Chapter 6 Objectives  After reading Chapter 6, you will be able to:  Identify the three main sources of data that e- marketers use to address research problems.  Discuss how and why e-marketers need to check the quality of research data gathered online.  Explain why the internet is used as a contact method for primary research and describe the main internet-based approaches to primary research. 6-2 ©2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 6 Objectives, cont. ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-2  Describe several ways to monitor the Web for gathering desired information.  Contrast client-side, server-side, and real-space approaches to data collection.  Highlight four important methods of analysis that e- marketers can apply to data warehouse information.

©2009 Pearson Education, Inc. Publishing as Prentice Hall  Nestle Purina PetCare wanted to know whether their Web sites and online advertising increased off-line behavior.  Nestle Purina developed 3 research questions:  Are our buyers using our branded Web sites?  Should we invest in other Web sites?  If so, where should we place the advertising? The Purina Story 6-3

©2009 Pearson Education, Inc. Publishing as Prentice Hall The Purina Story, cont.  They combined online and off-line shopping panel data and found that:  Banner click-through rate was low (0.06%).  31% of subjects who were exposed to both online and off- line advertising mentioned Purina.  The high exposure group mentioned Purina more than the low exposure group.  Home/health and living sites received the most visits from their customers.  Can you think of other Web sites besides petsmart.com and about.com that would be appropriate for Purina PetCare ads? 6-4

©2009 Pearson Education, Inc. Publishing as Prentice Hall Data Drive Strategy  Organizations are drowning in data.  E-marketers must determine how to glean insights from billions of bytes of data.  Marketing insight occurs somewhere between information and knowledge.  Purina, for example, sorts through hundreds of millions of pieces of data about 21.5 million consumers to make decisions. 6-5

©2009 Pearson Education, Inc. Publishing as Prentice Hall  Knowledge management is the process of managing the creation, use, and dissemination of knowledge.  Data, information, and knowledge are shared with internal decision makers, partners, channel members, and sometimes customers.  Examples of the uses of knowledge management can be found in Exhibit 6.3. Marketing Knowledge Management 6-6

Uses of Knowledge Management Use in the Telecom IndustryRepresentative Firm Scanner Check-Out Data Analysis Call Volume Analysis Equipment Sales Analysis Customer Profitability Analysis Cost and Inventory Analysis Purchasing Leverage with Suppliers Frequent-Buyer Program Management AT&T Ameritech Belgacom British Telecom Telestra Australia Telecom Ireland Telecom Italia Use in the Retail IndustryRepresentative Firm Scanner Check-Out Data Analysis Sales Promotion Tracking Inventory Analysis and Deployment Price Reduction Modeling Negotiating Leverage with Suppliers Frequent-Buyer Program Management Profitability Analysis Product Selection for Markets Wal-Mart Kmart Sears Osco/Savon Drugs Casino Supermarkets W. H. Smith Books Otto Versand Mail Order Amazon.com ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-9

©2009 Pearson Education, Inc. Publishing as Prentice Hall The Electronic Marketing Information System  Marketers manage knowledge through a marketing information system (MIS).  Many firms store data in databases and data warehouses.  The internet and other technologies have facilitated data collection.  Secondary data provides information about competitors, consumers, economic environment, etc.  Marketers use the Net and other technologies to collect primary data about consumers. 6-8

Source 1: Internal Records ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-9  Accounting, finance, production, and marketing personnel collect and analyze data.  Sales data  Customer characteristics and behavior Universal product codes Tracking of user movements through web pages

©2009 Pearson Education, Inc. Publishing as Prentice Hall Source 2: Secondary Data  Can be collected more quickly and less expensively than primary data.  Secondary data may not meet e-marketer’s information needs.  Data was gathered for a different purpose.  Quality of secondary data may be unknown.  Data may be old.  Marketers continually gather business intelligence by scanning the macroenvironment. 6-10

©2009 Pearson Education, Inc. Publishing as Prentice Hall Public and Private Data Sources  Publicly generated data  U.S. Patent Office  CIA World Factbook  American Marketing Association  Wikipedia  Privately generated data  comScore  Forrester Research  Nielsen/NetRatings  Commercial online databases 6-11

©2009 Pearson Education, Inc. Publishing as Prentice Hall Source 3: Primary Data  Primary data are information gathered for the first time to solve a particular problem.  Primary data collection enhanced by the internet:  Experiments  Focus groups  Observation  Survey research 6-12

Ethics of Online Research ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-13  Companies conducting research on the Web often give respondents a gift or fee for participating.  Other ethical concerns include:  Respondents are increasingly upset at getting unsolicited e- mail requests for survey participation.  “Harvesting” of addresses from newsgroups without permission.  “Surveys” for the sole purpose of building a database.  Privacy of user data.

Monitoring the Social Media ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-14  Companies must now monitor numerous web pages, blogs, and photo sites in order to learn what is being said about their brands or executives.  Companies can hire public relations firms or online reputation management firms to help.  They can also set up automated monitoring systems using , RSS feeds, or special software.

©2009 Pearson Education, Inc. Publishing as Prentice Hall Other Technology-Enabled Approaches  Client-side Data Collection  Cookies  Use PC meter with panel of users to track the user clickstream.  Server-side Data Collection  Site log software  Real-time profiling tracks users’ movements through a Web site. 6-15

©2009 Pearson Education, Inc. Publishing as Prentice Hall Real-Space Approaches  Data collection occurs at off-line points of purchase.  Real-space techniques include bar code scanners and credit card terminals.  Catalina Marketing uses the UPC for promotional purposes at grocery stores. 6-16

Marketing Databases & Data Warehouses ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-17  Product databases hold information about product features, prices, and inventory levels; customer databases hold information about customer characteristics.  Data warehouses are repositories for the entire organization’s historical data, not just for marketing data.  Data are stored in the data warehouse system and used for analysis by marketing decision makers.

Data Analysis and Distribution ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-18  Four important types of analysis for marketing decision making include:  Data mining  Customer profiling  RFM (recency, frequency, monetary value) analysis  Report generating

Knowledge Management Metrics ©2009 Pearson Education, Inc. Publishing as Prentice Hall 6-19  Two metrics are currently in widespread use:  ROI: total cost savings divided by total cost of the installation.  Total Cost of Ownership (TCO): includes cost of hardware, software, labor, and cost savings.