Topic 3: The role of marketing information Flashcards
What is big data?
Big Data refers to the huge and complex data sets generated by today’s sophisticated information generation, collection, storage, and analysis technologies.
What are consumer insights?
These are fresh marketing information-based understandings of customers and the marketplace that become the basis for creating customer value, engagement, and relationships.
What is a marketing information system (MIS)?
A marketing information system consists of people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate and validate actionable customer and market insights.
The MIS begins and ends with information users – marketing managers, internal and external partners, and others who need marketing information. First, it interacts with these information users to assess information needs. Next, it interacts with the marketing environment to develop needed information through internal company databases, marketing intelligence activities, and marketing research. Finally, the MIS helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships.
A good MIS balances the information users would like to have against what they really need and what is feasible to offer.
Where can marketers obtain the needed information?
Marketers can obtain the needed information from internal data, marketing intelligence, and marketing research.
What are internal databases?
These are collections of consumer and market information obtained from data sources within the company network. Information in an internal database can come from many sources. The marketing department furnishes information on customer characteristics, in-store and online sales transactions, and Web and social media site visits. The customer service department keeps records of customer satisfaction or service problems. The accounting department provides detailed records of sales, costs, and cash flows. Operations reports on production, shipments, and inventories. The sales force reports on reseller reactions and competitor activities, and marketing channel partners provide data on sales transactions. Harnessing such information can provide powerful customer insights and competitive advantage.
Internal databases usually can be accessed more quickly and cheaply than other information sources, but they also present some problems. Because internal information is often collected for other purposes, it may be incomplete or in the wrong form for making marketing decisions. Data also ages quickly; keeping the database current requires a major effort. Finally, managing the mountains of information that a large company produces requires highly sophisticated equipment and techniques.
What is competitive marketing intelligence?
Competitive marketing intelligence is the systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketplace. The goal of competitive marketing intelligence is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors’ actions, and providing early warnings of opportunities and threats. Marketing intelligence techniques range from observing consumers firsthand to quizzing the company’s own employees, benchmarking competitors’ products, researching on the Internet, and monitoring social media buzz.
Good marketing intelligence can help marketers gain insights into how consumers talk about and engage with their brands. Many companies send out teams of trained observers to mix and mingle personally with customers as they use and talk about the company’s products. Other companies have set up sophisticated digital command centers that routinely monitor brand-related online consumer and marketplace activity.
Companies also need to actively monitor competitors’ activities. They can monitor competitors’ Web and social media sites.
Companies can use the Internet to search specific competitor names, events, or trends and see what turns up. And tracking consumer conversations about competing brands is often as revealing as tracking conversations about the company’s own brands.
Firms use competitive marketing intelligence to gain early insights into competitor moves and strategies and to prepare quick competitive responses. Much competitor intelligence can be collected from people inside the company – executives, engineers and scientists, purchasing agents, and the sales force. The company can also obtain important intelligence information from suppliers, resellers, and key customers. Intelligence seekers can also pour through any of thousands of online databases.
The intelligence game goes both ways. Facing determined competitive marketing intelligence efforts by competitors, most companies take steps to protect their own information. The growing use of marketing intelligence also raises ethical issues. Some intelligence-gathering techniques may involve questionable ethics. Clearly, companies should take advantage of publicly available information. However, they should not stoop to snoop. With all the legitimate intelligence sources now available, a company does not need to break the law or accepted codes of ethics to get good intelligence.
What is marketing research?
Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. Companies use marketing research in a wide variety of situations. For example, marketing research gives marketers insights into customer motivations, purchase behavior, and satisfaction. It can help them to assess market potential and market share or measure the effectiveness of pricing, product, distribution, and promotion activities.
What are the four steps in the marketing research process?
- Defining the problem and research objectives.
- Developing the research plan.
- Implementing the research plan
- Interpreting and reporting the findings.
What are the three types of objectives that a marketing research project might have?
- Exploratory research: Marketing research to gather preliminary information that will help define problems and suggest hypotheses.
- Descriptive research: Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers.
- Causal research: Marketing research to test hypotheses about cause-and-effect relationships.
What does the research plan outline?
The research plan outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data. Research objectives must be translated into specific information needs.
The research plan should be presented in a written proposal. A written proposal is especially important when the research project is large and complex or when an outside firm carries it out. The proposal should cover the management problems addressed, the research objectives, the information to be obtained, and how the results will help management’s decision making. The proposal also should include estimated research costs.
To meet the manager’s information needs, the research plan can call for gathering secondary data, primary data, or both. Secondary data consist of information that already exists somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand.
What are some sources of external information for researchers?
- Company’s internal database.
- Buying secondary data from outside suppliers.
- Using commercial online databases.
- Internet seaarch engines.
Secondary data can usually be obtained more quickly and at a lower cost than primary data. Also, secondary sources can sometimes provide data an individual company cannot collect on its own – information that either is not directly available or would be too expensive to collect.
Secondary data can also present problems. Researchers 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 the research project’s needs), accurate (reliably collected and reported), current (up-to-date enough for current decisions), and impartial (objectively collected and reported).
What are the decisions to be made when designing a plan for primary data collection?
- Research approaches
- Contact methods
- Sapling plan
- Research instruments
What are the research approaches for collecting primary data?
Research approaches for gathering primary data include observation, surveys, and experiments.
- Observational research involves gathering primary data by observing relevant people, actions, and situations. Researchers often observe consumer behavior to glean customer insights they can’t obtain by simply asking customers questions. Marketers not only observe what consumers do but also observe what consumers are saying. Marketers now routinely listen in on consumer conversations on blogs, social networks, and Web sites. Observing such naturally occurring feedback can provide inputs that simply can’t be gained through more structured and formal research approaches. A wide range of companies now use ethnographic research. Ethnographic research involves sending observers to watch and interact with consumers in their “natural environments.” The observers might be trained anthropologists and psychologists or company researchers and managers. Beyond conducting ethnographic research in physical consumer environments, many companies now routinely conduct Netnography research – observing consumers in a natural context on the Internet and mobile space. Observing people as they interact and move about in the online world can provide useful insights into both online and offline buying motives and behavior. And observing people’s shopping patterns by tracking their mobile movement, both within and between stores, can provide retailers with valuable marketing information.
Observational and ethnographic research often yield the kinds of details that just don’t emerge from traditional research questionnaires or focus groups. Whereas traditional quantitative research approaches seek to test known hypotheses and obtain answers to well-defined product or strategy questions, observational research can generate fresh customer and market insights that people are unwilling or unable to provide. It provides a window into customers’ unconscious actions and unexpressed needs and feelings.
In contrast, however, some things simply cannot be observed, such as attitudes, motives, or private behavior. Long-term or infrequent behavior is also difficult to observe. Finally, observations can be very difficult to interpret. Because of these limitations, researchers often use observation along with other data collection methods.
- Survey reseach is the process of gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior. The major advantage of survey research is its flexibility; it can be used to obtain many different kinds of information in many different situations. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, in person, or online.
However, survey research also presents some problems. Sometimes people are unable to answer survey questions because they cannot remember or have never thought about what they do and why they do it. People may be unwilling to respond to unknown interviewers or about things they consider private. Respondents may answer survey questions even when they do not know the answer just to appear smarter or more informed. Or they may try to help the interviewer by giving pleasing answers. Finally, busy people may not take the time, or they might resent the intrusion into their privacy.
- Experimental research is the process of gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses. It is best suited for gathering causal information.
What are the contact methods that can be used to collect information?
- Mail:
Mail questionnaires can be used to collect large amounts of information at a low cost per respondent. Respondents may give more honest answers to more personal questions on a mail questionnaire than to an unknown interviewer in person or over the phone. Also, no interviewer is involved to bias respondents’ answers.
However, mail questionnaires are not very flexible; all respondents answer the same questions in a fixed order. Mail surveys usually take longer to complete, and the response rate – the number of people returning completed questionnaires – is often very low. Finally, the researcher often has little control over the mail questionnaire sample. Even with a good mailing list, it is hard to control who at a particular address fills out the questionnaire. As a result of the shortcomings, more and more marketers are now shifting to faster, more flexible, and lower-cost e-mail, online, and mobile phone surveys.
- Telephone:
Telephone interviewing is one of the best methods for gathering information quickly, and it provides greater flexibility than mail questionnaires. Interviewers can explain difficult questions and, depending on the answers they receive, skip some questions or probe on others. Response rates tend to be higher than with mail questionnaires, and interviewers can ask to speak to respondents with the desired characteristics or even by name.
However, with telephone interviewing, the cost per respondent is higher than with mail, online, or mobile questionnaires. Also, people may not want to discuss personal questions with an interviewer. The method introduces interviewer bias – the way interviewers talk, how they ask questions, and other differences that may affect respondents’ answers. Finally, in this age of do-not-call lists and promotion-harassed consumers, potential survey respondents are increasingly hanging up on telephone interviewers rather than talking with them.
- Personal:
takes two forms: individual interviewing and group interviewing. Individual interviewing involves talking with people in their homes or offices, on the street, or in shopping malls. Such interviewing is flexible. Trained interviewers can guide interviews, explain difficult questions, and explore issues as the situation requires. They can show subjects actual products, packages, advertisements, or videos and observe reactions and behavior. However, individual personal interviews may cost three to four times as much as telephone interviews.
Group interviewing consists of inviting 6 to 10 people to meet with a trained moderator to talk about a product, service, or organization. Participants normally are paid a small sum for attending. A moderator encourages free and easy discussion, hoping that group interactions will bring out actual feelings and thoughts. At the same time, the moderator “focuses” the discussion – hence the name focus group interviewing.
However, focus group studies present some challenges. They usually employ small samples to keep time and costs down, and it may be hard to generalize from the results. Moreover, consumers in focus groups are not always open and honest about their real feelings, behavior, and intentions in front of other people.
To overcome these problems, many researchers are tinkering with the focus group design. Some companies use immersion groups – small groups of consumers who interact directly and informally with product designers without a focus group moderator present. Other researchers are changing the environments in which they conduct focus groups to help consumers relax and elicit more authentic responses.
- Online: Online marketing research is the process of collecting primary data online through Internet surveys, online focus groups, Web-based experiments, or tracking of consumers’ online behavior.
Online research can take many forms. A company can use the Internet or mobile technology as a survey medium: It can include a questionnaire on its Web or social media sites or use e-mail or mobile devices to invite people to answer questions. It can create online panels that provide regular feedback or conduct live discussions or online focus groups. Researchers can also conduct online experiments. They can experiment with different prices, headlines, or product features on different Web or mobile sites or at different times to learn the relative effectiveness of their offers. They can set up virtual shopping environments and use them to test new products and marketing programs. Or a company can learn about the behavior of online customers by following their click streams as they visit the online site and move to other sites.
The Internet is especially well suited to quantitative research – for example, conducting marketing surveys and collecting data. Internet-based survey research offers many advantages over traditional phone, mail, and personal interviewing approaches. The most obvious advantages are speed and low costs.
Internet-based surveys also tend to be more interactive and engaging, easier to complete, and less intrusive than traditional phone or mail surveys. As a result, they usually garner higher response rates. The Internet is an excellent medium for reaching the hard-to-reach consumer – for example, the often-elusive teen, single, affluent, and well-educated audiences. It’s also good for reaching people who lead busy lives, from working mothers to on-the-go executives. Such people are well represented online, and they can respond in their own space and at their own convenience.
Just as marketing researchers have rushed to use the Internet for quantitative surveys and data collection, they are now also adopting qualitative Internet-based research approaches, such as online focus groups, blogs, and social networks. The Internet can provide a fast, low-cost way to gain qualitative customer insights. A primary qualitative Internet-based research approach is online focus groups. This is gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior. Such focus groups can be conducted in any language and viewed with simultaneous translation. They work well for bringing together people from different parts of the country or world at low cost. Researchers can view the sessions in real time from just about anywhere, eliminating travel, lodging, and facility costs. Finally, although online focus groups require some advance scheduling, results are almost immediate. Although growing rapidly, both quantitative and qualitative Internet-based research have some drawbacks. One major problem is controlling who’s in the online sample. Without seeing respondents, it’s difficult to know who they really are. To overcome such sample and context problems, many online research firms use opt-in communities and respondent panels. Alternatively, many companies are now developing their own custom social networks and using them to gain customer inputs and insights.
What is behavioral targeting?
This is a practice that uses online consumer tracking data to target advertisements and marketing offers to specific consumers.
What are the types of samples?
Probability sample and non-probability sample
