Managing Marketing Information CHAPTER 4 Managing Marketing Information

Roadmap: Previewing the Concepts Explain the importance of information to the company and its understanding of the marketplace. Define the marketing information system and discuss its parts. Outline the steps in the marketing research process. Explain how companies analyze and distribute marketing information. Discuss the special issues some marketing researchers face, including public policy and ethics issues. Copyright 2007, Prentice-Hall Inc.

COACH – Research Revamps Strategy The Situation Firm began by offering classically styled, high-quality leather handbags. Women needed only two purses in brown or black. Mid-1990s: sales slowed. Consumer preferences changed as more women entered the workforce. Designer bags made Coach’s look plain. Research’s Role Method: Interviews 14,000 women annually. Watches trends for “market voids.” Key research findings: 1) desire for “fashion pizzazz” in handbags. 2) “Usage voids.” New products are created to fill voids (wristlets, fabric bags, Signature line, etc.). Sales & earnings grow. Copyright 2007, Prentice-Hall Inc.

The Importance of Marketing Information Companies need information about their: Customer’s needs Marketing environment Competition Marketing managers do not need more information, they need better information. Copyright 2007, Prentice-Hall Inc.

Information Overload “In this oh so overwhelming information age, it’s all too easy to be buried, burdened, and burned out by data overload.” Copyright 2007, Prentice-Hall Inc.

Marketing Information System An MIS consists of people, equipment, and procedures to gather, sort, analyze, and distribute needed, timely, and accurate information to marketing decision makers. Copyright 2007, Prentice-Hall Inc.

Figure 4-1 The Marketing Information System Copyright 2007, Prentice-Hall Inc.

Marketing Information Systems A good MIS balances the information users would like against what they need and what is feasible to offer. Sometimes the company cannot provide the needed information because it is not available or due to MIS limitations. Have to decide whether the benefits of more information are worth the costs. Copyright 2007, Prentice-Hall Inc.

Sources of Marketing Information Internal Databases: Electronic collections of information obtained from data sources within the company. Marketing Intelligence: Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment. Marketing Research: Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. Copyright 2007, Prentice-Hall Inc.

Let’s Talk! At right is an example of the fields tracked by an internal sales database. Pick any firm. What custom fields should be added in order to enhance the database for research purposes? Copyright 2007, Prentice-Hall Inc.

Marketing Intelligence Marketing in Action Marketing Intelligence ProductScan Online leverages the power of the Internet to provide subscribers with access to a huge database featuring intelligence related to NEW consumer packaged goods. productscan.com Copyright 2007, Prentice-Hall Inc.

Marketing Research Marketing in Action Greenfield Online provides a variety of marketing research services. Visit the Web site to take a survey, join a consumer research panel, or to learn more. http://www.greenfield.com/programmingservices.htm Copyright 2007, Prentice-Hall Inc.

Figure 4-2 The Marketing Research Process Copyright 2007, Prentice-Hall Inc.

Defining Problem and Objectives Exploratory Research: Gathers preliminary information that will help define the problem and suggest hypotheses. Descriptive Research: Describes things (e.g., market potential for a product, demographics and attitudes). Causal Research: Tests hypotheses about cause-and-effect relationships. Copyright 2007, Prentice-Hall Inc.

Developing the Research Plan Includes: Determining the exact information needed. Developing a plan for gathering it efficiently. Presenting the written plan to management. Outlines: Sources of existing data Specific research approaches Contact methods Sampling plans Instruments for data collection Copyright 2007, Prentice-Hall Inc.

Secondary Data Information that already exists somewhere: Internal databases Commercial or syndicated data services Government sources Published sources (newspapers, magazines, etc.) Key sources of secondary data found on the Web: Media data: ACNielsen, Arbitron, Nielson, Interactive Advertising Bureau Government data: Census, FTC, SBA Consumer data: SMRB, ComScore Copyright 2007, Prentice-Hall Inc.

Census Data Provides Demographic Profiles Marketing in Action Census Data Provides Demographic Profiles One portion of the census site allows marketers to build profiles of geographic regions on a state, county, and/or city level. Census.gov Copyright 2007, Prentice-Hall Inc.

Pros and Cons of Secondary Data Advantages: Available more quickly and at a lower cost than primary data. May provide data the company cannot secure on its own. Potential Problems: Desired information may not exist. Not all information found is usable. Carefully evaluate information to be certain it is relevant, accurate, current, and impartial. Copyright 2007, Prentice-Hall Inc.

Primary Data Consists of information collected for the specific purpose at hand. Must be relevant, accurate, current, and unbiased. Must determine: Research approach Contact methods Sampling plan Research instruments Copyright 2007, Prentice-Hall Inc.

Observational Research The gathering of primary data by observing relevant people, actions, and situations. Ethnographic research: Observation in a “natural environment” Mechanical observation: People meters Checkout scanners Video Snippet Wild Planet uses ethnographic research to learn more about the children that they target. Copyright 2007, Prentice-Hall Inc.

Observational Research Marketing in Action Observational Research Many restaurants, retail stores, and other service-oriented businesses use mystery shoppers – a type of observational research – to evaluate the quality of customer service and aspects of the facilities. Learn more: myshoppingjobs.com Copyright 2007, Prentice-Hall Inc.

Survey Research Most widely used method for primary data collection. Approach best suited for gathering descriptive information. Can gather information about people’s knowledge, attitudes, preferences, or buying behavior. Copyright 2007, Prentice-Hall Inc.

Surveys can help marketers to understand attitudes. Marketing in Action Survey Research Surveys can help marketers to understand attitudes. Copyright 2007, Prentice-Hall Inc.

Experimental Research Tries to explain cause-and-effect relationships. Involves: selecting matched groups of subjects giving different treatments controlling unrelated factors checking differences in group responses Copyright 2007, Prentice-Hall Inc.

Primary Data Collection Methods Mail Survey Pros: Can collect large amounts of information at a relatively low cost per respondent. Generates more truthful responses than phone interviews. Improved validity (no interviewer bias). Mail Survey Cons: Not flexible; study takes longer to finish. Low response rate. Little control over sample. Copyright 2007, Prentice-Hall Inc.

Primary Data Collection Methods Phone Surveying Pros: Gathers information fast. Greater flexibility than mail surveys. Good response rates. Strong sample control. Phone Surveying Cons: Higher costs than mail. Interviewer effects exist. Limited quantity of data can be collected. Copyright 2007, Prentice-Hall Inc.

Primary Data Collection Methods Individual & Group Interviewing Pros: Highly flexible method that can gather a great deal of data from a respondent. Good control of sample, speed of data collection, and response rate. Individual & Group Interviewing Cons: High cost per respondent. Highly subject to interviewer bias and related interviewer effects. Copyright 2007, Prentice-Hall Inc.

Primary Data Collection Methods Online Marketing Research: Includes surveys, experiments, and focus groups conducted over the Internet. The least expensive and quickest way to gather information. Offers excellent control over sample. Good flexibility & response rates; able to collect a fair amount of information. Some forms prone to interviewer effects. Copyright 2007, Prentice-Hall Inc.

Sampling Plan Sample: segment of the population selected to represent the population as a whole. Sampling requires three decisions: Who is to be surveyed? Sampling unit How many people should be surveyed? Sample size How should the people in the sample be chosen? Sampling procedure Probability vs. nonprobability samples Copyright 2007, Prentice-Hall Inc.

Primary Data Collection Mechanical research instruments: – People meters (see image shown at left) – Supermarket scanners – Galvanometer – Eye Cameras Copyright 2007, Prentice-Hall Inc.

Implementing the Research Plan Collecting the data Most expensive phase Subject to error Processing the data Check for accuracy Code for analysis Analyzing the data Tabulate results Copyright 2007, Prentice-Hall Inc.

Interpreting and Reporting Findings Interpret the findings Draw conclusions Report to management Present findings and conclusions that will help decision making. Copyright 2007, Prentice-Hall Inc.

Analyzing Marketing Information Customer Relationship Management Managing detailed information about customers and carefully managing “customer touch points” in order to maximize customer loyalty. Copyright 2007, Prentice-Hall Inc.

Distributing and Using Marketing Information Routine information for decision making Nonroutine information for special situations Intranets Extranets demo.silverscan.com Copyright 2007, Prentice-Hall Inc.

Other Marketing Research Considerations Marketing research in small businesses and nonprofit organizations International marketing research Public policy and ethics in marketing research Consumer privacy Misuse of research findings Copyright 2007, Prentice-Hall Inc.

Let’s Talk! Video mining – analyzing video tape of consumers secretly obtained without their knowledge using computer software – is growing in prevalence. How do you feel about this technique? Would its use prevent you from shopping at a store? How could the information be used unethically? Copyright 2007, Prentice-Hall Inc.

Code of Ethics Marketing in Action www.casro.org Ethical firms should follow the CASRO’s standards. Copyright 2007, Prentice-Hall Inc.

Rest Area: Reviewing the Concepts Explain the importance of information to the company and its understanding of the marketplace. Define the marketing information system and discuss its parts. Outline the steps in the marketing research process. Explain how companies analyze and distribute marketing information. Discuss the special issues some marketing researchers face, including public policy and ethics issues. Copyright 2007, Prentice-Hall Inc.