Chapter IV: Managing Marketing Information:

Mai n Topics to be studied:

Explain the importance of information to the company and its understanding of the
marketplace.
Define the marketing information system and discuss its parts.
Outline the steps in the marketing research process.
Explain how companies analyze and distribute marketing information.
Case study:
The Coach Company: How marketing research helped to revamp strategy?
The ituation
Firm began by offering classically styled high!"uality leather handbags#
$omen needed only two purses in brown or black#
Mid!%&&'s: sales slowed#
Consumer preferences changed as more women entered the workforce#
(esigner bags made Coach)s look plain#
!esearch"s !ole
Method: *nterviews %+''' women annually# $atches trends for ,market voids#-
.ey research findings:
%/ desire for ,fashion pi00a00- in handbags#
1/ ,2sage voids#-
3ew products are created to fill voids 4wristlets fabric bags 5ignature line etc#/#
5ales and earnings grow#
The #mportance of $arketing #nformation
Companies need information about their:
6 Customers) needs
6 Marketing environment
6 Competition
Marketing managers do not need more information they need better information#
The marketing information system primarily serves the company)s marketring and other
managers# *t may also provide information to e7ternal partners such as suppliers
resellers or marketing service agencies#
6 8g: $al!Mart gives key suppliers access to information on customer buying
patterns and inventory levels#
$arketing #nformation ystem
9n M*5 consists of people e"uipment and procedures to gather sort analy0e evaluate
and distribute needed timely and accurate information to marketing decision makers#
The Marketing *nformation 5ystem
The M*5 helps managers to:
1. Assess information needs
2. Develop needed information
3. Distribute information
9 good M*5 balances the information users would like against what they really need and
what is feasible to offer#
5ometimes the company cannot provide the needed information because it is not
available or due to M*5 limitations#
Have to decide whether the benefits of more information are worth the costs#
De%eloping $arketing #nformation
Marketers can obtain the needed information from internal data marketing intelligence and
marketing research#
Internal Databases: 8lectronic collections of information obtained from data sources
within the company#
Marketing managers can readily access and work with information in the database to
identify the marketing opportunities and problems plan programs and evaluate
performance#
*nformation in the data base can come from many sources# The accounting department
prepares financial statements and keeps daily record of sales costs and cash flows#
:perations department reports on production schedules shipments and inventories# The
marketing department furnishes information on customer transactions demographics
psychographics and buying behavior# The customer service department keeps record of
customer satisfaction and service problems#
*nternal databases usually can be accessed more "uickly and cheaply than other
information sources# ;ecause internal information was collected for other purposes it
may be incomplete or in the wrong form for making marketing decisions# (ata also ages
"uickly# .eeping the database up!to!date is a ma<or effort#
Marketing Intelligence: 5ystematic collection and analysis of publicly available
information about competitors and developments in the marketing environment#
The goal of marketing intelligence is to improve strategic decision making assess and
track competitor)s actions and provide early warning of opportunities and threats#
Techni"ues range from "ui00ing the company)s own employees and benchmarking
competitor)s products to researching the internet lurking around industry trade shows
and even checking the rival)s trash bins#
Much intelligence can be collected from people inside company such as e7ecutives
engineers and scientists purchasing agents and the sales force# The company can also
obtain important intelligent information from suppliers resellers and key customers# *t
can buy and analy0e competitor)s products monitor their sales check for new patents
and e7amine various types of physical evidence#
The internet is providing a vast new source of competitor supplied information# 2sing
internet search engines marketers can search specific competitor names events or trends#
Moreover most companies now place volumes of information on their web pages
providing details to attract customers partners suppliers investors or franchisees# This
can provide a wealth of information about competitor)s strategies markets new products
facilities and other happenings#
Marketing Research: 5ystematic design collection analysis and reporting of data
relevant to a specific marketing situation facing an organi0ation#
Companies use marketing research in a wide variety of situations# Marketing research can
help marketers understand customer satisfaction and purchase behavior# *t can help them
assess market potential and market share or to measure the effectiveness of pricing
product distribution and promotion activities#
5ome large companies have their own research departments that work with marketing
managers on market research pro<ects# This is how =>? .raft Citigroup 2nilever and
many other corporate giants handle marketing research#
The marketing research process has four steps#
a# (efining the problem and research ob<ective
b# (eveloping the research plan
c# *mplementing the research plan
d# *nterpreting and reporting the findings
The Marketing @esearch =rocess
Defining Problem & Objectives
Marketing managers and researchers must work closely together to define the problem and agree
on research ob<ectives# (efining the problem and research ob<ective is often the hardest step in
the research process#
9fter the problem has been identified carefully the manager and researcher must set the research
ob<ective# 9 marketing research pro<ect might have one of the three types of ob<ectives#
87ploratory @esearch:
6 ?athers preliminary information that will help define the problem and suggest
hypotheses#
(escriptive @esearch:
6 (escribes things 4e#g# market potential for a product demographics and attitudes
of consumers who buy the product/#
Causal @esearch:
6 Tests hypotheses about cause!and!effect relationships#
Developing the Research Plan
:nce the research problems and ob<ectives have been identified researchers must determine the
e7act information needed develop a plan for gathering it efficiently and present the plan to
management#
*ncludes:
6 (etermining the e7act information needed#
6 (eveloping a plan for gathering it efficiently#
6 =resenting the written plan to management#
The research plan should be presented in a written proposal# 9 written proposal is especially
important when the research pro<ect is large and comple7 or when an outside firm carries it out#
The proposal should cover the management problems addressed and the research ob<ectives the
information to be obtained and the way the results will help management decision making# The
proposal should also include research costs#
To meet manager)s information needs the research plan call for gathering secondary data
primary data or both#
5econdary data consists of information that already e7ists somewhere having been collected for
another purpose#
=rimary data consists of information collected for specific purpose at hand#
Gathering Secondar Data
*nformation that already e7ists somewhere:
6 *nternal databases
6 Commercial data services
6 ?overnment sources
9vailable more "uickly and at a lower cost than primary data#
Must be relevant accurate current and impartial#
2sing commercial online databases marketing researchers can conduct their own searches for
secondary data sources# ?eneral databases such as (ialog =roAuest have an incredible wealth of
information at keyboards of marketing decision makers#
Primar Data !ollection
5econdary data provide a good starting point for research and often help to define research
problems and ob<ectives# *n most cases the company must also collect primary data# Bust as
researchers must carefully evaluate the "uality of secondary information they also must take
great care when collecting primary data# @esearchers should make sure that it will be relevant
accurate current and unbiased#
=rimary (ata Collection must determine:
6 @esearch approach
6 Contact methods
6 5ampling plan
6 @esearch instruments
!esearch &pproaches:
@esearch approaches for gathering primary data include observation surveys and e7periments#
"# Observational Research
:bservational research involves the gathering of primary data by observing relevant people
actions and situations# For e7ample a bank might evaluate possible new branch locations by
checking traffic patterns neighborhood conditions and the location of the competing branches#
:bservational research can obtain information that people are unwilling or unable to provide# *n
some cases observation may be the only way to obtain the needed information#
9 wide range of companies now use ethnographic research# 8thnographic research involves
sending trained observers to watch consumers in their ,natural environment-#
$# S%rve Research
5urvey research the most widely used method for primary data collection is the approach best
suited for gathering descriptive information#
9 company that wants to know about people)s knowledge attitudes preferences or buying
behavior can often find out by asking them directly#
The ma<or advantage of survey research is the fle7ibility!it can be used to obtain many different
kinds of information in many different situations# 5ometimes people are unable to answer survey
"uestions because they cannot remember or have never thought about what they do and why#
=eople may be unwilling to respond to unknown interviewers or about things they consider
private#
&# '(perimental Research
$hereas observation is best suited for e7ploratory research and surveys for descriptive
research e7perimental research is best suited for gathering causal information#
87perimental @esearch tries to e7plain cause!and!effect relationships#
!ontact Methods
*nformation can be collected by mail telephone personal interview or online#
Mail "uestionnaires can be used to collect large amounts of information at a low cost per
respondent# @espondents give more honest answers to more personal "uestions on a mail
"uestionnaire than to unknown interviewer in person or over the phone#
Telephone interviewing is one of the best methods for gathering information "uickly and it
provides greater fle7ibility than mail "uestionnaire# *nterviewers can e7plain difficult "uestions
and depending on the answers they receive skip some "uestions# @esponse rate tend to be higher
than with mail "uestionnaire and interviewers can ask to speak respondents with desired
characteristics or even by name# However with telephone interviewing the cost per respondent is
higher than with mail "uestionnaires#
=ersonal interviewing takes two forms!*ndividual and group interviewing#
*ndividual interviewing involves talking with people in their homes or offices on the street or in
shopping malls# 5uch interviewing is fle7ible# *ndividual personal interviews may cost three to
four times as much as telephone interviews#
?roup interviewing consists of inviting C!%' people to talk with a trained moderator to talk about
a product service or organi0ation# =articipants normally are paid a small sum for attending# The
moderator encourages free and easy discussion hoping that group interactions will bring about
actual feelings and thoughts# 9t the same time the moderator ,focuses- the discussion!hence the
name focus group inter%iewing#
Focus group interviewing has become one of the ma<or marketing research tools for gaining
insight into consumer thoughts and feelings#
Choosing the ample:
Marketing researchers usually draw conclusions about large groups of consumers by studying a
small sample of the total consumer population# 9 sample is a segment of the population selected
to represent the population as a whole# *deally the sample should be representative so that the
researcher can make accurate estimates of the thoughts and behaviors of the larger population#
(esigning the sample re"uires three decisions:
6 'ho is to be sur%eyed(
5ampling unit
6 )ow many people should be sur%eyed(
5ample si0e
6 )ow should the people in the sample be chosen(
5ampling procedure
!esearch #nstruments:
*n collecting primary data marketing researchers have a choice of two main research
instruments#
a# The "uestionnaire
b# Mechanical devices
*uestionnaires:
Auestionnaires are very fle7ible# There are many ways to ask "uestions# Closed ended
"uestions include all the possible answers and the sub<ects make choices among them#
87amples include multiple choice "uestions and scale "uestions#
:pen ended "uestions allow respondents to answer in their own words#
87ample: $hat is your opinion on Thai airways?
9lthough "uestionnaires are the most common research instrument researchers
also use mechanical instruments to monitor customer behavior# 5ome research
firms in 25 attaches ,=eople meters- to television sets in selected homes to
record who watches which programs# @etailers use checkout scanners to record
shoppers purchases#