1. Decision Support Systems and Marketing Research
Lamb, Hair, McDaniel
Chapter 8 Decision Support Systems and Marketing Research
CHAPTER 9
Decision Support Systems and Marketing Research
Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.

2. Chapter 8 Decision Support Systems and Marketing Research
Learning Outcomes
LO 1 Explain the concept and purpose of a marketing decision support system
LO 2 Define marketing research and explain its importance to marketing decision making
LO 3 Describe the steps involved in conducting a marketing research project

3. Chapter 8 Decision Support Systems and Marketing Research
Learning Outcomes
LO 4 Discuss the profound impact of the Internet on marketing research
LO 5 Discuss the growing importance of scanner-based research
LO 6 Explain when marketing research should be conducted
LO 7 Explain the concept of competitive intelligence

4. Marketing Decision Support Systems
Chapter 8 Decision Support Systems and Marketing Research
Marketing Decision Support Systems
Explain the concept and purpose of a marketing decision support system
Notes:
Marketing decision making relies on accurate and timely information. Good information is used to maximize sales, to use scarce company resources efficiently, and to prepare and adjust marketing plans.
The system used for gathering marketing information is called a marketing decision support system.
LO1

5. Marketing Decision Support Systems
Chapter 8 Decision Support Systems and Marketing Research
Marketing Decision Support Systems
An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.
Characteristics:
Interactive
Flexible
Discovery Oriented
Accessible
LO1

6. Marketing Decision Support Systems
Chapter 8 Decision Support Systems and Marketing Research
Marketing Decision Support Systems
The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.
The key tool for successful one-to-one marketing.
Database Marketing
Notes:
The fastest-growing use of DSSs is for database marketing. It is usually the key for successful one-to-one marketing, which relies on specific market information.
LO1

7. The Role of Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
The Role of Marketing Research
Define marketing research and explain its importance to marketing decision making
LO2

8. The Role of Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
The Role of Marketing Research
Marketing Research
The process of planning, collecting, and analyzing data relevant to a marketing decision.
Notes:
Marketing research plays a key role in the marketing system. It provides data on the effectiveness of the marketing mix and insights for necessary changes.
Marketing research is a main data source for management information systems and DSS.
LO2

9. Marketing Research Studies
LO2
Chapter 8 Decision Support Systems and Marketing Research
Marketing Research Studies
Products
Advertising
Prices
Packages
Names and Logos
Services
Buying habits
Colors
Uses
Awareness
Familiarity
New concepts
Traffic patterns
Wants
Needs
Politics
Notes:
About $7 billion is spent each year on marketing research in the U.S. Studies include the listings on this slide.

10. The Role of Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
The Role of Marketing Research
Diagnostic
Predictive
Descriptive
Gathering and presenting factual statements
Explaining data
“What if?”
Notes: Marketing research has three roles: descriptive, diagnostic, and predictive.
Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product?
Diagnostic: What was the impact on sales after a change in the package design?
Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a marketing decision?
LO2

11. Management Uses of Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
Management Uses of Marketing Research
Improve the quality of decision making
Trace problems
Focus on keeping existing customers
Understand the marketplace
Alert them to marketplace
trends
Gauge the value of goods
and services, and the level
of customer satisfaction
Beyond the Book
NOTE: Supplemental content – not in book.
LO2

12. The Importance of Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
The Importance of Marketing Research
Why marketing research?
Improve quality of decision making
Trace problems
Focus on keeping existing customers
Understand changes in marketplace
LO2

13. Steps in a Marketing Research Project
Chapter 8 Decision Support Systems and Marketing Research
Steps in a Marketing Research Project
Describe the
steps involved
in conducting
a marketing
research project
Notes:
The scope of a marketing research project may range from several hundred dollars to millions of dollars. In any case, the same general research process should be followed.
LO3

14. The Marketing Research Process
Chapter 8 Decision Support Systems and Marketing Research
The Marketing Research Process 1
Collect
Data
Specify
Sampling
Procedure
Plan Design/
Primary Data
Define
Problem
Analyze
Prepare/
Present
Report
Follow Up 2 3 4 5 6
Notes:
Exhibit 8.1 traces the steps in the marketing research process.
The research process begins with the recognition of a marketing problem or opportunity. As changes occur in the firm’s external environment, marketing managers must decide on changes to the existing marketing mix. 7
LO3

15. Sources of Secondary Data
Chapter 8 Decision Support Systems and Marketing Research
Sources of Secondary Data
Government Agencies
Trade and Industry Associations
Business Periodicals
News Media
Internal Corporate Information
Online
Coca-Cola Store
When you are asked for your opinion on the Coke Store Web site, is Coca-Cola doing marketing research, or gathering information for a DSS? Read the whole survey before deciding. Which did you pick and why?
LO3

16. Advantages of Secondary Data
Chapter 8 Decision Support Systems and Marketing Research
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
LO3

17. Disadvantages of Secondary Data
Chapter 8 Decision Support Systems and Marketing Research
Disadvantages of Secondary Data
May not give adequate detailed information
May not be on target with the research problem
Quality and accuracy of data may pose a problem
LO3

18. The New Age of Secondary Information: The Internet
Chapter 8 Decision Support Systems and Marketing Research
The New Age of Secondary Information: The Internet 1 2 3 4 5
Analyze your topic
Test run a word or phrase in a search engine
Learn as you go and vary your approach
Don’t bog down in strategy that doesn’t work
Return to earlier steps better informed
Notes:
Before the availability of the Internet’s widely accessible information, collection of secondary information was tedious and boring, often requiring visits to the library or communication with government agencies, trade associations or other secondary data providers.
By typing a description of the desired secondary data into a Web browser, the Internet may provide a wide range of information. However, keep in mind that the Internet is a self-publishing medium and the information quality may vary.
LO3

19. Marketing Research Aggregators
Provide small- to medium-sized companies with information they could not afford to research on their own
Increases the revenue generated by large, expensive reports by slicing and repackaging them
LO3

20. Planning the Research Design
Chapter 8 Decision Support Systems and Marketing Research
Planning the Research Design
Which research questions must be answered?
How and when will data be gathered?
How will the data be analyzed? ?
LO3

21. Chapter 8 Decision Support Systems and Marketing Research
Primary Data
Information collected for the first time. Used for solving the particular problem under investigation.
Advantages:
Answers a specific research question
Data are current
Source of data is known
Secrecy can be maintained
Notes:
The main advantage of primary data is that they will answer a specific research question that secondary data cannot answer.
Primary data are current and the source of data is known.
Moreover, the information is proprietary.
LO3

22. Disadvantages of Primary Data
Chapter 8 Decision Support Systems and Marketing Research
Disadvantages of Primary Data
Expensive
“Piggybacking” may confuse respondents
Quality declines if interviews are lengthy
Reluctance to participate in lengthy interviews
Disadvantages are usually offset by the advantages of primary data.
Notes:
The cost of primary data may range from a few thousand dollars for a limited survey to several million for a nationwide study.
To save money, firms may cut back on the number of interviews, or piggyback studies by gathering data on two different projects using one questionnaire.
LO3

23. Survey Research LO3 Survey Research
Chapter 8 Decision Support Systems and Marketing Research
Survey Research
Survey Research
The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes.
LO3

24. Forms of Survey Research
Chapter 8 Decision Support Systems and Marketing Research
Forms of Survey Research
Focus Groups
Executive Interviews
Mail Surveys
Telephone Interviews
Mall Intercept Interviews
In-Home Interviews
Notes:
In home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool.
Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population. However, probing is possible.
Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application. The federal “Do Not Call” law does not apply to survey research.
Mail Surveys: Benefits are the low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates. Consequently, the resulting sample may not represent the surveyed population. However, mail panels, consisting of a sample of households recruited to participate for a given period, yield response rates of 70 percent.
Executive interviews: Survey involves businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents.
Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews.
LO3

25. Questionnaire Design LO3 Open-Ended Question Closed-Ended
Chapter 8 Decision Support Systems and Marketing Research
Questionnaire Design
Open-Ended
Question
Closed-Ended
Scaled- Response
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.
A closed-ended question
designed to measure the intensity
of a respondent’s answer.
Notes:
Questionnaires contain three basic types of questions:
Open-ended questions
Closed-ended questions
Scaled-response questions.
LO3

26. Beyond the Book Questionnaire Design LO3
Chapter 8 Decision Support Systems and Marketing Research
Questionnaire Design
On the other hand, unless the researcher designs the closed-ended question very carefully, an important choice may be omitted.
Closed-ended and scaled-response questions are easier to tabulate than open-ended questions because response choices are fixed.
Beyond the Book
As mentioned in the slide, unless a researcher designs closed-ended questions very carefully, important choices may be omitted.
For example, suppose a food study asked this question: “Besides meat, which of the following items do you normally add to a taco that you prepare at home?”
A varied selection is provided. But suppose a respondent answers by saying, “I usually add a green, avocado-tasting hot sauce” or “I cut up a mixture of lettuce and spinach.”
How would you code these replies? As you can see, the questionnaire needs an “other” category.
LO3
NOTE: Supplemental content – not in book.

27. Reasonable terminology
Chapter 8 Decision Support Systems and Marketing Research
Questionnaire Design
Clear and concise
No ambiguous language
Unbiased
Reasonable terminology
Only one question
Online
CreateSurvey.com
Design a marketing questionnaire to post on your class Web site using the tools offered by Create Survey. Visit the demo polls on the site for ideas and tips.
Online
LO3

28. Observation Research LO3 Observation Research
Chapter 8 Decision Support Systems and Marketing Research
Observation Research
Observation Research
A research method that relies on three types of observation:
people watching people
people watching an activity
machines watching people
Notes:
Observation research is the systematic process of recording the behavioral patterns of people, objects, and occurrences without questioning them.
LO3

29. Observational Situations
Chapter 8 Decision Support Systems and Marketing Research
Observational Situations
Situation
People watching people
People watching phenomena
Machines watching people
Machines watching phenomena
Example
Mystery shoppers in a supermarket
Observer
at an intersection counting traffic
Video cameras recording behavior
Traffic-counting machine monitoring traffic flow
Notes:
Observation research depends on watching what people do. It may be conducted by human observers or machines.
LO3

30. Ethnographic Research
Chapter 8 Decision Support Systems and Marketing Research
Ethnographic Research
Ethnographic Research
The study of human behavior in its natural context; involves observation of behavior and physical setting.
Notes:
Ethnographic research comes from the field of anthropology, and is becoming popular in commercial marketing research. Ethnographers directly observe the population they are studying to gain richer insights into the culture and behavior of people.
LO3

31. Virtual Shopping
Allows customers to “shop” with realistic complexity and variety
Tests can be altered quickly
Computer automatically collects data
Virtual Grocery Store
LO3

32. Non-Probability Samples
Chapter 8 Decision Support Systems and Marketing Research
Sampling Procedure
Universe
Sample
Probability Samples
Non-Probability Samples
Notes:
Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Not all possible users of a new product can be interviewed, therefore a firm must select a sample of the larger population.
The population or universe must first be defined. Then it is determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed.
LO3

33. Non-Probability Samples
Chapter 8 Decision Support Systems and Marketing Research
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
Notes:
Exhibit 8.4 describes each of these types of samples.
LO3

34. Probability Samples LO3 Probability Sample Random Sample
Chapter 8 Decision Support Systems and Marketing Research
Probability Samples
Probability
Sample
A sample in which every element in
the population has a known statistical likelihood of being selected.
Random
Sample
A sample arranged so that every element of the population has an equal chance of being selected.
Notes:
The most desirable feature of a probability sample is that statistical rules can be used to ensure that the sample represents the population.
One type of probability sample is the random sample—where every element of the population has an equal chance of being selected as part of the sample.
LO3

35. Nonprobability Samples
Chapter 8 Decision Support Systems and Marketing Research
Nonprobability Samples
Nonprobability
Sample
Any sample in which little or
no attempt is made to get a representative cross-section
of the population.
Convenience
Sample
A form of nonprobability sample
using respondents who are
convenient or readily
accessible to the researcher.
Notes:
A nonprobability sample is a sample where little or no attempt is made to get a representative cross section of the population.
A common form of nonprobability sample is the convenience sample, a selection of convenient respondents such as employees, relatives, or friends. Because of their lower cost, nonprobability samples are the basis of much marketing research.
LO3

36. Types of Errors LO3 Error when there is a difference Measurement
Chapter 8 Decision Support Systems and Marketing Research
Measurement
Error
Error when there is a difference
between the information desired and the information provided by research
Sampling
Error
Error when a sample somehow does not represent the target population.
Frame
Error
Error when a sample drawn from a
population differs from the
target population.
Notes: Error is common to all surveys, yet it is often not reported or is underreported. When errors are ignored, misleading results can result in poor information and bad decisions.
Whenever a sample is used in marketing research, major types of errors may occur: measurement error and sampling error.
Frame error arises if the sample drawn from a population differs from the target population.
Random error occurs when the selected sample is an imperfect representation of the overall population.
Random
Error
Error because the selected sample is
an imperfect representation of
the overall population.
LO3

37. Field Service Firms provide:
Chapter 8 Decision Support Systems and Marketing Research
Collecting the Data
Field Service Firms provide:
Focus group facilities
Mall intercept locations
Test product storage
Kitchen facilities
Retail audits
Notes:
Most primary data is collected by marketing research field service firms.
Field service firms conduct interviews, provide focus-group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products.
LO3

38. Analyzing the Data LO3 Cross- Tabulation
Chapter 8 Decision Support Systems and Marketing Research
Analyzing the Data
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.
Notes:
After data is collected, the next step is to analyze data. The purpose of data analysis is to interpret and draw conclusions from the collected data.
Data is organized by one-way frequency counts, cross-tabulations, and sophisticated statistical analysis.
One-way frequency counts record the responses to a question. They provide a general picture of the study’s results.
A cross-tabulation looks at the associations between certain responses, such as association between gender and product choice.
LO3

39. Preparing and Presenting the Report
Chapter 8 Decision Support Systems and Marketing Research
Preparing and Presenting the Report
Concise statement of the research objectives
Explanation of research design
Summary of major findings
Conclusion with recommendations
Notes:
After data analysis is completed, the report is prepared, and conclusions and recommendations are communicated to management.
The report should be tailored to the audience, beginning with a statement of research objectives, followed by a brief explanation of the research design. A summary of major findings is next, followed by a conclusion with recommendations.
LO3

40. Following Up LO3 Were the recommendations followed?
Chapter 8 Decision Support Systems and Marketing Research
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?
Notes:
The final step in the marketing research process is to follow up. The researcher should determine why management did or did not carry out the recommendations of the report.
LO3

41. Impact of the Internet on Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
Impact of the Internet on Marketing Research
Discuss the profound impact of the Internet on marketing research
LO4

42. Impact of the Internet LO4 Allows better and faster decision making
Chapter 8 Decision Support Systems and Marketing Research
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 tracking research easier
Slashes labor- and time-intensive research activities and costs
Notes:
Online Internet marketing research is being used by 88 percent of U.S. research firms.
The reasons for its success are shown on this slide.
LO4

43. Advantages of Internet Surveys
Chapter 8 Decision Support Systems and Marketing Research
Advantages of Internet Surveys
Contact with the
hard-to-reach
Improved respondent
participation
Personalized questions
and data
Reduced costs
Rapid development,
Real-time reporting
Notes:
Rapid development, real-time reporting: Survey results can be tabulated and broadcast in a much shorter time frame.
Reduced costs: Costs can be cut by 25 to 40 percent with results in half the time required for traditional telephone surveys.
Personalized questions and data: Personalization allows relevance to each respondent’s own situation, thus speeding the response process.
Improved respondent participation: Internet surveys take half as much time to complete as phone interviews and can be accomplished at the respondent’s convenience.
Contact with the hard-to-reach: Doctors, management, and high-income professionals are among the most surveyed and the most difficult to reach. Many of these groups are well represented online.
LO4

44. Uses of the Internet by Marketing Researchers
Chapter 8 Decision Support Systems and Marketing Research
Uses of the Internet by Marketing Researchers
Other types of marketing research
Conduct focus groups
Administer surveys
Online
Greenfield On-line
Find out how online focus groups work by signing up to be a participant. Check out some of Greenfield’s online surveys in the Survey Center.
Online
LO4

45. Methods of Collecting Online Surveys
Web Survey Systems
Survey Design and Web Hosting Sites
Online Panel Providers
LO4

46. Process for Online Focus Groups
Chapter 8 Decision Support Systems and Marketing Research
Process for Online Focus Groups
Build a database of respondents via Web site screening questionnaire
Identify qualified individuals via
Develop a discussion guide
Moderator runs group by typing in questions online for all to see
Environment is similar to a chat room
Firm captures the complete text of the focus group
LO4

47. Types of Online Focus Groups
Chapter 8 Decision Support Systems and Marketing Research
Types of Online Focus Groups
Real-time online focus groups
Time-extended online focus groups
Notes:
Real-time online focus groups are live, interactive sessions with four to six participants and a moderator in a chat room format. The session is no longer than 45 to 50 minutes.
Time-extended online focus groups follow a message board format and usually last five to ten days. The 15 to 20 participants must comment at least 2-3 times per day and spend 15 minutes a day logged in to the discussion. This format translates into richer content and deeper insights.
LO4

48. Advantages of Online Focus Groups
Chapter 8 Decision Support Systems and Marketing Research
Advantages of Online Focus Groups
Speed
Cost-effectiveness
Broad geographic scope
Accessibility
Honesty
Do online focus groups offer any advantages over the traditional variety?
*In addition to savings on travel, online focus groups often can be accomplished faster than traditional groups because respondents are recruited from online panel members who are qualified to match research criteria.
*They completely eliminate the high cost of travel and lodging for several observers,
*They provide a way to achieve broad geographical dispersion within each group,
*Space, time, and location are no barriers to real-time communication,
*They offer a quick, convenient, cost-effective way to talk to a wide variety of people simultaneously,
*They promote more direct, honest answers because anonymity virtually eliminates "the peer pressure" often associated with face-to-face groups.
LO4

49. Web Community Research
A carefully selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation.
Web communities:
Engage customers
Achieve customer-derived innovations
Establish brand advocates
Offer real-time results
LO4

50. Role of Blogs in Marketing Research
Chapter 8 Decision Support Systems and Marketing Research
Role of Blogs in Marketing Research
Refined technologies allow companies to mine data available in Internet blogs.
Companies can identify the most influential bloggers and learn exactly what they are saying (and how they are saying it).
Notes:
In addition to the Internet uses shown on this slide, blogs are being used. Products, such as BlogPulse, monitors keywords and phrases, detects authors’ sentiments, classifies data in terms of relevance, and uncovers specific facts and data points about products or services.
Another company offering blog monitoring is 3iYing.
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51. Other Uses of the Internet by Marketing Researchers
Chapter 8 Decision Support Systems and Marketing Research
Other Uses of the Internet by Marketing Researchers
Viewing of presentations of
marketing research surveys
Publication and distribution
of reports
Data management and
online analysis
Collaboration between client and research supplier
Distribution of requests for
proposals (RFPs) and proposals
LO4

52. Scanner-Based Research
Chapter 8 Decision Support Systems and Marketing Research
Scanner-Based Research
Discuss the growing importance of
scanner-based research
LO5

53. Scanner-Based Research
Chapter 8 Decision Support Systems and Marketing Research
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.
BehaviorScan
InfoScan
Panel information from
Specific groups of people,
enables researchers to manipulate variables and see real results
Aggregate consumer information on all bar-coded products
Notes:
Scanner-based research is used for gathering information by monitoring the marketing mix and purchase behavior of a single group of respondents.
The two major scanner-based suppliers are Information Resources, Inc. and the A.C. Nielson Company. IRI’s first product is called BehaviorScan, which uses assigned ID cards to track grocery and drugstore purchases of household panel participants.
InfoScan is IRI’s tracking service for consumer goods. Data are collected weekly from more than 32,000 supermarkets, drugstores, and mass merchandisers.
LO5

54. Scanner-Based Research
BehaviorScan
With such a measure of household purchasing, it is possible to manipulate marketing variables, such as television advertising or consumer promotions, or to introduce a new product and analyze real changes in consumer buying behavior.
InfoScan
Retail sales, detailed consumer purchasing information (including measurement of store loyalty and total grocery basket expenditures), and promotional activity by manufacturers and retailers are monitored and evaluated for all bar-coded products.
Data are collected weekly from more than 34,000 supermarkets, drugstores, and mass merchandisers.
LO5

55. Competitive Intelligence
Chapter 8 Decision Support Systems and Marketing Research
Competitive Intelligence
Explain when marketing research should be conducted
LO6

56. When Should Marketing Research Be Conducted?
Chapter 8 Decision Support Systems and Marketing Research
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
LO5

57. Competitive Intelligence
Chapter 8 Decision Support Systems and Marketing Research
Competitive Intelligence
Explain the concept
of competitive intelligence
LO6

58. Competitive Intelligence
Chapter 8 Decision Support Systems and Marketing Research
Competitive Intelligence
An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.
Competitive Intelligence
Online
Society for Competitive Intelligence Professionals (SCIP)
Find out more about competitive intelligence at the SCIP Web site. Research a career in CI by checking out the job marketplace at SCIP.
Online
LO6

59. Sources of Competitive Intelligence
LO6
Chapter 8 Decision Support Systems and Marketing Research
Sources of Competitive Intelligence
Internet
Company Salespeople
Experts
CI Consultants
Government Agencies
UCC Filings
Suppliers
Periodicals
Yellow Pages
Trade Shows