©2002 South-Western Chapter 8 Version 6e1 chapter Decision Support Systems and Marketing Research 8 8 Prepared by Deborah Baker Texas Christian University

©2002 South-Western Chapter 8 Version 6e2 chapter Learning Objectives Explain the concept and purpose of a marketing decision support system. 2. Define marketing research and explain its importance to marketing decision making. 3. Describe the steps involved in conducting a marketing research project.

©2002 South-Western Chapter 8 Version 6e3 chapter Learning Objectives (continued) Discuss the profound impact of the Internet on marketing research. 5. Discuss the growing importance of scanner-based research. 6. Explain the concept of competitive intelligence.

©2002 South-Western Chapter 8 Version 6e4 Learning Objective 1 1 Explain the concept and purpose of a marketing decision support system.

©2002 South-Western Chapter 8 Version 6e5 Decision Support System An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. 1 1

©2002 South-Western Chapter 8 Version 6e6 DSS System Characteristics Characteristics of a DSS System Characteristics of a DSS System Interactive Flexible Discovery-Oriented Accessible 1 1

©2002 South-Western Chapter 8 Version 6e7 Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. 1 1

©2002 South-Western Chapter 8 Version 6e8 Learning Objective 2 2 Define marketing research and explain its importance to marketing decision making.

©2002 South-Western Chapter 8 Version 6e9 Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. 2 2

©2002 South-Western Chapter 8 Version 6e10 Roles of Marketing Research 2 2 Descriptive Diagnostic Predictive Marketing Research has three roles:

©2002 South-Western Chapter 8 Version 6e11 Diagnostic Predictive Descriptive  Gathering and presenting factual statements  Explaining data  Attempting to estimate the results of a planned marketing decision Roles of Marketing Research 2 2

©2002 South-Western Chapter 8 Version 6e12 Management Uses of Marketing Research  Improve the quality of decision making  Trace problems  Focus on keeping existing problems  Understand the ever-changing marketplace 2 2

©2002 South-Western Chapter 8 Version 6e13 Learning Objective Describe the steps involved in conducting a marketing research project. 3 3

©2002 South-Western Chapter 8 Version 6e14 The Marketing Research Process CollectDataCollectData SpecifySamplingProcedureSpecifySamplingProcedure Plan Design/ Primary Data Plan Design/ Primary Data DefineProblemDefineProblemAnalyzeDataAnalyzeData Prepare/PresentReportPrepare/PresentReport Follow Up 3 3

©2002 South-Western Chapter 8 Version 6e15 Marketing Research 3 3MarketingResearchProblemMarketingResearchProblemMarketingResearchObjectiveMarketingResearchObjective ManagementDecisionProblemManagementDecisionProblem 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.

©2002 South-Western Chapter 8 Version 6e16 Secondary Data Data previously collected for any purpose other than the one at hand. 3 3

©2002 South-Western Chapter 8 Version 6e17 Sources of Secondary Data Government Agencies Trade and Industry Associations Marketing Research Firms Commercial Publications News Media Internal Corporate Information 3 3

©2002 South-Western Chapter 8 Version 6e18 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 3 3

©2002 South-Western Chapter 8 Version 6e19 Disadvantages of Secondary Data 3 3  May not be on target with the research problem  Quality and accuracy of data may pose a problem

©2002 South-Western Chapter 8 Version 6e20 The New Age of Secondary Information 3 3 The Internet www  Search Engines and Directories  Sites of Interest to Marketing Researchers  Discussion Groups  Periodical, Newspaper, and Book Databases

©2002 South-Western Chapter 8 Version 6e21 Basic Types of Directories  Academic and Professional Directories  Commercial Portals 3 3

©2002 South-Western Chapter 8 Version 6e22 Research Design Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed. 3 3

©2002 South-Western Chapter 8 Version 6e23 Planning the Research Design 3 3 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ? ?

©2002 South-Western Chapter 8 Version 6e24 Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation. 3 3

©2002 South-Western Chapter 8 Version 6e25 Advantages of Primary Data 3 3  Answers a specific research question  Data are current  Source of data is known  Secrecy can be maintained

©2002 South-Western Chapter 8 Version 6e26 Disadvantages of Primary Data 3 3  Expensive  Quality declines if interviews are lengthy  Reluctance to participate in lengthy interviews Disadvantages are usually offset by the advantages of primary data! Disadvantages are usually offset by the advantages of primary data!

©2002 South-Western Chapter 8 Version 6e27 Survey Research The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. 3 3

©2002 South-Western Chapter 8 Version 6e28 Forms of Survey Research Focus Groups Executive Interviews Mail Surveys Telephone Interviews (Home and Central Location) Mall Intercept Interviews In-Home Interviews 3 3

©2002 South-Western Chapter 8 Version 6e29 Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. 3 3

©2002 South-Western Chapter 8 Version 6e30 Executive Interviews 3 3 A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.

©2002 South-Western Chapter 8 Version 6e31 Focus Group 3 3 Seven to ten people who participate in a group discussion led by a moderator.

©2002 South-Western Chapter 8 Version 6e32 Advantages of On-Line Focus Groups 3 3  Speed  Cost-effectiveness  Broad geographic scope  Accessibility  Honesty

©2002 South-Western Chapter 8 Version 6e33 Questionnaire Design 3 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.

©2002 South-Western Chapter 8 Version 6e34 Questionnaire Design Qualities of Good Questionnaires Clear and Concise No Ambiguous Language Unbiased Reasonable Terminology 3 3

©2002 South-Western Chapter 8 Version 6e35 Observation Research 3 3 A research method that relies on three types of observation:  people watching people  people watching an activity  machines watching people

©2002 South-Western Chapter 8 Version 6e36 Observation Research Mystery Shoppers One-Way Mirrors Types of Observation Research Audits Machines Watching People People Watching People People Watching an Activity Traffic Counters Passive People Meter 3 3

©2002 South-Western Chapter 8 Version 6e37 Mystery Shoppers 3 3 Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions.

©2002 South-Western Chapter 8 Version 6e38 Experiment 3 3 A method a researcher uses to gather primary data.

©2002 South-Western Chapter 8 Version 6e39 Sampling Procedure 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. 3 3

©2002 South-Western Chapter 8 Version 6e40 Probability Samples 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 change of being selected. 3 3

©2002 South-Western Chapter 8 Version 6e41 Nonprobability Samples 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 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. 3 3

©2002 South-Western Chapter 8 Version 6e42 Sampling Procedure Universe Sample Probability Samples Non-Probability Samples 3 3

©2002 South-Western Chapter 8 Version 6e43 Types of Samples Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample 3 3

©2002 South-Western Chapter 8 Version 6e44 Types of Errors Errors Associated with Sampling Errors Measurement Error Sampling Error Frame Error Random Error 3 3

©2002 South-Western Chapter 8 Version 6e45 Types of Errors Measurement Error Measurement Error Sampling Error Sampling Error Frame Error Frame Error Random Error Random 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 Error when a sample somehow does not represent the target population. 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. 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. 3 3

©2002 South-Western Chapter 8 Version 6e46 Field Service Firm 3 3 A firm that specializes in interviewing respondents on a subcontracted basis.

©2002 South-Western Chapter 8 Version 6e47 Field Service Firms 3 3  Focus group facilities  Mall intercept locations  Test product storage  Kitchen facilities  Retail audits Provide

©2002 South-Western Chapter 8 Version 6e48 Cross-Tabulation 3 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.

©2002 South-Western Chapter 8 Version 6e49 Preparing and Presenting the Report 3 3  Concise statement of the research objectives  Explanation of research design  Summary of major findings  Conclusion with recommendations

©2002 South-Western Chapter 8 Version 6e50 Following Up  Were the recommendations followed?  Was sufficient decision-making information included in the report?  What could have been done to make the report more useful? 3 3

©2002 South-Western Chapter 8 Version 6e51 Learning Objective Discuss the profound impact of the Internet on marketing research. 4 4

©2002 South-Western Chapter 8 Version 6e52 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 research easier  Slashes labor-and time-intensive research activities 4 4

©2002 South-Western Chapter 8 Version 6e53 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 Advantages of Internet Surveys Advantages of Internet Surveys 4 4

©2002 South-Western Chapter 8 Version 6e54 Internet Samples 4 4 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.

©2002 South-Western Chapter 8 Version 6e55 Other Uses of the Internet Other Internet Uses by Marketing Researchers Other Internet Uses 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 on-line analysis Data management and on-line analysis Collaboration in the management of a research project Collaboration in the management of a research project Distribution of requests for proposals Distribution of requests for proposals 4 4

©2002 South-Western Chapter 8 Version 6e56 Learning Objective Discuss the growing importance Discuss the growing importance of scanner-based research. 5 5

©2002 South-Western Chapter 8 Version 6e57 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. 5 5

©2002 South-Western Chapter 8 Version 6e58 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 5 5

©2002 South-Western Chapter 8 Version 6e59 Learning Objective 6 6 Explain the concept of competitive intelligence.

©2002 South-Western Chapter 8 Version 6e60 Competitive Intelligence An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. 6 6

©2002 South-Western Chapter 8 Version 6e61 Competitive Intelligence  Can help identify a competitor’s advantage  Can help determine how the competitor’s advantage was achieved 6 6

©2002 South-Western Chapter 8 Version 6e62 Advantages of Competitive Intelligence  Predict changes in business relationships  Guard against threats  Forecast a competitor’s strategy  Develop a successful marketing plan 6 6

©2002 South-Western Chapter 8 Version 6e63 Sources of Competitive Intelligence 6 6 Internet Company Personnel Experts CI Consultants Government Agencies UCC Filings Suppliers Newspapers/Periodicals Yellow Pages Trade Shows