ccutivcs face. They try to reduce their risk through a largely secretive process Pirates o f the or marketing research (hat involves small sample audiences selected co be representative or the larger population, Fixing bad movie names, for example, can turn poten- tial disasters into suLQssfuI blockbusters. Many studios use title testing—a form of marketing leseareh—to choose a name. Here are a few examples: • Arrival originally went by the Lille SIOry of Your Life, which same people thought sounded more like the name of a song • Edge ofTmnorrow, starring Tom Cruise and Ernlly Blum, first used the name of the book on which it was based, Al,' Kill. The word "kill," however, was unpopular. War Dogs started out as Arms and 'he Dudes, which was confusing and too complicated. • Begin Again. with Keira Knightley and Mark Ruffalo, began as Song Save Your Life? but audiences didn't like that title. Machine generated alternative text: T ELi. NO Cosney Generally, filmmakers Want movie titles are Short, appealing to Con- sumers, and wilhoul legal restrictions—the same factors that make a gam-t brand name: Studios also try to reduce their risks with additional forms of marketing research such as: Concept and scrip' These are used 10 assess early ideas for proposed new films. In addition, because many scripts and films today Machine generated alternative text: The text describes how social listening is used to help movies become a success are part of a series such as The Fasr and rhe Furious. Slur Wars. and Pirnles ofrhe Caribbean. these forms of rcscarch can cnsurc that sequels arc consistent with expectations created hy the past movies. Tesl (or preview) sereemngs_ In Lest screenings, 300 to 4(k) prospective moviegoers are recruited to attend a "sneak preview" of a film before its release. After viewing (he movie, the audience completes a survey to critique its title. plot, characters. music, and ending to identify improvements to make in the final edit. James Cameron, for example, used a test screening uf to cut the length of the movic from hours to 194 minutes, and to change the ending. • Tracking studies. Before an upcoming film's release, studios will ask pruspective movie, goers in the target audience three questiom•;: (Ij Arc you aware of the film? (2) Arc you interested in secing the film? Will you sec the film? Studios also use "social listening" to understand what potential moviegoers arc saying on Twitter. YouTube, Tumhlr, Facehook, Instagram, and Other social media sites. Studios use Ihese data tu monitor a promotional campaign, forecast the movie's apemng weekend box-office sales and, if necessary, add additional marketing activities promote These examples show how marketing rcsearch leads to effective marketing actions. the main topic Of this chapter. Also. marketing research is often used [O help a firm its sales forecasts, the final loptc Of this chapter, THE ROLE OF MARKETING RESEARCH Identify the reason fM conducting marketing research. Let's (l) look at what marketing research is, (2) identify some difficulties with it, and (3) describe the five steps marketers use to conduct it. What Is Marketing Research? Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions. AI- though imperfect, marketers conduct marketing research to reduce the risk of—and thereby improve—marketing decisions Machine generated alternative text: step 1 Step 2 Define the Develop the problem research plan • Sgecify research objectives constraints centify • Identify data possible needed for Ina Iketing marketing actions Actions FIGURE 8-1 Five-Step marketing research approach leading to marketing actions. Lessons learned from past research mistakes are fed back to improve each Of the steps. Step 3 Collect relevant information • Obta•m secondary data • Obtain primary data Step 4 p fin • Anabae the data • present the findings Step S ake action commen- ations plement Feedback to learn lessons for future research The Challenges in Doing Good Marketing Research Whatever the marketing issue involved—whether discovering consumer tastes or set- ting the right price—good marketing research is challenging, For example: Suppose your firm is developing a product that is completely new to the market- place, and you are charged With estimating demand for the product. HOW can marketing research determine if consumers Will buy a product they have never seen. and never thought about, before? • Understanding why consumers purchase some products often requires answers to personal questions. How can marketing research obtain answers that people know but are reluctant to reveal? Past purchase behaviors may help firms understand the influence of marketing actions. How can marketing research help people accurately remember and report theu interests. intentions, and purchases? Marketing research musl overcome these difficulties and obtain the information needed so that marketers can assess what consumers want and will buy. Five-Step Marketing Research Approach A decision is a conscious choice from among two or more alternatives. All Of us make many such decisions daily. At work we choose from alternative ways to accomplish an assigned task. At college we choose from alternative courses. As consumers we choose from alternative brands. No magic formula guarantees correct decisions. Managers and researchers have tried 10 improve the outcomes or decisions by using more formal, structured approaches to decision making, the act of consciously choos- ing from among alternatives. In this chapter, we describe a systematic marketing re- search approach used to collect information to improve marketing decisions and actions. This Five-step approach is shown in Ligure SM. Although our focus in this chapter is on marketing decisions, this approach provides a systematic checklist for making both business and personal decisions. 213 Describe the five- step marketing research approach that leads to marketing actions, STEP 1: DEFINE THE PROBLEM Every marketing problem faces its own research challenges. For example, the market- ing strategy used by LEGO Group's toy researchers and designers in Denmark illustrates the wide variations possible in collecting marketing research data to build better toys. Machine generated alternative text: 3 LEGO Group's definition of "toy" has changed dramatically in the past years—from interlocking plastic bricks to construction sets that create figures, vehicles, buildings, and even robots. One new version of a LEGO Group toy is the MINDSTORN1e kit, which integrates electmnics, computers, and robots with traditional LEGO Group bricks. Developed With the help Of the Media Lab at the Massachusetts Institute of Technology, the MINDSTORMS" kit appeals to a diverse market—from elementary school kids to world-class robotics experts. The kits can be found in homes, schools, universities, and in- dustrial laboratories. A simplified look at the marketing research for the LEGO Group's MINDSTORMS@EVA shows the two key elements in defining a problem: setting the research Objectives and identifying possible market- ing actions. egg AT g Marketing research helps Set the Research Objectives Research objectives are specific, measurable goals the decision maker seeks 10 achieve Croup identify possible in conducting the marketing research. For LEGO Group, let's assume the immediate marketing actions research objective is to decide which of two new MINDSTORMS@ designs should be such as its MINDSTORMsa selected for marketing. EV3 building system In setting research Objectives, marketers have to be clear On the purpose Of the re- souræ: LEGO search that leads to marketing actions. The three main types of marketing research are as roll ows: Croup's MINDSTORMS* TRACk3R Can operate after only 20 minutes 01 so„-æ: LEGO G,oup I. Exploratory research provides ideas about a vague problem or question. LEGO Group, for example, was concerned that middle school kids might be over, whelmed by the 500-plus pieces in MINDSTORMSG' kits and quickly lose Inter- est. LEGO Group's marketing researchers used exploratory research techniques such as interviews and focus groups to reveal that kids need to have a basic de- vice up, running, and doing tricks in 20 minutes. 2. Descrip,'ive research generally involves trying to find the frequency with which something occurs or the extent of a relationship between two factors, So if LEGO Group wants to know which of the two MINDSTORMSS kits is of greatest interest to middle school versus high school students, it might ask them specific questions about pref- erence_ LEGO Group can then assess the relationship by doing a Cross tabulation (discussed later the chapter) Of school level versus kit preference. 3. Causal research tries to determine the extent to which the change in one factor changes another one. Changing key pieces in a MINDSTORMS' kit affects how quickly the newly built device can do tricks—affecting acceptance by kit users _ Test markets, discussed later, use causal research _ Identify Possible Marketing Actions Effective decision makers develop specific measures of success, which are criteria or standards used in evaluating proposed solutions to the problem. Different research Machine generated alternative text: outcomes, based on the measure of success, lead to different marketing actions. For LEGO Group, assume the measure of success is the total time spent with each of the two potential new MINDSTORLA.re kits until a device that can do simple tricks is produced. This measure of success leads to a clear-cut marketing action: Market the kit that produces an acceptable device in the least amount of playmg time. Marketing researchers know that defining a problem is an incredibly difficult task. [f the Objectives are too broad. the problem may not be researchable. II- they are too narrow. the value Of the research results may he seriously diminished. This is Why marketing researchers spend so much time defining a marketing Eroblem precisely and writing a formal proposal that describes the research to be done. STEP 2: DEVELOP THE RESEARCH PLAN The second Step in the marketing research process requires that the researcher (I) specify the constraints on the marketing research activity, (2) identify the data needed tor marketing actions, and (3) determine how to collect the data. Specify Constraints The constraints in a decision are the restrictions placed on potential solutions to a problem. Examples include the limitations on the time and money available to solve the problem. What constraints might LEGO Group Set in developing new LEGO Group MIND- STORMS@EV3 products? LEGO Group might establish the following constraints on its decision to select one of the two new designs: The decision (l) must be made in five weeks (2) using 10 teams of middle school students playing with the two alternative MINDSTORMSu kits. Identify Data Needed for Marketing Actions Effective marketing research studies fw•us on collecting data that will lead to effective nurketing actions. In the MINDSTORMS@ case, LEGO Group's marketers might wanl to know students' math skills, time spent playing video games, and so on. But that information. While nice to know, is largely irrelevant because the study should focus on collecting only those data that Will help them make a clear choice between the two MINDSTORMS" designs. Determine How to Collect Data Determining how to collect useful marketing research data is often as important as actu- ally collecting the data—step 3 in the process, which is discussed later Two key ele• ments to consider in deciding how to collect the data are (I) concepts and (2) methods. Concepts In the world Of marketing. concep's are ideas about products or services. TO tind out about consumer reactions to a potential new product, marketing research- ers frequently develop a new-produc,' concept, which is a picture or verbal description of a product or service the firm might offer ror sale, For example, the LEGO Group designers might develop a new-product concept for a new EV3 robot that uses a color sensor, responds to voice commands, or uses GPS navigation software. Methods Melhods are the approaches that can be used to collect data to solve all Or part of d problem. To collect data, LEGO Group marketing researchers might use a Machine generated alternative text: combination of (l) observing the behavior of MINDSTORMSS users and (2) asking users questions about their opinions of the MIND-STORM-e: kits. Observing people and asking them questions—the two main data collection methods—-are discussed in the section that follows. How successful is LEGO Group's marketing research and design strategy for its MINDSTORMS/ products? Among younger users alone, tens of thousands of ele- mentary and middle-school teams face Off in competitions around the world each year. HOW can you find and use the methods that Other marketing researchers have found successful? Information on useful methods is available in tradebooks. textbooks, and handbooks that relate to marketing and marketing research, Some periodicals and tech- nical journals, such as the Journo/ of Afarkeying and the Journal of Markeying Re- search, both published by the American Marketing Association, summarize methods and techniques valuable in addressing marketing problems. Special methods vital to marketing are (I) sampling and (2) statistical inference. For example, marketing researchers often use sampling by selecting a group of dis• tributors, customers, or prospects, asking them questions, and treating their answers as typical Of all those in Whom are interested. They may then use stalisrica/ infer ence to generalize the results from the sample to much larger groups Of distributors, customers, or prospects to help decide on marketing actions. 8-1. What is marketing research? learning review 8-2. What is the five-step marketing research approach? 8-3. What are constraints. as they apply to developing a research plan? STEP 3: COLLECT RELEVANT INFORMATION Explain how marketing uses secondary and primary data. Collecting enough relevant information to make a rational. informed marketing deci- Sian sometimes simply means using your knowledge 10 decide immediately. At Other times it entails collecting an enormous amount Of information at great expense. shows how the different kinds of marketing information fit together. Data, the facts and figures related to the project, are divided into two main parts: sec- ondary data and primary data. Secondary data are facts and figures that have already been recorded prior to the project at hand. As shown in Figure 8—2, secondary data are divided into two parts—internal and external secondary data—depending on whether the data come from inside or outside the organization needing the research. Primary data are facts and ligures that are ne,vly collected for the project. Figure 8—2 shows that primary data can be divided into observational data, questionnaire data, and Other sources Of data. Secondary Data: Internal The internal records of a company generally offer the most easily accessible marketing information, These internal sources of secondary data may be divided into two related parts: (l) marketing inputs and (2) marketing outcomes, Marketing Input data relate to the effort expended to make sales. These range from marketing budget reports, which include advertising expenditures, to salespeople's call reports, which describe the number of sales calls per day, who was visited, and what was discussed. Marketing omcome dnra relate to the results Of the marketing efforts. These involve accounting records on shipments and include sales and repeat sales, Often broken down Machine generated alternative text: FIGURE 8-2 Types Of marketing Researchers must ChCH)Se carefully among these to get the best results, considering time and COSt constraints. Data Facts and ligules pertinent to the oroject Secondary data figures already recorded prior Primary data Facts enc figures newly fo• me project data (inside the firm) • Inpuls [budgets. financial statements. sales call reporls) • Outcomes (actual sales and customer communications) aeternal data (outside the firm) • Trade association studies • gusiness periodicals nternet-based reports data (watching • Meclnanlcal memods • Personal metnods eurornarketing methods data (asking • 'clea generation methods Idea evaluation methods Of data • Social meda • Panels and experiments • InformEtlon technology. ta mining The US Census provides valuable •nformaton for marketing decisions Are you ready for the 2020 Census? u S Oeoartmenr of by sales representative, industry, and geographic region. In addition, e-mails, phone calls, and letters from customers can reveal both complaints and what is working well. Secondary Data: External Published data from outside the organization are external secondary data. The U.S. Census Bureau publishes a variety of useful reports, Best known is the Census 2010, which is the most recent count of the U.S. population that occurs every 10 years. Re- cently, the Census Bureau began collecting data annually from a smaller number of No Time to Lose 2020 Census ;ggt Total cost people through the American Community Survey. Both surveys contain detailed information on Ameri• can households, such as the number Of people per household and the age, sex, race/ethnic background, income, occupation, and education Of individuals Within the household. Marketers use these data to identify characteristics and trends of ultimate consumers, The Census Bureau also publishes the Economic Census, which is conducted every five These reports are vital to business firms selling products and services to organizations. The 2017 Economic Census contains data on the number and sales of establish- ments in the United States that produce a product Or service based on each firm's geography (state, county, tip code, etc.'. industry sector (manufacturing. retail trade, etc.), and North American Industry Classifica- Lion System (NAICS) code. 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