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Chapter 5

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Department
Administrative Studies
Course
ADMS 2200
Professor
Li Lee
Semester
Winter

Description
Part 2 Understanding the Marketplace and Consumers CHAPTER 5 MANAGING MARKETING INFORMATION TO GAIN CUSTOMER INSIGHTS PREVIEWING THE CONCEPTS – CHAPTER OBJECTIVES 1. explain the importance of information in gaining insights about the marketplace and customers 2. define the marketing information system and discuss its parts 3. outline the steps in the marketing research process 4. explain how companies analyze and use marketing information 5. discuss the special issues some marketing researchers face, including public policy and ethics issues JUST THE BASICS CHAPTER OVERVIEW Thischapterlooksathowcompaniesdevelopandmanageinformationaboutimportantmarketplace elements. This chapter is an examination of marketing information systems designed to assess the firm’s marketing information needs, develop the needed information, and help managers to use the information to gain actionable customer and market insights. ANNOTATED CHAPTER NOTES/OUTLINE INTRODUCTION More than 60 years ago, P&G’s Tide revolutionized the industry as the first detergent to use synthetic compounds rather than soap chemicals for cleaning clothes. Tide really does get clothes clean. For decades, Tide has been positioned on superior performance. But, as it turns out, to consumers, Tide means a lot more than just getting clothes clean. So, Tide has been on a mission to unearth and cultivate the deep connections customers have with it. The marketing research impacted everything the brand did moving forward. Tide, the marketers decided, can do more than solve women’s laundryproblems. It can make a difference in something they truly care about – the fabrics that touch their lives. So,canyoudeveloparelationshipwithalaundrydetergentbrand? AccordingtoTide’sresearch,the answer is ―yes.‖ But, marketers must use the information to gain powerful customer and market insights. Chapter 5 Managing Marketing Information to Gain Customer Insights MARKETING INFORMATION AND CUSTOMER INSIGHTS Companies use such customer insights to develop competitive advantage. To gain good customer insights, marketers must effectively manage marketing information from a wide range of sources. The real value of marketing research and marketing information lies in how it is used and the customer insights that it provides. Customer insights group collect customer and market information from a wide variety of sources. A marketing information system (MIS) consists of people and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. (Figure 5.1) ASSESSING MARKETING INFORMATION NEEDS Agoodmarketinginformationsystembalancestheinformationuserswouldliketohaveagainstwhat they really need and what is feasible to offer. Sometimesthecompanycannotprovidetheneededinformation,eitherbecauseitisnotavailableor because of MIS limitations. By itself, information has no worth; its value comes from its use. DEVELOPING MARKETING INFORMATION Marketers can obtain the needed information from internal data, marketing intelligence, and marketing research. Internal Data Internal databases are electronic collections of consumer and market information obtained from data sources within the company network. Information in the database can come from many sources. Problems with internal data:  It may be incomplete or in the wrong form for making marketing decisions.  Keeping the database current requires a major effort, because data ages quickly. Part 2 Understanding the Marketplace and Consumers  All the data must be well integrated and readily accessible. Competitive Marketing Intelligence Competitive marketing intelligence is thesystematiccollectionandanalysis ofpubliclyavailable information about consumers, competitors, and developments in the marketplace. Marketing intelligence gathering has grown dramatically. Firms use competitive intelligence to gain early warnings of competitor moves and strategies. Muchcompetitorintelligencecanbecollectedfrompeopleinsidethecompany.Intelligenceseekers can also examine thousands of online databases like SEDAR and Hoover’s. Competitorsoftenrevealintelligenceinformationthroughtheirannualreports,businesspublications, trade show exhibits, press releases, advertisements, and Web pages. Most companies are now taking steps to protect their own information. The growing use of marketing intelligence raises a number of ethical issues. MARKETING RESEARCH Marketingresearchisthesystematicdesign,collection,analysis,andreportingofdatarelevanttoa specific marketing situation facing an organization. The marketing research process has four steps (see Figure 5.2): 1. Defining the Problem and Research Objectives Defining the problem and research objectives is often the hardest step in the research process. A marketing research project might have one of three types of objectives. 1. Exploratory research: to gather preliminaryinformation that will help define the problem and suggest hypotheses. 2. Descriptive research: to describe things, such as the market potential for a product. 3. Causal research: to test hypotheses about cause-and-effect relationships. Start with exploratory research and later follow with descriptive or causal research. 2. Developing the Research Plan Chapter 5 Managing Marketing Information to Gain Customer Insights The research plan outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data. Research objectives must be translated into specific information needs. The research plan should be presented in a written proposal. Secondary data consist of information that already exists somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand. Gathering Secondary Data Researchers usually start by gathering secondary data. Using commercial online databases, marketing researchers can conduct their own searches of secondary data sources. Web search engines can also be a big help in locating relevant secondary information sources. Secondary data can usually be obtained more quickly and at a lower cost than primary data. Its use can provide data an individual company cannot collect on its own. Secondary data can present problems.  The needed information may not exist.  The data might not be very usable. o relevant (fits research project needs), accurate (reliably collected and reported), o current (up-to-date enough for current decisions), and o impartial (objectively collected and reported). Primary Data Collection In most cases, a company must also collect primary data. Care must be given to ensuring that primary data is relevant, accurate, current, and unbiased. Research Approaches ObservationalResearchinvolvesgatheringprimarydatabyobservingrelevantpeople,actions,and situations. Part 2 Understanding the Marketplace and Consumers Observational research can obtain information that people are unwilling or unable to provide. Disadvantages:  Some things cannot be observed.  Long-term or infrequent behaviour is also difficult to observe.  Observations can be very difficult to interpret. Ethnographicresearchinvolvessendingtraine
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