Learning Goals

1. Explain the importance of information to

the company
Chapter 4 2. Define the marketing information system
3. Outline the steps in the market research
process
4. Explain how companies analyze and
distribute information
Managing Marketing 5. Discuss special issues facing market
Information to Gain researchers
Customer Insights
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Case Study
Learning Goals New Coke
1. Explain the importance of information to
the company New Coke product
2. Define the marketing information system failure Due largely to research
3. Outline the steps in the market research failure
process Poor sales
4. Explain how companies analyze and Over 1,500 phone calls Tested on taste only not
a day from angry intangibles
distribute information customers Decisions based on 60%
5. Discuss special issues facing market Old coke returns in only ratings
3 months All for $4 million!
researchers

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Learning Goals Marketing Information System
1. Explain the importance of information to the Marketing Information System (MIS)
company
Consists of people, equipment, and
2. Define the marketing information system
procedures to gather, sort, analyze, evaluate,
3. Outline the steps in the market research and distribute needed, timely, and accurate
process
information to marketing decision makers.
4. Explain how companies analyze and distribute
information
5. Discuss special issues facing market
researchers

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Marketing Information System

Marketing Information System

Interacts with information users to assess

information
Develops needed information from internal and
external sources
Helps users analyze information for marketing
decisions
Distributes the marketing information and helps
managers use it for decision making

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 Assessing Marketing Information
Needs
PeopleSoft markets The MIS serves company managers as
databases to well as external partners
optimize The MIS must balance needs against
customer feasibility:
relationship Not all information can be obtained
management Obtaining, processing, sorting, and delivering
information is costly

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Developing Marketing Information

This ad is
Internal data is gathered via
targeted to
Sources of Info customer databases, businesses to
financial records, and reinforce the
operations reports
Internal data importance of a
Advantages include
Marketing quick/easy access to good internal
intelligence information data for an MIS
Marketing research Disadvantages stem from the system
incompleteness or
inappropriateness of data to
a particular situation
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3
 Sources of Competitive
Developing Marketing Information
Intelligence
Marketing intelligence is
the systematic collection Company employees Competitors
Sources of Info and analysis of publicly
available information about Internet employees
competitors and trends in Garbage Trade shows
Internal data the marketing
environment. Published information Benchmarking
Marketing Competitive intelligence
intelligence gathering activities have
Channel members
Marketing research grown dramatically. and key customers
Many sources of
competitive information
exist.

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Developing Marketing Information

Greenfield
Marketing research is the Online runs
Sources of Info systematic design, a teen
collection, analysis, and panel for
reporting of data relevant feedback to
Internal data to a specific marketing
Marketing situation facing an
clients on
intelligence organization. this
Marketing research important
market

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4
 Steps in the Marketing
Learning Goals Research Process

Explain the importance of information to the

company
Define the marketing information system
Outline the steps in the market research process
Explain how companies analyze and distribute
information
Discuss special issues facing market
researchers

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Step 1: Defining the problem Step 1: Defining the Problem &

and research objectives Research Objectives
Example: American Airlines Case:
The manager and the researcher must American Airlines is constantly looking for new ways
work together. to serve the needs of air travelers.
One manager came up with the idea of offering phone
These objectives guide the entire
service to passengers.
process. The other managers got excited about this idea and
agreed that it should be researched further.
Exploratory, descriptive, and causal
The marketing manager volunteered to do some
research each fulfill different preliminary research
objectives.
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 Defining the Problem & Research Objectives
Example: American Airlines Case
The marketing manager contacted a major
telecommunications company to find out the cost of
providing this service on B-747 coast-to-coast flights.
The telecommunications company said that the device would
cost the airline $1.000 a flight.
The airline could breakeven if it charged $25 a phone call and at
least 40 passengers made calls during the flight.
The marketing manager then asked the companys
research manager to find out how air travelers would
respond to this new service.
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Defining the Problem & Research Objectives
Example: American Airlines Case (cont.)
American Airlines looking for new ways to serve the
needs of air travelers the idea of offering phone
service to passengers
Research Problem ?
to find out everything about air travelers need too broad!
to find out if enough passengers aboard a B-747 flying
between East Cost and West Coast would be willing to pay $
25 to make a phone call so that the company would break
even on the cost of offering this service too narrow!
Research Problem is finally defined as: Will offering an in-
flight phone service create enough incremental preference
and profit for American Airlines to justify its cost against other
possible investments that the company might make? 22

Defining the Problem & Research Objectives Step 1: Defining the Problem &
Example: American Airlines Case (cont.) Research Objectives
Research Objectives: Sheds light on problem - suggest
What are the main reasons that airline passengers might place phone solutions or new ideas.
Exploratory Gathers preliminary information
calls while flying? Research that will help define the problem
What kinds of passengers would be the most likely to make phone and suggest hypotheses
calls?
Ascertain magnitudes
How many passengers are likely to make phone calls, given different
Descriptive Describes things as market
price levels? potential for a product or the
Research demographics and consumers
How many extra passengers might choose American because of this
new service? attitudes.

How much long-term support will this service add to American

Test cause- and-effect
Airlines image? Causal relationships.
How important will phone service be relative to other factors? (such Research Tests hypotheses about cause-
as flight schedules, food quality, baggage handling, etc.) and-effect relationships.

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Step 2: Developing the Research
Secondary Data
Plan
Research plan is a written document which Secondary data sources:
outlines the type of problem, objectives, data Government information
needed, and the usefulness of the results. Internal,commercial, and online databases
Includes: Publications

Secondary data: Information collected for another Advantages:

purpose which already exists Obtained quickly
Primary data: Information collected for the specific Less expensive than primary data
purpose at hand Disadvantages:
Information may not exist or may not be usable

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Developing the Research Plan:

Data Sources
Secondary data
both must be:
on female
Data that were Relevant
collected for another Data gathered for spending has
purpose, and already Accurate
a specific purpose prompted
exist somewhere or for a specific
research project marketing
(+)Obtained more quikcly Current
/ at lower cost
changes at
Impartial retailers
(-)Might not be
usable data.

27 Source: Business Week

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Evaluate the Following
Primary Data
when Judging Data Quality
Relevance Currency Primary research decisions:
Accuracy Impartiality Research approaches
Contact methods
Sampling plan
Research instruments

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Primary Data Research Approaches

Observational
Gathering data by observing people, actions
Decisions Observation research
using people or machines and situations (Exploratory)
Discovers behavior but
Research Approach not motivations Survey
Contact Method Survey research Asking individuals about attitudes,
Effective for descriptive preferences or buying behaviors
Sampling Plan information (Descriptive)
Research Instrument Experimental research
investigates cause and
effect relationships Experimental
Using groups of people to determine
cause-and-effect relationships
(Causal)
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 Strengths and Weaknesses of
Primary Data Contact Methods Relate to:
Flexibility Interviewer effects
Decisions Key Contact Methods
include: Sample control Speed of data
Mail surveys collection
Data quantity
Research Approach Telephone surveys Response rate
Contact Method Personal interviewing: Cost
Individual or focus
Sampling Plan
group
Research Instrument Online research

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Strengths and Weaknesses of

Contact Methods Primary Data

Sample: subgroup of
Decisions population from whom
information will be collected
Sampling Plan Decisions:
Research Approach
Sampling unit
Contact Method Sample size
Sampling Plan Sampling procedure:
Research Instrument Probability samples
Non-probability
samples

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Sampling Plan Sampling Plan
Probability Sampling
Simple random sample every member of the population has
Who is to be an equal chance of selection
Probability or
surveyed? Stratified random sample the population is divided into
Non-probability groups, random samples are drawn from each group
sampling? (Sampling
Unit) Cluster (area) sample e.g. groups such as blocks
Sample -
representative
segment of the Nonprobability Sampling
population Convenience sample The most accessible population
How should the members are selected to obtain information
How many
sample be should be Judgement sample The researcher uses judgement to select
chosen? surveyed? population members who are good prospects for accurate
information
(Sampl.procedure) (Sample size)
Quota sample finds and interviews a prescribed number of
37 people in each of several categories 38

Primary Data Eye Cameras

Questionnaires Eye cameras track the

Decisions Include open-ended consumers eyes as they look at
and closed-ended marketing materials
questions
Research Approach Applications
Phrasing and question
Contact Method order are key print ads where do people look
Sampling Plan Mechanical instruments first?
Research Instrument Nielsens people meters Web pages do people view
Checkout scanners banner ads?
Eye cameras Other web applications?

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Discussion Question
A digital camera manufacturer
wants to determine what is
most important to older (50+)
camera buyers
Suggest a research approach,
contact methods, sampling
plan, research instruments
Step 4: Interpreting and Reporting
the Findings
The research interprets the finding, draws
conclusions and reports to management
Managers and researchers must work
together to interpret results for useful
decision making
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Step 3: Implementing the Research
Plan
Data is collected by the company or an
outside firm
The data is then processed and checked
for accuracy and completeness and coded
for analysis
Finally the data is analyzed by a variety of
statistical methods
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American Airlines Case:
Main Survey Findings
The chief reasons for using in-flight phone service are:
emergencies,
urgent business deals,
mix-ups in flight times, and so on.
Making phone calls to pass the time would be rare. Most
of the phone calls would be made by businesspeople on
expense accounts.
About 5 passengers out of every 200 would make in-flight
phone calls at a price $25 a call; 12 would make calls at
$15.
Thus a charge of $15 would produce more revenue
(12x$15=$180) than $25 a call (5x$25=$125).
(Still, this is far below the in-flight breakeven cost of $1000)
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American Airlines Case:
Main Survey Findings (cont.)
Good Marketing Research

The promotion of in-flight phone service would win

1. Is scientific
American about two extra passengers on each flight.
2. Is creative
The net revenue from these two extra passengers would be
about $ 620, but this still would not help meet the breakeven 3. Uses multiple methods
cost. 4. Realizes the interdependence of models & data
5. Acknowledges the cost & value of information
Offering in-flight phone service would strengthen the 6. Maintains healthy skepticism
publics image of American Airlines as an innovative and 7. Is ethical
progressive airline.
However, it would cost American about $200 per flight to create
this extra goodwill.
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Marketing Research Industry Marketing Research Industry

$ 9 Billion a year is spent on marketing/advertising/public
opinion research services around the world
US spending on MR is $ 4.6 billion
About 39% of the world's spending for research
services goes to the 10 largest MR organizations.
About 51% is held by the 25 largest worldwide
organizations
Approximately 31% of all research budget (cost) are
spent on
syndicated research.
19% is spent on custom qualitative studies
The remainder is spent on custom quantitative studies
in Turkey
Syndicated Services (MR data gathering and reporting)
AC Nielsen: Retail Measurement Services - Scan Track -
Brand Track- CATI and CAPI
AGB: Daily, weekly and monthly reports on the figures/
statistics of reseach, share, rating figures, distribution of
ratings on different target groups
Biliim International Research Org.: Monthly Advertising
Expenditure Surveys
HTP Research and Consulting Services: Household
consumption panel (weekly visits, monthly report, 12 major
cities, 300 households)
Information Resources Inc/Panel: Retail audit (Electronic
data collection) -Retail information (Supermarket
information, Infoscan)
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 Analyzing Marketing Information
Information gathered in internal databases and
through marketing intelligence and marketing
research may require more analysis
Statistical analysis and analytical models are often used
Managers may need help in applying the info. to
their mktg problems and decisions
Marketing decision support sysytems (MDSS)
coordinated collection of data, systems, tools and
techniques with supporting software and hardware, by which
an organization gathers and interprets relevant information
from business and environment and turns it into a basis for
marketing action
marketing and sales software programs
decision models
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Customer Relationship Management
Customer relationship management (CRM) software
helps manage information by integrating customer data
from all sources within a company, analyzing in depth,
and applying the results to build stronger relationships
Customer touch points are analyzed in order to maximize
customer loyalty.
Data warehouses
Data mining techniques
...CRM is not a technology solution....is just
one part of an effective overall customer
relationship strategy...
CRM software offers many benefits and can help a firm
gain a competitive advantage when used as part of a total
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CRM strategy

Distributing and Using Marketing

Other Considerations
Information
Distributes Routine Marketing research in small businesses and
Information for not-for-profit organizations
Decision Making
Intranets&extranets International marketing research
Public policy and ethics
Information Must be Distributed Consumer privacy issues
to the Right Managers at the Right Time. Misuse of research findings

Distributes Nonroutine
Information for Special
Situations 51 52

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Market Research Companies AC Market Research Companies AC
Nielsen Nielsen

AC Nielsen helps define the problem by

packaging data around common problems,
including customer satisfaction and new
product sales
It develops the sampling plans, collects and
analyzes the data
Firms purchase these reports as secondary
data.

Learning Goals
1. Explain the importance of information
to the company
2. Define the marketing information
system
3. Outline the steps in the market
research process
4. Explain how companies analyze and
distribute information
5. Discuss special issues facing market
researchers 55

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