1. Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Designed by Eric Brengle B-books, Ltd. CHAPTER 9 Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10 Decision Support Systems and Marketing Research

2. Copyright ©2009 by Cengage Learning Inc. All rights reserved Learning Outcomes 2 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 LO I LO 2 LO 3

3. Copyright ©2009 by Cengage Learning Inc. All rights reserved Learning Outcomes 3 Discuss the profound impact of the Internet on marketing research Discuss the growing importance of scanner-based research Explain the concept of competitive intelligence LO 5 LO 6 LO 4

4. Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Decision Support Systems 4 Explain the concept and purpose of a marketing decision support system LO I

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Decision Support Systems 5 Decision Support Systems DSS An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. LO I

6. Copyright ©2009 by Cengage Learning Inc. All rights reserved DSS System Characteristics 6 LO I Interactive Flexible Discovery-Oriented Accessible

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Decision Support Systems 7 Database Marketing The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. The key tool for successful one-to-one marketing. LO I

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Marketing Decision Support Systems 8 LO I

9. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Marketing Research 9 Define marketing research and explain its importance to marketing decision making LO 2

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Marketing Research 10 Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. LO 2

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Research Studies 11 LO 2 Products Advertising Prices Packages Names and Logos Services Buying habits Colors Uses Awareness Familiarity New concepts Traffic patterns Wants Needs Politics

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Marketing Research 12 LO 2 Diagnostic Predictive Descriptive  Gathering and presenting factual statements  Explaining data  “What if?”

13. Copyright ©2009 by Cengage Learning Inc. All rights reserved Management Uses of Marketing Research 13 LO 2  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

14. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Marketing Research and Its Importance 14 LO 2 Why marketing research?  Improve quality of decision making  Trace problems  Focus on keeping existing customers  Understand changes in marketplace

15. Copyright ©2009 by Cengage Learning Inc. All rights reserved Steps in a Marketing Research Project 15 Describe the steps involved in conducting a marketing research project LO 3

16. Copyright ©2009 by Cengage Learning Inc. All rights reserved 16 The Marketing Research Process LO 3 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 1 2 3 4 5 6 7

17. Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Research 17 LO 3 Marketing Research Problem Marketing Research Problem Marketing Research Objective Marketing Research Objective Management Decision Problem Management Decision Problem 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.

18. Copyright ©2009 by Cengage Learning Inc. All rights reserved Secondary Data 18 LO 3 Secondary Data Data previously collected for any purpose other than the one at hand.

19. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sources of Secondary Data 19 LO 3 Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information

20. Copyright ©2009 by Cengage Learning Inc. All rights reserved 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 20 LO 3

21. Copyright ©2009 by Cengage Learning Inc. All rights reserved 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 21 LO 3

22. Copyright ©2009 by Cengage Learning Inc. All rights reserved The New Age of Secondary Information: The Internet 22 LO 3 1 1 2 2 3 3 4 4 5 5 Analyze your topic Test run a word or phrase in a search engine Learn as you go and vary your approach Don’t bog down in strategy that doesn’t work Go back to earlier steps better informed

23. Copyright ©2009 by Cengage Learning Inc. All rights reserved Planning the Research Design 23 LO 3 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ?

24. Copyright ©2009 by Cengage Learning Inc. All rights reserved Primary Data 24 LO 3 Primary Data Information collected for the first time. Can be used for solving the particular problem under investigation.

25. Copyright ©2009 by Cengage Learning Inc. All rights reserved Advantages of Primary Data Answers a specific research question Data are current Source of data is known Secrecy can be maintained 25 LO 3

26. Copyright ©2009 by Cengage Learning Inc. All rights reserved Disadvantages of Primary Data Expensive “Piggybacking” may confuse respondents Quality declines if interviews are lengthy Reluctance to participate in lengthy interviews 26 LO 3 Disadvantages are usually offset by the advantages of primary data.

27. Copyright ©2009 by Cengage Learning Inc. All rights reserved Survey Research 27 LO 3 Survey Research The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes.

28. Copyright ©2009 by Cengage Learning Inc. All rights reserved Forms of Survey Research 28 LO 3 Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews

29. Copyright ©2009 by Cengage Learning Inc. All rights reserved Forms of Survey Research 29 LO 3 Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. Executive Interview A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.

30. Copyright ©2009 by Cengage Learning Inc. All rights reserved Forms of Survey Research 30 LO 3 Focus Groups Seven to ten people who participate in a group discussion led by a moderator.

31. Copyright ©2009 by Cengage Learning Inc. All rights reserved Questionnaire Design 31 LO 3 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.

32. Copyright ©2009 by Cengage Learning Inc. All rights reserved Questionnaire Design 32 LO 3 Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question

33. Copyright ©2009 by Cengage Learning Inc. All rights reserved Observation Research 33 LO 3 Observation Research A research method that relies on three types of observation:  people watching people  people watching an activity  machines watching people

34. Copyright ©2009 by Cengage Learning Inc. All rights reserved Observational Situations Situation People watching people People watching phenomena Machines watching people Machines watching phenomena Example Mystery shoppers in a supermarket Observer at an intersection counting traffic Video cameras recording behavior Traffic- counting machine monitoring traffic flow 34 LO 3

35. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethnographic Research 35 LO 3 Ethnographic Research The study of human behavior in its natural context; involves observation of behavior and physical setting.

36. Copyright ©2009 by Cengage Learning Inc. All rights reserved The Sampling Procedure 36 LO 3 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.

37. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sampling Procedure 37 LO 3 Universe Sample Probability Samples Non-Probability Samples

38. Copyright ©2009 by Cengage Learning Inc. All rights reserved Types of Samples 38 LO 3 Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample

39. Copyright ©2009 by Cengage Learning Inc. All rights reserved Probability Samples 39 LO 3 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.

40. Copyright ©2009 by Cengage Learning Inc. All rights reserved Nonprobability Samples 40 LO 3 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.

41. Copyright ©2009 by Cengage Learning Inc. All rights reserved Types of Errors 41 LO 3 Measurement Error Measurement 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 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.

42. Copyright ©2009 by Cengage Learning Inc. All rights reserved Field Service Firms Focus group facilities Mall intercept locations Test product storage Kitchen facilities 42 LO 3 Provide:

43. Copyright ©2009 by Cengage Learning Inc. All rights reserved Analyzing the Data 43 LO 3 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.

44. Copyright ©2009 by Cengage Learning Inc. All rights reserved Preparing and Presenting the Report Concise statement of the research objectives Explanation of research design Summary of major findings Conclusion with recommendations 44 LO 3

45. Copyright ©2009 by Cengage Learning Inc. All rights reserved 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? 45 LO 3

46. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 46 LO 3 Steps in a Marketing Research Project

47. Copyright ©2009 by Cengage Learning Inc. All rights reserved Impact of the Internet on Marketing Research 47 Discuss the profound impact of the Internet on marketing research LO 4

48. Copyright ©2009 by Cengage Learning Inc. All rights reserved 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 tracking research easier Slashes labor- and time-intensive research activities and costs 48 LO 4

49. Copyright ©2009 by Cengage Learning Inc. All rights reserved Advantages of Internet Surveys 49 LO 4 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 Dramatically reduced costs Rapid development, real-time reporting Rapid development, real-time reporting

50. Copyright ©2009 by Cengage Learning Inc. All rights reserved Uses of the Internet by Marketing Researchers 50 LO 4 Other types of marketing research Conduct focus groups Administer surveys

51. Copyright ©2009 by Cengage Learning Inc. All rights reserved Internet Samples 51 LO 4 Recruited Panels Recruited Panels Most popular form of Internet sampling. Screened Internet Sample Recruited Internet Sample An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate.

52. Copyright ©2009 by Cengage Learning Inc. All rights reserved Process for Online Focus Groups 52 LO 4 1.Build a database of respondents via Web site screening questionnaire 2.Identify qualified individuals via e-mail 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

53. Copyright ©2009 by Cengage Learning Inc. All rights reserved Types of Online Focus Groups 53 LO 4 Real-time online focus groups Time-extended online focus groups

54. Copyright ©2009 by Cengage Learning Inc. All rights reserved Advantages of Online Focus Groups Speed Cost-effectiveness Broad geographic scope Accessibility Honesty 54 LO 4

55. Copyright ©2009 by Cengage Learning Inc. All rights reserved Role of Consumer Generated Media in Marketing Research CGM is media which consumers generate themselves and share among themselves Companies can identify the most influential bloggers and learn exactly what they are saying (and how they are saying it). 55 LO 4

56. Copyright ©2009 by Cengage Learning Inc. All rights reserved Other Uses of the Internet by Marketing Researchers 56 LO 4 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 proposals

57. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Impact of the Internet on Marketing Research 57 LO 4

58. Copyright ©2009 by Cengage Learning Inc. All rights reserved Scanner-Based Research 58 Discuss the growing importance of scanner-based research LO 5

59. Copyright ©2009 by Cengage Learning Inc. All rights reserved Scanner-Based Research 59 Scanner-based Research LO 5 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

60. Copyright ©2009 by Cengage Learning Inc. All rights reserved When Should Marketing Research Be Conducted? 60 LO 5  Where there is a high level of uncertainty  When value of research information exceeds the cost of generating the information

61. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Scanner-Based Research 61 LO 5 BehaviorScan InfoScan Panel information from Specific groups of people, enables researchers to manipulate variables and see real results Aggregate consumer information on all bar-coded products

62. Copyright ©2009 by Cengage Learning Inc. All rights reserved Competitive Intelligence 62 Explain the concept of competitive intelligence LO 6

63. Copyright ©2009 by Cengage Learning Inc. All rights reserved Competitive Intelligence 63 Competitive Intelligence LO 6 An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.

64. Copyright ©2009 by Cengage Learning Inc. All rights reserved Sources of Competitive Intelligence 64 LO 6 Internet Company Salespeople Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows

65. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME Competitive Intelligence 65 LO 6 CI Part of a sound marketing strategy Helps companies respond to competitive threats Helps reduce unnecessary costs