1. Marketing Information and Research Unit 5

2. Starting with Information You must have information about your market before can start the marketing planning process Competitive and economic factors facing businesses today increase the need to gather and study information.

3. Marketers Need to Understand…. Consumer Differences o Most consumers have very different needs and wants o Most consumers will likely view product and service choices quite differently o Businesses must be able to determine the similarities and differences among market segments Decide how they can best meet the unique needs and wants of those segments Expanding Choices o Customer needs are changing o Consumers are able to satisfy basic needs more easily than in the past o They have moved beyond satisfying basic needs and are devoting more resources to satisfying their wants

4. Marketers Need to Understand… Competition o Gathering information about competitors’ products mad marketing activities in order to determine their strengths and weaknesses will make a business more competitive o Decision makers need information that enables them to make the best and most profitable product and service choices Ones that will improve on competitors’ offerings The Global Marketplace o Gathering information about the country and its people as well as new competitors can help determine how to become an effective global business.

5. Decide on Information Needs Approaches to Planning o How do you know whether a change in the marketing mix is warranted? o Are you basing the need for change off of a hunch or based off of factual data? Categories of Information o Each type of business needs specific information General categories: o Consumers o Marketing mix o Business environment

6. Consumers Age Gender Income Education Family size Occupation Attitudes Primary needs Purchase frequency Brand preferences Information needs Media preferences Shopping behavior Age Gender Income Education Family size Occupation Attitudes Primary needs Purchase frequency Brand preferences Information needs Media preferences Shopping behavior Marketing Mix Basic products Product features Services Product packaging Guarantees After-sale customer service Product price Discounts Location and method of sale Type of distribution used Promotion and sales methods Promotional message Promotional media Basic products Product features Services Product packaging Guarantees After-sale customer service Product price Discounts Location and method of sale Type of distribution used Promotion and sales methods Promotional message Promotional media Business Environment Type of competition Competitors’ strengths Competitors’ strategies Economic conditions Government regulations Consumer protection Ethical issues Tax policies Proposed laws International markets Type of competition Competitors’ strengths Competitors’ strategies Economic conditions Government regulations Consumer protection Ethical issues Tax policies Proposed laws International markets

7. Collecting Information There are many ways to collect information But why? o Effective marketing information improves the decisions of businesses o Effective marketing information reduces the risk of decision making If businesses can make better decisions… o It will increase the chance of making a profit o Therefore, any time or money spent gathering information is considered a good investment

8. Activity Your marketing research team works for a local movie theater. Your goal is to increase the number of moviegoers and the average amount each customer spends on concessions. Determine 3 specific types of information you will need for each category: o Consumers, marketing mix, and business environment Decide why each type of information is needed. Create a presentation (min. 4 slides)

9. Activity Example If my goal was to increase the number of people that shopped at ABC’s Sporting Goods: Consumers o Shopping Behavior Preference for a particular retail price format (every day low price) vs. promotional price Inclination to switch stores o Age To determine if there is a large enough market in this community to support your store To determine what promotional methods and ideas you will use to attract customers o Brand Preferences To ensure your store stocks the preferred brands of you target market How can we use brand preference to make our store more profitable?

10. Sources of Market Information Process for determining what information is needed and where to obtain it: o Identify the types of information needed o Determine the available sources of each type of information o Evaluate each source to determine if it meets the organization’s needs in terms of accuracy, time detail, and cost o Select the sources that best meet the identified needs o Enter the information into a marketing information system

11. Internal Information Sources Internal information : information developed from activities that occur within the organization Businesses keep detailed records on production schedules and inventory levels Example: Salesperson learns a lot from current and prospective customers o Perceptions of price, satisfaction with services, or requested changes to the company 3 categories of important types of internal info.: o Customer records & sales info., production & operations reports, & performance info.

12. Customer Records & Sales Information Companies keep a record of all transactions they have o They record what is purchased, the dates of purchase, & quantities purchased o Detailed information of payments and credit is also recorded o Problems and complaints are also a part of their records When customers stop buying the product, this info. Should not be discarded o Should be analyzed to determine why the customer was lost

13. Production & Operations Reports Products and services must be available when and where customers want them Quality standards need to be met Expenses need to be controlled in order to price products/services competitively Info. about production and operations activities needs to be collected & shared regularly o Info about sales, costs, inventory levels, and production an delivery schedules

14. Performance Information The success of a business is judged by its performance There are other performance measures than profit o Sales, costs, quality, and customer satisfaction Performance is measured in three ways 1.Records of past performance 2.Compare performance with similar businesses 3.Comparison of actual performance with expected or planned performance

15. External Information Sources External information : provides an understanding of factors outside of the organization Marketers cannot plan effectively without understanding consumers, competitors, the economy, and other changes around them There are many valuable sources of external information

16. External Sources Government Reports o Supplying info. that businesses and consumers can use o There are a number of agencies that collect marketing information U.S. Bureau of Census Trade and Professional Associations o Organized to serve people and businesses with common interests Members may be part of the same industry or job categories o Information may be published through websites, journals, newsletters, or detailed research reports.

17. External Sources Business Publications o Magazines and journals The Wall Street Journal, Forbes, Business Week Black Enterprise, Fast Company, E-Commerce Times o Gives current information on the economy, legislation, new technology, or business ideas Commercial Data and Information Services o Businesses that collect, analyze, and sell data Experian, Equifax, and TransUnion (three major credit reporting agencies)

18. Marketing Information Systems MkIS : an organized method of collecting, storing, analyzing, and retrieving information to improve the effectiveness and efficiency of marketing decisions Each business develops its own MkIS. Has to be complete, accurate, easy to use, timely, affordable, and cost-effective. All effecting MkIS contain five elements: o Input, storage, analysis, output, and decision making

19. The 5 Elements of an MkIS Input—Information that goes into the system for decision making o Routine information that is collected about customers, competitors, and business operations all used for marketing decisions Storage—Resources used to maintain info. so that it can be used when needed o If info. is lost or damaged it is not useful o Some information is very confidential—only authorized people should have access o Should be organized so information is easy to locate when needed

20. Five Elements Cont. Analysis—Process of summarizing, combining, or comparing information o Example: in order to plan a promotional budget, a manager may examine the budgets for other products or for past years Output—The result of analysis given to decision makers o Most important part of an MkIS o Usually written information or graphics o Should be well organized and easy to understand Decision Making—The purpose of an MkIS is to improve decision making o Includes who is involved in the decision, when decisions need to be made, and policies or procedures that should be considered, & info needed

21. Activity Search the internet to find 3 examples of external information and provide a description of each Example: o U.S. Census Bureau reports (statistical Abstract of the U.S.) Is the authoritative and comprehensive summary of statistics on the social, political, and economic organization of the United States. o The CIA World Fact Book Provides information on the history, people, government, economy, geography, communications, transportation, military, and transnational issues for 267 world entities.

23. Marketing Research Marketing research —a procedure designed to identify solutions to specific marketing problems through the use of scientific solving o The scientific method is used to ensure that a careful and objective procedure is followed in order to develop the best possible solution

24. Using Marketing Research Implementing a Marketing Strategy 1. Define the problem 2. Analyze the Situation 3. Develop a Data Collection Procedure 4. Gather and Study Information 5. Propose a Solution

25. See the Problem Clearly Define the problem o Clearly and carefully define the problem o This is not always easy o It is important to prepare a written statement of the problem and have several people review it to make sure it is understandable o The problem should be scientific enough to study whom to involve in the study, and the types of solutions or results

26. Analyze the Situation An important part is to understand the circumstances surrounding the problem well enough to determine how to solve it Analyzing the situation allows the researcher to identify: o What is already known about the problem, o The information available, and o Possible solutions already attempted

27. Develop a Data-Collection Procedure What additional information is needed and how should it be collected The researcher needs to know where to obtain information and the best and most efficient ways to obtain information o Primary Data —Information collected for the first time Collected by the researcher with a specific goal in mind Surveys, focus groups, in-depth interviews, or through experiments o Secondary Data —Information already collected for another purpose Should come before collecting primary data. Secondary data is cheaper and quicker to collect than primary data and can be more accurate.

28. Last Two Stages Gather Information o Select the participants Population —all of the people in the group the company is interested in studying Sample —a smaller group selected from the population o Collect data, analyze the data, prepare results, Propose a Solution o Research reports—usually prepared orally and in writing Effective communication is an important skill o Presenting research results In a written report the results reported in tables, charts, and graphs that all have brief explanations

29. Activity Applying the principles of the scientific method to a personal scenario..\Activities\Chapter 5\Marketing_Scientific_Method_Activity.doc..\Activities\Chapter 5\Marketing_Scientific_Method_Activity.doc

30. Collecting Primary Data— Conducting Surveys Survey —a planned set of questions to which individuals or groups of people respond o Surveys can be oral or written o People can be surveyed in person, through e-mail, phone, or online Closed-ended questions —offers two or more choices o “yes” or “no” o “agree” or “disagree” o Select A, B, C, or D o Scale of 1-10 where 10 is excellent and 1 is very poor

31. Surveys Cont. Open-ended questions —allows respondents to develop their own answers o When making purchases from a specific farmer/producer at a farmers’ market, what features do you find most appealing? o What is your primary motive in attending this farmers’ market? Open-ended questions are often used when researchers are attempting to identify the problem Researchers may discuss the problems with consumers using open-ended questions

32. Making Observations Observations —collects information by recording actions without interacting or communicating with the participant o The purpose of observation research is to see the actions of participants rather than have them recall or predict their actions Using observations requires more time and expense than surveys o Observations must be carefully planned in order to keep from changing the participants actions If people know they are being watched the may do things differently

33. Performing Experiments The most precise and objective information is obtained through experimentations o Experiments are carefully designed and controlled situations in which all important factors are the same except the one being studied o Research is done by planning and implementing experiments and then recording and analyzing the data Marketers use experiments to determine whether changes in a single element of the marketing mix will affect customer behavior

34. Test Markets Test markets —specific cities or geographic areas in which marketing experiments are conducted o The test markets are selected because they reflect consumer and competitive characteristics important to the company The companies try new product ideas or make marketing changes to the test markets o They collect data on the product performance for a period of several weeks or months and compare it with previously gathered information This way they can attempt to predict the performance in the total market

35. Simulations Simulations —experienced where researchers create the situation to be studied o Examples: a business may want to see how children respond when playing with a toy o So rather than observing children playing in their homes or schools, they create a play center o In the play center they bring children in and observe them under more carefully controlled circumstances Many simulations are done on computers, which allows participants to visualize a change and react to it

37. Activity Create a survey about one of the following: o Athletic shoes with attached in-line skates o Peanut-butter-and-jelly flavored potato chips o Electric powered scooter o Shower sponge shaped like a microphone o Soda can with a handle Survey must have a minimum of 10 questions—using a variety of question types