Some years ago Strategic Marketing Services helped an educational software company devise an effective strategy for marketing its products to secondary schools for use in mathematics curricula. Our efforts, which included a nation-wide survey of mathematics educators and administrators, focused on how to recognize and take advantage of strategic windows, and how to better navigate within the target market—i.e., to identify the real product purchasers, to understand what motivates them, and to characterize the kind of environment (budgets, plans, product biases) in which they work.
This was classic Market penetration research: find ways to get more of the company’s target market to purchase more of the company’s core product. But our client, always forward thinking, also wanted help generating a well-rounded diversification strategy for the future. Our continuing market research gave the company the strategic direction it needed for long term growth:
- Product development: Create a Windows version of its core software to help capture the significant share of schools that will continue to opt for PCs over Macs.
- Market development: Create home versions of its software that can stand alone or work in concert with the schools’ software.
- Diversification: Leverage the reputation earned by its mathematics software to offer new applications serving science and technology educators.
It was, and remains, a good plan, backed—made possible, actually—by solid marketing research. In this case, the classic, four-square, strategic opportunity matrix behaved “prescriptively”: it shaped our ability to fashion a well-rounded approach for our customer to achieve long-term growth.
The matrix need not work that way; in fact, it usually does not. Usually it is just dormant; it behaves “descriptively”. If you design a marketing research project, it will naturally find a home within one of these cells; it will “accept” one of these labels. We have never shaped, nor even seen, a marketing research project whose objectives did not do this—nor could we if we tried.
Consider a long-term, Global 500 client of ours whose systems and services support the comfort, safety, and security of those who occupy—either because they work in, or are guests in—large commercial buildings. (We’re talking offices, hospitals, schools, hotels, data centers, manufacturing plants, stadia—you get the picture.)
None of the scopes of the 100+ marketing research projects that we have performed for this single client was created in order to “fit” the strategic opportunities matrix. Instead, they were created to yield intelligence our client needed to make good business decisions. Yet, all of the 100+ scopes do fit the matrix. Consider four recent projects designed to answer four basic questions for that client:
- When is the best time in the sales cycle to persuade commercial building owners to purchase long-term service agreements on their installed systems? That’s a Market Penetration study.
- Under what conditions would owners of relatively small retail spaces use scaled versions of traditional commercial building systems? That’s a Market Development study.
- What cost would hotel owners bear for the purchase and installation of room occupancy detection systems to improve physical security and reduce energy usage? That’s a Product Development study.
- Finally, what combination of cost and environmental benefits would persuade municipal transit authorities to convert their fleets from diesel to compressed natural gas, and to purchase both the fuel and fueling operations from our client? That’s a Diversification study.
Marketing research firms often “prescribe” project scopes that fit their own strengths, comfort zones, and “proprietary” methodologies. Unfortunately, what they prescribe—what they sell—may not be capable of rendering the most effective possible outcomes for their clients.
Contact SMS to learn how we can work together to create a research scope that meets your needs precisely. Our diversified approach to scope creation will light your path.
For years we have tried to persuade our clients market research is an investment, but is that really accurate? Perhaps market research is better explained as a necessary business expense since it does not generate revenue unto itself. Let's take a closer look at this issue by exploring the idea of calculating return-on-investment (ROI) for market research.
Return-on-investment is a standard and important financial metric executives utilize for decision-making. Can this concept be applied to the arena of market research? The short answer is yes, but there are many challenges associated with this task. Dr. Chuck Chakrapani, President of Leger Marketing and Visiting Professor at Ryerson College, cites four specific difficulties as follows:
1. "Marketing research can produce a return only if someone acts on it"
2. "The same marketing research may lead to different actions"
3. "In some instances, the ROI is not worth calculating"
4. "Marketing research may be used as an input to many decisions"
In light of these challenges, the question of whether marketing research ROI should be calculated remains. In my humble opinion, true ROI is almost impossible to calculate for marketing research. Many of the most utilized models require decision-makers to subjectively estimate the value of the marketing research. This can be highly problematic and very difficult, especially for decision-makers with little market research experience. As a result, it's not an activity I recommend for most organizations.
Now, getting back to our original question: is marketing research an investment or expense given the complexity of calculating ROI? I tend to think of marketing research as a little bit of both. It's a necessary continuous activity that has an associated annual cost. However, the results of marketing research efforts enable organizations to make more informed decisions that have a greater likelihood of producing a return on their investment in marketing research over time.
If your organization is ready to invest in marketing research and looking for guidance, please contact Strategic Marketing Services. Our highly experienced project managers can help you understand your markets and customers better, which will enable your organization to make more informed and wiser business decisions.
Sources: "Calculating Return-on-Investment for Marketing Research." Marketing Research Association. 02/06/2011.
Recent articles addressing how corporate marketing researchers can elevate market research visibility at the executive level have peeked my interest and got me thinking about how I would advise our clients on this topic. Some of our current clients already have both the verbal and financial support for marketing research activities, but what about those that must champion their cause up the ladder?
There are several different types of ammunition available to corporate marketing researchers for making the case for marketing research expenditures. Here are the most common:
1. Market research can increase sales, profit and market share, as well as, reduce costs. Some specific examples include:
- Identifying new customers
- Increasing customer retention
- Decreasing employee turnover / Increasing employee productivity
- Identifying new pricing strategies
- Identifying new distribution opportunities
2. Market research facilitates successful product development and positioning. Some specific examples include:
- Guiding new product development to ensure successful product launch and market/customer acceptance
- Guiding efforts to successfully re-position mature products and/or brands
3. Market research uncovers new product and market opportunities. Some specific examples include:
- Identifying new markets for existing products
- Identifying new products for existing markets
Other effective methods to increase the value of market research to the executive level include:
- Infusing market research findings with organizational financials
- Understanding how your executive management team best digests new information. Consider the following options:
- Summarizing information to a limited number of bullet points
- Using storytelling to share insights
- Incorporating visual elements such as pictures or videos
- Providing direct interaction with research participants
- Offering full quantitative data sets that guides execs to conclusions
- Providing leading edge or predictive metrics rather than lagging ones
If you find yourself in a position to "justify" market research expenditures to your executive management team, try utilizing one of these tactics to champion your cause. However, in the end market research is an investment that can be rather difficult to quantify. Next week we'll explore various methods of calculating return on investment (ROI) for market research activities. In the meantime, please feel free to share your comments on this topic below.
Additionally, Strategic Marketing Services is always available to assist you in developing market research studies that support your organization's bottom line. Please contact SMS for more information or request a free consultation with one of our expert project managers.
Source: Hagins, Brett and Courtright, Melanie. "We have our marching orders". Quirks. February 2013.
Many organizations are embracing a new "river approach" that engages customers and non-customers alike with a series of small "research snacks" instead of long online surveys or in-depth interviews. The advantages with this approach include smaller, more focused intelligence that is easier to deal with. But, how can this approach be implemented quickly and seamlessly? With a custom research panel.
Custom-built research panels offer many advantages over traditional market research approaches and non-proprietary panels. The most significant advantages include:
Access to pre-recruited, pre-screened, targeted respondents
Significantly shorter recruitment times
Better sample control
Increased response rates
Lower per-respondent costs
Enhanced data quality
Flexibility and versatility---Panels can accommodate multiple research methodologies
Let's assume you are sold on the benefits of building a custom research panel. How do you go about implementing this approach? First, you should seek assistance from a market research vendor experienced in building custom research panels. Professional assistance will not only ensure proper development, recruitment and maintenance, but also offer third-party anonymity often required to obtain unbiased data.
Strategic Marketing Services has considerable experience building and maintaining custom research panels, as well as engaging panel members for participation in both traditional market research and "river" approaches. Please contact SMS to consult one of our project managers to learn more about how a custom-built research panel may benefit your organization's market research needs.
Determining the best quantitative research approach or methodology can be a challenging task. Is data best collected online, by phone, mail or social media? Determining the best fit for your research need involves considering several variables. Often this can be a difficult process for managers to navigate without professional market researcher guidance. However, here are five factors and associated implications that should be considered:
1. Research objective --- in some cases, the very nature of the research objective dictates the methodology. For example, if the objective involves having participants view visual elements like graphics or videos, phone or mail data collection many not are possible.
2. Timeline --- shorter internal timelines require a faster data collection approach such as social media, online or possibly telephone. If you have greater timeline flexibility, you can consider a wider range of data collection options.
3. Budget --- some data collection methodologies tend to be more expensive than others. For example, telephone data collection tends to be more labor intensive than mail surveys, which drives up the project cost. However, all research studies are different so hard and fast assumptions regarding data collection costs are not always accurate given a unique set of circumstances. It is important to remember budget is just one of several factors that impact methodology selection.
4. Sample population --- are the participants’ consumers or business/industry professionals? How large is the sample population? What type of contact information is available for the sample population (email, phone numbers, mailing address, etc.)? How likely is the sample population to have access to the internet for email, web surveys or social media? Answers to questions such as these will help narrow data collection options.
5. Survey length/complexity --- long and complex surveys can be problematic for phone and social media data collection techniques. Online and mail surveys allow participants to stop and start at their leisure, which is an important consideration for long surveys. Overly complex surveys (i.e., those that feature complicated skip patterns or randomization) are best suited for online data collection so the survey completion process is more seamless for participants.
Once these factors have been evaluated and discussed, one or possibly two "best" data collection methodologies emerge and you can make a final, informed decision. If you reach this point or have difficulties somewhere in the middle, it's always a good idea to reach out to an experienced market research professional. Strategic Marketing Services has several project managers that can help you make an informed decision regarding quantitative research data collection methodologies. Contact us to learn more about Strategic Marketing Services or to consult one of our experts.
Whether or not to conduct market research during the Thanksgiving, Christmas and New Year holidays is always a tricky question to answer. While there are no hard and fast rules, here are a few key considerations that will help you make the best decision for your organization.
1. Is the research B2C (business-to-consumer) or B2B (business-to-business)?
Most consumer research not specifically related to the holiday season can be more difficult to conduct. Consumers typically have less free time and more stress during this period, which negatively impacts participation. However, B2B research can often be effectively completed during this period if it involves professionals not directly impacted by the holiday season.
2. What industry segments are involved in the research?
In some cases, this time of year can be a slow period for some industry segments like agriculture, and you may even see enhanced participation as a result. However, industry segments more directly impacted by the holiday season such as retail, transportation/logistics and advertising/marketing can be problematic and should be avoided.
3. What methodology will be utilized?
During the holiday season, mail surveys are generally not the best choice given the extra demands placed upon the US Post Office and other delivery companies. However, methodologies such as telephone, email, web-based or social media can be successfully employed.
4. When will you collect the data?
Data collection should be timed carefully to avoid direct holidays and even the day before or after. Best data collection dates generally include the week after Thanksgiving to the last week before Christmas. The week of Christmas and the week between Christmas and New Year's should be avoided if possible.
With some upfront consideration and careful planning, market research can be successfully conducted during the holiday season. However, it's always wise to consult an expert to ensure success. One of Strategic Marketing Service's experienced project managers would be happy to assist your organization. Please contact SMS for more information.
Ever conducted market research during the holidays? Please share your thoughts, opinions and experiences.
The Strategic Marketing Services blog turned 1-year old last month. In celebration of this milestone, I'd like to highlight our 5 most popular blog articles.
1. Growth Strategy #1: Market Penetration
Market penetration is the name given to a growth strategy where an organization focuses on selling existing products to existing markets. Growing an organization by penetrating its market more thoroughly is typically the first growth strategy most organizations pursue as it is the least risky growth strategy. Common market penetration strategies include offering sales/coupons for products or services, increasing an organization's sales force, increasing distribution and promotion of products or services and increasing marketing and advertising expenditures. However, implementing any one of these new marketing strategies may require considerable investments of both time and money, and may not be translated into profits for a reasonable time period. Read this article to learn whether this growth strategy is right for your organization.
2. Brand Perception Vs. Brand Awareness
Brand Awareness and Brand Perception are the two key metrics companies use to measure brand strength. Unfortunately, these two terms are incorrectly used interchangeably. This article makes a clear distinction between the two terms and offers insight into which may be most important for your organization.
3. 4 Marketing Opportunities for Business Growth
Business development strategies seek to match marketing opportunities to the organization's resources (what it can do) and its objectives (what management wants to do). While some creative marketers are able to easily uncover attractive marketing opportunities, many of us are not so innovative. So, it is useful to have a framework for thinking about the broad kinds of marketing opportunities we seek to find. The Ansoff’s model, one of the best tools for organizations to develop market and product expansion strategies, is discussed in this article.
4. Growth Strategy #2: Market Development
For this strategy, an organization seeks to sell its existing products into new markets. In other words, you grow by leveraging your product or service knowledge to reach new customers. There are many possible ways of approaching this strategy utilizing internal or external resources, but four most commonly utilized approaches for market development are highlighted in this article.
5. 7 Benefits of Strategic Planning
There was a time when strategic planning was done only by the largest companies. Now it is simply a requirement for all business to survive. Business leaders must be constantly looking ahead, anticipating change, and developing a strategy to proactively and successfully navigate through the today’s global marketplace. Read this article to learn more.
As we approach the Thanksgiving holiday, I'm thankful for all our faithful readers and I look forward to another year of authoring helpful and informative blog articles.
Strategic Marketing Services works with businesses of all shapes and sizes. Contact us to discuss your organization's unique marketing challenges with one of our highly skilled and experienced project managers.
This article will wrap up our series on global segmentation strategy. We have previously discussed global segmentation and global targeting, and will now focus on the last step: global positioning.
Once an organization has segmented the global market and targeted specific market segments, a positioning strategy should be developed and implemented. Positioning is simply creating an image for a product or service in the mind of consumers in contrast to competitive offerings. Often, most organizations find it most effective and efficient to create a unified global positioning strategy. However, global positioning has limitations. Some experts recommend the pursuit of global positioning for only two distinct product/service categories: High-tech and High-touch.
High-tech products and services refer to items such as computers, audio/video equipment, mobile phones, or tablets. Generally, these types of products or services are purchased based on technical feature information already possessed or accumulated by consumers. High-tech products and services can also be segmented into three more specialized groups.
- Technical products/services (i.e., computers, mobile phones, financial services, etc.)
- Buyers have specialized needs and require extensive product information
- Marcom should focus on detailed product/service information
- Special-interest products/services (i.e., sports equipment, audio/video devices, etc.)
- Buyers are less technical and more experience-based
- Marcom should focus on common language and shared experiences
- Products/Services that demonstrate well (i.e., small kitchen appliances/gadgets, etc.)
- Products/services "speak for themselves" and travel easily
- Marcom should focus on personal, one-on-one conversations
High-touch products and services refer to items such as clothing, cosmetics, food or beverages, or automobiles. Generally, they type of products or services have less emphasis on information and more emphasis on image. High-touch products/services typically have a high level of consumer involvement and are experienced-based. High-touch products and services can also be segmented into three more specialized groups.
- Products/Services that solve a common problem (i.e., soft drinks, Starbucks, etc.)
- Products/services that address consumers' everyday challenges
- Marcom should focus on the product/service benefits in a way that evokes an emotional response
- Global village products/services (i.e., clothing, cosmetics, ethnic food, etc.)
- Products/services are sophisticated and multicultural; they often enhance social status
- Marcom should focus on chic, stylish and status-based themes
- Products/Services that use universal themes (i.e., music, alcoholic beverages, etc.)
- Products/services that are transnational in appeal
- Marcom should focus on universal themes such as materialism, heroism or romance
Positioning products and services as strictly high-tech or high-touch may not always be possible, as some products/services can be positioned utilizing multiple strategies. In those circumstances you should seek professional assistance to ensure your organization executes the most effective global positioning strategy. One of Strategic Marketing Services' project managers would be happy to consult with your organization to assist you in crafting a success positioning strategy. Please contact SMS for more information.
Keegan, Warren J.; Global Marketing Management--5th edition. 1995.
Our time at the Corporate Researchers Conference 2012 has been invigorating. Learning from and connecting with corporate market researchers will allow SMS to more effectively assist our corporate clients with the internal challenges they face. Some of the important issues we will explore in upcoming blogs will include:
- Freeing up corporate researchers to focus more on strategic research
- Embracing new technologies such as eye tracking
- Synthesis of new and existing data
- Short, concise and impactful presentations for executive management that address strategic initiatives
We greatly appreciate those of you at the conference that stopped by our booth to learn more about Strategic Marketing Services or iTracking Research Inc. If you were not able to attend we would love to connect with you to share some key insights from the conference. Please contact us for more information.
Now that we've discussed global segmentation considerations, the next step is to target attractive market segments. Global market attractiveness should be based on three key criteria:
- Current segment size & growth potential--is the market currently large enough or will it be large enough in the future to be profitable?
- Potential competition--is the market segment characterized by weak or strong competition?
- Compatibility & feasibility--is the market segment compatible with the organization's overall goals & objectives; and is it feasible from a resource perspective to pursue this market segment?
If the prospective market segment clears these hurdles, an appropriate target market strategy must be crafted and implemented. In most cases there are three basic types of global target market strategies that can be pursued.
1. Undifferentiated Global Marketing
This marketing strategy is very similiar to a mass marketing approach within a single country. More specifically, this strategy calls for creating one single marketing mix (product, price, distribution and communications) for one broad market segment. The advantages associated with this strategy include lower costs due to standardized products and communications. However, distribution may be more challenging as a large number of retail outlets are typically required.
2. Concentrated Global Marketing
This marketing strategy involves crafting a marketing mix designed to reach a single segment of the global market. Generally, this strategy has proven most effective for upscale and prestigiousproducts and services like high-end cosmetics, jewelry and fashion.
3. Differentiated Global Marketing
This third strategy option involves targeting two or more market segments with multiple marketing mixes. The distinct advantage of this strategy is allowing organization's to achieve broader market coverage. For example, fragrance manufacturers often offer products designed to appeal to low, mid and high-end buyers. Each of these unique market segments requires a unique marketing mix.
Crafting and implementing global target market strategies requires in-depth market intelligence and country knowledge. If pursuing global markets is a new initiative for your organization, it is important to have good business intelligence to inform your target market strategy decision-making. Strategic Marketing Services can help your organization understand world market characteristics by collecting appropriate market intelligence and delivering actionable information for wise strategy formation. Please contact Strategic Marketing Services for more information. One of our highly experienced Project Managers would be happy to discuss your organization's global business intelligence needs.
Keegan, Warren J.; Global Marketing Management--5th edition. 1995.