Marketing Research: Gathering, Analyzing, and Using Information

2 Chapter Objectives Explain the role of the marketing information system and the marketing decision support system in marketing decision making List and explain the steps in the marketing research process Appreciate the differences among exploratory, descriptive, and casual research Describe the different types of data-collection methods and types of consumer samples that research use Understand the impact of the growing use of online research

3 Real People, Real Choices Meet Cindy Turgate at Plan-it Marketing, a marketing research firm Priceline needed help in planning its business. Would its name-your-own-price strategy fly? The decision: What marketing research strategy would maximize results within a reasonable budget?  Option 1: conduct exploratory qualitative study  Option 2: conduct quantitative survey of 700+ leisure and business travelers  Option 3: conduct viability study with both qualitative exploratory study and confirmatory quantitative study

4 Knowledge is Power Accurate, up-to-date, relevant information is the fuel that runs the marketing engine

5 The Marketing Information System Determines what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users

6 Internal Company Data Information from within the company to produce reports on the results of sales and marketing activities Intranet: internal corporate communications network that links company departments, employees, and databases.

7 Marketing Intelligence Monitoring everyday sources and using “mystery shoppers” Futurists specialize in predicting consumer trends

8 Marketing Research Collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness  Syndicated research  Custom research

9 Acquired Databases From other companies Government databases Misuse of databases can be problematic and has led to do-not-call lists and antispam laws

10 Marketing Decision Support Systems MDSS: data plus analysis and interactive software allow marketing managers to access MIS data and conduct analyses

11 Searching for Gold: Data Mining Analysts sift through data to identify unique patterns of behavior among different customer groups

12 What Marketers Can Do with Data Mining Customer acquisition Customer retention and loyalty Customer abandonment Market basket analysis

13 Steps in the Marketing Research Process Step 1: Define the research problem  Specifying research objectives  Identifying consumer population of interest  Placing the problem in an environmental context Step 2: Determine the Research Design  Specifying exactly what information marketers will collect and what type of study they will do

14 Figure 4.5: Marketing Research Design

15 Secondary Versus Primary Research Secondary data have been collected for some purposes other than the problem at hand Primary data is information collected directly from respondents to specifically address the question at hand

16 Exploratory (Qualitative) Research Research techniques that generate insights for future, more rigorous studies Researchers conduct one-on-one discussions with consumers Focus group: a product-oriented discussion among a small group of consumers

17 Exploratory (Qualitative) Research (cont’d) Projective techniques: participants respond to some object Case study: comprehensive examination of a particular firm Ethnography: Marketers visit homes or participate in consumer activities to learn how products are used

18 Descriptive (Quantitative) Research Probes systematically into the problem Bases conclusions on large numbers of observations Results typically expressed in quantitative terms (averages, percentages, other stats)  Cross-sectional design  Longitudinal design

19 Causal Research Cause-and-effect relationships: a change in one thing causes a change in something else  Independent (cause) vs. dependent (change in outcome) variables  Experiments: test predicted relationships among variables in a controlled environment

20 Steps in the Marketing Research Process (cont’d) Step 3: Choose the Method for Collecting Primary Data  Survey Methods: interview respondents  Questionnaires: loosely, moderately, or completely structured

21 Questionnaires Mail questionnaires Telephone interviews Face-to-face interviews Online questionnaires

22 Observational Methods Observation: data collection where the researcher records consumers’ behaviors, often without their knowledge  Personal observation  Mechanical observation  Unobtrusive measures

23 Data Quality: Garbage In, Garbage Out How much faith should marketing managers place in research?  Validity  Reliability  Representativeness

24 Online Research Information gathered via consumer surfing and Web site/ /chat room questionnaires/focus groups Cookies allow a Web sponsor to track a surfer’s moves

25 Online Research Applications New product development Estimating market response Exploratory research (online focus groups) IM (Instant Messaging)

26 Advantages of Online Data Collection The same amount of data in a fraction of the time Convenience of survey completion Elimination of interviewer bias and data entry errors

27 Disadvantages of Online Data Collection Non-representativeness of respondents Limited computer access for poor and elderly Self-selection bias (people who like to take part in online studies) Hackers and competitors influencing/intercepting results

28 Step 4: Design the Sample Probability sample Each member of the population has some known chance of being included Sample is representative of population, and inferences about population are justified - Simple random sampling *Christine: these three should be lower-level (black)* - Systematic sampling - Stratified sampling

29 Step 4: Design the Sample (cont’d) Nonprobability sample Personal judgment used in selecting respondents Some members of population have no chance of being included No way to ensure that sample is representative of population  Convenience sampling  Quota sampling

30 Step 5: Collect the Data Challenges to gathering data in foreign countries  Differences in sophistication of research operations  Infrastructure/transportation challenges  Lack of phones  Low literacy rates  Local customs and cultural differences  Language translation difficulties

31 Step 6: Analyze and Interpret the Data Data need analysis for them to have meaning Tabulation: arranging data in a table or other summary form to get a broad picture of overall responses Cross-tabulation: examining the data by subgroups to see how results vary between categories

32 Step 7: Prepare the Research Report Executive summary Description of research methodology Discussion of results including tabulations, cross-tabulations Limitations of study Conclusions and recommendations

33 Real People, Real Choices Plan-it Marketing (Cindy Turgate) Cindy chose option 3: conduct viability study with both qualitative exploratory study and confirmatory quantitative study  Priceline.com was launched nationally in April 1998, and it continues to flourish

34 Keeping It Real: Fast Forward to Next Class Decision Time at Wild Planet Meet Danny Grossman, CEO and founder of Wild Planet Toys. Room Gear: a product line that lets kids decorate their rooms met with sharply different gender appeals The decision: the future direction of the Room Gear line