Managing Marketing Information Chapter 5

Objectives Understand the importance of information to the company. Know the definition of a marketing information system and be able to discuss its subparts. Learn the steps in the marketing research process.

Objectives Learn how companies analyze and distribute marketing information. Realize the special issues some marketing researchers face, including public policy and ethical issues.

c Coke “New Coke” was a fiasco; consumer complaints resulted in the return of “Coke Classic” after only 3 months. $4 million was spent researching “New Coke”. Key issue: the research problem was too narrowly defined, and consumer feelings were ignored. Poor judgment in interpretation of results was also a problem.

Marketing Info. System Marketing Information System (MIS) Consists of people, equipment, and procedures that gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

The Marketing Information System Figure 5-1: The Marketing Information System

Marketing Info. System Assessing Marketing Information Needs The MIS serves company managers as well as external partners.

Marketing Info. System Assessing Marketing Information Needs The MIS must balance needs against feasibility: Not all information can be obtained. Obtaining, processing, sorting, and delivering information is costly.

Developing Information Marketing Info. System Internal Data is gathered via customer databases, financial records, and operations reports. Advantages of internal data include quick/easy access to information. Disadvantages stem from incompleteness or inappropriateness of data to a particular situation. Developing Information Internal data Marketing intelligence Marketing research

Financial services provider USAA collects data from its customers, stores the data in a database, and uses the data to tailor ads and marketing offers to its customers.

Developing Information Marketing Info. System Marketing intelligence is the systematic collection and analysis of publicly available information about competitors and trends in the marketing environment. Competitive intelligence gathering activities have grown. Many sources of competitive info. exist. Developing Information Internal data Marketing intelligence Marketing research

Sources of Competitive Intelligence Marketing Info. System Sources of Competitive Intelligence Company employees Internet Garbage Published information Competitor’s employees Trade shows Benchmarking Channel members and key customers

Developing Information Marketing Info. System Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. Several steps are involved in the marketing research process. Developing Information Internal data Marketing intelligence Marketing research

The Marketing Research Process Figure 5-2: The Marketing Research Process

Marketing Info. System Step 1: Defining the problem and research objectives Don’t confuse the symptoms of the problem with its cause when defining the problem. Exploratory, descriptive, and causal research each fulfill different objectives.

Marketing Info. System Step 2: Developing the Research Plan Research objectives guide the determination of specific information needs.

Marketing Info. System Step 2: Developing the Research Plan Research proposals outline the type of data needed and the research plan. Secondary data: Information collected for another purpose which already exists. Primary data: Information collected for the specific purpose at hand

Marketing Info. System Types of Data Secondary data Primary data Secondary data sources: Government information Internal, commercial, and online databases Publications Advantages: Obtained quickly Less expensive than primary data Disadvantages: Information may not exist or may not be usable. Types of Data Secondary data Primary data

Online database services such as Dialog provide subscribers with a wealth of information.

Evaluate the Following When Judging Data Quality Marketing Info. System Evaluate the Following When Judging Data Quality Relevance Accuracy Currency Impartiality

Marketing Info. System Types of Data Secondary data Primary data Planning primary research: Research approaches: Observation Survey Experiment Contact methods Sampling plan Research instruments Types of Data Secondary data Primary data

Marketing Info. System Research approaches: Observation research using people or machines Mystery shoppers, traffic counters, web site “cookies” are some examples. Discovers behavior but not motivations. Ethnographic research expands observation research to include consumer interviews.

Discussion Question What specific behaviors, actions, or situations might an observational researcher track if employed by a bank?

The Impact of the Internet Experimental Research The Internet: provides an unprecedented opportunity for market testing and optimization. Digitization: will make it progressively easier to experimentally alter aspects of a business and quickly see how customers respond. Experimentation: Allows things that don’t exist to be tested Features random assignment of subjects to treatments Controls for other extraneous variables Design plan is key Source: “Learn and earn through testing on the Internet,” Marketing Research; Chicago; Fall 2000; Gordon A Wyner; Volume: 12 Issue: 3, 37-38.

The Impact of the Internet Experimental Research How can web-based experimentation be used? Customer buying experience on the web Site content Availability of links Spatial layout Usability Pricing tests Comparison shopping websites Service businesses For an overview of how the Internet can be used for experimental research see the following article: Source: “Learn and earn through testing on the Internet,” Marketing Research; Chicago; Fall 2000; Gordon A Wyner; Volume: 12 Issue: 3, 37-38.

Marketing Info. System Types of Data Secondary data Primary data Planning primary research: Research Approaches Contact methods: Mail Telephone Online Personal Sampling plan Research instruments Types of Data Secondary data Primary data

Marketing Info. System Key Contact Methods Include: Mail surveys Telephone surveys Personal interviewing: Individual or focus group Online (Internet) research

BusinessNow Telephia Video Clip Telephia uses multiple methods of data collection to service subscriber clients Click the picture above to play video

Strengths and Weaknesses of Contact Methods Relate To: Marketing Info. System Strengths and Weaknesses of Contact Methods Relate To: Flexibility Sample control Data quantity Cost Interviewer effects Speed of data collection Response rate

Marketing Info. System Active Group allows clients to view streamed video of online focus group sessions. Discuss the weaknesses of text-based focus groups conducted in an online chat environment. Clicking the WWW icon will open your web browser and link to the web site pictured in the screen shot. Active Group

Many companies today are migrating their research efforts to the web Many companies today are migrating their research efforts to the web. Visit the Greenfield Online site for details.

Marketing Info. System Types of Data Secondary data Primary data Planning primary research: Research approaches Contact methods Sampling plan Sampling unit Sample size Sampling procedure Research instruments Types of Data Secondary data Primary data

Marketing Info. System N = ??? Sample: subgroup of population from whom information will be collected Sampling Plan Decisions: Sampling unit Sample size Sampling procedure: Probability samples Non-probability samples N = ???

Marketing Info. System Types of Data Secondary data Primary data Planning primary research: Research approaches Contact methods Sampling plan Research instruments Questionnaire Mechanical instruments Types of Data Secondary data Primary data

Marketing Info. System Research Instruments: Questionnaires Include different types of questions Open-ended question: What are the most important benefits you seek when buying a car? Closed-ended question: What is your gender? ____ Male ____ Female Phrasing and question order are key

The manner in which questions are phrased can influence the validity of the data collected. Critique the following questions: What is your age? ___ 18 – 25 ___ 25 – 45 ___ 46 – 65 What is your income? $ _________ How important is fast and friendly service to you when selecting a fast food establishment? ___ Very important ___ Important ___ Somewhat important ___ Not important at all

SmarterKids.com Video Clip BusinessNow SmarterKids.com Video Clip Marketing research allows companies to customize their marketing mix to meet consumer needs. Click the picture above to play video

Marketing Info. System Research Instruments: Mechanical instruments Traffic counters Retailer store checkout scanners Video-taped store traffic People meters Website logs, cookies, software Physiological measurement equipment

Mechanical measures of physiological processes include eye movement, pulse rate, eye dilation, and as shown below, changes in facial expressions. Marketers can adjust offers accordingly.

Marketing Info. System Step 3 of the Research Process: Implementing the Research Plan Involves collecting, processing, and analyzing information.

Marketing Info. System Step 4 of the Research Process: Interpreting and Reporting the Findings

Marketing Info. System Analyzing Marketing Information Customer relationship management (CRM) helps manage information. CRM offers many benefits and can help a firm gain a competitive advantage. Technology alone can not build profitable customer relationships.

Siebel’s CRM software integrates individual customer data from every touch point to help build customer relationships. Siebel uses a testimonial approach in this ad to stress the benefits of CRM.

Marketing Info. System Distributing and Using Marketing Information Routine reporting makes information available in a timely manner. User friendly databases allow for special queries. Intranets and extranets help distribute information to company employees and value-network members.

Other Considerations Marketing research in small businesses and not-for-profit organizations International marketing research Public policy and ethics Consumer privacy issues Misuse of research findings