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Marketing- Ch 5.docx

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Wilfrid Laurier University
Shelley Mc Gill

Chapter 5: Marketing Research and Information Systems Marketing Research: a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas. - Why is Research so important to marketers?: o Helps reduce some uncertainty in their operations  Research help in decision making, help find info that they need o Provides link between firms and their environments  Allows firms to be customer oriented and build strategies with customer input o Firms can respond quickly to competitors moves  They are constantly researching competitor o Can Identify emerging opportunities and new and improved ways to satisfy customers’ needs and wants - Market research is useful for not for profits and government too Marketing Information System (MIS): - A set of procedures and methods that apply to the regular, planned collection, analysis, and presentation of information that then may be used in marketing decisions - Way to routinely accumulate info from internal and external sources so that the organization can have more informed decision making - MIS used for: o Routine reports o Customized analyses o For individual marketing research projects - Provides customer information and purchase history - Organized the data in data warehouses o Data warehouses: large computer files that store millions of pieces of individual data - Data Mining: the use of a variety of statistical analysis tools to uncover previously unknown patterns in the data stored in databases or relationships among variables. Way to extract valuable information Ethical Issues of Using Customer Information - Strong ethical orientation must be an important part of a firm’s marketing strategy and decision making - Marketers have a duty to understand and address the concerns of the various stakeholders in the firm - Marketers cannot abuse their access to very private data about customers - Must respect and protect the privacy of individual customers absolutely - Acts in place to protect consumer privacy and ensure they have control: o Privacy Act: governs collection, use, disclosure, and retention of personal information by federal government institutions o Personal Information Protection and Electronics Documentation Act (PIPEDA): governs the use, collection, disclosure, and retention of personal info by the private sector - Researchers must ensure that info is confidential and only used for purpose of research - 3 guidelines from the Canadian Marketing Association for conducting ethical market research: o Prohibits selling or fundraising under the disguise of conducting research o Supports maintaining research integrity by avoiding misrepresentation or omission of important research data o Encourages fair treatment of clients and suppliers - Marketing research should only be performed to produce unbiased, factual info The Marketing Research Process 1. Define the Problem and Objectives 2. Design the Research Project 3. Data Collection 4. Analyze Data 5. Present Results - Remember research doesn’t happen step by step, move around the steps - Before starting a research project, managers consider: o Will research be useful (reduce uncertainty, provide greater insight) o Is top management committed, will they follow findings o Research is expensive, if the value is not important, what’s the point - Marketers should also use the research process with the lowest cost, that provides them with the information that they need Step 1: Define the Problem and Objectives - Correctly defining the marketing problem - Define primary problem, not the symptoms - 2 ways to get the wrong solution o Define the problem incorrectly and do the right process o Define process correctly, but do process incorrectly - Specify research objectives and questions to be answered - Research will be poor if it is based on: o irrelevant questions and problems o questions that cannot be answered o already answered questions Step 2: Design the Research Project - identify the type of data needed and determine the type of research necessary to collect it - objectives of the project drive the type of data needed - 2 kinds of data, secondary (conducted first) and primary (conducted second): Secondary Data: - Pieces of information that have already been collected from other sources and usually are readily available - Helps to create a starting point, background info, a sketch of data - Ex. Census data, company’ s sales invoices, information from trade associations, internet, books, journals, databases, Stats can, periodicals, newspapers, syndicated data - Syndicated Data: data available for a fee from commercial research firms such as Information Resources Inc (IRI), National Purchase Diary Panel, and ACNielson - Syndicated Data includes: o Brand preferences, product usage in households, info from retailers selling products - Marketing Research Project begins with look at secondary data: o Company’s own records o Prior research studies undertaken by the company o Newspapers, magazines, published sources - Secondary data can be quickly accessed at a relatively low cost - Helps to determine size of potential market - PROS: o hard to gather info on your own, cheap, easily accessible, quicker - CONS: o may not be adequate to meet researcher’s needs (relevant, current), data was usually meant for some other reason than the question being asked, researchers must make sure that the data is trustworthy and reliable, may not be relevant to question Primary Data: - Data collected to address specific research needs - Collect primary data using: o Observations of consumer behaviour o Conducting focus group interviews o Surveying customers using the mail o Telephone o In person interviews o Internet - PROS: o Tailored to fit the research questions, specific to immediate data needs o Behavioural insights that secondary research does not give - CONS: o More costly to collect primary data o Collection of data takes longer o Marketers must have sophisticated training and experience to design and collect primary data that is unbiased, valid, and reliable - Market research studies must be unbiased, reliable, and valid - Unbiased: sample may not represent entire population, questions may be asked biasedly, respondents may respond they way they think researchers want them to - Reliability: the extent to which the same result is achieved when a study is repeated under identical situations - Validity: the extent to which a study actually measures what it is supposed to measure - Primary Research Data collection requires the following decisions: o Which methods to use o What type of sampling plan is best for the research objective o What type of research instrument to use (questionnaire, observation) o How should research instrument be designed o How best to contact potential respondents (telephone, in person) Sampling Plan - Too costly, timely, and impractical to study the whole group of consumers, so a sample is taken - Sample: a segment or subset of the population that adequately represents the entire population of interest - Sampling: the process of picking a sample o Who should be surveyed o How big should the sample be  Sample sizes should be big enough to be reliable, bigger samples give more reliable results o What type of sampling procedure should be used  Random, convenience, stratified, cluster Step 3: Data Collection Process - Begins only after research design process - Depending on research problem, data collection can be: o Exploratory research o Conclusive research - Usually use exploratory as first research phase, and then conclusive to back it up Exploratory Research: - Attempts to begin to understand the phenomenon if interest; also provides initial information when the problem lacks any clear d
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