Marketing Information Systems and Marketing Research

1
Marketing Information Systems and Marketing
Research

• Know your enemy and know yourself, and in a
  hundred battles you will never be in peril.
• Sun-Tzu

2
Objectives

• After reading the chapter, you should be able to
  
• Explain the importance of information in gaining
  insights about the marketplace and customers
• Explain the concept of a marketing information
  system
• Outline the marketing research process
• Explain how companies analyze and use marketing
  information

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Marketing information and Customer Insights

• To create value for customers build meaningful
  relationships with them, marketers must gain
  fresh, deep insights into what customers need and
  want.
• such insights come from the good marketing
  information
• While these insights are important for building
  value and relationships, they can be very
  difficult to obtain.
• customer needs motives are often anything but
  obvious
• Marketers must effectively manage marketing
  information from a wide range of sources.
• with information technologies, companies cannow
  generate information in great quantities
• Most marketing managers are overloaded with data
  and often overwhelmed by it, yet complain they
  lack enough information of the right kind.

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Marketing information and Customer Insights

• They dont need more informationthey need better
  information and to make better use of
  information they already have.
• a companys marketing research information
  system must do more than just generate lots of
  data
• The real value of marketing research and
  marketing information lies in how it is usedin
  the customer insights that it provides.
• Many companies are now restructuring renaming
  their marketing research and information
  functions.
• Customer insight groups collect customer market
  information and use the marketing information to
  develop important customer insights from which
  the company can create more value for its
  customers.
• one customer insights group states its mission
  simply as getting better at understanding our
  consumers and meeting their needs.

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The Marketing Information System

• A marketing information system (MIS) consists of
  people, equipment, and procedures to gather,
  sort, analyze, evaluate, and distribute needed,
  timely, and accurate information to marketing
  decision makers.
• it interacts with managers to assess their
  information needs
• it develops needed information from internal
  company records, marketing intelligence
  activities, and the marketing research process
• analysts process information to make it more
  useful
• the MIS distributes information to managers in
  the right form, at the right time to help in
  marketing planning, implementation, and control

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The Marketing Information System
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Assessing Information Needs

• A good marketing information system balances
  information managers would like to have
  againstthat which they really need is feasible
  to obtain.
• Some managers ask for whatever data they can get
  without thinking carefully about cost or
  usefulness.
• too much information can be as harmful as too
  little
• Other busy managers may fail to ask for things
  they need to know, or managers may not ask for
  some types of information that they should have.

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Obtaining Data

• The costs of obtaining, processing, storing, and
  delivering information can add up quickly.
• The company must estimate the value of having an
  item of information against the costs of
  obtaining it.
• value depends on how it will be used, and this
  judgmentis highly subjective
• Sometimes additional information contributes
  littleto improving a managers decision
• the cost may exceed the benefit

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Developing Information

• The answers to the questions in Table 51 will
  help managers assess their marketing information
  needs.

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Developing Internal Data

• Many companies build extensive internal
  databases,of consumer market information
  obtained fromdata sources within the company
  network.
• information in the database can come from many
  sources
• Internal data are accessed more quickly cheaply
  than other sources, but presents some problems.
• it may be incomplete or in the wrong form for
  marketing
• data also age quickly keeping the database
  current requires a major effort
• Every company contains more information than any
  manager can possibly know or analyze.

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Developing Internal Data

• The company brings order to its information gold
  mine, so its managers can easily make informed
  decisions.
• Increasingly, companies are creating data
  warehouses to house customer data in an
  accessible location.
• using powerful data mining techniques, they
  search for meaningful patterns communicate them
  to managers
• Managers can use information gathered from these
  and other sources to evaluate performance and
  detect problems and opportunities.

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Developing Internal Data

• Guest History Information
• Guest information is vital to
• improving service
• creating effective advertising sales promotion
  programs
• developing new products
• improving existing products
• developing marketing and sales plans
• development use of an effective revenue
  management program
• Unfortunately, far too many hospitality firms
  have only a vague idea of who their guests are.

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Developing Internal Data

• Specific guest information needs may include any
  or all of the data shown in Table 52 on Page
  116.
• While this list may seem overbearing and unduly
  inquisitive, hospitality companies
  increasinglycollect and use this type of
  information.
• a hospitality company must be very careful not
  toinfringe on privacy rights of guests or to
  disturb them
• An amazing amount of this information is
  available from internal records, which requires
  interfacing with other departments, such as
  reservations and accounting.

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Developing Internal Data

• Guest Information Trends
• Information concerning guest trends is vital to
  planning and revenue/yield management, and
  include the following
• booking patterns
• cancellations
• conversion percentages (percentage of inquiries
  to reservations)
• overbooking patterns
• historical trends on occupancy for prime,
  shoulder, and low seasons
• yield patterns by season

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Developing Internal Data

• Acquisition
• A system for obtaining guest information may
  include any or all of these techniques
• Handwritten Journals, Card Files from Guest
  Registrations and Personal Observations.
• despite an apparent 19th-century style, thisis
  often adequate for small enterprises
• Guest Comment Cards.
• provide useful information insights into
  problem areas
• Listening to Speaking with Guests.
• an excellent way to find out what guests think,
  and management hears it firsthand

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Developing Internal Data

• Acquisition
• Automated Systems.
• decreasing cost increasing capacity of
  automated guest history systems will allow hotels
  to create close relationships with their
  customers once again
• Mystery Shoppersa 1.5-billion industry.
• companies often hire disguised or mystery
  shoppers to pose as customers and report back on
  their experience
• A mystery shopper works best if there is a
  possibilityfor recognition and reward for good
  job performance
• Company Records.
• one of the most misused sources of information
• Point-of-Sale Information.
• a POS system can collect information about
  individual restaurant patrons where credit cards
  are used

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Marketing Intelligence

• Internal Sources
• Marketing intelligence includes everyday data
  about developments that helps managers prepare
  and adjust marketing plans and short-run tactics.
  
• It can be gathered by executives, front-desk
  staff, service staff, purchasing agents, and
  sales force.
• Hotel owners and managers are essential parts of
  a marketing intelligence system.
• managers should debrief contact personnel
  regularly
• A hospitality company must encourage suppliers,
  convention and tourist bureaus, and travel
  agenciesto pass along important intelligence.

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Marketing Intelligence

• External Sources
• The three types of external marketing information
  their sources are shown in Table 53 on page
  123.
• macromarket information competitive information
  new innovation and trends
• It is worthwhile to encourage gathering of this
  data by treating vendors, salespeople, and
  potential employees in a friendly and receptive
  manner.
• Members of management should be encouraged to
  join community and professional organizations.
• where they are likely to obtain essential
  marketing information

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Marketing Intelligence

• Sources of Competitive Information
• Competitive intelligence is available from trade
  magazine articles, competitors reports,
  speeches, press releases, brochures, and
  advertisements.
• managers should also visit competitors premises
  regularly
• Using the Internet, marketers can search
  competitor names, events, or trends see what
  turns up.
• Companies can subscribe online databases and
  information search services.
• Dialog, DataStar, LEXIS-NEXIS, Dow Jones News
  Retrieval, UMI ProQuest, and Dun Bradstreets
  Online Access

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Marketing Intelligence

• Sources of Competitive Information
• Hospitality managers can subscribe to newsletters
  such as National Restaurant Association Smart
  Brief and hotelmarketing.com
• Associations sometimes collect data from member
  companies, compile it, and make it available to
  members for a reasonable fee.
• this data can be misleading because member
  companies may provide incorrect data or refuse to
  contribute statistics if they have a dominant
  market share

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Marketing Research

• Casual marketing intelligence cannot answer some
  questions, and managers sometimes need to
  commission formal marketing research.
• Marketing research identifies and defines
  marketing opportunities problems, monitors and
  evaluates marketing actions performance, and
  communicates the findings and implications to
  management.

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Marketing Research

• Conducting research
• A company can conduct marketing research by
  employing its own researchers or hiring outside
  researchers.
• Most large companiesmore than 73have their own
  marketing research departments.
• even companies with their own departments hire
  outside firms to do fieldwork and special tasks

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Marketing Research

• Defining the problem and research objectives
• Managers must work closely with researchers to
  define the problem research objectives.
• they must know enough about marketing researchto
  interpret the findings carefully
• If they know little about marketing research,
  they may accept the wrong information, draw wrong
  conclusions, or request more data than they need.
  
• marketing researchers can help the manager define
  the problem and use the findings correctly
• Assuming the problem is well defined, the manager
  and researcher must set research objectives.

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Marketing Research

• Defining the problem and research objectives
• A marketing research project can have one of
  three types of objectives
• exploratory research, to gather preliminary
  information that will help define the problem and
  suggest hypotheses
• descriptive research, to describe size
  composition of the market
• causal research, to test hypotheses about
  cause-and-effect relationships

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Marketing Research

• The research plan specific information needs
• The second marketing research step is determining
  needed information making a data collection
  plan.
• research objectives must be translated into
  specific information needs
• To meet a managers information needs,
  researchers can gather secondary data, primary
  data, or both.
• primary data consist of information collected for
  the specific purpose at hand
• secondary data consist of information already in
  existence somewhere, having been collected for
  another purpose

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Marketing Research

• The research plan specific information needs
• The second marketing research step is determining
  needed information making a data collection
  plan.
• research objectives must be translated into
  specific information needs
• To meet a managers information needs,
  researchers can gather secondary data, primary
  data, or both.
• primary data consist of information collected for
  the specific purpose at hand
• secondary data consist of information already in
  existence somewhere, having been collected for
  another purpose

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Marketing Research

• The research plan primary and secondary data
• Researchers usually start by gathering secondary
  data, usually obtained more quickly and at a
  lower cost than primary data.
• a good starting point for marketing research
• When secondary sources cant provide all the
  needed information, the company must collect
  primary data.

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Marketing Research

• The research plan primary and secondary data
• Data collected casually can be useless or, even
  worse, misleading.
• Designing a plan for primary data collection
  callsfor decisions about research approaches,
  contact methods, a sampling plan, and research
  instruments.

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Marketing Research

• Research Approaches
• Three basic research approaches are observations,
  surveys, and experiments
• Observational research is gathering of primary
  data by observing relevant people, actions, and
  situations
• this research can yield information people are
  normally unwilling or unable to provide
• companies now use ethnographic research,
  observers who watch interact with consumers
• feelings, beliefs, and attitudes that motivate
  buying behavior cannot be observed.
• long-run or infrequent behavior is also difficult
  to observe

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Marketing Research

• Research Approaches
• Three basic research approaches are observations,
  surveys, and experiments
• Survey research, best suited to gathering
  descriptive information, can be structured or
  unstructured
• structured surveys use formal lists of questions
  askedof all respondents in the same way
• unstructured surveys let the interviewer probe
  respondents and guide the interview according to
  their answers
• the major advantage of survey research is its
  flexibility
• sometimes people are cant answer questions as
  they dont remember or never thought about what
  they do why
• careful survey design can help minimize problems

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Marketing Research

• Three basic research approaches are observations,
  surveys, and experiments
• Experimental Research is designed to capture
  cause-and-effect relationships by eliminating
  competing explanations of the observed findings
• the most scientifically valid research
• experiments call for subjecting matched groups of
  subjects to different treatments, controlling
  extraneous variables, and checking whether
  observed response differences are statistically
  significant
• if the experiment is well designed executed,
  managers can have confidence in the conclusions

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Marketing Research

• Contact methods
• mail questionnaires can collect large amounts of
  information at a low cost per respondent.
• telephone interviewing allows quick data
  gathering
• personal interviewing takes two forms individual
  (intercept) and in-depth methods

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Marketing Research

• Online interviews
• Online research is estimated to make up over 35
  of all survey-based research.
• Smart companies are using them to augment rather
  than replace more traditional methods.
• a director of marketing states, Online is not a
  solution in and of itself but it does expand our
  toolkit.
• Internet surveys are quick and can be
  inexpensive.
• response rate can be a problem if they are not
  properly designed and targeted
• Simple technology for a consumer market is
  critical.
• dont expect respondents to wait for graphics to
  load

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Marketing Research

• Focus Groups
• Focus groups are usually conducted by inviting
  6-10 people to gather with a trained moderator to
  talk about a product, service, or organization.
• The moderator starts with broad questions before
  moving to more specific issues.
• encouraging open and easy discussion to foster
  group dynamics that will bring out true feelings
  and thoughts
• Focus group interviewing is becoming a major
  marketing research tool for gaining customer
  insight.
• especially suited for use by managers of hotels
  and restaurants, who have easy access to their
  customers

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Marketing Research

• In-Depth Interviews
• In-depth surveys, another form of qualitative
  personal interviewing, can be used when it
  isdifficult to put together a focus group.
• Another form of qualitative personal
  interviewing, individual interviews using
  open-ended questions.
• they allow a researcher to probe gain insight
  into consumer behavior
• Qualitative research is useful to gain insight
  into definitions and concepts as well as insight
  into survey results.

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Marketing Research

• Sampling plans
• Marketing researchers usually draw conclusions
  about large consumer groups by taking a sample
• a segment of the population selected to represent
  the population as a whole
• Ideally, the sample should allow accurate
  estimates of the thoughts behaviors of the
  larger population
• Designing the sample calls for four decisions.
• who will be surveyed?
• how many people should be surveyed?
• how should the sample be chosen?
• when will the survey be given?

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Marketing Research

• Research Instruments
• In collecting primary data, marketing researchers
  have a choice of primary research instruments.
• the interview (structured and unstructured),
  mechanical devices, and structured models such as
  a test market
• Structured interviews use a questionnaire, by far
  the most common survey instrument.
• because there are many ways to ask questions, the
  questionnaire is very flexible
• Questionnaires should be developed and tested
  carefully before being used on a large scale.
• to avoid errors in a carelessly prepared
  questionnaire

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Marketing Research

• Research instruments Questionnaires
• The marketing researcher must decide what
  questions to ask, what form the questions should
  take, and how to word and sequence the questions.
  
• Questionnaires often omit questions that should
  be answered and include questions that cannot,
  will not, or need not be answered.
• The form of the question can influence the
  response.
• closed-ended questions include all possible
  answers, and subjects are asked to choose among
  them
• open-ended questions allow respondents to answer
  in their own words

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Marketing Research

• Research instruments Questionnaires
• The researcher should use simple, direct,
  unbiased wording and care should also be taken in
  the ordering of questions.
• Table 57 on pages 136-137 provides an
  overviewof formats for closed- and open-ended
  questions.
• Researchers in the hospitality industry must be
  very careful in developing questions and
  selecting the sample not to offend respondents
  unwittingly.
• this problem is less pervasive with many
  products, such as building tile or brass
  fittings

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Marketing Research

• Implementing the research plan
• The plan is put into action by collecting,
  processing, and analyzing the information.
• Data collection can be done by the marketing
  research staff, or by outside firms.
• data collection is generally the most expensive
  and most subject to error
• The collected data must be processed and
  analyzedto pull out important information and
  findings.
• The researcher must interpret the findings, draw
  conclusions report the conclusions to
  management.
• interpretation should not be left entirely to the
  researcher

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Marketing Research

• Interpreting and reporting the findings
• The researcher should avoid overwhelming managers
  with numbers, statistical techniques, and focus.
• management desires findings useful in decision
  making
• Findings can be interpreted in different ways,
  and discussions between researchers and managers
  will help point to the best interpretations.
• Interpretation is an important phase of the
  marketing process, as the best research is
  meaningless if a manager blindly accepts wrong
  interpretations
• managers may also have biased interpretations

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Marketing Research

• Interpreting and reporting the findings
• Information gathered can often benefit from
  additional analysis to help interpret the
  findings.
• such as advanced statistical analysis to learn
  moreabout the relationships within a set of data
• Such analysis allows managers to go beyond means
  and standard deviations in the data.
• mathematical models might also help marketers
  make better decisions
• Marketing information has no value until managers
  use it to make better decisions.

43
Marketing Research

• Interpreting and reporting the findings
• Information must reach appropriate marketing
  managers at the right time.
• often, the information arrives too late to be
  useful
• Recent developments in information handling have
  led to a revolution in information distribution.
• in some companies, marketing managers can use a
  desk terminal to tie into the companys
  information network
• Such systems allow managers to obtain needed
  information directly quickly tailor it to their
  needs.
• Hospitality companies will increasingly use
  decentralized marketing information systems.

44
International Marketing Research

• International marketing researchers often face
  more and different problems than domestic
  researchers with homogeneous markets within a
  single country.
• Markets in many different countries often vary
  dramatically in levels of economic development,
  cultures and customs, and buying patterns.
• in many foreign markets, the international
  researcherhas a difficult time finding good
  secondary data
• US researchers can obtain reliable secondary data
  from dozens of domestic research services.
• many countries have almost no research services
  at all

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International Marketing Research

• Language differences Differences in cultures
  from country to country cause additional problems
  for international researchers.
• language is the most obvious culprit
• Example of the Chevrolet Nova

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International Marketing Research

• Consumers attitudes vary toward marketing
  research, and people in one country may be very
  willing to respond in others, nonresponse is a
  major problem
• customs in some Islamic countries prohibit people
  from talking with strangers
• high functional illiteracy rates in many
  countries makeit impossible to use a written
  survey for some segments
• middle-class people in developing countries often
  make false claims in order to appear well off

47
Marketing Research

• Smaller organizations
• Managers of small businesses often believe that
  marketing research can be done only by experts in
  large companies with large research budgets.
• many marketing research techniques can be used by
  smaller organizations and at little or no expense
• Secondary data collection, observation, surveys,
  and experiments can be effective for small
  organizations.
• small business managers can obtain good marketing
  information by observing what occurs around them
• managers can also conduct simple experiments and
  informal surveys using small convenience samples