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Capturing Market Insights
This paper analyses the key methods for identifying opportunities in the macro environment. It discusses the importance of a marketing intelligence system, and attributes of good market research. It also discusses the methods for accurately measuring and forecasting demand.
Capturing Market Insights
Check Your Understanding:
- A marketing intelligence system is a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
- A trend is a direction or sequence of events with momentum and durability; it is predictable and reveals the shape of the future by providing strategic direction.
- Society shapes the beliefs, values, and norms that largely define tastes and preferences.
- The last step in the marketing research process is to make the decision.
- Research that is designed to capture cause-and-effect relationships by eliminating competing explanations of observed findings is called experimental research.
- Marketing decision support system (MDSS) is a coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.
According to Kotler, P. and Keller, K. (2012), marketing intelligence is a methodology that leaders use to gather frequent data improvements in the marketing habitat. Managers and leaders analyze and make business decision from the data gathered. Kotler, P. and Keller, K. (2012) further describes steps that can help improve the quality of marketing intelligence.
- Train and push top performers, develop new sales reps, and motivate the sales team to stay focused on adding value to customers. Educate the sales team on how customers leverage their products which helps gain insight and get feedback to enhance customer experience.
- Inspire, motivate and drive partner network, distributors, vendors, alliances and channels to provide feedback and customer intelligence. This important information can be used to better serve customers.
- Hire specialists to gather critical information from competitors. Collecting information such as how customers are treated, cleanliness of the facility and bathrooms, reward programs and so on.
- Network outside the organization to gain insight into competitor product features and benefits, pricing, and target market. Networking to gather competitive intelligence across multiple business groups and locations help gain good knowledge about the competition and this would help prepare for any potential threats in the future.
- Set up a customer advisory panel. Setting up a platform for customers to provide feedback. There is no better way to improve product benefits and customer experience than hearing directly from the customers.
- Leverage government related information resources to gain insight into population swings, and demographic groups.
- Buy data from research companies. Real time data and analysis can be obtained by third party vendors which would help companies with forecasting and demand.
A megatrend is a large, social, economic, political, and technological change that is slow to form, and once in place, influences us for some time; for example, between seven and ten years or longer. The ten trends are: (1) aging boomers; (2) delayed retirement; (3) the changing nature of work; (4) greater educational attainment—especially among women; (5) labor shortages; (6) increased immigration; (7) rising Hispanic influence; (8) shifting birth trends; (9) widening geographic differences; and (10) the changing age structure.
Online Market Research:
Pros include: The capital and upkeep expenses are much lower than traditional market research. Companies need to hire a work force to gather and collect data. As far as online market research is concerned, all the pre work and preparation along with the collection and handling of data is done from a single location. This would exponentially reduce costs for organizations.
Once a computer application is set up, it facilitates the entire system of data collection, allowing data to be collected and handled in an organized and efficient way. When the application is built, it is automated and allows participants to input their data. This system can be replicated for different projects. This helps save time as well. Online surveys and questions can be sent out via email to multiple people at once and needs no paper, no printing and no work force. This will enable the work force to run not only one campaign but multiple campaigns at he same time. Online surveys and questions allows people to think about the questions before they can answer them. This helps especially when people are dealing with sensitive topics. The biggets pro with online market research is that there are no geographic boundaries. Online surveys and questions can be sent to any part of the world. Therefore you can reach a wider audience. Surveys can be rolled out internationally and focus on niche markets.
There are a couple of cons of using online market research. For example, organizations conducting research areas where people are not internet savvy could be challenging. Rural areas in countries like India, parts of Africa have no internet. Also towns that reside people over 70 years of age are not going to be internet savvy.
Allstate’s Motorcycle Market:
Allstate is an insurance business company dealing with property, power sports, life/retirement etc. While targeting the audience in the power sports area which primarily comprises of the motorcycle industry, it was revealed that 20% of the American population comprised of the generation Y consumers who had a penchant towards cool electronic gadgets such as mp3 , smartphone, fast bikes and notebooks . They were the major buyers in the motorcycle industry, purchasing around 1.2 million motorcycles in the year 2006. In order to deal with this generation Y customers, the marketing executives needed an integrated marketing strategy which included advertising on platforms such as social networking sites, text messaging, internet, mobile websites etc. Allstate marketing executives found out that 600 of its 14,800 agents were also passionate riders and this could reap positive results as then the interaction between the potential customers and the agents could reach a new high due to their common passion for fast bikes. The marketing executives of the Allstate Company captured the above fact and organized a downloading service through the Rolling Stone Magazine as part of a digital advertising campaign which aimed at music lovers from amongst the riders and also sponsored races aimed to pamper their customer needs.
In this case study, All State Insurance has been known for attracting a conservative, mainstream target market. Having a new focus in lifestyle strategies, however, All State has recognized and understood the increasing interest in “baby boomers and Generation Y consumers”, with a relative increase in sales “for the past five years” (Brooks). This information helped direct All State to market towards motorcycle riders in order to broaden their complete insurance coverage policy as well as “revamp some of its advertising and marketing strategies” (Brooks). Since other insurance companies, such as State Farm and Geico, continued to focus their marketing advertisements to the general population, their catchy tunes “like a good neighbor, State Farm is there” focuses primarily on conservative automobile insurance holders, and not so much of the non-conservative motorcycle niche market. This differentiates them in a competitively unique niche market where there are very few competitors who already have an established customer base. In addition to these changes in marketing strategies, All State’s market research also found that “over 600 of its 14,800 agents were devout motorcycle riders themselves,” (Brooks) and thus decided to incorporate its policies to its current employees and extended family members and friends. What better way for a company to promote its current products and services, than having actual employees be a part of the company’s range of products and services in this newly established motorcycle insurance policy, while at the same time maintaining a rapport and word-of mouth promotional strategy with fellow coworkers, family, and friends who also happen to be a part of the motorcycle community.
When market research indicated motorcycle riders weren’t even considering Allstate Insurance during the insurance purchasing process, the company knew something needed to change. In 2008, Allstate launched the website Allstategarage.com, created by Chicago agency Leo Burnett. It allowed visitors to plan a ride, find an agent and get a quote. It also included safety themed features, such as 30 second vignettes starring well known motorcyclists. The goal of the website was to show that Allstate understands what the biker’s needs are. In the first two months, the site generated more than a 100,000 unique visitors, with the average visit length approximately 7.5 minutes.
For the third year in a row, Allstate was giving away a custom motorcycle designed by legendary bike builder Dave Perewitz. Allstate motorcycle insurance offers one of the most competitive policies in the industry with many product features, including: first accident waiver, guest passenger coverage, custom parts coverage and towing coverage. If eligible, motorcycle owners can save up to 40% off of their premiums with a variety of discount just for switching to Allstate. Insurance and discounts are subject to qualifications and availability.
Overall, the findings of this study suggest the importance accurately measuring and forecasting demand. Hence, it is vital for companies to track and identify opportunities in the macro environment; and asses return on investment in marketing.
- Kotler, P. and Keller, K. (2012). Marketing Management, 14/E. Prentice Hall
- Hine C. (2005). Virtual Methods: Issues in social research on the Internet. Oxford: Berg.
- Kvale, S (2003). InterViews: A guide for social social science students and research. London: Sage.
- Kemick, David (2011). How to claim your business on Yelp.
- Agresti, Alan (2002). Categorical Data Analysis. Hoboken: John Wiley and Sons.
- L. Devroye, G. Lugosi (1996). A Probabilistic Theory of Pattern Recognition. New York: Springer-Verlag.
- Tukey, John (1977). Exploratory Data Analysis. New York: Addison-Wesley.
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