Managing Marketing Information Dony Eko Prasetyo, S.IP.

Coca Cola In 1985, marketers thought they were listening to their target market. They noticed that they were losing market share to Pepsi and they conducted taste tests to develop their new formula. On April 23, 1985, Coca-Cola stopped producing old Coke and created a new Coke with a sweeter taste. $4 million was spent researching “New Coke”. Over 1,500 phone calls a day from angry customers. Angry customers panicked, filling their basements with old Coke and threatening lawsuits. 3 months later, Coca-Cola brought back the old formula calling it Coca-Cola Classic.

Luckily, Coca-Cola had quick reaction time. What went wrong??? Coca-Cola fouled up their research. They focused only on Taste. The company ignored consumers’ feeling about the old Coke. Luckily, Coca-Cola had quick reaction time.

The Importance of Marketing Information Companies need information about their: Customer needs Marketing environment Competition Marketing managers do not need more information, they need better information.

Marketing Information System Consists of people, equipment, and procedures that gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Marketing Information System consists of people and procedures for: Assessing the information needs Developing needed information Helping decision makers use the information for customer MIS provides information to the company’s marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies

Developing Marketing Information Marketers obtain information from Internal data Marketing intelligence Marketing research

Internal Data Internal databases are electronic collections of consumer and market information obtained from data sources within the company network Internal data is gathered via customer databases, financial records, and operations reports. Advantages of internal data include quick/easy access to information. Disadvantages stem from the incompleteness or inappropriateness of data to a particular situation.

Marketing Intelligence Marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace Competitive intelligence gathering activities have grown dramatically. Many sources of competitive information exist.

Sources of Competitive Intelligence Company employees Internet Garbage Published information Competitor’s employees Trade shows Benchmarking Channel members and key customers

Marketing Research Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization Define the problem and research object Develop the research plan Collect the information Analyze the information Present the findings Make the decision Marketing research steps

Marketing Research Written Research Plan Includes: Management problem Research objectives Information needed How the results will help management decisions Budget

Types of Data Secondary data consist of information that already exists somewhere, having been collected for another purpose Secondary data sources: Government information Internal, commercial, and online databases Publications Advantages: Obtained quickly Less expensive than primary data Disadvantages: Information may not exist or may not be usable.

Cont’d Primary data consist of information gathered for the special research plan Planning primary research: Research approaches: Observation, survey, experiment, ethnographical Contact methods: Mail, telephone, online, personal Sampling plan: Sampling unit, sample size, sampling procedure Research instruments: Questionnaire, mechanical instruments

Research Approach Observational research involves gathering primary data by observing relevant people, actions, and situations Ethnographic research involves sending trained observers to watch and interact with consumers in their natural environment Experimental research is best for gathering causal information—cause-and-effect relationships Survey research is the most widely used method and is best for descriptive information—knowledge, attitudes, preferences, and buying behavior Flexible People can be unable or unwilling to answer Gives misleading or pleasing answers Privacy concerns

Strengths and Weaknesses of Contact Methods Relate to: Flexibility Sample control Data quantity Cost Interviewer effects Speed of data collection Response rate

Survey Contact Methods Personal can mean individual interviewing or focus groups (6-10 people who talk about product) Mail Telephone Personal Online Flexibility Poor Good Excellent Qty of data that can be collected Fair Control of interviewer effects Control of sample Speed of data collection Response Rate Cost

Online Contact Methods Advantages Low cost Speed Higher response rates Good for hard to reach groups Disadvantages Restricted internet access Not sure who is answering

Sample Sample is a segment of the population selected for marketing research to represent the population as a whole Who is to be surveyed? How many people should be surveyed? How should the people be chosen?

Types of Samples Probability Sample Simple Random Sample Every member of the population has a known and equal chance of selection. Stratified Random Sample Population is divided into groups (ex age groups) and random samples are drawn from each group. Cluster (area) Sample Population is divided into groups based on location and samples are drawn from the groups. Nonprobability Sample Convenience Sample Researcher selects the easiest population members from which to obtain information. Judgment Sample Researcher uses his or her judgment to select population members who are good prospects. Quota Sample Researcher finds a prescribed number of people in each of several categories.

Questionnaires Most common Administered in person, by phone, or online Flexible Watch working and ordering of questions Closed-end questions include all possible answers, and subjects make choices among them Provide answers that are easier to interpret and tabulate Open-end questions allow respondents to answer in their own words Useful in exploratory research

Analyzing the Data Simple Tabulation – count the occurrences of each variable independently of other variables Cross Tabulation – divide the sample into sub-groups to show how the variable varies from one subgroup to another

Simple Tabulation 1 = Strongly Disagree, 2 = Moderately Disagree, 3 = Mildly Disagree, 4 = Mildly Agree, 5 = Moderately Agree, 6 = Strongly Agree

Cross Tabulation 1 = Strongly Disagree, 2 = Moderately Disagree, 3 = Mildly Disagree, 4 = Mildly Agree, 5 = Moderately Agree, 6 = Strongly Agree

Analyzing the Data Hypothesis Testing Uses Regression Analysis to Interpret the results Example: Taco Bell might take the data from the experiments designed to test the effect of sales on two different prices. The company would run a regression on the data to determine if the new price had a significant effect on sales.

-38.23 + (1.17 * Sales at the Old Price) Regression Output Interpretation: we are 98% confident (1-p value) that there is a relationship between old sales (x) and new sales (y) data. To estimate new sales, we would formulate the following equation: -38.23 + (1.17 * Sales at the Old Price) If sales at the old price averaged 200, we would estimate new sales by: -38.23 + (1.17 * 200) = 195.24

Making the Decision Given Estimated Sales at the New Price, is the price hike worth it? Judging by our research estimates, we would reduce sales by 5 if we implement the new price. We sold 200 at $4.98 = $996.00 The new price adds $0.50 per sale, so we would sell: 195 at $5.48 = $1,069.90

Making the Decision Assuming there are no other costs (or that the other costs don’t outweight the profits)… We would increase revenue by: $73.90 if we increase the price. So – YES we should make Taco Supreme Meals $5.48.

Analyzing Marketing Information Customer Relationship Management (CRM) consists of sophisticated software and analytical tools that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships Customer purchases Sales force contacts Service and support calls Web site visits Satisfaction surveys Credit and payment interactions Research studies

Distributing and Using Marketing Information Information distribution involves entering information into databases and making it available in a time-useable manner Intranet provides information to employees and other stakeholders Extranet provides information to key customers and suppliers