Shows when consumers are most likely to become receptive to a marketing message. Trendsetters come first, early adopters follow, the early majority comes next, the cautious late majority follow, and finally are the laggards, who prefer to keep on doing things the way they always have.
To visualize how this works, think of how people responded to home computers: First came Silicon Valley engineering types, then scientifically inclined students and professors, then tech-savvy businesspeople who increasingly relied on computers at work, then the bulk of students and business people, then the bulk of computer users (including those who were reluctant to give up their word processors), then finally the people still wedded to their 1939 Smith Corona typewriters.
This model describes effective promotion as a four-step process:
1. Get the target consumer’s attention.
2. Hold the target consumer’s interest.
3. Arouse the target consumer’s desire.
4. Obtain the target consumer’s action.
Using a low price to lure a customer into a store, then pushing more expensive brands to the customer inside the store. This is what’s happening when you find that MP3 player advertised on sale in the newspaper sitting on the shelf next to the new, deluxe model with a placard announcing its many attractive features.
Bias for action
Marketers with a bias for action are inclined to swing into action on campaigns rather than pore over market research indefinitely—a habit known as analysis paralysis. Granted, market researchers must examine the market, but they must know when to stop looking and start leaping.
New offerings that piggyback on the success of existing brands.
What every marketer hopes her product will inspire in customers: such devotion to a product that the customer is willing to search for it if necessary.
Determines if and when the company will be able to cover its costs at a particular price given various sales volumes. Market researchers should expect to get intimately familiar with this type of analysis.
You’ll need to secure this from the executive team to get the funds to pursue extensive market research, new product ideas, brand extensions, and most other marketing ideas. Beware of micromanaging execs; selling your ideas to these decision makers can take up more time than marketing to consumers and cause you to miss opportunities.
Attaching a service or product to a social cause to increase attention and respect. For example, Method’s cleaning products that are made with environmentally safe ingredients rely on cause marketing to distinguish them from similar products on the shelf.
When two or more companies or entities team up to offer products or services that bear both of their brands simultaneously, such as Skippy and Smuckers teaming up to create a swirled peanut-butter-and-jelly spread, or products carrying the Good Housekeeping Seal of Approval.
The magic mix of marketing strengths and product attributes that allow a product to prevail over its competitors in the marketplace.
A marketing team at many companies consists not only of professionals with expertise in marketing and market research, but also in technology, R&D, finance, and sales. Effective marketers can speak the lingo of all these disciplines and can manage crossfunctional teams.
CRM (Customer Relationship Management)
CRM consists of the entire interaction a company has with a consumer. CRM often refers specifically to the software that is used to track customer purchases and preferences.
Highlighting the unique characteristics of a brand to convince consumers to buy your product or service versus comparable ones. This requires careful positioning plus a finesse in the financial services arena in particular, where service offerings are often very similar due to legal standards and interest rates set by the government.
The bread and butter of many marketers—and the bane of many consumers’ existence. This covers marketing appeals delivered directly to the consumer by means other than face-to-face selling: direct mail, telemarketing, and email blasts (spam). “Opt-in” appeals targeted to consumers who sign up to receive such solicitations tend to yield a higher return on investment than mass direct marketing appeals.
Selling a product overseas at a price below the cost of production in that country, either to offload domestic surplus or drive foreign competitors out of business. This practice is strictly forbidden under most trade agreements, but it still happens.
Consumers who follow the lead of trend instigators in adopting a marketing idea. This group typically consists of opinion leaders whose positive opinion can influence their peers to adopt the idea, resulting in early majority backing for a marketing concept.
EDLP and hi-lo
Retailers usually fall into one of two categories: “Everyday low price” stores offer low prices across the board, while “hi-lo” retailers periodically run deals and discounts on their premium products.
An economic dream come true, this is the point at which the quantity and price sellers are willing to offer are equal to the quantity and price buyers are willing to pay. Once this point is reached, there will be no seller surplus or unmet consumer demand.
A sketch that dissects a marketing problem and finds out where a promising marketing campaign went wrong. If there are only one or two decisions out of joint and you catch these early on, perhaps the campaign can be salvaged.
Brands that protect the flanks of your flagship brand by covering a variety of alternative market niches and price points. Keep in mind that you don’t want to put your brands in direct competition with one another. For example, when Gap launched the successful, lower-priced Old Navy and took the Gap upscale, its premium Banana Republic brand began to suffer. Flanker brands should complement, not compete.
Selling the same products or services to different customers at different prices, as when premium items are sold at lower prices in developing overseas markets, or branded goods sell at different prices at department stores, discount chain stores, and online. Proceed with caution: Selectively lower prices can cause a luxury brand to lose its cachet, and online discounts can drive customers away from stores that feature your entire product line. Flexible pricing is sometimes a matter of ethics and necessity in the pharmaceutical industry, which has been successfully pressured by governments and activists to lower prices for retroviral drugs in developing countries.
Fast-moving consumer goods, including packaged foods or toiletries.
A group of usually six to ten people (typically paid for their participation) representing potential markets for your branded product or service and whom you interview to tease out potential market opportunities and solicit feedback to your marketing ideas. This is qualitative research, and the ideas explored in them are often subject to further testing with quantitative studies, such as surveys, for their broad applicability to the market.
Freestanding inserts in newspapers that offer coupons and fill recycling bins across America. The average redemption on FSI coupons is only 2 percent, but they can drive sales on many brands and deliver a return rate twice as high as the most successful Web banner advertising.
Gross rating points, which measure advertising impact.
According to this principle, key marketing information is often hidden in the summary data. This is market researchers’ comeback to marketers with a bias for action who are inclined to gloss over research findings in their hurry to initiate a campaign.
Other ways to say “brainstorming.”
Sales pitches focused on selling consumers on the organization and its reputation, rather than a specific product or service. Marketers often shy away from this promotional approach because it’s more difficult to show bottom-line impact of a campaign aimed at winning consumer admiration instead of consumer dollars. Might be used when first entering a marketplace or after a scandal.
The point at which sales for a particular product or service begin to level off, such as when a product or service is not so new.
The assessment of a brand’s strength, typically calculated by multiplying market share by mind share.
Identifies likely consumers for a particular product or service and groups these consumers according to similar characteristics or behavior patterns. This process helps identify the right marketing mix to appeal to the target markets for a product or service.
A company’s sales volume as a percentage of total sales volume for the market it competes in.
An attempt to quantify how likely consumers are to think of your company and brand as opposed to those of your competitors.
Marketing that is carefully targeted at a very specific demographic, such as 35- to 42-year-old stay-at-home soccer moms of preteen suburban girls whose family income is more than $100,000.
Nielsen and IRI (Information Resources Inc.)
Research firms that track store sales, television viewership, and many other vital statistics for marketers. Nielsen and IRI sales database information is typically updated on a weekly or monthly basis as new scanner data is processed, while the famous Nielsen television ratings are available weekly so that marketers can adjust media buys (purchases of advertising time).
Using placement, packaging, or promotion to sell a product to consumers instead of trying to win them over with a lower price than competitors.
A catch-all term that describes your efforts to make a brand seem unique and the most desirable choice among products or services in its category for your target market. Your positioning strategy will range from PR and advertising to product features, pricing, and packaging.
Putting your product in the hands of influential individuals—typically through the distribution of free samples—to generate buzz.
Also known as lifestyle analysis or AIOs, which stands for consumer Activities, Interests, and Opinions. This is the kind of soft, often speculative social science that makes market researchers roll their eyes if not executed carefully and supported with actual data.
Push is the extent to which you drive consumer choices by advertising and other unsolicited promotions. Pull is the way you appeal to consumers to engage with you and entice them to register on your website, sign up for promotional newsletters and mailings, and participate in promotional events.
Qualitative market research
Exploratory research that poses open-ended questions to consumers to uncover market opportunities and provide insights about possible product features and marketing approaches. Think focus groups and essay questions, not yes/no or multiple-choice surveys.
Quantitative market research
Structured research that seeks solid, generalizable answers to specific questions that can be expressed in numbers, ratios, averages, means, and percentages, such as, “91 percent of the survey sample of 5,000 ketchup consumers strongly preferred red ketchup to green ketchup.”
Reach vs frequency
The classic advertising tradeoff: Either you appeal to a broad audience a few times (think ads made especially for the Super Bowl) or reach a few people very frequently (for example, a banner ad in a daily legal brief email newsletter aimed at intellectual property lawyers).
Revamping a brand after an earlier branding attempt fell short of expectations, the demographics of the market for the brand have shifted, or a significant change in the brand took place.
A document outlining what kind of market information will be sought and the methods by which this data will be obtained.
The number of people in a research sample who respond to a questionnaire or survey.
Return on investment (ROI)
Ratio of after-tax profits to the investments made to gain that profit, including marketing expenses. Keep your attention focused on delivering an ROI, not just high profits; you need to keep your costs under control even as you drive up profits.
Research that’s already available on a specific topic. A smart market researcher knows the first step in any market research is to find out what information is already available, saving time and money in data collection.
SKU (stock-keeping unit)
Pronounced “skew,” this is a number assigned individually to all CPGs. Each individual package size and/or product variety is considered a separate SKU, which you can track through research services like Nielsen and IRI.
The price paid to the trade to “slot” your product into a space on the shelf, which is no small matter—slotting fees are still a significant cost of doing business for CPG companies.
Social network marketing
What happens when a friend eats a great meal at a restaurant and then tells her husband, who tells his friends, who decide to go try it for lunch. It’s basically word of mouth, but marketers have given it a fancy name because it’s much more important now thanks to blogs, MySpace, and other online mediums that let one person share an experience with a brand.
In the consumer packaged goods (CPG) world, this is the slang term for the retailers and vendors who sell your products. These are the people you’ll need to cozy up to if you want to ensure prime placement for your products.
Any benefit a product or service provides that causes it to be worth more. For example, a sandwich purchased at a nearby fast-food stand costs much more than its ingredients because of the value added by the convenience of having the food prepared and readily available during the lunch hour.
Sales volume is usually the first place execs look for marketing wins. It will be your job to redirect their attention to ROI so they can see the potential in smaller brands that are doing well and hear your argument about why some of the capital dedicated to high-volume, low-return behemoth brands should be distributed to other brands.