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Customer Insights ***

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Fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships

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Marketing Information System (MIS) ***

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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. Good MIS begins & ends with information users.

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Limitation of MIS

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Costly

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Process of MIS

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1) Assess information needs from information users, 2) Develop needed information from marketing environment through internal company databases, marketing intelligence, and marketing research, 3) Result: MIS help analyse & use information to develop customer insights, make marketing decisions, manage customer relationships

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Ways to Develop Marketing Information

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Use Internal data, competitive marketing intelligent

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Internal Data ***

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Electronic collections of consumer and market information obtained from data sources WITHIN company network

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Benefits of Internal Data

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Quickly accessible, cheap

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Limitations of Internal Data

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Incomplete, wrong form for making marketing decision, data ages quickly (outdated), requires sophisticated technology to manage

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Competitive Marketing Intelligence ***

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Systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. To gain insights into how consumers interact with brand.

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Marketing Research ***

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Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

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Process of Marketing Research

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1) Define problem & research objectives, 2) Develop research plan, 3) Implement research plan, 4) Interpret & report findings

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Exploratory Research ***

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Marketing research to gather PRELIMINARY information that will help define problems and suggest hypothesis

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Descriptive Research ***

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Marketing research to BETTER DESCRIBE marketing problem/situations/markets (e.g. market potential for a product or demographics and attitudes of customers)

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Causal Research ***

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Marketing research to TEST HYPOTHESIS about cause-and-effect relationships

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Written Proposal

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Research plan should be written in a written proposal. Must include: management problems, research objectives, information to be obtained, and how results will help mgmt

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Research Plan

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Presented in a written proposal. Includes gathering Secondary and Primary Data

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Secondary Data ***

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Information that already exists somewhere, having been collected for another purpose.

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Ways to Collect Secondary Data

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1) Internal database, 2) Buy from outside suppliers (Nielsen), 3) Commercial Online Databases, 4) Internet search engines

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Commercial Online Databases ***

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Secondary data collection of information available from online commercial sources or accessible via the internet

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PROs of Secondary Data

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1) less costly, 2) quick, 3) can provide data that a company cannot collect on its own (info not directly available/too expensive for one company to gather)

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CONs of Secondary Data

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1) info may not exist, 2) must evaluate secondary info carefully

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Good Characteristics of Secondary Data

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1) Relevant - fits research project needs, 2) Accurate - reliably collected & reported, 3) Current, 4) Impartial - objectively collected & reported

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Primary Data ***

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Information collected for the specific purpose at hand

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Ways to Collect Primary Data

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1) Research Approaches (observational research, survey, experiment), 2) Contact Methods (Mail, telephone, personal, online), 3) Sampling Plan (sampling unit, sample size, sampling procedure), 4) Research Instruments (questionnaire, mechanical instruments).

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Observational Research***

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Gathering primary data by observing relevant people, actions, and situations (patterns, sayings)

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Ethnographic research ***

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Form of observational research. Involves sending trained observers to watch and interact with consumers in their "NATURAL ENVIRONMENT"

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Survey Research ***

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Gathering primary data by asking people questions about their knowledge, attitudes, preferences, buying behaviors

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Pros of Survey

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Best for gathering descriptive information, flexibility (can get different information in many different situations)

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Cons of Survey

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Sometimes people cannot answer because they can't remember, unwillingness to respond (privacy concerns), answer when they don't really know the answer to appear smarter, help interviewer by answering favorable answers, people see it as a waste of time

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Experimental Research

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Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses (explains cause-and-effect relationships)

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Pros of Mail Questionnaires

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Can collect large amount of information, low cost, more honest answers for personal questions (vs. in person/phone), no bias in respondents' answers

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Cons of Mail Questionnaires

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Not flexible (all respondents answer same questions in fixed order), longer to complete, low response rate, little control over sample collected (hard to control 'whom' under an address was the one that filled out questionnaire) = least common in contact method

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Pros of Telephone Interviews

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best to get info quickly, greater flexibility (than mail questionnaires), interviewer can explain questions/skip/probe on certain q's, higher response rates (than mail), more personalized for respondent (address them via name)

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Cons of Telephone Interviews

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Cost per respondent is higher, may not want to discuss personal questions w/ interviewer, INTERVIEWER BIAS, more people are hanging up (due to the age that consumers are frequently been harassed about promotions)

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Interviewer Bias

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The way interviewer talk, how they ask questions may affect respondents' answers

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Personal Interviewing

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Individual Interview (flexible, show products, but more costly than phone), Group Interview (focus group interviews)

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Focus Group Interviewing ***

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Personal interviewing (6-10 people), to gather for few hours with trained interviewer (moderator) to talk about product. Interviewer 'focuses' group discussion on important issues. Researchers watch from behind window or cameras. Major quality marketing research tool.

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Pros of Focus Group Interviews

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Group interaction, spontaneity, richness, easy to understand (consumer language), speed, flexibility

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Cons of Focus Group Interviewing

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Small samples (to keep time & cost low), hard to generalize, consumers not always open/honest in front of other people

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New Focus Group Environments

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To create more congenial/comfortable setting where people can open up, share personal stories (more relevant)

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Immersion Groups

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A change/revised focus group design - small groups of consumers interacting directly & informally with product designers without focus group moderator present.

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Online Marketing Research ***

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Collecting primary data online through Internet surveys, online focus groups, Web-based experiments, or tracking consumers' online behavior.

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Quantitative Internet Research

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Conducting marketing surveys and collecting data (web based survey, online research)

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Pros of Web-based Surveys

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Speed, low cost, easily distributed, responses are instantaneous.

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Pros of Online Research

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Quantitative internet research approach. Little difference in cost and sample size, excellent medium to reach to hard-t0-reach targets.

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Qualitative Web-based research approaches

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Online depth interviews, focus groups, blogs, social network

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Online Focus Groups ***

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Primary qualitative web-based research approach. Gathers a small group of people online w/ trained moderator to talk about a product & gain QUALITATIVE insights about consumer attitudes and behavior (around the world). Pros: Can target international groups, Low cost, immediate results. Cons: requires advanced booking.

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Biggest issue facing online researcher

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Customers' privacy (unethical) - despite this, online marketing research is predicted to continue to grow

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Sample ***

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Segment of population selected for marketing research to represent population as a whole

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Designing a Sample

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1) Who? - what sampling unit, 2) How many? - sample size, 3) How are people in sample chosen? - sampling procedure

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Probability Samples

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Each population has a KNOWN chance of being included in sample, researchers can calculate confidence limits for sampling error. (E.g. simple random sample, stratified random sample, cluster (area) sample)

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Simple Random Sample

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Type of probability sample. Everyone has a known and equal chance of selection.

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Stratified Random Sample

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Type of probability sample. Population is divided into mutually exclusive groups (age groups), then random samples are drawn from each group.

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Cluster (area) Sample

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Type of probability sample. Population divided into mutually exclusive groups (blocks), and researcher draws a sample of groups to interview.

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Nonprobability Samples

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Used when probability sampling costs too much/too much time, cannot measure sampling error. (E.g. convenience sample, judgment sample, quota sample)

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Convenience Sample

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Type of NON-probability sample. Researcher select easier population members.

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Judgment Sample

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Type of non-probability sample. Researcher uses their judgment to select population member who are good prospects for accurate info.

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Quota Sample

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Type of non-probability sample. Researcher finds & interviews a prescribed number of people in each of several categories.

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2 Main Research Instruments for Collecting Primary Data

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1) Questionnaire, 2) Mechanical Devices

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Questionnaires

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Most common instrument. Very flexible in ways of asking questions (closed-ended questions vs. open-ended questions = good for explanatory research - to find what people think). Must consider "wording" and "ordering" of questions

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Characteristics of good questions

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Simple, direct, and unbiased wording. Questions should be arranged in a logical order (harder questions come last).

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Mechanical Instruments

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E.g. tools to track eye movement to see if consumers liked ads, attaching people meters to TV to see what people watch.

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Neuromarketing

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Measures brain activity to learn how consumers act/respond. Usually used in combination with other approaches since it's harder to interpret.

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Implementing the Research Plan

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(Step 3 in Marketing Research). Involves collecting, processing, and analyzing information. Must watch out for problems with quality of responses, interviewers' mistakes. Check for accuracy & completeness. Researchers then code it via statistical measures.

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Interpreting & Reporting the Findings

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(Step 4 in Marketing research). Managers + Researchers must work together to avoid bias and coming with solution.

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Analyzing and Using Marketing Information

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1) Use CRM (to capture consumer touch points and customize customers' experience), 2) Distribute & use marketing information (via intranet or extranet CRM systems)

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Customer Relationship Management (CRM) ***

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Managing detailed information about individual customers and carefully managing customer touch points to maximize customer loyalty. CRM analysts develop data warehouse, and use data mining techniques to find hidden customer data.

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Pros of CRM

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Can provide better customer service, develop deeper customer relationships; pinpoint high-value customers, target them, cross-sell other products, and create customized offers.

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Cautions from CRM

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Must not look at CRM only as technology and software solution - it is just one part of effective "customer relationship management strategy".

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Customer Touch Point

answer

Smart companies capture information at every possible customer touch points. Include customer purchases, sales force contacts, service and support calls, Web site visits, satisfaction surveys, credit/payment interactions, market research studies - every contact between a customer and a company.

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Data Warehouses

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Company-wide electronic database of finely detailed customer information that needs to be sifted through. Purpose: to consolidate information to a central, accessible location. Used in CRM.

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Data Mining

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Technique used in CRM to sift through data in data warehouse and find valuable information = leading to marketing opportunities.

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Intranet and Internal CRM System

answer

Provides ready access to research info, customer contact info, reports, etc. E.g. Uses customer's previous buying history to customize their recommendations.

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Extranets CRM System

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Allowing key customers, value-network members (suppliers, resellers) to access data on demand to update their accounts, arrange purchases = improve customer service.

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3 Special Marketing Information Topics

answer

1) Marketing research in small businesses & non-profit, 2) International marketing research, 3) Public policy and ethics in marketing research

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Marketing Research in Small Businesses & Non-Profit Organization

answer

Secondary data collection, observation, survey, experiments (= effective for small organizations w/ small budget). Smaller sample.

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International Marketing Research

answer

Must consider differences in economic development, cultures, language, customs, and buying patterns. Hard to find secondary data outside US (thus, researchers often collect their own primary data). Harder to reach sample.

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Public Policy & Ethics in Marketing Research

answer

1) Concerns over intrusion on consumer privacy (increasing consumer resentment - major issue for marketing research industry). 2) Misue of research findings - most abuse are "stretches" in info to sell more

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Major issue for marketing research industry

answer

Increasing consumer resentment

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Chief Privacy Officer (CPO)

answer

Most major companies (IBM, Amex) appoint _____, a position to safeguard privacy of consumers who do business with the company.

Ch. 4: Managing Marketing Information to Gain Customer Insight – Flashcards

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