Five Forces Model

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Five Forces Model
Technological Environment
Sociocultural Environment
Risk of Entry by Potential Competitors
Ecological Environment
Bargaining Power of Suppliers
Threat of Substitute Products
Regulatory Environment
Rivalry Among Established Firms
Economic Environment
Bargaining Power Of Buyers
Political Environment
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Bargaining Power of Buyers

• Buyers are powerful when
• supply industry is composed of many small
  companies and buyers are few in number and large
  e.g., market research firms
• buyers purchase in large quantities e.g.,
  Marriott and Amex MGM Mirage
• when supply industry depends on the buyers for a
  large of its total orders
• buyers can switch orders between supply companies
  
• threat of vertical integration
• buyers to purchase input from several companies
  at once

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Bargaining power of suppliers

• Suppliers are powerful when
• few substitutes and important to the company
• when companys industry not important to the
  supplier
• costly for a company to switch from one supplier
  to another
• suppliers use threat of vertically integrating to
  compete directly with company
• companies cannot use threat of vertically
  integrating backward to supply own needs

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Threat of substitute product

• existence of substitutes presents a strong
  competitive threat

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Rivalry among established companies

• Extent of rivalry is a function of the
  interaction among the following factors
• industry competitive structure
• demand conditions
• height of exit barriers
• ego of executives in charge
• environment

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8 Trends

• Trend 1 More visible guest comfort and
  convenience in the guestroom
• Trend 2 An authentic guest experience
• Trend 3 Continued brand consolidation with the
• emphasis on Europe
• Trend 4 Increasing brand proliferation
• Trend 5 The changing nature of destination
• Trend 6 The Increase and influence of social
  networks in hotel distribution
  decisions
• Trend 7 Increase in Environmental action
• Trend 8 Continued changes in FB delivery
  systems

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Guest Room of the Future

• Video from U-Tube

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Trend 1 More Visible Guest Comfort and
Convenience
Comfort
Convenience
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Westin Hotels Heavenly Bed
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Marriott Bedding
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New Offerings

• Softer Mattresses

• Silky Sheets

• Duvets

• Pillows in all Shapes, sizes and firmness

• Mood lighting

• Workout Equipment

A Global Industry Upgrade in Room Comfort

• Aromatherapy

• Customized Art

• Sound proofing

• Superior interior Air Quality

• Full-Flow Rainforest Showerheads

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Hyatt Check-in Kiosks
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Trend 2 An Authentic Guest Experience
Dont ask me to adapt to the hotels way of
operating. I want the hotel to adapt to me.
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Trend 3 Continued Brand Consolidation
The increasing ownership of many brands by fewer
and fewer companies
The conversion of an independent hotel to a brand
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Trend 4 Increasing Brand Proliferation

• Over 30 new brand introductions in the next two
  years in the US then migrating globally

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Synergy of Satisfaction
If you like us for business then you will love us
for leisure if not in this brand then in one
of our others
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Ginger Hotels

• TV ADVERTISEMENT

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Hotel Companies
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Trend 5 The Changing Nature Of Distribution
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Five Major Forces

• Customers demand for personalization and a travel
  experience
• A shift in customer preferences for
  communication/ transaction channels and methods
• The evolution of social networking from small
  cliques to global networks.
• The emergence of a non-traditional and
  dynamically changing mix of distribution partners
• The shifting of vendor-distribution partner
  relationships

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Trend 6 The Increase and Influence of Social
Networks in Hotel Distribution

• Customers have access to more sources of
  information
• Customers can get feedback from others
• Customer can make reservation through a number of
  methodologies-from travel agent to cell phone

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Trend 7 Increase in Environmental Action

• As a citizen of this planet
• Take care of the environment and society around
  you
• Build relationship with the customer

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Green Movement

• Defining what it actually means to be green from
  a hotel operations standpoint
• A clear understanding of the financial impact on
  the operating statement for going for green
• We need to determine a way to measure carbon
  output and the effects each property has on the
  environment.

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Trend 8 Continuing change in FB delivery systems

• Variety of outlets and delivery system

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FB Delivery Systems

• Eliminate Food and beverage completely
• Focus food and beverage on only one key market
  segment/one key meal period
• Lobby breakfast
• Lobby delicatessen/general store
• Outsource some or all of food and beverage
• Dial for delivery
• Restaurant lease/manage/franchise
• Self-service
• Buffets, barbecues, vending

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Kitchen Video

• Beverage Air at IH-MRS Show 2007

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8 Trends

• Trend 1 More visible guest comfort and
  convenience in the guestroom
• Trend 2 An authentic guest experience
• Trend 3 Continued brand consolidation with the
• emphasis on Europe
• Trend 4 Increasing brand proliferation
• Trend 5 The changing nature of destination
• Trend 6 The Increase and influence of social
  networks in hotel distribution
  decisions
• Trend 7 Increase in Environmental action
• Trend 8 Continued changes in FB delivery
  systems

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Tourism Trends for Europe
http//www.etc-corporate.org/modules.php?name
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Tourism Trends in Europe

• Number of older age categories will rapidly
  increase. Seniors will be healthier and will have
  higher incomes than in the past. Many will enjoy
  earlier retirement
• The average number of persons per household will
  decrease further with higher disposable incomes
  and spending power
• Health-consciousness will increase still further
• The average level of education is increasing

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Tourism Trends in Europe

• Modern society exerts increasing pressure on
  peoples daily lives, and stimulates the wish for
  more leisure time and relaxation which will
  have an adverse effect on the increase of free
  disposable incomes.
• The increase in the number of days of paid leave
  has come to a halt
• More sophisticated consumers are increasingly
  self-assured regarding their needs and rights.

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Tourism Trends in Europe

• Lifestyles in Western society change gradually
• The penetration of the internet and its use for
  information and the purchasing of tourism
  products and services will continue to increase
• The increasing availability of high-speed trains
  and low-cost carriers will influence classical
  travel flows. Road traffic more congestion

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Tourism Trends in Europe

• Environmental consciousness will continue to
  increase
• Acts of terrorism, regional wars, pollution, and
  other crises have unfortunately become facts of
  daily life, and influence the need to feel safe
  and secure

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Trend Site on Web

• http//www.htrends.com/trends-detail-sid-26299.htm
  l
• http//yumsugar.com/236915
• http//www.trendsresearch.com/institut.html

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Industry Trend Resources

• Stomach competence(Book GDI/Lebensmittel
  Zeitung)www.stomachcompetence.ch
• FoodService Europe(Magazines/Online-Archive)www.
  cafe-future.net
• Horizons FS Limited(Research/Consulting
  Company)www.horizonsforsuccess.com

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Changing ConsumersVideo Consumer of tomorrow
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Social Environment
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VALS Survey

• http//www.sric-bi.com/vals/presurvey.shtml

The VALSTM system, originally developed by SRI
International is now owned and operated by SRI
Consulting Business Intelligence (SRIC-BI). The
U.S. VALS system, Japan-VALS, and U.K. VALS have
proven to be effective tools for categorizing
American, Japanese, and U.K. consumers into
various segments based on psychological
characteristics and four key demographics.
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• Product Service Sub-strategy

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Segmentation Variables

• Geographic segmentation
• Most widely used in hospitality
• MSA and DMA
• Demographic segmentation
• Easily measured and classified
• Psychographic segmentation
• Based on self-concepts, lifestyle behaviors, and
  personality traits

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Segmentation Variables (cont.)

• Usage segmentation
• Purpose
• Frequency
• Monetary value
• Recency
• REM
• Timing
• Nature of purchase
• Where they go
• Purchase occasion
• Heavy, medium, and light users

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Segmentation Variables (cont.)

• Benefit segmentation
• Price segmentation
• Between product class
• Within product class
• International segmentation
• Fine-tuning segments
• Become more specific and concentrated

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• Segmentation Using Multivariate Analysis

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Methodology for Multivariate Procedures
The Multivariate Section presents an overview of
the findings of the multivariate analysis used to
develop a more detailed understanding of the
attitudinal differences of the population under
study. A variety of statistical techniques and
procedures were used to develop this
understanding.
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Factors of Importance Ratings

• Serves the type of food I Like
• Offers Healthy Choices
• Serves Generous Portions
• Location is Convenient
• Provides Exhibition Style Cooking
• A place for the family
• A good place to go with friends
• Service is Relaxed, not hurried
• Has Pleasant Decor

• Clean Appetizing
• Has Fresh Food
• The Restaurant is always clean
• The Food Always Looks Appetizing
• Clean Dinning Spaces
• Good Service/Staff
• Service is always prompt and efficient
• Server is knowledgeable about the food
• Has Friendly Staff
• Good Price Value
• Reasonable prices
• Good Value for Money
• Food preparation and taste
• The Food is Prepared Just the Way I Like It
• The Food Taste Great
• Consistent food and right variety
• Food is Constant Time After Time
• Has the right variety of food for me

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Multivariate Analysis
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J
Cluster II Friends Family Fun N 339 31.9

• Clean Appetizing
• Good Service/Staff
• Good Price Value
• Food preparation and taste
• Consistent food and right variety
• Serves the type of food I Like
• Offers Healthy Choices
• Serves Generous Portions
• Location is Convenient
• Provides Exhibition Style Cooking
• A place for the family
• A good place to go with friends
• Service is Relaxed, not hurried
• Has Pleasant Decor

A
I
K
H
M
E
D
F
N
B
Cluster I Limited KFH Experience N110 10.7
C
L
G
Cluster III Selection Service N324 30.5
Cluster IV Consistency N 114 10.7
Dimension 1 vs. Dimension 2
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Carvel Ice Cream

• Work on possible segmentation strategy for Carvel
  Ice Cream

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EfficiencyCommunication Sub-strategy
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Word of Mouth

• The One Number Firms Should Be Concerned About
• Critical in services because of variability and
  heterogeneity customers discount advertising,
  PR, and the like
• WOM comes from friend, associate, family member

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Word of Mouth - continues

• Questions to ask
• How likely is it that you would recommend _______
  to a friend or colleague?
• use a 0 to 10 scale

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Word of Mouth - continues

• Net Promoter calculate
• of people who respond with a 9 or 10
  (promoters)
• of people who respond with a 0 6 (detractors)
• Net Promoter Score Promoters Detractors
• (E-Bay, Amazon, USAA 75 - 80
• Median 400 firms in 28 industries was 16)

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Life-Time Value

• Case Pre Assignment

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Assignment

• Calculate the life-time value incremental
  customer for Jellystone Resort Campground

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Life Time Value Incremental CustomerJellystone
Resort Campground

• Need to Know the following
• Sale price
• Fixed cost
• Variable cost
• Average stay
• Lifetime Customers visit
• Return customers
• Total customers

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Assignment

• Calculate the value of word of mouth
  recommendation for Jellystone Resort Campground
  both positive and negative

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Word of Mouth Incremental Customer

• Need to know the following
• Likelihood that customer will refer
• Number of people to whom the recommendation will
  be made
• Percent of referrals that are empathetic (i.e.,
  have the ability to act on what they hear)
• Probability of those who are empathetic who will
  buy the service
• LVIC
• Formula
• WOM (abcde)

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Negative Word of Mouth Incremental Customer

• Need to know the following
• Number of people dissatisfied customers tells
• Percent of people that are empathetic (i.e., have
  the ability to act on what they hear)
• LVIC
• Formula (abc)

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How Might We Ask Questions to Get WOM Information?

• How likely are you to recommend ____ to your
  friends? 0 10
• How many friends are you likely to tell when you
  have a very positive experience?
• How many friends are you likely to tell when you
  have a very positive experience?

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Assignment

• Calculate the value of promotion for Jellystone
  Resort Campground

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Impact of Promotion to Increase Word of Mouth
Jellystone Resort Campground

• What we know
• Mailed 1000 postcards
• 10 off a 2 night stay and same discount for
  friends they brought with them
• Need to bring post card with you to get discount
• 200 people returned with card
• 50 came with card that was passed on to them by
  original receiver
• What is value of this promotion?

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Impact of Promotion to Increase Word of Mouth
Jellystone Resort Campground

• What we need to know
• of redemptions
• Revenue per customer per day
• Discount
• Length of stay
• Number of new comers
• New customer revenue
• Life time value of new comers
• What program cost
• loss revenue 250 35 2 17,500 (no
  discount)
• 250 31.502
  15,750 (discount)
• difference 1,
  750 cost of mailing

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The Communications Mix

• Advertising
• Sales promotion
• Merchandising
• Public relations and publicity
• Personal selling

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The Communications MixDefined

• All communications between the firm and the
  target market that increase the tangibility of
  the product/service mix, that establish or
  monitor consumer expectations, or that persuade
  customers to purchase.

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Communications Strategy

• To plan, implement, and control persuasive
  communication with customers
• Six stages of the communication process
• To whom to say it
• Why to say it
• What to say
• How to say it
• How often to say it
• Where to say it

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Attitudinal Components and Their Impact on
Communications Strategy
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Types of WOM

• Buzz Marketing
• Using high-profile entertainment or news to get
  people to talk about your brand.
• Viral Marketing
• Creating entertaining or informative messages
  that are designed to be passed along in an
  exponential fashion, often electronically or by
  email.
• Community Marketing
• Forming or supporting niche communities that are
  likely to share interests about the brand (such
  as user groups, fan clubs, and discussion
  forums) providing tools, content, and
  information to support those communities.

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Types of WOM

• Grassroots Marketing
• Organizing and motivating volunteers to engage
  in personal or local outreach.
• Evangelist Marketing
• Cultivating evangelists, advocates, or
  volunteers who are encouraged to take a
  leadership role in actively spreading the word
  on your behalf.
• Product Seeding
• Placing the right product into the right hands at
  the right time, providing information or samples
  to influential individuals.

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Types of WOM

• Influencer Marketing
• Identifying key communities and opinion leaders
  who are likely to talk about products and have
  the ability to influence the opinions of others.
• Cause Marketing
• Supporting social causes to earn respect and
  support from people who feel strongly about the
  cause.
• Conversation Creation
• Interesting or fun advertising, emails, catch
  phrases, entertainment, or promotions designed
  to start word of mouth activity.

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Types of WOM

• Brand Blogging
• Creating Blogs and participating in the
  blogosphere, in the spirit of open, transparent
  communications sharing information of value that
  the Blog community may talk about.
• Referral Programs
• Creating tools that enable satisfied customers
  to refer their friends.

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How to Create WOM

• Encouraging communications
• Giving people something to talk about
• Creating communities and connecting people
• Working with influential communities
• Creating evangelist or advocate programs
• Researching and listening to customer feedback

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How to Create WOM

• Engaging in transparent conversation
• Co-creation and information sharing
• Blogs

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http//www.subservientchicken.com/
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Video Undercover marketing
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Blog

• Word of the year in 2004
• Defined by Merriam-Webster as a web-site that
  contains an online personal journal with
  reflections, comments, and other hyperlinks.
• Survey by the Pew Internet and American Life
  Project revealed that 27 percent of adults who go
  online in the United States read blogs.

Janet Johnson, Vice President of Communications,
Marqui, Inc.
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Blog

• More than 28 of journalists now rely on blogs
  for reporting and research, according to a survey
  by EURO RSCG Magnet and Columbia University, with
  53 of surveyed journalists revealing they
  gleaned story ideas from blogs and 36 saying
  they used blogs to locate sources

Janet Johnson, Vice President of Communications,
Marqui, Inc.
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What a blog should be used for

• Provide product or service information, talk
  about your market, explore the vision of your
  management or leadership team, provide
  opportunity for customers to share their stories

Janet Johnson, Vice President of Communications,
Marqui, Inc.
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Examples of Blogs

• www.thelobby.com
• http//www.blogs.marriott.com/
• http//behospitable.com/
• http//www.hamptonlandmarks.com/
• http//www.homewoodstories.com/

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Positioning Strategy
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Product Positioning

• The way the product is defined by consumers on
  important attributes - the place the product
  occupies in consumers minds usually relative to
  something.

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Positioning - Continued

• Market position differences by market segment or
  season (e.g., business travel versus leisure
  travel)

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Positioning

• Must create an image, differentiate itself, and
  promise a benefit
• Positioning approaches
• By attribute, feature, or customer benefit
• By price/quality
• With respect to use or application
• According to users or class of users
• With respect to a product class
• Vis-à-vis the competition

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• Checklist for Evaluating Positioning Strategy
• Does it say who you are and what you stand for?
  Does it create a mental picture?
• Does it set you apart and show how you are
  different?
• Does it preempt a benefit niche and capitalize on
  an advantage?
• Does it turn any liability into an asset?
• Does it have benefits for the target market you
  are trying to reach?
• Does it provide tangible evidence or clues?

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• Checklist for Evaluating Positioning Strategy
• Does it feature the one or two things that your
  target market wants most?
• Is it consistent with strategyfor instance, does
  it expand or exchange usage patterns? Create new
  awareness? Project the right image?
• Does it have credibility?
• Does it make a promise you can keep?

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Ways to Position

• 1. Positioning by attribute
• Associating a product with an attribute, a
  product feature, or a customer feature
• e.g., Hyundai low price, Volvo safety, BMW
  handling

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Vintage Building
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Ways to Position

• 2. Positioning by how customer uses your
  product or service
• Arm Hammer baking soda as odor-destroying agent
  in refrigerators
• Long distance phone line Reach out and touch
  someone
• Campbells Soup for use at lunch, Gatorade as
  sports drink

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Ways to Position

• 2. Positioning by how customer uses your
  product or service continued
• Positioning to business travelers versus leisure
  travelers
• e.g, baby shampoo, Miller Lite beer

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Ways to Position

• 3. Positioning by price/value
• Higher price used to signal higher quality to the
  consumer
• Does not have to been high price especially if
  one considers definition of quality- design to
  work as it is supposed to work

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Ways to Position

• 4. Positioning with respect to product class
• e.g, 7-Up as the un-cola Caress as a bath oil
  rather than a hand soap

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Ways to Position

• 5. Positioning with respect to competitor
• Used to exploit the dominant position of a
  competitor (e.g., Avis, we are number two)
• Sometimes it is not important how good customers
  think you are, it is just important that they
  believe you are better than the competitor

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Positioning Maps Using Excel
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Example Importance Question

• Next, please think for a moment about the reason
  for visiting a specific hotel in Las Vegas for
  gambling. Please tell me how important each
  reason is for you in your decision to visit one
  specific property over another. Please use a 1
  to 10 scale, where a 1 means the reason is not
  at all important and a 10 means the reason is
  very important in your decision to choose one
  establishment over another for gambling. You may
  use any number on this 1 to 10 scale.
• Ask questions in random order
• How important is_______________in your decision
  to choose one place to visit over another?
• It is a place my friends like to go

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Example Attitude Question

• Now I am going to read you a list of features
  that may or may not describe some of the hotels
  in the Las Vegas area. Well use a 1 to 10
  scale, where a 1 means it does not describe the
  hotel at all and a 10 means describes the hotel
  perfectly. If you have not been to the hotel
  personally, please base your answers on what you
  have heard, or what you believe to be true.
• Ask questions in random order
• How well does this feature describe(brand to be
  rated)?
• It is a place my friends like to go

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Steps to Developing a Positioning Strategy

• Identify the competitors
• From customers point of view
• Different competitors in different segments

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Best Way to Define True Competitors

• Ask 50 100 customers at check-in, If you did
  not stay here tonight, where would you stay?
• Those hotels who, if they took a pricing action,
  would force you to take a pricing action
• Where do you currently walk guests?

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Best Way to Define True Competitors

• Based upon a definition of the core customer
  different competitors for different segments
• Avoid emotional opinions

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Steps to Developing a Positioning Strategy

• Determine how the competitors are perceived and
  evaluated
• Determine the competitors positions
• Critical to also have reference points for data
  analysis

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Matrix of Competitive Advantages
Example Casino
high
Slot Club
Friendly Staff
Value of Promotions
Brand
Feel Safe
Service
Package
Level of Importance
Price
Good Entertainment
Non Smoking
low
Relative Performance
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Index of Competitive Strength
The competitive advantages and disadvantages
which are shown in the matrix of competitive
advantages can be condensed into one single
index, the index of competitive strength. All
relative performances of the product on the
individual factors are weighted with their
importance and summed up.
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Calculation of Competitive Index

• Sum the importance ratings for all features and
  multiply by the number of scale points. (The
  numbers are in column A in Table on next page)
• For each attribute, multiple average importance x
  average performance. Answers in Column C
• Sum all numbers in column C
• Calculate the CSI as -- Total C/Total in A
• Repeat steps for competitor's see columns D and
  E

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Calculation of Competitive Index
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53.16 Caesar
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47.91 Bally
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180
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59.97 Rio
63.92 Boulder
43.41 Circus Circus
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54.3 Fiesta
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52.07 Excalibur
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Exercise

• Develop positioning maps for coffee shop data on
  the next slide
• What the positioning map show you?

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Innovation

• Case Study Taco Bell
• Case questions
• Critically analyze the actions taken by Taco Bell
  between 1983- 1994
• Given the speed and magnitude of change, why did
  not Taco Bell go out of control
• Can Taco Bells major competitors copy the Taco
  Bell strategy? Why or why not

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Case Questions Taco Bell

• What explains the degree of Taco Bells success
  in contrast to its competitors?
• Describe the process of change at Taco Bell and
  comment on whether it helped, hindered, or was
  essential to success.
• Can the strategy lead to a competitive advantage?
• What is next for Taco Bell?

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Taco Bell Video
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Understand the Customer Using Marketing Research/
Intelligence
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Definition of Marketing Research
The systematic and objective identification, colle
ction, analysis, and dissemination of information
for the purpose of assisting management in
decision making related to the identification and
solution of problems (and opportunities) in
marketing.
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Steps In the Research Process
1. Decision Problem
2. Research Problem
5. Determine Research Design
3. What Do We Expect To Know
4. Review Secondary Data
6. Data Collection Methods and Forms
7. Design Sample
8. Implement the Field Work
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Steps In the Research Process cont
9. Field Control
10. Field Supervision
11. Field Interviewers
12. Field Quality Checks
14. Editing
13. Validation
17. Code Verification
18. Keypunch
16. Coding
15. Code Building
19. Keypunch Verification
20. Clean Data
21. Analyze Data
22. Write Report
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Sources of Research

• Full Service Suppliers
• Consultants
• Advertising Agencies
• University
• Data Tabulation Houses

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Research Design

• Exploratory
• Descriptive
• Casual

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Research Design Exploratory Research

• Literature Search
• Focus Groups
• In-depth Interviews
• Analysis of selected cases

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Research Design Descriptive Research

• Purpose
• To describe characteristics of certain groups
• Estimate the of people in a specified
  population who behave in a certain way
• Make predictions
• Require clear specifications of who, what, where,
  when, why, and how

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Research Design Descriptive Research

• Types of Descriptive Studies
• Longitudinal Analysis
• True
• Advantages
• can look at changes in individuals
• collect lots of classification material
• accurate
• participants selected systematically

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Research Design Descriptive Research- cont

• Types of Descriptive Studies
• Longitudinal Analysis
• Omnibus
• Advantages
• can ask certain people certain questions
• smaller surveys

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Research Design Descriptive Research- cont

• Types of Descriptive Studies
• Cross-Sectional Analysis
• Provides snapshot of variables at a specific
  point in time
• example is a sample survey

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Research Design Casual Research X causes Y

• Three kinds of evidence to support inferences of
  causality
• Concomitant Variation
• Time order of occurrence
• Elimination of other possible causal factors

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Research Design Casual Research

• Use Experiments to Provide Evidence
• Laboratory
• Field Experiments

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Causal Research types of Q
A magazine company printed various cover designs
and asked people in its office to indicate the
design they like best. This experiment measured
the effects of cover design on preference.
The same company printed magazines with the two
most popular cover designs, shipped these
magazines to newsstands in different cities, and
measured sales for each design. This experiment
also measured the effects of cover design on
sales.
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Types of Data

• Nominal
• Ordinal
• Interval
• Ratio

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Types of Data - Nominal

• Measurement in which numbers are simply assigned
  to objects or classes of objects solely for the
  purpose of identification
• Only appropriate measure of central tendency is
  the mode

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Example Nominal Data

• Which of the soft drinks on the following list do
  you like? Check all that apply
• ____ Coke
• ____ Dr. Pepper
• ____ Mountain Dew
• ____ Pepsi
• ____ Seven Up

165
Types of Data - Ordinal

• Numerals assigned reflect order as well as
  identity
• The median and the mode are appropriate measures
  of central tendency

166
Example Ordinal Data

• Please rank the soft drinks on the following list
  according to your degree of liking for each,
  assigning your most preferred drink rank 1 and
  your least preferred drink rank 5.
• ____ Coke
• ____ Dr. Pepper
• ____ Mountain Dew
• ____ Pepsi
• ____ Seven Up

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Types of Data - Interval

• Numerals convey information about the magnitude
  of the differences between the objects we can
  determine how much more one category is than
  another
• Appropriate measures of central tendency are the
  mean, median, and mode

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Example Interval Data

• Please indicate your degree of liking for each of
  the soft drinks on the following list by checking
  the appropriate position on the scale
• Dislike a lot Like a lot
• 1 2 3 4 5 6 7
• Coke
• Dr. Pepper
• Mountain Dew
• Pepsi
• Seven Up

169
Types of Interval Scales

• Likert-type scales
• Below are a list of benefits that a luxury hotel
  could offer to entice you to be loyal to that
  hotel. For each benefit listed, please indicate
  the impact that feature would have on your
  loyalty. Use a 1 to 7 scale, where 1 means the
  feature will have no impact on your loyalty and
  7 means the feature will have a great impact on
  your loyalty. Use any number from 1 to 7

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My rule of thumb for scales

• Minimum scale range 1 to 7
• Tend to use 1 to 10
• Include No opinion option

171
Types of Data - Ratio

• Similar to interval, but there is a natural 0
  point
• The 0 point indicates an absence of the attribute

172
Example Ratio Data

• During your next 10 visits to the supermarket,
  please indicate the number of 2-liter bottles of
  each of the following beverages that you would
  purchase.
• ____ Coca-Cola
• ____ Dr. Pepper
• ____ Mountain Dew
• ____ Pepsi
• ____ Seven Up

173
Types of Data Generated

• Awareness, Trial, Usage (ATU)
• Behavior
• Intentions
• Attitudes and opinions
• Demographic information
• Service failure and value recovery

174
Measuring Attitude, Trial, and Usage (ATU)
175
Measuring ATU

• Awareness/Knowledge or ATU (awareness, trial, and
  usage) what respondents do and do not know about
  some object or phenomenon
• Unaided brand name not mentioned
• Aided consumers specifically asked if they
  recall brand

176
Measuring ATU
a. Please think for the moment about fast food
restaurants located in your area.
Which restaurants can you name? b. FOR THOSE
NOT MENTIONED ASK Before this interview, have
you heard of READ NON-CIRCLED BRANDS.
c. FOR BRANDS CIRCLED IN a or B ASK In the last
six months have you been to READ
BRAND. d. FOR BRANDS CIRCLED IN C ASK In the
last three months have you been to READ
BRAND. e. FOR BRANDS CIRCLED IN D ASK How many
times have you been to BRAND in the
last 30 days? Unaided Aided Six Months
Three Months Last 30 Days a b
c d e McDonalds 1
1 1 1
_________ Burger King 2 2 2
2 _________ In and Ou 3 3
3 3 _________ Other
Mentions (WRITE IN) ___________
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Measuring Behaviors
178
Behavior

• The measure of behavior involves four distinct
  elements
• the action the behavior one is trying to
  measure e.g., purchase of a hotel
  room
• the target the thing at which a behavior is
  directed e.g., purchase of a Marriott
  hotel room
• the context e.g., staying at a Marriott for
  business vs. staying at a Marriott for
  pleasure
• the time e.g., perhaps if late at night
  stay not at a Marriott, but first place
  you find

179
Behavior

• Behavior what subjects have done or are doing
• Involves the development of a description of the
  purchase or use activity, either past or present,
  with respect to some or all of the
  characteristics listed below
• Purchase/Use Behavior
• What
• How much
• How
• Where
• When
• In what situation
• Who

180
Behavior

• How many nights have you stayed overnight at a
  resort in the continental U.S. for vacation or
  personal reasons in the last 12 months?
  __________________
• How many nights have you stayed overnight at a
  hotel outside of the continental U.S. (including
  Hawaii and the Caribbean) for vacation or
  personal reasons in the last 12 months?
  __________________

181
Behavior

• While traveling for leisure in the last 12
  months, how many nights did you stay at READ
  EACH BRAND. IF ZERO, PLEASE WRITE 0.
• Crowne Plaza _____ Sheraton _____ Four
  Seasons_____
• Marriott _____ Hilton _____ Westin _____
• Hyatt _____ Ritz-Carlton ___ Other brands ____

182
Ex - Be Aware Of Situational Factors

• Wrong!
• What kind of wine did you last buy?
• Correct!
• What kind of wine did you last buy when you went
  out on a romantic date?

183
Ex - Response Choices Should Have All Possible
Answers

• Wrong!
• How many times did you eat lunch last week?
• 1
• 2
• 3
• 4
• 5
• 6

184
Ex - Response Choices Should Have All Possible
Answers

• Correct!
• How many times did you eat lunch last week?
• 1
• 2
• 3
• 4
• 5
• 6
• 7
• 8 - Did Not Eat Lunch

185
Ex - Make Items Clear and Precise

• Wrong!
• How frequently do you drink coffee?
• Extremely often. 1
• Very Often.. 2
• Not too often.. 3
• Never.. 4
• Correct!
• Within the last 7 days, how many 8 oz. cups of
  coffee did you drink?

186
Ex - Response Choices Should Not Overlap

• Wrong!
• How many times do you eat breakfast in the
  Dining Commons?
• 0-3
• 4-6
• 6-7
• Correct!
• How many times do you eat breakfast in the
  Dining Commons?
• 0
• 1-3
• 4-5
• 6-7

187
Ex - Respondents Must Be Competent To Answer
Questions

• Wrong!
• How many kilometers from home are you away
• from the nearest McDonalds?
• Correct!
• During normal traffic conditions, how many
  minutes does it take you to drive to the nearest
  McDonalds from your home?

188
Ex - State Explicit Alternatives

• Wrong!
• Would you buy pasta-in-a-jar if available in a
  store where you normally shop?
• Correct!
• If pasta-in-a-jar and the canned pasta product
  you currently use were both available in the
  store where normally shop, would you
• A) Buy only the canned pasta product
• B) Buy only the pasta-in-a-jar product
• C) Buy both products

189
Measuring Demographic Questions
190
Ex - Ask demographic questions in
non-threatening ways

• Wrong!
• How much do you make per year?
• Correct!
• 1. What is your annual household income
• 1. 50,000 or less (skip to Q1a)
• 2. 50,001 or more (skip to Q1b)

191
Ex - Ask demographic questions in
non-threatening ways

• Q1a. Is that
• 1. Under 20,000
• 2. 20,000 - 30,000
• 3. 30,001 - 40,000
• 4. 40,001 - 50,000

192
Exercise

• Work on developing questionnaire for CIC

193
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194
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195
Size

• Noodles

196
Questions for Noodles Case

• See pages 14 and 15 of case

197
Objectives

• Introduce Strategic Marketing System Model the
  Framework for the class
• Review definition of marketing and discuss the
  future of marketing
• Review the buyer purchase model
• Discuss how to calculate the life time value of
  the customer and the value of WOM and why this is
  important

198
Objectives

• Discuss market positioning
• Discuss a framework for developing a marketing
  plan
• Review communication strategies

199
Carvel Ice Cream

• Incorporates class material (negates 5 forces
  model, SWOT, presents measures to show success,
  etc.)
• Originality
• Likelihood of success

200
not at all 1 2 3 4 5 6 7 does
extremely well
201
Presentations