CRAVENS PIERCY PIERCY 8/e McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

5-2 Chapter Five Continuous Learning About Markets McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

5-3 Continuous Learning About Markets  Market orientation and organizational learning  Marketing research information  Information systems  Marketing intelligence systems and knowledge management  Ethical issues in collecting and using information

5-4 Market Orientation and Organizational Learning  Market orientation perspective includes all relevant sources of knowledge and ideas  Characteristics of the learning organization  Learning and competitive advantage

5-5 Learning About Markets Open- Minded Inquiry Keeping and Gaining Access to Prior Learning Synergistic Information Distribution Mutually Informed Interpretations Source: George S. Day, Journal of Marketing, October 1994.

5-6 Illustrative Example: The Bombay Company  Turnaround strategy at The Bombay Company started with customer research examining shopping experiences and what consumers really wanted from a home furnishings supplier  This drove major changes in how goods were displayed and presented to overcome perceptions of confused merchandizing and pricing  Stores were re-merchandized around themes to overcome consumer feelings that the company was too “stuffy”  The research showed that catalogs were used for decorating ideas not product listings, so they were restyled around lifestyle choices  The Bombay Company strategy is driven by extensive market research and rewsponse to customer feedback

5-7 A Framework for Market Sensing Probability of the Event Occurring Effect of the Event on the Company* HighLowMedium *1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal Utopia Field of Dreams Things to Watch Danger Future Risks

5-8 Types of Marketing Information  Marketing research studies  Standardized information services  Management information systems  Database systems  Decision support systems  Customer relationship management (CRM) systems  Competitor intelligence systems

5-9 Strategies for Obtaining Information Strategy alternatives Use standardized research services Collect existing information Conduct research study Internal Data Published information Subscription Single purchase Exploratory Full-scale

5-10 Advantages and Limitations of Questioning Methods Advantages Limitations Personal Interviews Most versatile and High cost flexible Possibility of interviewer Long questionnaires bias handled more easily Possibility of cheating by Presence of interviewer interviewer due to lack allows more flexibility of supervision in procedure Project time often lengthy More enjoyable for respondents Fewer refusals Telephone Interviews Fewer interviewers needed More noncommittal Relatively inexpensive answers Rapid method of data Some households collection overrepresented Can reach large number of Lengthy and detailed households questions often not More control over interviewers feasible Mail surveys Higher-quality information Questionnaire cannot be Better for collecting changed information on possibly Complex embarrassing subjects Can be completed by Relatively cheaper to conduct person other than intended No interviewer bias Follow-up expensive Response often slow in coming Source: Harper W. Boyd, Jr., Ralph Westfall, and Stanley F. Stasch, Marketing Research: Text and Cases, 5th ed. (Homewood, IL Richard D. Irwin, 1981), Chap. 4.

5-11 Special Research Studies Problem Definition Information Required Research Method Sampling Plan Questionnaire Design Data Collection Analysis and Report

Client  Would you recommend this supplier? 2. Supplier  Do you have sufficient funds for this project? 3. What parts of the project will be subcontracted, and how do you manage subcontractors? 4. May I see your interviewer’s manual and data entry manual? 5. How do you train and supervise interviewers? Screening A New Research Supplier

What percentage of interviews are validated? 7. May I see a typical questionnaire? 8. Who draws your samples? 9. What percentage of your data entry is verified? 10. Managers  What do you think about this supplier? Source: Seymour Sudman and Edward Blair, Marketing Research, A Problem-Solving Approach, Irwin/McGraw-Hill, 1998, 67.

5-14 Impact of the Internet on Marketing Costs and Availability  Online Surveys –Fast –Inexpensive –Limitations in population coverage –Resistance to excessive Web communications  Customer feedback and peer-to-peer Web communications  Monitoring customer Web behavior

5-15 Illustrative Example: Knowledge Sharing at Buckman Labs  Buckman has more than 50 Internet discussion groups focused on its main products – employees post messages a day  The company has amassed an easily searchable database of in-house expertise and past lessons learned, all accessible to employees and customers  The Web harnesses the brainpower of an entire global speciality chemicals company around customer problems  Knowledge sharing is the foundation for superior learning about customers

5-16 Marketing Decision-Support System Components Database Analysis Capabilities Display Models

5-17 Marketing Intelligence and Knowledge Management  Market sensing does not rely on hard data alone – intelligence from publications, sales calls, customer visits, social contacts, Internet, rumor  Knowledge management  Role of the Chief Knowledge Officer  Leveraging customer knowledge – creating “customer knowledge development dialogues” – operating enterprise-wide “customer knowledge communities” – capturing customer knowledge at the point of customer contact – management commitment to customer knowledge

5-18 Ethical Issues in Collecting and Using Information  Invasion of customer privacy –e.g., use of medical databases to sell healthcare products  Information and ethics –e.g., guidelines for sharing of confidential information –e.g., collecting data from children