CHAPTER 9 Decision Support Systems and Marketing Research Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10
Learning Outcomes Explain the concept and purpose of a marketing decision support system Define marketing research and explain its importance to marketing decision making Describe the steps involved in conducting a marketing research project LO I LO 2 LO 3
Learning Outcomes Discuss the profound impact of the Internet on marketing research Discuss the growing importance of scanner-based research Explain the concept of competitive intelligence LO 5 LO 6 LO 4
Marketing Decision Support Systems Explain the concept and purpose of a marketing decision support system LO I
Marketing Decision Support Systems DSS An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions. LO I Decision Support Systems
DSS System Characteristics LO I Interactive Flexible Discovery-Oriented Accessible
Marketing Decision Support Systems The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns. The key tool for successful one-to-one marketing. LO I Database Marketing
REVIEW LEARNING OUTCOME Marketing Decision Support Systems LO I
The Role of Marketing Research Define marketing research and explain its importance to marketing decision making LO 2
The Role of Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. LO 2 Marketing Research
Marketing Research Studies LO 2 Products Advertising Prices Packages Names and Logos Services Buying habits Colors Uses Awareness Familiarity New concepts Traffic patterns Wants Needs Politics
The Role of Marketing Research LO 2 Diagnostic Predictive Descriptive
Gathering and presenting factual statements
“ What if?”
Management Uses of Marketing Research LO 2
Improve the quality of decision making
Focus on keeping existing customers
Understand the marketplace
Alert them to marketplace trends
Gauge the value of goods and services, and the level of customer satisfaction
REVIEW LEARNING OUTCOME Marketing Research and Its Importance LO 2 Why marketing research?
Improve quality of decision making
Focus on keeping existing customers
Understand changes in marketplace
Steps in a Marketing Research Project Describe the steps involved in conducting a marketing research project LO 3
D E C I D E
Define the marketing problem
Enumerate the controllable and uncontrollable decision factors
Collect relevant information
Identify the best alternative
Develop and implement a marketing plan
Evaluate the decision and the decision process
The Marketing Research Process LO 3 Collect Data Specify Sampling Procedure Plan Design/ Primary Data Define Problem Analyze Data Prepare/ Present Report Follow Up 1 2 3 4 5 6 7
Marketing Research LO 3 Marketing Research Problem Marketing Research Objective Management Decision Problem Determining what information is needed and how that information can be obtained efficiently and effectively. The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions.
Secondary Data LO 3 Data previously collected for any purpose other than the one at hand. Secondary Data
Sources of Secondary Data LO 3 Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information
Advantages of Secondary Data
Saves time and money if on target
Aids in determining direction for primary data collection
Pinpoints the kinds of people to approach
Serves as a basis of comparison for other data
Disadvantages of Secondary Data
May not give adequate detailed information
May not be on target with the research problem
Quality and accuracy of data may pose a problem
The New Age of Secondary Information: The Internet LO 3 1 2 3 4 5 Analyze your topic Test run a word or phrase in a search engine Learn as you go and vary your approach Don’t bog down in strategy that doesn’t work Go back to earlier steps better informed
Planning the Research Design LO 3 Which research questions must be answered? How and when will data be gathered? How will the data be analyzed? ?
Primary Data LO 3 Information collected for the first time. Can be used for solving the particular problem under investigation. Primary Data
Advantages of Primary Data
Answers a specific research question
Data are current
Source of data is known
Secrecy can be maintained
Disadvantages of Primary Data
“Piggybacking” may confuse respondents
Quality declines if interviews are lengthy
Reluctance to participate in lengthy interviews
LO 3 Disadvantages are usually offset by the advantages of primary data.
Survey Research LO 3 The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes. Survey Research
Forms of Survey Research LO 3 Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews
Forms of Survey Research LO 3 Mall Intercept Interview Survey research method that involves interviewing people in the common areas of shopping malls. Executive Interview A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.
Forms of Survey Research LO 3 Seven to ten people who participate in a group discussion led by a moderator. Focus Groups
Questionnaire Design LO 3 Open-Ended Question Closed-Ended Question Scaled- Response Question An interview question that encourages an answer phrased in respondent’s own words. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondent’s answer.
Questionnaire Design LO 3 Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question
Observation Research LO 3
A research method that relies on three types of observation:
people watching people
people watching an activity
machines watching people
Observational Situations LO 3 Situation People watching people People watching phenomena Machines watching people Machines watching phenomena Example Mystery shoppers in a supermarket Observer at an intersection counting traffic Video cameras recording behavior Traffic-counting machine monitoring traffic flow
Ethnographic Research LO 3 The study of human behavior in its natural context; involves observation of behavior and physical setting. Ethnographic Research
The Sampling Procedure LO 3 Sample Universe A subset from a large population. The population from which a sample will be drawn.
Sampling Procedure LO 3 Universe Sample Probability Samples Non-Probability Samples
Types of Samples LO 3 Probability Samples Simple Random Sample Stratified Sample Cluster Sample Systematic Sample Non-Probability Samples Convenience Sample Judgment Sample Quota Sample Snowball Sample
Probability Samples LO 3 Probability Sample A sample in which every element in the population has a known statistical likelihood of being selected. Random Sample A sample arranged so that every element of the population has an equal chance of being selected.
Nonprobability Samples LO 3 Nonprobability Sample Convenience Sample Any sample in which little or no attempt is made to get a representative cross-section of the population. A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher.
Types of Errors LO 3 Measurement Error Error when there is a difference between the information desired and the information provided by research Sampling Error Error when a sample somehow does not represent the target population. Frame Error Error when a sample drawn from a population differs from the target population. Random Error Error because the selected sample is an imperfect representation of the overall population.
Field Service Firms
Focus group facilities
Mall intercept locations
Test product storage
LO 3 Provide:
Analyzing the Data LO 3 A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions. Cross- Tabulation
Preparing and Presenting the Report
Concise statement of the research objectives
Explanation of research design
Summary of major findings
Conclusion with recommendations
Were the recommendations followed?
Was sufficient decision-making information included in the report?
What could have been done to make the report more useful to management?
REVIEW LEARNING OUTCOME LO 3 Steps in a Marketing Research Project
Impact of the Internet on Marketing Research Discuss the profound impact of the Internet on marketing research LO 4
Impact of the Internet
Allows better and faster decision making
Improves ability to respond quickly to customer needs and market shifts
Makes follow-up studies and tracking research easier
Slashes labor- and time-intensive research activities and costs
Advantages of Internet Surveys LO 4 Contact with the hard-to-reach Improved respondent participation Personalized questions and data Dramatically reduced costs Rapid development, real-time reporting
Uses of the Internet by Marketing Researchers LO 4 Other types of marketing research Conduct focus groups Administer surveys
Internet Samples LO 4 Screened Internet Sample Recruited Internet Sample An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate. Recruited Panels Most popular form of Internet sampling.
Process for Online Focus Groups LO 4
Build a database of respondents via Web site screening questionnaire
Identify qualified individuals via e-mail
Develop a discussion guide
Moderator runs group by typing in questions online for all to see
Environment is similar to a chat room
Firm captures the complete text of the focus group
Types of Online Focus Groups LO 4 Real-time online focus groups Time-extended online focus groups
Advantages of Online Focus Groups
Broad geographic scope
Role of Consumer Generated Media in Marketing Research
CGM is media which consumers generate themselves and share among themselves
Companies can identify the most influential bloggers and learn exactly what they are saying (and how they are saying it).
Other Uses of the Internet by Marketing Researchers LO 4 Viewing of presentations of marketing research surveys Publication and distribution of reports Data management and online analysis Collaboration between client and research supplier Distribution of requests for proposals (RFPs) and proposals
REVIEW LEARNING OUTCOME Impact of the Internet on Marketing Research LO 4
Scanner-Based Research Discuss the growing importance of scanner-based research LO 5
Scanner-Based Research LO 5 A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy. BehaviorScan InfoScan Scanner-based Research
When Should Marketing Research Be Conducted? LO 5
Where there is a high level of uncertainty
When value of research information exceeds the cost of generating the information
REVIEW LEARNING OUTCOME Scanner-Based Research LO 5 BehaviorScan InfoScan Panel information from Specific groups of people, enables researchers to manipulate variables and see real results Aggregate consumer information on all bar-coded products
Competitive Intelligence Explain the concept of competitive intelligence LO 6
Competitive Intelligence LO 6 Competitive Intelligence An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.
Sources of Competitive Intelligence LO 6 Internet Company Salespeople Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows
REVIEW LEARNING OUTCOME Competitive Intelligence LO 6 CI Part of a sound marketing strategy Helps companies respond to competitive threats Helps reduce unnecessary costs