1. ELC 310
DAY 6
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2. Agenda Questions? Assignment 1 corrected Assignment 2 posted
Due September 26
Exam 1 on Sept 30
Chaps 1-5 of Strauss Text
10 Short Essays (2 per chapter)
You will have 70 minutes to complete exam
Open book, open notes
You should be working on your eMarketing Plans
Due Oct 28, Presentations on Oct 28
Discussion on Marketing Knowledge
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3. Assignment 1 recap S W O T Results generally good
I was looking for 4 things
A clearly articulated goal or objective
A properly prepared SWOT analysis
Strengths and weaknesses were internal
Opportunity and threats were external
A plan that that took in consideration the results of the SWOT analysis and met the goal and objective stated in part 1
Performance Metrics that allowed the student or an external entity to gauge the progress of the student as they implemented their plan to achieve their goal or objective.
Some general problems
Excessive wordiness—saying the same thing twice or many times
Less is more
Poorly organized (did not follow format)
Goal->SA(SWOT)->Strategy->Metrics
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4. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 6: Marketing Knowledge
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5. Question??? Define the following
Data
Information
Knowledge
Understanding
Wisdom
Where does learning (and teaching) fit??
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6. Chapter 6 Objectives After reading Chapter 6 you will be able to:
Identify the three main sources of data that e-marketers use to address research problems.
Discuss how and why e-marketers need to check the quality of research data gathered online.
Explain why the Internet is used as a contact method for primary research and describe the main Internet-based approaches to primary research.
Contrast client-side, server-side, and real-space approaches to data collection.
Highlight four important methods of analysis that e-marketers can apply to data warehouse information.
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7. The Purina Story
Nestle Purina PetCare Company wanted to know whether their web sites and online advertising increased off-line behavior.
Nestle developed 3 research questions:
Are our buyers using our branded Web sites?
Should we invest in other Web sites?
If so, where should we place the advertising?
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8. The Purina Story, cont.
They combined online and off-line shopping panel data and found that:
Banner clickthrough was low (0.06%).
31% of subjects who were exposed to both online and off-line advertising mentioned Purina.
The high exposure group mentioned Purina more than the low exposure group.
Home/health and living sites received the most visits from their customers.
Would you also have selected petsmart.com and about.com for Purina PetCare ads?
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9. Data Drives Strategy Organizations are drowning in data.
Marketing insight occurs somewhere between information and knowledge.
Purina, for example, sorts through hundreds of millions of pieces of data about 21.5 million consumers to make decisions.
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10. Data Drives Strategy Current problem for marketing decision makers
= Information overload.
Origin of data:
Survey results, product sales information, secondary data about competitors, and much more
Automated data gathering at Web sites, brick-and-mortar points of purchase, and all other customer touch points.
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11. Data Drives Strategy What to do with all the data?
Purina marketers built a roadmap for their Internet advertising strategy:
Data are collected from a myriad of sources,
Filtered into databases,
Turned into marketing knowledge,
Used to create marketing strategy.
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12. From Sources to Databases to Strategy (SDS Model)
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14. Terabytes of Corporate Data
One Terabyte = 1,099,511,627,776 bytes
The U.S. Library of Congress has claimed it contains approximately 20 terabytes of text.
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15. From Data to Decision: Purina
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16. Marketing Knowledge Management
Knowledge management is the process of managing the creation, use and dissemination of knowledge.
Data is the lubricant for a learning organization, and organizations are drowning in it.
This is an information technology manager’s problem, and e-marketers must determine how to glean insights from these billions of bytes.
Marketing insight occurs somewhere between information and knowledge:
Knowledge is more than a collection of information, but resides in the user,
People, not the Internet or computers, create knowledge; computers are simply learning enablers.
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17. Uses of Knowledge Management
Use in the Telecom Industry
Representative Firm
Scanner Check-Out Data Analysis
Call Volume Analysis
Equipment Sales Analysis
Customer Profitability Analysis
Cost and Inventory Analysis
Purchasing Leverage with Suppliers
Frequent-Buyer Program Management
AT&T
Ameritech
Belgacom
British Telecom
Telestra Australia
Telecom Ireland
Telecom Italia
Use in the Retail Industry
Sales Promotion Tracking
Inventory Analysis and Deployment
Price Reduction Modeling
Negotiating Leverage with Suppliers
Profitability Analysis
Product Selection for Markets
Wal-Mart
Kmart
Sears
Osco/Savon Drugs
Casino Supermarkets
W. H. Smith Books
Otto Versand Mail Order
Amazon.com
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18. The Learning Organization
Uses internal and external data to:
Quickly adapt to its changing environment
Creating organizational change to improve competitive position + employee satisfaction.
Recognizes the importance of:
Employee empowerment and development,
Cross-functional teams for brainstorming
Risk-taking for breakthrough ideas.
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19. The Learning Organization
Benefits from:
Improved product quality and innovation,
Better customer relations,
Shared visioning,
Process breakthrough improvements,
Stronger competitiveness through team effort.
Is a key concept in an organization because of information technology advances and the rapid growth of the Internet.
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20. The Learning Organization
One of the most important area in marketing learning
= the learning relationship.
The more marketers can learn about their customers, the better they can serve them with appropriate marketing mixes needs.
Example:
An American Airlines frequent flier can receive a short text message on her cell phone two hours before a flight with all flight information.
A step further = Would you like us to notify you this way for each flight you book with us?
American would be learning what the customer wants, confirming it, and then delivering it automatically.
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21. The Marketing Information System
Marketers manage knowledge through a marketing information system (MIS).
Many firms store data in databases and data warehouses.
The Internet and other technologies have facilitated data collection.
Secondary data provides information about competitors, consumers, the economic environment, etc.
Marketers use the Net and other technologies to collect primary data about consumers.
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22. Sources of data: Internal records
Accounting, finance, production and marketing personnel collect and analyze data.
Nonmarketing data, such as sales and advertising spending
Sales force data
Customer characteristics and behavior
Universal product codes
Tracking of user movements through web pages
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23. A hypothetical scenario for a computer company that is learning from its customers as a whole and using the information to improve products.
E-Marketers Learn From Customers
Source: Adaptation of ideas from Brian Caulfield (2001), “Facing up to CRM” at
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24. Secondary data
Can be collected more quickly and less expensively than primary data.
Secondary data may not meet e-marketer’s information needs.
Data were gathered for a different purpose.
Quality of secondary data may be unknown.
Data may be old.
Marketers continually gather business intelligence by scanning the macroenvironment.
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25. Public and Private Data Sources
Publicly generated data
U.S. Patent Office
American Marketing Association
Privately generated data
Forrester Research
Nielsen/NetRatings
Online databases
Secondary data help marketers understand:
Competitors,
Consumers,
The economic environment,
Political and legal factors,
Technological forces,
Other factors in the macro-environment affecting an organization.
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26. Public Sources of Data in the U.S.
Web site
Information
Stat-USA
U.S. Department of Commerce source of international trade data.
U.S. Patent Office
Provides Trademark and Patent Data for Businesses.
World Trade Organization
World Trade Data.
International Monetary Fund
Provides information on many social issues and projects.
Securities and Exchange Commission
Edgar database provides financial data on U.S. public corporations.
Small Business Administration
Features information and links for small business owners.
University of Texas at Austin
Ad World with lots of links in the ad industry.
Federal Trade Commission
Shows regulations and decisions related to consumer protection and anti-trust laws.
U.S. Census
Provides statistics and trends about the U.S. population.
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27. Sampling of Sources of Privately Generated Data in the U.S.
Web site
Information
AC Nielsen Corporation
Television audience, supermarket scanner data and more.
The Gartner Group
Specializes in e-business and usually presents highlights of its latest findings on the Web site.
Information Resources, Inc.
Supermarket scanner data and new product purchasing data.
Arbitron
Local-market and Internet radio audience data.
The Commerce Business Daily
Lists of government requests for proposals online.
Simmons Market Research Bureau
Media and ad spending data.
Dun & Bradstreet
Database on more than 50 million companies worldwide.
Dialog
library.dialog.com
Access to ABI/INFORM, a database of articles from 800+ publications.
Hoovers Online
Business descriptions, financial overviews, and news about major companies worldwide.
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28. Finding Economic Data http://www.economagic.com/
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29. Primary Data
Primary data = information gathered for the first time to solve a particular problem.
When secondary data are not available managers may decide to collect their own information.
They are more expensive and time-consuming to gather than secondary data.
They are current and more relevant to the marketer’s specific problem.
They are proprietary = unavailable to competitors.
Each primary data collection method can provide important information, as long as e-marketers understand the limitations. Remember that Internet research can only collect information from people who use the Internet, which leaves out a huge portion of the population.
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30. Source 3: Primary Data Electronic sources of primary data collection:
The Internet:
Focus groups, observation, in-depth interviews (IDI), and survey research.
Online panels: popular survey research method _ single-source research.
Real-time profiling at Web sites and computer client-side or server-side automated data collection.
The real-space
Refers to technology-enabled approaches to gather information offline that is subsequently stored and used in marketing databases.
Techniques = bar code scanners and credit card terminals at brick-and-mortar retail stores, computer entry by customer service reps while talking on the telephone with customers.
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31. Firms Using Online Primary Research
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32. 5 Steps for Primary Research
Problem
Plan
Data
Collection
Analysis
Distribute
Results
Primary Research Steps
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33. Primary Research Steps
Research problem. Specificity is vital.
Research plan.
Research approach. Choose from experiments, focus groups, observation techniques, in-depth interviews, and survey research, or nontraditional real-time and real-space techniques.
Sample design. Select the sample source and number of desired respondents.
Contact method. Telephone, mail, in person, via the Internet.
Instrument design. For survey = a questionnaire. For other methods = a protocol to guide the data collection.
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34. Primary Research Steps
Data collection. Gather the information according to plan.
Data analysis: Analyze the results in light of the original problem. Use statistical software packages for traditional survey data analysis or data mining to find patterns and other information in databases.
Distribute finding / add to the MIS. Research data might be placed in the MIS database and be presented in written or oral form to marketing managers.
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35. Some typical e-marketing research problems that electronic data can help solve.
Online Retailers
Web Sites
Improve online merchandising
Forecast product demand
Test new products
Test various price points
Test co-brand and partnership effectiveness
Measure affiliate program effectiveness
Pages viewed most often
Increase site “stickiness” (stay longer)
Test site icons and organization
Path users take through the site—is it efficient?
Site visit overall satisfaction
Customers and Prospects
Promotions
Identify new market segments
Test shopping satisfaction
Profile current customers
Test site customization techniques
Test advertising copy
Test new promotions
Check coupon effectiveness
Measure banner ad click-through
Typical Research Problems for E-Marketers
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36. Online Research Advantages & Disadvantages
Can be fast and inexpensive.
Surveys may reduce data entry errors.
Respondents may answer more honestly and openly.
Disadvantages
Sample representativeness.
Measurement validity.
Respondent authenticity.
Researchers are using online panels to combat sampling and response problems.
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37. Other Technology-Enabled Approaches
Client-side Data Collection
Cookies
Use PC meter with panel of users to track the user clickstream.
Server-side Data Collection
Data log software
Real-time profiling tracks users’ movements through a web site.
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38. Real-Space Data Collection, Storage, and Analysis
Offline data collection may be combined with online data.
Transaction processing databases move data from other databases to a data warehouse.
Data collected can be analyzed to help make marketing decisions.
Data Mining
Customer Profiling
Recency, Frequency, Monetary (RFM) Analysis
Report Generating
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39. Marketing Databases and Data Warehouses
Regardless of whether data are collected online or offline, they are moved to various marketing databases.
Product databases = product features, prices, and inventory levels.
Customer databases = customer characteristics and behavior.
Transaction processing databases are important for moving data from other databases into a data warehouse.
Data warehouses:
Store entire organization’s historical data.
Designed specifically to support analyses necessary for decision making.
The data in a warehouse are separated into more specific subject areas (called data marts) and indexed for easy use.
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40. Real-Space Data Collection and Storage Example
Customer Database
Data Warehouse
Product Database
Transaction Database
UPC Scanner
Real-Space Data Collection and Storage Example
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41. Data Analysis and Distribution
Data collected from all customer touch points are:
Stored in the data warehouse,
Available for analysis and distribution to marketing decision makers.
Analysis for marketing decision making:
Data mining = extraction of hidden predictive information in large databases through statistical analysis. Here, marketers don’t need to approach the database with any hypotheses other than an interest in finding patterns among the data.
Patterns uncovered by marketers help them to:
Refine marketing mix strategies,
Identify new product opportunities,
Predict consumer behavior.
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42. Data Analysis and Distribution
Customer profiling = uses data warehouse information to help marketers understand the characteristics and behavior of specific target groups.
Understand who buys particular products,
How customers react to promotional offers and pricing changes,
Select target groups for promotional appeals,
Find and keep customers with a higher lifetime value to the firm,
Understand the important characteristics of heavy product users,
Direct cross-selling activities to appropriate customers;
Reduce direct mailing costs by targeting high-response customers.
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43. Data Analysis and Distribution
RFM analysis (recency, frequency, monetary) = scans the database for three criteria.
When did the customer last purchase (recency)?
How often has the customer purchased products (frequency)?
How much has the customer spent on product purchases (monetary value)?
=> Allows firms to target offers to the customers who are most responsive, saving promotional costs and increasing sales.
Report generators:
automatically create easy-to-read, high-quality reports from data warehouse information on a regular basis.
Possible to specify information that should appear in these automatic reports and the time intervals for distribution.
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44. Knowledge Management Metrics
Marketing research is not cheap:
Need to weigh the cost of gaining additional information against the value of potential opportunities or the risk of possible errors from decisions made with incomplete information.
Storage cost of all those terabytes of data coming from the Web.
Two metrics are currently in widespread use:
ROI. Companies want to know:
Why they should save all those data.
How will they be used, and will the benefits in additional revenues or lowered costs return an acceptable rate on the storage space investment?
Total Cost of Ownership (TCO). Includes:
Cost of hardware, software, and labor for data storage.
Cost savings by reducing Web server downtime and reduced labor requirements.
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