For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 8 Improving Decisions with Marketing Information

Marketing Information Inputs to Marketing Strategy Planning Decisions (Exhibit 8-1)

Information for marketing decisions Marketing Information Inputs to Marketing Strategy Planning Decisions ( Exhibit 8-1) Marketing information systems Accessing multimedia data Data warehouse Decision support systems Marketing models Marketing information systems Accessing multimedia data Data warehouse Decision support systems Marketing models Marketing Research Role of research specialist Scientific method Steps in marketing research 1.Define problem 2.Analyze situation 3.Gather problem specific data 4.Interpret the data 5.Solve the problem Marketing Research Role of research specialist Scientific method Steps in marketing research 1.Define problem 2.Analyze situation 3.Gather problem specific data 4.Interpret the data 5.Solve the problem

Who Does the Work?

That marketing research geek doesn’t understand my business – she doesn’t even know my competitors! That overpaid Gen Y is clueless – she doesn’t even know how a chi-square is computed! Collaboration Is Absolutely Necessary! Effective Research Requires Cooperation

An Intranet Is Easy to Update An Intranet Is Easy to Update Get More Information Faster and Easier Get More Information Faster and Easier MIS Makes Information Available and Accessible MIS Makes Information Available and Accessible Marketing Managers Must Help Develop an MIS Marketing Managers Must Help Develop an MIS Changes Are Under Way in Marketing Information Systems

Elements of a Complete Marketing Information System (Exhibit 8-2)

The Impact of an MIS Information for implementation, planning and control Many Firms Are Not There Yet

Scientific method The process by which scientists, collectively and over time, endeavor to construct an accurate (that is, reliable, consistent and non- arbitrary)representation of the world. ppendixE.html

The scientific method has four steps Observation and description of a phenomenon or group of phenomena. Formulation of an hypothesis to explain the phenomena Use of the hypothesis to predict the existence of other phenomena, or to predict quantitatively the results of the new observations. Performance of experimental tests of the predictions by several independent experimenters and properly performed experiments.

The Scientific Method and Marketing Research (Exhibit 8-3) Defining the problem Analyzing the situation Getting problem- specific data Interpreting the data Solving the problem Early identification of solution Feedback to previous steps

Five Situations When Marketing Research Not Needed 1.Information already available 2.Insufficient time frame 3.Inadequate resources 4.Costs outweigh the value of the research 5.Strategic importance of the problem Explain the differences between data and information Changing View of the Marketing Research Process

Defining the Problem – Step 1 Problems vs. Symptoms Finding the Right Problem Level Setting Research Objectives

Analyzing the Situation – Step 2 What Information Do We Already Have? Situation Analysis Helps Educate a Researcher

Edna Bates, a marketing researcher who is an expert in customer satisfaction research, is asked by a client to conduct a study dealing with a completely unfamiliar research topic. Edna consults secondary data to gain more insight about this unfamiliar area. Edna is engaged in the _________ stage of the marketing research process. A. problem definition B. situation analysis C. gathering problem-specific data D. data interpretation E. solving the problem Checking Your Knowledge

Secondary and Primary Data (Exhibit 8-4) Secondary data sources All data sources Company files, intranet, reports, marketing information system, people, sales, cost data Inside company Internet, libraries, governments, trade associations, universities, private research organizations Outside company Primary data sources Equipment (video, scanner, etc.); website analysis; personal approaches Obser- vation In-depth and focus group interviews; online, mail, phone, personal surveys; panels Ques- tioning

Private Sources Are Useful Too

Situation Analysis – A Lot For a Little What Else Is Needed? Research Proposal Key Issues The Bottom Line on Secondary Data

Primary Data Observing Monitoring behaviors Human or machine Costs coming down Questioning Asking people Formal or informal Qualitative questioning is open-ended Getting Problem-Specific Data – Step 3

Focus Groups Stimulate Discussion

Focus Group Interviews A popular type of qualitative research Involves a small group (usually 6 to 10 people) in a discussion—usually for about 1 hour A group leader ("interviewer") unobtrusively guides the discussion Designed to get in-depth, open-ended responses, not intended to be "representative" of larger market Group interaction stimulates thinking and reactions Analysis of results is subjective May involve videotaping and or “on-line sessions” and other technologies

Can be summarized in numbers Seeks structured responses Faster response & analysis Quantitative Research Structured Questioning Gives More Objective Results

Personal Interview Mail and Online Telephone Primary Methods for Collecting Survey Data Surveys Come in Many Forms

A researcher wants to study 1,000 consumers and needs information about a lot of personal and sensitive issues. Which of the following would be the best way to gather this information? A. Mail survey B. Focus group C. Telephone survey D. Face-to-face interview E. Experiment Checking Your Knowledge

Observing – What You See Is What You Get Checkout Scanners “See” A Lot Observation In Common in Advertising Research Website Analysis Consumer Panels

Experimental Method Controls Conditions (Exhibit 8-5) Representative group of customers Half of the people see Ad #1 Half of the people see Ad #2 Average for group who saw Ad #1 = 3.2 Average for group who saw Ad #2 = Difference in response between two groups What conclusion can you draw from this research?

Interactive Exercise: Types of Data

Interpreting the Data – Step 4 (Exhibit 8-6) What is your household income? Less than $30,000 $30,000 to 50,000 $50,001 to $75,000 More than $75,000 Total Sample Does your home have broadband Internet service? Yes23.7%46.2%52.3%72.4%47.1% No Total100.0%

Confidence Intervals Confidence Intervals Sample Population Key Issues Validity Key Concerns in Data Interpretation

Lying with Statistics Withholding Information Unauthorized Disclosure of Personalized Information Disguised Sales Pitches Ethical Issues in Marketing Research

A sales training firm wants feedback on the quality of its classes and training services. The firm planned to send mail surveys to CEOs of its client companies to get the needed information. However, one executive objected to the survey plan, saying, “CEOs don’t attend our classes. How will they know if the classes are any good?” Another executive added, “If the survey isn’t relevant to the CEOs, it will be thrown away and we’ll get no data.” It appears that the research design presents problems with: A. response rate. B. relevance of population. C. validity. D. improper statistical analysis. E. both A and B. Checking Your Knowledge

Interactive Exercise: Confidence Interval

Quality of Suppliers Is Variable Managers Need to Know About Research Actionable Results Lack of Impact? Needed: Time, Forethought, Money Solving the Problem – Step 5

A marketing research firm conducted a telephone survey for a consumer products company. It provided new and interesting information about brand image, the competition, and other topics. At the end of the research company’s results presentation, the sales manager commented, “This is all interesting information, but it doesn’t tell me why our market share is declining among 18 to 34 year old women, nor does it offer me any suggestions about actions I can take to deal with the situation.” The sales manager’s complaint suggests that the research suffers from problems with: A. a lack of action implications for management. B. poor planning by the researcher and managers at the outset of the project. C. poor sampling. D. a low response rate. E. both A and B. Checking Your Knowledge

Research Contributes to Success Accurate Data—Hard To Find? Coordinate and Standardize International Marketing Research Use Local Researcher

1.Know about marketing information systems. 2.Understand the scientific approach to marketing research. 3.Know about methods for collecting secondary and primary data. 4.Understand the role of observing, questioning, and using experimental methods in marketing research. You should now be able to:

Marketing research Marketing information system (MIS) Intranet Data warehouse Decision support system (DSS) Search engine Marketing dashboard Marketing model Scientific method Hypotheses Marketing research process Situation analysis Secondary data Primary data Research proposal Qualitative research Focus group interview Quantitative research Response rate Consumer panel Key Terms

Experimental method Statistical packages Population Sample Confidence interval Validity Key Terms