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Chapter 5
MARKETING INFORMATIONAND RESEARCH
5-1 Understanding the Need for Market Information
5-2 Finding and Managing Marketing Information
5-3 Using Marketing Research
5-4 Collecting Primary Data
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UNDERSTANDING THE NEED FOR MARKETING INFORMATION
GOALS Explain the importance of information in
making marketing decisions.Describe the categories of information
needed by marketers.
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Starting with Information
Consumer differencesExpanding choicesCompetitionThe global marketplace
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Consumer differencesMost businesses no longer believe that all
consumers are alike Recognize that various consumers have very
different needs and view choices differentlyBusinesses know that in order to meet consumer
needs and expectations they must have detailed information about them
Must be able to determine similarities and differences of market segments
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Expanding choicesCustomers are able to satisfy their basic needs
more easily than in the pastMoving beyond basic needs and are devoting
more resources to satisfying their wants with discretionary purchases.
Discretionary Purchase – are not essential, so consumers can decide whether or not to purchase.
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Expanding choicesConsumers have many choices, and much more
information on those choices, so their decisions are more informed
In order to develop a marketing mix that will satisfy consumer wants, businesses must have a clear understanding of expanding consumer choices and consumer purchasing decision
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CompetitionCompetition is much more intensive for businesses It is more difficult to make marketing decisions that
will ensure customers will prefer your company over the competitions
Gathering information about competitors products to determine strengths and weaknesses will help businesses be more competitive
As wants and needs have expanded, products have as well
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Competition In the past, products were very basic with a few
additional featuresWhen products have limited differences, businesses
try to compete for sales by emphasizing things such as their brand name, availability, or price
They also try to compete by developing unique designs, or product improvements, expensive, hit or miss
The correct choices can be very profitable, while the wrong choice can result in losses for the company
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The global marketplaceAs business develop an international focus, differences
among customer groups and the number of distinct market segments can become even greater.
Understanding the consumer in your home country will not always transfer to other countries
Gathering information about the country and its people as well as new competitors can help determine how to become an effective global business.
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Deciding on Information Needs
Approaches to planningCategories of information
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Deciding on Information Needs
Approaches to planningRead together “Approaches to Planning”,
page 124Consider the two approaches two companies
use as they decide on their apparel lines for the upcoming year
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Deciding on Information Needs
Even though last year J Borg’s products were successful, should they keep it unchanged or simply just change the colors and some additional accessories?
Will customers get tired of the current offerings – Therefore new products should be developed
Dominque Designs marketing department provides records – quantity sold by size and color for each week of the year, the region and store where sales were made, original prices, markdowns, among others
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Deciding on Information Needs
How will each of the companies decide whether to make design changes and the types of designs to use for next year?
What is the biggest difference between Dominque Designs and J Borg’s?
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Deciding on Information Needs
Categories of informationYou are a manager for a national chain of
yogurt stores. You are tasked to increase sales and
profits.How do you do this? What information will
help you be successful.
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Deciding on Information Needs
Categories of informationDivided into 3 segments
ConsumersMarketing MixBusiness Environment
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Types of Information Needed for Effective Marketing Decisions
Consumersprimary needspurchase frequencybrand preferencesinformation needsmedia preferencesshopping behavior
agegenderincomeeducationfamily sizeoccupationattitudes
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Types of Information Needed for Effective Marketing Decisions
Marketing Mix discounts location and method of sale type of distribution used display procedures promotion and sales
methods promotional message promotional media
basic products product features services product packaging guarantees after-sale customer
service product price credit choices
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Types of Information Needed for Effective Marketing Decisions
Business Environmentconsumer protectionethical issues tax policiesproposed laws international markets
type of competitioncompetitors’ strengthscompetitors’ strategieseconomic conditionsgovernment regulationsnew technology
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Gathering Information
Effective marketing information improves the decisions of businesses, and effective marketing information reduces the risk of decision making.
If a business can make better decisions that increase the likelihood of making a profit, the time and money spent gathering information is a good investment.
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5-1 Assessment Page 125, #8
Work in your groups – You will create a presentation that will include a minimum of 4 slides (Title slide, Slide on Consumers, Slide on Marketing Mix, Slide on Business Environment)
You will need to include three specific types of
information you will need for each category and decide why each type of information is needed.
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5-1 Assessment Page 126, #8
Example: If my goal was to increase the number of people that shopped at ABC’s Sporting Goods – A locally owned and operated store Consumers – Shopping behavior, age, brand preferences Marketing Mix – Product features, promotional message, Product
Price Business Environment – competitors’ strengths, economic
conditions, new technology
Example of my bullet points for Consumers – You will also need to do marketing mix and business environment
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5-1 Assessment Page 126, #8 Consumers
Shopping Behavior Preference for a particular retail price format (every day low price) vs.
promotional price maybe servicie Inclination to switch stores
Age To determine if there is a large enough market in this community to support
your store To determine what promotional methods and ideas you will use to attract
customers Brand Preferences
To ensure your store stocks the preferred brands of your target market How can we use brand preference to make our store more profitable?
You will also need to do marketing mix and business environment
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FINDING AND MANAGING MARKETING INFORMATION
GOALSDescribe common sources of internal
and external market information.Explain the five critical elements of an
effective marketing information system.
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Sources of Market Information
Steps of the Process Identify the types of information needed.Determine the available sources of each type of
information.Evaluate each source to determine if it meets the
organization’s needs in term of accuracy, time, detail, and cost.
Select the sources that best meet the identified needs.Enter the information into a marketing information
system.
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Sources of Market Information
Internal SourcesExternal SourcesMarketing Research
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Internal Information Sources
Internal information- is information developed from activities that occur within the organization
Businesses keep detailed records on production schedules and inventory levels
This production needs to be studied to make sure the promotions match the available products
Example: Salesperson learns a great deal from current and prospective customers. Needs, perceptions of price, satisfaction and services, or requested
changes in products. Three categories of important types of internal information are:
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Internal Information Sources
Customer records and sales information
Production and operations reportsPerformance information
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Internal Information Sources
Customer records and sales information Companies keep a record of all transactions they have They record what is purchased, the dates of purchase, and
quantities purchased Detailed information of payments and credit is also recorded Problems and complaints are also a part of their records When customers stop buying the product, this information
should not be discarded….but analyzed to determine why the customer was lost
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Internal Information Sources
Production and operations reportsProducts and services must be available
when and where customers want themQuality standards need to be metInformation about production and operation
activities is collected regularly
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Internal Information Sources
Performance information The success of a business is judged by its performance There are other performance measures than profit, such
as sales, costs, quality, and customer satisfaction Performance is measured in three ways 1. Records of past performance 2. Compare performance with similar businesses 3. Comparison of actual performance with expected or
planned performance
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External Information Sources
External information- provides an understanding of factors outside of the organization
Marketers cannot plan effectively without understanding consumers, competitors, the economy, and other changes around them
There are many valuable sources of information such as:
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External Information Sources
Government reportsTrade and professional associationsBusiness publicationsCommercial data and information
services
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External Information Sources
Government reportsSupplying information that can be used by
businesses and consumersThere are a number of agencies that collect
marketing informationBest known: U.S. Bureau of Census – every 10
years collects the United States population Commercials are seen on TV
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External Information Sources
Trade and professional associationsAre organized to serve people and
business with common interest.Travel, Retailing, AARP
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External Information Sources
Business publicationsMagazine's and journals provide useful
information for business people.The wall Street Journal, Forbes, Barron’s
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External Information Sources
Commercial data and information servicesA number of business that collect, analyze and sell
data.Experian, Equifax, and TransUnion, credit
reporting agencies for consumer creditDun & BradstreetACNielsen
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Marketing Information Systems
Market Information Systems -An organized method of collecting, storing, analyzing, and retrieving information to improve the effectiveness and efficiency of marketing decisions
Each business develops its own marketing information system
All effective marketing information systems contains 5 elements:
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Marketing Information Systems
InputStorageAnalysisOutputDecision making
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Marketing Information Systems
Input- information that goes into the system for decision makingRoutine information that is collected about
customers, competitors, and business operations all used for marketing decisions
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Marketing Information Systems
Storage- the resources used to maintain information so it can be used when needed If information is lost or damaged it is not usefulSome information is very confidential – only
authorized people should have accessShould be organized so information is easy to
locate when needed
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Marketing Information Systems
Analysis- the process of summarizing, combining, or comparing information
Ex- in order to plan a promotional budget, a manager may examine the budgets for other products or for past years
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Marketing Information Systems
Output- the result of analysis given to decision makersMost important part of an MKISUsually written information or graphics
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Marketing Information Systems
Decision Making- the purpose of an MKIS is to improve decision makingIncludes who is involved in the decision,
when decision need to be made, any policies or procedures that should be considered, and the information needed by the decision makers
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Designing an MkIS
QuestionMkIS
ElementWhat information is needed to develop and implement the marketing strategy?
Input
How should the information be maintained so it is in a usable form, secure, and easy to access when needed?
Storage
What methods should be used to organize and study the information decisions?
Analysis
How and when should the information be made available for most effective use?
Output
What ways should the information be used to improve marketing?
Decision Making
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USING MARKETING RESEARCH
GOALSDescribe how to define and develop an
understanding of a problem as the first steps toward solving it.
Identify the steps needed to gather and study data relevant to a problem.
Explain how to prepare reports and present proposed solutions.
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Seeing the Problem Clearly
Marketing Research- is a procedure designed to identify solutions to specific marketing problems through the use of scientific solvingThe scientific method is used to ensure
that a careful and objective procedure is followed in order to develop the best possible solution
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Implementing a Marketing Research Study
1. Define the problem
2. Analyze the situation
3. Develop a data-collection procedure
4. Gather and study information
5. Propose a solution
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Implementing a Marketing Research Study
Define the problemClearly and carefully define the problemThis is not always easy It is important to prepare a written statement of the
problem and have several people review it to make sure it is understandable
The problem should be scientific enough to study whom to involve in the study, and the types of solutions or results
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Implementing a Marketing Research Study
Analyze the situationAn important part is to understand the
circumstances surrounding the problem well enough to determine how to solve it
Analyze the situation allows the researcher to identify what is already known about the problem, the information available, and even possible solutions already attempted
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Implementing a Marketing Research Study
Develop a data-collection procedureWhat additional information is needed and how
should it be collectedThe researcher needs to know where to obtain
information and the best and most efficient ways to obtain information Secondary data- information already collected for another
purpose Primary Data- information collected for the first time
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Implementing a Marketing Research Study
Develop a data-collection procedure Secondary data- information already collected for another
purpose A search of secondary data sources should precede any primary
research activity. Secondary data may be sufficient to solve the problem, or at least it helps the reader better understand the problem under study. Secondary data is cheaper and quicker to collect than primary data and can be more accurate.
Ex - A great deal of potentially useful secondary information already exists within enterprises. Typically useful information would be that relating to sales, finance, production, storage and transportation. Source for a and b - http://www.fao.org/docrep/W3241E/w3241e03.htm#chapter%20summary
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Implementing a Marketing Research Study
Develop a data-collection procedurePrimary Data- information collected for the first
time Primary data is collected by the researcher with a specific
goal in mind May be collected through surveys, focus groups, in-depth
interviews, or through experiments
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Implementing a Marketing Research Study
Gather and study informationSelect the participants
Population- all of the people in the group the company is interested in studying
Sample- a smaller group selected from the population
Random Sampling – everyone in the population has an equal chance of being selected in the sample
Collect data, analyze the data, prepare results
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Gather Information
Collect the dataPrivacyEthical
Analyze the dataNumerical data – mean, medianNon-numerical data – open ended
Prepare results Tables, charts and graphs
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Implementing a Marketing Research Study
Propose a solutionResearch reports- usually prepared orally
and in writing Effective communication is an important skill
Presenting research results In a written report the results reported in tables,
charts, and graphs that all have brief explanations
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Propose a Solution
Research reportsPresenting research resultsWhen to use marketing research
Two Factors How much risk is in the business facing from the problem
being studied How much time and money will be required to gather the
information
Complex Problem
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Sections of a Research Report
Statement of the problemReview of secondary dataResearch proceduresResults of the researchSummary and recommendations
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COLLECTING PRIMARY DATA
GOALSDescribe the purpose of marketing
research surveys.Explain the reasons for and limitations
of using observation.Define various types of marketing
research experiments.
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Conducting Surveys
When completing market research, the data-collection method chosen will depend on the type of information you need.
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Conducting Surveys
Closed-ended questionsOpen-ended questions
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Conducting Surveys – 1st Way
Survey- a planned set of questions to which individuals or groups of people respondSurveys can be oral or written
People can be surveyed in person, through e-mail, phone, or online
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Conducting Surveys
Closed-ended questions- offer two or more choices such as “yes”, or “no”“agree” or “disagree”select A, B,C, or D Scale of 1-10 where 10 is excellent and 1 is
very poor
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Conducting Surveys
Open ended questions- allows respondents to develop their own answersWhat are the most important features of
this product?How does the durability of brand A compare
to brand B?
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Focusing on the Issues
Focus groupQuestioning with clarity
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Focusing on the Issues
Open ended questions are often used when researchers are attempting to identify the problem
Researchers may discuss the problems with consumers using open ended questions
A popular method used to gather information is called a focus group
Focus group- smaller number of people brought together to discuss identified elements of an issue or problem
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Focusing on the Issues
Questioning with clarityIt is important that survey questions are
carefully writtenEach question must aid in the collection of
information that will help to solve the problem
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Making Observations – 2nd Way
Observations- collects information by recording actions without interacting or communicating with the participant
The purpose of observation research is to see the actions of participants rather than have them recall or predict their actions, greater accuracy
Using observations requires more time and expense than surveys
Observations must be carefully planned in order to keep from changing the participants actions
If people know they are being watched the may do things differently
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Making Observations
Recording devices includeVideo camerasAudio recordersBar code scannersEye-tracking photography
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Performing Experiments
Test marketsSimulations
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Performing Experiments
The most precise and objective information is obtained through experimentations
Experiments are carefully designed and controlled situations in which all important factors are the same except the one being studied
Research is done by planning and implementing experiments and then recording and analyzing the data
Marketers use experiments to determine whether changes in a single element of the marketing mix will affect customer behavior
Experiments are not used as often as surveys or observations
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Test Markets
Test markets- are specific cities or geographic areas in which marketing experiments are conducted
The test markets are selected because they reflect consumer and competitive characteristics important to the company
The companies try new product ideas or make marketing changes to the test markets
They collect data on the product performance for a period of several weeks or months and compare it with previously gathered information
This way they can attempt to predict the performance in the total market
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Simulations
Simulations- are experienced where researchers create the situation to be studied Ex- a business may want to see how children respond when
playing with a toy
So rather than observing children playing in their homes or schools, they create a play center
In the play center they bring children in and observe them under more carefully controlled circumstances
Many simulations are done on computers, which allows participants to visualize a change and react to it