1. Prentice Hall, Copyright 2009 1 Managing Marketing Information to Gain Customer Insights Chapter 4 Next Exit

2. 4-2 2 Prentice Hall, Copyright 2009 Rest Stop: Previewing the Concepts 1. Explain the importance of information in gaining insights about the marketplace and customers. 2. Define the marketing information system and discuss its parts. 3. Outline the steps in the marketing research process. 4. Explain how companies analyze and use marketing information. 5. Discuss the special issues some marketing researchers face, including public policy and ethics issues.

3. 4-3Prentice Hall, Copyright 2009 ZIBA – Background Company: ZIBA is a new- product design consultancy. Mission: “Help companies to create meaningful ideas, designs, and experiences that consumers crave.” Strategy: Implements in- depth study of consumers. Research Process: Consumer Insights and Trends Group uses social anthropologists, cultural ethnographers, user- experience wizards, trend trackers, brand translators and cool hunters. ZIBA – Getting to Know Customers Case Study ZIBA – In Action Client: Sirius Satellite Radio. Project: Develop a hand-held satellite radio receiver. Research Process: Interviewed 44 Sirius subscribers on why music mattered to them; viewed CD collections, socialized at tailgates; studied how car was accessorized. Results of Research: Developed profiles of Sirius user segments and positioning statement, “Discovery, portability, personalization.” Tested/refined prototypes. S50 was a holiday season top seller and earned a design award for ZIBA.

4. Prentice Hall, Copyright 20094-4 Figure 4.1 The Marketing Information System

5. 4-5Prentice Hall, Copyright 2009 The Importance of Marketing Information and Customer Insights  Companies need information about their: –Customers’ needs –Marketing environment –Competition  Marketing managers do not need more information, they need better information that provides insights which are useful for decision-making.

6. 4-6 6 Prentice Hall, Copyright 2009 Customer Insights Fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships.

7. 4-7Prentice Hall, Copyright 2009 Customer Insights  Firms use customer insights to develop competitive advantage.  Customer insight teams are replacing traditional market research departments.

8. 4-8 8 Prentice Hall, Copyright 2009 Marketing Information System Consists of people and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights.

9. 4-9Prentice Hall, Copyright 2009 Marketing Information System  The MIS helps managers to: 1. Assess information needs 2. Develop needed information 3. Analyze and use information

10. 4-10Prentice Hall, Copyright 2009 Assessing Information Needs  A good MIS balances the information users would like against what they really need and what is feasible to offer. –Sometimes the company cannot provide the needed information because it is not available or due to MIS limitations. –MIS efforts are costly. Firms must decide whether the value of the insights gained from more information is worth the cost.

11. 4-11Prentice Hall, Copyright 2009 Developing Marketing Information  Internal Databases: –Electronic collections of consumer and market information obtained from data sources within the company network. E.g., Computerized reservation and record keeping systems allow hotel chains to track smoking and bed size preferences of guests.

12. 4-12Prentice Hall, Copyright 2009 Developing Marketing Information  Marketing Intelligence: –Systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.  Marketing Research: –Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

13. 4-13 Prentice Hall, Copyright 2009 Gathering Marketing Intelligence “Dumpster diving” is one way to gather intelligence from the competition. Although dumpster diving is legal, it is often considered to be unethical. Marketing in Action

14. Prentice Hall, Copyright 20094-14 Figure 4.2 The Marketing Research Process

15. Fuel for Thought 4-15 Prentice Hall, Copyright 2009 Defining the marketing research problem is often the most difficult step in the research process. Brainstorm- ing potential causes of the key symptom is often helpful. Suppose that sales of your brand have been declining (this is a symptom of the actual problem). What marketing problems might have caused sales to decline?

16. 4-16Prentice Hall, Copyright 2009  Research objectives may include: –Exploratory Research: Gathering preliminary information that will help define the problem and suggest hypotheses. –Descriptive Research: Generating information to better describe marketing problems, situations, or markets. –Causal Research: Testing hypotheses about cause-and-effect relationships. Defining Problem and Objectives

17. 4-17Prentice Hall, Copyright 2009  Requires: –Determining the exact information needed. –Developing a plan for gathering it efficiently. –Presenting the written plan to management.  The research plan outlines: –Sources of existing data –Specific research approaches –Contact methods –Sampling plans –Instruments for data collection Developing the Research Plan

18. 4-18 18 Prentice Hall, Copyright 2009 Secondary Data Information that already exists somewhere which has been collected for another purpose.

19. 4-19Prentice Hall, Copyright 2009  Secondary data: –Common sources of secondary data: Internal databases Commercial data services Government sources Gathering Secondary Data

20. 4-20 Prentice Hall, Copyright 2009 Commercial Database Services Commercial database services such as Simmons offer an incredible wealth of information to firms. Visit their Web site at www.smrb.com to learn more. www.smrb.com Marketing in Action

21. 4-21Prentice Hall, Copyright 2009 Secondary Data  Advantages: –Available more quickly and at a lower cost than primary data. –Can sometimes lead to information that an individual firm could not gather itself.  Disadvantages: –Needed information may not exist as secondary data. –Secondary data must be carefully evaluated for relevancy, accuracy, currency, and impartiality.

22. 4-22 22 Prentice Hall, Copyright 2009 Primary Data Consists of information collected for the specific purpose at hand. Primary data must be relevant, accurate, current, and unbiased.

23. 4-23Prentice Hall, Copyright 2009  Primary data collection decisions: –Research approach: Observation, survey, or experiment –Contact methods: Mail, telephone, personal, or online –Sampling plan: Sampling unit, sample size, and sampling procedure –Research instruments: Questionnaire or mechanical instruments Primary Data Collection

24. 4-24Prentice Hall, Copyright 2009  The gathering of primary data by observing relevant people, actions, and situations. –Can obtain information that people are unwilling or unable to provide. –Cannot be used to observe feelings, attitudes, and motives, and long-term or infrequent behaviors. Observational Research

25. 4-25Prentice Hall, Copyright 2009  Ethnographic research: –Observation in the “natural habitat.” –Yields richer understanding of consumers. Observational Research

26. 4-26 Prentice Hall, Copyright 2009 Ethnographic Research After hanging out in hotel lobbies observing business travelers, Marriott revamped its hotel lobbies by creating a “social zone” where travelers can work or unwind. The new lobbies feature brighter lights, small tables, and wireless access. Marketing in Action

27. 4-27Prentice Hall, Copyright 2009  Survey Research: –Most widely used method for primary data collection. –Approach best suited for gathering descriptive information. –Can gather information about people’s knowledge, attitudes, preferences, or buying behavior. Survey and Experimental Research

28. 4-28Prentice Hall, Copyright 2009  Experimental Research: –Tries to explain cause-and-effect relationships. –Involves: Selecting matched groups of subjects Giving different treatments Controlling unrelated factors Checking differences in group responses Survey and Experimental Research

29. 4-29Prentice Hall, Copyright 2009  Mail surveys  Telephone surveys  Personal interviews: –Individual interviewing –Focus group interviewing  Online marketing research: –Internet surveys and online panels –Experiments –Online focus groups Contact Methods

30. 4-30Prentice Hall, Copyright 2009  Mail Survey Pros: –Can collect large amounts of information at a relatively low cost per respondent –Generates more truthful responses than phone interviews –Improved validity (no interviewer bias)  Mail Survey Cons: –Not flexible; study takes longer to finish –Low response rate –Little control over sample Contact Methods

31. 4-31Prentice Hall, Copyright 2009  Telephone Surveying Pros: –Gathers information fast –Greater flexibility than mail surveys –Interviewers can explain or skip questions –Better response rates than mail surveys –Strong sample control  Telephone Surveying Cons: –Higher costs than mail –Interviewer may bias results –Limited quantity of data can be collected Contact Methods

32. 4-32Prentice Hall, Copyright 2009  Individual and Group Interviewing Pros: –Highly flexible method that can gather a great deal of data from a respondent. –Good control of sample, speed of data collection, and response rate.  Individual and Group Interviewing Cons: –High cost per respondent. –Highly subject to interviewer bias and related interviewer effects. Contact Methods

33. 4-33 Prentice Hall, Copyright 2009 Focus Groups To create a more congenial setting for women to share their personal shaving and moisturizing stories, Shick invited women to participate in “Slow Sip” focus group sessions at local cafes. Marketing in Action

34. 4-34Prentice Hall, Copyright 2009  Online Marketing Research: –Includes surveys, experiments, and focus groups conducted over the Internet. –The least expensive and quickest way to gather information. –Offers excellent control over sample. –Good flexibility and response rates; able to collect a fair amount of information. –Some forms prone to interviewer effects. Sampling Plan

35. 4-35 Prentice Hall, Copyright 2009 Online Marketing Research Many online focus groups feature real-time audio and video. Visit the Channel M2 Web site to learn more.Channel M2 Web site Marketing in Action

36. 4-36Prentice Hall, Copyright 2009 Sampling Plan  Sample: –Segment of the population selected to represent the population as a whole. If the individuals pictured at right are typical of a given study’s sample, what characteristics seem to most obviously describe the population as a whole?

37. 4-37Prentice Hall, Copyright 2009  Sampling requires three decisions: –Who is to be surveyed? Selecting the sampling unit. –How many people should be surveyed? Referred to as sample size. –How should the people in the sample be chosen? Describes the sampling procedure.  Probability vs. nonprobability samples. Sampling Plan

38. 4-38Prentice Hall, Copyright 2009 Research Instruments  Questionnaire decisions: –What questions to ask? – Form of each question? Closed-ended Open-ended –Wording should be simple, direct, and unbiased. –Questions should be arranged in a logical order.

39. 4-39Prentice Hall, Copyright 2009 Research Instruments  Mechanical devices take many forms: –People meters, checkout scanners, eye tracking devices, and even neuromarketing. Neuromarketing tracks brain wave activity.

40. 4-40Prentice Hall, Copyright 2009  Collecting the data: –Most expensive phase –Subject to error  Processing the data: –Check for accuracy –Code for analysis  Analyzing the data: –Tabulate results Implementing the Research Plan

41. 4-41Prentice Hall, Copyright 2009 Quick Flick Burke Research Services Click to play video

42. 4-42Prentice Hall, Copyright 2009  Interpret the findings  Draw conclusions  Report to management: –Present findings and conclusions that will be most helpful to decision making. Interpreting and Reporting Findings

43. 4-43Prentice Hall, Copyright 2009  Many companies utilize CRM. –Captures customer information from all sources. –Analyzes it in-depth. –Applies the results to build stronger relationships. Analyzing and Using Marketing Information

44. 4-44 Prentice Hall, Copyright 2009 CRM Help From Salesforce.com CRM services such as those offered by salesforce.com can provide a 360 degree of the customer relationship. Visit the Web site to learn more. Marketing in Action

45. 4-45Prentice Hall, Copyright 2009  Companies look for customer touch points.  CRM analysts develop data warehouses and use data mining techniques to find out information about customers. Findings may lead to new marketing opportunities. Analyzing and Using Marketing Information

46. 4-46Prentice Hall, Copyright 2009 Customer Relationship Management (CRM)  Benefits of CRM: –Ability to offer better customer service and develop deeper customer relationships. –Pinpoints and targets high-value customers more effectively. –Enhances the firm’s ability to cross-sell products and develop offers tailored to customers.

47. 4-47 Prentice Hall, Copyright 2009 CRM at Harrah’s Harrah’s CRM system helps the firm to focus on its brand, marketing, and service development strategies. Harrah’s uses player card data as one input, and strives to develop offerings that benefit its most important customers. Marketing in Action

48. 4-48Prentice Hall, Copyright 2009 Distributing and Using Marketing Information  MIS must make information readily available for decision making: –Routine information for decision making. –Nonroutine information for special situations.  Intranets and extranets facilitate the information sharing process.

49. 4-49Prentice Hall, Copyright 2009 Other Marketing Information Considerations  Marketing research in small businesses and nonprofit organizations.  International marketing research.  Public policy and ethics in marketing research: –Intrusions on consumer privacy –Misuse of research findings

50. 4-50 50 Prentice Hall, Copyright 2009 Rest Stop: Reviewing the Concepts 1. Explain the importance of information in gaining insights about the marketplace and customers. 2. Define the marketing information system and discuss its parts. 3. Outline the steps in the marketing research process. 4. Explain how companies analyze and use marketing information. 5. Discuss the special issues some marketing researchers face, including public policy and ethics issues.

51. 4-51 51 Prentice Hall, Copyright 2009 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall