Decision support systems and marketing research

1. Decision support systems and marketing research Module 4: Chapter 5

2. Session overview • marketing managers’ need for information • what is a marketing decision support system (DSS)? • the role of marketing research • marketing research process • when should marketing research be conducted?

3. Information for marketing Marketing managers need information on… Competition Marketing environment Customers needs Strategic planning

4. Marketing managers need information for... • analysis • marketing programs, current performance, environment, competitors, markets • planning • strategic and marketing planning • implementation • marketing programs and activities • control • marketing programs and activities • review

5. Assessing Information Needs • is it relevant and necessary? • decision-based • utility • avoid information overload • is it feasible to acquire? • time • cost • availability

6. What is a decision support system (DSS)? • an interactive, flexible, computerised information system that enables managers to obtain and manipulate information as they are making decisions (Summers et al. 2005, p. 144). • three key sources of information • internal company records • marketing intelligence • marketing research

7. A DSS should be….. • interactive • immediate results • under direct control of marketing manager • flexible • able to be manipulated to produce various outputs • discovery-oriented • able to probe, isolate problems and ask ‘what-if’ questions. • accessible • easy to learn and use

8. Using a DSS for database marketing • create a large computerised file of customers’ and potential customers’ profiles and purchase patterns • used for target marketing • cross-selling and up-selling

9. What is marketing research? • the process of planning, collecting and analysing data relevant to a marketing decision (Summers et al. 2005, p. 145). • problem-specific

10. Roles of marketing research improving quality of decision-making Marketingresearch understanding changing market place tracing problems gauging value, measuring satisfaction keeping customers

11. When should marketing research be conducted? • how well does the firm know the market? • how much will the research cost? • will the research add value? • how long will the research take? • what is the quality of the research?

13. Step 1- Identifying the research problem or opportunity • what is the broad-based management problem for which some action is required? • e.g. How can we defend our market share in light of the entrance of a new competitor? • broadly, what information do we need to solve the problem? • e.g. What is our current positioning relative to competitors?

14. Step 1- Identifying the research problem or opportunity cont…. • what are our research objectives? • specifically, what do we want to find out in order to make a decision? • e.g. what attributes do current and potential customers use to evaluate our performance and how are we rated on those attributes relative to competitors?

15. Identify the problem or opportunity Management decision problem A broader-based problem that requires marketing research in order for managers to take proper actions. Action oriented. Marketing research problem Broadly, what information is needed and how can that information be obtained efficiently and effectively? Information oriented. Marketing research objective What specific pieces of information are needed to solve the marketing research problem and make a decision?

16. Step 2: Planning the research design • research design specifies • which research questions must be answered? • how and when will the data be gathered? • how will the data be analysed? • two main stages • collecting secondary data • gathering primary data

17. Secondary data • data previously collected purposes other than the one at hand (Summers et al. 2005, p. 150). • secondary sources (Exhibit 5.2, p. 151) • internal company information • sales reports, expenses, inventories etc. • government agencies (e.g ABS) • trade and industry associations (Retailer’s Association) • marketing research firms (e.g. Roy Morgan, ACNielsen) • commercial publications (e.g. Retail World, B & T weekly) • news media (e.g. Australian Financial Review)

18. Sources of electronic information • USQ databases – access via USQConnect • Company and organisational websites • Search engines – Google etc. • Useful Marketing information

19. Useful websites • Roy Morgan • AC Nielsen • Marketing Research Toolkit • Company websites

20. Advantages of secondary data • saves time and money • aids in determining direction for primary data collection • assists in problem definition • pinpoints the kinds of people to approach and their location • serves as a basis of comparison for other data

21. Disadvantages of secondary data • may not be relevant to the research problem • quality, accuracy, and currency of data may pose a problem

22. Primary data • information collected for the first time • Can be used for solving the particular problem under investigation (Summers et al. 2005, p. 152). • various methods of collection (Exhibit 5.3, p. 153) • surveys, in-depth interviews, focus groups, observation, experiments

23. Advantages of primary data • answers a specific research question • data is current • source of data is known • validity • secrecy can be maintained

24. Disadvantages of primary data 3 • expensive and time-consuming • validity suffers if not well designed • relies on correct and accurate analysis of results

25. Survey research • The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions and attitudes (Summers et al. 2005, p.153).

26. Forms of survey research • in-home personal interviews • mall intercept interviews • telephone interviews • mail surveys • computer disk by mail • focus groups • internet surveys

27. Focus group • group of about 7-10 people • participate in a group discussion by focusing on an issue • led by a trained moderator

28. Advantages of focus groups • interaction – group dynamics • group stimulates interactions and responses • brainstorming • depth of information - richness • interactions – non-verbals can be observed for post-analysis

29. Disadvantages of focus groups • relies on trained, skilled moderator • problem of ‘group think’ • problem of dominant members • time and cost • may not be representative of target market

30. Questionnaire design Open-ended question An interview question that encourages an answer phrased in respondents’ own words. Closed-ended question An interview question that asks the respondent to make a selection from a limited list of responses. Scaled-response question A closed-ended question designed to measure the intensity of a respondent’s answer.

31. Qualities of a good questionnaire clear and concise no ambiguous language unbiased reasonable terminology

32. Observation research 3 People watching people Mystery shoppers One-way mirrors Types ofobservationresearch People watching an activity Retail/wholesale audits Machines watchingpeople Traffic counters Passive people meter

33. Experiment • a method a researcher uses to gather primary data based on determining cause and effect • control group and treatment groups

34. Step 3: Sampling • a sample is a subset of the population being studied • assumed to be representative of the population being studied • types of samples • refer to Exhibit 5.5, p. 163 • probability versus non-probability sample

35. Probability samples Probability sample A sample in which every element in the population has a known statistical likelihood of being selected. Random sample A sample arranged so that every element of the population has an equal chance of being selected.

36. Non-probability samples Non-probability sample Any sample in which little or no attempt is made to get a representative cross-section of the population. Convenience sample A form of non-probability sample using respondents who are convenient or readily accessible to the researcher.

37. Step 4: Data collection and analysis • collect the data • field – surveys, observation • laboratory – experiments, simulations • training of interviewees • supervision of interviewees • random checking to see if data collected correctly

38. Analysing the data • coding (pre and post coding) • editing • data entry • checking • running frequencies • checking for normality (skewness etc.) • cross tabulations • relationships and associations among the data • e.g. usage by gender, attitude by age

39. Step 5: RecommendationsReporting the results • report conclusions and recommendations • presenting the data • addressing each research objective • report the research method used • explain the analysis conducted • use tables and charts for ease of interpretation • clarity in writing • concise

40. Summary • Marketing managers’ need for information • What is a marketing decision support system (DSS)? • The role of marketing research • Marketing research process • When should marketing research be conducted?