Chapter 5 Decision support systems and marketing research

Learning objectives 1Explain the concept and purpose of a marketing decision support system 2Define marketing research and explain its importance to marketing decision-making 3Describe the steps involved in conducting a marketing research project

Learning objectives (cont.) 4Discuss the growing importance of scanner-based research 5Explain when marketing research should and should not be conducted

Learning objective 1 Define the term marketing Explain the concept and purpose of a marketing decision support system

Decision support system (DSS) An interactive, flexible computerised information system that enables managers to obtain and manipulate information as they are making decisions. 1

Characteristics of a DSS 1 Interactive Flexible Discovery-oriented Accessible

Database marketing The creation of a large computerised file of customers’ and potential customers’ profiles and purchase patterns. 1

Learning objective 2 Describe four marketing management philosophies. Define marketing research and explain its importance to marketing decision-making

Marketing research The process of planning, collecting and analysing data relevant to a marketing decision. 2

Roles of marketing research Improving quality of Decision-making Tracing problems Keeping customers Gauging value, measuring satisfaction 2 Marketing research Understanding changing market place

Learning objective 3 Describe four marketing management philosophies. Describe the steps involved in conducting a marketing research project

The marketing research process 3 Marketing information system (MIS) Problem definition Research design Sampling Data collection and analysis Recommendation

Marketing research Marketing research problem Marketing research objective Management decision problem Determining what information is needed and how that information can be obtained efficiently and effectively. The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions. 3

Secondary data Data previously collected for any purpose other than the one at hand. 3

Sources of secondary data Internal corporate information Government agencies Trade and industry associations Marketing research firms Commercial publications News media 3

Advantages of secondary data 3 Saves time and money if on target Aids in determining direction for primary data collection Pinpoints the kinds of people to approach Serves as a basis of comparison for other data

Disadvantages of secondary data 3 May not be on target with the research problem Quality and accuracy of data may pose a problem

The new age of secondary information The Internet Search engines and directories Sites of interest to marketing researchers Discussion groups Periodical, newspaper and book databases 3

Research design Specifies which research questions must be answered, how and when the data will be gathered and how the data will be analysed. 3

Planning the research design 3 Which research questions must be answered? How and when will data be gathered? How will the data be analysed?

Primary data Information collected for the first time. Can be used for solving the particular problem under investigation. 3

Advantages of primary data 3 Answers a specific research question Data are current Source of data is known Secrecy can be maintained

Disadvantages of primary data 3 Expensive Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews

Survey research The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions and attitudes.

Forms of survey research In-home interviews Mail surveys Mall intercept interviews Internet surveys Telephone interviews (home and central location) Computer-assisted 3

Mall intercept interview Survey research method that involves interviewing people in the common areas of shopping malls. 3

Focus group A group of about 12 people who participate in a group discussion led by a moderator. 3

Advantages of on-line focus groups 3 Speed Cost-effectiveness Broad geographic scope Accessibility Honesty

Questionnaire design Open-ended question Closed-ended question Scaled- response question An interview question that encourages an answer phrased in respondents’ own words. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondent’s answer. 3

Questionnaire design (cont.) 3 Qualities of good questionnaires Clear and concise No ambiguous language Unbiased Reasonable terminology

Observation research people watching people people watching an activity machines watching people. 3 A research method that relies on three types of observation:

Observation research (cont.) Mystery shoppers One-way mirrors Types of observation research Audits Machines watching people People watching people People watching an activity Traffic counters Passive people meter 3

Mystery shoppers Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions. 3

Experiment A method a researcher uses to gather primary data. 3

Sampling procedure Sample Universe A subset from a large population. The population from which a sample will be drawn. 3

Probability samples Probability sample A sample in which every element in the population has a known statistical likelihood of being selected. Random sample A sample arranged so that every element of the population has an equal change of being selected. 3

Non-probability samples Non-probability sample Convenience sample Any sample in which little or no attempt is made to get a representative cross-section of the population. A form of non-probability sample using respondents who are convenient or readily accessible to the researcher. 3

Types of samples Probability samples Simple random sample Stratified sample Cluster sample Systematic sample Non-probability samples Convenience sample Judgement sample Quota sample Snowball sample 3

Internet samples Unrestricted Internet sample Screened Internet sample Recruited Internet sample A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are pre-recruited and must qualify to participate. 3

Types of errors 3 Measurement error Sampling error Frame error Random error

Types of errors (cont.) Measure- ment error Sampling error Frame error Random error Error when there is a difference between the information desired and the information provided by research. Error when a sample somehow does not represent the target population. Error when a sample drawn from a population differs from the target population. Error because the selected sample is an imperfect representation of the overall population. 3

Field service firm A firm that specialises in interviewing respondents on a subcontracted basis. 3

Field service firms (cont.) 3 Provide: focus group facilities mall intercept locations test product storage kitchen facilities retail audits.

Cross-tabulation A method of analysing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions. 3

Learning objective 4 Discuss the growing importance of scanner- based research

Scanner-based research A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion and pricing they are exposed to and the things they buy. 4

Scanner-based research (cont.) BehaviorScanInfoScan 4

Learning objective 5 Explain when marketing research should and should not be conducted

When and when not to conduct marketing research 5 How well does the firm know the market? How much will the research cost? Will the research add value? How long will the research take? What is the quality of the research?