A good MIS balances what the information users would like to have against what they need and what is feasible to offer.

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1 Chapter 5 Managing Marketing Information to Gain Customer Insight Customer Insight fresh understanding of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships. Marketing Information System (MIS) consists of people and procedures for: Assessing the information needs Developing needed information Helping decision makers use the information for customers Assessing Marketing Information Needs MIS provides information to the company s marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies. A good MIS balances what the information users would like to have against what they need and what is feasible to offer. Sometimes the company cannot provide the needed information, either because it is not available or because of MIS limitations. The costs of obtaining, analyzing, storing, and delivering information can mount quickly. The company must decide whether the value of insights gained from additional information is worth the costs of providing it, and both value and cost are often hard to assess. Developing Marketing Information 1) Internal Database information collected from different sources within the company, and stored within the organization s information system. 1

2 o Accounting system o Operations/productions\sales reporting system o Sales reporting system o Past research studies Internal data is cheap, quick and easy May not be in a usable form for the decision to be made. May be incomplete or inappropriate to a particular situation. 2) Marketing Intelligence the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplace. Good marketing intelligence can help marketers gain insights into how consumers talk about and connect with their brands. Companies need to actively monitor competitors activities. Firms use competitive intelligence to gain early warnings of competitor moves and strategies, new-product launches, new or changing markets, and potential competitive strengths and weaknesses. o Competitor intelligence can be collected from people inside the company - executives, engineers and scientists, purchasing agents, and the sales force. o Some companies have even rifled their competitors garbage. o Competitors often reveal intelligence information through their annual reports, business publications, trade show exhibits, press releases, advertisements, and webpages. o Intelligence can be obtained through any of thousands of online databases. Facing determined marketing intelligence efforts by competitors, most companies are now taking steps to protect their own information. 3) Marketing Research - the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation. A multi-step, purpose-driven process: Measure effectiveness of marketing actions, sales potential, try to understand consumer behaviour. Can be done by company personnel or contracted out to outside companies. 2

3 (I) Defining the Problem and Research Objectives Defining the problem and research objectives is often the hardest step in the research process. Helps to know what you are looking for. Partnership of manager and researcher. After the problem has been defined carefully, the manager and researcher must set the research objectives: o Exploratory research marketing research to gather preliminary information that will help define problems and suggest hypothesis. o Descriptive research marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographic and attitudes of consumers. o Causal research marketing research to test hypotheses about cause-and-effect relationships. (II) Developing the Research Plan Once the research problems and objectives have been defined, researchers must determine the exact information needed, develop a plan for gathering it efficiently, and present the plan to management. Written document which outlines the type of problem, objectives, data needed, and the expected value of the results. Sources include: o Secondary data information collected for another purpose which already exists. Sources: - Government, commercial, and academic sources - Publications and online databases Pros: fast, inexpensive. Cons: availability of the right info. o Primary data information collected for the specific purpose at hand. Research Approaches 3

4 Observation research gathering primary data by observing relevant people, actions, and situations. Discovers behavior but not motivations. Can obtain information that people are unwilling or unable to provide. Observations can be very difficult to interpret. Ethnographic research a form of observational research that involves sending trained observers to watch and interact with consumers in their natural habitat. Observational and ethnographic research often yield the kinds of details that just don t emerge from traditional research questionnaires or focus groups. Survey research gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior. Effective for descriptive information. Flexible it can be used to obtain many different kinds of information in many different situations. Experimental research gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling other factors and checking for differences in group responses. Investigates cause and effect relationships. Gathers causal information. Contact Methods Mail surveys (large amounts, low cost, not very flexible, little control over the sample) Telephone surveys (quick, flexible, higher response rate, high cost) Personal interviewing Individual (flexible, 3 or 4 times as much as telephone interviews) Focus group (participants are paid for attending, consumers are not always open and honest) Online research (speed, low costs, responses are instantaneous, more interactive and engaging, easier to complete, and less intrusive than traditional phone or mail surveys) Quantitative research conducting marketing surveys and collecting data. Qualitative research online focus groups or depth interviews. Sampling Plan Who should be surveyed? Individual? Household? How many? (sample size) 4

5 How? (sampling procedure) Probability samples each population member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error. Non-probability samples Research Instrument Questionnaires (flexible) Include open-ended (short answers) and closed-ended questions (mcqs) Phrasing and question order are key simple, direct, unbiased wording. Mechanical Instruments Nielsen s people meters (television) Checkout scanners (shoppers purchase) Eye tracking ( neuromarketing ) (III) (IV) Implementing the Research Plan Collect, process, and analyze the information. Most expensive and most subject to error. Process and analyze the collected data to isolate important information and findings. Implementing and Reporting the Findings The market researcher must interpret the findings, draw conclusions, and report them to management. Managers may be biased they might tend to accept research results that show what they expected and to reject those that they did not expect or hope for => findings can be interpreted in different ways. Analyzing and Using Marketing Information Customer Relationship Management (CRM) managing detailed information about individual customers and carefully managing customer touchpoints to maximize customer loyalty. CRM analysts develop data warehouses and use sophisticated data mining techniques to understand customer data. CRM data systems offer strong benefits in detailed and deep analysis for both reporting and prediction purposes. CRM systems investments are costly, and require investment in new internal competencies and focus that often entail organizational change. 5

6 Distributing and Using Marketing Information Routine reporting makes information available in a timely manner. User-friendly databases allow for special queries. Intranets and extranets help distribute information to company employees and valuenetwork members. 6