4 Discussion questions

Slide #

Scene #

Narration

Slide 1

Scene 1

[Carl, Ed, Samantha; Hallway]

Ed, Samantha, and Carl meet in the hallway in the morning. Exchange greetings to everyone in the hallway.

MKT500_2_1_Carl-1: Good morning, Ed.

MKT500_2_1_Ed-1: Good morning, Carl.

MKT500_2_1_Samantha-1: Good morning, Ed and Carl.

MKT500_2_1_Carl-2: So, I’ve been thinking a lot about our international markets since your last presentation. Tell me, what research have you done on international markets for the upcoming launch of the tablet computer?

MKT500_2_1_Ed-2: We are using a lot of the research we used five years ago when we launched the XY-two laptop.

MKT500_2_1_Carl-3: [laughing] That’s not going to work. Five years in the computing world is a lifetime.

MKT500_2_1_Samantha-2: [concerned] Carl, what type of research are you looking for regarding our international markets?

MKT500_2_1_Carl-4: I want to know more about customer behavior. Just how are international consumers purchasing computers? For instance, do more purchase online or in a traditional store? Do they purchase from foreign competitors or local manufacturers? What are the features and benefits they’re seeking when purchasing a tablet computer?

MKT500_2_1_Ed-3: Those are all valid questions, Carl.

MKT500_2_1_Carl-5: Yes, also what is the consideration set international consumers are using when deciding on which brands to purchase? And at what stage are international consumers determining the retail channel through which they will make their purchases?

Finally, what are their post-purchase needs? How do they determine if they are satisfied with the purchase, and if they are, do they recommend it to others?

MKT500_2_1_Samantha-3: That is definitely a lot to consider. I guess I didn’t realize the depth of research we’ll need to do.

MKT500_2_1_Ed-4: This is a lot, but I understand what you are looking for, Carl. We’ll get started on answering these questions right away.

Slide 2

Scene 2

[Ed, Samantha - Ed’s Office]

Ed and Samantha meet to discuss the research they will need to conduct for the tablet launch. Ed will display key terms / information on a projector screen in his office.

MKT500_2_2_Samantha-1: Wow, Carl is thorough, and he wants all of this information on his desk by this afternoon?! Ed, how are we going to accomplish this?

MKT500_2_2_Ed-1: Let’s tackle this by using the marketing science behind customer behavior and then we will have a starting point. We can then make educated decisions about our target market and use market segmentation strategies to reach these customers with the most buying potential.

MKT500_2_2_Samantha-2: You mean such segments as social class, perception, motivation, learning, memory and age cohorts?

MKT500_2_2_Ed-2: Exactly. After we have tackled these concepts, we can better understand the cultural differences between domestic and international consumers. We’ll also use Maslow’s Hierarchy of Needs theory in many of our decisions regarding the tablet launch.

MKT500_2_2_Samantha-3: It’s been awhile since I’ve learned about Maslow. Could you give me a quick refresher?

MKT500_2_2_Ed-3: Absolutely. In fact, I have a video right here that I think will be helpful.

Slide 3

Video: Consumer Motivation - Maslow's Hierarchy of Needs

http://youtu.be/wEY1hHpIN1I

Slide 4

Scene 2, cont.

MKT500_2_2_Ed-4: Did that help?

MKT500_2_2_Samantha-4: Yes. I get it now. When we are thinking about marketing the tablet, we need to think about which stages our potential customers may be trying to achieve in order to market our product to them effectively.

MKT500_2_2_Ed-5: Exactly. There’s more to it than that, though. As you mentioned before, there are other factors that affect consumers’ buying choices.

From my experience, social class and age are among the important various socio-cultural segments that affect how buyers form impressions, opinions and preferences, collect information, and make brand choices.

MKT500_2_2_Samantha-5: Oh, really? How so?

MKT500_2_2_Ed-6: Well, social class is a construct that is more complicated than just economic access to resources. Based on research we’ve done in the past, we’ve learned that people in Europe and Asia who come from affluent backgrounds seek exclusivity in their brands to affirm their special standing in society. In contrast, the nouveau riche are trying to make purchases to attain their status, the purchases being so-called “status symbols”.

Launching our new tablet computer and marketing communications for these two different groups involves different approaches.

MKT500_2_2_Samantha-6: Hmmm. I hadn’t considered that. How does age factor in to the equation?

MKT500_2_2_Ed-7: Age cohorts produce reliable, predictable shopping patterns. Most people in the same age group—that’s what determines a cohort—tend to share a significant number of experiences, goals, and values.

This information can help you make smart choices about how to market products and services. Age groups are particularly important when they are large in size, such as the Baby Boomer group.

In our last computer launch, we found the thirty to sixty-five year old age group to be particularly important, and they are large in size in both Europe and Asia. In India and the far East, we found that younger ages between twenty one and twenty nine are very strong in the marketplace, making up a large portion of purchase decisions.

See, when determining which segment to target, there are additional factors we need to consider in addition to age and social class.

Slide 5

Interaction. Student selects each to learn more information about the topic.

Motivation. Beyond the Maslow pyramid, there are other ways to distinguish needs and motivations.

Many consumer psychologists speak of utilitarian vs. hedonic products, that is, fulfilling needs vs. wants.

They also point to the motives that co-exist in all of us for conformity vs. individuality. If conformity is more important, the consumer will buy a popular brand. However, if individuality is more important, then the consumer finds an atypical, quirky brand.

A final means of distinguishing consumer motivations is whether consumers are risk-seeking vs. risk-averse.

Attitudes. Attitudes and decision making affect the extent to which consumers will buy a particular brand, repeatedly purchase it, become loyal, and recommend it to others.

Attitudes are conceptualized as a mix of beliefs and importance weights. Beliefs are opinions, such as BMWs are fast. Importance Weights are things like, “I don’t care much about whether my car is fast, but I would like it to be reliable.”

MKT500_2_2_Ed-8 narrates:

MKT500_2_2_Ed-8 (Tab 1):

Motivation. Beyond the Maslow pyramid, there are other ways to distinguish needs and motivations.

Many consumer psychologists speak of utilitarian versus hedonic products; that is, fulfilling needs versus wants.

They also point to the motives that co-exist in all of us for conformity versus individuality. If conformity is more important to the consumer, then he will buy a popular brand. However, if individuality is more important, then the consumer finds an atypical, quirky brand.

A final means of distinguishing consumer motivations is whether consumers are risk-seeking versus risk-averse.

MKT500_2_2_Ed-8 (Tab 2):

Attitudes. Attitudes and decision making affect the extent to which consumers will buy a particular brand, repeatedly purchase it, become loyal, and recommend it to others.

Attitudes are conceptualized as a mix of beliefs and importance weights. Beliefs are opinions, such as “BMWs are fast”. Importance Weights are things like, “I don’t care much about whether my car is fast, but I would like it to be reliable.”

Slide 6

Scene 2, cont.

MKT500_2_2_Ed-9: Tell me, Samantha, which segment do you think would be the most consistent to target for marketing the new tablet?

Slide 7

Interaction.

Based on the information Ed shared with Samantha, which segment would be the most consistent to target for marketing the new tablet?

A. Motivation

B. Attitudes

C. Age Cohorts

Incorrect Feedback A: Motivation – Motivation involves characteristics in an individual which are subject to change depending on the traits that an individual or society embraces at a given time. That which motivates an individual today can easily change tomorrow.

Incorrect Feedback B: Attitudes – Attitudes are based on beliefs and importance weights, which are not necessarily consistent over time.

Correct Feedback C: Age Cohorts - Age cohorts produce reliable, predictable shopping patterns. Most people in the same age group—that’s what determines a cohort—tend to share a significant number of experiences, goals, and values.

Slide 8

Scene 2, cont.

MKT500_2_2_Samantha-7: Ok, I have it. I think we should focus on age cohorts first.

MKT500_2_2_Ed-10: Good job. That’s exactly what I would recommend since using age cohorts in our last launch produced reliable, predictable shopping patterns.

We can then move on to motivation, as in the past we have found international consumers to be risk-averse. Since we have already established good brand loyalty, we can create more demand for our new tablet computer much quicker. Since nouveaus are trying to make purchases to attain their status, we will target them first.

I will have our marketing research department devise a focus group with some of our current international consumers, so we can gain greater insight into these issues.

We will use both quantitative and qualitative data from these focus group sessions to make our recommendations. We’ll also want to gather data on any cultural differences in our international market compared to our domestic markets.

MKT500_2_2_Samantha-8: Could you explain a little more about the effect culture has on marketing decisions? I mean, I understand how age or gender would affect the way we market the new tablet, but I’m having a hard time grasping the importance of understanding culture for marketing purposes.

MKT500_2_2_Ed-11: Sure!

Slide 10

Scene 2, cont.

MKT500_2_2_Samantha-9: Thanks. I can see now how important it is for us to make sure we understand the culture in our international markets if we intend to conduct profitable marketing in these areas. Ed, this is really a lot to think about.

MKT500_2_2_Ed-13: I know it seems like a lot, but we’ll just go step by step to get this marketing plan in order for a successful tablet launch.

Why don’t we break for lunch? Afterwards, we can finalize the details of our presentation before our meeting with Carl later this afternoon.

MKT500_2_2_Samantha-10: That sounds like a great idea. I definitely can use a break.

Slide 11

Scene 3

[Ed, Samantha, Carl – Conference Room]

Ed and Samantha meet with Carl to report on their research plan for the international market.

(Displayed on screen)

One - Penetrate twenty percent of existing market segments for tablet computers within the first twelve months.

Two - Reach a target segment of one million potential consumers within the first six months of launch.

Three - Cross-sell current Golds Reling customers with the use of database marketing in international markets.

Four - Obtain an initial markup of twenty percent on new tablet computer sales.

Five - Offer twelve month warranties for all new tablets sold.

MKT500_2_3_Carl-1: Good afternoon, Ed and Samantha. Have you come up with a strategy for our international consumers?

MKT500_2_3_Samantha-1: Yes, we have some ideas, and with help from the research department, we will confirm our hypotheses.

MKT500_2_3_Carl-2: Okay, tell me more.

MKT500_2_3_Samantha-2: During our brainstorming session, we both agreed that people’s tastes and opinions vary because of their differences in preferences and attitudes. According to psychologists, consumers purchase products to fulfill their needs. Economists call it imperfect competition.

MKT500_2_3_Carl-3: Okay, so how does this affect the launch of our new tablet?

MKT500_2_3_Samantha-3: It is unrealistic to think that as a marketer, we can offer a tablet computer with sufficient quality to satisfy premium customers, yet priced low enough to satisfy the price-sensitive. Not to mention that we have not even addressed the needs of our domestic consumers yet. So therefore, we will start with geographic segmentation first, which will recognize country-by-country differences and cultural differences.

When geographic and demographic information are combined, the segmentation schemes become even smarter. Working closely with our research department, we have decided to utilize PRIZM as the service that attempts to combine geographic and demographic information.

MKT500_2_3_Carl-4: Hmm, I like the sound of this. Did you have anything else?

MKT500_2_3_Samantha-4: Yes. We have also decided to focus on age cohorts first and then overlap with behavioral segmentation of our current users, who are very important to Golds Reling because it is relatively easy to communicate with them. We will also obtain information on the customers who are currently using a competitor’s brand, or who are not purchasers in the category altogether. We will also look at co-purchasing behavior.

MKT500_2_3_Carl-5: So if we decide to go with this strategy, how about implementation and budgets? And how do we know that the recommended target audience you have decided upon is profitable?

MKT500_2_3_Samantha-5: Ed and I discussed working with our current retailers and distributors in Europe and Asia to have them participate in on-site informal interviews with current customers to determine needs.

We feel that our international segments will be best created by iterating between the managerial understanding of the marketplace and good data which may be processed to identify similarities in purchasing propensities.

MKT500_2_3_Ed-1: As for the profitability, we have developed the following plan objectives:

(Displayed on screen)

One - Penetrate twenty percent of existing market segments for tablet computers within the first twelve months.

Two - Reach a target segment of one million potential consumers within the first six months of launch.

Three - Cross-sell current Golds Reling customers with the use of database marketing in international markets.

Four - Obtain an initial markup of twenty percent on new tablet computer sales.

Five - Offer twelve month warranties for all new tablets sold.

MKT500_2_3_Samantha-6: Our pre-launch initiatives will include free training seminars at our retailers and education to all salespeople, so they are well versed in the features of our new tablet. Product knowledge is the key factor for a successful launch.

MKT500_2_3_Carl-6: You both did a great job presenting your findings. I’m very impressed and feel that the launch is well on its way.

Slide 12

Scene 4

[Ed, Samantha - Hallway]

Ed and Samantha conclude the day in the hallway.

MKT500_2_4_Ed-1: Carl is right. I think we are well on our way to a successful launch. Once we determine which stage of Maslow’s Hierarchy of Needs our potential customers are trying to achieve, we’ll be on even more firm footing for getting our tablet marketed just right.

MKT500_2_4_Samantha-1: Thanks. With your experience and working closely with our research department, I think the new product will be well received by our international consumers, especially since we’ll be making efforts to understand the culture of our international markets.

MKT500_2_4_Ed-2: You’re welcome, Samantha. Don’t forget to participate in this week’s threaded discussion. I’ll see you next week!