Consumer+Psychology+Individual+Assignment REFLECTIVE PAPER

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Unit7Slides-Marketplace.ppt

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Unit 7

Understanding the Marketplace and Consumers

Unit 7: Learning Objectives

Explain the importance of information in gaining insights about the marketplace and customers.

Define the marketing information system and discuss its parts.

Outline the steps in the marketing research process.

Explain how companies analyze and use marketing information.

Discuss the special issues some marketing researchers face, including public policy and ethics issues.

Outlines learning objectives from this chapter.

Marketing Information
and Customer Insights

Customer Insights:

Understanding of customers and the marketplace

Basis for creating customer value and relationships

Develop competitive advantage
Insights stem from many sources
(Internal database, Market Intelligence, Marketing Research)

Data Collection and Analysis

LO 1: Explain the importance of information in gaining insights about the marketplace and customers.

- Customer insight teams are replacing traditional market research departments

Marketing Information System

Marketing Information System (MIS): consists of people and procedures which:

Assess information needs

Develop needed information

Analyze and use information

Decision makers use the information to validate actionable customer and market insights (to make marketing decisions)

Managing Marketing Information

to Gain Customer Insights

LO 1: Explain the importance of information in gaining insights about the marketplace and customers.

- Decision makers use the information to validate actionable customer and market insights

Marketing Information System

LO 1: Explain the importance of information in gaining insights about the marketplace and customers

- Decision makers use the information to validate actionable customer and market insights

Assessing Marketing Information Needs

A good MIS balances information wants, needs, and feasibility

An MIS has limitations – determine possibility

An MIS is costly – must consider ROI

LO 1: Explain the importance of information in gaining insights about the marketplace and customers.

A good MIS balances the information users would like to have against what they really need and what is feasible to offer. Some managers will ask for whatever information they can get without thinking carefully about what they really need. Too much information can be as harmful as too little. Other managers may omit things they ought to know, or they may not know to ask for some types of information they should have. For example, managers might need to know about surges in favourable or unfavourable consumer discussions about their brands on blogs or online social media. But because they don’t know about these discussions, they don’t think to ask about them. The MIS must monitor the marketing environment to provide decision makers with information they should have to better understand customers and make key marketing decisions.

Video Sharing - Why Walmart Is Failing In Japan?

Developing Marketing Information

Information from sources within the company
Accessed more efficiently
Prone to gaps in knowledge

Environmental analysis
Publically available information
Ethical issues raised
Annual reports and Social Media

Used when new problem exists
Systematic collection, analysis, and reporting of data

LO 2: Define the marketing information system and discuss its parts.

- Internal:

- Electronic collections of consumer and market information obtained from data sources within the company network (e.g., customer databases)

- Can be accessed more quickly and cheaply than other information sources

- However, may be incomplete or in the wrong form for marketing decisions

- Competitive marketing intelligence:

- Collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment (e.g., annual reports; brand discussions on blogs)

- Can raise ethical issues as some techniques are considered shrewd

Marketing Research Process

The Marketing Research Process:

Research objectives must be translated into specific information needs, which might include:

- Detailed customer characteristics

- Usage patterns

- Retailer reactions

- Sales forecasts

LO 3: Outline the steps in the marketing research process.

- Marketing Research: Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Marketing Research Process

Various Research Objectives:

Exploratory: Gathers information to help define the problem and suggest hypotheses (preliminary information)

Descriptive: Describes marketing situations or markets (such as market potential, demographics, consumer pattern)

Causal: Test hypotheses of cause-and-effect relationships

LO 3: Outline the steps in the marketing research process.

- This can be the most difficult step

The objective of exploratory research is to gather preliminary information that will help define the problem and suggest hypotheses. The objective of descriptive research is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product. The objective of causal research is to test hypotheses about cause-and-effect relationships.

Developing the Research Plan

Research plan outlines:

Sources of existing data

Specific research approaches

Contact methods and sampling plans

Instruments for data collection

Research Plan:

- Present research plan in a written proposal

- Research plans may outline need for secondary and primary data

LO 3: Outline the steps in the marketing research process.

- Research objectives must be translated into specific information needs, which might include:

- Detailed customer characteristics

- Usage patterns

- Retailer reactions

- Sales forecasts

- Research Plan:

- Present research plan in a written proposal

- Research plans may outline need for secondary and primary data

Collecting Data

Primary Data:

Information collected for a specific problem
Must be relevant, accurate, current, and unbiased

Secondary (Existing) Data:

Advantages:
Quicker and cheaper
Disadvantages:
Relevance, currency, accuracy
Rarely provides all necessary information

LO 3: Outline the steps in the marketing research process.

Research plans may outline need for secondary and primary data

Secondary Data:

- Advantages of secondary data:

- Available more quickly and cheaply than primary data

- Can provide data individual firm cannot collect on its own

- Disadvantages of secondary data:

- Needed information may not exist

- Information may not be usable; must evaluate relevancy, accuracy, currency, and impartiality

- Secondary data rarely provides all necessary information, requiring firms to collect primary data

- Primary data:

- Consists of information collected for the specific purpose at hand

- Must be relevant, accurate, current, and unbiased

Primary Data Collection

LO 3: Outline the steps in the marketing research process.

Secondary data provide a good starting point for research and often help to define research problems and objectives. In most cases, however, the company must also collect primary data. Table 5.1 shows that designing a plan for primary data collection calls for a number of decisions on research approaches, contact methods, the sampling plan, and research instruments.

Research Approaches

Observational

Gathers data by observing relevant people, actions, situations
Impossible to observe feelings
Ethnographic (examine certain social behavior) yields deeper observation

Survey

Gathers data by asking people questions
Most used method for primary data
Suited for gathering descriptive information

Experimental

Matches groups of people / looks for differences in responses
Best suited for explaining cause-and-effect relationships

LO 3: Outline the steps in the marketing research process.

- Gathering primary data by observing relevant people, actions, and situations

- Obtains information that people are unwilling or unable to provide

Cannot use to observe feelings, attitudes, motives, or long-term or infrequent behaviour
Ethnographic research yields richer understanding of consumers:
Trained observers watch and interact with consumers in their “natural habitat”

- Survey Research:

- Gathers primary data by asking people questions about their knowledge, attitudes, preferences, and buying behaviour

- Most widely used method for primary data collection

- Best suited for gathering descriptive information

- Gathers primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses

- Best suited for explaining cause-and-effect (causal) relationships

Ethnographic Research

A form of observational research that involves sending trained observers to watch and interact with consumers in their “natural environments.”

LO 3: Outline the steps in the marketing research process.

Ethnographic research - A form of observational research that involves sending trained observers to watch and interact with consumers in their “natural environments.”

Contact Methods

LO 3: Outline the steps in the marketing research process.

Information can be collected by mail, telephone, personal interview, or online. Table 5.2 shows the strengths and weaknesses of each contact method.

Contact Methods

Mail (low response rate), Telephone, and Personal Interviewing (cost and time)

Personal interviewing vs. group interviewing

Focus group interviewing

LO 3: Outline the steps in the marketing research process.

Mail questionnaires can be used to collect large amounts of information at a low cost per respondent. 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.

Telephone interviewing is one of the best methods for gathering information quickly, and it provides greater flexibility than mail questionnaires.

Personal interviewing 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.

Group interviewing consists of inviting 6 to 10 people to meet with a trained moderator to talk about a product, service, or organization. Participants are normally paid a small sum for attending

Focus group interviewing - Personal interviewing that involves inviting 6 to 10 people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer “focuses” the group discussion on important issues.

Contact Methods

Online Marketing Research

Well suited to quantitative research

Qualitative internet approach: online focus groups

Online behavioural and social tracking and targeting

LO 3: Outline the steps in the marketing research process.

The growth of the Internet has had a dramatic impact on how marketing research is conducted. Increasingly, researchers are collecting primary data through online marketing research Internet surveys, online panels, experiments, and online focus groups and brand communities.

Behavioural targeting - Using online consumer tracking data to target advertisements and marketing offers to specific consumers

The newest wave of Web analytics and targeting takes online eavesdropping even further—from behavioural targeting to social targeting. Whereas behavioural targeting tracks consumer movements across sites, social targeting also mines individual social connections and conversations from social networking sites. Research shows that consumers shop a lot like their friends and are much more likely to respond to ads from brands friends use.

Sampling Plan

Sample:

Segment of the population representing the whole

Requirements:

Who to survey (sample unit)

How many to survey
(sample size)

How to choose the people in the sample (sampling procedure)

Whole Population

Sample

LO 3: Outline the steps in the marketing research process.

- Sample:

- Segment of the population selected to represent the population as a whole

- Need to determine:

- Who to survey; sampling unit

- How many people to survey; sample size

- How to chose the people in the sample; sampling procedure

- Probability and nonprobability samples:

Probability (random) samples permit every subject in a given population to have equal opportunity to be contacted
Non-probability (non-random) samples include participants obtained through methods other than randomly. As such Non-probability samples are not as accurate as probability samples

Types
of
Samples

LO 3: Outline the steps in the marketing research process.

Table5.3 describes different kinds of samples. Using probability samples, each population member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error. But when probability sampling costs too much or takes too much time, marketing researchers often take nonprobability samples, even though their sampling error cannot be measured. These varied ways of drawing samples have different costs and time limitations as well as different accuracy and statistical properties. Which method is best depends on the needs of the research project

Research Instruments

Questionnaire:

Questions to ask (quantitative and qualitative)

Style of questions; open-ended and/or closed-ended

Wording and ordering of questions

Mechanical Instruments:

Monitor consumer behaviour

Includes people metres, checkout scanners, etc.
(Eye Tracking)

LO 3: Outline the steps in the marketing research process.

- Questionnaire decisions:

- What questions to ask

- Form of each question; closed or open-end

- Wording and ordering of questions

- Mechanical instruments:

- Monitor consumer behaviour

- Includes people metres, checkout scanners, eye tracking devices, neuro marketing

- Closed-end questions include all the possible answers, and subjects make choices among them (e.g., multiple-choice questions and scale questions)

- Open-end questions allow respondents to answer in their own words

- Neuro marketing measuring brain activity to learn how consumers feel and respond.

Implementing the Research Plan

Collect

Analyze

Process

Implementation

Most expensive

Subject to error

Check for accuracy

Code for analysis

Tabulate results (to present it in a professional way)

Compute statistical measures

LO 3: Outline the steps in the marketing research process.

- Collecting the data:

- Most expensive phase

- Subject to error

- Processing the data:

- Check for accuracy

- Code for analysis

- Analyzing the data:

- Tabulate results

- Compute statistical measures

Interpreting and Reporting the Findings

Interpret the findings
Draw conclusions (Marketing Manager and Researcher)
Report to management:

Present findings and conclusions that will be most helpful to decision making

LO 3: Outline the steps in the marketing research process.

Interpretation should not be left only to researchers. Although they are often experts in research design and statistics, the marketing manager knows more about the problem and the decisions that must be made. The best research means little if the manager blindly accepts faulty interpretations from the researcher

Analyzing and Using Marketing Information

Customer Relationship Management (CRM):

Manages detailed information about individual customers to maximize customer loyalty
(pinpoints and targets high-value customers more effectively)

Captures and analyzes information from all customer sources (offers better customer service and develops deeper customer relationships

Findings may lead to new marketing opportunities
(enhances the firm’s ability to cross-sell products)

LO 4: Explain how companies analyze and use marketing information.

- Customer Relationship Management (CRM):

- Manages detailed information about individual customers and carefully manages customer “touch points” to maximize customer loyalty

- Touch points describe the contact between the customer and company:

- Customer purchases, sales force contracts, service calls, website visits, etc.

- Many companies use CRM:

- Captures and analyzes information from all customer sources

- Applies the results to build stronger relationships

- Use data warehouses and data mining techniques

- Findings may lead to new marketing opportunities

- Benefits of CRM:

- Offers better customer service and develops deeper customer relationships

- Pinpoints and targets high-value customers more effectively

- Enhances the firm’s ability to cross-sell products and develop offers tailored to customers

Analyzing and Using Marketing Information

MIS data used for decision making:

Routine information for decision making

Non-routine information for special situations

Intranets and extranets assist the information sharing process

Must make information readily available!

LO 4: Explain how companies analyze and use marketing information.

- Marketing information systems must make information readily available for decision making:

- Routine information for decision making

- Non-routine information for special situations

- Intranets and extranets facilitate the information sharing process

Other Marketing Information Considerations

Marketing Research in Small Businesses and Non-profit Organizations

Secondary data, observation, informal surveys and experiments can all be used by small organizations and NFPs

LO 5: Discuss the special issues some marketing researchers face, including public policy and ethics issues.

Just like larger firms, small organizations need market information and the customer insights it can provide. Managers of small businesses and not-for-profit organizations often think that marketing research can be done only by experts in large companies with big research budgets

Other Marketing Information Considerations

International Marketing Research

Many countries have no research services

Good secondary data is scarce

Cultural differences must be considered

LO 5: Discuss the special issues some marketing researchers face, including public policy and ethics issues.

International marketing research has grown tremendously over the past decade. International researchers follow the same steps as domestic researchers, from defining the research problem and developing a research plan to interpreting and reporting the results. However, these researchers often face more and different problems. Whereas domestic researchers deal with fairly homogeneous markets within a single country, international researchers deal with diverse markets in many different countries. These markets often vary greatly in their levels of economic development, cultures and customs, and buying patterns.

Public Policy and Ethics
in Marketing Research

Misuse of marketing research can harm consumers and firms’ reputations
Intrusions on consumer privacy
Misuse of research findings

Should we worry when marketers track consumer locations via their mobile phones to issue location-based ads and offers?

LO 5: Discuss the special issues some marketing researchers face, including public policy and ethics issues.

Questions to consider:

Is it a good or bad thing that marketers track and analyze consumers’ online clicks and target ads to individuals based on their browsing and social networking behaviour?

Should we worry when marketers track consumer locations via their mobile phones to issue location-based ads and offers?

Should we care that some retailers use mannequins with cameras hidden in one eye to record customer demographics and shopping behaviour?

Similarly, should we applaud or resent companies that monitor consumer discussions on YouTube, Facebook, Twitter, or other social media in an effort to be more responsive

Reviewing the Concepts

Explain the importance of information in gaining insights about the marketplace and customers
- Understanding of customers and the marketplace
- Basis for creating customer value and relationships
- Develop competitive advantage

Define the marketing information system and discuss its parts.
- Consists of people and procedures
- Assess information needs
- Develop needed information
- Analyze and use information

Outline the steps in the marketing research process.

2. Explain how companies analyze and use marketing information.
- Manages detailed information about individual customers to maximize customer loyalty
- Captures and analyzes information from all customer sources
- Findings may lead to new marketing opportunities
- Information for marketing decision making

3. Discuss the special issues some marketing researchers face, including public policy, and ethics issues.
- Misuse of marketing research can harm consumers and firms’ reputations such as intrusions on consumer privacy and misuse of research findings