Decision Support Systems And Marketing Research

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Decision Support Systems and Marketing Research

Chapter 7

Prepared by Deborah Baker Texas Christian University Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Learning Objectives 1. Explain the concept and purpose of a marketing decision support system. 2. Define marketing research and explain its importance to marketing decision making. 3. Describe the steps involved in conducting a marketing research project.

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Learning Objectives (continued) 4. Discuss the profound impact of the Internet on marketing research. 5. Discuss the growing importance of scanner-based research. 6. Explain the concept of competitive intelligence.

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Learning Objective

On OnLine Line http://www.fws.gov http://www.fws.gov http://www.duckstamp.com http://www.duckstamp.com

Explain the concept and purpose of a marketing decision support system.

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Decision Support System

An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.

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DSS System Characteristics Interactive Interactive Flexible Flexible

Characteristics Characteristics of of aa DSS DSS System System

Discovery-Oriented Discovery-Oriented

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Accessible Accessible

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Database Marketing

The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.

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Learning Objective

Define marketing research and explain its importance to marketing decision making.

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Marketing Research

The process of planning, collecting, and analyzing data relevant to a marketing decision.

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Roles of Marketing Research

Descriptive

 Gathering and presenting factual statements

Diagnostic

 Explaining data

Predictive

 Attempting to estimate the results of a planned marketing decision

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2 On OnLine Line http://british-airways.com http://british-airways.com

Management Uses of Marketing Research

 Improve the quality of decision making  Trace problems  Focus on keeping existing customers  Understand the ever-changing marketplace

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Learning Objective

Describe the steps involved in conducting a marketing research project.

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The Marketing Research Process Define Define Problem Problem Plan Plan Design/ Design/ Primary Primary Data Data

Follow Follow Up Up

Specify Specify Sampling Sampling Procedure Procedure

Prepare/ Prepare/ Present Present Report Report

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Collect Collect Data Data

Analyze Analyze Data Data

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Marketing Research Marketing Marketing Research Research Problem Problem

Determining Determining what what information information is is needed needed and and how how that that information information can can be be obtained obtained efficiently efficiently and and effectively. effectively.

Marketing Marketing Research Research Objective Objective

The The specific specific information information needed needed to to solve solve aa marketing marketing research research problem; problem; the the objective objective should should provide provide insightful insightful decision-making decision-making information. information.

Management Management Decision Decision Problem Problem

A A broad-based broad-based problem problem that that requires requires marketing marketing research research in in order order for for managers managers to to take take proper proper actions. actions.

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Secondary Data

Data previously collected for any purpose other than the one at hand.

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Sources of Secondary Data Internal Internal Corporate Corporate Information Information Government Government Agencies Agencies Trade Trade and and Industry Industry Associations Associations Marketing Marketing Research Research Firms Firms Commercial Commercial Publications Publications News News Media Media Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Advantages of Secondary Data

 Saves time and money if on target  Aids in determining direction for primary data collection  Pinpoints the kinds of people to approach  Serves as a basis of comparison for other data Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Disadvantages of Secondary Data

 May not be on target with the research problem  Quality and accuracy of data may pose a problem

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3 On OnLine Line http://www.coca-colastore.com http://www.coca-colastore.com

The New Age of Secondary Information: The Internet

 Search Engines and Directories

www

 Sites of Interest to Marketing Researchers  Discussion Groups  Periodical, Newspaper, and Book Databases

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Research Design

Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

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Planning the Research Design

Which Which research research questions questions must must be be answered? answered?

??

How How and and when when will will data data be be gathered? gathered?

How How will will the the data data be be analyzed? analyzed?

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Primary Data

Information collected for the first time. Can be used for solving the particular problem under investigation.

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Advantages of Primary Data

 Answers a specific research question  Data are current  Source of data is known  Secrecy can be maintained

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Disadvantages of Primary Data  Expensive  Quality declines if interviews are lengthy  Reluctance to participate in lengthy interviews

Disadvantages Disadvantages are are usually usually offset offset by by the the advantages advantages of of primary primary data! data!

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Survey Research

The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes.

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Forms of Survey Research

On OnLine Line http:/www.hersheys.com http:/www.hersheys.com

In-Home In-Home Interviews Interviews

Mail Mail Surveys Surveys

Mall Mall Intercept Intercept Interviews Interviews

Executive Executive Interviews Interviews

Telephone Telephone Interviews Interviews

Focus Focus Groups Groups

(Home (Home and and Central Central Location) Location)

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Mall Intercept Interview

Survey research method that involves interviewing people in the common areas of shopping malls.

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Executive Interviews

A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.

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Focus Group

Seven to ten people who participate in a group discussion led by a moderator.

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Advantages of On-Line Focus Groups

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 Speed  Cost-effectiveness  Broad geographic scope  Accessibility  Honesty Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Characteristics of Traditional Forms of Survey Research

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Questionnaire Design Open-Ended Open-Ended Question Question

An An interview interview question question that that encourages encourages an an answer answer phrased phrased in in respondent’s respondent’s own own words. words.

An An interview interview question question that that asks asks Closed-Ended Closed-Ended the respondent to make a selection the respondent to make a selection Question Question from from aa limited limited list list of of responses. responses.

ScaledScaledResponse Response Question Question

A A closed-ended closed-ended question question designed designed to to measure measure the the intensity intensity of of aa respondent’s respondent’s answer. answer.

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Types of Questions in Questionnaire Design

3

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Questionnaire Design

On OnLine Line http://www.createsurvey.com http://www.createsurvey.com

Clear Clear and and Concise Concise No No Ambiguous Ambiguous Language Language Qualities Qualities of of Good Good Questionnaires Questionnaires Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

Unbiased Unbiased Reasonable Reasonable Terminology Terminology 34

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Observation Research

On OnLine Line http://www.bmiltd.com http://www.bmiltd.com

A research method that relies on three types of observation: people

watching people

people

watching an activity

machines

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watching people

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Observational Situations

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Observation Research People People Watching Watching People People

Types Types of of Observation Observation Research Research

People People Watching Watching an anActivity Activity Machines Machines Watching Watching People People

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Mystery MysteryShoppers Shoppers One-Way One-WayMirrors Mirrors

Audits Audits

Traffic TrafficCounters Counters Passive PassivePeople PeopleMeter Meter

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Mystery Shoppers

Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions.

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Experiment

A method a researcher uses to gather primary data.

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Sampling Procedure

Sample Sample

A A subset subset from from aa large large population. population.

Universe Universe

The The population population from from which which aa sample sample will will be be drawn. drawn.

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Probability Samples

Probability Probability Sample Sample Random Random Sample Sample

A A sample sample in in which which every every element element in in the the population population has has aa known known statistical statistical likelihood likelihood of of being being selected. selected. A A sample sample arranged arranged so so that that every every element element of of the the population population has has an an equal equal chance chance of of being being selected. selected.

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Nonprobability Samples

Nonprobability Nonprobability Sample Sample

Any Any sample sample in in which which little little or or no no attempt attempt is is made made to to get get aa representative representative cross-section cross-section of of the the population. population.

Convenience Convenience Sample Sample

A A form form of of nonprobability nonprobability sample sample using using respondents respondents who who are are convenient convenient or or readily readily accessible accessible to to the the researcher. researcher.

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Sampling Procedure

Universe

Sample Probability Probability Samples Samples Non-Probability Non-Probability Samples Samples

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Types of Samples Probability Probability Samples Samples

Non-Probability Non-Probability Samples Samples

Simple Random Sample

Convenience Sample

Stratified Sample

Judgment Sample

Cluster Sample

Quota Sample

Systematic Sample

Snowball Sample

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Types of Samples

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Types of Errors Error Error when when there there is is aa difference difference Measurement Measurement between the information desired and the between the information desired and the Error Error information information provided provided by by research research

Sampling Sampling Error Error

Error Error when when aa sample sample somehow somehow does does not not represent represent the the target target population. population.

Frame Frame Error Error

Error Error when when aa sample sample drawn drawn from from aa population population differs differs from from the the target target population. population.

Random Random Error Error

Error Error because because the the selected selected sample sample is is an an imperfect imperfect representation representation of of the the overall overall population. population.

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Field Service Firm

On OnLine Line http://www.greenfieldonline.com http://www.greenfieldonline.com

A firm that specializes in interviewing respondents on a subcontracted basis.

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Field Service Firms

Provide:  Focus group facilities  Mall intercept locations  Test product storage  Kitchen facilities  Retail audits Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Cross-Tabulation

A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions.

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Preparing and Presenting the Report  Concise statement of the research objectives  Explanation of research design  Summary of major findings  Conclusion with recommendations Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Following Up  Were the recommendations followed?  Was sufficient decision-making information included in the report?  What could have been done to make the report more useful to management?

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Learning Objective

Discuss the profound impact of the Internet on marketing research.

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Impact of the Internet 

Allows better and faster decision making



Improves ability to respond quickly to customer needs and market shifts



Makes follow-up studies and research easier



Slashes labor- and time-intensive research activities

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Advantages of Internet Surveys Rapid Rapid development, development, Real-time Real-time reporting reporting Reduced Reduced costs costs Personalized Personalized questions questions and and data data Improved Improved respondent respondent participation participation Contact Contact with with the the hard-to-reach hard-to-reach Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Internet Samples Unrestricted A Unrestricted A survey survey in in which which anyone anyone with with aa computer Internet computer and and modem modem can can fill fill out out Internet the the questionnaire. questionnaire. Sample Sample Screened Screened Internet Internet Sample Sample

An An Internet Internet sample sample with with quotas quotas based based on on desired desired sample sample characteristics. characteristics.

Recruited Recruited Internet Internet Sample Sample

A A sample sample in in which which respondents respondents are are prerecruited prerecruited and and must must qualify qualify to to participate. participate.

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Other Uses of the Internet by Marketing Researchers Distribution Distribution of of requests requests for for Proposals Proposals (RFPs) (RFPs) and and proposals proposals Collaboration Collaboration in in the the management management of of aa research research project project Data Data management management and and on-line on-line analysis analysis Publication Publication and and distribution distribution of of reports reports Viewing Viewing of of presentations presentations of of marketing marketing research research surveys surveys Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning

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Learning Objective

Discuss the growing importance of scanner-based research.

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Scanner-Based Research A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.

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When Should Marketing Research be Conducted?

 Where there is a high level of uncertainty  When value of research information exceeds the cost of generating the information

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Learning Objective

Explain the concept of competitive intelligence.

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Competitive Intelligence

On OnLine Line http://www.scip.org http://www.scip.org

An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.

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Competitive Intelligence

 Can help identify a competitor’s advantage  Can help determine how the competitor’s advantage was achieved

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Advantages of Competitive Intelligence

6 

Predict changes in business relationships



Identify marketplace opportunities



Guard against threats



Forecast a competitor’s strategy



Discover new or potential competitors



Learn from the success or failure of others



Learn about new technologies and impact of government regulations

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Sources of Competitive Intelligence

6 Internet Internet

UCC UCC Filings Filings

Company Company Personnel Personnel

Suppliers Suppliers

Experts Experts

Newspapers/Periodicals Newspapers/Periodicals

CI CI Consultants Consultants

Yellow Yellow Pages Pages

Government Government Agencies Agencies

Trade Trade Shows Shows

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