9 MKTG CHAPTER Marketing Research Chapter 8 Decision Support Systems and Marketing Research MKTG 9 CHAPTER Marketing Research

The Role of Marketing Research Chapter 8 Decision Support Systems and Marketing Research The Role of Marketing Research Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. Notes: Marketing research plays a key role in the marketing system. It provides data on the effectiveness of the marketing mix and insights for necessary changes. Marketing research is a main data source for management information systems and DSS. LO2

Marketing Research Types Chapter 8 Decision Support Systems and Marketing Research Marketing Research Types Diagnostic (Exploratory) Predictive (Causal) Descriptive Gathering and presenting factual statements Explaining data “What if?” Notes: Marketing research has three roles: descriptive, diagnostic, and predictive. Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product? Diagnostic: What was the impact on sales after a change in the package design? Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a marketing decision? LO2

The Marketing Research Process Chapter 8 Decision Support Systems and Marketing Research LO3 1 Collect Data Specify Sampling Procedure Plan Design/ Primary Data Define Problem Analyze Prepare/ Present Report Follow Up 2 3 4 5 Notes: Exhibit 8.1 traces the steps in the marketing research process. The research process begins with the recognition of a marketing problem or opportunity. As changes occur in the firm’s external environment, marketing managers must decide on changes to the existing marketing mix. 6 7

Marketing Research LO3 Marketing Research Problem Objective Management Chapter 8 Decision Support Systems and Marketing Research LO3 Marketing Research Problem Objective Management Decision 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. Notes: The marketing research problem is information oriented. The marketing research objective is to provide decision-making information. In contrast, the management decision problem is action oriented.

Secondary Data LO3 Secondary Data Sources: Internal vs. External Chapter 8 Decision Support Systems and Marketing Research LO3 Secondary Data Data previously collected for any purpose other than the one at hand. Sources: Internal vs. External Notes: Secondary data is a valuable tool particularly in the problem/opportunity identification stage.

Advantages of Secondary Data Chapter 8 Decision Support Systems and Marketing Research LO3 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

Disadvantages of Secondary Data Chapter 8 Decision Support Systems and Marketing Research LO3 May not give adequate detailed information May not be on target with the research problem Quality and accuracy of data may pose a problem

LO3 Primary Data Primary Data Chapter 8 Decision Support Systems and Marketing Research LO3 Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation.

Advantages of Primary Data Chapter 8 Decision Support Systems and Marketing Research LO3 Answers a specific research question Data are current Source of data is known Secrecy can be maintained Notes: The main advantage of primary data is that they will answer a specific research question that secondary data cannot answer. Primary data are current and the source of data is known. Moreover, the information is proprietary.

Disadvantages of Primary Data Chapter 8 Decision Support Systems and Marketing Research LO3 Disadvantages are usually offset by the advantages of primary data. Expensive “Piggybacking” may confuse respondents Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews Notes: The cost of primary data may range from a few thousand dollars for a limited survey to several million for a nationwide study. To save money, firms may cut back on the number of interviews, or piggyback studies by gathering data on two different projects using one questionnaire.

Planning the Research Design Chapter 8 Decision Support Systems and Marketing Research LO3 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ?

Forms of Survey Research Chapter 8 Decision Support Systems and Marketing Research LO3 In-Home Interviews Mail Surveys Mall Intercept Interviews Executive Interviews Telephone Interviews Focus Groups Notes: In home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool. Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population. However, probing is possible. Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application. The federal “Do Not Call” law does not apply to survey research. Mail Surveys: Benefits are the low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates. Consequently, the resulting sample may not represent the surveyed population. However, mail panels, consisting of a sample of households recruited to participate for a given period, yield response rates of 70 percent. Executive interviews: Survey involves businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents. Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews. Internet Surveys

Focus Groups LO4 Advantages Speed Uses small groups Cost-effectiveness Chapter 8 Decision Support Systems and Marketing Research LO4 Used to collect diagnostic info. Uses small groups Uses open-ended questions Often lasts 1 – 2 hours Often videotaped Listening for responses as well as watching reactions and body language Advantages Speed Cost-effectiveness Broad geographic scope Accessibility Honesty

Observational Research Chapter 8 Decision Support Systems and Marketing Research LO3 Situation People watching people People watching phenomena Machines watching people Machines watching phenomena Example Mystery shoppers in a supermarket Observer at an intersection counting traffic Video cameras recording behavior Traffic-counting machine monitoring traffic flow Online Brand Marketing International Learn more about mystery shopping by requesting a mystery shopper kit from BMI and reading its shopper application. Notes: Observation research depends on watching what people do. It may be conducted by human observers or machines. Online http://www.bmiltd.com

A subset from a large population. The population from which What is Sampling? Chapter 8 Decision Support Systems and Marketing Research LO3 Sample A subset from a large population. Universe The population from which a sample will be drawn. Notes: Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Not all possible users of a new product can be interviewed, therefore a firm must select a sample of the larger population. The population or universe must first be defined. Then it is determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed.

Non-Probability Samples Types of Samples Chapter 8 Decision Support Systems and Marketing Research LO3 Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample Notes: Exhibit 8.4 describes each of these types of samples.

Marketing Decision Support Systems Chapter 8 Decision Support Systems and Marketing Research Marketing Decision Support Systems LO1