Chapter 6 Market information, decision systems and marketing research

Learning objectives 1Explain the concept and purpose of a market information system 2Define marketing research and explain its importance to marketing decision- making 3Describe the steps involved in conducting a marketing research project 4Discuss the impact of electronic scanner-based research 5Explain when marketing research should and should not be conducted

1 Explain the concept and purpose of a market information system Learning objective

1 Marketing intelligence Everyday information about developments in the marketing environment a that managers used to compare and adjust marketing plans.

1 Linkage between DSS, market research, MIS and market intelligence

1Decision support system (DSS) An interactive, flexible computerised information system that enables managers to obtain and manipulate information as they are making decisions.

1Characteristics of a DSS Interactive Flexible Discovery-oriented Accessible

1Database marketing The creation of a large computerised file of customers and potential customer profiles and purchase patterns.

2 Define marketing research and explain its importance to marketing decision-making Learning objective

2Marketing research The process of planning, collecting and analysing data relevant to a marketing decision.

2Roles of marketing research Improving quality of decision-making Tracing problems Keeping customers Gauging value, measuring satisfaction Marketing research Understanding changing market place

3 Describe the steps involved in conducting a marketing research project Learning objective

3The marketing research process

3Marketing research Marketing research problem Marketing research objective Management decision problem Determining what information is needed and how that information can be obtained efficiently and effectively. The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions.

3Research design Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analysed.

3Planning the research design Which research questions must be answered? How and when will data be gathered? How will the data be analysed?

3Secondary data Data previously collected for any purpose other than the one at hand.

3Sources of secondary data Internal corporate information Government agencies Trade and industry associations Marketing research firms Commercial publications News media

3Advantages of secondary data Saves time and money if on target Aids in determining direction for primary data collection Pinpoints the kinds of people to approach Serves as a basis of comparison for other data

3Disadvantages of secondary data May not be on target with the research problem Quality and accuracy of data may pose a problem.

3Electronic secondary information The Internet –Search engines and directories –Sites of interest to marketing researchers –Discussion groups –Periodical, newspapers and books –Databases –Web 2.0.

3Primary data Information collected for the first time, which can be used for solving the particular problem under investigation.

3Advantages of primary data Answers a specific research question Data is current Source of data is known Secrecy can be maintained.

3Disadvantages of primary data Expensive Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews.

3Survey research The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions and attitudes.

3Forms of survey research In-home interviews Mail surveys Mall intercept interviews Internet surveys Telephone interviews (home and central location) Computer-assisted

3Mall intercept interview Survey research method that involves interviewing people in the common areas of shopping malls.

3Focus group A group of about 8 people who participate in a discussion led by a moderator.

3Advantages of on-line focus groups Speed Cost-effectiveness Broad geographic scope Accessibility Honesty

3Questionnaire design Open-ended question Closed-ended question Scaled- response question An interview question that encourages an answer phrased in a respondent’s own words. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondent’s answer.

3Questionnaire design (cont.) Qualities of good questionnaires –Clear and concise –No ambiguous language –Unbiased –Reasonable terminology

3Observation research A research method that relies on three types of observation: –people watching people –people watching an activity –machines watching people.

3Observation research (cont.) Mystery shoppers One-way mirrors Types of observation research Audits Machines watching people People watching people People watching an activity Traffic counters Passive people meter

3Mystery shoppers Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions.

3Experiment A method a researcher uses to gather primary data.

3Sampling procedure Sample Universe A subset from a large population. The population from which a sample will be drawn.

3Probability samples Probability sample A sample in which every element in the population has a known statistical likelihood of being selected. Random sample A sample arranged so that every element of the population has an equal chance of being selected.

3Non-probability samples Non-probability sample Convenience sample Any sample in which little or no attempt is made to get a representative cross-section of the population. A form of non-probability sample using respondents who are convenient or readily accessible to the researcher.

3Types of samples Probability samples Simple random sample Stratified sample Cluster sample Systematic sample Non-probability samples Convenience sample Judgement sample Quota sample Snowball sample

3Internet samples Unrestricted Internet sample Screened Internet sample Recruited Internet sample A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are pre-recruited and must qualify to participate.

3Types of errors Measurement error Sampling error Frame error Random error

3Types of errors (cont.) Measurement error Sampling error Frame error Random error Error when there is a difference between the information desired and the information provided by research. Error when a sample somehow does not represent the target population. Error when a sample drawn from a population differs from the target population. Error because the selected sample is an imperfect representation of the overall population.

3Field service organisation A firm that specialises in interviewing respondents on a subcontracted basis.

3Field service firm (cont.) Provide: –focus group facilities –mall intercept locations –test product storage –kitchen facilities –retail audits.

3 Data analysis To interpret and draw conclusions from the mass of collected data Qualitative data tends to use statistics for its data analysis. Qualitative data tends to use pattern matching for its data analysis

3Cross-tabulation A method of analysing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions.

4 Discuss the impact of electronic scanner-based research Learning objective

4Scanner-based research A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion and pricing they are exposed to and the things they buy.

4Two main scanner research products BehaviorScan Tracks the purchase of households through store scanners InfoScan Sales tracking service for consumer packaged goods

5 Explain when marketing research should and should not be conducted Learning objective

5When and when not to conduct marketing research How well does the firm know the market? How much will the research cost? Will the research add value? How long will the research take? What is the quality of the research?