Marketing Analytics

Marketing Analytics
• Identifying Marketing Information Needs
• Customer databases and Developing a
Marketing Information System
• Data mining
• Marketing Research, Analyzing and Using
Marketing Information for Forecasting
• On–line Research
• Impact of Big Data
 Marketing Analytics
• Marketing analytics involves measuring,
managing, and analyzing marketing
performance data to make it as effective as
possible and optimize return on investment
(ROI). Marketers also use analytics to gain
insights into customer behavior, preferences,
and trends.
 What is a
Marketing Information System (MIS)?
A marketing information system consists of
people, equipment, and procedures to gather,
sort, analyze, evaluate, and distribute needed,
timely, and accurate information to
marketing decision makers.
 Table 3.1 Information Needs Probes
• What decisions do you regularly make?
• What information do you need to make these
decisions?
• What information do you regularly get?
• What special studies do you periodically request?
• What information would you want that you are
not getting now?
• What are the four most helpful improvements
that could be made in the present marketing
information system?
 Internal Records and
Marketing Intelligence

Sales
Order-to-Payment
Information
Cycle
System

Databases, Marketing
Warehousing, Intelligence
Data Mining System
 Sources of Competitive Information

• Independent customer goods and service review

forums
• Distributor or sales agent feedback sites
• Combination sites offering customer reviews and
expert opinions
• Customer complaint sites
• Public blogs
 Environmental Forces
Demographic

Political-Legal Economic

Technological Socio-Cultural

Natural
 Population and Demographics
• Population growth • Educational groups
• Population age mix • Household patterns
• Ethnic markets • Geographical shifts
 Mattel
Markets in
China
Population Age Groups

65+
40-65

25-40
Teens
School-age
Preschool
Schwab’s Chinese-language Web site
Household Patterns
 Economic Environment
• Income Distribution
• Savings, Debt, and Credit

• Levi’s has responded to

changes in income
distribution by offering an
upscale line and a mass
market line
Social-Cultural Environment
Views of themselves

Views of others

Views of organizations

Views of society

Views of nature

Views of the universe

Interest in Nature: A Growing Trend
Marketing Research
 Chapter Questions
• What constitutes good marketing
research?
• What are good metrics for measuring
marketing productivity?
• How can marketers assess their return on
investment of marketing expenditures?
• How can companies more accurately
measure and forecast demand
Gillette Used Extensive Market Research When
Designing the Venus
 What is Marketing Research?
Marketing research is the systematic design,
collection, analysis, and reporting of data and
findings relevant to a specific marketing
situation facing the company.
 Qualitative
The aim of qualitative analysis is a
complete detailed description.
The design emerges as the study
unfolds
Researcher is the data gathering
instrument.
Data is in the form of words
(interviews), pictures (videos), or
objects (artifacts).
Qualitative data is more rich, time
consuming, and less able to be
generalized.
Quantitative
In quantitative research we classify
features, count them, and construct
statistical models in an attempt to
explain what is observed.
All aspects of the study are carefully
designed before data is collected.
Researcher uses tools (questionnaires
or equipment) to collect data.
Data is in the form of numbers and
statistics.
Quantitative data is more efficient,
able to test hypotheses, but may miss
contextual data.
 The Marketing Research Process

Define the problem

Develop research plan

Collect information Make

decision
Analyze information

Present findings
 Case 1
• A company going to launch women
accessories with features of self defense
weapon find out customer preferences, design
features and type of accessories ,
• Research on consumer preferences for women
accessories with features of self defense
weapon
 Case 2
• A company going to launch men grooming
range by indentify gap in the market

• Research on customer preferences in male

grooming and makeup range
 Step 1: Define the Problem

• Define the problem

• Specify decision alternatives
• State research objectives
Step 2: Develop the Research Plan

Data Research
Sources Approach

Research Sampling
Instruments Plan

Contact
Methods
Research Approaches
Observation

Ethnographic

Focus Group

Survey

Behavioral Data

Experimentation
Focus Group in Session
Research Instruments

Questionnaires
Qualitative Measures
Technological Devices
 Questionnaire Do’s and Don’ts
• Ensure questions are free of
bias
• Make questions simple
• Make questions specific
• Avoid jargon
• Avoid sophisticated words
• Avoid ambiguous words
• Avoid negatives
• Avoid hypotheticals
• Avoid words that could be
misheard
• Use response bands
• Use mutually exclusive
categories
• Allow for “other” in fixed
response questions
Question Types—Dichotomous
In arranging this trip, did you contact American
Airlines?
 Yes  No
Question Types—Multiple Choice
With whom are you traveling on this trip?
 No one
 Spouse
 Spouse and children
 Children only
 Business associates/friends/relatives
 An organized tour group
 Question Types—Likert Scale

Indicate your level of agreement with the following

statement: Small airlines generally give better service
than large ones.
 Strongly disagree
 Disagree
 Neither agree nor disagree
 Agree
 Strongly agree
 Question Types—Semantic Differential

American Airlines
Large ………………………………...…….Small
Experienced………………….….Inexperienced
Modern……………………….…..Old-fashioned
 Question Types—Importance Scale

Airline food service is _____ to me.

 Extremely important
 Very important
 Somewhat important
 Not very important
 Not at all important
 Question Types—Rating Scale

American Airlines’ food service is _____.

 Excellent
 Very good
 Good
 Fair
 Poor
 Question Types—
Intention to Buy Scale

How likely are you to purchase tickets on American

Airlines if in-flight Internet access were available?
 Definitely buy
 Probably buy
 Not sure
 Probably not buy
 Definitely not buy
 Question Types—Completely Unstructured

What is your opinion of American Airlines?

 Question Types—Word Association

What is the first word that comes to your mind when

you hear the following?
Airline ________________________
American _____________________
Travel ________________________
 Question Types—
Sentence Completion

When I choose an airline, the most important

consideration in my decision is:
__________________________________________
__________________________________________
__________________________________________
__________________________________________
__________________________________________
______________________________.
 Question Types—Story Completion

“I flew American a few days ago. I noticed that the

exterior and interior of the plane had very bright
colors. This aroused in me the following thoughts and
feelings.” Now complete the story.
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
______________
Question Types—Picture
(Empty Balloons)
Question Types—Thematic Apperception Test

Make up a story that reflects what you think is

happening in this picture.
Qualitative Measures

Word Association

Projective Techniques

Visualization
Technological Devices
Galvanometers

Tachistoscope

Eye cameras

Audiometers

GPS
Nielsen Outdoor Leverages GPS to Track
Billboard Reach
 Sampling Plan

• Sampling unit: Who is to be surveyed?

• Sample size: How many people should be
surveyed?
• Sampling procedure: How should the
respondents be chosen?
 Table 4.2 Types of Samples
Probability Samples Nonprobability Samples
• Simple random • Convenience
• Stratified random • Judgment
• Cluster • Quota
 Contact Methods
Mail Questionnaire

Telephone
Interview

Personal
Interview

Online
Interview
 Pros and Cons of Online Research

Advantages Disadvantages
• Inexpensive • Small samples
• Fast • Skewed samples
• Accuracy of data, even • Technological problems
for sensitive questions • Inconsistencies
• Versatility
 What is a
Marketing Decision Support System (MDSS)?

A marketing decision support system is a

coordinated collection of data, systems,
tools, and techniques with supporting
hardware and software by which an
organization gathers and interprets
relevant information from business and
environment and turns it into a basis for
marketing action.
 Barriers Limiting the Use of
Marketing Research

• A narrow conception of the research

• Uneven caliber of researchers
• Poor framing of the problem
• Late and occasionally erroneous findings
• Personality and presentational differences
Data Mining
 Chapter 1. Introduction
• Why Data Mining?

• What Is Data Mining?

 Why Data Mining?

• The Explosive Growth of Data: from terabytes to petabytes

– Data collection and data availability
• Automated data collection tools, database systems, Web,
computerized society
– Major sources of abundant data
• Business: Web, e-commerce, transactions, stocks, …
• Science: Remote sensing, bioinformatics, scientific simulation, …
• Society and everyone: news, digital cameras, YouTube
• We are drowning in data, but starving for knowledge!
• “Necessity is the mother of invention”—Data mining—Automated analysis of
massive data sets
 Evolution of Database Technology

• 1960s:
– Data collection, database creation, IMS and network DBMS
• 1970s:
– Relational data model, relational DBMS implementation
• 1980s:
– RDBMS, advanced data models (extended-relational, OO, deductive, etc.)
– Application-oriented DBMS (spatial, scientific, engineering, etc.)
• 1990s:
– Data mining, data warehousing, multimedia databases, and Web databases
• 2000s
– Stream data management and mining
– Data mining and its applications
– Web technology (XML, data integration) and global information systems
 What Is Data Mining?

• Data mining (knowledge discovery from data)

– Extraction of interesting (non-trivial, implicit, previously unknown and
potentially useful) patterns or knowledge from huge amount of data
• Alternative names
– Knowledge discovery (mining) in databases (KDD), knowledge
extraction, data/pattern analysis, , information harvesting, business
intelligence, etc.
• Watch out: Is everything “data mining”?
– Simple search and query processing
– (Deductive) expert systems
 Knowledge Discovery (KDD) Process
• This is a view from typical database
systems and data warehousing
Pattern Evaluation
communities
• Data mining plays an essential role in
the knowledge discovery process
Data Mining

Task-relevant Data

Data Warehouse Selection

Data Cleaning

Data Integration

Databases
 On–line Research
• Online research is a research method that
involves the collection of information from the
internet.
• Online surveys, polls, questionnaires, forms,
focus groups, are various tools of online
research that are vital in gathering
information essential for market research.
 Big Data
• Big Data is a term used to describe a collection
of data that is huge in size and yet growing
exponentially with time. In short such data is
so large and complex that none of the
traditional data management tools are able to
store it or process it efficiently.
 Big Data is Defined by Volume, Variety and Velocity

What is Big Data ?

Big Data relates to rapidly growing, Structured and Unstructured datasets with sizes beyond the ability of
conventional database tools to store, manage, and analyze them. In addition to its size and complexity, it refers to
its ability to help in “Evidence-Based” Decision-making, having a high impact on business operations

3Vs
Speed, Accuracy and Complexity of Intelligence

1 Large quantity of data

Small Data Sets Big Data which may be enterprise-
Volume specific or general and
public or private
Advanced Big Data
analytics analytics
2
Diverse set of data
being created, such
Variety as social networking
Small Data Sets Big Data feeds, video and
audio files, email,
sensor data and
Traditional Traditional other raw data
analytics analytics Velocity
3
Speed of data inflow as
Gigabytes Terabytes Petabytes Zetabytes well as rate at which this
fast-moving data needs to
Size of Data be stored
Source: CRISIL GR&A analysis

Source: CRISIL GR&A analysis

 The Global Data likely to Grow at a CAGR of 41%

Growth of global data, 2009-2020

Zetabytes CAGR 35.0
(2009-2020)
41.0%

7.9

1.9

0.8

2009 2011 2015 2020

Implication for an organization

 Need for large storage capacity and quick retrieval of data

 Enable informed decision-making effectively, leveraging large data sets
– Turn 12 TB of Tweets created each day into improved product sentiment analysis
– Convert 350 billion annual meter readings to better predict powerconsumption
Note: ZB stands for Zetabytes;
Source: IDC; CRISIL GR&A analysis
 Volume
Today 80% of Data Existing in any Variety

Enterprise is Unstructured Data Velocity

Introduction  Resides in formal data stores – RDBMS and Data

Structured Data Warehouse; grouped in the form of rows or columns
 Variety of sources from where data is being
 Accounts for ~10% of the total data existing currently
generated has also undergone a shift
RDBMS (e.g., Data Microsoft Project
 The types of data being created has changed from ERP and CRM Warehousing Plan File
structured to semi-structured to unstructured data

 A form of structured data that does not conform with the

Implication for organization Semi-
formal structure of data models
Structured Data
 Need to manage broad range of data types  Accounts for ~10% of the total data existing currently

 Process analytic queries across numerous data

types

 Comprises data formats which cannot be stored in row/

Unstructured column format like audio files, video, clickstream data,
Data
Solutions required  Accounts for ~80% of the total data existing currently
Weather Location
 Need to extract meaningful analysis from this data Video Audio Text message Blogs patterns co-ordinates
has led to several technologies to gain traction
 Examples include NoSQL databases to store
unstructured data as well as innovative processing
Web logs & Sensor data/ Geospatial
methods like Hadoop and massive parallel clickstreams M2M Email Social media data
processing (MPP)

Source: Industry reporting; CRISIL GR&A analysis

 Volume

Big Data will Enable Real Time Analytics Variety

Velocity

Big Data velocity enabling real

600+ time use of data
videos on
YouTube 200  Big Data is also characterized by
1,500+
blog posts
million+ velocity or speed i.e. frequency of
emails sent data generation or the frequencyof
data delivery
2
7,000+  New age communication channels
million+
photos on Google such as mobile phones, emails, social
flickr search networking has increased the rate of
Data queries information flows
velocity
per Examples:
minute 400,000+
700,000+  Telcos adopting location based
minutes of
Facebook
Skype marketing based on user location
updates sensed by mobile towers
calling
 Satellite images can help monitor and
US$ 3500+ analyze troop movements, a flood
300,000+ ticks per
are spent minute in plane, cloud patterns, or forest fires
on online 400,000+ securities
shopping trading  Video analysis systems could monitor
tweets on
Twitter
a sensitive or valuable facility,
watching for possible intruders and
alert authorities in real time
Source: Industry reporting; CRISIL GR&A analysis
 Key Players Across the Traditional and Big Data
Technology Stack
Key players in BI/Traditional Analytics vs. Big Data Analytics technology stack
Big Data Analytics

BI/Traditional Analytics
Big Data Use
E-commerce, Search , Social gaming
Traditional BI suites and OLAP
End-user
applications
IT Services – Data Management

Big Data Analytics Basic visualization apps. Advanced visualization apps. MapReduce Programs

Visualization
tools
Traditional Analytics Advanced Analytics

Analytical tools

Parallel Relational Hadoop

Big Data RDBMS NoSQL Databases Database
SAP HANA
Data
management
systems
Conventional
file systems
HDFS

Infrastructure &
storage systems Monolithic Hardware Distributed Hardware

Note: This is a representative list of players

Source: Industry reporting; CRISIL GR&A analysis
 Financial Services and Telecom to be the early
adopters of the Big Data
 Indian service providers like Infosys, Fractal are enabling Big Data analytics in the area of fraud detection, CRM
Financial and customer loyalty program, trading pattern analysis, risk calculation on large portfolio of loans
Services  Key Adopters: JPMorgan Chase, Merrill Lynch, HSBC, American Express, Goldman
Sachs, Barclays, Bank of America, Citigroup, and Wells Fargo

 Telecom players are increasingly focusing on Big Data to limit churn rates, build loyalty and provide multi-
Telecom channel and multi-service applications by proactively analyzing the subscriber and network data
 Key Adopters: Airtel , Vodafone

 Both brick and mortar as well as online retailers are increasing their adoption of Big Data analytics for real time
Retail analysis of purchase behavior and buying patterns, enhanced customer segmentation and customerloyalty
 Key Adopters: Walmart & Sears

 Indian service providers are enabling manufacturing companies through Big Data analytics in the areas of
Manufacturing accurate demand forecasting, optimization of operations, inventory management, open innovation and better
analysis of post sales feedback in real time

 Key benefits of big data in public sector include: Intelligence to counter national threats, Forecast economic
Public Sector events, Traffic management, Environment monitoring, energy/ waste management, etc.

 Healthcare players use Big Data Next-generation sequencing and mapping for genomics, analysis of correlation
Healthcare between treatments & outcomes and real time data from medical devices for better patient care

Source: Industry reporting; CRISIL GR&A analysis