1 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Decision Support 7 Systems and Marketing Research Canadian Adaptation prepared by Don Hill, Langara College

2 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objectives 1.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

3 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objectives (continued) 4. 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

4 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Explain the concept and purpose of a marketing decision support system Online

5 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Decision Support System An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. 1

6 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 DSS System Characteristics Interactive Flexible Discovery-Oriented Accessible 1

7 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. 1

8 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Define marketing research and explain its importance to marketing decision making 2 2 2

9 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. 2

10 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

11 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Management Uses of Marketing Research Improve the quality of decision making Trace problems Focus on keeping existing customers Understand the ever-changing marketplace Online

12 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Describe the steps involved in conducting a marketing research project 3 3 3

13 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 The Marketing Research Process 3

14 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Marketing Research MarketingResearchProblemMarketingResearchProblemMarketingResearchObjectiveMarketingResearchObjective 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. 3

15 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Secondary Data Data previously collected for any purpose other than the one at hand. 3 Online

16 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Sources of Secondary Data Government Agencies Trade and Industry Associations Marketing Research Firms Commercial Publications News Media Internal Corporate Information 3

17 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

18 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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 3

19 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 The New Age of Secondary Information: The Internet Search engines Directories Special interest groups Internet discussion groups 3

20 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

21 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Planning the Research Design Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ? ? 3

22 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation. 3

23 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Advantages of Primary Data Answers a specific research question Data is current Source of data is known Secrecy can be maintained 3

24 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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! 3

25 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Survey Research The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. 3

26 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Forms of Survey Research Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews 3

27 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. 3

28 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Executive Interviews A type of survey that involves interviewing business people at their offices concerning industrial products or services. 3

29 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Focus Group Seven to ten people who participate in a group discussion led by a moderator. 3

30 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Questionnaire Design 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. 3

31 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Types of Questions in Questionnaire Design 3 Open-endedClosed-EndedScaled- Response What is there about the colour of the eye shadow that makes you like it best? Dichotomous: Did you heat the Danish product before serving it? Yes/No Multiple Choice: Do you prefer to eat the Danish product Right out of the box 1 Refrigerated 2 Warmed in the oven 3 Toasted 4 Now that you have used the rug cleaner would you say that you Definitely buy it 1 Probably buy it 2 Might buy it 3 Probably not buy it 4 Definitely not buy it 5

32 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Questionnaire Design Qualities of Good Questionnaires Clear and Concise No Ambiguous Language Unbiased Reasonable Terminology Online

33 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Observation Research Online Observation Research A research method that relies on three types of observation:  people watching people  people watching an activity  machines watching people 3

34 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Observational Situations 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 cars Video cameras recording shopping behaviour Traffic- counting machine monitoring traffic flow on a road

35 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

36 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

37 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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 chance of being selected. 3

38 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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. 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

39 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Sampling Procedure Universe Sample Probability Samples Non-Probability Samples 3

40 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

41 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Field Service Firm A firm that specializes in interviewing respondents on a subcontracted basis. 3

42 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Field Service Firms Focus group facilities Mall intercept locations Test product storage Kitchen facilities Retail audits Provide: 3

43 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7Cross-Tabulation Cross-Tabulation 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. 3

44 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Preparing and Presenting the Report 1.Concise statement of the research objectives 2.Explanation of research design 3.Summary of major findings 4.Conclusion with recommendations 3

45 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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 to management? 3

46 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Steps in Market Research 3

47 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Discuss the profound impact of the Internet on marketing research 4 4 4

48 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

49 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Internet Usage Worldwide,

50 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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 reporting4

51 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Uses of the Internet by Marketing Researchers 4 Other marketing research Conduct focus groups Administer surveys

52 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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. 4

53 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Process for Online Focus Groups 4 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 Online

54 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Types of Online Focus Groups 4 Real-time online focus groups Time-extended online focus groups Online

55 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Advantages of Online Focus Groups Speed Cost-effectiveness Broad geographic scope Accessibility Honesty 4

56 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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 proposals4

57 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Discuss the growing importance of scanner-based research 5 5 5

58 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

59 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 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

60 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Learning Objective Explain the concept of competitive intelligence 6 6 6

61 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Competitive Intelligence Online Competitive Intelligence An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. 6

62 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Sources of Competitive Intelligence Internet Company Personnel Experts CI Consultants Government Agencies Patent Filings Suppliers Periodicals Yellow Pages Trade Shows 6

63 Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 7 Competitive Intelligence 6 Helps reduce unnecessary costs Helps companies respond to competitive threats Part of a sound marketing strategy