1. Decision Support Systems and Marketing Research
Chapter 7
Decision Support Systems and Marketing Research
Decision Support Systems and Marketing Research
Chapter 7
Prepared by
Deborah Baker
Texas Christian University
Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel
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2. 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.
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3. 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.
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4. Chapter 7
Decision Support Systems and Marketing Research
Learning Objective 1
On Line
Explain the concept and purpose of a marketing decision support system.
On Line
U.S. Fish and Wildlife Service
How well is the government marketing duck stamps over the Internet? Does the U.S. Fish and Wildlife Service Web site reflect the desire to market the stamps to environmental groups?
Notes:
Marketing decision making relies on accurate and timely information. Good information is used to maximize sales,to use scarce company resources efficiently, and to prepare and adjust marketing plans. The system used for gathering marketing information is called a marketing decision support system.
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5. Decision Support System1
DSS
An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.
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6. DSS System Characteristics
Chapter 7
Decision Support Systems and Marketing Research
DSS System Characteristics 1
Characteristics of a
DSS System
Interactive
Flexible
Discovery-Oriented
Notes:
The characteristics of a DSS system are:
Interactive: Simple instructions are given to the system and immediate results are given. No computer programming or scheduled reports are needed.
Flexible: A DSS can manipulate data in various ways, and be presented according to the user’s needs.
Discovery-oriented: Managers can probe for trends and ask “what if” questions.
Accessible: A DSS is easy to use even with minimal computer skills.
Accessible
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7. Chapter 7
Decision Support Systems and Marketing Research
Database Marketing 1
The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.
Notes:
The fastest-growing use of DSSs is for database marketing. It is usually the key for micromarketing, which relies on specific market information.
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8. Define marketing research and explain its importance to
Learning Objective 2
Define marketing research and explain its importance to
marketing decision making.
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9. Chapter 7
Decision Support Systems and Marketing Research
Marketing Research 2
The process of planning, collecting, and analyzing data relevant to a marketing decision.
Notes:
Marketing research plays a key role in the marketing system. It provides data on the effectiveness of the marketing mix and insights for changes. Marketing research is a main data source for management information systems and DSS.
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10. Roles of Marketing Research
Chapter 7
Decision Support Systems and Marketing Research
Roles of Marketing Research 2
Diagnostic
Predictive
Descriptive
Gathering and presenting factual statements
Explaining data
Attempting to estimate the results of a planned marketing decision
Notes:
Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product?
Diagnostic: What was the impact on sales after a change in the package design?
Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a marketing decision?
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11. Management Uses of Marketing Research
Chapter 7
Decision Support Systems and Marketing Research
Management Uses of Marketing Research 2
On Line
Improve the quality of decision making
Trace problems
Focus on keeping existing customers
Understand the ever-changing marketplace
On Line
British Airways
How are the changes in British Airways’ services reflected by the marketing on its Web site? Does the company use the site to collect marketing data? If so, how? If not, how would you suggest it do this?
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12. Chapter 7
Decision Support Systems and Marketing Research
Learning Objective 3
Describe the steps involved in conducting a marketing research project.
Notes:
The scope of a marketing research project may range from millions of dollars to several hundred dollars. In any case, the same general research process should be followed.
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13. The Marketing Research Process
Chapter 7
Decision Support Systems and Marketing Research
The Marketing Research Process 3
Collect
Data
Specify
Sampling
Procedure
Plan Design/
Primary Data
Define
Problem
Analyze
Prepare/
Present
Report
Follow Up
Notes:
Exhibit 7.1 traces the steps in the marketing research process.
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14. Marketing Research 3 Marketing Research Problem Objective Management
Chapter 7
Decision Support Systems and Marketing Research
Marketing Research 3
Marketing
Research
Problem
Objective
Management
Decision
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.
A broad-based problem that
requires marketing research in order
for managers to take proper actions.
Notes:
The marketing research problem is information oriented. The marketing research objective is to provide decision- making information. In contrast, the management decision problem is action oriented.
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15. Data previously collected for any purpose other
Chapter 7
Decision Support Systems and Marketing Research
Secondary Data 3
Data previously collected for any purpose other
than the one at hand.
Notes:
Secondary data is a valuable tool particularly in the problem/opportunity identification stage.
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16. Sources of Secondary Data3
Internal Corporate Information
Government Agencies
Trade and Industry Associations
Marketing Research Firms
Commercial Publications
News Media
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17. Advantages of Secondary Data3
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
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18. Disadvantages of Secondary Data3
May not be on target with the research problem
Quality and accuracy of data may pose a problem
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19. The New Age of Secondary Information: The Internet
Chapter 7
Decision Support Systems and Marketing Research
The New Age of Secondary Information: The Internet 3
On Line
www
Search Engines and Directories
Sites of Interest to Marketing Researchers
Discussion Groups
Periodical, Newspaper, and Book Databases
On Line
Coca-Cola Store
When you are asked for your opinion on the Coke Store Web site, is Coca-Cola doing marketing research, or gathering information for a DSS? Read the whole survey before deciding. Which did you pick and why?
Notes:
Before the availability of the Internet’s widely accessible information, collection of secondary information was tedious and boring, often requiring visits to the library or communication with government agencies and trade associations.
By typing a description of the desired secondary data into a Web browser, the Internet may provide a wide range of information. However, keep in mind that the Internet is a self-publishing medium and the information quality may vary.
Exhibit 7.2 in the textbook provides a list of Internet sources for obtaining secondary data.
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20. Chapter 7
Decision Support Systems and Marketing Research
Research Design 3
Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.
Notes:
Good secondary data can help researchers conduct a thorough situation analysis, and can list their unanswered questions and rank them. The research design then specifies which questions must be answered, the method of collection, and how the data will be analyzed.
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21. Planning the Research Design3
Which research questions must be answered?
How and when will data be gathered?
How will the data be analyzed? s ?
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22. Information collected for the first time. Can be
Primary Data 3
Information collected for the first time. Can be
used for solving the particular problem
under investigation.
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23. Advantages of Primary Data
Chapter 7
Decision Support Systems and Marketing Research
Advantages of Primary Data 3
Answers a specific research question
Data are current
Source of data is known
Secrecy can be maintained
Notes:
The main advantage of primary data is that they will answer a specific research question that secondary data cannot answer.
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24. Disadvantages of Primary Data
Chapter 7
Decision Support Systems and Marketing Research
Disadvantages of Primary Data 3
Expensive
Quality declines if interviews are lengthy
Reluctance to participate in lengthy interviews
Notes:
The cost of primary data may range from a few thousand dollars for a limited survey to several million for a nationwide study.
To save money, firms may cut back on the number of interviews, or piggyback studies by gathering data on two different projects using one questionnaire.
Disadvantages are
usually offset by the
advantages
of primary data!
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25. Survey Research 3
The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions,
and attitudes.
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26. Forms of Survey Research
Chapter 7
Decision Support Systems and Marketing Research
Forms of Survey Research 3
On Line
Focus Groups
Executive Interviews
Mail Surveys
Telephone Interviews (Home and Central Location)
Mall Intercept Interviews
In-Home Interviews
On Line: Hershey
Go to Hershey’s and read its Idea Submission Policy under Consumer Info. Do you think the policy is a good idea?
Notes:
In home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool.
Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population.
Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application.
Mail Surveys: Benefits are low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates.
Executive interviews: Survey involves businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents.
Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews.
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27. Mall Intercept Interview3
Survey research method that involves interviewing people in the common areas of shopping malls.
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28. Executive Interviews 3
A type of survey that involves interviewing businesspeople at their offices concerning industrial products
or services.
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29. Focus Group 3
Seven to ten people who participate in a group discussion led by a moderator.
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30. Advantages of On-Line Focus Groups
Chapter 7
Decision Support Systems and Marketing Research
Advantages of On-Line Focus Groups 3
Speed
Cost-effectiveness
Broad geographic scope
Accessibility
Honesty
Notes:
Focus groups are an excellent method to brainstorm new product ideas or to screen concepts for new products.
On-line or cyber focus groups are a new development in qualitative research.
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31. Characteristics of Traditional Forms of Survey Research3
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32. Open-Ended Question Closed-Ended Scaled- Response
Chapter 7
Decision Support Systems and Marketing Research
Questionnaire Design 3
Open-Ended
Question
Closed-Ended
Scaled- Response
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.
A closed-ended question
designed to measure the intensity
of a respondent’s answer.
Notes:
Questionnaires contain three basic types of questions:
Open-ended questions
Closed-ended questions
Scaled-response questions.
Examples of these types of questions are shown on the next slide and in Exhibit 7.5.
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33. Types of Questions in Questionnaire Design
Chapter 7
Decision Support Systems and Marketing Research
Types of Questions in Questionnaire Design 3
Notes:
Exhibit 7.5
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34. Qualities of Good Questionnaires Reasonable Terminology
Chapter 7
Decision Support Systems and Marketing Research
Questionnaire Design 3
On Line
Qualities of Good Questionnaires
Clear and Concise
No Ambiguous Language
Unbiased
Reasonable Terminology
On Line
CreateSurvey.com
Design a marketing questionnaire to post on your class Web site using the tools offered by Create Survey. Visit the demo polls on the site for ideas and tips.
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35. A research method that relies on three types of observation:
Chapter 7
Decision Support Systems and Marketing Research
Observation Research 3
On Line
A research method that relies on three types of observation:
people watching people
people watching an activity
machines watching people
On Line
Brand Marketing International
Learn more about mystery shopping by requesting a mystery shopper kit from BMI and reading the shopper application.
Notes:
Observation research depends on watching what people do. It may be conducted by human observers or machines.
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36. Observational Situations
Chapter 7
Decision Support Systems and Marketing Research
Observational Situations 3
Notes:
Exhibit 7.6 shows examples of various observational situations.
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37. Observation Research 3 Types of 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
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38. Researchers posing as customers who gather observational data about
Mystery Shoppers 3
Researchers posing as customers who gather observational data about
a store and collect data about customer/employee interactions.
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39. A method a researcher uses to gather primary data.
Chapter 7
Decision Support Systems and Marketing Research
Experiment 3
A method a researcher uses to gather primary data.
Notes:
While gathering primary data, the researcher alters one or more variables, such as price, advertising theme, package design, while observing the effects of those alterations on another variable, such as sales.
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40. A subset from a large population. The population from which
Chapter 7
Decision Support Systems and Marketing Research
Sampling Procedure 3
Sample
Universe
A subset from a large population.
The population from which
a sample will be drawn.
Notes:
Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Not all possible users of a new product can be interviewed, therefore a firm must select a sample of the larger population.
The population or universe must first be defined. Then it must be determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed.
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41. Probability Sample Random
Chapter 7
Decision Support Systems and Marketing Research
Probability Samples 3
Probability
Sample
A sample in which every element in
the population has a known statistical likelihood of being selected.
Random
A sample arranged so that every element of the population has an equal chance of being selected.
Notes:
The most desirable feature of a probability sample is that statistical rules can be used to ensure that the sample represents the population.
One type of probability sample is the random sample—where every element of the population has an equal chance of being selected as part of the sample.
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42. Nonprobability Samples
Chapter 7
Decision Support Systems and Marketing Research
Nonprobability Samples 3
Nonprobability
Sample
Convenience
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.
Notes:
A nonprobability sample is a sample where little or no attempt is made to get a representative cross section of the population.
A common form of nonprobability sample is the convenience sample, a selection of convenient respondents such as employees, relatives, or friends.
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43. Non-Probability Samples
Sampling Procedure 3
Universe
Sample
Probability Samples
Non-Probability Samples
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44. Non-Probability Samples
Chapter 7
Decision Support Systems and Marketing Research
Types of Samples 3
Probability Samples
Simple Random Sample
Stratified Sample
Cluster Sample
Systematic Sample
Non-Probability Samples
Convenience Sample
Judgment Sample
Quota Sample
Snowball Sample
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45. Chapter 7
Decision Support Systems and Marketing Research
Types of Samples 3
Notes:
Exhibit 7.7 describes types of probability and nonprobability samples.
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46. Types of Errors 3 Measurement Error Sampling Frame Random
Chapter 7
Decision Support Systems and Marketing Research
Types of Errors 3
Measurement
Error
Sampling
Frame
Random
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 because the selected sample is
an imperfect representation of
the overall population.
Notes:
Whenever a sample is used in marketing research, major types of errors may occur: measurement error and sampling error.
Frame error arises if the sample drawn from a population differs from the target population.
Random error occurs when the selected sample is an imperfect representation of the overall population.
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47. Chapter 7
Decision Support Systems and Marketing Research
Field Service Firm 3
On Line
A firm that specializes in interviewing respondents on a subcontracted basis.
On Line
Greenfield On-line
Find out how on-line focus groups work by signing up to be a participant. Check out some of Greenfield’s on-line surveys in the Survey Center.
Notes:
Most primary data is collected by marketing research field service firms.
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48. Provide: Focus group facilities Mall intercept locations
Chapter 7
Decision Support Systems and Marketing Research
Field Service Firms 3
Provide:
Focus group facilities
Mall intercept locations
Test product storage
Kitchen facilities
Retail audits
Notes:
Field service firms conduct interviews, provide focus-group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products.
Detailed field instructions should be developed for every job to ensure uniformity among subcontractors.
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49. Chapter 7
Decision Support Systems and Marketing Research
Cross-Tabulation 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.
Notes:
After data is collected, the next step is to analyze data. The purpose of data analysis is to interpret and draw conclusions from the collected data.
Data is organized by one-way frequency counts, cross-tabulations, and sophisticated statistical analysis.
One-way frequency counts record the responses to a question. They provide a general picture of the study’s results.
A cross-tab looks at the associations between certain responses, such as association between gender and product choice.
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50. Preparing and Presenting the Report
Chapter 7
Decision Support Systems and Marketing Research
Preparing and Presenting the Report 3
Concise statement of the research objectives
Explanation of research design
Summary of major findings
Conclusion with recommendations
Notes:
After data analysis is completed, the report is prepared, and conclusions and recommendations are communicated to management.
The report should be tailored to the audience, beginning with a statement of research objectives, followed by a brief explanation of the research design. A summary of major findings is next, followed by a conclusion with recommendations.
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51. Were the recommendations followed?
Chapter 7
Decision Support Systems and Marketing Research
Following Up 3
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?
Notes:
The final step in the marketing research process is to follow up. The researcher should determine why management did or did not carry out the recommendations of the report.
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52. Discuss the profound impact of the Internet on marketing research.
Learning Objective 4
Discuss the profound impact of the Internet on marketing research.
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53. Allows better and faster decision making
Chapter 7
Decision Support Systems and Marketing Research
Impact of the Internet 4
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
Notes:
By 2002, Internet marketing research will account for about 50 percent of all marketing research revenue in the U.S. due to the reasons shown on this slide.
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54. Advantages of Internet Surveys
Chapter 7
Decision Support Systems and Marketing Research
Advantages of Internet Surveys 4
Contact with the
hard-to-reach
Improved respondent
participation
Personalized questions
and data
Reduced costs
Rapid development,
Real-time reporting
Notes:
Rapid development, real-time reporting: Survey results can be tabulated and broadcast in a much shorter time frame.
Reduced costs: Costs can be cut by 25 to 40 percent with results in half the time required for traditional telephone surveys.
Personalized questions and data: Personalization allows relevance to each respondent’s own situation, thus speeding the response process.
Improved respondent participation: Internet surveys take half as much time to complete as phone interviews and can be accomplished at the respondent’s convenience.
Contact with the hard-to-reach: Doctors, management, and high-income professionals are among the most surveyed and the most difficult to reach. Many of these groups are well represented on-line.
On-line and off-line studies compare quite favorably and lead to the same business decisions.
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55. Unrestricted Internet Sample Screened Recruited4
Unrestricted
Internet
Sample
Screened
Recruited
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.
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56. Other Uses of the Internet by Marketing Researchers4
Viewing of presentations of
marketing research surveys
Publication and distribution
of reports
Data management and
on-line analysis
Collaboration in the
management of a research project
Distribution of requests for
Proposals (RFPs) and proposals
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57. Discuss the growing importance of scanner-based research.
Chapter 7
Decision Support Systems and Marketing Research
Learning Objective 5
Discuss the growing importance of scanner-based research.
Notes:
Scanner-based research is used for gathering information by monitoring the marketing mix and purchase behavior of a single group of respondents.
The two major scanner-based suppliers are Information Resources, Inc. and the A.C. Nielson Company. IRI’s first product is called BehaviorScan, where household panel participants shop with an ID card to track grocery and drugstore purchases.
InfoScan is IRI’s tracking service for consumer goods.
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58. Scanner-Based Research5
BehaviorScan
InfoScan
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.
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59. When Should Marketing Research be Conducted?5
Where there is a high level of uncertainty
When value of research information exceeds the cost of generating the information
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60. Explain the concept of competitive intelligence.
Learning Objective 6
Explain the concept of competitive intelligence.
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61. Competitive Intelligence
Chapter 7
Decision Support Systems and Marketing Research
Competitive Intelligence 6
On Line
An intelligence system that helps managers assess their competition and vendors in order to
become more efficient and effective competitors.
On Line
Society for Competitive Intelligence Professionals (SCIP)
Find out more about competitive intelligence at the SCIP Web site. Research a career in CI by checking out the job marketplace at SCIP.
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62. Competitive Intelligence6
Can help identify a competitor’s advantage
Can help determine how the competitor’s advantage was achieved
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63. Advantages of Competitive Intelligence6
Predict changes in business relationships
Identify marketplace opportunities
Guard against threats
Forecast a competitor’s strategy
Discover new or potential competitors
Learn from the success or failure of others
Learn about new technologies and impact of government regulations
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64. Sources of Competitive Intelligence6
Internet
Company Personnel
Experts
CI Consultants
Government Agencies
UCC Filings
Suppliers
Newspapers/Periodicals
Yellow Pages
Trade Shows
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