COMM 3710 S03 Exam

1
COMM 3710 S/03Exam 4 Study Guide

• April 22, 2003
• Tim Larson

2
4/3/03 4/8/03 Lectures3 Basic Equations some

• Slides 2-11
• You may bring a copy of the ratings formulas to
  the test.
• You do not have to memorize any of the formulas.

3
Three Basic Equations Average Quarter-Hour
Rating AQH Persons Population of Sex/Age/
cell Average Quarter-Hour Share AQH Persons
PUR or HUT CUME Rating CUME Audience Pop. Of
Sex/Age cell
4
6AM
AQH 3 CUME 5
ABC
ABD
645AM
615AM
BD
ABCE
630AM
5
Other Important Equations Time Spent
Listening AQH Persons X Number of 1/4-Hours in
daypart CUME Persons (of corresponding
daypart) Lets say we have an AQH Persons of
300 and our CUME persons is 5,000, and we want
to figure our TSL for morning drive (Mon-Fri
6AM-10AM). which consists of 80 quarter
hours. TSL 300 X 80 24,000 4.8 quarter
hours 5,000 5,000 1.2
hours 14.4 minutes
per day
6
Turnover Rate CUME Persons AQH
Persons Turnover (Persons 12) CUME
Persons (Persons 12) AQH
Persons (Persons 12) CUME persons
3,600 12 AQH persons 300.
7
Reach and Frequency Reach identifies the
estimated number of different people reached by a
schedule. It is the unduplicated audience a
station delivers. Reach can be expressed either
as different persons or as a rating. Reach is
another name for CUME. Frequency is the average
number of times the unduplicated listener will
hear an advertising message.
8
Reach and Frequency Reach identifies the
estimated number of different people reached by a
schedule. It is the unduplicated audience a
station delivers. Reach can be expressed either
as different persons or as a rating. Reach is
another name for CUME. Frequency is the average
number of times the unduplicated listener will
hear an advertising message.
9
Average Frequency Gross
Impressions Net Reach of Schedule
(persons) or Gross Rating
Points Net Reach of Schedule (percent) Gross
Impressions Number of times a spot is
played X AQH Audience
10
Calculating OES Spot Level

• 1. Calculate your stations weekly turnover rate
  CUME divided by AQH
• 2. Multiply turnover ratio by a constant value of
  3.29.
• 3. The number results in the quantity of spots
  required weekly to achieve an effective schedule.
• Example CUME persons 3,600 12
• AQH persons 300
• 
  
• 12 X 3.29 (39.48) or 40 commercials each
  week

11
Four Reasons why radio should be bought using
reach frequency

• 1. Radio is narrowcasting
• Target medium
• Reach demographic on certain station
• 2. Radio delivers frequency
• Effective frequency
• Target reach
• 3. Radio listeners are loyal
• Listen to only two or three stations a week
• 4. Qualitative radio counts.
• Reach type of customer most likely to purchase

12
4/10/03 LectureDatabases

• Slides 12-22

13
Types of DatabasesReading Jackson and Wang on
electronic reserveThe ABCs of Database
Marketing - Pages 21-53
1. Basic historical databases -Name, address, and
telephone number 2. Marketing intelligence
databases -Builds on basic database -Information
about past purchases propensity to purchase in
the future 3. Integrated business resource
(eCommerce) -Integrate all key business
information sources or functions in an
organization -HR -tracking pick, pack and
ship -service information -order and account
management -inventory -returns All aspects
of customer relationship management (CRM)
14
Types of Quantitatively Measurable Behavior that
can be added to a database

• 1. Response
• 2. Category/Brand Network Changes
• 3. Contact points
• 4. Commitments
• 5. Purchases
• Quantify and add data from these measures to the
  customer database.

15
Example Category/Brand Networking (Changes)
Beverage Liquid Good
with food Thirst quenching

Superordinate Level



Soft Drink Cola Sweet Carbonated
Preservatives Cold
Soft Drink Fruit Nutritious Cold Natural
Slightly sweet
Basic Level

Subordinate Level
OrangeJuice breakfast Florida orange
All Natural
Artificial Sweetener
Fruit Punch artificial unhealthy stores
well
Soft Drink
healthy unusual
diet cola
Diet Coke
Brand Connection
Diet Low calorie
Diet Pepsi
Brands
Diet Canfield
16
Example Contact Points Ways people
get information about McDonalds

Customers
Investors
Trade Press
McDonalds
Litter
Employees
Mass Media
Golden Arches
Friends
17
How to Measure Contact Behavior

• Contact Paths
• Conduct a customer inventory of major contacts
  that influenced brand or product usage.
• Contact Inventories
• Conduct a customer inventory of major contacts
  that influenced brand or product usage.
• What contacts does a customer have with the brand
  on the way to making a purchasing decision? Takes
  the form of contact mapping.
• Tracking Studies
• A series of measurements over time of the
  messages that are delivered and the changes in
  behavior that result.
• Measuring Known Contacts
• Encourage responses and develop two way
  communication.
• Encourage feedback through mail-back cards, 800
  number, Internet, warranty cards.

18
How to measure Purchase Behavior

• Direct measures
• Get purchase history. What do they buy? How
  often? From whom? Also, identify customers by
  name, address, telephone number, email address,
  etc.
• Scanners consumer goods like foods beverages
• In-house charge cards clothing.
• Indirect purchase measures
• Usually involves manufacturers who want to know
  about their customers customers.
• Warranty or service cards

19
The Behavior Measurement Process

Transaction Partial
Affiliations Attitudes
Category Networks Transactions

• Measure behavior as close to the actual
  transaction as possible.
• Start with the actual purchase behavior and move
  back up the purchase decision/behavior model
  until you find measurable points.
• Capture the behavioral data at the first
  productive point along the continuum and put it
  in the database.

20
Market Behavior Measurements

• Starts with actual purchase behavior
• Transaction
• Identifies the customers purchases provides a
  first cut at segmentation
• Partial transaction
• Looks at a measurable commitment in lieu of a
  purchase
• Brand relationship
• Measures some relationship or past affiliation
  with the brand
• Attitudes
• Helps to explain the why of the behaviors or
  non-behaviors
• Brand and Category networks
• How consumers mentally store ideas about
  products, services and brands.

21
Forms of Measurable Behavior at Each Point

• Transactions or purchases for which you have a
  record.
• Credit card use.
• Insurance policy or financial investment
• Partial transactions
• Some association with marketing organization.
• 800, coupon, dealer contact, request for info.
• Brand Relationship
• Measured through the brand network that the
  consumer has constructed or through affiliations.
• Motorboat/swimsuit, commuter/newspaper, dog
  owner/dog food,
• Attitudes
• Treating change of attitude as a behavior
  change.
• Brand and Category Network
• Customers feelings and beliefs developed using
  stored information in the form of mental nodes
  and networks.

22
The Future of Behavior Measurement and Databases

• Being digital
• Transactional programs
• Tied to EFT (electronic funds transfer)
• Accomplished with PDAs and cell phones.
• The marketer instantly knows who bought what and
  the price paid.
• Interactive two-way communication
• Cable TV, voice and data systems, telephone,
  fax, and other systems
• will enter each home or office.
• Real time message from marketers, to which
  customers can immediately
• respond.
• All information received and transmitted using a
  teleputer,a dumb terminal
• that can access millions of databases stored on
  millions of computers around
• the globe.
• The one-way, low-response, marketer driven
  communications
• systems will be replaced with an interactive,
  real-time response,
• customer driven, digital communications system.

23
4/15/03 LectureSegmentation

• Slides 23-31

24
The Principle of SegmentationKey insight.

• It is more important to reach the people who
  count than to count the people you reach.
• Based on the believe that individuals and
  businesses have differences.
• Defining and targeting segments is a way to
  leverage knowledge about individuals or
  companies differential responses.

25
Market SegmentationA fundamental principle of
marketing
Some form of quantitative measurement is
typically required if you want to segment.
However, raw data are not segments, only the
building blocks of segmentation. Segmentation
is facilitated by the computer and other
information technology.
26
Different Segmentations of a Market



Complete Segmentation

a
No market Segmentation
b
b
a
b
a
1a

1
1

Market Segmentation by age classes A B
2b

1
1b
3
2a
2
3a
3b
2
Multi-dimensional Market Segmentation By
income-age class
Market Segmentation by Income Classes 1, 2, and 3
27
Segmentation VariablesBe able to identify
variables in each of the segments below

• There is no single way to segment a market. A
  marketer has to try different segmentation
  variables, singly and in combination.
• 1. Geographics
• 2. Demographics
• 3. Psychographics
• 4. Purchase Behavior
• 5. Category Networking

28
Example Multi-dimensional Segmentation of
the Toothpaste Market Benefit Demographics
Behavior Psychographics
Brand Segment Network
Economy Men Heavy users High autonomy
Sale (low value oriented
Brands price) Medicinal Large Heavy users
Hypochondriac, Crest (prevent
families conservatives decay)
Cosmetic Teens, Smokers High
Macleans, (bright young adults,
sociability, Ultra teeth)
active Bright Taste Children
Spearmint High self-
Colgate, (good lovers involvement,
Aim Tasting) hedonistic
29
Basic Market-Preference Patterns Ice Cream
Preference Example










Creaminess
Creaminess
Creaminess


Sweetness
Sweetness
Sweetness
Homogeneous Diffused
Cluster Preferences Preferences
Preferences
30
Requirements for Effective Segmentation

• Measurability
• The degree to which the size and purchasing power
  of the segments can be measured. Some segments
  are hard to measure. (Teen smokers who are
  rebelling)
• Accessibility
• The degree to which the segments can be
  effectively reached and served. (Perfume and
  single women who frequent bars late at night.)
• Substantiality
• The degree to which the segments are large,
  homogenous, and/or profitable enough. (Cars for
  people who are 4 feet tall)
• Actionability
• The degree to which effective programs can be
  formulated for attracting and serving the
  segments. (Airlines with small staff serving
  seven segments.)

31
Technology Changes the Game

• We can measure actual consumer behavior in the
  marketplace through...
• Scanner panels Fresh Value/Smart cards
• Wireless Telephony Cell phone
• Two-way communication channels Cable/DSL
• Advanced direct marketing techniques Internet
• With this technology comes the need to rethink
  and reanalyze the results and impact of
  traditional marketing communications programs.
• One-on-One marketing is the future even with
  consumer goods.

32
Lecture4/17/03Conjoint Analysis

• Slides 32-42

33
Quantitative Techniques
Two choices when it comes to conducting
quantitative research Collect less
information across more individuals large
sample technique Collect a lot of information
from a few individual small sample
technique Rule of Thumb The more information
you collect from any single individual, the fewer
the number of cases you will need in order to
achieve a stable sample estimate.
34
Conjoint Analysis

• A small sample technique that quantifies peoples
  preferences or priorities when faced with the
  task of evaluating a set of products and choosing
  the most preferred alternative.
• Parallels a realistic purchase situation
• Often labeled trade-off analysis.
• What features or benefits is a consumer willing
  to trade off?
• For instance, if you were going to purchase a
  computer, some of your trade-off considerations
  might be
• HD memory Monitor Size RAM OS
  
• Service Software Peripherals
  Price

35
Alternative Measurement Techniques in Conjoint
Analysis

• 1. Trade-Off or Two Factor Approach
• Two alternatives presented
• Rating Scales
• 2. Conjoint simulation using a computer
• Lets you estimate the ideal feature combinations
• Computer-aided Interviewing
• Computer models used to present and compute
  conjoint analysis research.
• 3. Full-profile conjoint analysis

36
Example Trade-Off Conjoint
Matrices
Telephone
Price
Price

37
Example CHOICE SIMULATIONS USING A
COMPUTER Reveals consumer preference for
specific product configurations. Flight 1
300 5 hours two stops no meal Flight 2
400 4 hours one stop snack Flight
3 500 3 hours direct meal Possible
Questions Will a price change of 50
influence the consumers choice? Would the
consumer be willing to pay 50 more if s/he got a
meal?
38
Example Product Description in a Full Profile
Conjoint Example

• Card Print Speed Handset Price
• 5ppm Yes 499
• 5ppm Yes 699
• 5ppm Yes 899
• 4 5ppm No 499
• 5 5ppm No 699
• 6 5ppm No 899
• 7 8ppm Yes 499
• 8 8ppm Yes 699
• 9 8ppm Yes 899
• 10 8ppm No 499
• 11 8ppm No 699
• 12 8ppm No 899
• 13 10ppm Yes 499
• 14 10ppm Yes 699
• 15 10ppm Yes 899
• 16 10ppm No 499
• 17 10ppm No 699
• 18 10ppm No 899

39
Example 4.1 Hypothetical Conjoint Output for
FAX Machine
Utility/Partsworth Difference
Relative Weight Paper cutter Yes .6 No
.01 .59 18 Telephone
handset Yes .5 No .1 .4
12 Answering machine Yes .8 No .5 .3
9 Print speed 5ppm .3 8ppm .9 10ppm
1.0 .7 21
Brand name Sharp .4 Panasonic .5 Brother
.5 HP .6 .2 6 Color Black .1 Putty/B
eige .2 Gray .2 .1 6 Price 499
1.5 699 .9 899 .5 1.0
31 Total Utility
3.29 100
40
4.2 Partworth/Utility Diagrams for Hypothetical
FAX Example
Preference Utility
Preference Utility
Preference Utility
Black Beige Gray Color
Yes No Paper Cutter
Yes No Answering Machine
Preference Utility
Preference Utility
Preference Utility
Sharp Panasonic Brother HP Brand
Name
Yes No Telephone Handset
499 699 899
Price
Preference Utility
5ppm 8ppm 10ppm Print Speed
41
Example Conjoint Analysis
Data Collection Data collection involves showing
respondents a series of cards that contain a
written description of each and every product
configuration. A typical card examining the
business traveler might be When you next
purchase a FAX machine, how likely would you be
to choose one with the following
characteristics? Please circle the
appropriate number from 1 to 10 to indicate your
feelings. 8PPM No Handset 499
Would never Would definitely
choose this FAX choose this FAX 1 2
3 4 5 6 7 8 9
10
42
Summary Conjoint Basics

• Involves presenting respondents with alternative
  choice situations and having them rank the
  alternatives.
• Computer model decomposes these preferences by
  analyzing what features have been consistently
  present or traded-off in the way choices were
  rank-ordered.
• Output of model is a set of numerical values
  associated with every feature and feature level,
  which portrays the relative importance of each to
  the individual.

43
4/22/03 LectureMulti-Dimensional
ScalingPerceptual Mapping

• Slides 43-52

44
Review of Large Sample Quantitative Methods

• Survey research/Public Opinion Polling
• Goal is to estimate, with as much precision as
  possible, the percentage of your sample that does
  this or that or believes one way or another.
• Sampling error formula
• SE1.95 (P) x (1-P)
• N
• Size of sample is based on how much diversity or
  homogeneity there is in the population or market,
  or how many ways you will want to cross-section
  (segment) the sample. Cost factors are fixed to
  sample size

45
Review of Levels of Data or Measurement

• Nominal (chi-square)
• Classification of attributes into mutually
  exclusive categories that have no quantitative
  relationship (Yes/No, male/female)
• Ratio
• Quantify attributes by scaling them along a
  continuum
• Usually an absolute zero (distance, weight,
  purchases)
• Interval measurements (t-test)
• Variant of of the ratio scale
• No real zero --arbitrary zero points
  (temperature, an index)
• Ordinal measurements
• Categorical in nature and different from nominal
• Rank ordered (education, segmented ratio data)

46
Review of Criteria for Measurement Quality

• How do you know when it is a quality measurement?
• Three criteria to consider
• Precision (the more precision the better)
• Validity (face,content, construct)
• Reliability (consistency and dependability)

47
Multi-dimensional Scaling (MDS) and Perceptual
Mapping

• MDS quantifies the perceptions and images that
  people have about a market, a brand, an idea, or
  any concept by assessing how similar or
  dissimilar people perceive them to be from
  various other related concepts.
• Often called perceptual mapping because, in
  addition to deriving the perceptual distances
  among brands or concepts, the program will plot
  these concepts as points in a geometric space so
  that they are visually shown as a picture --a
  perceptual map.
• See Exhibit 4.1 -Multidimensional Scaling
  Perceptual Map

48
MDS Procedure and Interpretation

• 1. Begin with selecting the concepts to be
  included in the map, or those brands, adjective
  descriptors, and other key concepts and/or
  phrases that define the topic or market under
  study.
• See Exhibit 4.2 Brands and Brand Descriptors
• 2. Obtain similarities or proximities data on
  each concept in relation to every other concept.
• -See Exhibit 4.3 Examples of MDS Similarity
  Measures

49
4.2 Example MDS Concepts for the Copier Category

• Brands
• 1. Canon
• 2. Kodak
• 3. Konica
• 4. Minolta
• 5. Mita
• 6. Panasonic
• 7. Ricoh
• 8. Sharp
• 9. Toshiba
• 10. Xerox

• Brand Descriptors
• 1. Affordable
• 2. Aloof
• 3. American
• 4. Approachable
• 5. Bureaucratic
• 6. Conservative
• 7. High Quality
• 8. Innovative
• 9. Intimidating
• 10. Me
• 11. Prestigious
• 12. Reliable
• 13. Canon
• 14. Sharp
• 15. Xerox

50
4.3 Examples of MDS Similarity or Proximity
Measures

• A. How similar or different are
• Canon and Xerox
• Very Similar ------------------------- Very
  Different
• Cannon and American
• Very Similar-------------------------- Very
  Different

B. How similar or different are Canon and
Xerox Very Similar 1 2 3 4 5 6 7 8 9 10
Very Different Canon and American Very Similar
1 2 3 4 5 6 7 8 9 10 Very Different

• On a scale from 0 to 100, how would you rate the
  similarity of the
• following pairs of concepts? If you think two
  concepts are very similar
• of seem to go together, or are often associated
  with each other, then
• write a small number. On the other hand, if you
  think the concepts are
• very different, do not seem to go together, or
  are seldom associated
• with one another, then write a large number. Thus
  a zero means that
• you believe the two concepts are identical, while
  a 100 means that you
• believe the two concepts are as different from
  each other as the
• possibly could be.
• D.Which pairs of words seem to be more similar or
  seem to go together
• better? Choose 1.
• 1. Canon and Xerox Canon and Sharp
• 2.Canon and American Canon and My Business
• E. Please rank-order the following concept pairs
  based on how similar the word
• pairs seem to be. The pair which you think seems
  the most alike, rank first,
• the pair you think seems next most similar, rank
  second, and so on. The
• pair which is the most different in your opinion
  should be ranked last.

51
Metric and Non-metric Measurements

• Metric measures are those that use higher-level
  measurement, such as ratio scaling techniques
  that require respondents to estimate actual
  distance between concepts with a number, or to
  mark on a line scale that can be directly related
  to a number. See Exhibit 4.3 - measuring scales
  A, B, and C
• Non-metric measures are those that do not require
  a direct estimate of perceptual distance.
  Respondents are asked only to make rank-order
  judgments about differences between the pairs of
  concepts. See Exhibit 4.3 - parts D and E

52
4.5 Copier MDS Map with Descriptors
4.4 Copier MDS Map with Brands Only
Intimidating High Quality
Prestigious Innovative
Bureaucratic Xerox Aloof
Conservative Reliable
Mita Lanier
Xerox
Sharp Canon Approachable My
Business Affordable
American
Ricoh Konica Toshiba Minolta
Panasonic Sharp Canon Kodak
4.6 Perceptual Map with Preference Mapping
4.7 Message Strategies for Copier
Copier Specialist
Bureaucratic XEROX Aloof
Conservative
Intimidating High Quality
Prestigious Innovative
Mita Lanier
Xerox
Ideal Point
American
Foreign
Ricoh Konica Toshiba Minolta
Panasonic Sharp Canon Kodak
American
Sharp Canon Approachable MY
BUSINESS Affordable
General Electronics Company
53
MDS Applications

• Some questions MDS can answer
• What is my brand/company/services image or
  perceived position in the marketplace?
• Who are my key competitors in the customers
  eyes?
• What are my perceived strengths and weaknesses?
• How do I best position my product?
• What are my best message strategies?
• Are there different perceptual segments in the
  market?
• How has my image changed over time?
• Are there untapped opportunities in the
  marketplace that are as yet unmet by the
  competition?

54
Dates to remember

• Study Sessions with Todd Norton
• Tuesday, April 29
• LNCO 2920
• 1030 AM 1230 AM
• Exam 4
• Thursday, May 1
• LNCO 1110
• 8 AM to 10 AM
• Please be on time and seated by 8 AM

55
Contact

• With problems or questions, contact
• Tim Larson
• 581-5341
• 944-8655
• Email
• Tim.larson_at_m.cc.utah.edu
• In-person
• LNCO 2425