Managing Marketing

Information To Gain
Customer Insights
Chapter 4
 Rest Stop: Previewing the Concepts

• Explain the importance of information in

gaining insights about the marketplace and
customers
• Define the marketing information system and
discuss its parts
• Outline the steps in the marketing research
process

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 Rest Stop: Previewing the Concepts

• Explain how companies analyze and use

marketing information
• Discuss the special issues some marketing
researchers face, including public policy and
ethics issues

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 First Stop: Domino’s Pizza
• Declining revenues prompt Domino’s to ask
customers for honest feedback
• Gains insights from social media and focus
groups
• Discovers that main problem is taste
• Reinvents its product, launches “Pizza
Turnaround” campaign
• Result – Increased sales and profits
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 Marketing Information and
Customer Insights
• Consumer needs and motives for buying are
difficult to determine
• Online sources give marketers abundant data
about consumer behavior
• Challenge for companies is to make better
use of information to gain customer insights
• Firms use customer insights to develop a
competitive advantage

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Figure 4.1 - The Marketing Information
System

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 Assessing Information Needs
• A good MIS balances the information users
would like against what they really need
• Collecting, storing and delivering information
using a MIS is expensive
• Information value comes from its use
• Firms must decide whether the value of the
insights gained from more information is
worth the cost

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 Internal Data
• Can be accessed more
quickly and cheaply than
other information
sources
• Ages rapidly and may be
incomplete
• Maintenance and storage
of data is expensive
• Managing much data Financial services provider USAA uses its
requires highly extensive database to tailor its services
sophisticated equipment to the specific needs of individual
& techniques customers, creating incredible loyalty

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 Internal Data
• Can come from many sources:
• The marketing dept
• The customer service dept
• Operations dept
• The sales force
• Marketing channel partners
Harnessing such info can provide powerful
customer insights and competitive advantage.
Competitive Marketing Intelligence
• Techniques include:
• Observing consumers
• Quizzing the company’s own employees
• Benchmarking competitors’ products
• Monitoring Internet buzz
• Actively monitoring competitors’ activities
• Researching the internet
• Lurking around industry trade shows
• From people inside the company
• From suppliers, resellers and key customers
Competitive Marketing Intelligence
• Monitoring Competitors’ published
information
• Checking for new patents
• Examining various types of physical evidence
• Buying and analyzing competitors’ products
• Monitoring competitors’ sales
• Poring through online databases
 Marketing Intelligence
• Gaining insights on how Cs talk about and
connect with the Co.’s brands:
• Sending out teams of trained observers to
mingle with Cs
• Routinely monitor consumers’ online chatter
 Competitive Intelligence Uses
Firms use marketing intelligence to gain early
warnings of:
• competitors’ moves and strategies
• New product launches
• New or changing markets
• Potential competitive strengths and weaknesses
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Figure 4.2 - The Marketing Research
Process

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Defining the Problem and Research
Objectives

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 The Research Plan Outline
• Sources of data
• Specific research approaches
• Contact methods
• Sampling plan
• Research instruments
 The Research Plan

• Should be presented in a written proposal

• Should cover:
• The management problems addressed
• Research objectives
• Information to be obtained
• How results will help decision-making
• Estimated research costs
• Type of data required (Primary or secondary)

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 Secondary Data
• Common sources of secondary data:
• Internal company databases
• Commercial online databases
• Internet search engines
• Industry associations, gov’t agencies, business
publications and news medium
• Cheaper to obtain than primary data
• Can be collected faster than primary data

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 Secondary Data
Must be:
• Relevant
• Accurate
• Current
• Impartial
 Primary Data
• Designing a primary data collection plan
involves making decisions about:
• The research approach
• Observation, ethnographic, survey, or experiment
• Contact methods
• Mail, telephone, personal, or online
• The sampling plan
• Sampling unit, sample size, and sampling procedure
• Research instruments

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 Observational Research
• 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

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 Ethnographic Research

Kraft Canada sent out high-level executives to observe actual family

life in diverse Canadian homes. Videos of their experiences helped
marketers and others across the company to understand the role
Kraft’s brands play in people’s lives
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Contact Methods – Mail Questionnaires

• Pros
• Used to collect large amounts of information at a
relatively low cost per respondent
• Enables more honest responses than interviews
• Absence of interviewer bias
• Cons
• Inflexible, low response rate, take longer to
complete
• Researcher has little control over sample
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 Contact Methods - Telephone
Interviewing
• Pros
• Gathers information fast, high response rate
• Allows greater flexibility than mail surveys
• Strong sample control
• Interviewer can explain difficult questions
• Cons
• Higher costs than mail questionnaires
• Interviewer may bias results or cheat
• Respondents might not want to answer private questions
• Do-not-call lists: potential respondents increasingly
hanging up on phone interviewers
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 Contact Methods – Personal
Interviewing
• Pros
• Highly flexible method that can gather a great deal of
data from a respondent
• Good control of sample, speed of data collection, and
response rate
• Can show subjects actual products, packages or ads and
observe their reactions and behavior
• Cons
• High cost per respondent
• Subject to interviewer bias

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 Focus Groups
• Involve inviting six to
ten people to gather
for a few hours with
a trained interviewer
to talk about a
product, service, or
organization Lexus general manager Mark
Templin hosts “An Evening with
Lexus” dinners with luxury car
buyers to figure out why they did
or didn’t become Lexus owners
 Focus Groups
• Major qualitative marketing research tool for gaining fresh
insights into consumers thoughts and feelings.
• Marketers and researchers watch the focus G discussions
from behind one-way glass and comments are recorded
• Can be Web-based
• Keep costs and time down but cannot generalize results.
• Cs are not always honest about their real feelings and
intentions in front of others
• Immersion groups: Four or five people with whom product
designers and/or marketers talk freely without a focus group
moderator present.
 Contact Methods – Online Marketing
Research
• Pros
• Especially well-suited for conducting marketing surveys
• Speed and lower costs
• Less intrusive
• Lowest cost per respondent of all contact methods;
• For reaching hard to reach audiences
• Good flexibility and response rate due to interactivity
• Responses almost instantaneous ; researchers can
tabulate, review and share research data as they arrive.
• Cons
• Difficulty in controlling sample and impersonal nature
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 Contact Methods – Online Marketing
Research
• The Internet is well
suited to
quantitative
research
• Its low cost puts
online research well
within the reach of Thanks to survey services such as
Zoomerang, almost any business,
almost any business, large or small, can create, publish,
and distribute its own custom
large or small surveys in minutes

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 Online Focus Groups
• Gathering a small group
of people online with a
trained moderator to
chat about a product,
service, or organization
and gain qualitative Channel M2 “puts the human
insights about touch back into online research” by
assembling focus group
consumer attitudes and participants in people-friendly
“virtual interview rooms”
behavior
 Online Focus Groups
• Participants can log from anywhere
• Brings people together from different places
• Can take several formats:
• Online chat room discussions
• Online message board: participants log on
daily and comment on focus group topics.
This format can produce more data and
deeper insights than single session in-person
focus group
 Online Marketing Research
Drawbacks
• Restricted internet access
• Sample control: controlling who’s in the online sample
• Can be dry and lack the dynamics of more personal
approaches
• Consumer privacy:
 Use of technologies that collect information online without
the respondent’s consent
 Use of e-mail addresses and confidential responses gathered
to sell products after research is completed
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 Sampling Plan
• Sampling requires three decisions:
• Who is to be studied? (sampling unit)
• How many people should be included? (sample
size)
• How should the people in the sample be chosen?
(sampling procedure)

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 Research Instruments
• Questionnaires
• Closed-end questions include all the possible
answers, and subjects make choices among them
• Include multiple choice and scale questions
• Open-end questions allow respondents to
answer in their own words
• Suitable for exploratory research
• Mechanical devices
• People meters, checkout scanners, eye cameras,
neuromarketing (electro-loaded caps)
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 Questionnaires
• Close-ended questionnaires measure how
many people think in a certain way
• Open-ended questionnaires try to find out
what people think
• Should be simple, direct, unbiased
• Arranged in a logical order
• Should create interest
• Difficult or personal questions should be
asked last
 Mechanical instruments
• To find out what ads
work and why,
Disney researchers
use an array of
devices to track eye
movement, monitor
heart rates, and
measure other
physical responses
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 Implementing the Research Plan
• Collecting the data: can be outsourced
• Most expensive phase
• Subject to error
• Processing the data
• Check for accuracy and completeness
• Code for analysis
• Analyzing the data
• Tabulate results
• Compute statistical
measures

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 Implementing the Research Plan
• Problems:
• With respondents who refuse to cooperate or
give biased answers
• With interviewers who make mistakes or take
shortcuts
 Interpreting and Reporting
Findings
• Interpret the findings: should not be left only
to researcher
• Draw conclusions
• Report to management
• Present findings and conclusions that will be
most helpful to decision making
• Refrain from overwhelming the manager with
numbers and statistical techniques

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 Customer Relationship
Management (CRM)
• Managing detailed information about
individual customers and carefully managing
customer touch points to maximize customer
loyalty
• Helps firms offer better customer service
• Helps identify high-value customers
• Enhances the firm’s ability to cross-sell products
and develop offers tailored to customers

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 CRM
• Consists of sophisticated software and
analytical tools that integrate customer
information from all sources, analyze it in
depth and apply the results to build stronger
customer relationships.
• CRM analysts develop data warehouses and
use sophisticated mining techniques to sift
through mounts of data and dig out
interesting findings about customers
 Data Warehouse
• A companywide electronic database of finely
detailed customer information that needs to
be sifted through for gems
 Distributing and Using Marketing
Information
• Marketing information systems (MIS) must
make information readily available for
decision-making:
• Routine information for decision making: regular
performance reports, intelligence reports,
reports on the results of research studies
• Nonroutine information for special situations
• Intranets and extranets facilitate the
information sharing process
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 Other Marketing Information
Considerations
• Small businesses and
nonprofit
organizations can
benefit from
marketing research
insights
• International
marketing research Some of the largest research
is growing, but services firms have large
presents unique international organizations.
challenges ACNielsen, for example, has offices
in more than 100 countries

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 Public Policy and Ethics in
Marketing Research
• Intrusions on consumer privacy
• The Marketing Research Association’s “Your
Opinion Counts” and “Respondent Bill of Rights”
initiatives
• Adopting standards that outline researchers’
responsibilities to respondents
• Misuse of research findings
• Development of codes of research ethics and
standards of conduct

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 Rest Stop: Reviewing the Concepts

• Explain the importance of information in

gaining insights about the marketplace and
customers
• Define the marketing information system and
discuss its parts
• Outline the steps in the marketing research
process

4 - 59