MARKETING 1 Chapter 5 MARKETING INFORMATION AND RESEARCH 5-1Understanding the Need for Market Information 5-2Finding and Managing Marketing Information.

MARKETING

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Chapter 5

MARKETING INFORMATIONAND RESEARCH

5-1 Understanding the Need for Market Information

5-2 Finding and Managing Marketing Information

5-3 Using Marketing Research

5-4 Collecting Primary Data

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UNDERSTANDING THE NEED FOR MARKETING INFORMATION

GOALS Explain the importance of information in

making marketing decisions.Describe the categories of information

needed by marketers.

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Starting with Information

Consumer differencesExpanding choicesCompetitionThe global marketplace

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Consumer differencesMost businesses no longer believe that all

consumers are alike Recognize that various consumers have very

different needs and view choices differentlyBusinesses know that in order to meet consumer

needs and expectations they must have detailed information about them

Must be able to determine similarities and differences of market segments

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Expanding choicesCustomers are able to satisfy their basic needs

more easily than in the pastMoving beyond basic needs and are devoting

more resources to satisfying their wants with discretionary purchases.

Discretionary Purchase – are not essential, so consumers can decide whether or not to purchase.

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Expanding choicesConsumers have many choices, and much more

information on those choices, so their decisions are more informed

In order to develop a marketing mix that will satisfy consumer wants, businesses must have a clear understanding of expanding consumer choices and consumer purchasing decision

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CompetitionCompetition is much more intensive for businesses It is more difficult to make marketing decisions that

will ensure customers will prefer your company over the competitions

Gathering information about competitors products to determine strengths and weaknesses will help businesses be more competitive

As wants and needs have expanded, products have as well

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Competition In the past, products were very basic with a few

additional featuresWhen products have limited differences, businesses

try to compete for sales by emphasizing things such as their brand name, availability, or price

They also try to compete by developing unique designs, or product improvements, expensive, hit or miss

The correct choices can be very profitable, while the wrong choice can result in losses for the company

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The global marketplaceAs business develop an international focus, differences

among customer groups and the number of distinct market segments can become even greater.

Understanding the consumer in your home country will not always transfer to other countries

Gathering information about the country and its people as well as new competitors can help determine how to become an effective global business.

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Deciding on Information Needs

Approaches to planningCategories of information

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Approaches to planningRead together “Approaches to Planning”,

page 124Consider the two approaches two companies

use as they decide on their apparel lines for the upcoming year

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Even though last year J Borg’s products were successful, should they keep it unchanged or simply just change the colors and some additional accessories?

Will customers get tired of the current offerings – Therefore new products should be developed

Dominque Designs marketing department provides records – quantity sold by size and color for each week of the year, the region and store where sales were made, original prices, markdowns, among others

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How will each of the companies decide whether to make design changes and the types of designs to use for next year?

What is the biggest difference between Dominque Designs and J Borg’s?

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Categories of informationYou are a manager for a national chain of

yogurt stores. You are tasked to increase sales and

profits.How do you do this? What information will

help you be successful.

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Categories of informationDivided into 3 segments

ConsumersMarketing MixBusiness Environment

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Types of Information Needed for Effective Marketing Decisions

Consumersprimary needspurchase frequencybrand preferencesinformation needsmedia preferencesshopping behavior

agegenderincomeeducationfamily sizeoccupationattitudes

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Marketing Mix discounts location and method of sale type of distribution used display procedures promotion and sales

methods promotional message promotional media

basic products product features services product packaging guarantees after-sale customer

service product price credit choices

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Business Environmentconsumer protectionethical issues tax policiesproposed laws international markets

type of competitioncompetitors’ strengthscompetitors’ strategieseconomic conditionsgovernment regulationsnew technology

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Gathering Information

Effective marketing information improves the decisions of businesses, and effective marketing information reduces the risk of decision making.

If a business can make better decisions that increase the likelihood of making a profit, the time and money spent gathering information is a good investment.

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5-1 Assessment Page 125, #8

Work in your groups – You will create a presentation that will include a minimum of 4 slides (Title slide, Slide on Consumers, Slide on Marketing Mix, Slide on Business Environment)

You will need to include three specific types of

information you will need for each category and decide why each type of information is needed.

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5-1 Assessment Page 126, #8

Example: If my goal was to increase the number of people that shopped at ABC’s Sporting Goods – A locally owned and operated store Consumers – Shopping behavior, age, brand preferences Marketing Mix – Product features, promotional message, Product

Price Business Environment – competitors’ strengths, economic

conditions, new technology

Example of my bullet points for Consumers – You will also need to do marketing mix and business environment

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5-1 Assessment Page 126, #8 Consumers

Shopping Behavior Preference for a particular retail price format (every day low price) vs.

promotional price maybe servicie Inclination to switch stores

Age To determine if there is a large enough market in this community to support

your store To determine what promotional methods and ideas you will use to attract

customers Brand Preferences

To ensure your store stocks the preferred brands of your target market How can we use brand preference to make our store more profitable?

You will also need to do marketing mix and business environment

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FINDING AND MANAGING MARKETING INFORMATION

GOALSDescribe common sources of internal

and external market information.Explain the five critical elements of an

effective marketing information system.

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https://www.youtube.com/watch?v=8bU6tsscv9c

https://www.youtube.com/watch?v=8bU6tsscv9c

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Sources of Market Information

Steps of the Process Identify the types of information needed.Determine the available sources of each type of

information.Evaluate each source to determine if it meets the

organization’s needs in term of accuracy, time, detail, and cost.

Select the sources that best meet the identified needs.Enter the information into a marketing information

system.

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Sources of Market Information

Internal SourcesExternal SourcesMarketing Research

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Internal Information Sources

Internal information- is information developed from activities that occur within the organization

Businesses keep detailed records on production schedules and inventory levels

This production needs to be studied to make sure the promotions match the available products

Example: Salesperson learns a great deal from current and prospective customers. Needs, perceptions of price, satisfaction and services, or requested

changes in products. Three categories of important types of internal information are:

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Customer records and sales information

Production and operations reportsPerformance information

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Customer records and sales information Companies keep a record of all transactions they have They record what is purchased, the dates of purchase, and

quantities purchased Detailed information of payments and credit is also recorded Problems and complaints are also a part of their records When customers stop buying the product, this information

should not be discarded….but analyzed to determine why the customer was lost

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Production and operations reportsProducts and services must be available

when and where customers want themQuality standards need to be metInformation about production and operation

activities is collected regularly

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Performance information The success of a business is judged by its performance There are other performance measures than profit, such

as sales, costs, quality, and customer satisfaction Performance is measured in three ways 1. Records of past performance 2. Compare performance with similar businesses 3. Comparison of actual performance with expected or

planned performance

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External Information Sources

External information- provides an understanding of factors outside of the organization

Marketers cannot plan effectively without understanding consumers, competitors, the economy, and other changes around them

There are many valuable sources of information such as:

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Government reportsTrade and professional associationsBusiness publicationsCommercial data and information

services

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Government reportsSupplying information that can be used by

businesses and consumersThere are a number of agencies that collect

marketing informationBest known: U.S. Bureau of Census – every 10

years collects the United States population Commercials are seen on TV

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Trade and professional associationsAre organized to serve people and

business with common interest.Travel, Retailing, AARP

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Business publicationsMagazine's and journals provide useful

information for business people.The wall Street Journal, Forbes, Barron’s

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Commercial data and information servicesA number of business that collect, analyze and sell

data.Experian, Equifax, and TransUnion, credit

reporting agencies for consumer creditDun & BradstreetACNielsen

http://www.dnb.com/

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Marketing Information Systems

Market Information Systems -An organized method of collecting, storing, analyzing, and retrieving information to improve the effectiveness and efficiency of marketing decisions

Each business develops its own marketing information system

All effective marketing information systems contains 5 elements:

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InputStorageAnalysisOutputDecision making

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Input- information that goes into the system for decision makingRoutine information that is collected about

customers, competitors, and business operations all used for marketing decisions

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Storage- the resources used to maintain information so it can be used when needed If information is lost or damaged it is not usefulSome information is very confidential – only

authorized people should have accessShould be organized so information is easy to

locate when needed

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Analysis- the process of summarizing, combining, or comparing information

Ex- in order to plan a promotional budget, a manager may examine the budgets for other products or for past years

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Output- the result of analysis given to decision makersMost important part of an MKISUsually written information or graphics

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Decision Making- the purpose of an MKIS is to improve decision makingIncludes who is involved in the decision,

when decision need to be made, any policies or procedures that should be considered, and the information needed by the decision makers

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Designing an MkIS

QuestionMkIS

ElementWhat information is needed to develop and implement the marketing strategy?

Input

How should the information be maintained so it is in a usable form, secure, and easy to access when needed?

Storage

What methods should be used to organize and study the information decisions?

Analysis

How and when should the information be made available for most effective use?

Output

What ways should the information be used to improve marketing?

Decision Making

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USING MARKETING RESEARCH

GOALSDescribe how to define and develop an

understanding of a problem as the first steps toward solving it.

Identify the steps needed to gather and study data relevant to a problem.

Explain how to prepare reports and present proposed solutions.

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Seeing the Problem Clearly

Marketing Research- is a procedure designed to identify solutions to specific marketing problems through the use of scientific solvingThe scientific method is used to ensure

that a careful and objective procedure is followed in order to develop the best possible solution

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Implementing a Marketing Research Study

1. Define the problem

2. Analyze the situation

3. Develop a data-collection procedure

4. Gather and study information

5. Propose a solution

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Define the problemClearly and carefully define the problemThis is not always easy It is important to prepare a written statement of the

problem and have several people review it to make sure it is understandable

The problem should be scientific enough to study whom to involve in the study, and the types of solutions or results

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Analyze the situationAn important part is to understand the

circumstances surrounding the problem well enough to determine how to solve it

Analyze the situation allows the researcher to identify what is already known about the problem, the information available, and even possible solutions already attempted

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Develop a data-collection procedureWhat additional information is needed and how

should it be collectedThe researcher needs to know where to obtain

information and the best and most efficient ways to obtain information Secondary data- information already collected for another

purpose Primary Data- information collected for the first time

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Develop a data-collection procedure Secondary data- information already collected for another

purpose A search of secondary data sources should precede any primary

research activity. Secondary data may be sufficient to solve the problem, or at least it helps the reader better understand the problem under study. Secondary data is cheaper and quicker to collect than primary data and can be more accurate.

Ex - A great deal of potentially useful secondary information already exists within enterprises. Typically useful information would be that relating to sales, finance, production, storage and transportation. Source for a and b - http://www.fao.org/docrep/W3241E/w3241e03.htm#chapter%20summary

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Develop a data-collection procedurePrimary Data- information collected for the first

time Primary data is collected by the researcher with a specific

goal in mind May be collected through surveys, focus groups, in-depth

interviews, or through experiments

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Gather and study informationSelect the participants

Population- all of the people in the group the company is interested in studying

Sample- a smaller group selected from the population

Random Sampling – everyone in the population has an equal chance of being selected in the sample

Collect data, analyze the data, prepare results

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Gather Information

Collect the dataPrivacyEthical

Analyze the dataNumerical data – mean, medianNon-numerical data – open ended

Prepare results Tables, charts and graphs

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Propose a solutionResearch reports- usually prepared orally

and in writing Effective communication is an important skill

Presenting research results In a written report the results reported in tables,

charts, and graphs that all have brief explanations

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Propose a Solution

Research reportsPresenting research resultsWhen to use marketing research

Two Factors How much risk is in the business facing from the problem

being studied How much time and money will be required to gather the

information

Complex Problem

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Sections of a Research Report

Statement of the problemReview of secondary dataResearch proceduresResults of the researchSummary and recommendations

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COLLECTING PRIMARY DATA

GOALSDescribe the purpose of marketing

research surveys.Explain the reasons for and limitations

of using observation.Define various types of marketing

research experiments.

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Conducting Surveys

When completing market research, the data-collection method chosen will depend on the type of information you need.

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Conducting Surveys

Closed-ended questionsOpen-ended questions

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Conducting Surveys – 1st Way

Survey- a planned set of questions to which individuals or groups of people respondSurveys can be oral or written

People can be surveyed in person, through e-mail, phone, or online

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Conducting Surveys

Closed-ended questions- offer two or more choices such as “yes”, or “no”“agree” or “disagree”select A, B,C, or D Scale of 1-10 where 10 is excellent and 1 is

very poor

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Conducting Surveys

Open ended questions- allows respondents to develop their own answersWhat are the most important features of

this product?How does the durability of brand A compare

to brand B?

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Focusing on the Issues

Focus groupQuestioning with clarity

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Open ended questions are often used when researchers are attempting to identify the problem

Researchers may discuss the problems with consumers using open ended questions

A popular method used to gather information is called a focus group

Focus group- smaller number of people brought together to discuss identified elements of an issue or problem

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Questioning with clarityIt is important that survey questions are

carefully writtenEach question must aid in the collection of

information that will help to solve the problem

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Making Observations – 2nd Way

Observations- collects information by recording actions without interacting or communicating with the participant

The purpose of observation research is to see the actions of participants rather than have them recall or predict their actions, greater accuracy

Using observations requires more time and expense than surveys

Observations must be carefully planned in order to keep from changing the participants actions

If people know they are being watched the may do things differently

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Making Observations

Recording devices includeVideo camerasAudio recordersBar code scannersEye-tracking photography

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Performing Experiments

Test marketsSimulations

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Performing Experiments

The most precise and objective information is obtained through experimentations

Experiments are carefully designed and controlled situations in which all important factors are the same except the one being studied

Research is done by planning and implementing experiments and then recording and analyzing the data

Marketers use experiments to determine whether changes in a single element of the marketing mix will affect customer behavior

Experiments are not used as often as surveys or observations

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Test Markets

Test markets- are specific cities or geographic areas in which marketing experiments are conducted

The test markets are selected because they reflect consumer and competitive characteristics important to the company

The companies try new product ideas or make marketing changes to the test markets

They collect data on the product performance for a period of several weeks or months and compare it with previously gathered information

This way they can attempt to predict the performance in the total market

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Simulations

Simulations- are experienced where researchers create the situation to be studied Ex- a business may want to see how children respond when

playing with a toy

So rather than observing children playing in their homes or schools, they create a play center

In the play center they bring children in and observe them under more carefully controlled circumstances

Many simulations are done on computers, which allows participants to visualize a change and react to it

MARKETING 1 Chapter 5 MARKETING INFORMATION AND RESEARCH 5-1Understanding the Need for Market Information 5-2Finding and Managing Marketing Information.

Documents

marketing decisions

marketing research5

consumer needs

marketing information5

marketing mix

marketing informationgoals

company marketingchapter

importance of information