SARTA: How to do Marketing Research for Your Business Plan.

1. SARTA: How to do Marketing Research for Your Business Plan.  February 2012

2. TMTG propaganda Segmentation Analysis Qualitative Customer Satisfaction and Loyalty Customer and Product Requirements Go To Market Planning Technology Assessment Product Concept Testing Pricing Quantitative Opportunity Analysis Post Launch Acceptance Launch Preparation Product Creation Product Monitoring Technology Sourcing Pre-Launch Post-Launch SARTA Leadership Series - Marketing Research

3. TMTG Clients (partial list) SARTA Leadership Series - Marketing Research

4. Global coverage SARTA Leadership Series - Marketing Research

5. Agenda Marketing 101: more than a brochure factory! Why bother: validate your marketing plan? Market vs. marketing research How to do this SARTA Leadership Series - Marketing Research

6. A. Marketing 101 Market ‘ing customer selling $ SARTA Leadership Series - Marketing Research

7. A. Marketing 101: Classic thinking, the brochure factory! Techno Hard to do Years of academic training Cost money Must be protected customer The easy part A couple of brochures May not even need a salesman People will fight to get it $ SARTA Leadership Series - Marketing Research

8. A. Marketing 101: Correct thought process Customer NEED Do not tell me you know everything about the customer “problem” you are trying to solve product Do you have it? “solution” you bring demand This is really what you are after SARTA Leadership Series - Marketing Research

9. A. Marketing 101:How do we go from product to demand? Customer NEED MARKETING Technology & Service to fulfill an unmet need or rather address a need better. product Right time, right place, right price. demand SARTA Leadership Series - Marketing Research

10. A. Marketing 101:Sometimes we go the wrong way • We're doing it backwards: you should always start with a customer problem and find a technical solution to solve the problem • Often we start with technology and then we look for a problem • That's okay, just don't forget the problem! Without it, you will never get paid • There are lots of reasons to start a company, but if you don't get paid, your company will die SARTA Leadership Series - Marketing Research

11. Customer A. Marketing 101:So you need to VALIDATE THE market Competition Speed Market Who is the customer? Size Who is the enemy? How bad will they want this? Units vs. $? SARTA Leadership Series - Marketing Research

12. A. Marketing 101:Size and speed … • STEP 1: to figure out the magnitude of the problem • How many potential customers have it? • How much do they care about the problem? (does the problem cost them lots of money, horrible disfiguration, or terrible distress?) Now you have a market SARTA Leadership Series - Marketing Research

13. A. Marketing 101:Customer Segmentation • STEP 2: target the customer segment • Ok, but what is segmentation? • “dividing customers into homogenous groups who will exhibit uniform purchasing behavior when exposed to the same marketing mix” • Simply put: SARTA Leadership Series - Marketing Research

14. A. Marketing 101:Customer Adoption Cycle Time EarlyAdopters EarlyMajority LateMajority Innovators Laggards Enthusiasts Visionaries Pragmatists Conservatives Skeptics Technology products follow a predictable adoption cycle by customer type—these types often determine segments SARTA Leadership Series - Marketing Research

15. Sometime like this $ $ $ $ $ $ $ $ Time EarlyAdopters EarlyMajority LateMajority Innovators Laggards Enthusiasts Visionaries Pragmatists Conservatives Skeptics It does not allow work that way – so prioritize well. SARTA Leadership Series - Marketing Research

16. A. Marketing 101:Positioning Talk to the customer (s) Assess need / interest in product • Look for their reaction and classify them by • Psychographics • Motivational drivers • Purchase behavior / decision making Target and Position Prioritize segments • Be able to explain why a particular segment will be attacked first: use rationale like size, affinity for new solutions, or intensity of market need • What are you going to do next? • Develop your marketing plan to each segment • Adjust your offering • Determine the right price SARTA Leadership Series - Marketing Research

17. A. Marketing 101:Marketing mix • STEP 3: define your marketing mix SARTA Leadership Series - Marketing Research

18. All this is nice …. But why bother? SARTA Leadership Series - Marketing Research

19. B. Why bother: credibility for your investors • Market size: VCs focus on it right away, so be honest. • If you can multiply price by the # of potential customers, you can validate your assumptions about market size • It doesn't matter if you are wrong but if you don't pick a number, we are going to make our own assumptions • Price vs. demand: “most contentious” with VC • Make sure you drop the anchor and pick a price • Cost plus, Competitive, EVC (Economic Value to Customer) • Make sure you can be profitable and yet create demand • Get paid now • paid pilot projects validate your market well SARTA Leadership Series - Marketing Research

20. B. Why bother: define your marketing plan • Product positioning: what is the value proposition? • Consider the different types of new product • Brand new, complement, line extension, brand extension • Define core benefits which make the product a "must buy" • Predict speed to market, product life cycle, and customer adoption patterns • Yes there is competition • Where is your product / service fit ? Which box do you fit in, which category? SARTA Leadership Series - Marketing Research

21. B. Why bother: define your marketing plan • Promo: Message, Medium, Budget • Consider the different methods and mockup material • PR, Ad, Sales Incentives (promo), Personal selling • Awareness is generated by your promotional plan SARTA Leadership Series - Marketing Research

22. B. Why bother: define your marketing plan • Channel: “go to market” is also looked at • Don't recreate the wheel • Don't build out your own channel capabilities if someone else's will be more effective • Don't be naive • Managing channels effectively is one of the hardest things to do and can be very costly. • If your assumptions about building out an indirect channel are too aggressive, you are going to look like an amateur • Remember the customer! • How do they want the product to be made available? • Availability is created by your channel plan SARTA Leadership Series - Marketing Research

23. Market vs. Marketing Research SARTA Leadership Series - Marketing Research

24. C. Market vs. Marketing Research • Market research = secondary research • This is a market analysis (size, structure, etc.) • Data is already out there • Examples? • Marketing research = primary research • This is a VOICE of customer analysis (preference, perception) • The data do not exist: you need to collect that data • It is hard to do it right (unbiased) • Examples? SARTA Leadership Series - Marketing Research

25. C. Market vs. Marketing Research • The role of research as a decision making tool • Be an investor, not a gambler • But you need to be smart about this investment (time and money) • Follow a rigorous process just like you do it for engineering • Key Steps: • Define a problem and scope (why spending $?) • Design carefully (garbage-in/garbage-out) • Collect data (scientifically) • Interpret (define actions) • Act on findings (leverage your investment) SARTA Leadership Series - Marketing Research

26. Phone Face-To-Face Options Dyads Cognititian Talk-The-Talk Why us? Interactive C. Marketing Research Qualitative methodologies • IN-DEPTH INTERVIEWSDescription:30-60 minute ONE-on-ONE interviews • Value: • Segmentation criteria. • Purchase process and drivers • Product needs and expectations • Process: • Recruitment with screener. • Discussion guide: open ended question • Interview scripts. SARTA Leadership Series - Marketing Research

27. Observation Cross-Review Options Forum Non-Intrusive Deep Why us? Focused C. Marketing Research Qualitative methodologies • OBSERVATIONAL FIELD WORKDescription:Customer visit analysis. • Value: • Contextual knowledge • Workflow and organizational behavior • Understand product use. • Process: • Customer site selection • Field observation. • .Interview and summaries SARTA Leadership Series - Marketing Research

28. Tryads Mini FG Options Mock-Up Trial Knowledge Direct Why us? Fun C. Marketing Research Qualitative methodologies • FOCUS GROUPS Description: Consists of a moderated exchange among decision makers within a target customer segment • Value: • Consensus feedback. • Product concept testing • Group dynamics • Process: • Recruitment with screener • Moderation guide (few open end) • Summary of key points SARTA Leadership Series - Marketing Research

29. SURVEYS • Description: • Close format questionnaire administered over the phone or self-administered. • Objectives: • Descriptive and causal research / perception/satisfaction • Statistical validation • Process (similar for all surveys): • Survey questionnaire • Sampling (randomized, stratified) & Pre-test. • Incentive scheme • Administration: email, Fax, Phone (CATI), Web-Based. • Coding and editing • Rule-based data entry and QA. • Presentation of results in graphic or tabulated format Phone/Fax Web-Based Options Conference Design Rich Why us? On-Time C. Marketing Research Quantitative methodologies SARTA Leadership Series - Marketing Research

30. V2 V4 V1 V3 C. Marketing Research Quantitative methodologies: perceptual maps SARTA Leadership Series - Marketing Research

31. Technology innovator Dedicated accessible support teams Brand appeals to referring physicians Best coil design and/or handling Reliable and dependable service Vendor 4 Best long-term magnet upgradeability program Best value Vendor 1 Excellent spatial resolution Reliable abdominal imaging Vendor 3 Fastest patient throughput Techs master scanners & produce high quality image Reduce patient anxiety Vendor 2 C. Marketing Research Quantitative methodologies: brand perception SARTA Leadership Series - Marketing Research

32. Number of Data Points: GE: 36 Philips: 7 Siemens Symphony: 35 Siemens Espree: 9 Siemens Avanto: 13 The number of data points is insufficient for meaningful statistical comparisons. P4 15% P1 20% P3 30% P2 15% The 45o line intersects the overall average price and brand rating value. proportional to the product’s market share as estimated by Vendor 1. P5 20% (Normalized to 100 pt scale) (Normalized to 100 pt scale) C. Marketing Research Quantitative methodologies: price-to-value SARTA Leadership Series - Marketing Research

33. CONJOINT/ TRADE-OFF ANALYSES • Description: • Objective estimation of the value buyers place on the attributes or features which define products and services. • Value • Predictive rather than descriptive results. • Demand curves, substitution effects, and cannibalization • Quantification of product attribute value trade-offs • Price sensitivity testing • Process: • Definition of relevant product/service attributes/features • Selection of conjoint methodology • Experimental design to calculate main effects and key interactions • Utility / part-worth estimate per respondent • Simulation mode to predict the impact of changes in product or price Choice-Based Adaptive Options Full-Profile Integration Expertise Why us? Consultative C. Marketing Research Quantitative methodologies A DERIVED MEASUREMENT OF YOUR CUSTOMER PREFERENCE SHARE SARTA Leadership Series - Marketing Research

34. C. Marketing Research Quantitative methodologies: survey screenshot SARTA Leadership Series - Marketing Research

35. Ratings vs. Conjoint Trade-Off Methodology Self-explicated ratings tend to not discriminate enough Ratings can even provide wrong answers: in this example customers may state that they performance and they prefer a specific brand, … … but when confronted with reality and trade-off choices, they will clearly favor economic factors such as price and MPG. C. Marketing Research Quantitative methodologies: why conjoint Derived Importance (Conjoint-based) Stated Importance (Ratings-based) SARTA Leadership Series - Marketing Research

36. MODELING / SIMULATION • Description: • A family of methodologies for simulating real-world market behaviors in order to predict expected outcomes. • Value: • Decision-support • Forecast and prediction • Pricing Decision Trees Markov Models Options Monte Carlo Simulation Data Access Health Economics Why us? Partnerships C. Marketing Research Quantitative methodologies SARTA Leadership Series - Marketing Research

37. D. How to do this • Sizing the market • TAM = from secondary data • Unmet need = from voice of customer • Customer segmentation • Behavior = from VOC • Value prop • Competitive benchmarking • SWOT • Pricing vs. adoption • Elasticity • Modeling SARTA Leadership Series - Marketing Research

38. D. How to do this:Sizing the market • Secondary analysis • Market reports • Web • Gvt data • Associations / trade groups • Count the units first Units x count TAM Segment specific Addressable 1 $ Addressable 1 First YEAR Adoption curve SARTA Leadership Series - Marketing Research

39. D. How to do this:Need Assessment & Customer segmentation • ASK the customer Customer Customer YOUR CUSTOMER Customer Customer Customer Customer Customer MARKETING RESEARCH THE RESULT Segment 1 Segment 3 Segment 2 SARTA Leadership Series - Marketing Research

40. D. How to do this:Value proposition and positioning • SWOT • Competitive table Customer research will help correct any potential myopia SARTA Leadership Series - Marketing Research

41. D. How to do this:Pricing vs. adoption • Price sensitivity • Preference model Market simulators Price vs. adoption SARTA Leadership Series - Marketing Research

42. Okay, let's try it… • Market sizing • TAM • Addressable SARTA Leadership Series - Marketing Research

43. Okay, let's try it… • Value proposition and customer segmentation • Let us define the top 10 questions we would ask a potential customer of the following product • Motivation: if you collect good information, you can learn valuable information to refine your business model • You probably won't learn everything with one or two customers, you need to decide how much data validity you need (directional vs. accurate) SARTA Leadership Series - Marketing Research

44. Okay, let's try it… • Competitive positioning • From customer data • From intelligence SARTA Leadership Series - Marketing Research

45. Okay, let's try it… • Price vs. demand (adoption) • You would need to decide if you want to spend money in a large scale survey SARTA Leadership Series - Marketing Research

46. Remember: • Be open minded • Accept study findings • Interpret what this means • Implement • Measure again SARTA Leadership Series - Marketing Research

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