Chapter 4: Marketing Research and Information Systems

1. Chapter 4:Marketing Research and Information Systems Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans

2. Objectives • Define marketing research and understand its importance. • Describe the basic steps in conducting marketing research. • Explore the fundamental methods of gathering data for marketing research. • Describe how tools such as databases, decision support systems, and the Internet facilitate marketing information systems and research. • Identify key ethical and international considerations in marketing research.

3. Marketing Research • The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities. Importance of Marketing Research Irwin provides services to help companies better understand their customers’ needs

4. Discussion Question • Can you think of a situation in which you would introduce a new product to a market where marketing research would be inappropriate?

5. The Benefits of Marketing Research • Facilitates strategic planning • Assess opportunities/threats • Ascertain potential for success • Determine feasibility • Improves marketer’s ability to make decisions

6. The Marketing Research Process

7. Discussion Question • Which of the five steps of the marketing research process is the most important?

8. Locating and Defining Issues or Problems • Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation • Departures from normal or expected marketing results • Typical problems requiring research • Discover reasons for exceeding/not meeting goals • Evidence of possible or potential market opportunities

9. Defining the Problem • Nature/scope of situation • Clear definition of need • Determine precisely what research is to determine • How will research be used?

10. Designing the Research Project • Research Design • An overall plan for obtaining the information needed to address a research problem or issue • Hypothesis • An informed guess or assumption about a certain problem or set of circumstances • Accepted or rejected hypotheses act as conclusions for the research effort

11. Types of Research • Exploratory Research • Conducted to gather more information about a problem or to make a tentative hypothesis more specific • How are consumers car buying habits changing? • Conclusive Research • Designed to verify insights through objective procedures and to help marketers in making decisions • What % of consumers will consider an electric car purchase? • Descriptive Research • Conducted to clarify the characteristics of certain phenomena to solve a particular problem • How are consumers gathering information to assist in car buying? • Experimental Research • Research that allows marketers to make causal inferences about relationships

12. Differences Between Exploratory and Conclusive Research

13. Reliability and Validity • Reliability • A condition existing when a research technique produces almost identical results in repeated trials • also considered as ‘repeatability’ if results can be replicated • Validity • A condition existing when a research method measures what it is supposed to measure

14. Collecting Data • Primary data: • Is observed, recorded or collected directly from respondents • Is collected to address a specific problem that cannot be answered by secondary data alone Primary Data Collection M/A/R/C works with multinational companies to collect primary data to maintain strong brand equity

15. Collecting Data • Secondary data: • Is compiled both inside and outside the organization • Is for some purpose other than the current investigation

16. External Sources of Secondary Data

17. External Sources of Secondary Data

18. Web Exercise @ Census: Click on the @ symbol to access the U.S. Census State and County Quick Facts Web Site. Once there, explore some of the information available for one or more states.

19. Discussion Question • Can you name any of the top marketing research firms in the U.S.? • Which marketing research firm do you think is the largest in terms of sales revenue? @ Click on the @ for the answers 

20. Methods of Collecting Primary Data • Population - all the elements, units, or individuals of interest to researchers for a specific study • Sample - a limited number of units chosen to represent the characteristics of the population • Sampling - the process of selecting representative units from a total population

21. Probability Sampling • Probability sampling • sampling technique in which every element in the population being studied has a known chance of being selected for study • Random sampling • type of probability sampling in which all units in a population have an equal chance of appearing in a sample • Stratified sampling • type of probability sampling in which the population is divided into groups according to a common attribute; a random sample is then chosen within each group

22. Nonprobability Sampling • Nonprobability sampling • sampling technique in which there is no way to calculate the likelihood that a specific element of the population being studied will be chosen • Quota sampling • nonprobability sampling technique in which researchers divide the population into groups and then arbitrarily choose participants from each group

23. Sampling Probability Nonprobability Random SamplingStratified Sampling Quota How Types of Sampling Align

24. Survey Methods • Mail Sample Mail Survey • Telephone Sample Phone Survey • Online Sample Online Survey • Personal Interview Collecting Data Through Surveys Infosurv assists clients in the development and execution of online surveys

25. Social Networking and Surveys • Social networking sites • can be used to gather useful information in understanding consumer decisions – provide a new way for marketers to conduct market research.

26. Comparing Four Basic Survey Methods

27. Forms of Personal Interviews • Focus-group • observation of group interaction when members are exposed to an idea or concept • In-home/Door-to-Door • takes place in respondents’ homes • Customer advisory boards • small groups of actual customers providing feedback on ideas, products, marketing strategies Kentucky Fried Chicken “Mom’s Matter” • Telephone depth • combines ability to probe with confidentiality Computer Assisted Telephone Interviewing (CATI) • Shopping-mall intercept • interviewing a % of persons walking through malls

28. Benefits of a Personal Interview • Rapport • More in-depth • Probes • Follow-up • Tests • Longer • Yield more information • Respondents can be carefully selected, reasons for nonresponse explored • Allow you greater flexibility

29. Questionnaire ConstructionQuestion Types • Open-Ended Question What is your general opinion about coffee shops? ________________________________________________ _______________________________________________ • Dichotomous Question Have you ever purchased a coffee product? Yes _____ No _____ • Multiple-Choice Question What income group are you in? $0-$19,000 _____ $20,000-$59,999 _____ $60,000-$99,000 _____ more than $100,000 _____

30. Observation Methods • Direct contact with subject is avoided to reduce possible awareness of observation process. • Physical conditions, subject actions, and demographics are noted. • Observations may be combined with same subject interviews. • Data gathered may be influenced by observer bias.

31. Interpreting Research Findings • Statistical interpretation - focuses on what is typical or what deviates from the average Interpreting Research Companies like Market Strategies can help interpret the data collected from market research and offer insight into the areas investigated

32. Reporting Research Findings • Prepare a formal, written document • Clear, objective look • Point out deficiencies • Formal, written document • Determine level of detail • Summary/recommendations first

33. Using Technology to Improve Marketing Information Gathering and Analysis Using Technology Re Rez uses some of the most advanced marketing research technology to assist clients

34. Technology and Information Gathering and Analysis • Increasingly accessible • Customer relationship management enhanced • Permits internal research and quick information gathering • Access array of valuable information sources

35. Types of Technology Used • Marketing Information Systems (MIS) • framework for managing and structuring information gathered from internal and external sources • Databases • Single-source data provided by single marketing research firm • Marketing Decision Support Systems (MDSS) • customized computer software that aids marketing managers in decision making

36. The Importance of Ethical Marketing Research

37. International Issues in Marketing Research • Modification of data-gathering methods to account for regional differences • Use of two-pronged approach to international marketing research • Consider sociocultural, economic, political, legal, and technological forces

38. After Reviewing This Chapter You Should Be Able to: • Define marketing research and explain its importance. • Describe the basic steps in conducting marketing research. • Discuss the fundamental methods of gathering data for marketing research. • Describe how tools such as databases, decision support systems, and the Internet facilitate marketing information systems and research. • Identify key ethical and international considerations in marketing research.

39. Key Concepts • Marketing research • Research design • Hypothesis • Exploratory research • Conclusive research • Descriptive research • Experimental research • Reliability • Validity • Primary data • Secondary data • Population • Sample • Sampling • Probability sampling • Random sampling • Stratified sampling • Nonprobability sampling • Quota sampling • Mail survey • Telephone survey • Online survey • Personal interview survey • In-home (door-to-door) interview • Focus-group interview • Customer advisory boards • Telephone depth interview • Shopping mall intercept interview • Statistical interpretation • Marketing information system (MIS) • Database • Single-source data • Marketing decision • support system (MDSS)