chapter 15 Customer Information Systems McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Customer Information Systems — Today’s Objectives Objectives will be to: Define and understand marketing research Explore a framework for marketing research Examine marketing research data-collection methods Compare how online methods differ from offline methods Discuss what research is best suited by the Internet Understand the implications of international Internet market research Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Exhibit 15.1: Customer-Centric Marketing Process Marketing Research Marketing Strategy and Tactics Customer Relationship Management Sales Force Management and Customer Experience Database Marketing Acquire/Up-Sell Cross-Sell Exhibit 15.2: Leveraging Customer Information Define Problem Collect Data Organize Data Analyze Data Utilize Data Exhibit 15.3: Customer Information System Exhibit 15.4: Framework of Marketing Research Marketing Research Opportunity/Problem Definition Research Design Data Collection and Entry Data Analysis Final Report/Data Utilization Exhibit 15.5: What Is Marketing Research? Target Market Marketing Research Customer Identification Market Opportunities Marketer Definition Public Market Problems Action Consumer Marketing Research Objectives Marketing Research Attempts to Perform Three Basic Tasks: Description Marketing Research Diagnosis Prediction Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Benefits of Marketing Research Improve the quality of decision-making Guide communications with current and potential customers Identify potential opportunities in the marketplace Minimize business risk by uncovering prospective problems Create benchmarks and track progress Evaluate overall success Many more… Benefits of Internet Marketing Research Quickly gain crucial market intelligence Act upon first-mover advantages Stay afloat in a fast-paced environment Reduce market research costs Many more… Exhibit 15.6: Popular Uses of Marketing Research How to segment the market? Who are my customers? What is the price elasticity? Conjoint Analysis Customer Identification When do they purchase? Discrete Choice Modeling Marketing Research Buying-Habit Studies Opinion Research What do they like? Environmental Studies Competitive Analysis Who are my competitors? What are the growth trends? Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Exhibit 15.7: Opportunity/Problem Definition “Market Research on Internet Habits of Teenagers” Project Title “Teenagers Make Up a Large Portion of the Market” Statement of Marketing Problem/Opportunity Identify the Characteristics of Webpages Teenagers Visit Ex.: What Sites Do Teenagers Visit Most? Project Objective(s) Questions That the Study Attempts to Answer Exhibit 15.8: Deciding on a Research Design Type Study Type Exploratory Research Why? How? When? Conclusive Research Causal Research Descriptive Research What Causes What? Who, What, When, Where? How Often? How Many? Exhibit 15.9: Types of Marketing Research Data Information Previously Collected and Published Secondary Research Ex.: Library Search Information Gleaned by a Researcher for a Specific Purpose Primary Research Ex.: Interview Information About the Motivations, Perceptions and Thoughts of a Group Qualitative Research Ex.: Focus Groups Information About How Many People in a Population Share a Set of Characteristics Quantitative Research Ex.: Interview Population Sampling Desired Accuracy? How Many Subjects? Random Selection — Equal Impact on Study Result? Representative Sample Exhibit 15.10: Guidelines for Using the Internet for Marketing Research Can a sufficiently representative sample be drawn? Yes No Can confidentiality be assured? Yes No Can answers be obtained via simple surveys? Yes Internet Marketing Research No Traditional Marketing Research Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Exhibit 15.11: Marketing Research Data-Collection Methods Data-Collection Methods Offline Methods Secondary Colleges, universities, libraries Books, publications Magazines, newspapers Marketing departments Others Online Methods Primary Secondary Primary Focus groups Search engines Questionnaires Surveys Newsgroups Observations Directories Discussion groups Click data Exhibit 15.12: Questionnaire Types Questionnaires Flat File Instruments Interactive Instruments E-Mail Integrated Questionnaires Simple, Non-Interactive Survey Simple, Interactive Survey E-Mail Survey or Delivery Tool Exhibit 15.13: Survey Questions Survey Questions How Old Are You? Single-Response Questions Are You Male or Female? DichotomousResponse Questions In Which of the Following Income Ranges Do You Fall? MultichotomousResponse Questions Scaled Questions PairedComparison Tradeoff Open-Ended Questions In 100 Words or Less, Describe Your Experience With This Product What Would You Prefer — a Porsche or a Ferrari? On a Scale of 1 to 10, How Happy Are You? Internet Compatibility High Low Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Exhibit 15.14: Comparison of Offline & Online Marketing Research Methods Decision Factor Offline Method Online Method Cost High Low Turnaround Time Slow Quick Labor-Intensive Labor-Nonintensive Medium High High Low Accurate Inaccurate Controllable High to Uncontrollable** Limited Unlimited High Low Limited Unlimited High to Medium Low Low High Effort Data Quality* Researcher Control Sampling Sample-selection Bias Delivery/Illustration Interviewer Bias Geographical Coverage Anonymity guarantee Ethical Issues (privacy) * Quality of data is defined here as ease and timeliness of data collection and entry. ** As the Internet becomes ubiquitous, this issue is becoming less important. Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Exhibit 15.15: Data Analysis Data Analysis Procedures Basic Statistics Frequency tables Cross-tabulation Graphic representation Descriptive Statistics Inferential Statistics Mean T-test Standard deviation Correlation Median Inter-quartile range Others Mode Range Complexity Econometric Analysis Linear regression Nonlinear regression Logit modeling Clustering analysis Turf analysis Logistic regression Validation Internal Validation: What happens to my results if I change one study parameter? External Validation: How does my study compare to actual data or other studies? Validation: Are my results realistic? Exhibit 15.16: Database Marketing Program Plan I. II. Marketing objectives Market analysis A. Customer analysis and segmentation B. Competition C. Environment III. Offer and market fit IV. Assessment of performance with similar programs V. Communication strategy A. Targeting and positioning B. Unique selling proposition C. Media and list decisions D. Message strategy VI. Database requirements A. Development B. Utilization C. Enhancement VII. Program budget VIII. Timeline IX. Accountability Exhibit 15.18: Provider-Consumer Interaction Matrix Chapter 15: Customer Information Systems Understanding Marketing Research Benefits and Uses of Marketing Research Framework for Marketing Research Data Collection in Marketing Research Comparisons for Offline and Online Marketing Research Methods Guidelines for Conducting Data Analysis and Utilization Conclusion Customer Information Systems — Conclusion A general marketing research framework involves the following seven steps: 1) opportunity or problem definition, 2) research design, 3) data collection and entry, 4) data analysis, and 5) final report and data utilization Offline marketing research methods are generally reliable but expensive and labor-intensive. Online methods significantly reduce the turnaround time and cost, but it may be difficult to draw a random and representative sample. Internet-based marketing research works best when: A representative sample can be drawn from the population There is no issue with confidentiality of the data The topic is sufficiently straightforward that it can be communicated via a short, relatively simple survey