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Chapter # 04 Marketing Information and Customer Insight Marketers must first gain fresh, deep insights into what customers need and want iPod wasn’t the first digital music player but Apple was the to first to get it right Customer insights groups collect customer and market information from marketing research studies, mingling with and observing consumers to monitoring consumer online conversations about the company and its products Marketing Information System (MIS) People and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights MIS begins and ends with information users – marketing managers, internal and external partners who need marketing information Developing Marketing Information Internal data Marketing intelligence Marketing research Internal Data Electronic collections of consumer and market information obtained from data sources within the company network Information in the database come from customer transactions, demographics, psychographics, and buying behavior The customer service dept. keeps record of customer satisfaction or service problems The accounting dept. keeps records of sales, costs and cash flows Marketing Intelligence Systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace Monitoring Internet buzz, observing consumers firsthand, quizzing the company’s own employees, benchmarking competitor’s products, researching the Internet, lurking around industry trade shows, and even rooting through rival’s trash bins Help marketers to gain insights into how consumers talk about and connect with their brands Marketing Research Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation; e.g. customer motivations, purchase behavior, and satisfaction Own research departments or outside research specialist Defining the Problem and Research Objectives Exploratory research: gather preliminary information that will help define the problem and suggest hypotheses Descriptive research: Statistical research. Describes data and characteristics about the population or phenomenon being studied. Causal research: explores the effect of one thing on another. Measures the impact of a specific change. Predict hypothetical scenarios. Managers often starts with exploratory research and later follow with descriptive or causal research. Developing the Research Plan Outlines sources of existing data and spells out specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data Primary data: info. collected for the specific purpose at hand Secondary data: info. that already exists somewhere, having been collected for another purpose Secondary Data Researchers usually start by gathering secondary data Company’s internal database Companies can buy secondary data reports from outside suppliers; e.g. ACNielsen sells buyers data Using commercial online databases, marketing researchers can conduct their own searches; ProQuest, LexisNexis Web search engines Secondary data can usually be obtained more quickly and at a lower cost than primary data Data must be relevant, accurate, current, and impartial Observational Research Gathering primary data by observing relevant people, actions, and situations Observe consumer behavior to glean customer insights; e.g. Fisher-Price’s lab to observe the reactions of little tots to new toys Can obtain info. that people are unwilling or unable to provide Feelings, attitudes, and motives can’t be observed Observations can be very difficult to interpret Survey Research Best suited for gathering descriptive info. Asking consumers directly Flexible – many different kinds of info. in many different situations Phone or mail, in person, or on the Web People may be unwilling to respond People may not remember or have never thought about what they do and why Giving pleasing answers Respondents may answer even when they do not know the answer Experimental Research Best suited for gathering causal info. Involve selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses Experiments to test the effects on sales as a result of two different prices of the new McDonald’s sandwich Two different prices in the two cities The cities are similar, and all other marketing efforts for the sandwich are the same Contact Methods Mail Telephone Personal interview Online Mail Questionnaires Large amounts of information at a low cost per respondent Respondents may give more honest answers to more personal questions No interviewer bias Time consuming and low response rate Little control over the mail questionnaire sample Not very popular in the subcontinent Telephone Interviewing One of the best methods for gathering info. quickly Cost per respondents is high Interviewer bias – may affect respondent’s answers Do-not-call lists and promotion-harassed consumers Extensive penetration of mobile phones Personal Interviewing Individual interviewing Individual Interviewing is flexible Trained interviewers can guide interviews, explain difficult questions, and explore issues as the situation requires May cost three to four times as much as telephone interviews Most prevalent method in the subcontinent Availability of educated interviewers at low cost Better response rates and quality of responses Personal Interviewing Group interviewing Focus group interviewing: six to ten people meet with a trained moderator to talk about a product, service, or organization Participants normally are paid a small sum for attending Group interactions bring out actual feelings and thoughts Fresh insights into consumer thoughts and feelings Not always open and honest about their real feelings, behavior, and intentions in front of other people Immersion groups: four or five people with whom product designers talk informally, without a focus group moderator present Online Marketing Research Collecting primary data online through Internet surveys, online focus groups, Web-based experiments, or tracking consumers’ online behavior Researchers can experiment with different prices, use different headlines, or offer different product features to learn the relative effectiveness of their offers Following consumers’ click streams Online focus groups (from anywhere) The impersonal nature of the Internet can be a problem Research Instruments Questionnaires Very flexible – close-end and open-end questions Open-end questions are especially useful in exploratory research Close-end questions provide answers that are easier to interpret and tabulate Researchers should care in wording and ordering of questions Research Instruments Mechanical instruments People meter and checkout scanners Eye cameras to study viewers’ eye movements while watching ads IBM’s BlueEyes technology interprets human facial reactions by tracking pupil, eyebrow, and mouth movements Neuromarketing – measuring brain activity to learn how consumers feel and respond Implementing the Research Plan Putting the marketing research plan into action This involves collecting, processing, and analyzing the information The data collection phase is generally the most expensive and the most subject to error Process and analyze the collected data to isolate important information and findings Check data for accuracy and completeness and code it for analysis Interpreting and Reporting the Findings Present important findings and insights that are useful in the decision making process Managers may be biased – accept the expected results and reject those that they did not hope for Discussions between researchers and managers will help point to the best interpretations The managers and researchers must work together THANK YOU