The Value Proposition

Why should a consumer buy from you?

Competitive Advantages

What makes you better than your competition?

Choosing A Differentiation Strategy

You chose a target market, now what?

Tuesday, July 31, 2012

Marketing 101: Primary Data Collection - Research

In this edition of the Marketing 101 series we will take a quick look at Primary Data collection.  So far we have been discussing data that is considered secondary.  Secondary data was collected by someone else.  Whether it was your sales department, or a comScore research report that you purchased, it was created by someone else other than your department.  It did not involve any of your department interacting with existing and potential customers to collect data.  It was not collected with your marketing objectives in mind.

There is nothing wrong with secondary data.  You cannot perform any Market Intelligence without secondary data.  It is a great and necessary starting point for any of your research.  Secondary data is critical when you are defining the problems and objectives that are the focus of your Marketing Intelligence initiatives.  However in most cases, you will need to collect primary data of some kind in order to have the information you need to make real decisions.

What is Primary Data?
Primary Data is research that has been conducted by your organization, first hand. It is also known as Field Research.  It is usually more reliable than secondary data, because it is usually more accurate since you collected it yourself.  Primary data is specific and relevant to your products and services. However, Primary Data is often very time consuming to collect, and usually costs more to create than purchasing secondary data reports. You must take special care when collecting primary data.  It needs to be relevant, current, and as unbiased as possible.

Primary Data is relevant when it directly applies to your company's products and services.  It is relevant when it relates to the problems you are trying to solve, and the marketing goals of your organization.  Primary Data is current when it is recent, and directly corresponds to the profile of your customers TODAY.  Primary Data is unbiased when your subjects have been honest and open during data collection.  When constructing your Primary Data collection plan, you must consider research methods, contact methods, the sampling plan, and your research instruments.

Research Methods consist of observation, surveys, and experimentation.  Contact Methods typically consist of mail, phone, personal interaction, and various online methods.  Sampling Plans take into account units, size, and procedures.  Research Instruments typically consist of questionnaires and other mechanical instruments.  Let's start with a quick discussion of Research Methods.  There are three typical ways that Primary Data is collected in marketing: observation, surveys, and experiments.

Observation is the collection of Primary Data through observing people, their actions and the situations they are in.  Observation may be the easiest research to do.  Typically, observation is also the most cost effective method.  Observation can also give you data that people aren't usually willing to tell you themselves, such as their feelings, emotions, attitudes or the motives behind their buying decisions.

How does observation work?  It's extremely simple.  Take a restaurant franchise owner.  He may be planning on opening another location.  He may also have little or no money to pay for marketing research.  However a lot of the data he needs he can collect himself.  He can get into his car and drive around town, observing the traffic patterns.  He can see where his clientele goes to shop.  He can see what time the traffic appears.  He can call real estate agents and ask them for lease prices for different properties.  He can drive around and look for areas that don't have his type of restaurant, looking for areas of little competition.  He can do all of this for just the cost of the gas in his car.  You can do this yourself.

Surveys are the most common method of collecting Primary Data.  Surveys are the best way to get the descriptive information that you need for your marketing intelligence.  Simply put, surveys collect data by asking other people a series of questions about their personal knowledge, emotions, attitudes, preferences, and buying behaviors.  Surveys can provide you a wealth of data.  There is always a golden nugget, a piece of data that can give you the insight you need to figure out the direction of your next campaign.

However, there are drawbacks to the data you collect via surveys.  Often people just don't recall some of the information that you are asking for, and as a result, they are unable to answer the questions.  Therefore the response that they give will not be the complete truth, it may be something that they feel you want to hear.  Sometimes people are unwilling to provide information that they might deem "private".  This prevents completely truthful responses, and it skews the data that you are analyzing.  If the responses seem too good to be true...they just may be.  

Primary Data can also be collected via experimentation.  Experimentation is the practice of gathering data by selecting matched groups of people, giving them different treatments or scenarios, controlling related factors in their environments, and checking for differences in their responses.  Experimentation gives us what we call "causal" data.  Causal data helps us explain cause and effect relationships.  Experimenting helps us try to answer "why" someone is doing something, and what influences their buying behavior.

A common example of experimentation is price testing.  To the buyer, price will be the final emotional factor that determines whether or not they will give us their hard earned money.  Depending on the product and market segment, price may be the most important factor.  How do you know what price is the right price?  You have to test it.  Many companies will test certain prices when collecting primary data on a new menu item that is being developed.  How do you think McDonalds knows how much to charge for a Big Mac?  They tested how much they can charge for that Big Mac, looking for that magic number that will provide the most sales and the most profit.

In my next post we will continue this exploration of Primary Data by examining different contact methods.

Sunday, July 22, 2012

Marketing 101: Marketing Intelligence: External Data Sources

When conducting Marketing Intelligence you will need to explore External Data sources.  Here is a list of popular paid and free external data sources.

ACNielsen Corporation
In 100 countries around the world, Nielsen provides clients the most complete understanding of what consumers watch and buy.  Provides television audience data along with supermarket scanner data on sales, market share, retail prices, and household purchases.

Ad Age Datacenter's DataCenter features premium content, including profiles of top advertisers, media, agencies and more.

American Demographics
American Demographics creates reports on demographic trends and their significance.

Arbitron provides local radio market and internet radio audience data, along with advertising expenditure information data.

ClickZ Stats/CyberAtlas
Provides information about internet use by consumers, such as e-commerce statistics.

comScore Networks
comScore provides consumer behavior information and geo-demographic analysis of internet use.  They also have large amounts of data about digital media use around the world.

Dun & Bradstreet
D&B maintains a massive database with information on over 50 million individual companies around the globe.

Factiva offers business and knowledge management solutions, and competitive intelligence data. They specialize in in-depth financial, historical, and operational data on public and private companies.

Federal Trade Commission
The FTC website provides information on regulations and decisions related to consumer protection and antitrust laws in the United States.

Forrester Reasearch (Acquired Jupiter Research)
Forrester Research monitors internet traffic and provides rankings on the most popular sites.

Hoovers, Inc.
Hoovers provides business descriptions, financial overviews, and news about major companies around the world.

IMS Health
IMS Health specializes in tracking drug sales, monitoring performance of pharmaceutical sales representatives, and offers pharmaceutical market forecasting data.

Interactive Advertising Bureau
iab creates statistics about advertising on the internet.

J.D. Power and Associates
J.D. Power and Associates provides information via independent consumer surveys of product and service quality, customer satisfaction, and buyer behavior.

LexisNexis features articles from business, consumer, and marketing publications, and tracks firms, industries, trends, and promotion techniques.

Offers social media analysis tools that help marketing and sales professionals analyze consumer insights, opinion, emotion, and behavior online.

Securities and Exchange Commission Edgar Database
This SEC database provides financial data on U.S. public corporations.

Simmons Market Research Bureau
Provides detailed analysis of consumer patterns in 400 product categories in selected markets.

SocialBakers is a premiere provider of social media metrics and analytics tools.

This popular Department of Commerce site, highlighting statistics on U.S. business and international trade was closed in 2010.  Various websites provide links to all of the data that was hosted there. (Felix G Woodard Library)

SymphonyIRI (formerly Information Resources, Inc.)
Provides supermarket scanner data for tracking grocery product movement and new product purchasing data.

Thomson Dialog offers access to more than 900 database containing publications reports newsletters and directories covering dozens of industries.

U.S. Census
The U.S. Census provides detailed statistics and trends about the U.S. population

U.S. Patent and Trademark Office
This U.S. government agency allows searches to find out who has filed for trademarks and patents across the United States.

Tuesday, July 10, 2012

Marketing 101: Developing Marketing Information

Next in our discussion of Marketing Information Systems, we're going to explore Developing Marketing Information.  Marketing Information Systems rely on multiple types of marketing data.  As a Marketing Manager, you need to stay on top of creating and maintaining these data sources that are vital to your ability to make strategic marketing decisions.  You can obtain the data you need from internal databases, marketing intelligence, and marketing research.

Internal Data Sources
Internal Data is usually your first stop when doing marketing research.  Internal data consists of your collections of electronic data.  This data contains consumer and marketing information, and it is usually created from existing data sources inside your own business.  This data comes from numerous sources.  Your accounting department keeps records of sales, costs and cash flows.  Your operations department will have data on production schedules, logistics, and staffing.  Your own marketing department will have information on your customers, their transactions, their demographics, psychographics, and buying behaviors.  Your customer service representatives will have data on customer satisfaction, and any service issues that they deal with.  (Side note: if you do not have anyone devoted to customer service in your business, seriously think about hiring someone)  Your sales department has tons of valuable information. They will have reports on your resellers, activity of your competitors, and your channel partners will have data on point-of-sale transactions.  All of this data can be found inside of your Marketing Micro-environment.

Internal data is usually faster to get ahold of, and much cheaper to use, but there are potential issues to be aware of.  First, your own internal data may be incomplete, and it might not contain the data you really need.  Second, often that data is not in the right form you need to use it.  For example, sales data usually will need to be converted from existing financial reports into a format that can be used for evaluating your customer segments, your sales force, or your channel performance.  Third, data ages quickly.  In fact, it ages immediately.  It is always old.  Data is only as fresh as that date it was collected.  Keeping data current takes a lot of man power and time to update.  There must be a staff person dedicated to this task at all times.  Fourth, managing your data requires data backup, higher end PC's for transforming data, and more advance reporting techniques depending on how you want to look at your data.

External Data Sources
Eventually you will run out of usable data inside your own walls. Inevitably you will have to do some additional research, depending on the data requirements you have, and the reports you are looking to create.  It's time to do some Marketing Intelligence.  Marketing Intelligence is the systematic collection and analysis of publically available information about your competitors and other developments in the marketplace.  Marketing Intelligence aims to improve your strategic decision making, helps you assess and track your competitors actions, and can give you an early alert of new opportunities and potential threats coming from outside your own walls.

The practice of, and the "art" of Marketing Intelligence, has grown exponentially as more businesses are "spying" on their competitors.  Common Marketing Intelligence practice has grown to include interviewing competitors staff, benchmarking competitor's products, doing research online, attending trade shows, and even some occassional dumpster diving.  There is also a wealth of publically available information online.  You can monitor publically published information - such as product reviews, SEC filings, pubically available financial records, annual reports, business publications (corporate magazines that go to partners), press releases, advertisements, and competitor's websites.  It is also possible to acquire information from competitor's suppliers, your own resellers, and competitor's major customers.  All of this information provides a wealth of information about your competitor's strategies, markets, new products, and other company happenings.

In my next post I will cover a number of free and paid database services that you can use in your marketing intelligence endevors.

Wednesday, July 4, 2012

Marketing 101: Managing Marketing Information: An Overview

Now that we have finished our overview of the Marketing Micro-environment, it's time to begin looking at Managing Marketing Information.

Why do we care about marketing information?  Marketing Information allows the Marketing Manager to do their job; it allows them to make real strategic decisions involving a business's brand, it's products, and the messages communicated to it's Publics.  Marketing Information provides a business with data about it's customers needs, the marketing environment, and it's competition.  A Marketing Information System provides data to key partners and suppliers in the Marketing Micro-environment.  Marketing managers usually need more information, they need the right information.

Over the next few weeks during out discussion of Managing Marketing Information we are going to cover:

- Assessing Marketing Needs
- Developing Marketing Information
- Marketing Research
- Analyzing Marketing Information

Assessing Marketing Needs
A good Marketing Information System balances the information you would LIKE to have with the information you NEED to have.  Remember, you don't need more information, just the RIGHT information.  Your responsibility as a marketing manager is to interview your staff to find out these needs.  Sometimes they may ask for more than they need, and they may not ask for what they really need because they don't know they need it.  Some managers won't ask for certain types of information because they feel they should already know it.

Sometimes it's not possible for your business to provide the information you need, because it is not available, or it is not capable because of your current Marketing Information System's limitations.  Always consider that the costs of obtaining, processing, storing and delivering marketing information can quickly become prohibitive for many business's.  You must decide if the benefits of having more information are worth the costs of providing it to your staff.  However, this can be hard to assess.  Remember that information doesn't itself have value.  What gives data value is how you are using it and the results it is providing your business.