Principles of Marketing Chapter 4: Managing Marketing Information

1. Principles of MarketingChapter 4:Managing Marketing Information

2. Marketing Research and the (Non)Ambidextrous Organization* • Ambidextrous Organizations (Tay and Lusch IEEE Intelligent Systems 2007) • Firms that both exploit their current competencies [through efficiency improvement] while simultaneously exploring new competencies [based upon firm strengths and customer needs]. • Exploration & Exploitation • Nonambidextrous Organizations • Firms that exploit their current competencies but don’t explore new competencies • Exploitation only Dr. James Carver – Auburn University

3. (Non)Ambidextrous Organizations* • Both are “learning” organizations • An exploitation strategy • Learning via “crossover” • Combines knowledge in different ways to improve what it’s doing • Market stability pushes for greater focus here due to stable buyer preferences • An exploration strategy • Learning via “mutation” • Adoption of new technology to evolve firm or market offering • Market turbulence enhances applicability due to constant changes in buyer preferences Dr. James Carver – Auburn University

4. Marketing Research • Tools used span the continuum of sophistication. • Elaborate conjoint analyses and Agent-Based modeling programs to simple communication and dialogue • Recall ketchup example? • But more information is not key; better information is • On competitors to resellers; products to customer and uses Dr. James Carver – Auburn University

5. Information for Customer Insights • Customer insight is key to information value • Definition: • Fresh understanding of customers and the marketplace derived from marketing information that becomes the basis for creating customer value and relationships. • Customer insight is the origin of a differential advantage. • “Customer Insight Teams” are replacing traditional market research departments. • Note how the name change alters the focus from information to customers’ needs Dr. James Carver – Auburn University

6. Having the “Right” Insights • “Cornerstone” of a Differential Advantage • Marketing Information Systems (MIS) • Goal: • Giving the right information, at the right time, and in the right form to help decision-makers in generating value • What is it? • Consists of 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 • Valuable for not only marketing or the firm’s value chain, but also the entire value delivery system Dr. James Carver – Auburn University

7. Assessing Information Needs • A “balancing” act… • The info. users would like vs. what they really need and what is feasible to offer. • Bounded by • Availability • Cost • Managers’ not knowing what to ask for • Too much information is as bad as too little Dr. James Carver – Auburn University

8. Developing Marketing Information • Sources include: • Internal databases: • Electronic collections of consumer and market info. obtained from data sources within the firm’s network (e.g., website usage by customers) • Competitive marketing intelligence: • Systematic collection and analysis of publicly available information about consumers, competitors, & the marketing environment (e.g., annual reports, discussions on blogs, etc.) • Marketing research: • Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing a firm (e.g., focus groups) Dr. James Carver – Auburn University

9. The Marketing Research Process • Steps involved: • Define the problem and research objectives. • Develop research plan for collecting information. • Implement the research plan • Interpret and report the findings Dr. James Carver – Auburn University

10. Defining Problem and Objectives • Often the most difficult step of a project. • Research objectives may include: • Exploratory research: • Gathering preliminary information that will help define the problem and suggest hypotheses. • Descriptive research: • Generating information to better describe marketing problems, situations, or markets. • Causal research: • Testing hypotheses about cause-and-effect relationships. Dr. James Carver – Auburn University

11. Developing the Research Plan • Requires: • Determining the exact information needed. • Developing a plan for gathering it efficiently. • Presenting the written plan to management. • The research plan outlines: • Sources of existing data. • Specific research approaches. • Contact methods. • Sampling plans. • Instruments for data collection. Dr. James Carver – Auburn University

12. Developing the Research Plan (cont.) • Research objectives must be translated into specific information needs. • Information needs might include • Detailed customer characteristics, • Usage patterns, • Retailer reactions, etc. • Research plan should be presented in a written proposal. • May outline need for primary and secondary data Dr. James Carver – Auburn University

13. Secondary Data • Secondary data: • Information that already exists somewhere which has been collected for another purpose. • Common sources of secondary data: • Internal databases • Commercial data services • Government sources Dr. James Carver – Auburn University

14. (Dis)Advantages ofSecondary Data • Advantages: • Available more quickly and at a lower cost than primary data. • Can lead to information that an individual firm could not gather itself. • Disadvantages • Desired information may not exist. • Must be carefully evaluated for relevancy, accuracy, currency, and impartiality. Dr. James Carver – Auburn University

15. Primary Data • Secondary data rarely provides all of the necessary information, forcing firms to collect primary data. • Primary data: • Consists of information collected for the specific purpose at hand. • Primary data must be relevant, accurate, current, and unbiased. Dr. James Carver – Auburn University

16. Primary Data Collection Plan • Designing a primary data collection plan involves making decisions related to the: • Research approach: • Observation, survey, or experiment • Contact methods: • Mail, telephone, personal, or online • Sampling plan: • Sampling unit, sample size, and sampling procedure • Research instruments: • Questionnaire or mechanical instruments Dr. James Carver – Auburn University

17. Observational Research • The gathering of primary data by observing relevant people, actions, and situations. • Can obtain information that people are unwilling or unable to provide. • Cannot be used to observe feelings, attitudes, and motives, and long-term or infrequent behaviors. • Ethnographic research: • Trained observers watch and interact with consumers in their “natural habitat.” • “Research with the purpose of articulating a socio-cultural system embedded in human behavior,”*(Belk, Wallendorf, and Sherry 1989) • Yields richer understanding of consumers, but isn’t really “planned” and instead “evolves” based upon themes* Dr. James Carver – Auburn University

18. Survey Research • Survey research: • Gathers primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior. • Most widely used method for primary data collection. • Best suited for gathering descriptive (i.e., correlational) information. Dr. James Carver – Auburn University

19. Experimental Research • Experimental research: • Gathering 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 (i.e., causal) relationships. Dr. James Carver – Auburn University

20. Methods of Contact • Include but are not limited to: • Mail surveys • Telephone surveys • Personal interviews • Individual interviewing • Focus group interviewing • Online marketing research: • Internet surveys and online panels • Experiments • Online focus groups Dr. James Carver – Auburn University

21. Sampling Plan • Sample: • Segment of the population selected to represent the population as a whole. • Sampling requires three decisions: • Who is to be surveyed? • Selecting the sampling unit. • How many people should be surveyed? • Referred to as sample size. • How should the people in the sample be chosen? • Describes the sampling procedure. • Probability sampling ~ members have a known chance (e.g., random) • Nonprobability ~ (e.g., snowballing, purposive [experts sampled] Dr. James Carver – Auburn University

22. Research Instruments • Questionnaire decisions: • What questions to ask? • Form of each question? • Closed-ended vs. Open-ended • Wording? • Double-barrel*, • Framing* ~ “ground beef” or “Asian Disease” (Tversky & Kahneman, 1981) • Ordering? • Mechanical devices: • People meters, checkout scanners, eye tracking devices, neuromarketing (e.g., FMRI) Dr. James Carver – Auburn University

23. Analyzing and UsingMarketing Information • Customer relationship management (CRM): • Managing detailed information about individual customers and carefully managing customer “touch points” in order to maximize customer loyalty. • Captures customer information from all sources • Analyzes it in-depth • CRM analysts develop data warehouses and use data mining techniques to find out information about customers and generate new marketing opportunities Dr. James Carver – Auburn University

24. Other Marketing Information Considerations • Small businesses and nonprofit organizations can also benefit from marketing research insights. • International marketing research is growing but presents unique challenges. • Misuse of marketing research can harm consumers. Public policy and ethics in marketing research is concerned with: • Intrusions on consumer privacy • Misuse of research findings Dr. James Carver – Auburn University