Marketing : An Introduction An Asian Perspective Armstrong, Kotler & da Silva 4 Managing Marketing Information © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-1 ROAD MAP: Previewing the Concepts • Explain the importance of information to the company and its understanding of the marketplace. • Define the marketing information system and discuss its parts. • Outline the steps in the marketing research process. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-2 Case Study Coach – Research Revamps Strategy The Situation • Firm began by offering classically styled, highquality leather handbags. • Women needed only two purses in brown or black. • Mid-1990s: sales slowed. • Consumer preferences changed as more women entered the workforce. • Designer bags made Coach’s look plain. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective Copyright 2007, Prentice Hall, 4-3 Role of Information Research’s Role • Method: Interviews 14,000 women annually. Watches trends for “market voids.” • Key research findings: 1) desire for “fashion pizzazz” in handbags. 2) “Usage voids.” • New products are created to fill voids (wristlets, fabric bags, Signature line, etc.). • Sales and earnings grow. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective Copyright 2007, Prentice Hall, 4-4 New Coke instead of classic • New Coke Product Failure: – Poor sales – Over 1,500 phone calls a day from angry customers – Old Coke returns in only 3 months • Was due largely to Research Failure: – Tested on taste only – not intangibles – Decisions based on 60% ratings – All for $4 million! © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-5 The Importance of Information • Companies need information about their: – Customer needs – Marketing environment – Competition • Marketing managers do not need more information, they need better information. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-6 Information Overload “In this oh so overwhelming information age, it’s all too easy to be buried, burdened, and burned out by data overload.” © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-7 The Marketing Information System Figure 4.1 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-8 Marketing Information System • An MIS consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. • The MIS helps managers to: 1. Assess Information Needs 2. Develop Needed Information 3. Distribute Information © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-9 Developing Marketing Information • Internal Databases: Electronic collections of information obtained from data sources within the company. • Marketing Intelligence: Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment. • Marketing Research: Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-10 Internal Databases • Electronic collections of information obtained from data sources within the company. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-11 Marketing Intelligence • Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-12 Marketing Research: • Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. • Why sales declined? • Are my customers happy? © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-13 The Marketing Research Process Figure 4.2 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-14 Defining the Problem & Objectives Exploratory Research Gather preliminary information that will help define the problem and suggest hypotheses. Descriptive Research Describes things (e.g., market potential for a product, Demographics, and attitudes). Causal Research Tests hypotheses about cause-and-effect relationships. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-15 Exploratory Research • Collecting the preliminary information regarding the problem • Usually data will be collected by secondary sources such as internet, books etc. • Informal Interviews, Case study analysis etc. will help to collect more information regarding the problem faced by the company. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-16 Descriptive Research • Also known as Statistical research. • More detailed analysis of the problem faced • Descriptive research answers the questions who, what, where, when and how... • Results and conclusions are based on mathematical/ statistical analysis • Use primary data collection techniques © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-17 Causal Research • Most detailed ways of doing research • Analyze cause and effect relationships © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-18 Developing the Research Plan • Includes: – Determining the exact information needed – Developing a plan for gathering it efficiently – Presenting the written plan to management • Outlines: – Sources of existing data – Specific research approaches – Contact methods – Sampling plans – Instruments for data collection © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-19 Gathering Secondary Data • Information that already exists somewhere – Internal databases – Commercial data services – Government sources • Available more quickly and at a lower cost than primary data • Must be relevant, accurate, current, and impartial © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-20 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-21 Primary Data Collection • Consists of information collected for the specific purpose at hand. • Must be relevant, accurate, current, and unbiased. • Must determine: – Research approach – Contact methods – Sampling plan – Research instruments © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-22 © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-23 Observational Research • The gathering of primary data by observing relevant people, actions, and situations. • Ethnographic research: – Observation in “natural environment” • Mechanical observation: – People meters – Checkout scanners © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-24 Survey Research • Most widely used method for primary data collection. • Approach best suited for gathering descriptive information. • Can gather information about people’s knowledge, attitudes, preferences, or buying behavior. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-25 Experimental Research • Tries to explain causeand-effect relationships. • Involves: – selecting matched groups of subjects, – giving different treatments, – controlling unrelated factors, and – checking differences in group responses. © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-26 Strengths & Weaknesses of Contact Methods © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-27 Choosing the Sample • Sample – segment of the population selected to represent the population as a whole. © Armstrong, Kotler & da Silva • Requires 3 Decisions: – Who is to be surveyed? • Sampling unit – How many people should be surveyed? • Sample size – How should the people in the sample be chosen? • Sampling procedure Marketing : An Introduction An Asian Perspective 4-28 Primary Data Collection Research Instruments Questionnaires Mechanical Devices • What questions to ask • Form of each question •Closed-ended •Open-ended • Wording • Ordering © Armstrong, Kotler & da Silva • • • • People Meters Supermarket Scanners Galvanometer Eye Cameras Marketing : An Introduction An Asian Perspective 4-29 MECHANICAL DEVICES © Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 4-30