CTE3809 Review for Exam III Model of the forecasting process Ch 8 Consumer Research Consumer anthropology o Methods originally used by anthropologists to study primitive tribes or subcultures have been adapted to study consumers and buying behavior o Research helps companies understand motivators within a product category or the more specific motivators within a product category or the more specific motivators to buy a particular brand o When people cannot verbalize what they think observing actual behavior provides rich data on the meanings attached to brand choice o Harvard professor Gerald Zaltman asked interviewees to bring images or pictures that describe feelings on a given topic One consumer brought a picture of a rain forest to depict shopping in department stores explaining that both are dense crowded and involve facing the unknown Another brought a picture of a military tank to represent shopping because driving a tank gave her control protection and increased security from the manipulations of the store 1 Taps into the memories emotions thoughts and other cognitive processes we re not aware of or can t articulate Mall intercept research o Market research conducted for a client using consumers recruited from shoppers in a mall who satisfy the requirements of the client o One drawback is time It may take several weeks to design the study negotiate with the research sites distribute the research materials and run the studies o Suppose it takes a month before data are available that time horizon may be too long in a fast paced competitive environment Qualitative research o The researcher listens to consumer talk or observe consumers in natural settings and reports findings as descriptions of consumer types or categories of behavior o An approach to research based on ethnography case studies and phenomenological studies in which human experiences are observed in a natural setting and described or explained using the natural language categories and frameworks of subjects Quantitative research o The researcher conducts surveys or experiments with a group of consumers o An approach to research that uses experimental methods or surveys to collect data on a sample in order to generalize finding to a population o Consumers under age 25 are frequently the focus of qualitative and quantitative research because they have tremendous spending power shows greater interest in fashion than other age groups and are influential in establishing trends Showcase or laboratory stores o Stores where maga niche and lifestyle aka 3 D brands can present their entire line as a billboard for the brand an educational environment for retailers on the latest in visual merchandising and a research site for gathering intelligence about what consumers want which products in the line are heating up and which cooling down and which packaging and promotional initiatives are most effective o The stores are a place for the manufacturer to gather intelligences about what consumers want which products in the line are heating up and which are cooling down and which packaging and promotional initiatives are most effective 2 o For example when Nike wanted to understand the women s customer the company opened up a womens only boutique Data was collected on sales and sales associates encouraged shoppers to complete questionaires Test store o Specialty store chains selling store labels designate certain stores as test sites o Any store in the chain may be designated as a test store for a particular time period o The test store is cleared of merchandise and reset with test merchandise o Then business continues as usual consumers are completely unaware that a test is under way Test merchandise group merchandise visual merchandising Style testing o A less extensive approach is to plan test groups of merchandise with ordinary o When product develops monitors sales information from these test sites the company can fine tune sales potential by optimizing the selling price and color assortment o They can discover items that often are sold together as input for promotions and o Pretesting styles with consumers to identify winners and losers early enough in the product development cycle to enable styles with low consumer interest to be eliminated from further development Ch 9 Sales Forecasting Automated replenishment system o A collaborative effort between a retailer and a manufacturer involving vendor designed assortment plans and automatic shipping to keep stock at optimum levels o The goal is more precise forecasting and improved in stock positions in stores o In this kind of collaboration manufacturers gain access to retailers information about promotion plans store openings local events and other factors that have an impact on forecasts 3 o Retailers gain access to order status and are alerted to any problems in production or distribution as it affects delivery time Category management o A collaborative strategy between a retailer and a manufacturer in which the manufacturer acts as a specialist in forecasting keeping the right flow of merchandise going to the selling floor o Provides expertise in a category including trends silhouettes and finishes and makes recommendations on merchandising assortment display and inventory controls in that product category on a store by store basis Consumer confidence o An index of consumer feelings of economic well being used to predict future consumer expenditures and turning points in the business cycle o The indexes breaking down results to highlight demographic but neither survey reports findings by race and geographic differences o The Consumer Confidence Index CCI from the conference board a nonprofit business research organization Uses 5 questions and a mail survey of 5 000 households The first 2 questions deal with the current state of business Present Situation Index and other 3 questions ask consumers to consider conditions 6 months into the future Expectations Index o The Index of Consumer Sentiment ICS Managed by the survey research center at the U of Michigan Uses a phone interview to ask 5 questions about consumers confidence in making big ticket purchases Correlation or regression techniques o Statistical techniques for comparing how a change in one variable ex advertising effort or some outside factor causes a change in another variable ex sales volume o Another common forecasting task is to predict the increase in sales given some marketing action such as a sales