CHAPTER 4 Marketing Information and Research: Analyzing the Business Environment Off-line and Online

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CHAPTER 4Marketing Information and Research
Analyzing the Business Environment Off-line and
Online
M A R K E T I N G
Real People, Real Choices Fourth Edition
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Knowledge is Power

• A Marketing Information System (MIS) determines
  what information managers need and then gathers,
  sorts, analyzes, stores, and distributes relevant
  and timely marketing information to system users
• What market info. do you need?
• Should we change our ad campaign?
• Should we change our packaging?

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Four types of data

• Internal Data sales reports, old market
  research, complaint records, profit and loss
  statements, etc.
• intranet
• Marketing Intelligence - method to get
  information about the environment newspapers,
  trade publications, www, observations in market
  place
• Mystery shoppers

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Four types of data

• Marketing Research - process of collecting,
  analyzing, and interpreting data about customers,
  competitors, and the business environment to
  improve marketing effectiveness
• Two types
• Syndicated research
• Custom research

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Four types of data

• Syndicated research reports
• secondary data collected and compiled by firms on
  a regular basis and sold to many firms. e.g.
  Nielsens TV ratings, Arbitron ratings, Simmons
  Market Research Bureau CB, demographics and
  media usage)
• Custom research reports
• primary data collected to provide answers to
  specific questions

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Four types of data

• Acquired databases many companies collect
  information about you and sell it to others at a
  cost
• Opt out clauses
• Spam and junkmail
• Do-not-call lists

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Marketing Decision Support Systems (MDSS)

• MIS System analysis (statistical and modeling
  software) interactive capabilities
• Allows managers to conduct their own analyses
• Allows posing what-if scenarios
• E.g. How do consumers perceive our brand w.r.t.
  competition?
• E.g. Would withdrawing the ad campaign result in
  a decline in sales?

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Differences in MIS and MDSS

• MIS
• What were our company sales of each product
  during the last month and the last year?

• MDSS
• Have our sales declines simply reflected changes
  in overall industry sales or is there some
  portion of the decline that cannot be explained
  by industry changes?

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Differences in MIS and MDSS

• MIS
• What medium best reaches my target audience?
• What were our sales this season and the same time
  last season?

• MDSS
• How much will my sales improve if I use radio
  instead of TV?
• Was the improvement in our sales this season due
  to the new pricing plan?

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Search for Gold Data Mining

• Data mining is a process in which analysts sift
  through data to identify unique patterns of
  behavior among different customer groups
• 4 key applications for marketers
• customer acquisition (e.g. make offers based on
  matched key customer characteristics)
• customer retention (isolate big-spenders and send
  them special offers other do not receive)
• customer abandonment (Fedex and the good, the
  bad and the ugly
• market basket analysis (Fingerhut and mailers for
  gas grilles based on purchases of outdoor patio
  furniture)

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Marketing Research Process Step 1

• Specify the research objectives
• Identify the consumer population of interest
• Place the problem in an environmental context
• What factors may be influencing the situation

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Step 2 Determine the Design

• Can the information be acquired from existing
  data?
• If so, secondary data sources will be utilized
  (e.g. if you want to know zip code-wise
  population clusters, you can get this data from
  the Census)
• If not, primary research will be necessary

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Exploratory Research

• Generally provides qualitative data
• May take several forms
• Consumer interviews
• Focus groups
• Case studies
• Ethnography
• Projective techniques explore underlying
  feelings in the face of unwillingness or
  inarticulation
• E.g.
• What thoughts come to your mind when you think of
  Winthrop?
• What do you think about high gas prices?

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Descriptive Research

• Utilizes a large sample of participants as base
• Generally provides quantitative data
• Designs
• Cross-sectional design involves the systematic
  collection of quantitative information from one
  or more samples of respondents at one point in
  time
• Longitudinal design tracks the responses of the
  same sample of respondents over time

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Descriptive Research

• Cross-sectional Designs
• Measuring consumer response to a new product in
  the market
• Longitudinal Design
• Measuring consumer attitude to a brand every one
  month

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Causal Research

• Attempts to understand cause-and-effect
  relationships
• Factors that might cause a change are independent
  variables while the variables that are affected
  are dependent variables
• Experimental design allows researchers to control
  possible explanations for the effect

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Causal Research

• Example
• Measuring consumer response to a brand before and
  after seeing a new commercial
• It is important to rule out other possible causes
  of the effect
• E.g. Existing brand loyalties may influence the
  effect. This has be controlled.

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Step 3 Choose the Data Collection Method

• Communication
• Mail questionnaires
• Telephone interviews
• Face-to-face interviews
• Online questionnaires
• Observation
• Personal
• Mechanical

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Mail Questionnaires

• Advantages
• Respondents feel anonymous
• Low cost
• Good for ongoing research

• Disadvantages
• Slow return speed
• Low response rates typical
• Inflexible questionnaire
• Length of survey is limited

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Telephone Interviews

• Advantages
• Fast
• Low cost
• Limited interviewer bias

• Disadvantages
• Decreasing levels of cooperation
• Limited questionnaire length
• Consumers screen calls

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Face-to-Face Interviews

• Advantages
• Flexibility of questioning
• Long questionnaires possible
• Can help explain questions
• Can use visuals

• Disadvantages
• High cost
• Interviewer bias possible
• Time requirements are high

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Online Questionnaires

• Advantages
• Instant data collection
• Low cost
• No interviewer bias
• Access regardless of geographic location

• Disadvantages
• Unclear who is responding
• No assurance of honesty
• Limited questionnaire length
• Limitations inherent with self-selected samples

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Observation

• Personal observation
• traffic analysis
• recording how products are used
• Unobtrusive measures
• pantry checks
• garbage search
• Mechanical observation
• people meters

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Data Quality

• Reliability - extent to which research
  measurement techniques are free of errors.
• Measuring alcohol dependency by a survey question
  vs. measuring it by a pantry check.
• Validity - extent to which the research measures
  what it was intended to measure
• If you intend to measure if a consumer will buy
  the brand, then a question that asks him how much
  he/she likes the brand is not a valid question.
• Representativeness - extent to which consumers in
  the study are similar to the target of interest
• If your target of interest is housewives,
  surveying female university students is not the
  appropriate sample.

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Step 4 Design the Sample

• Probability samples
• each member of the population has an equal and
  known chance of being included in the sample
• allows for inferences to be made about the
  population
• Non-probability samples
• unequal chance of being included in the sample
• limits inferences to the population

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Probability Samples

• Simple random sample
• Systematic random sample
• Stratified sample
• Divide the population into segments of interest
• Random selection from each segment separately
• e.g. dividing the population into males and
  females first and then making a random selection
  from each segment

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Non-Probability Samples

• Convenience sample
• Quota sample
• Decide a quota and once it is full stop further
  selection
• E.g. if you decide to have 50 females in your
  sample, you recruit the first 50 you meet and
  stop any further selection.

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Step 5 Collect the Data

• Implementation phase
• Special issues in data collection
• Single Source Data
• Data on purchasing behavior and advertising
  exposure are measured for members of a consumer
  panel using television meters, retail scanners,
  and split-cable technology
• E.g. Did a new campaign influence brand switching?

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Step 6 Analyze and Interpret Data

• Enter, clean, and code data
• Choose appropriate techniques for analysis
• Interpret analysis

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Step 7 Prepare the Research Report

• Executive summary
• A description of research methods
• Discussion of results
• Limitations of study
• Conclusions and recommendations

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Online Research

• Online Tracking online consumer behavior
• Cookies text files which track online consumer
  behavior
• Tradeoff between privacy and customization
• Testing, Questionnaires, and Focus Groups

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Online Tracking

• The Internet offers the ability to track and
  monitor consumers while they surf
• Several behaviors can be monitored
• What sites are visited?
• How long did the visitor stay?
• What types of information did they collect at the
  site?
• Where did they go after they left?

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Cookies

• Cookies are text files inserted on a users hard
  drive by an Internet site
• Cookies allow for details of a Web visit to be
  stored and tracked with future visits
• For marketers, cookies allow a way of observing
  behavior and customizing Web sites and offerings
  to specific users
• For consumers, cookies represent a trade-off
  between privacy and customization