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Slide 5.

Chapter 5
Internal secondary data and
the use of databases

The research industry needs to evolve in


order to weather the digital storm of
change that threatens to engulf it.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.2

Chapter outline
1) Internal secondary data
2) Geodemographic data analyses
3) Customer relationship management
4) Web analytics
5) Linking different types of data
6) International marketing research
7) Ethics in marketing research
8) Digital applications in marketing research

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.3

Examples of data generated from invoices that


could help to understand consumer behaviour

What products customers buy


Which customers buy the most products
Which customers repeat purchases
Which customers appear only when there are
special offers
Where these customers are located
How these customers pay by cash or credit
Which customers are the most profitable
Seasonal patterns of purchasing behaviour by
product types and customer types.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.4

Researchers benefits of loyalty card


and product scanning systems

Profile of customers can be built up


One big laboratory
Refining the marketing process
Developing a clear understanding of gaps
in the knowledge of consumers
Linking behavioural and attitudinal data

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.5

Geodemographic information system

At a base level, a geodemographic information


system matches geographic information with
demographic information. This allows subsequent
data analyses to be presented on maps.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.6

Geodemographic classification

Geodemographic classification groups consumers


together based on the types of neighbourhood in
which they live. If a set of neighbourhoods are
similar across a wide range of demographic
measures, they will also offer similar potential
across most products, brands, services and media.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.7

Sophisticated singles

Sophisticated Singles contains young people, mostly single and well


educated, who positively enjoy the variety and stimulation afforded by
life in large cities. Typically international in their outlook and with a rich
network of personal contacts, they are quick to explore and adopt new
social and political attitudes and are important agents of innovation, in
terms of both lifestyles and the adoption of consumer products. Most
are at the stage of their lives when the development of human capital,
i.e. skills, contacts, knowledge, continue to take precedence over the
maximization of their incomes or indeed the accumulation of financial
assets and much of their income is spent on experiences, such as
entertainment, eating out, travel, books and magazines, rather than on
equipment. They exhibit a variety of household arrangements and
typically marry and have children late in their lives. Such people
gravitate towards the smarter downtown areas of major cities where
they spend short periods of time living in small, rented apartments.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.8

Customer relationship management

The processes involved in the identification of


profitable customers and/or customer groups and
the cultivation of relationships with these
customers. The aim of such processes is to build
customer loyalty, raise retention rates and
therefore increase profitability.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.9

Customer relationship management

ESOMARs Basic Principles

Market Research shall be clearly distinguished


and separated from non-research activities
including any commercial activity directed at
individual participants.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.10

Customer relationship management

ESOMARs Global Market Research Report 2010:


addressing one of the biggest threats to the industry

As CRM databases improve, a growing amount of


data collection needs to be non-anonymous and
linked to customer databases at the moment
marketing research is not well placed to contribute
to that process.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.11

Web Analytics

The process of collection,


measurement and analysis of user
activity on a website.

When linked to other databases within an


organisation or integrated with a GIS or CRM
system, this form of electronic observation can
measure and model customers in ways that
marketing research techniques may find
impossible to replicate.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.12

Figure 5.1 Building consumer profiles from website events

Website
Data Click
event

Website visit Visit

Browsing

Repeat visit Visitor

Person
identified
Customer

Shopping
Person High Value
Knowledge Customer
profiled

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.13

Figure 5.2 Visitor profile database

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.14

Figure 5.3 Methods of segmenting markets

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.15
Figure 5.4 Approaches to gaining consumer insight

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.16

Challenges in integrating marketing research,


customer analytics, social media research and
business intelligence

1. Data challenges. To source, gather, validate, store,


integrate, feed, model, analyse and interpret internally and
externally generated quantitative and qualitative data.

2. Information system challenges. To manage this


array of data, develop and support emergent knowledge in an
organisation.

3. Marketing challenges. To keep abreast of the nature


and dynamism of what should be an organisations target
markets and performance in those markets.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.17

Distinctive role of marketing research

1. Focus upon existing and potential customers.


2. Use quantitative and qualitative approaches to tap into a rich
array of consumer attitudes, emotions and aspirations.
3. Tap into a rich array of sensory and experiential characteristics
of consumers.
4. Draw on a well established and robust theoretical base in
measuring and understanding consumers.
5. Draw on a well established and robust theoretical base in being
representative and generalising populations.
6. Demonstrate social responsibility through a long established,
proactive and open code of conduct.

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012
Slide 5.18

What ethical dilemmas emerge from the


marketing researcher working with databases
where participant anonymity is lost?

The marketing research industry needs to


acknowledge that databases are serious products and
that both types of information have benefits. If you
take the best of both what we call information based
marketing you get something that is significantly
more powerful. The `them and us situation does
nobody any favours and the idea that the two
disciplines bear no resemblance to each other is
wrong.
Greg Ward, Development Director for Taylor Nelson, (www.tns-global.com)

Naresh Malhotra, David Birks and Peter Wills, Marketing Research, 4th Edition, Pearson Education Limited 2012

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