DECISION SUPPORT SYSTEMS AND MARKETING RESEARCH

Prepared by Angela Zigras, Seneca College Deborah Baker, Texas Christian University

You will learn to ...

1. Explain the concept and purpose of a marketing decision support system. 2. Define marketing research and explain its importance to marketing decision making. 3. Describe the steps involved in conducting a marketing research project.

You will learn to ...

4. Discuss the growing importance of scanner-based research.

5. Explain when marketing research should and should not be conducted.

Marketing Intelligence

Everyday information about developments in the marketing environment that managers use to prepare and adjust marketing plans.

Decision Support System

An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.

DSS System Characteristics

Interactive

Flexible

Discovery-Oriented

Characteristics of a DSS System

Accessible

Database Marketing

The creation of a large computerized file of customers and potential customers profiles and purchase patterns.

Marketing Research

The process of planning, collecting, and analyzing data relevant to a marketing decision.

Defining Market Research

(1)

Research is the systematic and objective approach to investigate a specific problem that needs a solution. Research is a process by which a series of well thought out and carefully executed activities enable one to enquire, investigate or examine a problem to discover new facts to deal with the problem.

Defining Research

(2)

Systematic : well organised and planned Objectivity : unbiased and unemotional The information is used to identify and define opportunities and problems, and make recommendations on solutions Market Research links consumer, customer and the public to the marketers through information. Generate, refine and evaluate marketing actions, performance and the marketing process.

Issues to consider with Problem definition

P R O B L E M

Past information (secondary

data/MIS)

Resources and constraints Objectives Buyer behaviour (human or

organisational)

Legal environment Economic environment Marketing and technological skills

Roles of Marketing Research

Marketing Research has three roles:

Descriptive Diagnostic

Predictive

Roles of Marketing Research

Gathering and presenting Descriptive factual statements

Diagnostic Explaining data

Attempting to estimate the results of a planned marketing decision

Predictive

Management Uses of Marketing Research

Improve the quality of decision making
Trace problems Focus on keeping existing customers

Understand the ever-changing marketplace

Steps in a Marketing Research Project

Define Problem Plan Design/ Primary Data Specify Sampling Procedure

Collect Data

Prepare/ Present Report Follow Up

Analyze Data

Marketing Research
Marketing Research Problem
Marketing Research Objective Management Decision Problem
Determining what information is needed and how that information can be obtained efficiently and effectively.
The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions.

Objective setting example 1

Management Problem: Should a new product be launched?
Research Objective:
Determine consumer preference and purchase intentions for the proposed new product.

Objective setting example 2

Management Problem: Should the ad campaign be changed?
Research Objective: To determine effectiveness of the current campaign.

Objective setting example 3

Management Problem:
Should the price of the brand be increased?

Research Objective:
To determine the price elasticity of demand and the impact on sales and profits of various levels of price changes.

Sources of Secondary Data

Internal Information
Marketing Research Firms Trade and Industry Associations National Research Bureaus Professional Associations

Commercial Publications

Secondary Data

Data previously collected for any purpose other

than the one at hand.

Advantages of Secondary Data

Saves time and money if on target
Aids in determining direction for primary data collection Pinpoints the kinds of people to approach Serves as a basis of comparison for other data

Disadvantages of Secondary Data

May not be on target with the research problem Quality and accuracy of data may pose a problem

The New Age of Secondary Information

The Internet

Search Engines and Directories

www

Sites of Interest to Marketing Researchers

Discussion Groups Periodical, Newspaper, and Book Databases

Basic Types of Directories

Academic and Professional Directories Commercial Portals

Research Design

Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

Planning the Research Design

Which research questions must be answered?

How and when will data be gathered?

How will the data be analyzed?

Primary Data

Information collected for the first time. Can be used for solving the particular problem under investigation.

Advantages of Primary Data

Answers a specific research question
Data are current Source of data is known Secrecy can be maintained

Disadvantages of Primary Data

Expensive Quality declines if interviews are lengthy

Reluctance to participate in lengthy interviews

Survey Research

The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes.

Forms of Survey Research

Mall Intercept Interviews

Mail Surveys

Computer-assisted Personal Interviewing Telephone Interviews

(Home and Central Location)

Internet Surveys

Focus Groups

Mall Intercept Interview

Survey research method that involves interviewing people in the common areas of shopping malls.

Computer-Assisted Personal Interviewing

An interviewing method in which the interviewer reads the questions from a computer screen and enters the respondents data directly into the computer.

Impact of the Internet

Allows better and faster decision making
Improves ability to respond quickly to customer needs and market shifts

Makes follow-up studies and research easier

Slashes labour-and time-intensive research activities

Advantages of Internet Surveys

Rapid development, Real-time reporting Reduced costs

Advantages of Internet Surveys

Personalized questions and data Improved respondent participation Contact with the hard-to-reach

Internet Samples
Unrestricted Internet Sample
Screened Internet Sample Recruited Internet Sample
A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate.

Other Uses of the Internet

Distribution of requests for proposals Collaboration in the management of a research project

Other Internet Uses by Marketing Researchers

Data management and on-line analysis Publication and distribution of reports Viewing of presentations of marketing research surveys

Focus Group

Seven to ten people who participate in a group discussion led by a moderator.

Advantages of On-Line Focus Groups

Speed
Cost-effectiveness Broad geographic scope Accessibility

Honesty

Questionnaire Design
Open-Ended Question
Closed-Ended Question ScaledResponse Question
An interview question that encourages an answer phrased in respondents own words. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondents answer.

Questionnaire Design
Clear and Concise

No Ambiguous Language Qualities of Good Questionnaires Unbiased

Reasonable Terminology

Observation Research
A research method that relies on three types of observation:
people
people

watching people
watching an activity watching people

machines

Observation Research
People Watching People
Mystery Shoppers One-Way Mirrors

Types of Observation Research

People Watching an Activity Machines Watching People

Audits

Traffic Counters Passive People Meter

Mystery Shoppers
Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions.

Experiment

A method a researcher uses to gather primary data.

Sampling Procedure

Sample Universe

A subset from a large population. The population from which a sample will be drawn.

Probability Samples

Probability Sample Random Sample

A sample in which every element in the population has a known statistical likelihood of being selected. A sample arranged so that every element of the population has an equal change of being selected.

Nonprobability Samples

Any sample in which little or no Nonprobability attempt is made to get a representative Sample cross-section of the population

Convenience Sample

A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher.

Sampling Procedure

Sample Universe
Probability Samples

Non-Probability Samples

Types of Errors
Measurement Error Sampling Error Frame Error Random Error

Errors Associated with Sampling

Types of Errors
Measurement Error Sampling Error Frame Error Random Error
Error when there is a difference between the information desired and the information provided by research
Error when a sample somehow does not represent the target population. Error when a sample drawn from a population differs from the target population. Error because the selected sample is an imperfect representation of the overall population.

Field Service Firm

A firm that specializes in interviewing respondents on a subcontracted basis.

Collecting Data
Field Service Firms Provide
Focus group facilities Mall intercept locations Test product storage Kitchen facilities

Retail audits

Types of Samples
Probability Samples
Simple Random Sample
Stratified Sample Cluster Sample Systematic Sample

Non-Probability Samples
Convenience Sample
Judgment Sample Quota Sample Snowball Sample

Cross-Tabulation
A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions.

Preparing and Presenting the Report

Concise statement of the research objectives
Explanation of research design Summary of major findings Conclusion with recommendations

Following Up
Were the recommendations followed?
Was sufficient decision-making information included in the report? What could have been done to make the report more useful?

Scanner-Based Research
A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.

When Should Marketing Research be Conducted?

Where there is a high level of uncertainty When value of research information exceeds the cost of generating the information