Market Information Systems

1. Market Information Systems Market Research & How it is Conducted

2. Market Research • In this section you will discover • What market research is • Why market research is important • Who uses market research • The value of technology • Different types of research • Limitations of research

3. Marketing Research • Links the public to the marketer through information • Marketing information is used to: • Identify market opportunities • Solve marketing problems • Implement market plans • Monitor market performance

4. Marketing Research • Research is all methods used to gather information, analyze it & report on it • Kellogg's could use it to launch a new cereal, Hilton to gauge customer satisfaction

5. Marketing Research • Since customers accept only about 10% of new products, knowing likes and dislikes is crucial • Will help to minimize risk & potential losses • Will help to capitalize of product and company strengths

6. Why is research important? • Businesses need to know what the current & future trends are • Where customers like to shop • What media they go to for information • How much customers will spend • Keep track of competition • What Company X is selling and for how much

7. Research takes time • Some companies will spend years on developing products • Stouffers spent 13 years creating Lean Cuisine • Testing product and packaging designs and conducting pilot sales in large cities

8. Who uses Market research? • Small businesses (under $5 mil) do informal research, usually by employees or owner • Simple surveys with no specialized department • Larger companies have formal research departments • Alternatively, they could outsource the research

9. Big bucks in research • Over $3 billion annually

10. Who uses Market Research? • Consumer product companies • Media outlets • Federal Government • Trade Organizations • Retails • Anyone who wants to better understand the wants and needs of consumers

11. What now? • After collecting all kinds of data, it needs to be sorted and stored • Market Information Systems • Set of procedures & methods that regulates, generates, stores, analyzes and distributes information for use in marketing decisions

12. Market Information Systems • These systems typically rely heavily on internal data • Sales reports, inventory lists • Other forms include • Competitor records • Customer profile data • Government data • Third party research

13. Technology at its finest • Bar code scanners • Are most often used to help with inventory management • Can be used to gather P.O.S. data on types of products purchased together to help with promotions • Valued customer cards • Adds identity to products • Allows marketers to gather personal data

14. Databases • A collection of related information about a topic • L.L. Bean maintains a customer catalog • American Express has a detailed system • Address • What you buy • Where you eat • How much you spend • Uses it to send special perks to members

15. More data • Data harvesting • Collecting all possible information • Companies often turn around and sell databases to other companies • A bank may sell lists of mortgages to mortgage insurers • No consumer permission is needed • Government has begun to step in and protect consumers

16. Difficulties Arise • Very costly • Need computer systems and trained personnel • Can be overwhelmed by the amount of data • Must prioritize, just because you can get it, doesn’t mean you should

17. Liar, Liar • Researchers often find people are less than truthful • A focus group of bald men insisted they were not bothered being bald, but they always wore hats • New technology is using brain waves and skin sensations to detect misrepresentations

18. Types of Research • Attitude • Market • Media • Product

19. Attitude Research • Also called opinion research • Determine how people feel about products, ideas, companies • Gallup is one of the largest and most respected organizations • Random Sampling • 10% of a population is typically large enough

20. Market Research • Gathering & analyzing data related to marketed goods and services • Concerned with size, location & makeup of market • Need to gather before product is introduced and frequently thereafter • Ford’s focus on younger customers • Cadillac’s revival

21. Market Research • Goal is to investigate & define target markets • Data, existing and projected, help to identify trends and prepare company • Not 100% reliable – generalized study • Sales and Economic forecasting

22. Sales Forecasting • Attempt to make an educated guess at future sales • Total market sales are calculated, then a share is predicted • Share based on previous company sales

23. Economic Forecasting • Attempt to predict future conditions • Federal agencies collect information on new homes, inflation, money supply & price indexes • Woods & Poole Economies, Inc. give projections for MSAs through 2020 • Metropolitan Statistical Area

24. Media Research • Media selection & frequency • Measures effectiveness of message and placement • Includes demo-,psycho-, and geographic information • Print • Broadcast • Online

25. Print • Tested on recall, communication & persuasiveness • Ability to change beliefs, attitudes or intended behavior • Uses consumer panels • Focus Groups • Typically a cross section of society – teens, seniors, minorities, etc.

26. Broadcast Media • Arbitron Ratings Co. – largest radio survey company • Uses diaries to gauge tune ins • Includes station and program details • Nielson Media Research, Inc. • Uses a sample of 5000 homes • Homes equipped with meters that monitor programs

27. Online Advertising • Agencies use mock & live situations to test recall or web advertising • Favorite methods • Pop-ups • Pop-unders • Cookies

28. Product research • Centers on product & package design and usage & acceptance of products • New product acceptance • Utilize test markets • Could be risky due to leaks of new products to competition • Existing products • Question both industry and consumers

29. Limitations • Limited by time • Often decisions need to be made before enough data has been collected • Limited by capital • Companies often do not want to invest enough for a in-depth study • Limited by information • Even the most expansive studies will not find all variables or will return too much information