McGraw-Hill/Irwin Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. Marketing Dhruv Grewal Michael Levy Chapter 9 Marketing Research and Information Systems

9-2 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Harrah’s Entertainment, Inc. 82% of revenue came from 26% of customers Not high rollers but middle aged workers and seniors Three tier reward structure designed to meet the needs of those customers

9-3 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Marketing Research Marketing research: Consists of a set of techniques and principles for systematically collecting, recoding, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas.

9-4 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Using Marketing Information Systems to Create Better Value Marketing Information System (MkIS) Marketing Information System (MkIS) Data warehouse Data mining

9-5 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Ethics of Using Customer Information Council of American Survey Research Organizations Code of Ethics Bottom Line: Marketing research should be used only to produce unbiased, factual information.

9-6 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What Would You Do? He has just finished giving a successful presentation to a major client. The client has asked for a list of companies that participated in the study and copies of all the completed surveys. Consider Aaron, a marketing researcher

9-7 Test Your Knowledge When conducting research, why must researchers assure respondents that the information they provide will be treated as confidential? A)It is the law B)Customers will be more likely to make purchases C)Customers will be more likely to provide honest responses D)It is a requirement of the AMA

9-8 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Marketing Research Process

9-9 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 1: Defining the Objectives and Research Needs What information is needed to answer specific research questions? How should that information be obtained?

9-10 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 2: Designing the Research Project Secondary data Primary data

9-11 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Syndicated Data

9-12 Test Your Knowledge How does syndicated data differ from secondary data? A)Secondary data tends to be more reliable B)Syndicated data only provides pricing trends C)Secondary data is not as readily available as syndicated data D)Syndicated data is purchased from a research firm

9-13 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advantages and Disadvantages of Secondary and Primary Data

9-14 Adding Value 9.2: Using Weblog Information © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 3.2 Million Weblogs or blogs available worldwide Provide a source of information for marketers Companies now track blogs to gain customer insight

9-15 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Step 3: Data Collection Process Conclusive research Exploratory research

9-16 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Exploratory Versus Conclusive Data Collection

9-17 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Exploratory Methods Observation In-depth interview Focus group

9-18 Test Your Knowledge Which of the following research methods gathers qualitative data about initial reactions to a new or existing product or service, opinions about different competitive offerings, or reactions to market stimuli? A)focus groups B)in-depth interviews C)projective research D)all of these are correct

9-19 How can a firm use exploratory research to uncover consumers’ attitudes toward their product/service? Using Exploratory Research

9-20 Case in Point: Kit Kat Bars Challenge Answer Results Kit Kat bars were losing appeal among younger consumers while remaining popular with consumers aged Qualitative interviews were conducted with younger consumers. New forms of Kit Kat bars were sampled. The interviews were followed with focus groups. The introduction of the Kit Kat chunky, a single large Kit Kat bar.

9-21 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Ethical Dilemma 9.1: Watching ConsumersWatching Consumers Marketing research firms dedicated to watching consumers. Gather data that would not otherwise be available. Should researchers get consent prior to observing?

9-22 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Conclusive Research Methods Can be either: Descriptive Experimental

9-23 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Survey Research

9-24 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What Not to Do When Designing a Questionnaire

9-25 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Web Surveying Response rates are relatively high Respondents may lie less It is inexpensive Results are processed and received quickly

9-26 Test Your Knowledge What is the typical response rate for online surveys? A)1 – 2 percent B)10 – 15 percent C)30 – 35 percent D)40 – 45 percent

9-27 How do firms successfully use web surveying? Using Web Surveying

9-28 Case in Point: Derham Marketing Research, Ltd. Challenge Answer Results Derham Marketing Research Limited was looking for a reliable means of writing, delivering and analyzing online surveys. Partnering with Form Artist software that allowed the firm to have internal control over their online surveys. Derham has saved money, kept costs down, increased control. Quantifiable benefits: saved on average 2 days at least in project turnaround, and often up to a week. Reporting can be the same day, also saving up to a week. Electronic files saved paper and clarified the reporting procedure. The capacity to copy and paste has saved further re-handling and ensured accuracy of any information carried across to the clients' own systems.

9-29 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Experimental Research Variable 1 (e.g., price) Variable 2 (e.g., quantity) systematic manipulation Profitability

9-30 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Using Experimental Research How can firms use experimental research to improve value for customers and the firm?

9-31 Case in Point: It’s Beginning to Smell a Lot Like Christmas © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Challenge Answer Results Retailers need to get shoppers into the holiday spending mood. Use an experiment to determine what factors in the retail environment contribute to customers “holiday spending mood”. Retailers who used holiday music and holiday scents together were viewed more favorably, the merchandise in the store was rated higher, and purchase intentions increased compared to retailers who used either alone or non-congruent music and scent.

9-32 Scanner Research © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Information Resources, Inc. AC Nielsen What if I reduce my price by 10%?

9-33 Panel Research © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What are they buying or not buying? Group of consumers Survey or sales receipts

9-34 Step 4: Analyzing Data © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Converting data into information to explain, predict and/or evaluate a particular situation.

9-35 Step 5: Presenting Results © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Executive Summary Body Conclusions Limitations Supplements – Tables – Figures – Appendixes

9-36 Test Your Knowledge Which of the following should NOT be included in a marketing analysis results report? A)recommendations to management B)technical jargon C)supportive tables and figures D)methodology used

9-37 Conclusive research: Provides the information needed to confirm preliminary insights, which managers can use to pursue appropriate courses of action. Data mining: Technique that uses a variety of statistical analysis tools to extract valuable database information and uncover previously unknown patterns in the data or relationships among variables. Data warehouse: Large computer files of individual data consisting of customer information and purchase history. Exploratory research: Attempts to begin to understand the phenomenon of interest; it also provides initial information when the problem lacks any clear definition. Focus group: An exploratory research technique in which trained researchers ask questions, listen to and record answers, and then pose additional questions to clarify or expand on a particular issue. In-depth interview: An exploratory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue. Marketing Information System (MkIS): A set of procedures and methods that apply to the regular, planned collection, analysis, and presentation of information that then may be used in marketing decisions. Observation: Exploratory research method that entails examining purchase and consumption behaviors through personal or video camera scrutiny. Primary data: Data collected to address specific research needs. Secondary data: Pieces of information that have already been collected from other sources and usually are readily available. Chapter 9 Glossary