Transcript No Slide Title

Internet Marketing, 2nd Ed
Mohammed, Fisher, Jaworski, Paddison
Chapter 15 Lecture Slides
Customer Information Systems
Exhibits and Tables
Copyright © 2003 by Marketspace LLC
Customer Information Systems — Today’s Objectives
Objectives will be to:

Define and understand marketing research and explore a framework for
marketing research

Discuss what research is best done though the Internet

Examine marketing research data-collection methods and compare how
online methods differ from offline methods

Define and understand database marketing

Discuss customer relationship management
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Figure 15–1: Customer-Centric Marketing Process
Effective customer-centric marketers make, and then act on, three major types of decisions:
Marketing Research
Marketing Strategy & Tactics
Customer Relationship
Management
Salesforce Management &
Customer Experience
Database Marketing
Acquire/Up-Sell/Cross-Sell
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–2: Leveraging Customer Information
The objective of this chapter is to give an overview of processes for obtaining, organizing,
analyzing and utilizing customer-relevant information that can reduce the uncertainty
associated with each of the three major types of decisions
Define
Problem
Collect
Data
Organize
Data
Analyze
Data
Utilize
Data
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–3: Customer Information System
Marketing Research
Marketing Strategy &
Tactics
Customer Relationship
Management
Database Marketing
Salesforce Management &
Customer Experience
Acquire/Up-Sell/Cross-Sell
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline and
Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–4: Framework of Marketing Research
Marketing Research
Opportunity / Problem Definition
Research Design
Data Collection and Entry
Data Analysis
Final Report / Utilize Data
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–5: What Is Marketing Research?
Target Market
Marketing Research
Customer
Identification
Market Opportunities
Marketer
Definition
Public
Market Problems
Action
Consumer
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 15–A: Benefits of Marketing Research
Improve the quality of decision-making
Guide communications with current and potential customers
Identify potential opportunities in the marketplace
Minimize business risk by uncovering prospective problems
Create benchmarks and track progress
Evaluate overall success
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–6: Popular Uses of Marketing Research
How to
segment
the market?
Who are my
customers?
What is
the price
elasticity?
Conjoint
Analysis
Customer
Identification
When
do they
purchase?
Discrete Choice
Modeling
Marketing
Research
Buying Habit
Studies
Opinion
Research
What do
they like?
Environmental
Studies
What are
the growth
trends?
Competitive
Analysis
Who are my
competitors?
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–7: Opportunity / Problem Definition
“Market
Research on
Internet Habits
of Teenagers”
Project Title
Teenagers
make up a
large portion of
the market
Statement of Marketing
Problem / Opportunity
Identify the
characteristics
of webpages
teenagers visit
Ex.: What sites
do teenagers
visit most?
Project Objective(s)
Questions that the Study
Attempts to Answer
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–8: Deciding on a Research Design Type
Study Type
Exploratory Research
Why? How?
When?
Conclusive Research
Casual
Research
Descriptive
Research
What
causes
what?
Who, what,
when,
where?
How often?
How many?
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–9: Types of Marketing Research Data
Information
previously collected
and published
Secondary Research
Ex. Library Search
Information gleaned
by a researcher for a
specific purpose
Primary Research
Ex. Interview
Information about the
motivations,
perceptions, and
thoughts of a group
Qualitative Research
Ex. Focus Groups
Information about
how many people in a
population share a
set of characteristics
Quantitative Research
Ex. Interview
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–10: Guidelines for Using the Internet
Can a sufficiently representative
sample be drawn?
Yes
No
Can confidentiality be assured?
Yes
No
Can answers be obtained
via simple surveys?
Yes
Internet Marketing
Research
No
Traditional Marketing Research
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 15–B: Online Population Sampling
Online research does have its weaknesses that should be taken into consideration when
performing marketing research online:
Online research will always be subject to sampling error because
certain segments of the population will not be represented online.
The typical Internet user is younger, more affluent,
and more educated than the general population.
This user is also more accustomed to using the Internet
to transact business and to search for information.
However, with the rapid proliferation of the Internet,
sampling error is becoming less of an issue.
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of
Offline and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–11: Marketing Research Data Collection
Data-Collection Methods
Offline Methods
Secondary

Colleges,
universities,
libraries

Books,
publications

Magazines,
newspapers

Marketing
departments

Others
Online Methods
Primary
Secondary
Primary

Focus groups

Search engines

Questionnaires

Surveys

Newsgroups


Observations

Directories
Discussion
groups

Click data
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–12: Online Questionnaires Types
Questionnaires
Flat File Instruments
Interactive
Instruments
E-mail Integrated
Questionnaires
Simple,
noninteractive
survey
Simple,
interactive
survey
E-mail survey
or delivery tool
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–13: Online Survey Questions
Survey Questions
How old
are you?
Single-Response
Questions
Are you male
or female?
DichotomousResponse
Questions
In which
of the following
income ranges
do you fall?
Scaled
Questions
PairedComparison /
Tradeoff
What would you
prefer — a
Porsche or a
Ferrari?
MultichotomousResponse
Questions
Open-Ended
Questions
In 100 words or
less, describe
your experience
with this product.
On a scale of
one to 10, how
happy are you?
High
Internet Compatibility
Low
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–14: Comparison of Offline and Online Marketing Research
Methods
Decision Factor
Offline Method
Online Method
Cost
High
Low
Turnaround time
Slow
Quick
Labor-intensive
Labor-nonintensive
Medium
High
High
Low
Accurate
Inaccurate
Controllable
High to uncontrollable**
Limited
Unlimited
High
Low
Limited
Unlimited
High to medium
Low to medium
Low
High
Effort
Data quality*
Researcher control
Sampling
Sample-selection bias
Delivery / illustration
Interviewer bias
Geographical coverage
Anonymity
Ethical issues (privacy)
*Quality of data is defined here as ease and timeliness of data collection and entry.
**As the Internet becomes ubiquitous, this issue is becoming less important.
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–15: Data Analysis
The researcher has a number of analytical procedures available to him, ranging from simple
tabulations to complex econometric models:
Data Analysis Procedures
Basic
Statistics

Frequency
tables

Cross-tabulation

Graphic
representation

Descriptive
Statistics
Inferential
Statistics

Mean

T-test

Standard
deviation

Correlation

Median

Inter-quartile
range
Others

Mode

Range
Econometric
Analysis

Linear
regression

Nonlinear
regression

Logit modeling

Clustering
analysis

Turf analysis

Logistic
regression
Complexity
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 15–C: Validation
Validation is a crucial step in any marketing research study. Also known as a “face test,”
validation is a test of common sense, and answers the question of whether the results of the
study seem realistic:
Internal Validation:
What happens to
my results if I change
one study parameter?
External Validation:
How does my study
compare to actual data
or other studies?
Validation:
Are my results
realistic?
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 15–D: Framework of Database Marketing
Database marketing consists of obtaining meaningful individual-level consumer information,
analyzing this information to estimate consumer response to various offers, and making
marketing decisions based on this expected response:
Database Marketing
Define Problem
Collect Data
Organize Data
Analyze Data

Planning a Database Marketing Program

Database Marketing Decision Variables

Sources of Lists

List Processing

Establishing a Database

Updating a Database

Privacy

Segmentation Variables

List Segmentation

Segmentation Techniques

Measurement

Testing Potential Database Marketing Programs
Utilize Data
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–16: Database Marketing Program Plan
The elements of a database marketing program plan are similar to those in a corporate
strategy or marketing plan:
I. Marketing objectives
II. Market analysis
A. Customer analysis and segmentation
B. Competition
C. Environment
III. Offer and market fit
IV. Assessment of performance with similar programs
V. Communication strategy
A. Targeting and positioning
B. Unique selling proposition
C. Media and list decisions
D. Message strategy
VI. Database requirements
A. Development
B. Utilization
C. Enhancement
VII. Program budget
VIII. Timeline
IX. Accountability
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–17: Database Customer Vectors
When establishing a database for purposes of database marketing, conceptualize each
perspective or current customer as a vector of data within the database:
D
A
T
A
B
A
S
E
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–18: Provider-Consumer Interaction Matrix
Consumer Interaction
Direct
• Permission Needed from
Banks Review?
California Management
High
Telecom
Retail
Indirect
Airlines
Packaged Goods
Drugs
Interaction
Frequency
Low
Personal Computers
Internet
Infrastructure
Furniture
Autos
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Supporting Slide 15–E: Framework of Customer Relationship Management
Customer Relationship Management
Customer relationship management is a philosophy and a process that emphasizes
customer retention
Define Problem
Collect Data

Touchpoints


Firm-Initiated
E-Mail
Customer-Initiated
E-Mail

Opportunity in
Online Community
Organize Data
Analyze Data

Satisfaction

Loyalty

Share of Customer
Utilize Data
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–19: E-Mail Describing New Fleet Center Security Procedures
E-mail announcements tent to include material that can impact a customer, such as new
policies
Before you attend the BOSTON CELTICS Vs ORLANDO MAGIC, we wanted to make you aware
of the new FleetCenter Security Procedures.
As we begin another exciting season of FleetCenter events, we remind you that bags,
backpacks, luggage, coolers, parcels, briefcases and like articles will be strictly prohibited from
the FleetCenter. Binoculars are permitted, but please no cases.
All guests will be subject to search, at the FleetCenter's discretion, of their person and/or
possessions (including women's handbags of normal size which may be allowed entry after such
search). Patrons with prohibited articles will be turned away at the entrances and no storage or
"check-in area" will be provided for such items. Enforcement will be without exceptions.
We're confident that these added precautions are prudent and will be welcomed and understood
by everyone. We ask that you please forward this information to anyone who may be going to
future FleetCenter events or games. If you have further questions, please go to
http://www.fleetcenter.com/tickets_boxoffice.htm or contact your local Ticketmaster Charge by
Phone.
Thank you and enjoy the game!
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–20: Hanna Andersson Specials E-Mail
E-mail invitations tend to be for events, such as attending webcasts or conferences, or
participating in community events or marketing research
Dear Hanna Friend,
If you love a good sale, now's the time to check out all the new specials at hannaAndersson.com!
Go to our sale section for terrific savings on current season items such as Wiggle Pants, Jeepers
Creepers, Cozy Flannel Dresses, Cargo Pants in Twills or Cords and Women's Dresses, as well as of
past season items! Click the link to go directly to the sale section.
http://www.hannaAndersson.com/saleavailability/?MAIL=FALL01
We hope you enjoy the savings,
hanna
We at Hanna believe we are sending this e-mail with your permission. If you feel you have received this
message in error, please click the link below and accept our apologies for the intrusion. You will be
removed from this list promptly.
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Exhibit 15–21: EBay Promotion for Mother’s Day
Market research tells eBay’s
marketers that perfume,
flowers, and jewelry are
particularly compelling
around Mother’s Day. Acting
on this information, they
prominently feature a
Mother’s Day promotion on
the site highlighting these
categories.
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Chapter 15:
Customer Information Systems

Framework for Marketing Research and Types of Marketing Research Data

Guidelines for Conducting Marketing Research on the Internet

Data Collection Methods in Marketing Research and Comparisons of Offline
and Online Marketing Research Methods

Data Analysis

Database Marketing Program

Customer Relationship Management

eBay Example

Conclusion
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC
Customer Information Systems— Conclusion

A general marketing research framework involves the following five steps: 1)
opportunity or problem definition, 2) research design, 3) data collection and
entry, 4) data analysis, and 7) final report or data utilization.

Offline marketing research methods are generally reliable but expensive and
labor-intensive. Online methods significantly reduce the turnaround time and
cost, but it may be difficult to draw a random and representative sample.

Database marketing consists of obtaining meaningful individual-level
consumer information, analyzing this information to estimate consumer
response to various offers, and making marketing decisions based on this
expected response.

Traditionally, marketers have focused more of their actions and expenditures
on acquiring customers than retaining them. Emphasis on customer
retention, however, can have a significant impact on marketing efficiency
and profitability. Customer relationship management is a philosophy and a
process that emphasizes customer retention.
Last Updated: 10/10/03
Copyright  2003 by Marketspace LLC