MARKETING RESEARCH AND MARKETING INFORMATION SYSTEMS

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MARKETING RESEARCH AND MARKETING INFORMATION
SYSTEMS

• Marketing Information Systems (MkIS)
• Primary vs. secondary data
• Advantages and disadvantages of each
• Marketing research tools

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Learning Objectives

• Appreciate the costs and benefits of research
• Appreciate the uses of both primary and secondary
  market research
• Appreciate the respective advantages and
  disadvantages of different primary research
  methods
• Develop an understanding of research method
  problems that can lead to misleading or incorrect
  conclusions.
• Understand the proper sequence of research
  activities.

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Marketing Research

• An investment to reduce uncertainty
• Can help guide decisions on
• Whether to enter
• Product characteristics
• Promotional strategy
• Positioning

• Must weigh costs and benefits of research
• Money
• Time spent
• No perfect methodtradeoffs between methods

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Marketing Information Systems (MkIS)

• Set of procedures and methods for regular
  collection and analysis of information for
  marketing decisions
• Databases (internal informatione.g., sales
  volumes)
• Market research
• Primary
• Secondary

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Data Mining

• Processing of vast amounts of data to find
  relationships between variablese.g.,
• Items frequently purchased together ? strategic
  adjacencies (items placed together in retail
  setting)
• Seasonal patterns in sales
• Customer segments

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Two Research Methods

• Secondary use of existing research already done
• Internal
• Information System contente.g., sales/order
  records
• External
• Government
• Consulting firms
• Newspaper and magazine articles
• Primary creation of specific studies to answer
  specific questions

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Market Research Sequence
Identify problem or opportunity
Plan research design and collect data
Collect data
Text, p. 169
Analyze data
Report and present results
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Primary Research Methods

• Surveys
• Experimentation
• Observation
• Focus groups
• In-depth interviews
• Projective techniques
• Physiological Measures
• Online research
• Scanner data
• Hybrid Methods

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Primary Research Methods

• Exploratory Methods
• Observation (can be more definitive with larger
  sample sizes and focus on specific behavior)
• In-depth interviews
• Focus groups
• Projective techniques

• Precision Methods (Conclusive)
• Experiments
• Surveys
• Panel
• Scanner data

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Surveys

• Forms
• Mail (self-administered, single time)
• Mail panel (self-administered, multiple surveys
  administered over time)
• Telephone (from central location)
• Mall Intercept
• Computer/Internet
• Planned questions
• Open-ended
• Closed-ended
• Need large sample sizes for precise conclusions

SURVEY COSTS USUALLY LOW
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Characteristics of Some Problematic Questions

• Difficult to answerrespondent may not have
  knowledge needed
• Amounts spent annually on specific product
  categories may not be known
• Sensitive (embarrassing)
• Two in onee.g., On a scale from 1 to 10, how
  fast and reliable are Microsoft programs?
• Leading questionsgiving the feeling of the
  desired response
• Do you agree that soft drinks with sugar are bad
  for you?
• Non-exhaustive question
• Non-mutually exclusive answers

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Continuum Questions

• Questions rating the degree of a characteristic
  (e.g., agreement or product usage) tend to be
  more effective than binary Yes/No questions
• E.g.,

5 4
3 2
1 Strongly Neither Strongly Agree
Agree Agree Nor
Disagree Disagree Disagree
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Some Areas Suited for Continuum Ratings

• Interest
• Purchase likelihood
• Satisfaction/ Dissatisfaction
• Brand loyalty
• Price sensitivity
• Knowledge
• Experience

• Involvement
• Decision control
• Frequency or level of use
• Awareness
• Information search
• Personality traits
• Variety seeking

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The Pentagon Declares War on Rush Limbaugh
Misleading Research

• Survey found that only 4.8 of listeners to the
  Armed Forces Radio Network wanted to listen to
  the biggest hawk there is.
• How could a survey be made to get these results?
• Being on the watch for misleading surveys.

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Experimentation

• Subjects in different groups treated differently
• E.g., for some, target product is given better
  shelf space
• E.g., some get coupon
• Can help isolate causes
• Subject is not biased by questionsdoes not know
  how others are treated

EXPERIMENT COSTS HIGH
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My Simulated Store
A shopper in the everyday low price condition
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Ashs Instant Coffee Study
GROCERY SHOPPING LIST Ground beef Potatoes Apples
Flour Sugar Laundry detergent Instant coffee 6
cups of yogurt Paper towels Bananas
GROCERY SHOPPING LIST Ground beef Potatoes Apples
Flour Sugar Laundry detergent Ground coffee 6
cups of yogurt Paper towels Bananas
Respondents were asked to describe their
impressions of a housewife based only on her
shopping list. These shopping lists differ only
on one item.
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Definition

• Confound The tendency of some phenomenon to be
  caused at least in part by some variable other
  than the one of interest.
• E.g., does having more toys cause children to be
  more intelligent?

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Confounds

• What is cause, what is effect, and what is
  coincidence?
• Correlation is not necessarily cause
• Lurking factors may be real cause of
• Does sitting in front of the room cause higher
  grades?
• Do vaccinations cause autism?
• Does Prozac cause suicide?
• Do fish-heavy diets cause stomach cancer?
• Does fraternity/sorority membership cause higher
  grades?

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Observation

• Looking at consumes in the fielde.g.,
• Searching for product category area
• Number of products inspected and time spent on
  each
• Apparent scrutiny of labels or other information
• Involvement of others
• Behavior under limiting circumstances (e.g., time
  constraints)

OBSERVATION COSTS LOW TO HIGH (DEPENDING ON
CODING AND ANALYSIS NEEDED)
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Taste Tests

• Not experiments unless
• Two or more groups of people are treated
  differently (e.g., get different food version) or
• The same person is being treated differently at
  separate times (e.g., half the participants
  receive new formulation, then current half the
  participants receive in the opposite order)
• Triangle Measure
• Each respondent is given three items One
  current, one new, and one duplicate of either old
  or new
• Asked to identify the one that is different and
  explain why

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Focus Groups

• Groups of 8-12 consumers assembled
• Start out talking generally about context of
  product
• Gradually focus in on actual product

Usually NOT the best approach. Should NOT be
chosen as default research method!
MOST APPROPRIATE AS EARLY STAGE METHOD
FOCUS GROUP COSTS HIGH (ESPECIALLY FOR THE
AMOUNT OF INFORMATION COLLECTED)
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REMINDER

• Focus groups are most useful for identifying
  issues that should be studied in more detail with
  more precise methods
• Due to the small sample size and social influence
  on individual responses, it is difficult to
  generalize much from focus groups

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In-depth interviews

• Structured vs. unstructured interviews
• Generalizing to other consumers
• Biases
• Subtle, inadvertent feedback

IN-DEPTH INTERVIEW COSTS HIGH
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Projective Techniques

• Getting at motivations that may not be
  consciously known Tell a story about this
  picture.
• Measurement of attitudes consumers are unwilling
  to express
• It is easier to admit something embarrassing
  about someone else
• Consumer discusses what other consumer might
  think, feel, or do

PROJECTIVE METHODS COSTS USUALLY HIGH IF
PERSONAL INTERVIEWS OR EXTENSIVEINTERPRETATION
IS NEEDED
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Projective Examples
Please tell me a story of what is going on in
this picture.
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More Projective Examples
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Projective Techniques--Examples
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Physiological Measures

• Consumer bodily responses are watched at various
  phases of advertisement or other marketing
  exposure

• Tracking of
• Eye movements
• For areas of focus
• For attention, involvement
• Heart rate
• Skin conductivity
• Brain waves
• State of mind
• Attention

PHYSIOLOGICAL METHODS COSTS HIGH
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Online ResearchAnalysis of Customer Search
Queries

• Unmet demandsearch for product not found on site
• Message comprehensioncomparison of search terms
  to media message
• Consumer vocabulary
• Feedback analysis

ONLINE SURVEY COSTS USUALLY LOW
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Online Surveys

• Conditional branchingdirect skip to relevant
  question
• Quality of response
• Time pressures
• Willingness to write out answers or respond to
  multiple closed-ended questions
• Willingness to read and follow instructions is
  limited
• Reliability and browser compatibility issues

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Conditional Branching

• Traditional surveys Have you bought a new car
  during the last six months? If not, please skip
  to Question 11.
• Conditional branching Respondent will be taken
  to the appropriate question according to answer
• Customization of questions
• E.g., consumer lists three brands ? subsequent
  questions ask about these specific brands by name

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Other Online Tools

• Click Stream Analysis Analysis of clicking
  pathhow does the consumer get to a desired page
  or product?
• Shopping cart analysis

COSTS HIGH START-UP COSTS LOW VARIABLE COSTS
POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW
COSTS HIGH START-UP COSTS LOW VARIABLE COSTS
POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW
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Searching for Reports of Personal Experience

• Sources
• Blogs (blogsearch.google.com)
• Photos (e.g., Flickr, Webshots, Picasaweb, Google
  image search)
• Video (e.g., Youtube)
• Cautions
• May be staged or sensationalized
• May represent what the writer or photographer
  wants to show
• May be limited entries on certain mundane tasks
  such as dishwashing

• Some issues
• Joy, enjoyment
• Decisions
• Anxiety
• Social setting and influence

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Online Market Research Concerns

• Representativeness of
• Populationare relevant groups reached in desired
  proportions?
• Sampleeven if the desired population is reached,
  do respondents respond in desired proportions?
• Willingness of participants to follow
  instructions
• Timing of survey participation requests
• Panel recruitment
• Privacy

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Scanner Data

• Panel members in test communities agree to
• Swipe a card prior to each purchase
• Have purchases matched to
• Demographic profiles
• Media/coupon exposure
• Promotional status of competing brands
• Past purchases
• Problems
• Aggregation over household
• Aggregation bias--averages of disparate segments
  obscure!
• Only available for grocery and some drugstore
  products

COSTS HIGH START-UP COSTS LOW VARIABLE COSTS
POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW
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Scanner Data Research
Purchase on occasion Yes, no Time since
previous purchase Previous purchases Current
price Previous price Current promotional
status Previous promotional status Current
display status Previous display status Display
status of competing brands Promotional status of
competing brands Coupon used Yes, no Coupon
available Yes, no Coupon available for other
brands? Yes, no Amount of coupon
No. of ads seen by shopper Ads seen for competing
brands Split cable
RECORDED PURCHASES
TELEVISION EXPOSURE
HOUSEHOLD FILE
DEMOGRAPHIC INFORMATION
ANALYSIS
Family size Occupation Family size Income Home
ownership
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Hybrid Studies

• Some studies do not fall neatly into one category
  or may consist of a combination
• E.g., a series of questionnaires in which
  respondents are given different information/
  presentations becomes an experiment

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Research Sequencing

• More than one research method may be needed
• Exploratory studiese.g., focus groupsshould be
  done BEFORE precision approaches such as surveys.
• Parallel Studies can be done at the same time
  if needed
• E.g., need to know both attitude toward brand
  (questionnaire) and brand switching propensity
  (scanner data)
• Follow-up One study is needed to address issues
  raised in a previous one

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Follow-Up Studies

• Normally, more general methods (e.g., focus
  groups) should be used first
• E.g., identify issues of concern
• Subsequent studies can use more precise, less
  flexible methods
• E.g., questionnaire, scanner data, physiological
  measures, or experiments to follow up on issues
  raised in early focus group

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REMINDER

• If focus groups should be used at all, they
  should usually be used EARLY in the research
  processNOT after more precise methods are used.