Chapter 3: Managing Marketing Information

types of market information needed

1 data related to broad areas of interest such as demographic and economic trends, or the customer order fulfillment process inside the company. T 2. addresses a specific question, for example, what is the best kitchen design for a retired baby boomer couple? O.

Internal Databases (source)

Internal databases are collections of consumer and market information obtained from data sources within the company network o Information from sources within the company o Accessed more efficiently o Prone to gaps in knowledge

what a market information system consists of

Internal source External source

Secondary Data

Information that already exists Collected for another purpose Advantages o Low cost o Obtained quickly o Cannot collect otherwise Disadvantages o Potentially irrelevant o Inaccurate o Dated

Determine the actual cost of a customer order

activity-based cost accounting can allocate time and overhead costs to specific customers.

Causal research

discover the cause and effect between variables throughout the hypothesis For example, in our Harley-Davidson example, does an increase in Harley-Davidson advertising directed toward men lead to increased sales of Harley-Davidson motorcycles? T

Rank customers based on established criteria like profitability

each customer rates on a defined set of criteria to better allocate current resources and develop strategies for future growth

Why use descriptive research

everyday multiple choice question. Since there are predefined categories a respondent must choose from, it is considered descriptive research. allows you to measure the significance of your results on the overall population you are studying, as well as the changes of your respondent's opinions, attitudes, and behaviours over time.

CRM systems

use customer data collected through market information systems to help drive customer centric strategies

2. Establish research design

must establish a research design, or a plan of action for attacking the research problem. Research designs consist of certain types to help establish the research.

Survey

structured questionnaires given to a sample group of individuals representing the population of interest and are intended to solicit specific responses to explicit questions.

Distribution of data (getting the analysis to decision makers and back into the field)

the information goes to management as part of a larger market information system. At the same time, the information goes back out to the sales force

Marketing Research

the methodological identification, collection, analysis, and distribution of data related to discovering then solving marketing problems or opportunities and enhancing good decision making

Political-Legal Environment

the relationship between business and government. Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry.

Economic Conditions

the state of the economy at a given time Two type of economic knowledge: -Microeconomic -Macroeconomic

global research challenges associated with primary data

-unwillingness to respond -unreliable sampling procedures -inaccurate language translation and insufficient comprehension

Establish the research design pt. 2

-Benefit vs. Cost: For research must examine the benefits over the cost -Time Until Decision: time is short researchers may have to rely on more explor- atory research and the use of secondary data. -Nature of the Decision: What Kind of Data Do We Need? ~Primary,Secondary, Quantitative, Qualitative, or focus group -Availability of Data

Internal Information Sources

-Customer orders -Customer Payments -Marketing Plans Salesperson Information system -Customer Inquires

global research challenges associated with secondary data

-Data Accessibility -Data Dependability -Data Comparability

External sources

-Demographics -Economic Conditions -Technology Transformations -Natural World -Political/Legal Environment -Competition

3. Search Secondary Sources

-Government Sources -Market Research Organizations -The Internet

CRM system enables companies to:

-Identify the frequency and size of customer orders -Determine the actual cost of a customer order -Rank customers based on established criteria like profitability -Calculate the efficiency of the company's production, and distribution system

Demographic External source

-Population of interest -Ethnic group Geographic changes

Steps in the Marketing Research Process

1. Defining the research problem 2. Establish research designs 3. Search Secondary Sources 4. Collect the Data 5. Analyze the Data 6. Report the Findings

what characterizes good research

1. Follows a well-defined set of activities and does not happen by accident 2. Enhances the validity of the information 3. Is impartial and objective

A sales information system includes

1. Formal systems for collecting data 2. Interpretation of data (analysis) 3. Distribution of data (getting the analysis to decision makers and back into the field

Making Good Marketing Decisions

A significant problem for most managers today is not having too little information, but having too much

External Databases

Collecting Information Outside the Company Most companies engage in collecting, analyzing, and storing data from the macro environment on a continuous basis known as marketing intelligence.

4. Collect Data

Collecting the data o Researchers should guard against various problems Processing the data o Check for accuracy o Code for analysis Analyzing the data o Tabulate results o Compute statistical measures

Natural World

Everyone lives on planet Earth, and business operates within the constraints of available natural resources.

Two key issues drive marketers' need to know about the natural world

First, individuals, governments, and business all recognize the need to manage the available resources well A second concern regarding the natural world is pollution.

Exploratory Research Techniques

Focus group In-depth interview

Ethnic group

Many countries are becoming more ethnically diverse as individuals increase their mobility. example: As the Hispanic population grows, advertisers continue to seek endorsements from Hispanic celebrities like Eve Mende

Formal systems for collecting data (getting the data)

Many salespeople write call reports summarizing each sales call

population of interest

Marketers are not interested in all groups, only populations of interest

Heard on the Street—Sales Information System

One of the best internal information sources is the sales force. Salespeople are on the front lines of the company-customer interface and have unique access to the customer

1. Defining the research problem

One of the biggest challenges facing a market researcher is accurately defining the problem. First, management, working with researchers and marketing decision makers, defines the management research deliverable. Exactly what does management want to do with this research? Second, define the problem. Exactly what information is needed to help management in this situation?

Competition

One of the most important external environmental factors to consider is the competition. Companies want to know as much as possible about competitors'

Geographic Changes

People are moving not only in the United States but around the world.

Primary data research approaches

Qualitative Research Qunatitative Research

5. Analyze data/6. Report the Findings

Responsibilities of the market researcher: o Interpret the findings o Draw conclusions o Report findings to management

Descriptive Research Techniques

Surveys Behavioral data Observational data

Technology Transformation

Technology has been one of the major catalysts for change in the marketplace. Marketing managers need to know the role of technology in their business today and also, perhaps even more importantly, its role in the future.

the importance of marketing information

The analysis of past sales and interpretation of cost information are important in evaluating performance and providing useful facts for future planning. All these activities rely on marketing information and a rigorous marketing research process to produce insights managers can trust and act on

Exploratory Research Design

focus is on the discovery of ideas and insights as opposed to collecting statistically accurate data. That is why exploratory research is best suited as the beginning of your total research plan. •Clarifying the research problem. •Developing hypotheses for testing in descriptive or causal research. •Gaining additional insight to help in survey development or to identify other research variables for study. •Answering the research question.

Calculate the efficiency of the company's production, and distribution system

Tracking customer orders makes it possible to assess many of the company's critical functions

Fundamentals of Market information system

What information should be collected by the system? What are the information needs of each decision maker? How does the system maintain the privacy and confidentiality of sensitive information?

microeconomic conditions

a consumers ability to buy is related to income, which consists of gross, disposable, and discretionary components. helps marketing managers understand how individuals set priorities and make buying decisions.

Market Information System (MIS)

a continuing process of identifying, collecting, analyzing, accumulating and dispensing critical information to marketing decision makers.

Observational Research

behavioral patterns among the population of interest. One of the most common uses of this type of research is in retailing. Retailers watch how people move through a store,

Identify the frequency and size of customer orders example

charting the frequency, size, and specific items included in an order

behavioral data

information about when, what, and how often customers purchase products and services as well as other customer "touches" (for example, when they contact the organization with a complaint or question).

Internal source information example

management might see that an increase in call wait times has led to higher customer dissatisfaction.

closed-ended questions

more precise and pro- vide specific responses. As a result, they allow for more quantitative

exploratory research takes place in the form of

open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses

macroeconomic conditions

performance of economy based on indicators such as GDP, unemployment, price changes. gives a "big picture" perspective for an economy and can be helpful at looking for broad economic trends.

Interpretation of data (analysis)

regional or national offices will analyze data from many salespeople looking for broad trends.

Descriptive Research

seeks to describe or explain some phenomenon. Often this involves something going on in the marketplace. -preplanned and structured in design so the information collected can be statistically inferred on a population. •Identifying the characteristics of our target market. •Assessing competitor actions in the marketplace. •Determining how customers use our product. • Discovering differences across demographic characteristics (age, education, income) with respect to the use of our product or that of our competitor