Marketing Research: Gather, Analyze, and Use Information Chapter Four © 2012 Pearson Education, Inc. publishing as Prentice-Hall

4-2 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Chapter Objectives  Explain the role of a marketing information system and marketing decision support system in marketing decision making  Understand the data mining and realize how marketers can put it to good use  List and explain the steps and key elements of the marketing research process

4-3 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Time at Discover Card  Which option should Ryan undertake? Option 1: Continue to use the same new project prioritization process that has been used in the past Option 1: Continue to use the same new project prioritization process that has been used in the past Option 2: Modify the process to include existing consumer input Discover can easily access Option 2: Modify the process to include existing consumer input Discover can easily access Option 3: Engage an outside firm to assist Discover in developing a new process Option 3: Engage an outside firm to assist Discover in developing a new process

4-4 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Knowledge Is Power  Marketing research provides accurate, up-to-date, and relevant information  Marketing research should be conducted in an ethical manner  Marketing information systems: Determine what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users Determine what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users

4-5 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Marketing Information Systems  Marketing information systems (MIS) include multiple components: Data: Data:  Internal company data  Marketing intelligence  Marketing research  Acquired database Computer hardware and software Computer hardware and software Information for marketing decisions Information for marketing decisions

4-6 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Internal Company Data  Internal data: Information from within the company Information from within the company Used to produce reports on the results of sales and marketing activities Used to produce reports on the results of sales and marketing activities Commonly accessed via Intranets Commonly accessed via Intranets Intranet: Internal corporate communications network that links company departments, employees, and databases Intranet: Internal corporate communications network that links company departments, employees, and databases

4-7 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Marketing Intelligence  Marketing intelligence systems Method that marketers use to gather information about everyday happenings in the marketing environment Gathered via monitoring everyday sources, observation, and discussions with salespeople or others Gathered via monitoring everyday sources, observation, and discussions with salespeople or others

4-8 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Marketing Research  Market research: Collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness Syndicated research Syndicated research Custom research Custom research

4-9 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Acquired Databases  External databases can be used to collect a variety of information from different sources: Non-competing businesses Non-competing businesses Government databases Government databases  Misuse of databases can be problematic and has led to do-not-call lists and anti-spam laws

4-10 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Marketing Decision Support Systems  Marketing decision support systems: Data plus analysis and interactive software that allow managers to conduct analyses and find the information that they need Includes statistical and modeling software tools Includes statistical and modeling software tools Helps answer “What if” type questions Helps answer “What if” type questions

4-11 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Searching for Gold: Data Mining  Data mining: Sophisticated analysis techniques to take advantage of the massive amount of transaction information available now Data warehouses Data warehouses Reality mining Reality mining Data mining applications in marketing: Data mining applications in marketing:  Customer acquisition  Customer retention and loyalty  Customer abandonment  Market basket analysis

4-12 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Steps in the Marketing Research Process  Step 1: Define the research problem: Specifying research objectives Specifying research objectives Identifying the consumer population of interest Identifying the consumer population of interest Placing the problem in an environmental context Placing the problem in an environmental context

4-13 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Steps in the Marketing Research Process  Step 2: Determine the research design Determine whether secondary data are available Determine whether secondary data are available Determine whether primary data are required and if so, what type: Determine whether primary data are required and if so, what type:  Exploratory research  Descriptive research  Causal research

4-14 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Secondary and Primary Research  Secondary data Information collected for some purpose other than the problem at hand Information collected for some purpose other than the problem at hand  Primary data: Information collected directly from respondents to specifically address the question at hand Information collected directly from respondents to specifically address the question at hand

4-15 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Exploratory (Qualitative) Research  Exploratory research techniques generate insights for future, more rigorous studies Typically involve in-depth consumer probing Typically involve in-depth consumer probing Take many forms: Take many forms:  Focus groups  Case studies  Ethnography

4-16 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Descriptive (Quantitative) Research  Descriptive research studies: Probe systematically into the problem Probe systematically into the problem Base conclusions on large numbers of observations Base conclusions on large numbers of observations Typically expresses results in quantitative terms Typically expresses results in quantitative terms Often use cross-sectional design Often use cross-sectional design Sometimes a longitudinal design is used Sometimes a longitudinal design is used

4-17 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Causal Research  Causal research: Technique that attempts to understand cause-and-effect relationships Experiments test predicted relationships among variables in a controlled environment: Experiments test predicted relationships among variables in a controlled environment:  Independent variables are factors that might cause a change  Dependent variables are those which measure a change in outcome

4-18 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Steps in the Marketing Research Process  Step 3: Choose the method to collect primary data: Determine which survey methods are most appropriate Determine which survey methods are most appropriate Determine which observational methods are most appropriate Determine which observational methods are most appropriate

4-19 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Survey Methods  Survey methods are used to interview respondents  Questionnaires: Mail questionnaire Mail questionnaire Telephone interviews Telephone interviews Face-to-face interviews Face-to-face interviews Online questionnaires Online questionnaires

4-20 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Observation Research  Observation: Data collection method where the researcher records consumers’ behaviors, often without their knowledge Personal observation Personal observation Mechanical observation Mechanical observation Unobtrusive measures Unobtrusive measures

4-21 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Online Research  Advantages of online research  Types of online research: Gathering information via consumer surfing Gathering information via consumer surfing Gathering information via online sources Gathering information via online sources  Cookies allow marketers to track consumers  Predictive technology is made possible by online research  Concern over consumer privacy is growing  Disadvantages of online research

4-22 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Data Quality: Garbage In, Garbage Out  How much faith should marketing managers place in research? Three key considerations include: Validity Validity Reliability Reliability Representativeness Representativeness

4-23 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Step 4: Design the Sample  Probability sampling: Each member of the population has some known chance of being included Each member of the population has some known chance of being included Sample is representative of population, and inferences about population are justified Sample is representative of population, and inferences about population are justified  Types of probability sampling: Simple random sampling Simple random sampling Systematic sampling Systematic sampling Stratified sampling Stratified sampling

4-24 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Step 4: Design the Sample  Nonprobability sample: Personal judgment is used in selecting respondents Personal judgment is used in selecting respondents Some members of population have no chance of being included so sample is not representative of population Some members of population have no chance of being included so sample is not representative of population  Types of nonprobability sampling: Convenience sampling Convenience sampling Quota sampling Quota sampling

4-25 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Step 5: Collect the Data  Conclusions are only as good as the quality of data collected  Challenges associated with gathering data in foreign countries include: Differences in sophistication of research operations Differences in sophistication of research operations Infrastructure/transportation challenges Infrastructure/transportation challenges Lack of phones and/or low literacy rates Lack of phones and/or low literacy rates Local customs and cultural differences Local customs and cultural differences Language translation difficulties Language translation difficulties

4-26 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Step 6: Analyze and Interpret the Data  Data must be analyzed and interpreted to be meaningful  Tabulation: Arranging data in a table or other summary form to get a broad picture of overall responses Arranging data in a table or other summary form to get a broad picture of overall responses  Cross-tabulation: Examining the data by subgroups to see how results vary between categories Examining the data by subgroups to see how results vary between categories

4-27 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Step 7: Prepare the Research Report  Research reports typically contain the following sections: Executive summary Executive summary Description of research methods Description of research methods Discussion of study results Discussion of study results Limitations of study Limitations of study Conclusions and recommendations Conclusions and recommendations

4-28 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Real People, Real Choices: Decision Made at Discover Card  Ryan chose option 3 Why do you think that Ryan chose to engage an outside firm to assist Discover in developing a new process? Why do you think that Ryan chose to engage an outside firm to assist Discover in developing a new process?

4-29 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. Keeping It Real: Fast-Forward to Next Class Decision Time at (RED)  Meet Julie Cordua, VP Marketing—(RED)  (RED) works with international brands to make unique products and directs up to 50% of gross profits to the Global Fund  The decision to be made: Is partnering with mass market international brands the optimal way to generate money for the Global Fund?

4-30 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 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