1Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Decision Support Systems and Marketing Research Prepared by Deborah Baker Texas Christian University Chapter 8

2Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives 1.Explain the concept and purpose of a marketing decision support system. 2. Define marketing research and explain its importance to marketing decision making. 3. Describe the steps involved in conducting a marketing research project.

3Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4. Discuss the profound impact of the Internet on marketing research. 5. Discuss the growing importance of scanner-based research. 6. Explain the concept of competitive intelligence.

4Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the concept and purpose of a marketing decision support system. 1 1 On Line On Line

5Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Decision Support System An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. 1 1

6Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning DSS System Characteristics Characteristics of a DSS System Characteristics of a DSS System Interactive Flexible Discovery-Oriented Accessible 1 1

7Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. 1 1

8Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Define marketing research and explain its importance to marketing decision making. 2 2

9Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. 2 2

10Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Diagnostic Predictive Descriptive  Gathering and presenting factual statements  Explaining data  Attempting to estimate the results of a planned marketing decision Roles of Marketing Research 2 2

11Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Management Uses of Marketing Research  Improve the quality of decision making  Trace problems  Focus on keeping existing customers  Understand the ever-changing marketplace 2 2 On Line On Line

12Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the steps involved in conducting a marketing research project. 3 3

13Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Marketing Research Process CollectDataCollectData SpecifySamplingProcedureSpecifySamplingProcedure Plan Design/ Primary Data Plan Design/ Primary Data DefineProblemDefineProblemAnalyzeDataAnalyzeData Prepare/PresentReportPrepare/PresentReport Follow Up 3 3

14Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Research MarketingResearchProblemMarketingResearchProblemMarketingResearchObjectiveMarketingResearchObjective ManagementDecisionProblemManagementDecisionProblem Determining what information is needed and how that information can be obtained efficiently and effectively. 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. 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. A broad-based problem that requires marketing research in order for managers to take proper actions. 3 3

15Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Secondary Data Data previously collected for any purpose other than the one at hand. 3 3

16Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sources of Secondary Data Government Agencies Trade and Industry Associations Marketing Research Firms Commercial Publications News Media Internal Corporate Information 3 3

17Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of Secondary Data  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 3 3

18Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Disadvantages of Secondary Data  May not be on target with the research problem  Quality and accuracy of data may pose a problem 3 3

19Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The New Age of Secondary Information: The Internet www  Search Engines and Directories  Sites of Interest to Marketing Researchers  Discussion Groups  Periodical, Newspaper, and Book Databases 3 3 On Line On Line

20Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Research Design Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed. 3 3

21Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Planning the Research Design Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? s How will the data be analyzed? s ? ? 3 3

22Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation. 3 3

23Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of Primary Data  Answers a specific research question  Data are current  Source of data is known  Secrecy can be maintained 3 3

24Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Disadvantages of Primary Data  Expensive  Quality declines if interviews are lengthy  Reluctance to participate in lengthy interviews Disadvantages are usually offset by the advantages of primary data! Disadvantages are usually offset by the advantages of primary data! 3 3

25Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Survey Research The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. 3 3

26Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Forms of Survey Research Focus Groups Executive Interviews Mail Surveys Telephone Interviews (Home and Central Location) Mall Intercept Interviews In-Home Interviews 3 3 On Line On Line

27Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. 3 3

28Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Executive Interviews A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services. 3 3

29Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Focus Group Seven to ten people who participate in a group discussion led by a moderator. 3 3

30Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of On-Line Focus Groups  Speed  Cost-effectiveness  Broad geographic scope  Accessibility  Honesty 3 3

31Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Characteristics of Traditional Forms of Survey Research 3 3

32Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Questionnaire Design Open-Ended Question Open-Ended Question Closed-Ended Question Closed-Ended Question Scaled- Response Question Scaled- Response Question An interview question that encourages an answer phrased in respondent’s own words. An interview question that asks the respondent to make a selection from a limited list of responses. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondent’s answer. A closed-ended question designed to measure the intensity of a respondent’s answer. 3 3

33Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 3 3 Types of Questions in Questionnaire Design

34Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Questionnaire Design Qualities of Good Questionnaires Clear and Concise No Ambiguous Language Unbiased Reasonable Terminology 3 3 On Line On Line

35Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Observation Research A research method that relies on three types of observation:  people watching people  people watching an activity  machines watching people 3 3 On Line On Line

36Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 3 3 Observational Situations

37Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Observation Research Mystery Shoppers One-Way Mirrors Types of Observation Research Audits Machines Watching People People Watching People People Watching an Activity Traffic Counters Passive People Meter 3 3

38Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Mystery Shoppers Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions. 3 3

39Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Experiment A method a researcher uses to gather primary data. 3 3

40Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sampling Procedure Sample Universe A subset from a large population. The population from which a sample will be drawn. The population from which a sample will be drawn. 3 3

41Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Probability Samples Probability Sample Probability Sample A sample in which every element in the population has a known statistical likelihood of being selected. A sample in which every element in the population has a known statistical likelihood of being selected. Random Sample Random Sample A sample arranged so that every element of the population has an equal chance of being selected. 3 3

42Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nonprobability Samples Nonprobability Sample Nonprobability Sample Convenience Sample Convenience Sample Any sample in which little or no attempt is made to get a representative cross-section of the population. Any sample in which little or no attempt is made to get a representative cross-section of the population. A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher. A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher. 3 3

43Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sampling Procedure Universe Sample Probability Samples Non-Probability Samples 3 3

44Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Types of Samples Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample 3 3

45Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 3 3 Types of Samples

46Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Types of Errors Measurement Error Measurement Error Sampling Error Sampling Error Frame Error Frame Error Random Error Random Error Error when there is a difference between the information desired and the information provided by research Error when there is a difference between the information desired and the information provided by research Error when a sample somehow does not represent the target population. Error when a sample drawn from a population differs from the target population. Error when a sample drawn from a population differs from the target population. Error because the selected sample is an imperfect representation of the overall population. Error because the selected sample is an imperfect representation of the overall population. 3 3

47Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Field Service Firm A firm that specializes in interviewing respondents on a subcontracted basis. 3 3 On Line On Line

48Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Field Service Firms  Focus group facilities  Mall intercept locations  Test product storage  Kitchen facilities  Retail audits Provide: 3 3

49Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Cross-Tabulation A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions. 3 3

50Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Preparing and Presenting the Report  Concise statement of the research objectives  Explanation of research design  Summary of major findings  Conclusion with recommendations 3 3

51Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Following Up  Were the recommendations followed?  Was sufficient decision-making information included in the report?  What could have been done to make the report more useful to management? 3 3

52Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the profound impact of the Internet on marketing research. 4 4

53Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Impact of the Internet  Allows better and faster decision making  Improves ability to respond quickly to customer needs and market shifts  Makes follow-up studies and research easier  Slashes labor- and time-intensive research activities 4 4

54Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of Internet Surveys Contact with the hard-to-reach Contact with the hard-to-reach Improved respondent participation Improved respondent participation Personalized questions and data Personalized questions and data Reduced costs Rapid development, Real-time reporting Rapid development, Real-time reporting 4 4

55Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Internet Samples Unrestricted Internet Sample Unrestricted Internet Sample Screened Internet Sample Screened Internet Sample Recruited Internet Sample Recruited Internet Sample A survey in which anyone with a computer and modem can fill out the questionnaire. A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate. A sample in which respondents are prerecruited and must qualify to participate. 4 4

56Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Other Uses of the Internet by Marketing Researchers Viewing of presentations of marketing research surveys Viewing of presentations of marketing research surveys Publication and distribution of reports Publication and distribution of reports Data management and on-line analysis Data management and on-line analysis Collaboration in the management of a research project Collaboration in the management of a research project Distribution of requests for Proposals (RFPs) and proposals Distribution of requests for Proposals (RFPs) and proposals 4 4

57Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the growing importance of scanner-based research. 5 5

58Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Scanner-Based Research A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy. 5 5

59Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning When Should Marketing Research be Conducted?  Where there is a high level of uncertainty  When value of research information exceeds the cost of generating the information 5 5

60Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain the concept of competitive intelligence. 6 6

61Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Competitive Intelligence An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. 6 6 On Line On Line

62Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Competitive Intelligence  Can help identify a competitor’s advantage  Can help determine how the competitor’s advantage was achieved 6 6

63Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Advantages of Competitive Intelligence  Predict changes in business relationships  Identify marketplace opportunities  Guard against threats  Forecast a competitor’s strategy  Discover new or potential competitors  Learn from the success or failure of others  Learn about new technologies and impact of government regulations 6 6

64Chapter 8 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Sources of Competitive Intelligence Internet Company Personnel Experts CI Consultants Government Agencies UCC Filings Suppliers Newspapers/Periodicals Yellow Pages Trade Shows 6 6