Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada1

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Marketing Research 2 Marketing research serves many roles. It can: 1.Link companies with customers via information 2.Help define problems and opportunities 3.Generate, refine and evaluate marketing actions 4.Help monitor performance Information is power. Power used wisely produces profit!

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Scope of Marketing Research 3 Organizations tend to focus on three primary areas when conducting marketing research. Market Analysis Product Research Consumer Analysis Information about the marketplace Information about how people perceive products Information about the needs and motivations of consumers

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Collecting Information 4 Information is collected in a scientific manner. Procedures are implemented to ensure the information is reliable and valid Reliability Validity Information is reliable if another study under similar conditions gives similar results. When research method actually measures what is intended to measure.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Marketing Research Process 5 1. Problem Awareness 2. Exploratory Research 3. Primary Research 4. Data Transfer & Processing 5. Data Analysis & Interpretation 6. Recommendations and Implementation

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Problem Awareness 6 The problem at hand must be clearly distinguished from symptoms. A drop in sales or market share is a not a problem. They are symptoms that make marketers aware there is a deeper problem. 1.The problem must be precisely defined. 2.A typical research study will address a specific decision that must be made. 3.Exploratory research helps to define the problem.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Exploratory Research 7 When doing exploratory research a manger is actually conducting an investigation in an informal manner. 1.The situation is divided into manageable variables to narrow down the field of investigation, a process called funneling. 2.Funneling is accomplished through situation analysis; a procedure calling for consultation with internal an external experts and from secondary sources.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Secondary Data 8 Data compiled and published for purposes unrelated to the specific problem under investigation, yet may have some impact on resolving the problem. 1.Internal Data Sources 2.External Data Sources

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Secondary Data 9 Advantages 1.Inexpensive 2.Readily available 3.Useful in exploratory stage Disadvantages 1.Reliability questionable 2.Outdated 3.Unlikely to resolve problem

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Primary Research 10 The collecting and recording of new data, called primary data, in order to resolve a specific problem, usually at high cost to the organization.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Primary Research Steps 11 Problem Definition Objectives and Hypotheses What to achieve Predicted outcomes Sample Design Who? How many? What procedure? Data Collection Survey, observation or experiment Qualitative or quantitative Methodology

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Sample Design 12 A representative sample is essential in order to produce valid and reliable data. Steps: 1.Define Population 2.Identify Sampling Frame 3.Determine Type of Sample 4.Determine Sample Size

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Data Collection Methods 13 Survey Observation Experiment Structured questionnaires with fixed-response answers. By personal or electronic means. Simulated test situations or test markets.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Qualitative Data 14 Data collected from small samples in a controlled environment (e.g., a focus group- is a small group of people 8to 10). “Focus” implies the discussion concentrates on one topic or concept. Interviews reveal “attitudes” held by consumers. Focus groups can now be held online; an environment where control is in the hands of the participant.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Quantitative Data 15 Data collected from large samples. Analysis and interpretation rely on numbers and percentages obtained from data collected from a structured questionnaire. The feelings, attitudes, and opinions obtained from focus groups are quantified.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Survey Methodology 16 Personal Interview Telephone Mail Online Which option to use depends on: 1.Nature of information sought 2.Cost and time constraints 3.Location of respondent See Fig3.11 page 77 for more

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Data Transfer and Processing 17 Editing Reviewing questions for consistency, completeness, and authenticity. Data Transfer Transferring pre-coded responses to a computer. Direct electronic transfer is now common. Tabulation Counting responses to arrive at a frequency distribution and cross- tabulation by various sub-groups.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Data Analysis & Interpretation 18 Data Analysis Interpretation An evaluation of each question to record observations. An assessment of accumulated data in relation to the problem, objectives, and hypotheses of the study.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Managing Information 19 Sophisticated software technologies facilitate the collection and management of information. A procedure known as data mining provides a means to uncover information about customers that should produce more effective marketing strategies. The goal is to maximize the value of a customer though additional purchases of a product or through complementary purchases of related products.

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada Database Management System 20 External Information Consumer Market Competitor Economy Social Technology Online Data Internal Information Sales Costs Profit Budgets Inventory Production Database Marketing Analysis Marketing Plan Evaluation and Control

Chapter 3: Marketing Intelligence Copyright © 2010 Pearson Education Canada CRM Model 21 External Data Internal Data Database Data Analysis Marketing Strategy Customer Retention Customer Acquisition Customer Extension