Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel Decision Support Systems and Marketing Research 8 CHAPTER

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 Learning Outcomes Explain the concept and purpose of a marketing decision support system Define marketing research and explain its importance to marketing decision making Describe the steps involved in conducting a marketing research project LO 1 LO 2 LO 3

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 Learning Outcomes Discuss the profound impact of the Internet on marketing research Discuss the growing importance of scanner-based research Explain the concept of competitive intelligence LO 4 LO 5 LO 6

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Explain the concept and purpose of a marketing decision support system Marketing Decision Support Systems LO 1

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 LO 1 Marketing Decision Support Systems Decision Support Systems Decision Support Systems An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 LO 1 DSS System Characteristics Interactive Flexible Discovery-Oriented Accessible

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 LO 1 Marketing Decision Support Systems Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. The key tool for successful one-to-one marketing.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 REVIEW LEARNING OUTCOME LO 1 Marketing Decision Support Systems

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 Define marketing research and explain its importance to marketing decision making The Role of Marketing Research LO 2

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 The Role of Marketing Research LO 2 Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 Marketing Research Studies LO 2 Products Advertising Prices Packages Names and Logos Services Buying habits Colors Uses Awareness Familiarity New concepts Traffic patterns Wants Needs Politics

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 The Role of Marketing Research LO 2 Diagnostic Predictive Descriptive  Gathering and presenting factual statements  Explaining data  “What if?”

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 LO 2 Beyond the Book 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 NOTE: Supplemental content – not in book.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 REVIEW LEARNING OUTCOME LO 2 Marketing Research and Its Importance Why marketing research?  Improve quality of decision making  Trace problems  Focus on keeping existing customers  Understand changes in marketplace

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 Describe the steps involved in conducting a marketing research project Steps in a Marketing Research Project LO 3

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 The Marketing Research Process LO 3 Collect Data Collect Data Specify Sampling Procedure Specify Sampling Procedure Plan Design/ Primary Data Plan Design/ Primary Data Define Problem Define Problem Analyze Data Analyze Data Prepare/ Present Report Prepare/ Present Report Follow Up

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Marketing Research LO 3 Marketing Research Problem Marketing Research Problem Marketing Research Objective Marketing Research Objective Management Decision Problem Management Decision Problem Determining what information is needed and how that information can be obtained efficiently and effectively. Determining what information is needed and how that information can be obtained efficiently and effectively. The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions. A broad-based problem that requires marketing research in order for managers to take proper actions.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Secondary Data LO 3 Data previously collected for any purpose other than the one at hand. Secondary Data

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Sources of Secondary Data LO 3 Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information Online

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Advantages of Secondary Data LO 3  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

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Disadvantages of Secondary Data LO 3  May not give adequate detailed information  May not be on target with the research problem  Quality and accuracy of data may pose a problem

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 The New Age of Secondary Information: The Internet LO Analyze your topic Test run a word or phrase in a search engine Learn as you go and vary your approach Don’t bog down in strategy that doesn’t work Go back to earlier steps better informed

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Planning the Research Design LO 3 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ?

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 Primary Data LO 3 Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 Advantages of Primary Data LO 3  Answers a specific research question  Data are current  Source of data is known  Secrecy can be maintained

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 Disadvantages of Primary Data LO 3  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.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 Survey Research LO 3 The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. Survey Research

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 Forms of Survey Research LO 3 Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29 Forms of Survey Research LO 3 Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. Executive Interview A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30 Forms of Survey Research LO 3 Seven to ten people who participate in a group discussion led by a moderator. Focus Groups

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 31 Questionnaire Design LO 3 Open-Ended Question Open-Ended Question Closed-Ended Question Closed-Ended Question Scaled- Response Question Scaled- Response Question 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. 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. A closed-ended question designed to measure the intensity of a respondent’s answer.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32 Questionnaire Design LO 3 Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question Online

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 33 Observation Research LO 3 A research method that relies on three types of observation:  people watching people  people watching an activity  machines watching people Observation Research

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 34 Observational Situations LO 3 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 Online

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 35 Ethnographic Research LO 3 The study of human behavior in its natural context; involves observation of behavior and physical setting. Ethnographic Research

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 36 The Sampling Procedure LO 3 Sample Universe A subset from a large population. The population from which a sample will be drawn. The population from which a sample will be drawn.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 37 Sampling Procedure LO 3 Universe Sample Probability Samples Non-Probability Samples

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 38 Types of Samples LO 3 Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 39 Probability Samples LO 3 Probability Sample Probability Sample A sample in which every element in the population has a known statistical likelihood of being selected. A sample in which every element in the population has a known statistical likelihood of being selected. Random Sample Random Sample A sample arranged so that every element of the population has an equal chance of being selected.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 40 Nonprobability Samples LO 3 Nonprobability Sample Nonprobability Sample Convenience Sample Convenience Sample Any sample in which little or no attempt is made to get a representative cross-section of the population. Any sample in which little or no attempt is made to get a representative cross-section of the population. A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher. A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 41 Types of Errors LO 3 Measurement Error Measurement Error Error when there is a difference between the information desired and the information provided by research Error when there is a difference between the information desired and the information provided by research Sampling Error Sampling Error Error when a sample somehow does not represent the target population. Frame Error Frame Error Error when a sample drawn from a population differs from the target population. Error when a sample drawn from a population differs from the target population. Random Error Random Error Error because the selected sample is an imperfect representation of the overall population. Error because the selected sample is an imperfect representation of the overall population.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 42 Field Service Firms LO 3  Focus group facilities  Mall intercept locations  Test product storage  Kitchen facilities  Retail audits Provide:

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 43 Analyzing the Data LO 3 A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions. Cross- Tabulation

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 44 Preparing and Presenting the Report LO 3  Concise statement of the research objectives  Explanation of research design  Summary of major findings  Conclusion with recommendations

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 45 Following Up LO 3  Were the recommendations followed?  Was sufficient decision-making information included in the report?  What could have been done to make the report more useful to management?

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 46 REVIEW LEARNING OUTCOME LO 3 Steps in a Marketing Research Project

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 47 Discuss the profound impact of the Internet on marketing research Impact of the Internet on Marketing Research LO 4

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 48 LO 4 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

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 49 LO 4 Advantages of Internet Surveys Contact with the hard-to-reach Contact with the hard-to-reach Improved respondent participation Improved respondent participation Personalized questions and data Personalized questions and data Reduced costs Rapid development, Real-time reporting Rapid development, Real-time reporting

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 50 LO 4 Uses of the Internet by Marketing Researchers Other types of marketing research Conduct focus groups Administer surveys Online

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 51 LO 4 Internet Samples Unrestricted Internet Sample Unrestricted Internet Sample Screened Internet Sample Screened Internet Sample Recruited Internet Sample Recruited Internet Sample A survey in which anyone with a computer and modem can fill out the questionnaire. A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate. A sample in which respondents are prerecruited and must qualify to participate.

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 52 LO 4 Process for Online Focus Groups 1.Build a database of respondents via Web site screening questionnaire 2.Identify qualified individuals via 3.Develop a discussion guide 4.Moderator runs group by typing in questions online for all to see 5.Environment is similar to a chat room 6.Firm captures the complete text of the focus group

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 53 LO 4 Types of Online Focus Groups Real-time online focus groups Time-extended online focus groups

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 54 LO 4 Advantages of Online Focus Groups  Speed  Cost-effectiveness  Broad geographic scope  Accessibility  Honesty

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 55 LO 4 Role of Blogs in Marketing Research  Refined technologies allow companies to mine data available in Internet blogs.  Companies can identify the most influential bloggers and learn exactly what they are saying (and how they are saying it).

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 56 LO 4 Other Uses of the Internet by Marketing Researchers Viewing of presentations of marketing research surveys Viewing of presentations of marketing research surveys Publication and distribution of reports Publication and distribution of reports Data management and online analysis Data management and online analysis Collaboration between client and research supplier Distribution of requests for proposals (RFPs) and proposals Distribution of requests for proposals (RFPs) and proposals

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 57 REVIEW LEARNING OUTCOME LO 4 Impact of the Internet on Marketing Research

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 58 Discuss the growing importance of scanner-based research Scanner-Based Research LO 5

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 59 LO 5 Scanner-Based Research Scanner-based Research A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy. BehaviorScan InfoScan

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 60 LO 5 When Should Marketing Research Be Conducted?  Where there is a high level of uncertainty  When value of research information exceeds the cost of generating the information

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 61 REVIEW LEARNING OUTCOME LO 5 Scanner-Based Research BehaviorScan InfoScan Panel information from Specific groups of people, enables researchers to manipulate variables and see real results Aggregate consumer information on all bar-coded products

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 62 Explain the concept of competitive intelligence Competitive Intelligence LO 6

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 63 Competitive Intelligence LO 6 Online An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. Competitive Intelligence

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 64 Sources of Competitive Intelligence LO 6 Internet Company Salespeople Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows

Chapter 8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 65 REVIEW LEARNING OUTCOME LO 6 Competitive Intelligence CI Part of a sound marketing strategy Helps companies respond to competitive threats Helps reduce unnecessary costs