Chapter 5 Market Research and Business Intelligence 2001.

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1 Chapter 5 Market Research and Business Intelligence

2 Lessons from Vignette 5 Advertising networks track consumers online Tracking can: reveal consumer preferences lead to better pricing decisions enable cross-selling lead to more precise targeting of ads enable measurement of advertising effectiveness Consumer tracking online also raises serious questions regarding privacy protection and ethics

3 Market Research Process Problem Definition and Research Objectives Research Methodology Sampling Questionnaire Design and Testing Data Collection Analysis Presentation of Results

4 Market Research Online Secondary Research Primary Research Observation, Tracking and Datamining Important Considerations Quality of data Cost and Time Consumer Privacy Rights and Ethics

5 Secondary Research Online Secondary Research - previously published information private versus government sources Fee-based versus free sources Advantages ease of information gathering, low cost, access to vast amount of information Disadvantages authenticity, reliability and bias, methodology (often unknown)

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7 Primary Research Online Primary Research - initiated to study a specific problem at hand, where information does not exist at present Qualitative versus Quantitative Research Advantages cost, time, interactivity, consistency checks, automated data entry (for online surveys) Disadvantages sample respresentativeness, authenticity of responses, limited length of questionnaire, conduct in focus groups, problems with non-pc devices

8 Qualitative Research Online

9 Online focus groups can encourage participation as some people respond better when there is no face-to-face interaction Participants must be screened in advance (say through telephone) and invited to participate Participants can be anywhere in the world Moderator must play an important role Verification of participant identity and lack of body language are limitations

10 Surveys Quantitative Research Web-based easy to fill out, data captured instantly, participants must be invited or announcement ed less elegant, survey reaches participants, use targeted mailing list to reach the right sample Pop-up variation of Web-based survey, a window pops up when consumer is browsing through a site ideal for short customer satisfaction surveys

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12 Experiments Controlled experiments can be conducted online For instance, a company designing a new Web site, can randomly send visitors to their URL to different pages on their site and then solicit consumer feedback Different banner ads can be shown to different visitors to a site to determine which ad is more effective Amazon.com conducted a pricing experiment by varying the price of DVDs to different consumers The study was intended to allow Amazon to fine-tune their pricing Study became controversial because some consumers paid a much higher price, forcing Amazon to stop the study

13 Cookies Tracking and Datamining A small text file sent from Web server, which is stored in the visitor s computer User preferences, shopping pattern and repeat visits can be tracked Cookies are useful in customizing Web pages and online services Web Site Log Analysis tracking programs on can measure visits, pages visited, amount of time spent on each page, repeat visits, the site or external link from where visitor came and other data

14 (Web Site Log Analysis - continued) page design can be enhanced, higher advertising rates for more frequently visited pages can be charged, advertising effectiveness can be monitored (check if visitor came from a banner ad) Analysis of newsgroups and bulletin boards sites like Deja.com allow firms to monitoring online word of mouth by tracking messages relating to the firm or their brands powerful source of consumer feedback in a natural setting negative word-of-mouth can be addressed quickly

15 Ethics Tracking software programs and cookies can be used for good purposes, but can also intrude consumer privacy Consumer privacy rights must be respected Online market researchers must adhere to ethical research practices See ESSOMAR Guideline in Appendix D

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