Essentials of Marketing Research

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Essentials of Marketing Research

• Kumar, Aaker, Day
• Instructors Presentation Slides

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ChapterTwo

• Marketing Research in Practice

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Information Systems in Marketing Research

• What is a information system (IS)?
• Types of Information Systems
• Types of Information for MDSS
• Purpose of MDSS
• What issues should be considered in designing a
  marketing information system?
• How should the marketing information system be
  staffed and equipped?

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Information System (IS)

• A continuing and interacting structure of people,
  equipment and procedures designed to gather,
  sort, analyze, evaluate, and distribute
  pertinent, timely and accurate information.
• Example SAP

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SAP (Application Software)
Production Planning
Procurement
Service
Marketing Sales
SAP
Inventory
Accounting
Shipping Distribution
Production
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Types of Information Systems

• Information System (IS)
• Decision Support System (DSS)
• Marketing Decision Support System (MDSS)

MDSS
IS
DSS
MDSS
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Decision Support Systems (DSS)

• DSS models are developed and adapted to support
  each firms own decision problems
• Used to retrieve data, transform it into usable
  information, and disseminate it to users
• Allow managers to interact directly with database
  to retrieve information (EIS)
• Provides a modeling function to help interpret
  information retrieved (OLAP)

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Exemplary Entry Screen for Executive Information
System
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Online Analytical Processing (OLAP)

• Also known as multidimensional data analysis.
• Fast, flexible data summarizations.
• Online analyses and reporting capabilities.
• Ability to view trends over time.
• Beyond traditional two-dimensional row and column
  data analysis.

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3-D Plot in OLAP
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Types of Information for MDSS

• Recurring market and accounting data from market
  analysis and accounting activities
• Intelligence relevant to future strategy of
  business
• Marketing research studies not of a recurring
  nature
• May contain a broad range of data from both
  internal and external sources

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Purpose of MDSS

• Identify problems and opportunities at an early
  stage
• Provides early information for a head start or at
  least to keep up with competitors
• Not totally separate activities
• MDSS specifically for marketing decisions and
  used by marketing staff
• Direct data access shifts to line positions

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Level of Data Aggregation

• Disaggregated or aggregated
• Disaggregate data are more flexible and are
  typically used by companies (sales per customer)
• Example Spiegel Inc. Mail Order
• disaggregate records for identifying consumers
  with slow order cycles (fewer catalogs)
• identifying consumers who have missed their order
  cycle (reminder letters, discounts)
• identifying customers who order repeatedly in the
  same department (specialty mailings)

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Use of Information Systems (IS) in Marketing
Research

• IS emphasizes that market research should be part
  of systematic and continuous effort to improve
  decision-making process
• Marketing research used to close gaps in data
  base revealed by use of models and IS

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Who uses Marketing Research?

• Organizations vary greatly in their use of
  marketing research
• Size (small vs. large)
• Philosophy
• Industry (stable vs. unstable)
• Product (non-durable vs. durable, consumer vs.
  industrial product)

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Who produces Marketing Research?

• Corporate or in-house marketing research
  department
• External suppliers

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Type and Nature of Services

• Customized
• Work with individual clients (NPD, Burke,
  M/A/R/C)
• Syndicated
• Routinely collect information on several
  different issues and provide it to firms that
  subscribe to their services (Nielsen Television
  Index, Arbitron)
• Standardized
• Projects conducted in standard, pre-specified
  manner and supplied to several different clients.
  (e.g., Starch readership surveys)

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Type and Nature of Services (Contd.)

• Field
• Suppliers concentrate only on collecting data for
  research projects (personal interview, focus
  groups)
• Selective
• Specialize in just one or two aspects of
  marketing research, mainly concerning data coding
  data, editing or data analysis.
• Branded products / services
• Specialized data collection and analyses
  procedures that address specific research
  problems. Marketed as branded products (e.g.
  PRIZM).

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Example for Branded Service
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Participants in Marketing Research Activities
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The Global Market Research Industry

• Percentage of Worldwide Market Research
  Expenditure Per Country
• United States 39
• Japan 10
• Western Europe 40
• Rest 11
• Revenue of 25 largest marketing research
  companies in 1996 6.1 billion (up 10 from 95)

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Top Global Research Organizations(March, 1997)

• Organization Country Employees Revenue Rev
• (million) International
• AC. Nielsen U.S. 18,000 1,358 78.9
• Cognizant U.S. 7,100 1,223 48.8
• Kantar Group U.K. 2,824 473 60.1
• IRI Inc. U.S. 3,900 405 15.0
• GFK Germany 2,920 318 44.8
• SOFRES France 2,771 276 54.4
• Burke AG Germany 780 167 35.5
• IPSOS France 1,120 161 61.3

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Factors Influencing Choice of Information Supplier

• Internal personnel may not have skills or
  experience
• Outside help may be called to boost internal
  capacity in response to urgent deadline
• Often it is cheaper to go outside

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Factors Influencing Choice of Information
Supplier (contd.)

• Outside suppliers may have special facilities or
  competencies which would be costly to duplicate
  for a single study
• Political considerations
• Increased credibility of research used in
  litigation or in proceedings before regulatory or
  legislative bodies

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Market Research Managers Perceptions of Changes
in the Industry (80s and 90s)
Source 1993 CASRO Journal