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Synopsis
After five years of stagnant or declining revenues, Dominos Pizza did something practically unheard of in the
business world. It asked customers for honest feedback and reinvented its product from the crust up. The
Dominos Pizza Turnaround campaign began with marketing research to understand what customers thought and
wanted. Industry research showed that although Dominos was tops in service, convenience, and value for the
money, it trailed far behind competitors in taste. To gain deeper insights into what consumers really thought,
Dominos turned to research using social media channels and focus groups. Rather than hiding from these stinging
results or waving them off, Dominos executives fessed up to the problems and faced them head on. The company
began by completely reinventing its pizza recipes, and customers seemed to like it. To announce the changes and to
turn around customer opinions, Dominos launched a daring $75 million Pizza Turnaround promotion campaign.
The startlingly honest campaign was fully integrated into the brands Facebook and Twitter pages, where the
company posted all the bad along with the good and asked for continuing feedback. Since the Pizza Turnaround
campaign began, Dominos has seen revenues increase by 21 percent and profits increase by 31 percent, even as the
pizza-delivery industry and restaurants in general of struggled. The lesson for marketers is that talking to customers,
hearing what they have to say, and acting on the resulting insights can pay big dividends.
Discussion Objective
A focused 10-minute discussion of the Dominos Pizza Turnaround story will reveal just how far corporations can
sometimes stray from the needs and opinions and needs of their customers. The chapter-opening Dominos story
underscores the importance of recognizing ones problems, gaining customer insights (even when it is painful), and
then taking bold steps to re-invent a product. This discussion should also illustrate how Dominos effectively used
social media to research and monitor customer opinions, and then use those opinions as the basis for their entire
marketing campaign to promote The Pizza Turnaround.
Discussion Questions
1. How is it possible that a large and successful corporation such as Dominos drifted so far from what its
customers thought about them and how their pizzas tasted? (Consider how companies can weaken their
market position and lose their competitive edge when they fail to conduct continual market research,
revisiting customer preferences, checking out the competition, and double-checking their assumptions. It is
CHAPTER OVERVIEW
Use Power Point Slide 4-1 Here
This chapter looks at how companies develop and manage information about important market-
place elements. This chapter is an examination of marketing information systems designed to
assess the firms marketing information needs, develop the needed information, and help
managers to use the information to gain actionable customer, and market insights.
CHAPTER OBJECTIVES
Use Power Point Slide 4-2 Here
1 Explain the importance of information in gaining insights about the marketplace and
customers.
2 Define the marketing information system and discuss its parts.
3 Outline the steps in the marketing research process.
4 Explain how companies analyze and use marketing information.
5 Discuss the special issues some marketing researchers face, including public policy and
ethics issues.
CHAPTER OUTLINE
p. 100 INTRODUCTION
After five years of stagnant or declining revenues, Dominos
Pizza asked its customers for honest feedback and reinvented p. 101
its product. Photo: Dominos
To gain deeper insights into what consumers really thought,
p. 104
PPT 4-9 DEVELOPING MARKETING INFORMATION
Internal Data
PPT 4-10 p. 104
Internal databases are electronic collections of consumer Key Term: Internal
and market information obtained from data sources within Databases
the company network.
PPT 4-13 The marketing research process has four steps (see Figure
Assignments, Resources
Use Discussion Question 3 here
Use Critical Thinking Exercise 2 here
Use Additional Projects 1 here
Use Outside Example 1 here
Troubleshooting Tip
Although todays students have grown up with
computers, the idea of an information system may
be very new to them. They typically will not have
had to do any research, and any jobs theyve held to
this point in their lives will most likely have entailed
very basic, entry-level type work. To get them past
this, you could talk about the type of information the
university will hold on each studenttheir major, the
courses theyve taken, the grades theyve gotten, their
current address, their home address, their parents
names, whether they are paying full tuition or are on
any kind of scholarship, what high school they
attended and their grade point average there, what
sports they play or activities they participate in, and
so forth. Then talk about how the university might
use that information to understand their current
student population to help them figure out how to
target future students while they are still in high
school. This should help them grasp how data gets
turned into information, and from that point to
knowledge.
Disadvantages:
Disadvantages:
Assignments, Resources
Use Real Marketing 4.1 here
Use Discussion Question 4 here
Use Critical Thinking Exercise 1 here
Use Additional Projects 2, 3, and 4 here
Use Individual Assignments 2 here
PPT 4-30 Closed- end questions include all the possible answers, and
subjects make choices among them.
Assignments, Resources
Assignments, Resources
Use Discussion Question 5 here
Use Marketing Technology here
Use Small Group Assignment 1 here
Assignments, Resources
Use Real Marketing 4.2 here
Use Company Case here
1. What is a marketing information system and how is it used to create customer insights?
(AACSB: Communication)
Answer:
Answer:
3. Explain the role of secondary data in gaining customer insights. Where do marketers obtain
secondary data and what are the potential problems in using it? (AACSB: Communication)
Answer:
Secondary data consist of information that already exists somewhere, having been collected
for another purpose. Researchers usually start by gathering secondary data. The companys
internal database provides a good starting point. However, the company can also tap into a
wide assortment of external information sources, including commercial data services and
government sources (see Table 4.1). Companies can buy secondary data reports from outside
suppliers. Using commercial online databases, marketing researchers can conduct their
own searches of secondary data sources. Beyond commercial Web sites offering information
for a fee, almost every industry association, government agency, business publication, and
news medium offers free information to those tenacious enough to find their Web sites.
There are so many Web sites offering data that finding the right ones can become an almost
overwhelming task. Web search engines can also be a big help in locating relevant secondary
information sources.
Secondary data can present problems. The needed information may not existresearchers
can rarely obtain all the data they need from secondary sources. Even when data can be
found, the information might not be very usable. The researcher must evaluate secondary
information carefully to make certain it is relevant (fits research project needs), accurate
(reliably collected and reported), current (up-to-date enough for current decisions), and
impartial (objectively collected and reported).
4. What are the advantages of Internet-based survey research over traditional survey research?
(AACSB: Communication)
Answer:
Internet-based survey research offers some real advantages over traditional phone and mail
approaches. The most obvious advantages are speed and low costs. By going online,
researchers can quickly and easily distribute Internet surveys to thousands of respondents
simultaneously via e-mail or by posting them on selected Internet sites. Responses can be
almost instantaneous, and because respondents themselves enter the information, researchers
5. What is neuromarketing and how is it useful in marketing research? Why is this research
approach usually used with other approaches? (AACSB: Communication)
Answer:
Neuromarketing is a way to measure brain activity to learn how consumers feel and respond.
Marketing scientists using MRI scans and EEG devices have learned that tracking brain
electrical activity and blood flow can provide companies with insights into what turns
consumers on and off regarding their brands and marketing. Neuromarketing has been used
to test commercials, product designs, and packaging. Although neuromarketing techniques
can measure consumer involvement and emotional responses second by second, such brain
responses can be difficult to interpret. Thus, neuromarketing is usually used in combination
with other research approaches to gain a more complete picture of what goes on inside
consumers heads.
1. In a small group, identify a problem faced by a local business or charitable organization and
propose a research project addressing that problem. Develop a research proposal that
implements each step of the marketing research process. Discuss how the research results
will help the business or organization. (AACSB: Communication; Reflective Thinking)
Answer:
The marketing research process has four steps: (1) defining the problem and research
objectives, (2) developing the research plan, (3) implementing the research plan, and (4)
interpreting and reporting the findings. Defining the problem and research objectives is often
the hardest step in the research process. The manager may know that something is wrong,
without knowing the specific causes. After the problem has been defined carefully, the
manager and researcher must set the research objectives. A marketing research project might
have one of three types of objectives: exploratory research, descriptive research, or causal
research. The statement of the problem and research objectives guides the entire research
process. Once the research problems and objectives have been defined, researchers must
determine the exact information needed, develop a plan for gathering it efficiently, and
present the plan to management. The research plan outlines sources of existing data and
spells out the specific research approaches, contact methods, sampling plans, and instruments
Copyright 2014 Pearson Education
that researchers will use to gather new data. Research objectives must be translated into
specific information needs. To meet the managers information needs, the research plan can
call for gathering secondary data, primary data, or both. The researcher next puts the
marketing research plan into action. This involves collecting, processing, and analyzing the
information. Finally, the market researcher must now interpret the findings, draw
conclusions, and report them to management.
2. Want to earn a little extra cash? Businesses that use focus groups and surveys to make better
marketing decisions might pay for your participation. Visit www.FindFocusGroups.com and
review the opportunities available for research participation. Find two more Web sites that
recruit research participants. Write a brief report of what you found and discuss the pros and
cons to companies of recruiting research participants this way. (AACSB: Communication;
Use of IT; Reflective Thinking)
Answer:
Students responses will vary, but they should be able to find several sites offering research
opportunities. Other Web sites include www.surveyclub.com, www.2020Research.com, and
www.pineconeresearch.com. Many of these require a participant to set up a profile in the
database, and if their profile matches researchers needs, they are offered an opportunity to
participate. Some pay hundreds of dollars for participation. Many of the focus group
opportunities are in major metropolitan areas, such as Boston, Chicago, and Atlanta.
However, many of the opportunities are online, even for focus groups, which means
researchers can gain access to a nationwide sample. One disadvantage of paying respondents
to participate is the potential for professional participants who participate in many studies
only for the compensation.
In 1996, Marks & Spencer (M&S), the venerable British retailer, launched lunchtogoan
online corporate catering service (see www.lunchtogo-e.com/). But M&S found it difficult to
develop long-term relationships with corporate customers due to high personnel turnover within
customer organizations, so it turned to EWA Bespoke Communications, a company that uses data
mining to tell you more about your customers. EWA used propensity modeling to develop a
critical lag formula, that identified customers whose last order fell outside of their expected
behavior. EWA then developed an automated system to send communications to customers who
have not reordered within the maximum allowed order lag determined by the formula. Whereas
most customers received e-mails, the system flagged M&Ss best corporate catering customers
that should receive more personalized phone calls because of their value and importance. EWA
also implemented information systems to improve the companys service. Knowing more about
its customers paid offwithin a short period of time, the EWA system generated more than 1
million, tripling the operations revenues, and delivered an almost perfect order accuracy rate.
1. Visit EWA Bespoke Communications at www.ewa.ltd.uk/ to learn more about its Customer
Insight services and the types of analyses performed by this company. What is propensity
Copyright 2014 Pearson Education
modeling? Review other case studies from this Web site and write a brief report of how data
mining technology was used to gain customer insights. (AACSB: Communication; Use of
IT)
Answer:
Students responses will vary, but students should discuss the types of analyses performed in
addition to propensity modeling, such as data study and audit, cross-sell analysis, critical lag,
customers as assets (customer lifetime value), and impact assessment. Propensity modeling
statistically predicts future behavior based on past behavior, allowing companies to focus on
customers most likely to respond to marketing communications. All of the analysis
techniques are described at www.ewa.ltd.uk/services/customer-insight. Additional case
studies include Adidas, Nissan, Merial, TDA, Ford, Brintons Carpets, traveline, and Wilshire
Farm Foods.
2. Describe how other organizations can benefit from these types of data mining analyses. Find
examples of other companies that can offer such analysis to businesses. (AACSB:
Communication; Reflective Thinking)
Answer:
E-book sales have now surpassed print book sales, resulting in lower margins for all companies
in the publishing industry value chain. However, there is a silver lining to this trende-books
can read the readers. Publishers and e-book retailers are gathering billions of bits of information
from e-book readers. The publishing industry has been notorious for not conducting research,
leaving authors to lament that they didnt know who their readers were or what they wanted.
The only way to know if readers liked a book was from sales data after the fact. Not anymore.
Now companies know how many hours readers spend reading a book and how far they get when
they open it. Some publishers are even testing e-book manuscripts, revising them based on
feedback, and then publishing the print version. Scholastic Inc. has set up online message boards
and interactive games to learn what story lines and characters are connecting with readers.
Coliloquy digital books let readers choose their own stories, which the company then aggregates
and sends to the authors to shape future books. Amazon Kindle users sign an agreement giving
the company permission to store their reading behavior data, and the company then highlights
some of the data on its Web site. For example, the most highlighted passage in Catching Fire,
the second book of the popular Hunger Games series, is Because sometimes things happen to
people and theyre not equipped to deal with them.
Answer:
The main ethical issue is privacy. According to the Electronic Frontier Foundation (EFF),
there is no way for readers to tell publishers or retailers of e-books that they do not want their
reading behavior tracked. Some consumers may be concerned because they dont want
others to know what they are reading. For example, because of the erotic content of the
books, the popular Fifty Shades of Grey trilogy may not have been so popular if e-readers
were not available. California enacted the Reader Privacy Act, which places restrictions on
law enforcement groups access to consumers digital reading records. A court-order must be
obtained to access this data. While most data are aggregated and not personally-identifying,
most digital reading platforms have considerable demographic information about their
customers and share that information with publishers.
2. What would your textbook reading behavior data reveal to publishers? How would
marketing textbooks change based on your behavior? (AACSB: Communication; Reflective
Thinking)
Answer:
Students opinions will vary. Many will probably say they would like shorter chapters and
more interactive media in e-textbooks.
Have you ever been disappointed because a television network cancelled one of your favorite
television shows because of low ratings? The network didnt ask your opinion, did it? It
probably didnt ask any of your friends, either. Thats because estimates of television audience
sizes are based on research done by The Nielsen Company, which uses a sample of only 9,000
households out of the more than 113 million households in the United States to determine
national ratings for television programs. That doesnt seem like enough, does it? As it turns out,
statistically, its many more than enough.
Answer:
The confidence interval is commonly called the margin of errorthe plus or minus figure
that is usually reported with polling data. The confidence level indicates how sure one can be
with the results. Thus, a 95% confidence level means one can be 95% sure that the response
lies within the confidence interval, and a 99% confidence interval means 99% certain. Thats
why the required sample size was larger at the higher confidence level.
2. What sample sizes are necessary at population sizes of 1 billion, 10,000, and 100 with a
confidence interval of 5 and a 95-percent confidence level? Explain the effect population
size has on sample size. (AACSB: Communication; Use of IT; Analytical Reasoning)
Answer:
1 billion = 384
10,000 = 370
100 = 80
Population size only matters when dealing with a relatively small population. When the
population is approximately 250,000 or more, the required sample size is 384. An important
factor, however, is the representativeness of the sample. Truly random samples do not have
to be large.
Synopsis
Meredith Corporation was started by E.T. Meredith in 1902 with a single publication, Successful
Farming, a publication that is still available today. Now, the company publishes 21 subscription
magazines and over 150 special interest publications. But Meredith also owns television stations
and 50 Web sites.
But Merediths strength as a company is not rooted in its products. It is rooted in its expertise on
managing marketing information. Specifically, Meredith has a massive database that allows it to
intimately know women. Meredith knows them as a group, and as individuals. With 85 million
individuals in its database, it has an average of over 700 unique pieces of information on each.
This case shows how Meredith manages information in a way that allows them to deliver
product, pricing, distribution, and promotional strategies in a way that truly appeal to individuals.
It also outlines how Meredith is moving from a largely print media publisher to other growth
media by employing its information management expertise.
Discussion Questions
1. Analyze Merediths marketing information system. What are its strengths and
weaknesses?
For this, students should refer to Figure 4.1, The Marketing Information System. The
case gives little information with respect to assessing information needs. However, we
can make some pretty sound assumptions based on its information system. We might
assume that Meredith is also expert at keeping its database and analytics up-to-date by
assessing the need for new information.
In the developing needed information section, it is clear that Meredith has not only a
strength, but a core competency in its internal database. That is, Merediths database is a
valuable asset that gives it a competitive advantage over other publishers as well as
providing it with a revenue stream as a seller of marketing research and analytics. We
know little with respect to Merediths efforts in the area of marketing intelligence. The
case mentions some things about marketing research, but even that is limited.
Meredith has a huge strength in analyzing and using information as well. Its passion
points system is based on 20 predictive analytical models that are scored and ranked
every week. That is a powerful analytical system that uses the information in the
database on a consistent and ongoing basis. When it comes to using the information, the
case describes how the analytical outcomes help to come up with new product ideas.
That information also directs the type of promotional material that women see. Women
are targeted based on their interests. And because Meredith has such a large portfolio of
womens magazines, Meredith can keep a customer by graduating them from one title to
another as their life stages change.
One potential weakness of Merediths system is that even though it has an incredible
system, it is limited by the box that is created by the parameters set. In other words, it
knows women based on the information collected. This is the problem with a lot of
marketing research. Companies may be very efficient at collecting and analyzing
information. But what if they arent asking the right questions? The outcome of
information is limited by the nature of the information collected. We dont have a lot of
One example of this is how heavily dependent Meredith is on middle-aged and older
women. A glimpse at all the titles Meredith has reveals that they have almost nothing that
appeals to tweens, teens, and young adults today. If they dont bring those girls in, their
customer base will age and disappear. If all the information that they are gathering is
based on current customers, then they are missing a key set of data that would allow
them to cater to a new set of customers.
But the good news for companies like Meredith is they dont have to. Customer-brand
relationships arent exactly the same as interpersonal relationships. Companies only
need to replicate some of those relationship characteristics. And in that respect, data
points can absolutely serve as the foundation for forming meaningful company-customer
relationships. In the old days, the company-customer relationship was based more on the
proprietor of a business. People formed relationships with a business based on the
relationship with the person who ran the butcher shop, the insurance agency, or the
bookstore. Today, the more successful businesses are those who can employ technology in
a way that they can automate the collection, and processing of information in a way that
the outcomes executed are personal to individuals. Netflix, Amazon, and Zappos are all
great examples of companies that process massive amounts of information on individual
customers in a way that provides a very custom customer experience.
3. Does Merediths marketing information expertise transfer into other media and products?
Absolutely. The concept of understanding needs and wants of market segments and
individuals is not bound to a particular medium. However, refer to the comments made
for question 1. If the nature of the information is media-specific, then it is limited to that
context. One thing that Meredith gathers and manages is information about which kinds
of magazines women subscribe to as well as how they respond to different offers for
subscriptions. That is print media information that has little bearing on other media. But,
that is only one kind of information that Meredith gathers. They clearly gather
information on life stages and personal interests. Thats the kind of information that
transfers.
4. As a company still heavily rooted in print, what does Merediths future hold? Gloom and
doom? Or future success? The bottom line is, Meredith is still a magazine company. The
Additionally, even with really successful websites, the revenue models are not there. This
is the same thing that most Web companies have struggled with. Even Facebook is just
now coming in to profitability. You can have all the Web traffic in the universe, but there
must be a way to make money off that traffic. The advertising model alone for Websites
has not produced the kind of revenues that more traditional media (TV, radio, print) have.
Another recommendation would be to consider products that are not based on the
distribution of content. Most magazines have turned websites into an online version of
the magazine, something that is heavily rooted in the content itself. Can Meredith
transition into other types of products that still draw from its knowledge of women?
Teaching Suggestions
This is an interesting case because most college students have little interest in the magazines that
Meredith publishes. Care must be taken to challenge them to get in to analyzing the case of an
old company from an old industry and moving it in to the next century. Students have the
perspective of what they want and what they think will succeed in coming decades. After having
students work on questions individually, have students get into groups to develop a set of
recommendations as per question 5.
This case also works well with the creating customer value chapter (Chapter 1) and the consumer
behavior chapter (Chapter 5).
1. Secondary data consists of information that already exists, having been collected for another
purpose. What are some secondary data sources you might take a look at if you were helping
your college or university develop a recruitment strategy? (Objective 3)
2. Observational research involves gathering primary data by observing people. Do you see any
potential ethical conflicts with its use? (Objective 5)
1. Form students into groups of three to five. Each group should read the opening vignette to
the chapter on Dominos. Each group should answer the following questions. (Objective 3)
In this case, how did Dominos approach to marketing research differ from that of a
traditional corporation?
Discuss the key social media tools that Dominos utilized in researching customer
insights. What other tools would you have used, and how would you use them?
How has the Dominos Pizza Turnaround played out among your friends and
roommates? Do you believe the new pizza is vastly improved over the old recipe?
Why or why not?
What are some other possible advertising themes you might develop based on
Dominos discoveries regarding the taste and quality of its pizza?
2. Form students into groups of three to five. Develop a short questionnaire (seven questions)
designed to determine a respondents favorite social media site and the reason why.
(Objective 3)
Individual Assignments
1. Take a look at Apples Web site (www.apple.com). Examine the pages that discuss the
iPhone 4S. What customer insights do you believe Apple paid attention to in the redesign of
its famous mobile device? (Objective 1)
2. Construct two simple (5 question) surveys that examine students attitudes toward life at
your university. One survey should contain open-ended questions only and the other only
closed-ended questions. Be careful of your wording. Which of the two surveys do you
believe would provide the greatest depth of information? Why? (Objective 3)
Think-Pair-Share
Consider the following questions, formulate and answer, pair with the student on your right,
share your thoughts with one another, and respond to questions from the instructor.
1. What are the four steps of the marketing research process? (Objective 3)
1. Secondary data consist of information that already exists somewhere, having been collected
for another purpose. One of the main sources of secondary data is the U.S. Census. Take a
look at the 2010 Census (http://2010.census.gov/2010census/) Find data that is relevant to
your home state and/or community. How reliable or accurate do you believe that information
to be? (Objective 3)
Possible Solution:
The interesting point of this exercise is for students to realize just how dated and unreliable
much of the secondary data we use to make decisions may be. Although the information
contained in this census was gathered in 2010, much of it will quickly change their individual
home states/communities. This can be an eye-opening activity.
2. Using observational research, gather data on your roommates eating habits. What do your
findings tell you? More importantly, what do your findings NOT tell you about his/her eating
habits? (Objective 3)
Possible Solution:
Students will come up with a variety of observations. What is important is to pay attention to
what the students believe they are discovering about their roommates eating habits. They
will be able to discover WHAT those habits are; however, they cannot determine the driving
force or motivation behind those habits.
Web Resources
1. http://247.prenhall.com
This is the link to the Prentice Hall support link.
2. www.dominos.com
Go to this Web site to learn more about the company and the campaign described at the
beginning of this chapter.
3. www.radian6.com
This Web site describes how Radian6 software is used to track important consumer trends.
4. www.redbull.com
Discover how Red Bull develops new beverage lines based on consumer insights on their
site.
6. www.dunkindonuts.com
Check out this Web site and discover the many social media vehicles Dunkin Donuts uses to
gather information from its consumers.
7. www.apple.com
This is Apples Web home and it provides you with a wealth of information.