MARKETING

Real People, Real Choices

Fourth Edition

CHAPTER 4
Marketing Information and Research:
Analyzing the Business Environment
Off-line and Online

Knowledge is Power
A Marketing Information System (MIS)
determines what information managers
need and then gathers, sorts, analyzes,
stores, and distributes relevant and
timely marketing information to system
users
What market info. do you need?
Should we change our ad campaign?
Should we change our packaging?

Four types of data

Internal Data sales reports, old market
research, complaint records, profit and
loss statements, etc.
intranet
Marketing Intelligence - method to get
information about the environment
newspapers, trade publications, www,
observations in market place
Mystery shoppers

Four types of data

Marketing Research - process of
collecting, analyzing, and interpreting
data about customers, competitors, and
the business environment to improve
marketing effectiveness
Two types:
Syndicated research
Custom research

Four types of data

Syndicated research reports
secondary data collected and
compiled by firms on a regular basis
and sold to many firms. e.g. Nielsens
TV ratings, Arbitron ratings, Simmons
Market Research Bureau CB,
demographics and media usage)
Custom research reports
primary data collected to provide
answers to specific questions

Four types of data

Acquired databases: many companies
collect information about you and sell it
to others at a cost
Opt out clauses
Spam and junkmail
Do-not-call lists

Marketing Decision Support Systems

(MDSS)
MIS System + analysis (statistical and
modeling software) + interactive capabilities
Allows managers to conduct their own
analyses
Allows posing what-if scenarios
E.g. How do consumers perceive our brand
w.r.t. competition?
E.g. Would withdrawing the ad campaign
result in a decline in sales?

Differences in MIS and MDSS

MIS
What were our
company sales of
each product during
the last month and
the last year?

MDSS
Have our sales
declines simply
reflected changes in
overall industry
sales or is there
some portion of the
decline that cannot
be explained by
industry changes?

Differences in MIS and MDSS

MIS
What medium
best reaches my
target audience?
What were our
sales this season
and the same
time last season?

MDSS
How much will my
sales improve if I
use radio instead
of TV?
Was the
improvement in
our sales this
season due to the
new pricing plan?

Search for Gold: Data Mining

Data mining is a process in which analysts sift
through data to identify unique patterns of behavior
among different customer groups
4 key applications for marketers:
customer acquisition (e.g. make offers based on
matched key customer characteristics)
customer retention (isolate big-spenders and send
them special offers other do not receive)
customer abandonment (Fedex and the good, the
bad and the ugly
market basket analysis (Fingerhut and mailers for
gas grilles based on purchases of outdoor patio
furniture)

Marketing Research Process: Step 1

Specify the research objectives

Identify the consumer population of
interest
Place the problem in an environmental
context
What factors may be influencing the
situation

Step 2: Determine the Design

Can the information be acquired from
existing data?
If so, secondary data sources will be
utilized (e.g. if you want to know zip
code-wise population clusters, you
can get this data from the Census)
If not, primary research will be
necessary

Exploratory Research
Generally provides qualitative data
May take several forms
Consumer interviews
Focus groups
Case studies
Ethnography
Projective techniques explore underlying
feelings in the face of unwillingness or
inarticulation
E.g.
What thoughts come to your mind when you think
of Winthrop?
What do you think about high gas prices?

Descriptive Research
Utilizes a large sample of participants as base
Generally provides quantitative data
Designs
Cross-sectional design involves the
systematic collection of quantitative
information from one or more samples of
respondents at one point in time
Longitudinal design tracks the responses of
the same sample of respondents over time

Descriptive Research

Cross-sectional Designs:
Measuring consumer response to a new
product in the market
Longitudinal Design:
Measuring consumer attitude to a brand
every one month

Causal Research
Attempts to understand cause-andeffect relationships
Factors that might cause a change are
independent variables while the
variables that are affected are
dependent variables
Experimental design allows researchers
to control possible explanations for the
effect

Causal Research
Example:
Measuring consumer response to a
brand before and after seeing a new
commercial
It is important to rule out other possible
causes of the effect
E.g. Existing brand loyalties may
influence the effect. This has be
controlled.

Step 3: Choose the Data Collection Method

Communication
Mail questionnaires
Telephone interviews
Face-to-face interviews
Online questionnaires

Observation
Personal
Mechanical

Mail Questionnaires
Advantages
Respondents feel
anonymous
Low cost
Good for ongoing
research

Disadvantages
Slow return speed
Low response
rates typical
Inflexible
questionnaire
Length of survey
is limited

Telephone Interviews
Advantages
Fast
Low cost
Limited
interviewer bias

Disadvantages
Decreasing levels
of cooperation
Limited
questionnaire
length
Consumers
screen calls

Face-to-Face Interviews
Advantages
Flexibility of
questioning
Long
questionnaires
possible
Can help explain
questions
Can use visuals

Disadvantages
High cost
Interviewer bias
possible
Time
requirements are
high

Online Questionnaires
Advantages
Instant data
collection
Low cost
No interviewer bias
Access regardless
of geographic
location

Disadvantages
Unclear who is
responding
No assurance of
honesty
Limited
questionnaire length
Limitations inherent
with self-selected
samples

Observation
Personal observation
traffic analysis
recording how products are used
Unobtrusive measures
pantry checks
garbage search
Mechanical observation
people meters

Data Quality
Reliability - extent to which research measurement
techniques are free of errors.
Measuring alcohol dependency by a survey
question vs. measuring it by a pantry check.
Validity - extent to which the research measures what
it was intended to measure
If you intend to measure if a consumer will buy the
brand, then a question that asks him how much
he/she likes the brand is not a valid question.
Representativeness - extent to which consumers in
the study are similar to the target of interest
If your target of interest is housewives, surveying
female university students is not the appropriate
sample.

Step 4: Design the Sample

Probability samples
each member of the population has an
equal and known chance of being included
in the sample
allows for inferences to be made about the
population
Non-probability samples
unequal chance of being included in the
sample
limits inferences to the population

Probability Samples
Simple random sample
Systematic random sample
Stratified sample
Divide the population into segments of
interest
Random selection from each segment
separately
e.g. dividing the population into males and
females first and then making a random
selection from each segment

Non-Probability Samples
Convenience sample
Quota sample
Decide a quota and once it is full stop
further selection
E.g. if you decide to have 50 females
in your sample, you recruit the first 50
you meet and stop any further
selection.

Step 5: Collect the Data

Implementation phase
Special issues in data collection
Single Source Data
Data on purchasing behavior and
advertising exposure are measured for
members of a consumer panel using
television meters, retail scanners, and
split-cable technology
E.g. Did a new campaign influence brand
switching?

Step 6: Analyze and Interpret Data

Enter, clean, and code data
Choose appropriate techniques for
analysis
Interpret analysis

Step 7: Prepare the Research Report

Executive summary
A description of research methods
Discussion of results
Limitations of study
Conclusions and recommendations

Online Research
Online Tracking online consumer
behavior
Cookies text files which track online
consumer behavior
Tradeoff between privacy and
customization
Testing, Questionnaires, and Focus
Groups

Online Tracking
The Internet offers the ability to track
and monitor consumers while they surf
Several behaviors can be monitored
What sites are visited?
How long did the visitor stay?
What types of information did they
collect at the site?
Where did they go after they left?

Cookies
Cookies are text files inserted on a users
hard drive by an Internet site
Cookies allow for details of a Web visit to be
stored and tracked with future visits
For marketers, cookies allow a way of
observing behavior and customizing Web
sites and offerings to specific users
For consumers, cookies represent a trade-off
between privacy and customization