This document discusses barriers between marketing researchers and managerial decision makers. It identifies three types of barriers: behavioral, process, and organizational. Specific behavioral barriers discussed include confirmatory bias, the difficulty balancing creativity and data, and the newcomer syndrome. Process barriers include unsuccessful problem definition and research rigidity. Organizational barriers include misuse of information asymmetries. The document also discusses ethical issues in marketing research such as deceptive practices, invasion of privacy, and breaches of confidentiality.

1. Barriers between Marketing Researchers
and Managerial Decision Maker
Course: MBA
Subject: MM II
Unit: I

2. We consider three types of barriers to information
Intelligence.(Figure 1)
A. Behavioral barriers: these are barriers mainly due to
behavioral characteristics of managers, decision
makers, and researchers.
B. Process barriers: these are barriers mainly due to the
process characteristics of an information analysis
project.
C. Organizational barriers: these are barriers due to the
organizational structure of the groups involved in an
information analysis project.

4. Confirmatory Bias
This is mainly a behavioral barrier. As discussed above one of the fundamental
behavioral biases of decision makers in market research is to only look for
information that simply confirms existing beliefs and often disregard all other
information. Unfortunately there is a saying that ‘‘if you torture the data enough
they will reveal anything to you’’. In other words, having a purely confirmatory
mind frame will sooner or later lead to evidence that, almost definitely wrongly
so, indeed ‘‘confirms’’ the initial beliefs. But then there is effectively no use of
the information whatsoever. We found from our interviews, in agreement with
the past work on market research outlined above, that the confirmatory bias is,
among other behavioral biases (Kahneman et al.,1982), central to the success of
market research initiatives. Moreover, even though managers are aware of this
trap, they typically do not control for it.

5. Difficulty to Balance Creativity and Hard Data:
This is also mainly a behavioral barrier. It is a very delicate
balance that needs to be achieved between intuition and prior
beliefs, and what the data reveal. Lean too much towards hard
data, hence ‘‘successfully’’ analyzing the information available,
and creativity may be lost.

6. Unsuccessful Problem Definition
This is due to a very basic characteristic of intelligence projects
very often ignored: if you get the wrong questions upfront, you
will get the right answer for the wrong problem. As an example,
the CEO of a big group asked the CEO of a marketing research
supplier to work on a strategic question forthe group. But the
person who subsequently briefed the project team of the
supplier with the objectives was somebody who was not
specialized in marketing or research. After receiving the
objectives and carrying out some initial research, the group
CEO was given
a verbal debrief. Although he was quite happy, he also asked for
more strategic answers, whereas the brief had been defined only
as a tactical problem. The fundamental problem was that the
contact person did not correctly lay out the objectives of the
project.

7. Research Rigidity
This is another fundamental characteristic of intelligence
projects: even when they lead to the correct answers for the
correct questions, these answers may quickly become outdated.
Reality changes fast and one must recognize that information
intelligence search is a dynamic, iterative process, not done in
one rigid shot. Information intelligence projects are iterative,
sometimes to such an extent that they are not really projects
but ongoing processes. As some business intelligence
managers said, business intelligence is not a project with a
beginning and an end, but a process continuing indefinitely.

8. Misuse of Information Asymmetries
This is mainly an organizational barrier. It is probably the hardest
barrier to overcome and has been extensively considered for
example for knowledge management initiatives. Information
asymmetries arise when one or more parties have relevant
information that is not shared with another party or parties
involved.

9. Newcomer Syndrome
It’s always good to have new people with fresh ideas joining an
information intelligence project, but sometimes newcomers may
be dangerous simply because they are expected to come up with
new findings.

10. Ethical issues in MR
Marketing research has experienced a resurgence with the
widespread use of the Internet and the popularity of social
networking. It is easier than ever before for companies to connect
directly with customers and collect individual information that
goes into a computer database to be matched with other pieces of
data collected during unrelated transactions. The way a company
conducts its market research these days can have serious ethical
repercussions, impacting the lives of consumers in ways that have
yet to be fully understood. Further, companies can be faced with a
public backlash if their market research practices are perceived as
unethical.

11. Deceptive Practices
The ease with which a company can access and gather data about
its customers can lead to deceptive practices and dishonesty in the
company's research methods. This type of ethical problem can run
the gamut — from not telling customers that information is being
collected when they visit a website to misrepresenting research
results by changing database numbers. Any action that uses lies
and deception to find out or establish information about
consumers falls under this category.

12. Invasion of Privacy
One of the most serious ethical considerations involved in market
research is invasion of privacy. Companies have an
unprecedented ability to collect, store and match information
relating to customers that can infringe on a person's right to
privacy. In many instances, the customer does not know or
understand the extent of the company's infiltration into his life.
The company uses this information to reach the customer with
targeted advertising, but the process of targeting can have a
chilling affect on personal freedom.

13. Breaches of Confidentiality
Another significant ethical consideration involved in market
research involves breaches of confidentiality. Companies
regularly share information about customers with partners and
affiliates, requiring the customer to opt-out of the sharing if he
doesn't want to be involved. Some companies sell information
they have gathered on customers to outside companies. Ethically,
any unauthorized disclosure of customer information is
problematic

14. Objectivity
Marketing and advertising have a significant impact on public
perceptions. Market researchers have an ethical obligation to
conduct research objectively, so that available data allows for the
development of a balanced or reality-based picture. Researchers
who allow their own prejudices to skew their work tend to
contribute to the perpetuation of stereotypes in advertising, the
development of destructive social constructs and the enabling of
unjust profiting from poverty. For example, a market researcher
with a one-dimensional view of minorities could do a fair amount
of harm if allowed to shape an advertising campaign based on
skewed data collection.

15. A marketing information system (MkIS) is a management information
system (MIS) designed to support marketing decision making. Jobber
(2007) defines it as a "system in which marketing data is formally
gathered, stored, analyzed and distributed to managers in accordance
with their informational needs on a regular basis."
Marketing Information System

16. Components of Marketing
Information System
The four main components of Marketing Information System
(MIS) are:
Internal Records,
Marketing Intelligence,
Marketing Research (MR),
and
Marketing Decision Support System.

18. :
The first component of MIS is ‘Internal Record’. Marketing managers get
lots of information from the internal-records of the company. These
records provide current information about sales, costs, inventories, cash
flows and account receivable and payable. Many companies maintain
their computerized internal records. Inside records help marketing
managers to gain faster access to reliable information.
Internal records

19. Marketing intelligence :The second component of MIS is ‘Marketing
Intelligence’. It collects information from external sources. It provides
information about current marketing-environment and changing
conditions in the market. This information can be easily gathered from
external sources like; magazines, trade journals, commercial press, so on.
This information cannot be collected from the Annual Reports of the
Trade Association and Chambers of Commerce, Annual Report of
Companies, etc. The salesmen’s report also contains information about
market trends.
The information which is collected from the external sources cannot be
used directly. It must be first evaluated and arranged in a proper order. It
can be then used by the marketing manager for taking decisions and
making policies about marketing.
So, marketing intelligence is an important component of MIS

20. Marketing research : The third important component of MIS is
‘Marketing Research’. MR is conducted to solve specific marketing
problems of the company. It collects data about the problem. This data is
tabulated, analyzed and conclusions are drawn. Then the
recommendations are given for solving the problem. Marketing research
also provides information to the marketing managers. However, this
information is specific information. It can be used only for a particular
purpose. MIS and MR are not substitutes of each other. The scope of MIS
is very wide. It includes ‘MR’. However, the scope of MR is very narrow

21. Marketing decision support system : The fourth component
of MIS is ‘Marketing Decision Support System’. These are the
tools which help the marketing managers to analyze data
and to take better marketing decisions. They include
hardware, i.e. computer and software programs. Computer
helps the marketing manager to analyze the marketing
information. It also helps them to take better decisions. In
fact, today marketing managers cannot work without
computers. There are many software programs, which help
the marketing manager to do market segmentation, price
fixing, advertising budgets, etc

22. Market potential is the entire size of the market for a
product at a specific time. It represents the upper limits of
the market for a product. Market potential is usually
measured either by sales value or sales volume. For example,
the market potential for ten speed bicycles may be worth
$5,000,000 in sales each year. On the other hand, the market
potential for motorcycles may be 500,000 units each year,
which is a measure of sales volume rather than sales value.
Keep in mind that market potential is just a snapshot in time.
It's a fluid number that changes with the economic
environment. For example, rising and falling interest rates
will affect the demand for products that are typically
financed, like cars and houses

23. What is Company Demand?
Company demand is demand for a specific company’s goods compared to
other company offerings. The demand is determined by sales numbers of a
particular brand put against total market sales. For example, if the number of
shirts sold within a particular season is 50,000 units (combining all brands and
sellers), and if a specific company’s shirts amount to 4,000 units, the company
demand for the firm is (4000x100/50000) 8 percent.
Company demand is a brief picture of how consumers perceive and exhibit
preference for particular company products and services when compared to
the competition. Like other kinds of market demand, company demand is
variable and is bound to change periodically. To increase or sustain company
demand, a firm must constantly sell quality products and services, backed by
effective marketing strategies.

24. What are sales forecasts?
Sales forecasts are estimates of your sales for the forecast period.
The sales forecast establishes the level of activity used in all the other
forecasts and budgets for the business. If your sales forecast varies wildly
from your actual results, your cash flow and profitability forecasts will
similarly be inaccurate. Regularly updating forecasts ensures current market
intelligence, buying signals from clients and the efforts behind the marketing
strategy can be taken into account for the next forecast.
To get started, ask yourself how much can you realistically sell next year,
and how much will you charge for your goods or services?
If you are already in business, use sales data and internal accounting records
from previous years in addition to external current market and economic
indicators to develop a realistic forecast.
If you are starting a new business and don't have a trading history, base your
sales estimates on market research, industry information, business strategies
and objectives

25. Sales Quota is the sales goal set for a product line, company
division or sales representative. It helps the managers to define
and stimulate sales effort. Sales quota is the minimum sales goal
for a set time span.
Generally sales quotas are set slightly higher than the estimated
sales so as to stretch the sales force effort.
Sales quotas are developed through the study of annual territory
marketing plan. In this the plan for developing new accounts and
expanding existing accounts is given by the representatives

26. Budgeting is important for any business. Without a budget
companies can't track process or improve performance. The
first step in creating a master company while budget is to
create a sales budget.
A sales budget estimates the sales in units as well as the
estimated earnings from these sales. Management carefully
analyzes economic conditions, market competition,
production capacity, and selling expenses when developing
the sales budget. All of these factors play an important role
in the company's future performance. Basically, the sales
budget is what management expects to sell and the
revenues collected from these sales.
Sales Budget

27. What Is Demand Forecasting &
Estimation?
• Demand forecasting and estimation gives businesses valuable
information about the markets in which they operate and the
markets they plan to pursue. Forecasting and estimation are
interchangeable terms that basically mean predicting what
will happen in the future. If businesses do not use demand
forecasting and estimation, they risk entering markets that
have no need for the business's product

28. • Purpose
The purpose of demand forecasting and estimation is to find
a business's potential demand so managers can make
accurate decisions about pricing, business growth and
market potential. Managers base pricing on demand
trends in the market. For example, if the market demand
for pizza is high in a city but there are few competitors,
managers know they can price pizzas higher than if the
demand was lower. Established businesses use demand
forecasting and estimation if they consider entering a new
market. If the demand for their product is currently low,
but will increase in the future, they will wait to enter the
market.

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