Chapter 1 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 Lamb, Hair, McDaniel CHAPTER 9 Decision Support Systems and Marketing Research © iStockphoto.com/Zonecreative

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 Learning Outcomes 123 © Cengage Learning Inc All Rights Reserved. 2

Discuss the profound impact of the Internet on marketing research Discuss the growing importance of scanner- based research Explain when marketing research should be conducted Explain the concept of competitive intelligence Learning Outcomes 4567 © Cengage Learning Inc All Rights Reserved. 3

Explain the concept and purpose of a marketing decision support system Marketing Decision Support Systems 1 © Cengage Learning Inc All Rights Reserved. 4

Marketing Decision Support Systems An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. Characteristics:  Interactive  Flexible  Discovery Oriented  Accessible 1 © Cengage Learning Inc All Rights Reserved. 5

Marketing Decision Support Systems Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. 1 © Cengage Learning Inc All Rights Reserved. 6

Define marketing research and explain its importance to marketing decision making The Role of Marketing Research 2 © Cengage Learning Inc All Rights Reserved. 7

The Role of Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. 2 Marketing Research © Cengage Learning Inc All Rights Reserved. 8

The Role of Marketing Research Diagnostic Predictive Descriptive Gathering and presenting factual statements Explaining data Address “what if” questions 2 © Cengage Learning Inc All Rights Reserved. 9

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. © Cengage Learning Inc All Rights Reserved. 10

Describe the steps involved in conducting a marketing research project Steps in a Marketing Research Project 3 © Cengage Learning Inc All Rights Reserved. 11

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 Exhibit 9.1 The Marketing Research Process © Cengage Learning Inc All Rights Reserved. 12

The Marketing Research Project Marketing Research Problem Marketing Research Objective Management Decision Problem 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 be to provide insightful decision- making information. A broad-based problem that uses marketing research in order for managers to take proper actions. 3 © Cengage Learning Inc All Rights Reserved. 13

Sources of Secondary Data Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information 3 © Cengage Learning Inc All Rights Reserved. 14

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 © Cengage Learning Inc All Rights Reserved. 15

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 © Cengage Learning Inc All Rights Reserved. 16

The New Age of Secondary Information: The Internet The rapid development of the Internet has eliminated much of the drudgery associated with the collection of secondary data. 3 © Cengage Learning Inc All Rights Reserved. 17

Marketing Research Aggregators Acquire, catalog, reformat, segment, and resell reports already published by large and small marketing research firm. Databases are getting bigger, more comprehensive, and easier to search. Some major aggregators are: mindbranch.com aarkstore.com usadata.com 3 © Cengage Learning Inc All Rights Reserved. 18

Planning the Research Design Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ? 3 © Cengage Learning Inc All Rights Reserved. 19

Primary Data Information collected for the first time. Used for solving the particular problem under investigation. Advantages:  Answers a specific research question  Data are current  Source of data is known  Secrecy can be maintained 3 © Cengage Learning Inc All Rights Reserved. 20

Disadvantages of Primary Data  Primary data can be very expensive. Disadvantages are usually offset by the advantages of primary data. 3 © Cengage Learning Inc All Rights Reserved. 21

Survey Research The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes. Survey Research 3 © Cengage Learning Inc All Rights Reserved. 22

Forms of Survey Research Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews 3 © Cengage Learning Inc All Rights Reserved. 23

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 the 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 © Cengage Learning Inc All Rights Reserved. 24

Questionnaire Design Closed-ended and scaled-response questions are easier to tabulate than open-ended questions because response choices are fixed. On the other hand, unless the researcher designs the closed-ended question very carefully, an important choice may be omitted. © Cengage Learning Inc All Rights Reserved. 25

Questionnaire Design Clear and concise No ambiguous language Avoid two questions in one Avoid leading questions 3 © Cengage Learning Inc All Rights Reserved. 26

Observation Research A research method that relies on four types of observation:  people watching people  people watching an activity  machines watching people  machines watching an activity Observation Research 3 © Cengage Learning Inc All Rights Reserved. 27

Exhibit 9.3 Observational Situations © Cengage Learning Inc All Rights Reserved. 28

Observational Research Mystery Shoppers Behavioral Targeting (BT) Researchers posing as customers who gather observational data about a store. A form of observation marketing research that uses data mining coupled with identifying Web surfers by the IP addresses. 3 © Cengage Learning Inc All Rights Reserved. 29

Ethnographic Research The study of human behavior in its natural context; involves observation of behavior and physical setting. 3 © Cengage Learning Inc All Rights Reserved. 30

Virtual Shopping Advantages of virtual shopping: Creates an environment with a realistic level of complexity and variety. Allows quick set up and altering of tests. Low production costs. High flexibility. 3 © Cengage Learning Inc All Rights Reserved. 31

Experiments Experiments are used by researchers to gather primary data. Experiment Variables Price Package design Shelf space Advertising theme Advertising expenditures 3 © Cengage Learning Inc All Rights Reserved. 32

Sampling Procedure Universe Sample Probability Samples Non-Probability Samples 3 © Cengage Learning Inc All Rights Reserved. 33

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 © Cengage Learning Inc All Rights Reserved. 34

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 © Cengage Learning Inc All Rights Reserved. 35

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 © Cengage Learning Inc All Rights Reserved. 36

Types of Errors Measurement Error Measurement Error Error when there is a difference between the information desired and the information provided by the process Error when there is a difference between the information desired and the information provided by the process 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. 3 © Cengage Learning Inc All Rights Reserved. 37

Collecting the Data  Focus group facilities  Mall intercept locations  Test product storage  Kitchen facilities provide: Field Service Firms provide: 3 © Cengage Learning Inc All Rights Reserved. 38

Analyzing the Data 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 3 © Cengage Learning Inc All Rights Reserved. 39

Preparing and Presenting the Report  Concise statement of the research objectives  Explanation of research design  Summary of major findings  Conclusion with recommendations 3 © Cengage Learning Inc All Rights Reserved. 40

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 © Cengage Learning Inc All Rights Reserved. 41

Discuss the profound impact of the Internet on marketing research The Profound Impact of the Internet On Marketing Research 4 © Cengage Learning Inc All Rights Reserved. 42

Impact of the Internet  Under appropriate conditions, can represent the entire population  Has replaced computer-assisted telephone interviewing  Rated as having the greatest potential for further growth 4 © Cengage Learning Inc All Rights Reserved. 43

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 4 © Cengage Learning Inc All Rights Reserved. 44

Uses of the Internet by Marketing Researchers Other types of marketing research Conduct focus groups Administer surveys 4 © Cengage Learning Inc All Rights Reserved. 45

Methods of Collecting Online Surveys Web Survey Systems Survey Design and Web Hosting Sites Online Panel Providers 4 © Cengage Learning Inc All Rights Reserved. 46

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 4 © Cengage Learning Inc All Rights Reserved. 47

Advantages of Online Focus Groups  Better participation rates  Cost-effectiveness  Broad geographic scope  Accessibility  Honesty 4 © Cengage Learning Inc All Rights Reserved. 48

Web Community Research A carefully selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation. Web communities: –Engage customers –Achieve customer-derived innovations –Establish brand advocates –Offer real-time results 4 © Cengage Learning Inc All Rights Reserved. 49

Role of Consumer-Generated Media in Marketing Research  CGM comes from various sources: blogs, message boards, review sites, podcasts, etc.  CGM is trusted more than traditional advertising. 4 © Cengage Learning Inc All Rights Reserved. 50

Discuss the growing importance of scanner-based research Scanner-Based Research 5 © Cengage Learning Inc All Rights Reserved. 51

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 Research program that tracks the purchases of 3,000 households through store scanners in each research market Sales-tracking service for the consumer packaged-goods industry 5 © Cengage Learning Inc All Rights Reserved. 52

Scanner-Based Research BehaviorScan With such a measure of household purchasing, it is possible to manipulate marketing variables, such as television advertising or consumer promotions, or to introduce a new product and analyze real changes in consumer buying behavior. InfoScan Retail sales, detailed consumer purchasing information (including measurement of store loyalty and total grocery basket expenditures), and promotional activity by manufacturers and retailers are monitored and evaluated for all bar-coded products. Data are collected weekly from more than 70,000 supermarkets, drugstores, and mass merchandisers. 5 © Cengage Learning Inc All Rights Reserved. 53

Explain when marketing research should be conducted When Should Marketing Research Be Conducted? 6 © Cengage Learning Inc All Rights Reserved. 54

When Should Marketing Research Be Conducted?  Depends on managers’ perceptions of its quality, price, and timing  When the expected value of research information exceeds the cost of generating the information 6 © Cengage Learning Inc All Rights Reserved. 55

Explain the concept of competitive intelligence Competitive Intelligence 7 © Cengage Learning Inc All Rights Reserved. 56

Competitive Intelligence An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors. Competitive Intelligence (CI) 7 © Cengage Learning Inc All Rights Reserved. 57

Sources of Competitive Intelligence Internet Company Salespeople Industry Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows 7 © Cengage Learning Inc All Rights Reserved. 58

Chapter 9 Videos Ogden Publications Ogden publications distributes magazines covering three topics: sustainable living, rural lifestyles, and machinery collectors. The company publishes magazines and manages Web sites for readers of these magazines. Technology has changed the ways that Ogden is able to perform its market research, enabling them to modify media and marketing accordingly. © Cengage Learning Inc All Rights Reserved. 59

Part 2 Videos Analyzing Marketing Opportunities Watch the video on Raleigh. How has the company specifically targeted its market and made those decisions? /book_content/ _lamb/pa rt_videos/part02.html © Cengage Learning Inc All Rights Reserved. 60