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  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Marketing decision making relies on accurate and timely information. Good information is used to maximize sales, to use scarce company resources efficiently, and to prepare and adjust marketing plans. The system used for gathering marketing information is called a marketing decision support system.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The characteristics of a DSS system are: Interactive: Simple instructions are given to the system and immediate results are given. No computer programming or scheduled reports are needed. Flexible: A DSS can manipulate data in various ways, and be presented according to the user’s needs. Discovery-oriented: Managers can probe for trends, isolate problems, and ask “what if” questions. Accessible: A DSS is easy to use even with minimal computer skills.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The fastest-growing use of DSSs is for database marketing. It is usually the key for successful one-to-one marketing, which relies on specific market information.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Marketing research plays a key role in the marketing system. It provides data on the effectiveness of the marketing mix and insights for necessary changes. Marketing research is a main data source for management information systems and DSS.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: U.S. marketers spend over $7 billion each year on research. Studies include the listings on this slide.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Marketing research has three roles: descriptive, diagnostic, and predictive. Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product? Diagnostic: What was the impact on sales after a change in the package design? Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a marketing decision?
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The scope of a marketing research project may range from several hundred dollars to millions of dollars. In any case, the same general research process should be followed.
  • D Define the marketing problem E Enumerate the controllable and uncontrollable decision factors C Collect relevant information I Identify the best alternative D Develop and implement a marketing plan E Evaluate the decision and the decision process
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Exhibit 9.2 traces the steps in the marketing research process. The research process begins with the recognition of a marketing problem or opportunity. As changes occur in the firm’s external environment, marketing managers must decide on changes to the existing marketing mix.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The marketing research problem is information oriented. The marketing research objective is to provide decision-making information. In contrast, the management decision problem is action oriented.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Secondary data is a valuable tool particularly in the problem/opportunity identification stage.
  • Chapter 9 Decision Support Systems and Marketing Research Most of these sources are available on the Internet.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Before the Internet’s made information widely accessible, collecting secondary information was tedious and boring. It often required visits to the library or communication with government agencies, trade associations or other secondary data providers. By typing a description of the desired secondary data into a Web browser, the Internet may provide a wide range of information. Be aware that the Internet is a self-publishing medium and the information quality may vary.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The main advantage of primary data is that they will answer a specific research question that secondary data cannot answer. Primary data are current and the source of data is known. Moreover, the information is proprietary.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The cost of primary data may range from a few thousand dollars for a limited survey to several million for a nationwide study. To save money, firms may cut back on the number of interviews, or piggyback studies by gathering data on two different projects using one questionnaire.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: In home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool. Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population. However, probing is possible. Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application. The federal “Do Not Call” law does not apply to survey research. Mail Surveys: Benefits are the low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates. Consequently, the resulting sample may not represent the surveyed population. However, mail panels, consisting of a sample of households recruited to participate for a given period, yield response rates of 70 percent. Executive interviews: Survey involves businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents. Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Questionnaires contain three basic types of questions: Open-ended questions Closed-ended questions Scaled-response questions. Examples of these types of questions are shown in Exhibit 9.5.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Observation research is the systematic process of recording the behavioral patterns of people, objects, and occurrences without questioning them.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Observation research depends on watching what people do. It may be conducted by human observers or machines.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Ethnographic research comes from the field of anthropology, and is becoming popular in commercial marketing research. Ethnographers directly observe the population they are studying to gain richer insights into the culture and behavior of people.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Not all possible users of a new product can be interviewed, therefore a firm must select a sample of the larger population. The population or universe must first be defined. Then it is determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Exhibit 9.7 describes each of these types of samples.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The most desirable feature of a probability sample is that statistical rules can be used to ensure that the sample represents the population. One type of probability sample is the random sample—where every element of the population has an equal chance of being selected as part of the sample.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: A nonprobability sample is a sample where little or no attempt is made to get a representative cross section of the population. A common form of nonprobability sample is the convenience sample, a selection of convenient respondents such as employees, relatives, or friends. Because of their lower cost, nonprobability samples are the basis of much marketing research.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Error is common to all surveys, yet it is often not reported or is underreported. When errors are ignored, misleading results can result in poor information and bad decisions. Whenever a sample is used in marketing research, major types of errors may occur: measurement error and sampling error. Frame error arises if the sample drawn from a population differs from the target population. Random error occurs when the selected sample is an imperfect representation of the overall population.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Most primary data is collected by marketing research field service firms. Field service firms conduct interviews, provide focus-group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: After data is collected, the next step is to analyze data. The purpose of data analysis is to interpret and draw conclusions from the collected data. Data is organized by one-way frequency counts, cross-tabulations, and sophisticated statistical analysis. One-way frequency counts record the responses to a question. They provide a general picture of the study’s results. A cross-tabulation looks at the associations between certain responses, such as association between gender and product choice.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: After data analysis is completed, the report is prepared, and conclusions and recommendations are communicated to management. The report should be tailored to the audience, beginning with a statement of research objectives, followed by a brief explanation of the research design. A summary of major findings is next, followed by a conclusion with recommendations.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: The final step in the marketing research process is to follow up. The researcher should determine why management did or did not carry out the recommendations of the report.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Online Internet marketing research is being used by 88 percent of U.S. research firms. The reasons for its success are shown on this slide.
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Rapid development, real-time reporting: Survey results can be tabulated and broadcast in a much shorter time frame. Reduced costs: Costs can be cut by 25 to 40 percent with results in half the time required for traditional telephone surveys. Personalized questions and data: Personalization allows relevance to each respondent’s own situation, thus speeding the response process. Improved respondent participation: Internet surveys take half as much time to complete as phone interviews and can be accomplished at the respondent’s convenience. Contact with the hard-to-reach: Doctors, management, and high-income professionals are among the most surveyed and the most difficult to reach. Many of these groups are well represented online.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes : Recruited panels – allowed research firms to build large pools of individuals who were available to respond quickly to the demands of online marketing research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Real-time online focus groups are live, interactive sessions with four to six participants and a moderator in a chat room format. The session is no longer than 45 to 50 minutes. Time-extended online focus groups follow a message board format and usually last five to ten days. The 15 to 20 participants must comment at least 2-3 times per day and spend 15 minutes a day logged in to the discussion. This format translates into richer content and deeper insights.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research In addition to the Internet uses shown on this slide, blogs are being used. Products, such as BlogPulse, monitors keywords and phrases, detects authors’ sentiments, classifies data in terms of relevance, and uncovers specific facts and data points about products or services.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research Notes: Scanner-based research is used for gathering information by monitoring the marketing mix and purchase behavior of a single group of respondents. The two major scanner-based suppliers are Information Resources, Inc. and the A.C. Nielson Company. IRI’s first product is called BehaviorScan, which uses assigned ID cards to track grocery and drugstore purchases of household panel participants. InfoScan is IRI’s tracking service for consumer goods. Data are collected weekly from more than 32,000 supermarkets, drugstores, and mass merchandisers.
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research
  • Chapter 9 Decision Support Systems and Marketing Research

Int to mktng ch9 Presentation Transcript

  • 1. 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
  • 2. 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
  • 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
  • 4. Marketing Decision Support Systems Explain the concept and purpose of a marketing decision support system LO I
  • 5. 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
  • 6. DSS System Characteristics LO I Interactive Flexible Discovery-Oriented Accessible
  • 7. 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
  • 8. REVIEW LEARNING OUTCOME Marketing Decision Support Systems LO I
  • 9. The Role of Marketing Research Define marketing research and explain its importance to marketing decision making LO 2
  • 10. The Role of Marketing Research The process of planning, collecting, and analyzing data relevant to a marketing decision. LO 2 Marketing Research
  • 11. 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
  • 12. The Role of Marketing Research LO 2 Diagnostic Predictive Descriptive
    • Gathering and presenting factual statements
    • Explaining data
    • “ What if?”
  • 13. Management Uses of Marketing Research LO 2
    • Improve the quality of decision making
    • Trace problems
    • 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
  • 14. REVIEW LEARNING OUTCOME Marketing Research and Its Importance LO 2 Why marketing research?
    • Improve quality of decision making
    • Trace problems
    • Focus on keeping existing customers
    • Understand changes in marketplace
  • 15. Steps in a Marketing Research Project Describe the steps involved in conducting a marketing research project LO 3
  • 16. D E C I D E
    • D
      • Define the marketing problem
    • E
      • Enumerate the controllable and uncontrollable decision factors
    • C
      • Collect relevant information
    • I
      • Identify the best alternative
    • D
      • Develop and implement a marketing plan
    • E
      • Evaluate the decision and the decision process
  • 17. 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
  • 18. 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.
  • 19. Secondary Data LO 3 Data previously collected for any purpose other than the one at hand. Secondary Data
  • 20. Sources of Secondary Data LO 3 Government Agencies Trade and Industry Associations Business Periodicals News Media Internal Corporate Information
  • 21. 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
    LO 3
  • 22. 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
    LO 3
  • 23. 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
  • 24. 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? ?
  • 25. Primary Data LO 3 Information collected for the first time. Can be used for solving the particular problem under investigation. Primary Data
  • 26. Advantages of Primary Data
    • Answers a specific research question
    • Data are current
    • Source of data is known
    • Secrecy can be maintained
    LO 3
  • 27. Disadvantages of Primary Data
    • Expensive
    • “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.
  • 28. 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
  • 29. Forms of Survey Research LO 3 Focus Groups Executive Interviews Mail Surveys Telephone Interviews Mall Intercept Interviews In-Home Interviews
  • 30. 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.
  • 31. Forms of Survey Research LO 3 Seven to ten people who participate in a group discussion led by a moderator. Focus Groups
  • 32. 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.
  • 33. Questionnaire Design LO 3 Clear and concise No ambiguous language Unbiased Reasonable terminology Only one question
  • 34. Observation Research LO 3
    • A research method that relies on three types of observation:
    • people watching people
    • people watching an activity
    • machines watching people
    Observation Research
  • 35. 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
  • 36. Ethnographic Research LO 3 The study of human behavior in its natural context; involves observation of behavior and physical setting. Ethnographic Research
  • 37. The Sampling Procedure LO 3 Sample Universe A subset from a large population. The population from which a sample will be drawn.
  • 38. Sampling Procedure LO 3 Universe Sample Probability Samples Non-Probability Samples
  • 39. 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
  • 40. 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.
  • 41. 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.
  • 42. 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.
  • 43. Field Service Firms
    • Focus group facilities
    • Mall intercept locations
    • Test product storage
    • Kitchen facilities
    LO 3 Provide:
  • 44. 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
  • 45. Preparing and Presenting the Report
    • Concise statement of the research objectives
    • Explanation of research design
    • Summary of major findings
    • Conclusion with recommendations
    LO 3
  • 46. Following Up
    • 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?
    LO 3
  • 47. REVIEW LEARNING OUTCOME LO 3 Steps in a Marketing Research Project
  • 48. Impact of the Internet on Marketing Research Discuss the profound impact of the Internet on marketing research LO 4
  • 49. 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
    LO 4
  • 50. 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
  • 51. Uses of the Internet by Marketing Researchers LO 4 Other types of marketing research Conduct focus groups Administer surveys
  • 52. 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.
  • 53. 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
  • 54. Types of Online Focus Groups LO 4 Real-time online focus groups Time-extended online focus groups
  • 55. Advantages of Online Focus Groups
    • Speed
    • Cost-effectiveness
    • Broad geographic scope
    • Accessibility
    • Honesty
    LO 4
  • 56. 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).
    LO 4
  • 57. 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
  • 58. REVIEW LEARNING OUTCOME Impact of the Internet on Marketing Research LO 4
  • 59. Scanner-Based Research Discuss the growing importance of scanner-based research LO 5
  • 60. 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
  • 61. 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
  • 62. 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
  • 63. Competitive Intelligence Explain the concept of competitive intelligence LO 6
  • 64. 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.
  • 65. Sources of Competitive Intelligence LO 6 Internet Company Salespeople Experts CI Consultants Government Agencies UCC Filings Suppliers Periodicals Yellow Pages Trade Shows
  • 66. REVIEW LEARNING OUTCOME Competitive Intelligence LO 6 CI Part of a sound marketing strategy Helps companies respond to competitive threats Helps reduce unnecessary costs