1. Chapter 9: Decision Support Systems and Marketing Research Prepared by Amit Shah, Frostburg State University Designed by Eric Brengle, B-books, Ltd. Copyright 2010 by Cengage Learning Inc. All Rights Reserved1

2. Learning Outcomes 2 Explain the concept and purpose of a marketing decision support system Define marketing research and explain its importance to marketing decision making Describe the steps involved in conducting a marketing research project LO 1 LO 2 LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

3. Learning Outcomes 3 Discuss the profound impact of the Internet on marketing research Discuss the growing importance of scanner-based research Explain the concept of competitive intelligence LO 5 LO 6 LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

4. Marketing Decision Support Systems 4 Explain the concept and purpose of a marketing decision support system. LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

5. Marketing Decision Support Systems 5 An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

6. DSS System Characteristics 6 Interactive Flexible Discovery-Oriented Accessible Copyright 2010 by Cengage Learning Inc. All Rights Reserved

7. Marketing Decision Support Systems 7 Database Marketing - 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

8. Review Learning Outcome Marketing Decision Support Systems 8 LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

9. The Role of Marketing Research 9 Define marketing research and explain its importance to marketing decision making. LO 2 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

10. The Role of Marketing Research 10 The process of planning, collecting, and analyzing data relevant to a marketing decision. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

11. Marketing Research Studies 11 Products Advertising Prices Packages Names and Logos Services Buying habits Colors Uses Awareness Familiarity New concepts Traffic patterns Wants Needs Politics Copyright 2010 by Cengage Learning Inc. All Rights Reserved

12. The Role of Marketing Research 12 Diagnostic Predictive Descriptive  Gathering and presenting factual statements  Explaining data  “What if?” Copyright 2010 by Cengage Learning Inc. All Rights Reserved

13. Management Uses of Marketing Research 13  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 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

14. Review Learning Outcome Marketing Research and Its Importance 14 LO 2 Why marketing research?  Improve quality of decision making  Trace problems  Focus on keeping existing customers  Understand changes in marketplace Copyright 2010 by Cengage Learning Inc. All Rights Reserved

15. Steps in a Marketing Research Project 15 Describe the steps involved in conducting a marketing research project. LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

16. The Marketing Research Process Collect Data Collect Data Specify Sampling Procedure Specify Sampling Procedure Plan Design/ Primary Data Plan Design/ Primary Data Identify the Problem Identify the Problem Analyze Data Analyze Data Prepare/ Present Report Prepare/ Present Report Follow Up 1 2 3 4 5 6 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

17. Marketing Research 17 Marketing Research Problem Marketing Research Problem Marketing Research Objective Marketing Research Objective Management Decision Problem Management Decision Problem 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

18. Secondary Data 18 Data previously collected for any purpose other than the one at hand. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

19. Sources of Secondary Data 19 Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information Copyright 2010 by Cengage Learning Inc. All Rights Reserved

20. 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 20 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

21. 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 21 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

22. Planning the Research Design 22 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ? Copyright 2010 by Cengage Learning Inc. All Rights Reserved

23. Primary Data 23 Information collected for the first time. Can be used for solving the particular problem under Investigation. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

24. Advantages of Primary Data Answers a specific research question Data are current Source of data is known Secrecy can be maintained 24 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

25. Disadvantages of Primary Data Expensive “Piggybacking” may confuse respondents Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews 25 Disadvantages are usually offset by the advantages of primary data. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

26. Survey Research 26 The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

27. Forms of Survey Research 27 Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews Copyright 2010 by Cengage Learning Inc. All Rights Reserved

28. Forms of Survey Research 28 Mall Intercept Interview- Survey research method that involves interviewing people in the common areas of shopping malls. Executive Interview- A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

29. Forms of Survey Research 29 Focus Groups - Seven to ten people who participate in a group discussion led by a moderator. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

30. Questionnaire Design 30 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

31. Questionnaire Design 31 Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question Copyright 2010 by Cengage Learning Inc. All Rights Reserved

32. Observation Research 32 A research method that relies on four types of observation: people watching people people watching an activity machines watching people machines watching an activity Copyright 2010 by Cengage Learning Inc. All Rights Reserved

33. 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 33 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

34. Ethnographic Research 34 The study of human behavior in its natural context; involves observation of behavior and physical setting. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

35. The Sampling Procedure 35 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

36. Sampling Procedure 36 Universe Sample Probability Samples Non-Probability Samples Copyright 2010 by Cengage Learning Inc. All Rights Reserved

37. Types of Samples 37 Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample Copyright 2010 by Cengage Learning Inc. All Rights Reserved

38. Probability Samples 38 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

39. Nonprobability Samples 39 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

40. Types of Errors 40 Measurement Error Measurement 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 Sampling Error Sampling Error Error when a sample somehow does not represent the target population. Frame Error Frame Error 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. Random Error Random Error 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

41. Field Service Firms Focus group facilities Mall intercept locations Test product storage Kitchen facilities 41 Provide: Copyright 2010 by Cengage Learning Inc. All Rights Reserved

42. Analyzing the Data 42 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. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

43. Preparing and Presenting the Report Concise statement of the research objectives Explanation of research design Summary of major findings Conclusion with recommendations 43 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

44. 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? 44 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

45. Review Learning Outcome 45 LO 3 Steps in a Marketing Research Project Copyright 2010 by Cengage Learning Inc. All Rights Reserved

46. Impact of the Internet on Marketing Research 46 Discuss the profound impact of the Internet on marketing research. LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

47. 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 47 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

48. Advantages of Internet Surveys 48 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 Dramatically reduced costs Rapid development, real-time reporting Rapid development, real-time reporting Copyright 2010 by Cengage Learning Inc. All Rights Reserved

49. Uses of the Internet by Marketing Researchers 49 Other types of marketing research Conduct focus groups Administer surveys Copyright 2010 by Cengage Learning Inc. All Rights Reserved

50. Process for Online Focus Groups 50 1.Build a database of respondents via Web site screening questionnaire 2.Identify qualified individuals via e-mail 3.Develop a discussion guide 4.Moderator runs group by typing in questions online for all to see 5.Environment is similar to a chat room 6.Firm captures the complete text of the focus group Copyright 2010 by Cengage Learning Inc. All Rights Reserved

51. Types of Online Focus Groups 51 Real-time online focus groups Time-extended online focus groups Copyright 2010 by Cengage Learning Inc. All Rights Reserved

52. Advantages of Online Focus Groups Speed Cost-effectiveness Broad geographic scope Accessibility Honesty 52 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

53. Role of Consumer Generated Media in Marketing Research CGM is media which consumers generate themselves and share among themselves Companies can identify the most influential bloggers and learn exactly what they are saying (and how they are saying it). 53 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

54. Other Uses of the Internet by Marketing Researchers 54 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 online analysis Data management and online analysis Collaboration between client and research supplier Distribution of requests for proposals (RFPs) and proposals Distribution of requests for proposals (RFPs) and proposals Copyright 2010 by Cengage Learning Inc. All Rights Reserved

55. Review Learning Outcome Impact of the Internet on Marketing Research 55 LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

56. Scanner-Based Research 56 Discuss the growing importance of scanner-based research. LO 5 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

57. Scanner-Based Research 57 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 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

58. When Should Marketing Research Be Conducted? 58  Where there is a high level of uncertainty  When value of research information exceeds the cost of generating the information Copyright 2010 by Cengage Learning Inc. All Rights Reserved

59. Review Learning Outcome Scanner-Based Research 59 LO 5 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 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

60. Competitive Intelligence 60 Explain the concept of competitive intelligence. LO 6 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

61. Competitive Intelligence 61 An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

62. Sources of Competitive Intelligence 62 Internet Company Salespeople Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows Copyright 2010 by Cengage Learning Inc. All Rights Reserved

63. Review Learning Outcome Competitive Intelligence 63 LO 6 CI Part of a sound marketing strategy Helps companies respond to competitive threats Helps reduce unnecessary costs Copyright 2010 by Cengage Learning Inc. All Rights Reserved