Chapter 8 Improving Decisions with Marketing Information

Basic Definitions MIS - an integrated collection of equipment, processes and people designed to provide information to marketing managers Data versus Information

Decision Support System Data Bases Analytical Model System User Interaction System Input Output

Marketing Research Marketing Research is the systematic process of generating new information for use in making marketing decisions. lWhat information is needed? lHow can the data be collected?

Research/MIS Comparison Marketing Research 1. Data used is primarily external 2. Primary function is to solve problems 3. Projects handled on a project- to-project basis 4. Information focus is toward present & past data 5. Process provides one source of information for decision makers 6. Commitment can be sporadic MIS 1. Data can be internal or external 2. Functions are to solve problems and to prevent problems through controls 3. Operates as a true system rather than intermittent projects 4. Projection techniques allow for future oriented data 5. This system includes a variety of sub-systems 6. Total organizational commit- ment secures the best efficiency

Marketing Research Process Problem Definition Analyzing the Situation Data Collection Data Analysis Solving the Problem (Report Preparation, Presentation and Follow-Up)

Problem Definition Problem/Opportunity/Question/Issue Symptoms versus Problems Problem Definition Symptom detection Analysis of the situation Problem definition Statement of research objectives (hypotheses) Exploratory Research Purpose: to investigate; to define the problem more accurately Typically small scale and in-depth Example: Focus Groups

Situation Analysis Can secondary data solve the problem? If yes, what are the appropriate sources of secondary data? If no, what type of primary data are needed? What is the appropriate “design” or plan for collecting the data?

Secondary Data Advantages: –Almost always less expensive than primary data –Can be obtained quickly –Can provide understanding of the existing knowledge base and gaps Disadvantages: –May be out-dated –May be collected only periodically –May not have been collected in the preferred form –May not be able to assess its accuracy

Uncertainty and Methodology Uncertainty associated with the research problem determines the research methodology: Degree of Problem Definition Uncertain aboutAware of Problem Problem Problem Clearly Defined Exploratory Descriptive Causal Research Research Research Appropriate Research Methodology Observation Survey Experimentation

Selecting the Sample Sampling versus Census Basic Questions: –Who is to be sampled? Population versus Sample Frame –How big should the sample be? Sample Size –How should the sample be selected? Probability versus Nonprobability Samples

Collecting the Data Collection Methods for Surveys –Mail, Phone or In-Person Response Rates Pretesting Field Service Firms –Syndicated Research Firms –Data Collection Agencies

Analyzing the Data Data: editing, coding, entry, analysis Reliability and Validity Confidence Intervals and Error Rates Oral and Written Reports

Value Versus Cost of Research ValueCost Decreased Uncertainty Increased Likelihood of Correct Decision Improved Marketing Performance Higher Profits Research Expenditures Delay of Decision Possible Disclosure of Information to Rivals Possible Erroneous Results