Marketing Research and Decision Support Systems

1. 6 Marketing Researchand DecisionSupport Systems

2. Learning Objectives • After studying this chapter, you should be able to: • Understand the purpose and functions of marketing research. • Be familiar with the stages of the marketing research process. • Discuss different types of research designs, data collection methods, and sources of secondary and primary marketing research data. • Understand many of the major issues involved with survey design and sampling. • Appreciate the role of marketing research within decision support systems.

3. IMS Health • IMS Health is the second largest marketing research firm in the United States and the largest provider of research information to the global pharmaceutical industry. IMS is expertly positioned to supply data and business solutions to organizations throughout the health care environment.

4. What is Marketing Research? • Marketing research links the consumer, the customer, and the public through information used to • Identify and define marketing opportunities. • Generate, refine, and evaluate marketing actions. • Monitor marketing performance. • Improve understanding of marketing as a process.

5. Marketing Research • Marketing research: • Specifies the information required to address these issues. • Designs the methods for collecting information. • Manages and implements the data collection process. • Analyzes the results. • Communicates the findings and implications.

6. Marketing Research Questions

7. The New Millennium • Marketing Research in the New Millennium: • Environmental Phenomena will affect the marketing research industry in the next decade and beyond. • The traditional time line of 4 to 6 weeks for the typical research project will not be acceptable. • Marketing research is becoming a part of the marketing strategy development process. • Interactivity, e-commerce, and the Internet are affecting the practice of marketing research. • How will data be managed? • Marketing research industry itself is in transition

8. Market Research Process • The exhibit below shows the stages of the marketing research process. The sequence begins with an understanding of the problem and ends with analysis and interpretation. The overall objective should be to generate useful, timely, and cost-effective information. Exhibit 6-2

9. Problem Definition • Problem Definition: • The first step in any marketing research project and is critical to its success. • All parties involved must: • Focus on the real research problem, not the symptoms. • Anticipate how the information will be used. • Avoid prescribing a specific study until the problem is fully understood and defined.

10. Research Designs Exploratory Research Typically carried out to satisfy the researcher’s desire for better understanding, or to develop preliminary background and suggest issues for a more detailed follow-up study. Descriptive Research • Normally directed by one or more formal research questions or hypotheses. • 1. Cross-sectional study • 2. Longitudinal research Casual Research Experiments in which researchers manipulate independent variables and then observe or measure the dependent variable or variables of interest.

11. Three General Research Designs • Marketing research designs are general strategies or plans of action for addressing the research problem and the data collection and analysis process.

12. Data Collection Methods & Examples • Marketing research information can also be categorized as either primary data or secondary data. Interrelationships among the different types of data and the various data collection methods are summarized below:

13. more Data Collection Methods Focus Groups The most common exploratory procedure is the focus group. Focus groups usually comprise 8 to 12 individuals led by a moderator in a focused, in-depth discussion on a specific topic. Telephone Surveys Telephone interviews are relatively cost-effective; a large number of them over a wide geographical area can be conducted quickly and efficiently. Many firms use telephone interviews as their primary means of conducting survey research.

14. more Data Collection Methods (con’t) Mail Surveys Mail surveys can obtain broad geographical market coverage, are generally less expensive per completed survey than other methods, and can be used to collect data rather quickly. Surveys can address a range of issues in a single questionnaire. Personal Interviews Personal interviews involve one-on-one interactions between a consumer, customer, or respondent and the researcher or some field interviewer paid to conduct the interviews.

15. more Data Collection Methods (con’t) Mall Intercepts The shortcomings of personal interviews have led to increased use of mall intercept interviews. In a mall intercept, consumers are approached and interviewed while on shopping trips. Internet Surveys The Internet is fast becoming a popular means of conducting survey research, as are modified focus group discussions. With technology changing rapidly, the future of Internet-based research is both promising and hard to predict.

16. Data Collection Methods (con’t) Projective Techniques Projective techniques, such as word association or sentence completion, allow a researcher to elicit feelings that normally go unexpressed. They may be particularly useful in eliciting honest opinions about sensitive subjects. Observation Observation research monitors customer behavior by a researcher or by video camera. Much can be learned by unobtrusively observing how customers use a firm’s or its competitor’s products.

17. Data Collection Instruments • The collection of marketing research information typically involves construction of a data collection instrument called a survey or questionnaire.

18. Five Errors in Question Design • Errors in question design include five types: • Double-barreled wording: “How would you rate the handling ability and gas economy of your new Toyota?” (very good, good, fair, poor, very poor) • Loaded wording: “Given the growing rate of product recalls, how likely would you be to complain about problems with a new car purchase?” (likely, unlikely) • Ambiguous wording: “Have you purchased a home appliance within the last six months?” (yes, no) • Inappropriate vocabulary: “Do you feel the current discount rate is too high?” (yes, no) • Missing alternatives: “Which of the following includes your age?” (25 and under, 26 to 49, and over 50)

19. Sample Design • The decisions and sequences involved in sampling are presented below. The particular purpose of any research greatly influences the nature of the sampling process; of course, the population or group to be studied is determined by the issue of interest. Exhibit 6-7

20. International Considerations • Eight common errors in conducting an international research proposal: • Selecting a domestic research company to do international research • Rigidly standardizing methods across countries • Interviewing in English around the world • Implementing inappropriate sampling techniques • Failing to communicate effectively with local research companies • Lack of consideration given to language

21. Evaluating Marketing Research • A research proposal is often developed prior to conducting a research study. These proposals outline the purpose of the research, the activities of the project, the costs and time constraints, and the likely implications or outcomes. The most important questions to ask in evaluating a research design prior to conducting research are presented below: Exhibit 6-8

22. Ethical Issues in Marketing Research • Questionable Tactics: • excessive interviewing • lack of consideration and abuse of respondents • delivering sales pitches under the guise of marketing research • Questionable Research Practices: • incomplete reporting of results • misleading reporting • nonobjective research

23. Marketing Decision Support Systems • Many firms view all marketing data and information as part of a larger entity called a marketing decision support system (MDSS). All activities and computerized elements used to process information relevant to marketing decisions are components. Exhibit 6-9

24. Marketing Decision Support Systems • Marketing decision support systems are generally designed to: • Support but not supplant management decision making. • Apply to semistructured decisions of middle and upper management, such as pricing, promotion, and location decisions. • Provide interaction between and among people and systems. • Center on a segment of related decisions (the allocation of marketing effort and resources). • Be user-friendly.

25. Database Marketing Database Marketing The collection and use of individual customer-specific information to make marketing more efficient. Data Mining The process by which customer descriptions are derived from databases by the use of analytical procedures that discover patterns Customer Relationship Management One extension of the use of information at the customer level has been the evolution of customer relationship management.

26. Summary • After studying this chapter, you should be able to: • Understand the purpose and functions of marketing research. • Be familiar with the stages of the marketing research process. • Discuss different types of research designs, data collection methods, and sources of secondary and primary marketing research data. • Understand many of the major issues involved with survey design and sampling. • Appreciate the role of marketing research within decision support systems.