3.7 Market Research for EC Market research is aimed at finding information that describes the relationship between consumers, products, marketing methods, and marketers in order to discover marketing opportunities and issues, to establish marketing plans, to better understand the purchasing process, and to evaluate marketing performance.

Market Research Includes: Economy Industry Firms Products Pricing Distributions Promotion Consumer Purchasing Behavior

Marketing Research Process SEE FIGURE 3.6 Page 95 Market Segmentation Process of dividing a consumer market into logical groups for conducting marketing research decision making, advertisement, and sales. Improved methods of market research allow marketers to collect, store, and analyze detailed and personal information in a cost-efficient way.

Market Segmentation/cont. Important task is to analyze consumer-product relations. What product(s) are certain types of consumers likely to purchase? How are these consumers distinct from those less likely to but a certain product? Psychographic Information is useful; lifestyle preferences Data about work, family, hobbies, interests, preferences, etc. but not always reliable.

ONLINE MARKET RESEARCH Frequently more efficient, faster, and cheaper than traditional telephone, mail, or shopping mall surveys Ability to reach more geographically diverse audiences. Larger sample size will provide more accuracy and more powerful predictive capabilities 20% to 80% cheaper than other methods; Telephone can cost as much as $50 per response. Usually is interactive and can help to identify customer preference shifts early.

Online Market Research Methods Can be an efficient vehicle for fast, cheap, and reliable collection and processing of marketing information, including multimedia formats. Can include one-on-one communcation, surveys on web sites, email, moderated focus groups, etc.

Online Mark Research Methods/ cont. Web sites can utilize games, prizes, quizzes, or sweepstakes. However 8th GVU Survey (1998) claims that 40% of of the information people place on questionnaires is inaccurate or incorrect. Therefore appropriate design of Web Questionnaires and incentives for completion are critical to validity of results.

FACTORS AFFECTING ONLINE SURVEYS: Style, length, and appropriateness of questions. Technical issues, like latest computers Ease and transparency of use Slow download and processing speed. Use of cookies – files that attach to a user’s browser to help track Web surfer’s movements online, whether or not consumer is aware (may be unethical or illegal!)

LIMITATIONS Demographics of online surfers may not be a good representative sample. Skewed towards those with access May be a self-defining (or defeating) prophecy. Anonymity may hide t ruth.

Further Methods for Discussion Data Mining Automated prediction of trends and patterns Automated discovery of unknown patterns Neural Computing Machine Learning; identify patterns Intelligent Agents Autonomous specialists that learn by sensing an environment