CHAPTER 6:

MARKETING RESEARCH &

MARKETING INFORMATION
SYSTEM & NEW PRODUCT
DEVELOPMENT

1
Key Notes:

1. Define marketing research.

2. Describe the reasons for doing marketing

research (the five Cs) and explain why
marketing research is sometimes not done.

3. List and describe the FIVE (5) key

requirements for good research information.

4. List in order and explain the steps in the

marketing research process.

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cont.

5. Describe the internal and external sources of

secondary research.

6. Explain the differences between PRIMARY and

SECONDARY research and list their respective
advantages and disadvantages.

7. List and describe the primary research methods

and differentiate between QUANTITATIVE and
QUALITATIVE research.

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cont.

8. Explain the advantages and disadvantages of

personal interviews, mail, telephone, in-house, self-
administered, and online surveys.

9. Explain the important of ethical marketing

research & issues in marketing research

10. Understand MIS & its component

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MARKETING RESEARCH

Definition:

‘the systematic gathering, recording and analysing of

data about PROBLEMS relating to the marketing of
goods and services’
American Marketing Association

Marketing research is about researching the whole of a

company's marketing process
Palmer (2000)

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 The function that links the consumer, customer,
and public to the marketer through
information.

 The information is used to:

1. Identify and define marketing opportunities
and problems.
2. Generate, refine, and evaluate marketing
actions.
3. Monitor marketing performance.
4. Improve understanding of marketing as a
process.

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6.1.1. Purpose of marketing
research
Focus on several areas:
 a. Market segmentation
 b. Evaluation of marketing programs
 c. Measurement of results
 d. Decision Making

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
cont.
6.1.1. Purpose of marketing research

The main functions of market research should aid

management in the following areas:

a. Market segmentation
- describe each market that the bank is trying to serve

- the common denominators that are prevalent in

marketing today is addressed;

demographics, identifying customers’ wants, needs &

desires in terms of banking services, market segment
& niche potential.
8
Cont.

b. Evaluation of marketing programs

- to satisfy customers’ needs

- It is achieved by testing products, concepts &

advertising campaigns, prior to their introduction to
the market.

- This will aid in facilitating the management cycle of

controlling performance against plans already in place,
solving problems that arise in planning

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cont.

c. Measurement of results
- efforts in quantifiable terms through specialized
studies that look at the past, present (eg:customer
satisfaction, brand image & product introduction
measurement) &

future (eg:new product, new market or new business

opportunities studies)

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Cont.

- this can be subdivided into:

i. the tracking of the product

requirements/conditions(syarat2) of
each type of account, and

ii. using internal data (e.g. number of

account, openings, closings, &
balance)

• THE BANK CAN THEN DETERMINE

HOW WELL A SPECIFIC PRODUCT
OR SERVICE HAS PERFORMED!

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d. Decision Making

 Researcher’s role is not to make decisions,

but to collect data on a confusing &
uncertain market & rearrange them into a
form that is understandable to mgt/bankers
& asist in decision making.
 Research should improve the decision
making process through the measurement
of probabilities & potential value of
alternative actions.
 The real value of research can be seen over
the long run- increasing the percentage of
good decisions improved bottom line
/profits/sales performance.

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6.1.2 Reasons for Doing Marketing Research:
The Five Cs

1. Customers: To determine how well

customer needs are being met/fulfill, investigate
new target markets, and assess and test new
services and facilities.

2. Competition: To identify primary

competitors and pinpoint their strengths and
weaknesses.

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cont.

3. Confidence: To reduce the perceived risk in

making marketing decisions.

4. Credibility: To increase the

believability/kepercayaan of promotional messages
among customers.

5. Change: To keep updated with changes in

travelers’ needs and expectations.

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6.1.3 Reasons for Not Doing Marketing
Research

1. Timing: It will take to much time.

2. Cost: The cost of the research is too high.

3. Reliability: There is no reliable research

method available for doing the research.

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cont.

4. Competitive intelligence: There is a

fear that competitors will learn about the
organization’s intentions.

5. Management decision: Management

prefers to use own judgment/own
decision.

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6.1.4 Five Key Requirements of Marketing Research
Information

1. Utility: Can we use it (information)? Does it

apply to us?

2.Timeliness: Will it be available in time?

3. Cost-effectiveness: Do the benefits outweigh

the costs (can cover the cost)?

4. Accuracy: Is it accurate?

5. Reliability: Is it reliable?

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6.1.5 Marketing Research Programs and Projects

a. Marketing Research Program:

A plan or program to investigate several marketing

opportunities or problems (several projects).

b. Marketing Research Project:

An individual element of a marketing research program in

which a specific marketing opportunity or problem is
investigated.

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6.2. Marketing Research Process

- consists of:
1) defining the problem & research objectives,
2) developing the research plan,
3) implementing the research plan &
4) interpreting &
5) reporting the findings

19
 Cont.

Develop Implement
the research
Define the Analysis Feedback
research plan in
problem & & actions
plan for collecting
research
data analysis
objectives
collection data

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1. Define the problem & research objectives:

- Define research problem

example:

the bank may want to know why the average balances

of saving accounts is falling or why the queue at the
counters are getting longer despite increasing the
number of ATM machines at the banking hall.

- A marketing research will have one of three types of

objectives:

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 i. Exploratory research:

aims to gather preliminary information

that will help define the problem &
suggest hypotheses.

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Cont.

ii. Descriptive research

- Typically answers who, what, why, when, how questions

- Used for describing marketing problems, situations or

markets

- E.g. market potential for a product & attitudes of

potential customers who buy the product

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Cont.

iii. Causal research

- Aims to test hypotheses about the cause & effect

relationships

- E.g. a 10% increase in commissions charged for

outward telegraphic transfers (TT) result in a 20% fall
in the number of TT transactions

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Cont.

- Characteristics:

- Based on experiments.
- Complex; time consuming; expensive.
- Controlling variables is difficult.
- Not very commonly used.

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2. Develop the research plan for data
collection:

- outlines sources of existing data, advises

the specific research approaches, contact
,methods, sampling plans & instruments
that were used to gather new data

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Cont.
•Collecting Data

–Types of data
•Primary data: data observed and
recorded or collected directly from
respondents

•Secondary data: is information that

already exists having collected for
another purpose

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28
29
Cont.
Advantages and Disadvantages of Secondary Data

Advantages

- Inexpensive
- Easily accessible
- Immediately available

Disadvantages

- Frequently outdated
- Potentially unreliable
- May not be applicable

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Cont.
Advantages and Disadvantages of
Primary Data

Advantages

- Applicable and usable

- Accurate and reliable
- Up-to-date

Disadvantages

- Expensive
- Not immediately available
- Not as readily accessible

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Cont.

Primary Data Methods

- Experimental (e.g., test marketing)

- Observational (human and mechanical)
- Survey (mail, telephone, personal interview,
in-house self-administered, online)
- Simulation (mathematical and computer
modeling)
- Focus groups (groups of 8 to 12 people with
moderator trying to reach a consensus
of opinions)

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3. Implement research plan in collecting
analyzing data:

- Involves collecting, processing, & analyzing the

data gathered.

- Data collected will have to be processed to

reveal important facts & information. Several
statistical methods can be used to tabulate &
interpret the data (SPSS/Eviews/SAS).

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4. Analyze And Interpret Data:

- the information must be interpreted

5. Feedback & actions:

- Make recommendations from conclusions. The

findings will be reported to management who will
take the appropriate action based on the
information presented

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6.2.1 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

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6.2.2 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 data-gathering
about customer needs and preferences

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6.3. MARKETING INFORMATION SYSTEM

Kotler's1 definition: MIS is more than a system of

data collection or a set of information technologies:

“Consists of people, equipment, and procedures to

gather, sort, analyze, evaluate, and distribute needed,
timely, and accurate information to marketing decision
makers.”

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Cont.

6.3.2 Assessing information needs:

- It is costly to gather data, process data, store data &

maintain the information database that is not often use or
not useful.

- a good MIS system balances information that we would

like to have against that which is really needed and feasible
to obtain.

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Cont.

6.3.3 Developing information:

Four Main Sources and Types

- Internal records information

- Marketing intelligence
- Marketing research
- Marketing Decision Support System (MDSS)

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Cont.

Internal Records

Information from sources within the organization used to

evaluate marketing performance and to identify marketing
problems and opportunities

Marketing Intelligence

can be gathered from bank’s staff, existing customers,

potential customers, competitors, newspaper &
advertisements

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Cont.

Marketing Research

- the bank may not have its own researchers &

therefore has to approach a market research
company/consultant

- marketing researchers provide services such as

measuring market share, estimating market potential of
a new product, assessing customer satisfaction, pricing
studies, etc.

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Cont.

Marketing Decision Support Systems (MDSS)

- Decision support system will allow the

information to be analyzed, interpreted &
distributed to the right decision makers in the bank

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 The components of a computerised MIS

Table

Data Bank

Statistical Display Marketing

MKIS
Bank unit Manager

Model
Bank

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Cont.

The components of a computerised MKIS

 Data bank - raw data e.g historical sales

data, secondary data
 Statistical bank - programmes to
carry-out sales forecasts, spending
projections
 A model bank - stores marketing
models e.g Ansoff’s matrix, Boston
Matrix,product life cycle
 Display unit - VDU and keyboard
44
Cont.

6.3.4 Distributing information

- is a trend now that banks need management

information on a regular basis for specific decision
makers to make certain kind of decisions.

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Cont.

6.3.5 Customer & Product Information

The three investigative areas are broadly

categorized:

- Customer Information System (CIS)

- Product Information System (PIS)
- Cost Centre Information System (CCIS

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Customer Primary & secondary markets.
Information Relative profitability of markets.
System (CIS) Analysis of retail customers:
Demographic
Psychographics, and
Socioeconomic data
Analysis of commercial customers.
Type of business.
Deposit & loan balances.
Number of products & services used.
Account growth & duration.
Profitability of accounts.
Banking patterns.

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Cont.

Product New product development.

Information Modifications/
System (PIS) improvement of present
products & services.
Applications of products &
services
Packaging of products.
Products & service
preferences of customers.
Profitability of products &
services.
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Cont.

Cost Centre Sales performance

Information measurement.
System Sales training effectiveness.
(CCIS) Costs of products & services.
Sales territories/ Branch
locations.

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6.4 MIS for profitability analysis

- profitability analysis is readily acceptable that the

banks must take a profit from its total loan portfolio.

- discusses the support systems that will assist bank

management to expediently monitor & analyze
customer performance & profit contribution to the
bank.

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Cont.

- The MIS should be designed that it can generate

information to assist marketing managers to prepare
marketing plans, sales forecast & continuously gathering
market intelligence to monitor product profitability.

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