Chapter 9 Marketing Research Chapter 9 Decision Support Systems and Marketing Research Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes Define marketing research and explain its importance to marketing decision making Describe the steps involved in conducting a marketing research project Discuss the profound impact of the Internet on marketing research Describe the growing importance of mobile research

Learning Outcomes (continued) Discuss the growing importance of scanner- based research Explain when marketing research should be conducted Explain the concept of competitive intelligence

Marketing Research Chapter 9 Decision Support Systems and Marketing Research LO 1 Process of planning, collecting, and analyzing data relevant to a marketing decision Links the consumer, customer, and public to the marketer through information Role in business Descriptive Diagnostic Predictive Marketing research provides data on the effectiveness of a marketing mix and insights for necessary changes. It is the main data source for management information systems. Marketing research should be descriptive, diagnostic, and predictive. Descriptive - What is the historic sales trend in the industry? What are consumers’ attitudes toward a product? Diagnostic - What was the impact on sales after a change in the package design? Predictive - “What if” questions, such as how can descriptive and diagnostic research be used to predict the results of a planned marketing decision?

9.1 The Marketing Research Process Chapter 9 Decision Support Systems and Marketing Research LO 2 9.1 The Marketing Research Process Exhibit 9.1 traces the steps in the marketing research process. As changes occur in the firm’s external environment, marketing managers must decide on changes to the existing marketing mix.

Components of a Marketing Research Project Chapter 9 Decision Support Systems and Marketing Research LO 2 Determines what information is needed and how it can be obtained efficiently and effectively Marketing research problem Defines the specific information needed to solve a marketing research problem Marketing research objective Broad-based problem that uses marketing research in order for managers to take proper actions Management decision problem Virtually all firms that have adopted the marketing concept engage in some marketing research because it offers decision makers many benefits. Some companies spend millions on marketing research; smaller firms conduct informal, limited-scale research studies.

Exponential growth in the volume, variety, and velocity of information Big Data Chapter 9 Decision Support Systems and Marketing Research LO 2 Exponential growth in the volume, variety, and velocity of information Development of complex, new tools to analyze and create meaning from such data Gathered both online and offline Data visualization uncovers subtle patterns from billions of pieces of data Enables managers to share and explain their findings Today, more and more firms are using big data tools to catalog customer attributes and analyze which characteristics they have in common. Big data analytics focuses on gathering data and learning and adapting based on that data.

Planning the Research Design Chapter 9 Decision Support Systems and Marketing Research LO 2 Research design specifies: Research questions that must be answered How and when to gather data The way to analyze data Project budget is finalized after the research design is approved

Closed-ended questions Scaled-response questions Types of Questions Chapter 9 Decision Support Systems and Marketing Research LO 2 Encourage an answer phrased in the respondent’s own words Open-ended questions Ask the respondent to make a selection from a limited list of responses Closed-ended questions Closed-ended questions designed to measure the intensity of a respondent’s answer Scaled-response questions

Observation and Ethnographic Research Chapter 9 Decision Support Systems and Marketing Research LO 2 Observation research relies on: People watching people People watching an activity Machines watching people Machines watching an activity Ethnographic research Involves observation of behavior and physical setting Observation research is the systematic process of recording the behavioral patterns of people, objects, and occurrences without questioning them. A market researcher using the observation technique witnesses and records information as events occur or compiles evidence from records of past events. Ethnographic research comes from the field of anthropology and is becoming popular in commercial marketing research. Ethnographers directly observe the population they are studying to gain richer insights into the culture and behavior of people.

Used by researchers to gather primary data Experiments Chapter 9 Decision Support Systems and Marketing Research LO 2 Used by researchers to gather primary data One or more variables are altered, and the effects of the alterations are observed on another variable

Chapter 9 Decision Support Systems and Marketing Research LO 2 9.5 Types of Samples Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Since it is not possible to interview all users of a new product, a firm must select a sample or a subset of the larger population. The population, or universe, must first be defined. Then it is determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed. Otherwise, a non-probability sample is considered. In a probability sample, every element in the population has a known statistical likelihood of being selected. In a non-probability sample, little or no attempt is made to get a representative cross-section of the population.

Types of Errors Measurement error Sampling Frame Random Chapter 9 Decision Support Systems and Marketing Research LO 2 Measurement error Occurs when there is a difference between the information desired and the information provided Sampling Occurs when a sample does not represent the target population Frame Occurs when a sample drawn from a population differs from the target population Random Occurs when the selected sample is an imperfect representation of the overall population Measurement and sampling errors may occur when a sample is used in marketing research.

Collecting and Analyzing the Data Chapter 9 Decision Support Systems and Marketing Research LO 2 Some primary data are collected by marketing research field service firms Data analysis Purpose is to interpret and draw conclusions from the collected data Techniques used to organize data One-way frequency counts and cross-tabulations Hypothesis testing, measures of association, and regression analysis Field service firms specialize in interviewing respondents on a subcontracted basis. They also provide focus group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products. Data are organized using techniques such as one-way frequency counts, cross-tabulations, and sophisticated statistical analysis. One-way frequency tables record the responses to a question and provide a general picture of the study’s results. A cross-tabulation helps the analyst look at the associations between certain responses, such as the association between gender and product choice.

9.6 Popcorn Cross-Tabulation LO 2 9.6 Popcorn Cross-Tabulation

Preparing and Presenting the Report and Follow Up Chapter 9 Decision Support Systems and Marketing Research LO 2 Researchers are required to present written and oral reports Contents of a report Concise statement of the research objectives Brief explanation of research design Summary of major findings Conclusion with recommendations Follow up Researcher should determine why management did or did not carry out the recommendations After data analysis is completed, the report is prepared and conclusions and recommendations are communicated to management. The report should be tailored to the audience.

Advantages of Internet Surveys Chapter 9 Decision Support Systems and Marketing Research LO 3 Rapid development Reduced costs Personalized questions and data Improved respondent participation Contact with the hard-to-reach

Methods of Conducting Online Surveys LO 3 Web survey systems Designed for web questionnaire construction and delivery Google consumer surveys Do-it-yourself web surveys Online panel providers Pre-recruit people who agree to participate in online surveys

Web Community, Mobile, and Scanner-Based Research Chapter 9 Decision Support Systems and Marketing Research LO 3 Web communities Selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation Mobile research New and better apps make the survey experience easier and more intuitive Scanner-based research System for gathering information from a single group of respondents Web communities help companies create a customer-focused organization by putting employees into direct contact with consumers as well as providing cost effective, flexible research Mobile research has expanded into both quantitative and qualitative research. With today’s mobile qualitative research tools, ethnography shop-alongs can be completely self-guided. As screen size decreases, so do survey completion rates. 76 percent of surveys are completed on desktop, 70 percent on tablet, and 59 percent on mobile phone. Scanner-based research entails the aggregation of scanner data from retailers, analysis, and identification of sales trends. The two major scanner-based suppliers are SymphonyIRI Group Inc. and The Nielsen Company. InfoScan is SymphonyIRI’s tracking service for consumer goods. It collects weekly data from supermarkets, drugstores, and mass merchandisers.

Conducting Market Research Chapter 9 Decision Support Systems and Marketing Research LO 6 Depends on managers’ perceptions of its quality, price, and timing When the expected value of research information exceeds the cost of generating the information When managers have several possible solutions to a problem, they should not instinctively call for marketing research. The first decision to make is whether to conduct marketing research at all.

9.7 A Simple Flow Model of the Customer Relationship Management System Chapter 9 Decision Support Systems and Marketing Research LO 6 9.7 A Simple Flow Model of the Customer Relationship Management System CRM is described as a closed-looped system that builds relationships with customers. Exhibit 9.7 illustrates this continuous and circular system with no defined starting or end point. The CRM cycle is initiated by identifying customer relationships within the organization. Next, the company must understand the interaction each customer has with the company by building on the initial information collected and developing a useful database. Based on the knowledge of the customer and his/her interactions with the company, the company can then acquire and capture all relevant information about the customer. Technology plays a critical part in a CRM system. Technology is used to store and integrate customer data. Not all customers are equally important to a business. Consequently, the company must use data mining to determine its profitable and unprofitable customer segments. Once the customer data are analyzed, they are leveraged. Data are transformed into information and disseminated throughout the organization—to the right person in the right place at the right time.

Sources of Competitive Intelligence Chapter 9 Decision Support Systems and Marketing Research LO 7 Internet Company salespeople Industry experts CI consultants Government agencies UCC filings Suppliers Periodicals Yellow Pages Trade shows Competitive intelligence helps managers assess their competition and vendors in order to become more efficient and effective competitors. It can help identify the advantage and play a major role in determining how it is achieved.

Key Terms Marketing research Marketing research problem Chapter 9 Decision Support Systems and Marketing Research Key Terms Marketing research Marketing research problem Marketing research objective Management decision problem Secondary data Big data Research design Primary data Survey research Mall intercept interview Computer-assisted personal interviewing Computer-self interviewing Central-location telephone (CLT) facility Executive interview Focus group Open-ended question Close-ended question Scaled-response question

Key Terms (continued) Observation research Nonprobability sample Chapter 9 Decision Support Systems and Marketing Research Key Terms (continued) Observation research Mystery shoppers Behavioral targeting (BT) Social media monitoring Ethnographic research Experiment Sample Universe Probability sample Random sample Nonprobability sample Convenience sample Measurement error Sampling error Frame error Random error Field service firm Cross-tabulation Scanner-based research InfoScan Neuromarketing Competitive intelligence

Marketing research helps in marketing decision making Summary Marketing research helps in marketing decision making Online research is the most popular mode of data collection Mobile survey traffic is rapidly increasing Before, conducting research, managers should analyze if it is really required Competitive intelligence is an important tool for helping a firm overcome a competitor’s advantage