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
Database Marketing
Management
Acquire/Up-Sell
Sales Force Management
Cross-Sell
and Customer Experience
Exhibit 15.2: Leveraging Customer
Information

Define Collect Organize Analyze Utilize

Problem Data Data Data Data
Exhibit 15.3: Customer Information
System
Exhibit 15.4: Framework of Marketing
Research

Opportunity/Problem Definition
Marketing Research

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?

What is
Who are my
the price
customers? Conjoint elasticity?
Analysis
Customer Discrete Choice
Identification Modeling

Marketing
Buying-Habit Research Environmental
When Studies Studies What are
do they the growth
purchase? trends?
Opinion Competitive
Research Analysis

What do Who are my

they like? competitors?
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
Project Title Internet Habits
of Teenagers”

“Teenagers
Make Up a Statement of Marketing
Large Portion
of the Market”
Problem/Opportunity

Identify the
Characteristics
of Webpages Project Objective(s)
Teenagers Visit

Ex.: What Sites

Do Teenagers
Questions That the Study
Visit Most? Attempts to Answer
Exhibit 15.8: Deciding on a Research
Design Type
Study Type

Exploratory Research Conclusive Research

Causal Descriptive
Research Research

Who, How
Why? What
What, Often?
How? Causes
When, How
When? What?
Where? Many?
Exhibit 15.9: Types of Marketing
Research Data
Information
Previously Collected Secondary Research Ex.: Library Search
and Published

Information Gleaned
by a Researcher for a Primary Research Ex.: Interview
Specific Purpose

Information About the

Motivations,
Perceptions and Qualitative Research Ex.: Focus Groups
Thoughts of a Group

Information About
How Many People in a
Population Share a Quantitative Research Ex.: Interview
Set of Characteristics
Population Sampling

Desired
Accuracy?

Random
How Many Selection —
Subjects? 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 No

Internet Marketing
Traditional Marketing Research
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 Online Methods

Secondary Primary Secondary Primary

 Colleges,  Focus groups  Search engines  Questionnaires

universities,  Surveys  Newsgroups  Discussion
libraries
groups
 Observations  Directories
 Books,  Click data
publications
 Magazines,
newspapers
 Marketing
departments
 Others
Exhibit 15.12: Questionnaire Types

Questionnaires

Interactive E-Mail Integrated

Flat File Instruments
Instruments Questionnaires

Simple, Simple,
E-Mail Survey
Non-Interactive Interactive
or Delivery Tool
Survey Survey
 Exhibit 15.13: Survey Questions
Survey Questions

Paired-
How Old Single-Response Scaled Open-Ended
Comparison
Are You? Questions Questions Questions
Tradeoff

Dichotomous-
Are You Male In 100 Words or
Response
or Female? Less, Describe Your
Questions
Experience With
This Product
In Which What Would You
Multichotomous-
of the Following Prefer — a Porsche
Response
Income Ranges or a Ferrari?
Questions
Do You Fall?
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
Effort Labor-Intensive Labor-Nonintensive
Data Quality* Medium High
Researcher Control High Low
Sampling Accurate Inaccurate
Sample-selection Bias Controllable High to Uncontrollable**
Delivery/Illustration Limited Unlimited
Interviewer Bias High Low
Geographical Coverage Limited Unlimited
Anonymity guarantee High to Medium Low
Ethical Issues (privacy) Low High
* 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 Descriptive Inferential Econometric

Statistics Statistics Statistics Analysis
 Frequency  Mean  T-test  Linear
tables regression
 Standard  Correlation
 Cross-tabulation deviation  Nonlinear
regression
 Graphic  Median
representation  Logit modeling
 Inter-quartile
 Others range  Clustering
analysis
 Mode
 Turf analysis
 Range
 Logistic
regression

Complexity
Validation

External Validation: Internal Validation:

How does my study What happens to
compare to actual data my results if I change
or other studies? one study parameter?

Validation:
Are my results
realistic?
Exhibit 15.16: Database Marketing
Program Plan
I. Marketing objectives
II. 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