© 2001 South-Western College Publishing1 CHAPTER SEVEN DECISION SUPPORT SYSTEMS AND MARKETING RESEARCH Prepared by Jack Gifford Miami University (Ohio)

© 2001 South-Western College Publishing2 MARKETING DECISION SUPPORT SYSTEMS *Accurate and timely information is the lifeblood of marketing decision making. *Good information can help maximize an organization’s sales and efficiently use scarce company resources

© 2001 South-Western College Publishing3 DECISION SUPPORT SYSTEM (DSS) *A marketing DSS is an interactive, flexible computerized information systems that enables managers to obtain and manipulate information as they are making decisions *Interactive *Flexible *Discovery-oriented *Accessible From data to information, knowledge and wisdom

© 2001 South-Western College Publishing4 DATA-BASED MARKETING *The fastest-growing use of DSS is for database marketing *The creation of large data files related to specific existing or potential customers *These relational data bases can be combined with other internal or external data sources to allow data mining from data warehouses.

© 2001 South-Western College Publishing5 THE ROLE OF MARKETING RESEARCH *Any discussion of the importance of information to the marketer must include a discussion of marketing research. *Marketing research allows managers to make decisions based on objective, systematically gathered data rather than on intuition. *Marketing research is the process of planning, collecting and analyzing data relevant to a marketing decision

© 2001 South-Western College Publishing6 THE THREE ROLES OF MARKETING RESEARCH

© 2001 South-Western College Publishing7 DIFFERENCES BETWEEN MARKETING RESEARCH AND DECISION SUPPORT SYSTEMS MARKETING RESEARCHDECISION SUPPORT SYSTEM Problem-orientedContinuously channels information about environmental changes into the organization MR is part of a DSS

© 2001 South-Western College Publishing8 MANAGEMENT USES OF MARKETING RESEARCH *Improving the quality of decision-making *Tracing problems *Keeping existing customers *Understanding the ever-changing marketplace

© 2001 South-Western College Publishing9 WHAT IS GOOD MARKETING RESEARCH *What is marketing research? *Systematic and objective process *Generation of new information *For use in making marketing decisions

© 2001 South-Western College Publishing10 MARKETING RESEARCH STAGES IN THE RESEARCH PROCESS Problem/ Opportunity Identification Planning Research DesignSelecting a Sample Collecting DataAnalyzing Data Conclusions and ReportFollowing Up /Feedback

© 2001 South-Western College Publishing11 THE RESEARCH PROCESS: STEP ONE Problem/Opportunity Identification and Formulation *Usually occur due to internal or external changes in a company’s environment *Problems are often carefully disguised opportunities *The marketing research problem is information-oriented *The marketing research objective is to provide insightful decision-making information

© 2001 South-Western College Publishing12 THE RESEARCH PROCESS: STEP ONE Problem/Opportunity Identification and Formulation *A valuable resource throughout the research process, but particularly in the problem/opportunity identification stage is secondary data *Secondary data are data previously collected for any purpose other than the one at hand. *Secondary data save time and money *Help formulate problem statement

© 2001 South-Western College Publishing13 TRADITIONAL SOURCES OF SECONDARY DATA *Internal company information *Market research firms *Trade associations *Commercial publications *National research bureaus, professional associations, foundations *Government

© 2001 South-Western College Publishing14 THE NEW AGE OF SECONDARY INFORMATION - THE INTERNET AND WORLD WIDE WEB *Browsers *World Wide Web *Search engines *Newsgroups *Bulletin boards *Smart agents *Databases on CD-ROMs

© 2001 South-Western College Publishing15 THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data * Research design *Which research questions must be answered? *How and when the data will be gathered? *How the data will be analyzed? * Primary data: information collected for the first time *Expensive and time consuming

© 2001 South-Western College Publishing16 *Primary Data *Survey research *Telephone interviews *Central-location phone *In-bound telephone surveys *Computer disk by mail survey *Computer assisted... *Personal-interviewing *Self-interviewing *Mall intercept interview *In-home interview THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data

© 2001 South-Western College Publishing17 THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data *Primary Data *Survey research (continued) *Internet surveys Advantages Speed & low cost Creation of panels for efficiency Good for asking only a few questions Reach large numbers of people Graphic & audio capabilities Disadvantages Non-representativeness Security issues Unrestricted sampling Screened vs recruited samples

© 2001 South-Western College Publishing18 THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data *Primary Data *Survey research (continued) *Cyber focus groups Advantages Speed Cost effectiveness Broad geographic scope Accessibility Screen names (anonymity) Disadvantages Non-representativeness Group dynamics may not work Unable to observe & hear participants

© 2001 South-Western College Publishing19 THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data *Questionnaire design *Open-ended questions *Closed-ended questions *Scaled response questions Do you eat bagels at least once a week? Describe what you like about bagels. On a scale of 1 to 10, how would you rate the bagel you just ate?

© 2001 South-Western College Publishing20 THE RESEARCH PROCESS: STEP TWO Research Design and Gathering Primary Data *Observation research *Mystery shoppers *One-way mirror observations *Traffic counters *Passive people meters *Experiments *Marketplace / Field *Laboratory

© 2001 South-Western College Publishing21 *What is a sample? *What is a census? *Who should be sampled? *Size of sample? *How is sample selected? *Probability or non probability sampling method? *Measurement error? THE RESEARCH PROCESS: STEP THREE Selecting a Sample

© 2001 South-Western College Publishing22 THE RESEARCH PROCESS: STEPS FOUR AND FIVE Collecting and Analyzing Data *Stage Four: Collecting Data *Minimize errors *The pretest *Use of field service firms *Stage Five: Analyzing the Data *Editing ---> Coding *Statistical and qualitative analysis *Cross-tabulation

© 2001 South-Western College Publishing23 Chapter 9 THE RESEARCH PROCESS: STEP SIX Preparing and Presenting the Report *Stage Six: Drawing conclusions and Preparing the Report *Written and oral *Executive summary *Presentation quality *Did it… *Meet the objectives established in the proposal? *Was the correct methodology followed? *Are the conclusions and recommendations logical?

© 2001 South-Western College Publishing24 Chapter 9 THE RESEARCH PROCESS: STEP SEVEN Following up and feedback *Were the recommendations followed? Why or why not? *Did the research finding suggest additional areas to explore? *Were there weaknesses in the research that can be avoided next time?

© 2001 South-Western College Publishing25 WHEN SHOULD MARKETING RESEARCH BE CONDUCTED? *Value of research information exceeds the cost of generating the information *When time permits conducting quality research *Where there is a high level of uncertainty