Advanced Marketing Solutions For Strategic Decision-Making

Advanved Research Solutions For Strategic Decision-Making

Advanved Research Solutions For Strategic Decision-Making

THE MARKETING ANALYSTS is concerned with helping clients identify, select and implement successful marketing strategies.   Our intent is to provide our clients with advanced research solutions to improve the quality of strategic decision-making.

Clearly, the right strategic decision-making produces the positive outcomes that every organization seeks.  However, wrong decisions may produce disastrous results.  As example, here are some startling statistics from well-known American retailers:

•             1990 – 2004         Circuit City grew from $2 billion to $9.75 billion.  Five years later, the company filed for bankruptcy.

•             1930’s   Sears Roebuck and Montgomery Ward were about equal in sales and profits.  Twenty years later, Sears was about three times larger than Montgomery Ward.  In 2001, Montgomery Ward closed all of its remaining stores.

•             1991       Walmart surpassed Sears and Kmart to become the largest US retailer.  Today Walmart is the largest retail company in the world and is becoming one of the largest grocers in the US.

While these examples are dramatic, every organization is affected by strategic decisions. Thus every company must plan and act strategically.  You can uncover the information you need through numerous ways—from online research to focus groups to predictive models.  With effective market research, we can help you determine the need for your service or a product’s likelihood to sell, target-market demographics, and determine desirable store locations. To help you meet your target market’s needs, we offer a leading collection of tools, resources and professionals.

THE MARKETING ANALYSTS can help you.

Conjoint AnalysisMarketing Mix ModelsBrand MapsMarket SegmentationProduct Line ManagementSales ForecastsAdvertisement OptimizationData MiningMarket Basket AnalysisCustomer Retention/Predictive Customer Churn

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239-243-0767
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Email: info@themarketinganalysts.com

Discriminant Analysis, Marketing Segmentation & Perceptual Maps

Perceptual Map Created With Discriminate Analysis

Perceptual Map Created With Discriminate Analysis

Perceptual maps are used to visualize the differences and similarities in perceptions and choices between products, brands or customers.

For example, a manufacturer of salon brand hair care items wants to see whether a lifestyle variables such as being a NASCAR racing fan, education level, ethnicity and demographic variables such as personal income, sex and a number of other factors are useful in distinguishing purchasers of their products from purchasers of other salon hair care brands.   Based on this classification, customer profiles will be developed in order to plan targeted advertising campaigns.

Discriminate analysis, a multivariate technique used for market segmentation and predicting group membership is often used for this type of problem because of its ability to classify individuals or experimental units into two or more uniquely defined populations.  The discriminant score is the basis for predicting to which group (a purchaser of the manufacturer’s brand or a competitive brand) the particular individual belongs. The discriminant weights of each predictive variable (age, sex, income, etc) indicate the relative importance of each variable.  For instance, if age has a low discriminant weight then it is less important than the other variables.

With this information, a classification matrix can be developed that indicates the accuracy of our model that will be used to construct our map.  For instance, if our discriminant model correctly classified 94.5-percent of users of our brand, then only 5.5-percent were incorrectly classified.  Conversely, if the model correctly classifies 92-percent of the competitive brand users, then only 8-percent were incorrectly classified.  We consider this a strong model because the number of correct classifications is much higher than what might be expected by chance.

Other Applications of Discrimant Analysis

While our example illustrated how discriminant analysis helped classify users and nonusers of salon brand hair care products based on independent variables, other uses of discriminant analysis include the following:

Product research – Distinguish between heavy, medium, and light users of a product in terms of their consumption habits and lifestyles

Perception/Image research – Distinguish between customers who exhibit favorable perceptions of a store or company and those who do not

Advertising research – Identify how market segments differ in media consumption habits

Direct marketing – Identify the characteristics of consumers who will respond to a direct marketing campaign and those who will not

Conclusion

While discriminant analysis is often used in marketing research for marketing segmentation and predicting group membership, there are more powerful and accurate techniques available.  We invite you to learn more about our solutions by contacting us today.

US TOLL FREE: 866-371-4863
INTL:
239-243-0767
FAX: 480-393-5183
Email: info@themarketinganalysts.com

Ensure The Success Of Your New Product With Conjoint Analysis

Conjoint analysis is a term given to a broad set of marketing research techniques that are used in new product development.  Some of the main types of conjoint analysis include Choice Based Conjoint (CBC), MaxDiff, and Adaptive Conjoint Analysis (ACA).  Because each offers special advantages, THE MARKETING ANALYSTS offers all major types to address the specific requirements of your project.

How Can Conjoint Analysis Help Me?

When the correct conjoint method is used, it is extremely effective determining the optimal set of features that a new product should have and the best pricing strategy.  Conjoint analysis works by simulating an actual purchase experience and explains how people make choices between products and services.  The result is a dynamic market model that determines the best product design and pricing strategy that optimizes profitability, market share and how the behavior of competitors will influence your market position.

How Conjoint Analysis Works

While the conjoint analysis has been used for many years, new varieties continue to be developed that provide more powerful and accurate results.  In a typical study, respondents are asked to make a series of product feature relates trade-offs or choices.  The simple exercise usually asks respondents to select or rank the most preferred alternatives from a selection of competing alternatives.  The analytical analysis is usually carried out using hierarchical Bayesian mathematics.  Because of the flexibility of new conjoint methods, research studies can be conducted by web or paper-and-pencil surveys.

Conjoint analysis can be used to determine what really drives customers to buy one product over another and what customers really value, when the following assumptions are met:

  1. A product (good or service) must be able to be described or represented by a set of attributes that are mutually exclusive.
  2. Consumers view the product as a combination of attributes that can be exchanged for others.  An example is the inclusion of an additional product feature in exchange for a higher price.
  3. The total utility (value) of the product being analyzed is equivalent to the sum of the individual utilities of each attribute.  It is important to realize that several common forms of “conjoint analysis” do not consider nonlinear relationships, particularly interactions among attributes.  Ignoring interaction will lead to bad research results.
  4. Products with a greater overall utility are more attractive than products with lower total utility scores.

When these assumptions are met, conjoint analysis provides quantifiable and actionable data that include:

  • Relative importance for each product attribute
  • Most desirable level of each product attribute
  • Potential market share for the product
  • Market segmentation information

For additional information about conjoint analysis, please visit  and contact us today about our low prices.