Chapter 4: Managing Marketing Information to Gain Customer Insights Flashcards
To create value for customers and build meaningful relationships with them, marketers must first
gain fresh, deep insights into what customers need and want.
Big data
refers to the huge and complex data sets generated by today’s sophisticated information generation, collection, storage, and analysis technologies.
Big data analogy
“When it rains, you can’t just drink the water. It must be collected, purified, bottled, and delivered for consumption,” observes a data expert. “Big data works the same way. It’s a raw resource that is a few important steps away from being useful
Customer insights
Fresh marketing information based understandings of customers and the marketplace that became the basis for creating customer value, engagement, and relationships
customer insights teams
whose job it is to develop actionable insights from marketing information and work strategically with marketing decision makers to apply those insights
marketing information system (MIS)
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 marketing information system primarily serves
the company’s marketing and other managers. However, it may also provide information to external partners, such as suppliers, resellers, or marketing services agencies
Marketers can obtain the needed information from
internal data, marketing intelligence, and marketing research.
Internal databases
collections of consumer and market information obtained from data sources within the company’s network
Competitive marketing intelligence
the systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketplace
The goal of competitive marketing intelligence
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, online research, and real-time monitoring of social and mobile media.
Firms use competitive marketing intelligence
to gain early insights into competitor moves and strategies and to prepare quick responses.
The growing use of marketing intelligence also raises ethical issues.
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.
Marketing research
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 behaviour, and satisfaction. It can help them to assess market potential and market share or measure the effectiveness of pricing, product, distribution, and promotion activities.
In recent years, as a host of new digital data-gathering technologies have burst onto the scene,
traditional marketing research has undergone a major transformation
Traditional mainstays such as research surveys and focus groups, although still prevalent and powerful,
are now giving way to newer, more agile, more immediate, and less costly digital data-gathering methods.
just-in-time research
Today’s fast and agile decision making often calls for fast and agile marketing information and research
Is marketing research still important?
marketing research is still widely used and very important.
The traditional research approaches, although often more time-consuming and expensive,
can allow for deeper, more focused probing, especially into the whys and wherefores of consumer attitudes and behaviour.
The key for marketers is to blend the traditional and new approaches into a unified marketing information system that yields agile but deep and complete marketing information and insights.
New digital approaches can provide immediate and affordable access to real-time data on the wants, whens, wheres, and hows of consumer buying activities and responses.
The marketing research process has four steps
1) defining the problem and research objectives,
2) developing the research plan,
3) implementing the research plan,
4) and interpreting and reporting the findings.
Hardest part of researching process
Defining the problem and research objectives is often the hardest step in the research process.
A marketing research project might have one of three types of objectives
1) exploratory research
2) descriptive research
3) causal research
1) exploratory research
Objective: gather preliminary information that will help define the problem and suggest hypotheses.
2) descriptive research
Objective: is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product.
3) causal research
Objective: to test hypotheses about cause-and-effect relationships. For example, would a 10 percent decrease in tuition at a private college result in an enrolment increase sufficient to offset the reduced tuition?
Managers often start with _____ research and later follow with _______ or _______ research.
exploratory
causal or descriptive
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.
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.
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.
Researchers usually start by gathering _____ data
secondary
The company’s internal database provides a good starting point.
Secondary data sources
1) commercial online databases
2) Internet search engines
3)
Benefits of secondary data
- can usually be obtained more quickly and at a lower cost than primary data
- 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 problems
- Researchers can rarely obtain all the data they need from secondary sources
- 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).
designing a plan for primary data collection calls for decisions on
1) research approaches,
2) contact methods,
3) the sampling plan,
4) research instruments
Research approaches for gathering primary data include
1) observation,
2) surveys,
3) experiments
1) observational research
involves gathering primary data by observing relevant people, actions, and situations
For example, Petro-Canada might evaluate possible new gas station locations by checking traffic patterns, neighborhood conditions
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
2) survey research
- most widely used method for primary data collection
- best suited for gathering descriptive information
- conducted by phone or mail, online, or in person.
3) Experimental Research
Experiments involve selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses.
best suited for gathering causal information.
Cause-and-effect relationships.
Contact Methods
Information can be collected by mail, by telephone, by personal interview, or online. Each contact method has its own particular strengths and weaknesses.
Mail questionnaires
- can be used to collect large amounts of information at a low cost per respondent
- Respondents may give more honest answers on a mail questionnaire than to an unknown interviewer in person or over the phone
- no interviewer is involved to bias respondents’ answers
- not very flexible; all respondents answer the same questions in a fixed order
Telephone interviewing
- can be used by gather 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.
- the cost per respondent is higher than with mail, online, or mobile questionnaires.
- people may not want to discuss personal questions with an interviewer
declined in recent years
Personal interviewing takes two forms
1) individual interviewing
2) group interviewing
1) individual interviewing
- involves talking with people in their homes or offices, on the street, or in shopping malls.
- interviewing is flexible
- Trained interviewers can guide interviews, explain difficult questions, and explore issues as the situation requires
- individual personal interviews may cost three to four times as much as telephone interviews.
Focus Group Interviewing
- consists of inviting small groups of 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 deeper feelings and thoughts
- one of the major qualitative marketing research tools for gaining fresh insights into consumer thoughts and feelings
- consumers in focus groups are not always open and honest about their real feelings, behavior’s, and intentions in front of other people.
online marketing research
internet and mobile surveys, online focus groups, consumer tracking, experiments, and online panels and brand communities.
online focus groups
Focus group but online
behavioural targeting
marketers use the online data to target ads and offers to specific consumers. Even further, they use social targeting, mining individual online social networking activity for the purpose of target ads and marketing efforts.
sample
a segment of the population selected for marketing research to represent the population as a whole
Designing the sample requires three decisions
1) Who (is to be studied)
2) How many (people should be included)
3) How (should people be chosen)
probability samples,
each population member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error
Nonprobability Sample
Convenience sample
Judgment sample
Quota sample
Probability Sample
Simple random sample
Stratified random sample
Cluster (area) sample
In collecting primary data, marketing researchers have a choice of two main research instruments:
questionnaires and mechanical devices
Questionnaires
-most common instrument,
-very flexible
-Closed-ended questions include all the possible answers, and subjects make choices among them(MC)
-Open-ended questions allow respondents to answer in their own words
-should use simple, direct, and unbiased wording
-
Mechanical Instruments
-mechanical instruments to monitor consumer behavior
-neuromarketing (EEG and MRI)
-biometric measures
-
-
-
Information gathered from internal databases, competitive marketing intelligence, and marketing research usually
requires additional analysis
Customer Relationship Management (CRM)
Building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
CRM integrates everything that a company’s sales, service, and marketing teams know about individual customers, providing a 360-degree view of the customer relationship
smart companies capture information at every possible customer touch point.
These touch points include customer purchases, sales force contacts, service and support calls, web and social media site visits, satisfaction surveys, credit and payment interactions, market research studies—every contact between a customer and a company.
Marketing analytics
consists of the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance.
artificial intelligence (AI)
technology by which machines think and learn in a way that looks and feels human but with a lot more analytical capacity.
Marketing Research in Small Businesses and Nonprofit Organizations
They too need market information and the customer insights that it can provide
Small businesses can obtain much useful market and customer insight without spending a lot of money
can obtain good marketing insights through observation, secondary data searches, or informal surveys using small convenience samples
many associations, local media, and government agencies provide special help to small organizations
International Marketing Research
follow the same steps as domestic researchers, from defining the research problem and developing a research plan to interpreting and reporting the results
international researchers deal with diverse markets in many different countries
In many foreign markets, the international researcher may have a tough time finding good secondary data
Must conduct primary data, but such information is largely lacking in many countries.
Questionnaires must be prepared in one language and then translated into the languages of each country researched
Public Policy and Ethics in Marketing Research
the misuse of marketing research can also harm or annoy consumers
Two major public-policy and ethics issues in marketing research are
1) intrusions on consumer privacy
2) the misuse of research findings.
Misuse of Research Findings
Recognizing that marketing research can be abused, several associations—including the Canadian Marketing Association, the American Marketing Association, the Marketing Research Association, and the Council of American Survey Research Organizations (CASRO)—have developed codes of research ethics and standards of conduct
