Part Three Using Technology and Information to Build Customer Relationships 7 Marketing Research and Information Systems
Objectives 1. To describe the basic steps in conducting marketing research 2. To explore the fundamental methods of gathering data for marketing research 3. To describe the nature and role of information systems in marketing decision making 4. To understand how such tools as databases, decision support systems, and the Internet facilitate marketing research 5. To identify key ethical and international considerations in marketing research Copyright © Houghton Mifflin Company. All rights reserved. 7 | 2
Chapter Outline • The Importance of Marketing Research • The Marketing Research Process • Using Technology to Improve Marketing Information Gathering and Analysis • Issues in Marketing Research Copyright © Houghton Mifflin Company. All rights reserved. 7 | 3
The Importance of Marketing Research • Marketing Research – The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities Copyright © Houghton Mifflin Company. All rights reserved. 7 | 4
U. S. Hot Dog Consumption Hot dogs consumed between Memorial Day and Labor Day 7 billion Average number of hot dogs eaten person from Memorial Day to Labor Day 24 Rate of consumption during this time 818 hot dogs/second Top 5 Major League Ball Parks for Hot Dog Consumption 1. Dodger Stadium 1. 6 million 2. Coors Field 1. 5 million 3. Wrigley Field 1. 5 million 4. Yankee Stadium 1. 3 million 5. Minute Maid Park 1. 2 million Source: National Hot Dog and Sausage Council, as reported in American Demographics, July/August 2004 p. 48. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 5
The Importance of Marketing Research (cont’d) • Benefits of Marketing Research – Helps firms stay in touch with customers’ changing attitudes and purchase patterns – Assists in better understanding market opportunities – Determines the feasibility of a particular marketing strategy – Aids in the development of marketing mixes to match the needs of customers – Improves marketer’s ability to make decisions Copyright © Houghton Mifflin Company. All rights reserved. 7 | 6
Net Sights • Perhaps one of the best-known pollsters and research firms, the Gallup Organization, has been conducting public opinion surveys and since 1935. The company is often called on to survey the public about political issues, business and economic issues, social issues, and lifestyle topics. To view the company’s latest survey results, visit www. gallup. com. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 7
The Five Steps of the Marketing Research Process FIGURE 7. 1 Copyright © Houghton Mifflin Company. All rights reserved. 7 | 8
The Marketing Research Process • Locating and Defining Problems or Research Issues – Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation • Departures from normal or expected marketing results • Biases in marketing information that distort its meaning • Evidence of possible or potential market opportunities Copyright © Houghton Mifflin Company. All rights reserved. 7 | 9
Top 5 Greatest “Brain Gain” and “Brain Drain” Markets Brain Gaining* Metro Regions 1. Atlanta, GA 76, 443 2. Phoenix-Mesa, AZ 63, 084 3. Dallas-Fort Worth, TX 54, 814 4. San Francisco-Oakland-San Jose, CA 48, 614 5. Denver-Boulder-Greeley, CO 40, 973 Brain Draining* Metro Regions 1. New York-Northern New Jersey-Long Island, NY-NJ (122, 000) 2. Chicago-Gary-Kenosha, IL-IN-WI (29, 647) 3. Pittsburgh, PA (20, 065) 4. Detroit-Ann Arbor-Flint, MI (17, 224) 5. Buffalo-Niagara Falls, NY (17, 171) *Net domestic migration gains (losses) among college graduates aged 25 and older. Source: William H. Frey, “Brain Gains, Brain Drains, ” American Demographics, June 1, 2004, http: //americandemographics. com. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 10
The Marketing Research Process (cont’d) • Designing the Research Project – Research design • An overall plan for obtaining the information needed to address a research problem or issue – Hypothesis • An informed guess or assumption about a certain problem or set of circumstances • Accepted or rejected hypotheses act as conclusions for the research effort Copyright © Houghton Mifflin Company. All rights reserved. 7 | 11
The Marketing Research Process (cont’d) • Types of Research – Exploratory research • Research conducted to gather more information about a problem or to make a tentative hypothesis more specific – Descriptive research • Research conducted to clarify the characteristics of certain phenomena to solve a particular problem – Causal research • Research in which it is assumed that a particular variable X influences a variable Y Copyright © Houghton Mifflin Company. All rights reserved. 7 | 12
The Marketing Research Process (cont’d) • Research Reliability and Validity – Reliability • A condition existing when a research technique produces almost identical results in repeated trials – Validity • A condition existing when a research method measures what it is supposed to measure Copyright © Houghton Mifflin Company. All rights reserved. 7 | 13
The Marketing Research Process (cont’d) • Collecting Data – Types of data • Primary data: data observed and recorded or collected directly from respondents • Secondary data: data complied both inside and outside the organization for some purpose other than the current investigation Copyright © Houghton Mifflin Company. All rights reserved. 7 | 14
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SNL Data. Source provides a broad array of secondary data in the financial services industry Reprinted with permission of Greg Amonette, SNL Financial, snl. com Copyright © Houghton Mifflin Company. All rights reserved. 7 | 17
Top 10 Metro Markets with Married and Unmarried Gay and Lesbian Households 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. San Francisco-Oakland-San Jose, CA Santa Fe, NM Portland, ME Miami-Fort Lauderdale, FL Bloomington, IN Austin-San Marcos, TX Madison, WI Burlington, VT Springfield, MA Seattle-Tacoma, WA Source: Christopher Reynolds, “Still a Hidden Market, ” American Demographics, April 1, 2004, http: //demographics. com. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 18
The Marketing Research Process (cont’d) • Methods of Collecting Primary Data – Sampling • Population—all the elements, units, or individuals of interest to researchers for specific study • Sample—a limited number of units chosen to represent the characteristics of a total population – Types of sampling – – – Probability—each element has an known chance for study Random—each element has an equal chance for study Stratified—study population divided into like groups Nonprobability: element’s likelihood of study is unknown Quota: population is grouped and elements are arbitrarily chosen Copyright © Houghton Mifflin Company. All rights reserved. 7 | 19
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The Marketing Research Process (cont’d) • Basic Survey Methods – – Mail survey Telephone survey Online survey Personal interview survey • • • In-home (door-to-door) interview Focus-group interview Telephone depth interview Shopping mall intercept interviews On-site computer interviews Copyright © Houghton Mifflin Company. All rights reserved. 7 | 22
The Marketing Research Process (cont’d) • Questionnaire Construction – Open-ended question • Question which invites the respondent to answer as their own interests or personal subjectivity dictates – Dichotomous question • Question which to which the respondent can make only an either/or or yes/no response – Multiple-choice question • Question asks the respondent to choose a response from a fixed set of responses • Observation Methods • Experimentation Copyright © Houghton Mifflin Company. All rights reserved. 7 | 23
Class Exercise You are considering opening a new “fluff-andfold” laundry pick‑up, cleaning, and delivery service for students. You are uncertain whether sufficient demand exists, and you have questions about when students will need your service most and what level of service they will require. You realize that marketing research can help solve your information needs. You must now answer these questions. 1. Define the problem. 2. Design the research project. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 24
Class Exercise (cont’d) 3. After consulting secondary data, you decide to conduct an exploratory study with students in your classes. Develop open‑ended questions to ask students that will provide information regarding your hypotheses. 4. Having gained some insight into the problem, you are now ready to conduct a descriptive study. You decide to conduct a survey to further test your refined hypotheses. However, you have several decisions to make regarding this study. a. What type of sampling approach (random, stratified, area, quota) will you use and why? b. What survey method (mail, telephone, personal interview) will you use and why? c. How will you construct the questionnaire? Develop open‑ended, dichotomous, or multiple‑choice questions that will test your hypotheses. Remember to remain impartial and inoffensive. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 25
The Marketing Research Process (cont’d) • Observation (for Data Collection) Methods – Direct contact with subject is avoided to reduce possible awareness of observation process. – Physical conditions, subject actions, and demographics are noted. – Observations may be combined with same subject interviews. – Data gathered may be influenced by observer bias. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 26
Class Exercise What is the most appropriate data collection method for each of these research questions? 1. How do consumers in South Dakota feel about Christmas shopping? 2. How do JC Penney customers feel about Penney’s customer service? 3. What is the opinion of U. S. consumers toward a Chrysler advertisement that questions the quality of Japanese cars? 4. How many people nationwide currently live in apartments? 5. How do Sears’ charge customers view that company’s new pricing policy? Copyright © Houghton Mifflin Company. All rights reserved. 7 | 27
The Marketing Research Process (cont’d) • Experimentation – A research method that attempts to maintain (control) certain variables while measuring the effects of experimental (uncontrolled) variables • Independent variable: acts on the dependent variable • Dependent variable: is affected by variations in the independent variable Copyright © Houghton Mifflin Company. All rights reserved. 7 | 28
Interpreting Research Findings • Statistical Interpretation – Analysis of survey data to determine what is typical or what deviates from the average that indicates: • • • How widely the responses vary How the responses are distributed Which hypotheses are supported Which hypotheses are rejected Whether construction errors have invalidated the survey’s results Copyright © Houghton Mifflin Company. All rights reserved. 7 | 29
Interpreting Research Findings (cont’d) • Reporting Research Findings – Take an objective look at survey findings • Report deficiencies and reasons for deficiencies – Prepare a formal, written document • Summary and recommendations – Short, clear, and simply expressed for executives • Technical report – Contains more detailed information about research methods and procedures and important data gathered Copyright © Houghton Mifflin Company. All rights reserved. 7 | 30
Using Technology to Improve Marketing Information Gathering and Analysis • Marketing Information Systems – Marketing Information System (MIS) • A framework for the management and structuring of information gathered regularly from sources inside and outside an organization Copyright © Houghton Mifflin Company. All rights reserved. 7 | 31
Using Technology to Improve Marketing Information Gathering and Analysis (cont’d) • Databases – Database • A collection of information arranged for easy access and retrieval – Single-source data • Information provided by a single marketing research firm Copyright © Houghton Mifflin Company. All rights reserved. 7 | 32
Using Technology to Improve Marketing Information Gathering and Analysis (cont’d) • Marketing Decision Support Systems (MDSS) – Customized computer software that aids marketing managers in decision making • Capability to create market models based on changes in marketing variables • Artificial Intelligence (AI) assists in customer support Copyright © Houghton Mifflin Company. All rights reserved. 7 | 33
Using Technology to Improve Marketing Information Gathering and Analysis (cont’d) • The Internet and Online Information Services – Ease of information dissemination – Ease of information accessibility (intranets) – Access to customer data (data mining websites) – Subscription information services on Web Copyright © Houghton Mifflin Company. All rights reserved. 7 | 34
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Issues in Marketing Research • The Importance of Ethical Marketing Research – Ethical questions affect: • The reliability of the research • The researcher–marketing manager relationship • The nature of marketing managers’ decisions Copyright © Houghton Mifflin Company. All rights reserved. 7 | 36
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Debate Issue • Does marketing research (surveys, telephone interviewing) invade a respondent’s privacy? Copyright © Houghton Mifflin Company. All rights reserved. 7 | 38
Issues in Marketing Research (cont’d) • International Issues in Marketing Research – Modification of data-gathering methods to account for regional differences – Use of two-pronged approach to international marketing research • Detailed search for and analysis of secondary data • Field research to refine firm’s understanding of how local environment will shape/restrict datagathering about customer needs and preferences Copyright © Houghton Mifflin Company. All rights reserved. 7 | 39
JRA provides global marketing research services Reprinted with permission of JRA, J. Reckner Associates, Inc. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 40
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After reviewing this chapter you should: • Know the basic steps in conducting marketing research. • Be familiar with the fundamental methods of gathering data for marketing research. • Be able to describe the nature and role of information systems in marketing decision making. • Understand how such tools as databases, decision support systems, and the internet facilitate marketing research. • Be able to identify key ethical and international considerations in marketing research. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 42
Chapter Quiz 1. Marketing information systems and marketing research have changed rapidly because customers and companies around the world have been linked by a. the computer. b. the Internet. c. the Interactive Network. d. electronic online services. e. telecommunications. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 43
Chapter Quiz (cont’d) 2. Dan was given the task of conducting a research project for his firm and proceeds with the following steps. He asks questions to determine the research topic, conducts a telephone survey, writes a report describing the survey results, and gives that report to his boss. Which step of the marketing research process has Dan omitted? a. Collecting data b. Defining and locating problems c. Interpreting research d. Designing the research project e. Reporting research findings Copyright © Houghton Mifflin Company. All rights reserved. 7 | 44
Chapter Quiz (cont’d) 3. A study that is valid and reliable a. is called a marketing research study. b. measures what it is supposed to measure and produces almost identical results every time. c. is expensive to implement and complete. d. measures subtle differences in the population being studied. e. is difficult to produce without expert researchers. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 45
Chapter Quiz (cont’d) 4. Chelsea, Ltd. , a retail clothing store chain, wants to use observation methods to gather information about shopping behavior. Which of the following should Chelsea know about observation methods of data collection? a. Observation uses secondary sources of data. b. Observation depends on mall interviews. c. Observation can tell Chelsea what is being done, but not why. d. Observation focuses on open‑ended questions. e. Observation works best for telephone surveys. Copyright © Houghton Mifflin Company. All rights reserved. 7 | 46
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