Decision Support Systems and Marketing Research Lamb, Hair, McDaniel Chapter 9 Decision Support Systems and Marketing Research 2010-2011 CHAPTER 9 Decision Support Systems and Marketing Research Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.

Marketing Decision Support Systems Chapter 9 Decision Support Systems and Marketing Research Marketing Decision Support Systems There will be no questions on Marketing Decision Support Systems Notes: Marketing decision making relies on accurate and timely information. Good information is used to maximize sales, to use scarce company resources efficiently, and to prepare and adjust marketing plans. The system used for gathering marketing information is called a marketing decision support system. LO1

The Role of Marketing Research Chapter 9 Decision Support Systems and Marketing Research The Role of Marketing Research Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. Notes: Marketing research plays a key role in the marketing system. It provides data on the effectiveness of the marketing mix and insights for necessary changes. Marketing research is a main data source for management information systems and DSS. LO2

Marketing Research Studies LO2 Chapter 9 Decision Support Systems and Marketing Research Marketing Research Studies Products Advertising Prices Packages Names and Logos Services Buying habits Colors Uses Awareness Familiarity New concepts Traffic patterns Wants Needs Politics Notes: About $7 billion is spent each year on marketing research in the U.S. Studies include the listings on this slide.

The Role of Marketing Research Chapter 9 Decision Support Systems and Marketing Research The Role of Marketing Research Diagnostic Predictive Descriptive Gathering and presenting factual statements Explaining data “What if?” Notes: Marketing research has three roles: descriptive, diagnostic, and predictive. Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product? Diagnostic: What was the impact on sales after a change in the package design? Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a marketing decision? LO2

Management Uses of Marketing Research Chapter 9 Decision Support Systems and Marketing Research Management Uses of Marketing Research Improve the quality of decision making Trace problems Focus on keeping existing customers Understand the marketplace Alert them to marketplace trends Gauge the value of goods and services, and the level of customer satisfaction Beyond the Book NOTE: Supplemental content – not in book. LO2

The Importance of Marketing Research Chapter 9 Decision Support Systems and Marketing Research The Importance of Marketing Research Why marketing research? Improve quality of decision making Trace problems Focus on keeping existing customers Understand changes in marketplace LO2

Steps in a Marketing Research Project Chapter 9 Decision Support Systems and Marketing Research Steps in a Marketing Research Project There will be no questions on this topic Notes: The scope of a marketing research project may range from several hundred dollars to millions of dollars. In any case, the same general research process should be followed. LO3

Sources of Secondary Data Chapter 9 Decision Support Systems and Marketing Research Sources of Secondary Data Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information Online Coca-Cola Store When you are asked for your opinion on the Coke Store Web site, is Coca-Cola doing marketing research, or gathering information for a DSS? Read the whole survey before deciding. Which did you pick and why? LO3

Advantages of Secondary Data Chapter 9 Decision Support Systems and Marketing Research Advantages of Secondary Data 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 LO3

Disadvantages of Secondary Data Chapter 9 Decision Support Systems and Marketing Research Disadvantages of Secondary Data May not give adequate detailed information May not be on target with the research problem Quality and accuracy of data may pose a problem LO3

Chapter 9 Decision Support Systems and Marketing Research Primary Data Information collected for the first time. Used for solving the particular problem under investigation. Advantages: Answers a specific research question Data are current Source of data is known Secrecy can be maintained Notes: The main advantage of primary data is that they will answer a specific research question that secondary data cannot answer. Primary data are current and the source of data is known. Moreover, the information is proprietary. LO3

Disadvantages of Primary Data Chapter 9 Decision Support Systems and Marketing Research Disadvantages of Primary Data Expensive “Piggybacking” may confuse respondents Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews Disadvantages are usually offset by the advantages of primary data. Notes: The cost of primary data may range from a few thousand dollars for a limited survey to several million for a nationwide study. To save money, firms may cut back on the number of interviews, or piggyback studies by gathering data on two different projects using one questionnaire. LO3

Survey Research LO3 Survey Research Chapter 9 Decision Support Systems and Marketing Research Survey Research Survey Research The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. LO3

Forms of Survey Research Chapter 9 Decision Support Systems and Marketing Research Forms of Survey Research Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews Notes: In home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool. Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population. However, probing is possible. Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application. The federal “Do Not Call” law does not apply to survey research. Mail Surveys: Benefits are the low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates. Consequently, the resulting sample may not represent the surveyed population. However, mail panels, consisting of a sample of households recruited to participate for a given period, yield response rates of 70 percent. Executive interviews: Survey involves businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents. Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews. LO3

Questionnaire Design LO3 Open-Ended Question Closed-Ended Chapter 9 Decision Support Systems and Marketing Research Questionnaire Design Open-Ended Question Closed-Ended Scaled- Response An interview question that encourages an answer phrased in respondent’s 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. Notes: Questionnaires contain three basic types of questions: Open-ended questions Closed-ended questions Scaled-response questions. LO3

Beyond the Book Questionnaire Design LO3 Chapter 9 Decision Support Systems and Marketing Research Questionnaire Design On the other hand, unless the researcher designs the closed-ended question very carefully, an important choice may be omitted. Closed-ended and scaled-response questions are easier to tabulate than open-ended questions because response choices are fixed. Beyond the Book As mentioned in the slide, unless a researcher designs closed-ended questions very carefully, important choices may be omitted. For example, suppose a food study asked this question: “Besides meat, which of the following items do you normally add to a taco that you prepare at home?” A varied selection is provided. But suppose a respondent answers by saying, “I usually add a green, avocado-tasting hot sauce” or “I cut up a mixture of lettuce and spinach.” How would you code these replies? As you can see, the questionnaire needs an “other” category. LO3 NOTE: Supplemental content – not in book.

Reasonable terminology Chapter 9 Decision Support Systems and Marketing Research Questionnaire Design Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question Online CreateSurvey.com Design a marketing questionnaire to post on your class Web site using the tools offered by Create Survey. Visit the demo polls on the site for ideas and tips. Online http://www.surveymonkey.com/ LO3

Observation Research LO3 Observation Research Chapter 9 Decision Support Systems and Marketing Research Observation Research Observation Research A research method that relies on three types of observation: people watching people people watching an activity machines watching people Notes: Observation research is the systematic process of recording the behavioral patterns of people, objects, and occurrences without questioning them. LO3

Observational Situations Chapter 9 Decision Support Systems and Marketing Research Observational Situations Situation People watching people People watching phenomena Machines watching people Machines watching phenomena Example Mystery shoppers in a supermarket Observer at an intersection counting traffic Video cameras recording behavior Traffic-counting machine monitoring traffic flow Notes: Observation research depends on watching what people do. It may be conducted by human observers or machines. LO3

Field Service Firms provide: Chapter 9 Decision Support Systems and Marketing Research Collecting the Data Field Service Firms provide: Focus group facilities Mall intercept locations Test product storage Kitchen facilities Retail audits Notes: Most primary data is collected by marketing research field service firms. Field service firms conduct interviews, provide focus-group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products. LO3

The Profound Impact of the Internet on Marketing Research Chapter 9 Decision Support Systems and Marketing Research The Profound Impact of the Internet on Marketing Research Discuss the profound impact of the Internet on marketing research LO4

Impact of the Internet LO4 Allows better and faster decision making Chapter 9 Decision Support Systems and Marketing Research Impact of the Internet Allows better and faster decision making Improves ability to respond quickly to customer needs and market shifts Makes follow-up studies and tracking research easier Slashes labor- and time-intensive research activities and costs Notes: Online Internet marketing research is being used by 88 percent of U.S. research firms. The reasons for its success are shown on this slide. LO4

Advantages of Internet Surveys Chapter 9 Decision Support Systems and Marketing Research Advantages of Internet Surveys Contact with the hard-to-reach Improved respondent participation Personalized questions and data Reduced costs Rapid development, Real-time reporting Notes: Rapid development, real-time reporting: Survey results can be tabulated and broadcast in a much shorter time frame. Reduced costs: Costs can be cut by 25 to 40 percent with results in half the time required for traditional telephone surveys. Personalized questions and data: Personalization allows relevance to each respondent’s own situation, thus speeding the response process. Improved respondent participation: Internet surveys take half as much time to complete as phone interviews and can be accomplished at the respondent’s convenience. Contact with the hard-to-reach: Doctors, management, and high-income professionals are among the most surveyed and the most difficult to reach. Many of these groups are well represented online. LO4

Uses of the Internet by Marketing Researchers Chapter 9 Decision Support Systems and Marketing Research Uses of the Internet by Marketing Researchers Other types of marketing research Conduct focus groups Administer surveys Online Greenfield On-line Find out how online focus groups work by signing up to be a participant. Check out some of Greenfield’s online surveys in the Survey Center. Online http://www.greenfieldonline.com LO4

Methods of Collecting Online Surveys Chapter 9 Decision Support Systems and Marketing Research Methods of Collecting Online Surveys Web Survey Systems Survey Design and Web Hosting Sites Online Panel Providers LO4

Competitive Intelligence Chapter 9 Decision Support Systems and Marketing Research Competitive Intelligence There will be no questions on competitive intelligence LO7