Trier 4 Marketing Research MANAGING MARKETING INFORMATION TO GAIN CUSTOMER INSIGHTS
Marketing Information and Customer Insights Fresh and deep insights into customers needs and wants Difficult to obtain Not obvious Customer Insights are: Customer s unsure of their behavior Better information and more effective use of existing information
Marketing Information and Customer Insights Companies are forming customer insights teams Include all company functional areas Customer Insights Collect information from a wide variety of sources Use insights to create more value for their customers
Marketing Information and Customer Insights Marketing Information Systems (MIS) Marketing information system(mis) consists of people and procedures for: Assessing the information needs Developing needed information Helping decision makers use the information for customer
Previewing concepts (1) Recognise the importance of information to an organisation and the role information plays in effective marketing decision-making Define the marketing information system and discuss its parts Outline the steps in the marketing research process 4-5
Previewing concepts (2) Outline the sources of secondary and primary data, understand their role and the issues involved in their collection and analysis Explain how companies analyse and distribute marketing information Discuss the special issues some marketing researchers face, including public policy and ethics issues 4-6
Gaining Insights 2012 Pearson Education
04 Marketing Information 2012 Pearson Education
The Importance of Information Companies need information about their: Marketing environment Competition Customer needs Managers don t need more information, they need better information. 7-9
Information Systems Data vs. Information 7-10
Systematic Approach Managers need to set up a systematic approach to gather, sort, analyse, evaluate and distribute the right information to the right managers 4-11
What is a marketing information system? A marketing information system (MIS) includes the people, equipment, and procedures to gather, sort, analyse, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. 7-12
Marketing Information System (MIS)? The MIS helps managers to: 1. Assess Information Needs, 2. Develop Needed Information, 3. Distribute Information. 4-13
A good MIS... balances users information desires against what they need and what is feasible to offer 2012 Pearson Education
Information Users MIS Information Users Assess Info Needs MARKETING INFORMATION SYSTEM Develop Needed Info Research/Intelligence/Databases Analyze/Use Info Marketing Environment 2012 Pearson Education
Figure 7.1 The marketing information system 4-16
Developing marketing information Internal data Marketing intelligence Marketing research 4-17
Functions of a MIS: Developing Information Information Needed by Managers Can be Obtained From: Internal Data Marketing Intelligence Marketing Research Computerized Collection of Information from Data Sources (i.e. Accounting) Within the Company. Collection and Analysis of Publicly Available Information about Competitors and the Marketing Environment (i.e. Technological). Design, Collection, Analysis, and Reporting of Data about a Specific Marketing Situation Facing the Organization. 4-18
Information Types Internal Secondary Primary Information must be timely and accurate 4-19
Internal: What Information Have You Now? 7-20
Internal data Internal Information can come from many sources. The accounting department prepares financial statements and keeps detailed records of sales, costs, and cash flows. Operations reports on production schedules, shipments, and inventories. Sales force reports on reseller reactions and competitor activities. The marketing department furnishes information on customer demographics, psychographics, and buying behaviour. The customer service department keeps records of customer satisfaction or service problems. Research studies done for one department may provide useful information for several others. 4-21
What you can learn from an invoice 1. The average sale per customer. 2. The top ten customers. 3. The geographical breakdown of sales. 4. Your customers by various categories e.g. builders, farmers, retailers. 5. Value of different products in your overall sales. 6. Seasonal patterns in sales. 7. Average length of credit taken by customers. 4-22
MARKETING INTELLIGENCE A relatively unstructured approach to gathering information about the marketing environment Sources: regularly scanning newspapers using specialised media cutting services listening to employees listening to intermediaries employing consultants 4-23
Sources of competitive intelligence Executives Engineers Scientists Purchasing agents Sales force Suppliers Resellers Customers Published information Competitors 7-24
Competitive intelligence Competitor intelligence can come from assessing competitors products, monitoring their sales, checking for new patents, and examining various types of physical evidence. Competitors may reveal intelligence information through their annual reports, business publications, trade show exhibits, press releases, advertisements, and Web pages. 4-25
P&G went dumpster diving for competitive information on Unilever 4-26
Information Analysis Systems: Decision Support Systems 4-27
Information Analysis Systems: Databases a collection of data that is arranged in a logical manner and organized in a form that can be stored and processed by a computer e.g.: customer names, addresses, zip codes, previous purchases, sizes, shipping and payment preferences, etc. 4-28
Information Analysis Systems: Data Warehousing & Data Mining The use of powerful computers and relational database software to dig through exceedingly large volumes of data to discover patterns of behavior. e.g. Classification trees 7-29
Distributing and using marketing information Marketing information has no value until it is used to make better marketing decisions. Many firms use a company intranet to facilitate this process. The intranet provides ready access to research information, stored reports, shared work documents, contact information for employees and other stakeholders, and more. Companies are also increasingly allowing key customers and value-network members to access account, product, and other data on demand through extranets. 4-30
What is marketing research? Marketing research is the systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organisation. 7-31
THE NATURE AND IMPORTANCE OF MARKETING RESEARCH It is essentially about KEEPING IN TOUCH with the marketing environment Information is a source of competitive advantage 4-32
Marketing Research is The process of listening to the voice of the market and conveying it to management. It answers questions such as: Who are my customers? Where do they shop? What do they want? What price will they pay? Who are my competitors, what do they offer? 4-33
Columbia Tri-Star Conducted Research to Determine Perceptions of Spider-Man Brand 7-34
Voodoo Research Meets Consumers at Festivals Source: Voodoo research www.voodoores.com 7-35
WHO CARRIES OUT MARKET RESEARCH? In house OK for small projects or where there is a routine and constant level of work Specialist research company (e.g. MORI) Likely to have much broader range of skills Can handle peaks and troughs in activity May be more objective Need close working relationship with client company 4-36
What is Market Research? Market Research is a formal study which; Specifies the information needed to address a particular marketing issue Designs the method for collecting that information Manages and implements the data collection process Analyses and interprets the results Communicates the implications of findings to the marketing manager 4-37
The Origins of Research Data Qualitative Quantitative 4-38
Qualitative Research Uses Investigating Motivations Attitudes Beliefs intentions Characteristics Non-probability samples Small samples Grounded in behavioural sciences 7-39
Quantitative Research Characteristics Probability and non-probability samples Relatively large sample sizes Statistical analysis 4-40
QUALITATIVE v QUANTITATIVE RESEARCH Qualitative Research: rich in meaning, but usually limited to small samples Quantitative Research: large scale data may be reliable, but meaning may not be valid Both approaches should be used in combination 4-41
Types of Research Exploratory Descriptive Causal 4-42
Exploratory Research Exploratory research utilizes qualitative research approaches and is undertaken to collect preliminary data in order to clarify or identify a problem. 4-43
Descriptive Research Descriptive research utilizes quantitative research approaches and aims to provide the marketer with a better understanding of a particular issue or problem. 4-44
Causal (Predictive) Research Causal research utilizes quantitative research approaches in order to test cause-and-effect relationships with a goal of making reasonably accurate predictions about the probable outcome of particular actions. 4-45
Experimentation Marketplace or Field Laboratory Low Degree of Control High 4-46
THE MARKETING RESEARCH PROCESS To be useful, research must be accurate and reliable Similar to other scientific research processes 7-47
Market Research Process (8-Step Model) Problem definition Conduct research Research objectives Planning research: Prepare research brief Agree on research plan Analyse and interpret data Prepare and present report Data collection Research evaluation 4-48
Figure 7.2 The marketing research process (4-Step Model) Defining the problem and research objectives Developing the research plan for collecting information Implementing the research plan Interpreting and reporting the findings 4-49
Problem Definition: Typical Questions What s the purpose of the study? What is the decision to be made? What information is needed? How will the information be used? What is to be measured? Is there a need for marketing research? 4-50
Examples of Research Objectives Defining market trends and competitive structure Profiling strengths and weaknesses of suppliers Identifying primary buyers Identifying buying criteria Surveying potential users for willingness to switch 4-51
Research Objectives Exploratory research seeks to gather preliminary information that will help define the problem and suggest hypotheses Descriptive research describes thing like market potential or consumer attitudes Causal research seeks to test hypotheses about cause-and-effect relationships 4-52
Information Needs Information collected specifically for the purpose at hand is called primary data Information collected already for some other purpose is known as secondary data 4-53
Secondary vs Primary Data Secondary data is data already collected and documented for purposes other than the problem at hand by others. Primary data is specifically collected by the researcher for the specific problem/opportunity and involves all steps of the marketing research process. 4-54
Develop the Research Plan Information That Already Exists Somewhere. + Obtained More Quickly, Lower Cost. - Might Not be Usable Data. Both Must Be: Relevant Accurate Current Impartial Information Collected for the Specific Purpose at Hand. 4-55
Sources of Data Secondary (desk research) Published data Commercial sources Government research Academic research Primary (field research) In-house staff Marketing research agency Internal databases 7-56
Using Published Sources of Information 7-57
Secondary research Sometimes referred to as desk research. Consists of data and information that is already in existence and which can be accessed by the organisation. Can be cheaper and quicker to access than primary research. May provide an organisation with information that it would not otherwise have time to gather. Secondary data may not always be up to date, be applicable to an organisation, or give the full picture. 7-58
Research and Data Types Desk Research Field Research Secondary Data Primary Data Purpose: Collected for other Collected for specific problem reasons by others in hand by researcher Relevancy: Some to little Complete Objectivity: Unknown High Process: Easy to gather Difficult to gather Cost: Relatively cheap Relatively expensive Time: Relatively little Relatively much 7-59
PRIMARY v SECONDARY RESEARCH Begin with secondary research quick, relatively inexpensive but out of date and may not be specific enough Follow up with primary research provides information to current needs but is expensive and time consuming 4-60
Classification of Secondary Data Secondary Data INTERNAL EXTERNAL Ready to Use Needs Modification Government State Bodies Directories Trade/Professional Bodies Internet/WWW Databases/ CD-ROMs Syndicated Services Grey Material/ Other 7-61
Secondary Data Internal Records Customer records Financial statements Inventory records Research reports Credit data POS register information External Sources Government sources Trade Association statistics Commercial sources Internet sources 7-62
SOURCES OF SECONDARY RESEARCH Government departments and official publications e.g. General Household Survey, National media e.g. Financial Times country surveys Professional and trade associations Trade, technical and professional media Local chambers of trade and commerce Year-books and directories, e.g. Dataquest Companies' Annual Reports and Accounts Subscription services, e.g. Keynote, MEAL, Mintel etc. Subscription electronic databases, e.g. Mintel OnLine 4-63
Useful Web some sources www.cso.ie www.irlgov.ie www.esri.ie www.kompass.ie www.acnielsen.com www.mintel.co.uk www.tnsofres.com www.europages.com 4-64
Evaluating Secondary Data Sources Pertinency of data Who collected and why Method of collecting data Evidence of careful work 4-65
Evaluating secondary data How relevant is the data to the project at hand? How accurate is the data? How current is the data? Were the data collected by an impartial party? 4-66
Primary research Sometimes called field research. Is undertaken or commissioned by an organisation for a specific purpose. The required information does not already exist. It is exactly tailored to a problem. Can be expensive and time consuming. 7-67
Implementing the research plan The researcher next puts the marketing research plan into action. The data collection phase of marketing research process is generally the most expensive and the most subject to error. Researchers must process and analyse the collected data to isolate important information and findings. They need to check data for accuracy and completeness and code it for analysis. The researchers then tabulate the results and compute averages and other statistical measures. 4-68
Decisions associated with primary data collection Research approach Contact method Sampling plan Research instruments 4-69
Primary Research Techniques Focus groups In-depth interviews Surveys Observation Experimentation 4-70
Personal interviewing Focus group interviewing utilises a small sample of typical consumers under the direction of a group leader who elicits their reaction to a stimulus such as an ad or product concept Individual interviewing involves talking with people in their homes or offices on the street or in shopping centres 4-71
Primary Research Methods Personal Interviews Unstructured Structured Semi-structured Focus Group interviews Source: Leapfrog Research http://www.leapfrogresearch.co.uk 10-12 participants discussion guide domino effect 7-72
Primary data collection: research approaches Observational Survey Experiment 4-73
Develop the Research Plan Planning Primary Data Collection Observational Research Gathering data by observing people, actions and situations (Exploratory) Research Approaches Survey Research Asking individuals about attitudes, preferences or buying behaviors (Descriptive) Experimental Research Using groups of people to determine cause-and-effect relationships (Causal) 4-74
What is survey research? Survey research is the gathering of primary data by asking people questions about their knowledge, attitudes, preferences, and buying behaviour. 7-75
Harris Interactive is a major provider of custom survey solutions 4-76
Primary data collection: contact methods Mail Telephone Personal Online 4-77
Strengths and weaknesses of contact methods 4-78
Primary Research Methods Observational New product trials Consumer shopping Mystery shopping Physiological responses 7-79
Observational 2012 Pearson Education
Mechanical instruments Eye cameras People meters Checkout scanners 7-81
Mechanical devices used to monitor» Nielsen Media Research attaches people meters to television sets in selected homes to record who watches which programmes.» Retailers use checkout scanners to record shoppers purchases.» Other mechanical devices measure subjects physical responses. 4-82
ShopperTrak uses video mining to monitor consumer behaviour 4-83
Ethnographic 2012 Pearson Education
What is ethnographic research? Ethnographic research is a form of observational research that involves sending trained observers to watch and interact with consumers in their natural habitat. 7-85
IDEO used ethnographic research to design a Marriott strategy 4-86
What is experimental research? Experimental research is the gathering of primary data by select matched groups of subjects, giving them different treatments, controlling related factors and checking for differences in group responses. 7-87
Primary Research Methods Experimentation Laboratory Real-world Simulation 7-88
Table 5.1 Comparative Performance of Data Collection Techniques Personal Interview Group Interview Telephone Survey Mail Survey Cost/response High Fairly high Low Very low Speed Fast Fast Very fast Slow Quantity of data Large Large Moderate Moderate Sample dispersion Low Low High High Response rate High Very high Fairly high Low Probing High High Fairly high None 4-89
Table 5.1 Comparative Performance of Data Collection Techniques (Con t) Personal Interview Group Interview Telephone Survey Mail Survey Visual aids High High None Fairly high Flexibility of questioning High High Fairly high Low Sensitive questions Fairly low Fairly high Fairly high High Anonymity Possible Possible None None Cooperation Good Very good Good Poor 4-90
Table 5.2 Advantages of Internet Research Quantitative Faster/cheaper Automated Visual aids possible Enhanced data quality International coordination Qualitative Faster/ cheaper Enhanced control Illustration of concepts Easier recruitment International coordination Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray (2000b) 7-91
Table 5.2 Disadvantages of Internet Research Quantitative Internet coverage (respondent universe) Sampling issues Potential for self-selection bias Technical problems Qualitative Loss of non-verbal elements New moderation skills required Slow typing speeds Technical problems Sampling issues Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray (2000b) 7-92
Developing Marketing Information Marketing Research Strengths and Weakness of Contact Methods Mail Telephone Personal Online Flexibility Poor Good Excellent Good Quantity of data collected Control of interviewer effects Good Fair Excellent Good Excellent Fair Poor Fair Control of sample Fair Excellent Good Excellent Speed of data collection Poor Excellent Good Excellent Response rate Poor Poor Good Good Cost Good Fair Poor Excellent
Methods of Generating Continuous Data Consumer panels Home audits Omnibus surveys 4-94
ACNielsen Homescan: An Example of Home Audits 7-95
Omnibus Surveys Capibus Phonebus Ncompass Autobus Access Omnibus RSGB Omnibus 7-96
Greenfield Online overcomes the a weakness of online research by using panel members 4-97
Primary data collection: sampling plan Sampling unit Sample size Sampling procedure 4-98
Designing a sample Who is to be surveyed? How many people should be surveyed? How should the people in the sample be chosen? 4-99
Types of samples Probability Simple random Stratified random Cluster Nonprobability Convenience Judgement Quota 7-100
Designing questionnaires Marketing Birmingham 4-101
Developing Marketing Information Probability Sample Marketing Research Sampling Plan Types of Samples Simple random sample Stratified random sample Cluster (area) sample Nonprobability Sample Convenience sample Judgment sample Quota sample Every member of the population has a known and equal chance of selection The population is divided into mutually exclusive groups and random samples are drawn from each group The population is divided into mutually exclusive groups and the researcher draws a sample The research selects the easiest population members The researcher uses their judgment to select population members The researcher finds and interviews a prescribed number of people in each of several categories
Stages in the Development of a Questionnaire Planning stage Design stage Pilot stage 4-103 5
Designing questionnaires Should questions be closed-ended or open-ended? How should questions be worded? How should the questions be ordered? 7-104
Types of Questions Closedended Openended 4-105
Table 9.6 Types of question (continued) 7-106
Table 9.6 Types of question (continued) 7-107
Poorly Worded Questions What type of wine do you prefer? Type is ambiguous: respondents could say French, red, claret,say, depending on their interpretation. Do you think that prices are cheaper at Asda than Aldi? Leading question favouring Asda; a better question would be Do you think that prices at Asda are higher, lower or about the same as Aldi? Names should be reversed for half the sample. Which is more powerful and kind to your hands: Ariel or Bold? Two questions in one: Ariel may be more powerful but Bold may be kinder to the hands. Ask the two questions separately. Do you find it paradoxical that X lasts longer and yet is cheaper than Y? Unfamiliar word: a study has shown that less than a quarter of the population understand such words as paradoxical, chronological or facility. Test understanding before use. 4-108
Likert Scale Tesco prices are generally lower than those of other supermarkets Strongly agree Agree Neither Disagree Strongly disagree 4-109
Semantic Differential Rating Scale 4-110
Reporting Findings to Managers 2012 Pearson Education
The Report Title page Contents Preface Executive summary Research methods Findings Conclusions Recommendations Appendices 7-112
Interpreting and reporting of the findings The market researcher must now interpret the findings, draw conclusions, and report them to management. The researcher should present important findings that are useful in the major decisions faced by management. Interpretation should not be left only to the researchers. The marketing manager knows more about the problem and the decisions that must be made. 4-113
Analysing marketing information Data may be analysed using advanced statistical methods and the development of econometric models 7-114
Marketing research for small business and non-profit organisations Research can be based on simple observation Small scale surveys can be conducted using convenience samples Managers can conduct simple experiments Secondary information is easily available 4-115
Customer Touchpoints Purchases Sales force contacts Support calls Website visits Satisfaction surveys 2012 Pearson Education
Issues facing international marketing research Diverse markets in different countries Difficulty finding good secondary data Difficulty recruiting good samples Communication modes (telephone, internet) may not be widespread Language is an obstacle Attitudes toward marketing research vary Illiteracy rates may limit participation 4-117
Ethical Issues in Marketing Research Intrusions of privacy Misuse of marketing research findings Competitive information gathering Selling under the guise of marketing research 4-118
Market research ethics Increasing consumer resentment has become a major problem in the research industry due to how the market research has been used and abused. Consumers fear researchers may use sophisticated techniques to obtain information that may be intrusive and infringe consumer rights. There is also the fear that the research findings may be manipulated and misinterpreted to suit the company paying for the research. To minimise abuse the research industry has developed broad standards such as ESOMAR s International Code of Marketing and Social Research Practice. 4-119
Discussing the concepts (1) Determine how the activities in Figure 7.1 would apply to Reebok developing the information it needs to market a new running shoe. List three different sources of internal data useful for a mobile phone company. How could the data be useful for creating mobile phone services that provide greater customer value and satisfaction? 4-120
Discussing the concepts (2) Outline the strengths and weaknesses of marketing research conducted online. How does your college use an intranet to help its students access data? List three ways, using limited resources, in which a director of fundraising for a small non-profit organisation could gather information about primary donor groups. 4-121