Chapter 8

1. Chapter 8 Improving Decisions with Marketing Information www.mhhe.com/fourps

2. At the end of this presentation, you should be able to: • Know about marketing information systems. • Understand the scientific approach to marketing research. • Know about methods for collecting secondary and primary data. • Understand the role of observing, questioning, and using experimental methods in marketing research.

3. Marketing Information Inputs to Marketing Strategy Planning Decisions(Exhibit 8-1)

4. Marketing Information Inputs to Marketing Strategy Planning Decisions (Exhibit 8-1) Information for marketing decisions • Marketing information systems • Accessing multimedia data • Data warehouse • Decision support systems • Marketing models • Marketing Research • Role of research specialist • Scientific method • Steps in marketing research • Define problem • Analyze situation • Gather problem specific data • Interpret the data • Solve the problem

5. Who Does the Work?

6. That marketing research geek doesn’t understand my business – she doesn’t even know my competitors! That overpaid Gen Y is clueless – she doesn’t even know how a chi-square is computed! Effective Research Requires Cooperation Collaboration Is Absolutely Necessary!

7. Changes Are Under Way in Marketing Information Systems (need information about customers and their responses to the marketing mix; targeting and segmentation; competitors; marketing environment) MIS Makes Information Available and Accessible Get More Information Faster and Easier Marketing Managers Must Help Develop an MIS An Intranet Is Easy to Update

8. Elements of a Complete Marketing Information System (decision support system put manager online to get and use information while making decisions; marketing model—relationships among marketing variables)

9. The Impact of an MIS Information for implementation, planning and control Many Firms Are Not There Yet

10. Research is a Bridge to Customers © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

11. The Scientific Method and Marketing Research(decision-making approach that is objective and orderly in testing ideas before accepting them: Hypotheses—educated guesses about likely causes and effects that can be measured objectively) Defining the problem Analyzing the situation Early identification of solution Feedback to previous steps Getting problem-specific data Interpreting the data Solving the problem

12. Defining the Problem – Step 1 Finding the Right Problem Level Problems vs. Symptoms Setting Research Objectives

13. Analyzing the Situation – Step 2 What Information Do We Already Have? Situation Analysis Helps Educate a Researcher

14. Checking Your Knowledge • Edna Bates, a marketing researcher who is an expert in • customer satisfaction research, is asked by a client to • conduct a study dealing with a completely unfamiliar • research topic. Edna consults secondary data to gain more • insight about this unfamiliar area. Edna is engaged in the • _________ stage of the marketing research process. • problem definition • situation analysis • gathering problem-specific data • data interpretation • solving the problem

15. Company files, intranet, reports, marketing information system, people, sales, cost data Inside company Equipment (video, scanner, etc.); website analysis; personal approaches Obser-vation Internet, libraries, governments, trade associations, universities, private research organizations Outside company In-depth and focus group interviews; online, mail, phone, personal surveys; panels Ques-tioning Secondary (Information that has already been collected or published) and Primary Data (information specifically collected to solve a current problem) Secondary data sources All data sources Primary data sources

16. Private Sources Are Useful Too—comprehensive database of business establishments

17. The Bottom Line on Secondary Data KeyIssues Research Proposal Situation Analysis – A Lot For a Little What Else Is Needed?

18. Observing Questioning • Asking people • Formal or informal • Qualitative questioning is open-ended • Monitoring behaviors • Human or machine • Costs coming down Getting Problem-Specific Data – Step 3 PrimaryData

19. Focus Groups Stimulate Discussion

20. Structured Questioning Gives More Objective Results Can be summarized in numbers Seeks structured responses QuantitativeResearch Faster response & analysis (e.g., agree or disagree)

21. Primary Methods for Collecting Survey Data Surveys Come in Many Forms Mail and Online (ability to ask extensive set of questions; convenience; anonymity; willingness to provide personal information) Telephone (more faster and effective than mail survey) Personal Interview can be in-depth

22. Checking Your Knowledge • A researcher wants to study 1,000 consumers and • needs information about a lot of personal and • sensitive issues. Which of the following would be • the best way to gather this information? • Mail survey • Focus group • Telephone survey • Face-to-face interview • Experiment

23. Observing – What You See Is What You Get Observation are Common in Advertising Research Website Analysis allows observation of customer behavior at a website Checkout Scanners “See” A Lot (help to manage inventories & adjust merchandise selections) Consumer Panels (groups of consumers who provide information to research firms on a continuing basis)

24. Difference in response between two groups Average for group who saw Ad #1 = 3.2 Average for group who saw Ad #2 = 4.6 1 2 3 4 5 Experimental Method Controls Conditions (which ad produces a more favorable impression) Half of the people see Ad #1 Representative group of customers Half of the people see Ad #2 What conclusion can you draw from this research?

25. Interactive Exercise: Types of Data

26. Interpreting the Data – Step 4 (Exhibit 8-6)

27. Key Concerns in Data Interpretation Population (people of interest) Sample (smaller group selected to represent the population) KeyIssues Confidence Intervals (range on either side of an estimate that is likely to contain the true population value) Validity (extent to which data measures what it is intended to measure)

28. Withholding Information Unauthorized Disclosure of Personalized Information Disguised Sales Pitches Lying with Statistics Ethical Issues in Marketing Research

29. Ethical Issues in Marketing © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

30. Checking Your Knowledge • A sales training firm wants feedback on the quality of its • classes and training services. The firm planned to send • mail surveys to CEOs of its client companies to get the • needed information. However, one executive objected to • the survey plan, saying, “CEOs don’t attend our classes. • How will they know if the classes are any good?” Another • executive added, “If the survey isn’t relevant to the CEOs, it • will be thrown away and we’ll get no data.” It appears that • the research design presents problems with: • response rate. • relevance of population. • validity. • improper statistical analysis. • both A and B.

31. Solving the Problem – Step 5 Actionable Results Lack of Impact? (due to problems with research itself or barriers to the use of research within the organization) Managers Need to Know About Research Quality of Research Suppliers Is Variable Needed: Time, Forethought, Money

32. Checking Your Knowledge • A marketing research firm conducted a telephone survey • for a consumer products company. It provided new and • interesting information about brand image, the competition, • and other topics. At the end of the research company’s • results presentation, the sales manager commented, “This • is all interesting information, but it doesn’t tell me why our • market share is declining among 18 to 34 year old women, • nor does it offer me any suggestions about actions I can • take to deal with the situation.” The sales manager’s • complaint suggests that the research suffers from problems • with: • a lack of action implications for management. • poor planning by the researcher and managers at the outset of the project. • poor sampling. • a low response rate. • both A and B.

33. International Marketing Research Research Contributes to Success Accurate Data—Hard To Find? Coordinate and Standardize Use Local Researcher

34. Marketing Research Identifies International Opportunities(Crest Whitening toothpaste in United Arab Emirates) © 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

35. Study Question 1 Marketing managers can search the Internet for secondary data by using:  A. a popular Internet subject directory like Yahoo. B. a library Internet subject directory like INFOMINE. C. a powerful Internet search engine like Google. D. a relevant database that is accessed by using software at the website where the database is located. E. all of the above.

36. Study Question 2 A consumer products manufacturer wants consumer reaction to its existing products. Interaction is considered important to stimulate thinking. The firm should use:  A. the observation method. B. focus group interviews. C. the GSR (galvanic skin response) method. D. quantitative interviews. E. telephone interviews.

37. Study Question 3 What would be the best way for the marketing manager of a supermarket to find out how consumers move through the store?  A. Have an interviewer go through the store with each customer. B. Observe customers with hidden cameras. C. Give customers a questionnaire after they have finished shopping. D. Install checkout counters at the end of each aisle. E. None of the above would be very good.

38. Study Question 4 Jane has agreed to participate in marketing research in which she will provide information about her purchases on an ongoing basis. She is probably part of a:  A. confidence interval. B. statistical package. C. contributor group. D. consumer panel. E. focus group.

39. Study Question 5 Two similar groups of consumers are shown different magazines which include the same ad. Then each consumer is asked questions about the advertised product. This seems to be a description of  A. the experimental method. B. a set of focus group interviews. C. a consumer panel research project. D. a set of personal interviews. E. None of the above.