1. MARKETING 1 Chapter 5 MARKETING INFORMATION AND RESEARCH 5-1Understanding the Need for Market Information 5-2Finding and Managing Marketing Information 5-3Using Marketing Research 5-4Collecting Primary Data CHAPTER 5

2. MARKETING Chapter 5 2 Focus Questions: What is your first impression when viewing the ad? Does the image encourage you to read the ad? What type of product or service is Pitney Bowes describing? Who does it appear the company wants to see the ad? Why do companies need precise information about their customers? ©PITNEY BOWES

3. MARKETING Chapter 5 3 UNDERSTANDING THE NEED FOR MARKETING INFORMATION GOALS Explain the importance of information in making marketing decisions. Describe the categories of information needed by marketers. 5-1

4. MARKETING Chapter 5 4 Starting with Information Consumer differences Expanding choices Competition The global marketplace

5. MARKETING Chapter 5 5 Starting with Information Consumer differences Most businesses no longer believe that all consumers are alike Recognize that various consumers have very different needs and view choices differently Businesses know that in order to meet consumer needs and expectations they must have detailed information about them Must be able to determine similarities and differences of market segments

6. MARKETING Chapter 5 6 Starting with Information Expanding choices Customers are able to satisfy their basic needs more easily than in the past Moving beyond basic needs and are devoting more resources to satisfying their wants with discretionary purchases. Discretionary Purchase – are not essential, so consumers can decide whether or not to purchase.

7. MARKETING Chapter 5 7 Starting with Information Expanding choices Consumers have many choices, and much more information on those choices, so their decisions are more informed In order to develop a marketing mix that will satisfy consumer wants, businesses must have a clear understanding of expanding consumer choices and consumer purchasing decision

8. MARKETING Chapter 5 8 Starting with Information Competition Competition is much more intensive for businesses It is more difficult to make marketing decisions that will ensure customers will prefer your company over the competitions Gathering information about competitors products to determine strengths and weaknesses will help businesses be more competitive As wants and needs have expanded, products have as well

9. MARKETING Chapter 5 9 Starting with Information Competition In the past, products were very basic with a few additional features When products have limited differences, businesses try to compete for sales by emphasizing things such as their brand name, availability, or price They also try to compete by developing unique designs, or product improvements, expensive, hit or miss The correct choices can be very profitable, while the wrong choice can result in losses for the company

10. MARKETING Chapter 5 10 Starting with Information The global marketplace As business develop an international focus, differences among customer groups and the number of distinct market segments can become even greater. Understanding the consumer in your home country will not always transfer to other countries Gathering information about the country and its people as well as new competitors can help determine how to become an effective global business.

11. MARKETING Chapter 5 11 Deciding on Information Needs Approaches to planning Categories of information

12. MARKETING Chapter 5 12 Deciding on Information Needs Approaches to planning Read together “Approaches to Planning”, page 124 Consider the two approaches two companies use as they decide on their apparel lines for the upcoming year

13. MARKETING Chapter 5 13 Deciding on Information Needs Even though last year J Borg’s products were successful, should they keep it unchanged or simply just change the colors and some additional accessories? Will customers get tired of the current offerings – Therefore new products should be developed Dominque Designs marketing department provides records – quantity sold by size and color for each week of the year, the region and store where sales were made, original prices, markdowns, among others

14. MARKETING Chapter 5 14 Deciding on Information Needs How will each of the companies decide whether to make design changes and the types of designs to use for next year? What is the biggest difference between Dominque Designs and J Borg’s?

15. MARKETING Chapter 5 15 Deciding on Information Needs Categories of information You are a manager for a national chain of yogurt stores. You are tasked to increase sales and profits. How do you do this? What information will help you be successful.

16. MARKETING Chapter 5 16 Deciding on Information Needs Categories of information Divided into 3 segments Consumers Marketing Mix Business Environment

17. MARKETING Chapter 5 17 Types of Information Needed for Effective Marketing Decisions Consumers primary needs purchase frequency brand preferences information needs media preferences shopping behavior age gender income education family size occupation attitudes

18. MARKETING Chapter 5 18 Types of Information Needed for Effective Marketing Decisions Marketing Mix discounts location and method of sale type of distribution used display procedures promotion and sales methods promotional message promotional media basic products product features services product packaging guarantees after-sale customer service product price credit choices

19. MARKETING Chapter 5 19 Types of Information Needed for Effective Marketing Decisions Business Environment consumer protection ethical issues tax policies proposed laws international markets type of competition competitors’ strengths competitors’ strategies economic conditions government regulations new technology

20. MARKETING Chapter 5 20 Gathering Information Effective marketing information improves the decisions of businesses, and effective marketing information reduces the risk of decision making. If a business can make better decisions that increase the likelihood of making a profit, the time and money spent gathering information is a good investment.

21. MARKETING Chapter 5 21 5-1 Assessment Page 125, #8 Work in your groups – You will create a presentation that will include a minimum of 4 slides (Title slide, Slide on Consumers, Slide on Marketing Mix, Slide on Business Environment) You will need to include three specific types of information you will need for each category and decide why each type of information is needed.

22. MARKETING Chapter 5 22 5-1 Assessment Page 126, #8 Example: If my goal was to increase the number of people that shopped at ABC’s Sporting Goods – A locally owned and operated store Consumers – Shopping behavior, age, brand preferences Marketing Mix – Product features, promotional message, Product Price Business Environment – competitors’ strengths, economic conditions, new technology Example of my bullet points for Consumers – You will also need to do marketing mix and business environment

23. MARKETING Chapter 5 23 5-1 Assessment Page 126, #8 Consumers Shopping Behavior Preference for a particular retail price format (every day low price) vs. promotional price maybe servicie Inclination to switch stores 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 Brand Preferences To ensure your store stocks the preferred brands of your target market How can we use brand preference to make our store more profitable? You will also need to do marketing mix and business environment

24. MARKETING Chapter 5 24 FINDING AND MANAGING MARKETING INFORMATIONGOALS Describe common sources of internal and external market information. Explain the five critical elements of an effective marketing information system. 5-2

25. MARKETING Chapter 5 25 Sources of Market Information Steps of the Process Identify the types of information needed. Determine the available sources of each type of information. Evaluate each source to determine if it meets the organization’s needs in term of accuracy, time, detail, and cost. Select the sources that best meet the identified needs. Enter the information into a marketing information system.

26. MARKETING Chapter 5 26 Sources of Market Information Internal Sources External Sources Marketing Research

27. MARKETING Chapter 5 27 Internal Information Sources Internal information- is information developed from activities that occur within the organization Businesses keep detailed records on production schedules and inventory levels This production needs to be studied to make sure the promotions match the available products Example: Salesperson learns a great deal from current and prospective customers. Needs, perceptions of price, satisfaction and services, or requested changes in products. Three categories of important types of internal information are:

28. MARKETING Chapter 5 28 Internal Information Sources Customer records and sales information Production and operations reports Performance information

29. MARKETING Chapter 5 29 Internal Information Sources Customer records and sales information Companies keep a record of all transactions they have They record what is purchased, the dates of purchase, and quantities purchased Detailed information of payments and credit is also recorded Problems and complaints are also a part of their records When customers stop buying the product, this information should not be discarded….but analyzed to determine why the customer was lost

30. MARKETING Chapter 5 30 Internal Information Sources Production and operations reports Products and services must be available when and where customers want them Quality standards need to be met Information about production and operation activities is collected regularly

31. MARKETING Chapter 5 31 Internal Information Sources Performance information The success of a business is judged by its performance There are other performance measures than profit, such as 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

32. MARKETING Chapter 5 32 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 information such as:

33. MARKETING Chapter 5 33 External Information Sources Government reports Trade and professional associations Business publications Commercial data and information services

34. MARKETING Chapter 5 34 External Information Sources Government reports Supplying information that can be used by businesses and consumers There are a number of agencies that collect marketing information Best known: U.S. Bureau of Census – every 10 years collects the United States population Commercials are seen on TV

35. MARKETING Chapter 5 35 External Information Sources Trade and professional associations Are organized to serve people and business with common interest. Travel, Retailing, AARP

36. MARKETING Chapter 5 36 External Information Sources Business publications Magazine's and journals provide useful information for business people. The wall Street Journal, Forbes, Barron’s

37. MARKETING Chapter 5 37 External Information Sources Commercial data and information services A number of business that collect, analyze and sell data. Experian, Equifax, and TransUnion, credit reporting agencies for consumer credit Dun & Bradstreet ACNielsen

38. MARKETING Chapter 5 38 Marketing Information Systems Market Information Systems -An organized method of collecting, storing, analyzing, and retrieving information to improve the effectiveness and efficiency of marketing decisions Each business develops its own marketing information system All effective marketing information systems contains 5 elements:

39. MARKETING Chapter 5 39 Marketing Information Systems Input Storage Analysis Output Decision making

40. MARKETING Chapter 5 40 Marketing Information Systems Input- information that goes into the system for decision making Routine information that is collected about customers, competitors, and business operations all used for marketing decisions

41. MARKETING Chapter 5 41 Marketing Information Systems Storage- the resources used to maintain information so it can be used when needed If information is lost or damaged it is not useful Some information is very confidential – only authorized people should have access Should be organized so information is easy to locate when needed

42. MARKETING Chapter 5 42 Marketing Information Systems Analysis- the process of summarizing, combining, or comparing information Ex- in order to plan a promotional budget, a manager may examine the budgets for other products or for past years

43. MARKETING Chapter 5 43 Marketing Information Systems Output- the result of analysis given to decision makers Most important part of an MKIS Usually written information or graphics

44. MARKETING Chapter 5 44 Marketing Information Systems Decision Making- the purpose of an MKIS is to improve decision making Includes who is involved in the decision, when decision need to be made, any policies or procedures that should be considered, and the information needed by the decision makers

45. MARKETING Chapter 5 45 Designing an MkIS Question MkIS Element What information is needed to develop and implement the marketing strategy? Input How should the information be maintained so it is in a usable form, secure, and easy to access when needed? Storage What methods should be used to organize and study the information decisions? Analysis How and when should the information be made available for most effective use? Output What ways should the information be used to improve marketing? Decision Making

46. MARKETING Chapter 5 46 USING MARKETING RESEARCH GOALS Describe how to define and develop an understanding of a problem as the first steps toward solving it. Identify the steps needed to gather and study data relevant to a problem. Explain how to prepare reports and present proposed solutions. 5-3

47. MARKETING Chapter 5 47 Seeing the Problem Clearly Marketing Research- is a procedure designed to identify solutions to specific marketing problems through the use of scientific solving The scientific method is used to ensure that a careful and objective procedure is followed in order to develop the best possible solution

48. MARKETING Chapter 5 48 Seeing the Problem Clearly Define the problem Analyze the situation Develop a data-collection procedure Secondary data Primary data

49. MARKETING Chapter 5 49

50. MARKETING Chapter 5 50 Implementing a Marketing Research Study 1.Define the problem 2.Analyze the situation 3.Develop a data-collection procedure 4.Gather and study information 5.Propose a solution

51. MARKETING Chapter 5 51 Implementing a Marketing Research Study Define the problem Clearly and carefully define the problem This is not always easy It is important to prepare a written statement of the problem and have several people review it to make sure it is understandable The problem should be scientific enough to study whom to involve in the study, and the types of solutions or results

52. MARKETING Chapter 5 52 Implementing a Marketing Research Study Analyze the situation An important part is to understand the circumstances surrounding the problem well enough to determine how to solve it Analyze the situation allows the researcher to identify what is already known about the problem, the information available, and even possible solutions already attempted

53. MARKETING Chapter 5 53 Implementing a Marketing Research Study 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 Secondary data- information already collected for another purpose Primary Data- information collected for the first time

54. MARKETING Chapter 5 54 Implementing a Marketing Research Study Develop a data-collection procedure Secondary data- information already collected for another purpose A search of secondary data sources should precede any primary research activity. Secondary data may be sufficient to solve the problem, or at least it helps the reader better understand the problem under study. Secondary data is cheaper and quicker to collect than primary data and can be more accurate. Ex - A great deal of potentially useful secondary information already exists within enterprises. Typically useful information would be that relating to sales, finance, production, storage and transportation. Source for a and b - http://www.fao.org/docrep/W3241E/w3241e03.htm#chapter%20summary

55. MARKETING Chapter 5 55 Implementing a Marketing Research Study Develop a data-collection procedure Primary Data- information collected for the first time Primary data is collected by the researcher with a specific goal in mind May be collected through surveys, focus groups, in-depth interviews, or through experiments

56. MARKETING Chapter 5 56 Implementing a Marketing Research Study Gather and study information 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 Random Sampling – everyone in the population has an equal chance of being selected in the sample Collect data, analyze the data, prepare results

57. MARKETING Chapter 5 57 Gather Information Collect the data Privacy Ethical Analyze the data Numerical data – mean, median Non-numerical data – open ended Prepare results Tables, charts and graphs

58. MARKETING Chapter 5 58 Implementing a Marketing Research Study Propose a solution Research reports- usually prepared orally and in writing Effective communication is an important skill Presenting research results In a written report the results reported in tables, charts, and graphs that all have brief explanations

59. MARKETING Chapter 5 59 Propose a Solution Research reports Presenting research results When to use marketing research Two Factors How much risk is in the business facing from the problem being studied How much time and money will be required to gather the information Complex Problem

60. MARKETING Chapter 5 60 Sections of a Research Report Statement of the problem Review of secondary data Research procedures Results of the research Summary and recommendations

61. MARKETING Chapter 5 61 COLLECTING PRIMARY DATA GOALS Describe the purpose of marketing research surveys. Explain the reasons for and limitations of using observation. Define various types of marketing research experiments. 5-4

62. MARKETING Chapter 5 62 Conducting Surveys When completing market research, the data-collection method chosen will depend on the type of information you need.

63. MARKETING Chapter 5 63 Conducting Surveys Closed-ended questions Open-ended questions

64. MARKETING Chapter 5 64 Conducting Surveys – 1 st Way Survey- a planned set of questions to which individuals or groups of people respond Surveys can be oral or written People can be surveyed in person, through e-mail, phone, or online

65. MARKETING Chapter 5 65 Conducting Surveys Closed-ended questions- offer two or more choices such as “yes”, or “no” “agree” or “disagree” select A, B,C, or D Scale of 1-10 where 10 is excellent and 1 is very poor

66. MARKETING Chapter 5 66 Conducting Surveys Open ended questions- allows respondents to develop their own answers What are the most important features of this product? How does the durability of brand A compare to brand B?

67. MARKETING Chapter 5 67 Focusing on the Issues Focus group Questioning with clarity

68. MARKETING Chapter 5 68 Focusing on the Issues 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 A popular method used to gather information is called a focus group Focus group- smaller number of people brought together to discuss identified elements of an issue or problem

69. MARKETING Chapter 5 69 Focusing on the Issues Questioning with clarity It is important that survey questions are carefully written Each question must aid in the collection of information that will help to solve the problem

70. MARKETING Chapter 5 70 Making Observations – 2 nd Way Observations- collects information by recording actions without interacting or communicating with the participant The purpose of observation research is to see the actions of participants rather than have them recall or predict their actions, greater accuracy Using observations requires more time and expense than surveys 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

71. MARKETING Chapter 5 71 Making Observations Recording devices include Video cameras Audio recorders Bar code scanners Eye-tracking photography

72. MARKETING Chapter 5 72 Performing Experiments Test markets Simulations

73. MARKETING Chapter 5 73 Performing Experiments The most precise and objective information is obtained through experimentations Experiments are carefully designed and controlled situations in which all important factors are the same except the one being studied 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 Experiments are not used as often as surveys or observations

74. MARKETING Chapter 5 74 Test Markets Test markets- are specific cities or geographic areas in which marketing experiments are conducted 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 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

75. MARKETING Chapter 5 75 Simulations Simulations- are experienced where researchers create the situation to be studied Ex- a business may want to see how children respond when playing with a toy So rather than observing children playing in their homes or schools, they create a play center 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