Marketing Research: Gather, Analyze, and Use Information

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Marketing Research: Gather, Analyze, and Use Information Chapter 4 Marketing Research: Gather, Analyze, and Use Information

Chapter Objectives Explain the role of the marketing information system and the marketing decision support system in marketing decision making Understand data mining and how marketers can put it to good use List and explain the steps and key elements of the marketing research process Appreciate the importance of high ethical standards in marketing research Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Real People, Real Choices: Decision Time at Plan-It Marketing What marketing research strategy would maximize results of the research within a reasonable budget? Option 1: Conduct exploratory qualitative study Option 2: Conduct quantitative survey of 700+ leisure and business travelers Option 3: Conduct viability study with both qualitative exploratory study and confirmatory quantitative study Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Is Power Accurate, up-to-date, relevant information is the fuel that runs the marketing engine Understanding consumers’ value needs is essential to creating/delivering a value proposition Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Knowledge Is Power Marketing information systems: Determine what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users Marketing information systems include multiple components Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 4.2 The Marketing Information System Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Internal Company Data Internal data: Information from within the company to produce reports on the results of sales and marketing activities Intranet: Internal corporate communications network that links company departments, employees, and databases Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Marketing Intelligence Marketing intelligence systems: Method by which marketers get information about everyday happenings in the marketing environment Example: Monitoring the Internet and using “mystery shoppers” Futurists specialize in predicting consumer trends Get the scoop on mystery shopping! Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

It’s Debatable Class Discussion Question Faith Popcorn, the 1990’s “Nostradamus of Marketing” according to Fortune magazine, is a well-known pop culture futurist. Visit her Web site and view one or more of the Trend Bank videos. Put yourself in the position of the consumer goods marketer of your choice. How will this trend impact the marketing of your brand? Will it have a positive impact or a negative impact? Why? NOTE: Instructors may wish to “skip the intro” to the Web site by clicking the link at the bottom right hand side of the screen as it loads. It may useful to follow up on a visit to the Brain Reserve Web site by sharing the following Los Angeles Times article with students, “Faith Popcorn’s predictions five years later,” currently available online at www.latimes.com/entertainment/news/la-et-popcorn-predicts01-2008oct01,0,3853028.story. The article shows that while some Faith’s 2003 trend predictions were dead on (food coaches who help individuals and families develop healthy eating habits; enhanced focus on grooming and male vanity products among heterosexual males manifesting in salons that cater to men), others were big misses (transcouture: teenage rejection of brand name fashions; baby cloning and genetic alternation). Visit Faith Popcorn’s BrainReserve Copyright 2009 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 Custom research Copyright 2009 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 Government databases Misuse of databases can be problematic and has led to do-not-call lists and antispam laws The census offers great free information Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Marketing Decision Support Systems Marketing decision support systems: Data plus analysis and interactive software that allows managers to conduct analyses and find the information that they need Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 4.3 The Marketing Decision Support System Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Searching for Gold: Data Mining Data mining: Includes sophisticated analysis techniques to take advantage of the massive amount of transaction information now available Analysts sift through data to identify unique patterns of behavior among different customer groups for use in behavioral targeting A Web site which instructors may wish to visit during class for additional information regarding behavioral targeting can be found at www.behavioraltargeting.com/. Although this site markets a commercial consulting firm, it also offers an overview of behavior targeting and two brief case studies that can be viewed online of how Fortune 500 companies used behavioral targeting to meet their objectives. However, all is not rosy on the behavioral targeting horizon. Although three of the four major ISP providers are arguing in favor of self-regulation of behavioral target efforts, as of September 2008, Congress was investigating protests that “ensued when ISPs ran trials of a targeted ad service from the Web tracking company NebuAd last year without user consent.” SOURCE: Kean, Megan, “Large ISPs Endorse Behavioral Targeting Guidelines” Wired, September 26, 2008 (retrieved from http://blog.wired.com/business/2008/09/large-isps-endo.html October 28, 2008). Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

It’s Debatable Class Discussion Question The popularity of social network sites such as MySpace, Facebook, Second Life, and others has been growing tremendously. Under pressure to increase revenues, Facebook now allows marketers to create brand pages, which after being viewed by a user, feeds directly to that person’s “friends.” Does this move to viral marketing violate the privacy of Facebook’s users? Will it hurt membership? Advertising on Facebook Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

What Marketers Can Do with Data Mining Data mining applications in marketing: Customer acquisition Customer retention and loyalty Customer abandonment Market basket analysis An interesting question to raise is “When” does an online customer “abandon” merchandise? While most students would assume abandonment occurs the moment a user leaves a Web site without committing to a transaction after items are placed into a shopping cart, some online merchants take a longer view by allowing items to remain in shopping carts indefinitely, with the hope that consumers will return later to purchase. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Steps in the Marketing Research Process Step 1: Define the research problem Specifying research objectives Identifying consumer population of interest Placing the problem in an environmental context Defining the research problem often proves to be the most difficult phase of the process, and further explanation may help to clarify this portion of lecture. One point that can be made is that thinking in terms of “problems” may be misleading. Often marketing research is undertaken for the purpose of understanding how to best capitalize upon an opportunity. The second point to be made is that if the firm is indeed investigating a “problem” from the perspective that something is wrong (a new brand is not meeting it’s sales goals), researchers must be careful not to confuse symptoms of the problems (low sales, low market share) with the cause of the problem itself, or they may end up investigating the wrong phenomena. For example, the real cause of poor sales might stem from inadequate distribution, improper positioning, the wrong pricing strategy, or a badly designed product or package. Burke Research Video Copyright 2009 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 primary data are required and if so, what type: Exploratory research Descriptive research Causal research Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 4.5 Marketing Research Designs Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Secondary and Primary Research Secondary data: Have been collected for some purposes other than the problem at hand Guideline.com (industry and trend reports) Dialog.com (sorts firms by location, size, industry) Lexisnexis.com (information database) Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Secondary and Primary Research Primary data: Information collected directly from respondents to specifically address the question at hand Look-Look employs an army of “coolhunters” to report on the latest trends Copyright 2009 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 Take many forms: Consumer interviews Focus groups Productive techniques Case studies Ethnography One form of exploratory research is ethnography. There are several methods by which data can be collected: 1) sending a consumer observer/researcher into stores, work places, and homes to observe real behavior; 2) giving subjects a video camera to record consumer interactions with the target product; or 3) having consumers record their behavior in a diary. The ethical ramifications of doing disguised research (e.g., the consumer doesn’t know he or she is being studied) might create an interesting discussion when considering whether observation takes place in a store, work environment, or the subject’s home. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Descriptive (Quantitative) Research Descriptive research studies: Probe systematically into the problem Base conclusions on large numbers of observations Typically expresses results in quantitative terms (averages, percentages, other stats) Cross-sectional design Longitudinal design Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Causal Research Cause-and-effect relationships: A change in one thing causes a change in something else Independent (cause) vs. dependent (change in outcome) variables Experiments test predicted relationships among variables in a controlled environment Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Steps in the Marketing Research Process Step 3: Choose the method for collecting primary data Survey methods are used to interview respondents Questionnaires: loosely, moderately, or completely structured Observational research methods Online research Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

? Questionnaires Mail questionnaires Telephone interviews Face-to-face interviews Mall intercept Online questionnaires Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Observational Methods Observation: Data collection method where the researcher records consumers’ behaviors, often without their knowledge Personal observation Mechanical observation Unobtrusive measures Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Observation Methods Students are often incensed to learn that garbologists may be looking through their trash for physical evidence of some type of consumption behavior. Many think this tactic should be illegal, but of course it is not. It could be worthwhile to underscore to students that any information left on your curb for trash collection pick up is fair game for anyone to pick through. Although this point is not directly related to research, it could be helpful to students to stress that they need to shred bills or any information containing credit card numbers, social security number, or any other details that could result in identity theft. Unobtrusive measures such as Garbology look for physical evidence that remains after some action has been taken Wireless users at the Connection Court are easily observed Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Online Research Types of online research: Gathering information via consumer surfing Gathering information via Web site/ e-mail/chat room questionnaires/focus groups Online research used as part of: New-product development Estimating market response Exploratory research IM and focus groups Copyright 2009 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 Reliability Representativeness Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Figure 4.6 Completion Test Obtaining accurate information from children can be very difficult. To encourage kids to express their feelings, researchers used this completion test. Boys were asked to write in the balloon what they think the boy in the drawing will say when the girl asks, “What program do you want to watch next?” Copyright 2009 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 Sample is representative of population, and inferences about population are justified Types of probability sampling: Simple random sampling Systematic sampling Stratified sampling Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Step 4: Design the Sample Nonprobability sample Personal judgment used in selecting respondents Some members of population have no chance of being included so sample is not representative of population Types of nonprobability sampling Convenience sampling Quota sampling Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Step 5: Collect the Data Challenges to gathering data in foreign countries include: Differences in sophistication of research operations Infrastructure/transportation challenges Lack of phones and/or low literacy rates Local customs and cultural differences Language translation difficulties Copyright 2009 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 Cross-tabulation: Examining the data by subgroups to see how results vary between categories Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Step 7: Prepare the Research Report Research reports typically contain the following sections: Executive summary Description of research methodology Discussion of results including tabulations, cross-tabulations Limitations of study Conclusions and recommendations Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Ethics in Marketing Research Marketing research ethics: Taking an ethical and above-board approach to conducting marketing research that does no harm to the participant in the process of conducting the research Researchers must provide full disclosure of confidentiality and anonymity options Ethics in marketing research actually touches on three broad areas: 1) the relationship between the researcher and client; 2) the relationship between the research and research subjects; and 3) the relationship between the researcher and the marketing research industry. Example: Researcher/client and research/subject ethical dilemma: Client asks for a list of firms that responded to a survey, along with the questionnaires that contain the actual responses, but the researcher has promised anonymity and confidentiality to the participating firms. What does he or she do? See www.marketingprofs.com/5/fodness1.asp?part=2 for a couple of other scenarios. Web site of interest: Council of American Survey Research Organization’s Code of Standards for Survey Research: www.casro.org/codeofstandards.cfm. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Real People, Real Choices: Decision Made at Plan-It Marketing Cindy chose option 3, conducting both qualitative and quantitative research Implementation: Concept design was refined using input from qualitative research; quantitative study of 700 business and leisure travelers confirmed viability of Priceline’s business model concept Measuring success: Used total unduplicated reach and frequency analysis Copyright 2009 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? Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2009 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. Copyright © 2009 Pearson Education, Inc.   Publishing as Prentice Hall Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall