Lec 7 Marketing information and research

Objectives
Explain the importance of information to the company
Define the marketing information system
Outline the steps in the market research process

Marketing Process

Information
Is
Power

Kinds of Questions Marketing Information and Research Can Help Answering
Strategic Planning:
What kinds of people buy our products? Where do they live?
How much do they earn? How many of them are there?
Are the markets for our products increasing or decreasing?
Are there promising markets that we have not yet reached?
Are the channels of distribution for our products changing?
Are new types of marketing institutions likely to evolve?

Kinds of Questions Marketing Information and Research Can Help Answering
Product:
Which of various product design is likely to be the most successful?
What kind of packaging should we use?
Price:
What price should we charge for our products?
As production costs decline, should we lower or prices or try to higher quality products?

Kinds of Questions Marketing Information and Research Can Help Answering
Place:
Where, and by whom, should our products be sold?
What kinds of incentives should we offer the trade to push our products?
Promotion:
How much should we spend on promotion? How should it be allocated to product and geographic areas?
What combination of media--newspapers, radio, television, magazines--should we use?

Kinds of Questions Marketing Information and Research Can Help Answering
Control:
What is our market share overall? In each geographic area? By each customer type?
Are customers satisfied with our products?
How does the public perceive our company? What is our reputation with the trade?

Marketing Information System (MIS)
Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Marketing Information System (MIS)

Marketing Information System (MIS)
Begins and Ends with Information Users:
Interacts with information users to assess information
Develops needed information from internal and external sources
Helps users analyze information for marketing decisions
Distributes the marketing information and helps managers use it for decision making

Assessing Marketing Information Needs
The MIS serves company managers as well as external partners
The MIS must balance needs against feasibility
Not all information can be obtained.
Obtaining, processing, sorting, and delivering information is costly

Assessing Marketing Information Needs
Some useful questions to discover their information needs are:
What decisions do you regularly make?
What information do you need to make with these decisions?
What information do you regularly get?
What information would you want that you are not getting now?
What information would you want daily? Weekly? Monthly? Yearly?
Etc...

Developing Marketing Information

Internal Data
“Internal data is gathered via customer databases, financial records, and operations reports.”
Advantages:
can be accessed more quickly, easily and cheaply than other information sources.
Disadvantages
Because internal information was collected for other purposes, it may be incomplete or in the wrong form for making marketing decisions.
Data ages quickly.

Marketing Intelligence
“Marketing intelligence is systematic collection and analysis of publicly available information about competitors and developments in the marketplace”
The goal of marketing intelligence is to improve strategic decision making, assess and track competitors’ actions, and provide early warning of opportunities and threats.

Sources of Marketing Intelligence
Company employees
Internet
Garbage
Published information
Competitor’s employees
Trade shows
Channel members and key customers

Marketing Research
“Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.”

Marketing Research
Marketers often need formal studies of specific situations.
It can help marketers understand customer satisfaction and purchase behavior.
It can help them assess market potential and market share.
It can measure the effectiveness of pricing, product, distribution, and promotion activities.

The Marketing Research Process

Step 1: Defining The Problem And Research Objectives
Defining the problem and research objectives is often the hardest step in the research process.
Don’t confuse the symptoms of the problem with its cause when defining the problem.(Example: Increase store traffic)
The statement of the problem and research objectives guides the entire research process.

Step 1: Defining The Problem And Research Objectives

Step 1: Defining The Problem And Research Objectives

Step 1: Defining The Problem And Research Objectives
After the problem has been defined carefully, the manger and researcher must set the research objective.
Marketing research project might have one of three types of objectives.
Exploratory, descriptive, and causal research each fulfill different objectives.
Managers often start with exploratory and later follow with descriptive or causal research.

Step 1: Defining The Problem And Research Objectives
Exploratory research:
the objective is to gather preliminary information that will help define the problem and suggest hypotheses.
Example: Why people do not buy our products?
Descriptive research:
the objective is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product.
Example: What are the characteristics of our consumers?
Causal research:
the objective is to test hypotheses about cause-and-effect relationships.
Example: What will be the consequences of a price increase of 10%?

Step 2: Developing the Research Plan
The research plan is a written document that outlines the type of problem, objectives (exploratory, descriptive, or causal research), data needed (qualitative or quantitative) ,outline sources of existing data (secondary or primary), spells out the specific research approaches (observation, survey, experiment), contact methods (mail, telephone, personal interview, or online), sampling plane (who, how many, and how to choose –probability or non-probability), instruments that researchers will use to gather new data (questionnaire, or mechanical instruments), the usefulness of the results, and the research costs.

Types Of Research Data
Types of research data:
Qualitative data
Data which are concerned with describing meaning. They provide a more in depth and rich description.
e.g., Opinions, preferences, feelings, behaviours, etc...
Quantitative Data
Is data measured or identified on a numerical scale. Numerical data can be analyzed using statistical methods
e.g., Sales, market share, market size, profit, price, number of consumer complaints.

Types Of Research Data
There is two types of data sources:
Secondary data:
Information collected for another purpose which already exists.
Primary data:
Information collected for the specific purpose at hand

Secondary data
Researchers usually start gathering secondary data.
Companies can buy secondary data reports from outside suppliers.
Government information, Internal, commercial, online databases, and publications, all are sources of secondary data.
Advantages:
Obtained quickly
Less expensive than primary data
Disadvantages:
Information may not exist or may not be usable.

Secondary data
Evaluate the Following When Judging Data Quality
Relevance: fits research project needs
Accuracy: reliably collected and reported
Currency: up-to-date enough for current decisions
Objectivity: objectively collected and reported

Primary Data
Designing a plan for primary data collections calls for a number of decisions.
Primary research decisions:
Research approaches
Contact methods
Sampling plan
Research instruments

Planning Primary Data collection

Primary research decisions
Research approaches:
Observational research:
(best suited for exploratory research)
“Is gathering primary data by observing relevant people, actions, and situations. “
Observation research using people or machines. Mystery shoppers, and web site “cookies” are some examples.
Discovers behavior but not motivations.
Survey research:
(best suited for descriptive research)
“gathering of primary data by asking people questions about their knowledge, attitudes, preference, and buying behavior”

Primary research decisions
Research approaches:
Experimental research:
(best suited for gathering causal information)
“the gathering of primary data by selecting matched group of subjects, giving them different treatment, controlling related factors, and checking for differences in group responses”
Investigates cause and effect relationships.

5-
The Internet: provides an unprecedented opportunity for market testing and optimization.
Digitization: will make it progressively easier to experimentally alter aspects of a business and quickly see how customers respond.
The Impact of the Internet
Experimental Research
Experimentation:
Allows things that don’t exist to be tested
Features random assignment of subjects to treatments
Controls for other extraneous variables
Design plan is key

5-
Customer buying experience on the web
Site content
Availability of links
Spatial layout
Usability
The Impact of the Internet
Experimental Research
How can web-based experimentation be used?
Pricing tests
Comparison shopping websites
Service businesses

5-
What specific behaviors, actions, or situations might an observational researcher track if employed by a bank?
Discussion Question

Primary research decisions
Contact methods
Key Contact Methods Include:
Mail surveys
Telephone surveys
Personal interviewing:
Individual or focus group
Online research
Each contact method has strengths and weaknesses
Strengths and Weaknesses of Contact Methods Relate to:
Flexibility
Sample control
Data quantity
Cost
Interviewer effects
Speed of data collection
Response rate

Primary research decisions
Strengths and Weaknesses of Contact Methods

Primary research decisions
Sampling plan
Sample:
“subgroup of population from whom information will be collected’
Sampling Plan Decisions:
Sampling unit (who)
Sample size (how many)
Sampling procedure: (how to choose people)
Probability samples
Non-probability samples

Primary research decisions
Research Instruments:
Questionnaires
Include open-ended and closed-ended questions
Phrasing and question order are key
Mechanical instruments
Nielsen’s people meters
Checkout scanners
Eye cameras

5-
Marketing Info. System
Research Instruments:
Questionnaires
Include different types of questions
Open-ended question:
What are the most important benefits
you seek when buying a car?
Closed-ended question:
What is your gender?
____ Male ____ Female
Phrasing and question order are key

5-
The manner in which questions are phrased can influence the validity of the data collected. Critique the following questions:
What is your age?
___ 18 – 25 ___ 25 – 45 ___ 46 – 65
What is your income? $ _________
How important is fast and friendly service to you when selecting a fast food establishment?
___ Very important
___ Important
___ Somewhat important
___ Not important at all

5-
Marketing Info. System
Research Instruments:
Mechanical instruments
Traffic counters
Retailer store checkout scanners
Video-taped store traffic
People meters
Website logs, cookies, software
Physiological measurement equipment

5-
Mechanical measures of physiological processes include eye movement, pulse rate, eye dilation, and as shown below, changes in facial expressions.
Marketers can adjust offers accordingly.

Step 3: Implementing the Research Plan
Data is collected by the company or an outside firm
The data is then processed and checked for accuracy and completeness and coded for analysis
Finally, the data is analyzed by a variety of statistical methods

Step 4: Interpreting and Reporting the Findings
The research interprets the findings, draws conclusions and reports to management
Managers and researchers must work together to interpret results for useful decision making

Analyzing Marketing Information
Statistical analysis and analytical models are often used
Customer relationship management (CRM) software helps manage information by integrating customer data from all sources within a company
CRM software offers many benefits and can help a firm gain a competitive advantage when used as part of a total CRM strategy