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Managing MarketingInformation
Chapter 4
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Learning Goals
1. Explain the importance of information tothe company
2. Define the marketing information system
3. Outline the steps in the market researchprocess
4. Explain how companies analyze anddistribute information
5. Discuss special issues facing marketresearchers
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Learning Goals
1. Explain the importance of information tothe company
2. Define the marketing information system
3. Outline the steps in the market researchprocess
4. Explain how companies analyze anddistribute information
5. Discuss special issues facing marketresearchers
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Case StudyNew Coke
New Coke productfailure
Poor sales
Over 1,500 phone callsa day from angrycustomers
Old coke returns in only3 months
Due largely to research
failure
Tested on taste onlynotintangibles
Decisions based on 60%ratings
All for $4 million!
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Learning Goals
1. Explain the importance of information to thecompany
2. Define the marketing information system3. Outline the steps in the market research
process
4. Explain how companies analyze and distribute
information5. Discuss special issues facing market
researchers
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Marketing Information System
Marketing Information System (MIS)
Consists of people, equipment, and
procedures to gather, sort, analyze, evaluate,and distribute needed, timely, and accurateinformation to marketing decision makers.
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Marketing Information System
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Marketing Information System
Interacts with information users to assessinformation
Develops needed information from internal andexternal sources
Helps users analyze information for marketingdecisions
Distributes the marketing information and helpsmanagers use it for decision making
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PeopleSoft marketsdatabases to
optimizecustomer
relationship
management
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Assessing Marketing Information
Needs The MIS serves company managers as
well as external partners
The MIS must balance needs againstfeasibility:
Not all information can be obtained
Obtaining, processing, sorting, and deliveringinformation is costly
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Developing Marketing Information
Internal data is gathered viacustomer databases,financial records, and
operations reports
Advantages includequick/easy access toinformation
Disadvantages stem from theincompleteness orinappropriateness of data toa particular situation
Internal data
Marketing
intelligence
Marketing research
Sources of Info
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This ad istargeted tobusinesses toreinforce theimportance of agood internaldata for an MIS
system
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Developing Marketing Information
Marketing intelligenceisthe systematic collectionand analysis of publiclyavailable information about
competitors and trends inthe marketingenvironment.
Competitive intelligencegathering activities have
grown dramatically. Many sources of
competitive informationexist.
Internal data
Marketing
intelligence
Marketing research
Sources of Info
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Sources of Competitive
Intelligence Company employees
Internet
Garbage Published information
Competitors
employees
Trade shows Benchmarking
Channel membersand key customers
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Developing Marketing Information
Marketing researchis thesystematic design,collection, analysis, and
reporting of data relevantto a specific marketingsituation facing anorganization.
Internal data
Marketing
intelligence
Marketing research
Sources of Info
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GreenfieldOnline runs
a teenpanel for
feedback toclients on
this
importantmarket
http://www.whaddyaknow.com/ -
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Learning Goals
Explain the importance of information to thecompany
Define the marketing information system Outline the steps in the market research process
Explain how companies analyze and distributeinformation
Discuss special issues facing marketresearchers
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Steps in the MarketingResearch Process
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Step 1: Defining the problem
and research objectives The manager and the researcher must
work together. These objectives guide the entire
process.
Exploratory, descriptive, and causalresearch each fulfill differentobjectives.
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Step 1: Defining the Problem &
Research ObjectivesExample: American Airlines Case:
American Airlines is constantly looking for new ways
to serve the needs of air travelers. One manager came up with the idea of offering phone
service to passengers.
The other managers got excited about this idea andagreed that it should be researched further.
The marketing managervolunteered to do somepreliminary research
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Defining the Problem & Research ObjectivesExample: American Airlines Case
The marketing manager contacted a majortelecommunications company to find out the cost ofproviding this service on B-747 coast-to-coast flights.
The telecommunications company said that the device wouldcost the airline $1.000 a flight.
The airline could breakeven if it charged $25 a phone call and atleast 40 passengers made calls during the flight.
The marketing manager then asked the companysresearch managerto find out how air travelers wouldrespond to this new service.
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Defining the Problem & Research ObjectivesExample: American Airlines Case (cont.)
American Airlines looking for new ways to serve the
needs of air travelers the idea of offering phone
service to passengers
Research Problem? to find out everything about air travelers need too b road!
to find out if enough passengers aboard a B-747 flyingbetween East Cost and West Coast would be willing to pay $25 to make a phone call so that the company would break
even on the cost of offering this service too n arrow!
Research Problemis finally defined as: Will offering an in-flight phone service create enough incremental preferenceand profit for American Airlines to justify its cost against other
possible investments that the company might make?
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Defining the Problem & Research ObjectivesExample: American Airlines Case (cont.)
Research Object ives:
What are the main reasons that airline passengers might place phonecalls while flying?
What kinds of passengers would be the most likely to make phonecalls?
How many passengers are likely to make phone calls, given differentprice levels?
How many extra passengers might choose American because of thisnew service?
How much long-term support will this service add to AmericanAirlines image?
How important will phone service be relative to other factors? (suchas flight schedules, food quality, baggage handling, etc.)
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Step 1: Defining the Problem &Research Objectives
ExploratoryResearch
DescriptiveResearch
CausalResearch
Test cause- and-effectrelationships.
Tests hypotheses about cause-and-effect relationships.
Sheds light on problem - suggestsolutions or new ideas.
Gathers preliminary informationthat will help define the problem
and suggest hypotheses
Ascertain magnitudesDescribes things as market
potential for a product or thedemographics and consumers
attitudes.
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Step 2: Developing the Research
Plan Research plan is a written document which
outlines the type of problem, objectives, data
needed, and the usefulness of the results.Includes:
Secondary data: Information collected for anotherpurpose which already exists
Primary data: Information collected for the specificpurpose at hand
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Secondary Data
Secondary data sources:Government information
Internal, commercial, and online databases
Publications
Advantages:Obtained quickly
Less expensive than primary data Disadvantages:
Information may not exist or may not be usable
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Data that were
collected for anotherpurpose, and alreadyexist somewhere
(+)Obtained more quikcly
/ at lower cost
(-)Might not be
usable data.
Developing the Research Plan:Data Sources
both must be:
Relevant
Accurate
Current
Impartial
Data gathered fora specific purposeor for a specificresearch project
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Secondary dataon female
spending haspromptedmarketingchanges atretailers
Source: Business Week
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Evaluate the Following
when Judging Data Quality Relevance
Accuracy
Currency
Impartiality
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Primary Data
Primary research decisions:
Research approaches
Contact methodsSampling plan
Research instruments
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Primary Data
Observation researchusing people or machines
Discovers behavior butnot motivations Survey research
Effective for descriptiveinformation
Experimental research investigates cause and
effect relationships
Research Approach
Contact Method
Sampling Plan
Research Instrument
Decisions
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Research Approaches
SurveyAsking individuals about attitudes,
preferences or buying behaviors
(Descript ive)
ExperimentalUsing groups of people to determinecause-and-effect relationships
(Causal)
ObservationalGathering data by observing people, actions
and situations (Exploratory)
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Primary Data
Key Contact Methodsinclude:
Mail surveysTelephone surveysPersonal interviewing:
Individual or focusgroup
Online research
Research Approach
Contact Method
Sampling Plan
Research Instrument
Decisions
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Strengths and Weaknesses ofContact Methods Relate to:
Flexibility
Sample control
Data quantity Cost
Interviewer effects
Speed of datacollection
Response rate
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Strengths and Weaknesses ofContact Methods
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of
Data Collected
Good Fair Excel lent Good
Control ofInterviewer
Excel lent Fair Poor Fair
Control ofSample
Fair Excel lent Fair Poor
Speed of DataCollection
Poor Excel lent Good Excel lent
Response Rate Fair Good Good Good
Cost Good Fair Poor Excel lent
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Primary Data
Sample: subgroup ofpopulation from whominformation will be collected
Sampling Plan Decisions: Sampling unit Sample size Sampling procedure:
Probability samples Non-probability
samples
Research Approach
Contact Method
Sampling Plan
Research Instrument
Decisions
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Sampling Plan
Who is to besurveyed?(Sampling
Unit)
How manyshould besurveyed?
(Sample size)
How should thesample bechosen?
(Sampl.procedure)
Probability orNon-probability
sampling?Samp le -
representativesegment of the
population
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Sampling Plan
Probabi l ity Sampl ing Simple random sampleevery member of the population has
an equal chance of selection
Stratified random samplethe population is divided intogroups, random samples are drawn from each group
Cluster (area) samplee.g. groups such as blocks
Nonp robabi l i ty Sampl ing
Convenience sampleThe most accessible population
members are selected to obtain information Judgement sampleThe researcher uses judgement to select
population members who are good prospects for accurateinformation
Quota samplefinds and interviews a prescribed number of
people in each of several categories
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Primary Data
Questionnaires
Include open-endedand closed-ended
questions Phrasing and question
order are key
Mechanical instruments
Nielsens people metersCheckout scanners
Eye cameras
Research Approach
Contact Method
Sampling Plan
Research Instrument
Decisions
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Eye Cameras
Eye cameras track theconsumers eyes as they look at
marketing materials Applications
print adswhere do people lookfirst?
Web pagesdo people viewbanner ads?
Other web applications?
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Discussion Question
A digital camera manufacturerwants to determine what ismost important to older (50+)camera buyers
Suggest a research approach,contact methods, samplingplan, research instruments
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Step 3: Implementing the ResearchPlan
Data is collected by the company or anoutside firm
The data is then processed and checkedfor accuracy and completeness and codedfor analysis
Finally the data is analyzed by a variety ofstatistical methods
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Step 4: Interpreting and Reportingthe Findings
The research interprets the finding, drawsconclusions and reports to management
Managers and researchers must worktogether to interpret results for usefuldecision making
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American Airlines Case:Main Survey Findings
The chief reasons for using in-flight phone service are: emergencies,
urgent business deals,
mix-ups in flight times, and so on.
Making phone calls to pass the time would be rare. Mostof the phone calls would be made by businesspeople onexpense accounts.
About 5 passengers out of every 200 would make in-flight
phone calls at a price $25 a call; 12 would make calls at$15. Thus a charge of $15 would produce more revenue
(12x$15=$180) than $25 a call (5x$25=$125).
(Still, this is far below the in-flight breakeven cost of $1000)
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American Airlines Case:Main Survey Findings (cont.)
The promotion of in-flight phone service would winAmerican about two extra passengers on each flight.
The net revenue from these two extra passengers would beabout $ 620, but this still would not help meet the breakevencost.
Offering in-flight phone service would strengthen the
publics imageof American Airlines as an innovative andprogressive airline.
However, it would cost American about $200 per flight to createthis extra goodwill.
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Marketing Research Industry
$ 9 Billion a year is spent on marketing/advertising/publicopinion research services around the world
US spending on MR is $ 4.6 billion
About 39% of the world's spending for researchservices goes to the 10 largest MR organizations.
About 51% is held by the 25 largest worldwideorganizations
Approximately 31% of all research budget (cost) arespent on
syndicated research. 19% is spent on custom qualitative studies The remainder is spent on custom quantitative studies
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Marketing Research Industryin Turkey
Syndicated Services(MR data gathering and reporting)AC Nielsen:Retail Measurement Services - Scan Track -
Brand Track- CATI and CAPI
AGB:Daily, weekly and monthly reports on the figures/
statistics of reseach, share, rating figures, distribution ofratings on different target groups
Biliim International Research Org.:Monthly AdvertisingExpenditure Surveys
HTP Research and Consulting Services:Household
consumption panel (weekly visits, monthly report, 12 majorcities, 300 households)
Information Resources Inc/Panel:Retail audit (Electronicdata collection) -Retail information (Supermarketinformation, Infoscan)
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Analyzing Marketing Information
Information gathered in internal databases andthrough marketing intelligence and marketingresearch may require more analysis Statistical analysis and analytical models are often used
Managers may need help in applying the info. totheir mktg problems and decisions Market ing decis ion support sys ytems (MDSS)
coordinated collection of data, systems, tools andtechniques with supporting software and hardware, by which
an organization gathers and interprets relevant informationfrom business and environment and turns it into a basis formarketing action marketing and sales software programs decision models
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Customer Relationship Management
Customer relationship management (CRM) softwarehelps manage information by integrating customer datafrom all sources within a company, analyzing in depth,and applying the results to build stronger relationships
Customer touch points are analyzed in order to maximizecustomer loyalty. Data warehouses Data mining techniques
...CRM is not a technology solution....is justone part of an effect ive overal l cus tom errelationship strategy...
CRM software offers many benefits and can help a firmgain a competitive advantage when used as part of a totalCRM strategy
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Distributing and Using MarketingInformation
Information Must be Distributed
to the Right Managersat the Right Time.
Distributes NonroutineInformation for Special
Situations
Distributes RoutineInformation for
Decision MakingIntranets&extranets
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Market Research Companies ACNielsen
AC Nielsen helps define the problem bypackaging data around common problems,
including customer satisfaction and newproduct sales
It develops the sampling plans, collects and
analyzes the data Firms purchase these reports as secondary
data.
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Market Research Companies ACNielsen
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Learning Goals1. Explain the importance of information
to the company
2. Define the marketing information
system3. Outline the steps in the market
research process
4. Explain how companies analyze anddistribute information
5. Discuss special issues facing market