Technology to Assist Market Research
Marketing Information Systems
A marketing information system (MIS) is a management information system designed to support marketing decision making.
LEARNING OBJECTIVES
Show the use of marketing information systems used in research and consumer marketing
KEY TAKEAWAYS
Key Points
- An MIS brings together many different kinds of data, people, equipment, and procedures to help an organization make better decisions.
- MIS not only indicates how things are going, but also why and where performance is failing to meet the plan.
- MISs produce fixed, regularly scheduled reports to middle and operational level managers to identify and inform structured and semi-structured decision problems.
- An MIS can provide endless benefits to any organization including: enabling managers to share information and work together virtually, helping marketers collaborate with customers on product designs and customer requirements, and addressing operational needs through customer management systems.
Key Terms
- Philip Kotler: An American academic focused on marketing. The author of Marketing Management, among dozens of other textbooks and books, and the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University.
Marketing Information Systems
A marketing information system (MIS) is a management information system designed to support marketing decision making. It brings together many different kinds of data, people, equipment and procedures to help an organization make better decisions. American academic Philip Kotler has defined it more broadly as “people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. ” Not to be confused for a management information system, marketing information systems are designed specifically for managing the marketing aspects of the business.
Example of an MIS: A marketing information system supports the decision-making process in marketing.
Jobber (2007) defines it as a “system in which marketing data is formally gathered, stored, analysed and distributed to managers in accordance with their informational needs on a regular basis. ”
MIS not only indicates how things are going, but also why and where performance is failing to meet the plan. These reports include near real-time performance of cost centers and projects with detail sufficient for individual accountability. MISs produce fixed, regularly scheduled reports to middle and operational level managers to identify and inform structured and semi-structured decision problems.
A traditional marketing information system can provide endless benefits to any organization in the private or public sector, despite its size or level of managerial sophistication. Some of these benefits include:
- It enables managers to share information and work together virtually.
- It helps marketers collaborate with customers on product designs and customer requirements.
- It addresses operational needs through customer management systems that focus on the day-to-day processing of customer transactions from the initial sale through customer service.
- The availability of the customer data and feedback can help the company align their business processes according to the needs of the customers. The effective management of customer data can help the company perform direct marketing and promotional activities.
- Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company.
Digital Surveys
Digital surveys are research tools that ask consumers questions in a virtual environment.
LEARNING OBJECTIVES
Describe the characteristics of digital surveys from a market research point of view
KEY TAKEAWAYS
Key Points
- With the increasing use of the Internet, online questionnaires have become a popular way to collect information.
- Online Research Methods include: ethnography, focus groups, interviews, web-based experiments and clinical trials.
- The advantages of digital surveys include: questions can be displayed in different ways, data can be received immediately, collection is more cost-effective than traditional methods, and adapting surveys is quick and affordable.
- The disadvantages of digital surveys include: response rates are limited to people who can access the web, many people dislike completing questionnaires online, and people who respond to online questionnaire invitations tend to be younger.
Key Terms
- ethnography: The branch of anthropology that scientifically describes specific human cultures and societies.
- Online Research Method: A way in which researchers can collect data via the Internet. This is also referred to as Internet research.
- focus group: A group of people, sampled from a larger population, interviewed in open session for market research or political analysis.
Digital surveys, also referred to as online questionnaires, are research tools that ask consumers questions in a virtual environment. These surveys are a type of Online Research Method (ORM). Many of these ORMs are related to older research methodologies that have been re-invented and re-imagined to work with new technologies and the on-the-go conditions of a digital environment.
With the increasing use of the Internet, online questionnaires have become a popular way of collecting information. However, the online research field remains relatively new and continues to evolve. With the growth of social media, new levels of complexity and opportunity have been created for using digital surveys to conduct market research.
Other Online Research Methods for Surveying Consumers
- Online Ethnography
- Online Focus Group
- Online Interview
- Web-based Experiments
- Online Clinical Trials
Clinical Trial: An online clinical trial is one type of research method used to survey customers.
Advantages of Digital Surveys
- The administrator has greater flexibility in displaying questions. Questions can be displayed with check boxes, pull down menus, pop up menus, help screens, or submenus.
- An online forum allows responses to be received from more subjects and from anywhere in the world.
- This method is also cheaper to use, because there are fewer costs incurred from buying paper, printing materials or paying postage.
- Since data is collected into a central database, the time for analysis is substantially reduced.
- It is easier to correct errors on an online questionnaire, since the administrator does not have to reprint and redistribute all the questionnaires.
Disadvantages of Digital Surveys
- Not everyone has access to the Internet, so the response rate is limited.
- Many people are not receptive to completing questionnaires online.
- Studies indicate that the demographic that responds to online questionnaire invitations are generally younger people.
Databases
In market research, databases contain information that is collected, aggregated, and used to define segments of homogeneous consumers.
LEARNING OBJECTIVES
Describe the purpose and use of databases in marketing research
KEY TAKEAWAYS
Key Points
- Researchers keep consumer databases up-to-date with as much available data as possible regarding consumer behavior and product consumption.
- When companies want to conduct consumer market research, they call on these research facilities to request consumers who fit a specific demographic and behavioral profile so that these prospective respondents can then be contacted to participate in research studies.
- Database research provides the raw data that has already been contributed by the purchaser when they complete brief surveys that ask for their contact and demographic information during or after a product purchase.
- Marketers can use database research to identify common buying patterns among consumers.
- Lists that can be found in existing databases include: credit card holders, smokers, drinkers, car buyers, video buyers.
Key Terms
- Market Research: The systematic collection and evaluation of data regarding customers’ preferences for actual and potential products and services.
- baby boomer: A person born in the postwar years (generally considered in the USA and other Allied countries as between 1945 and the early 1960s), when there was an increase in the birth rate following the return of servicemen at the end of World War II.
- database: An organized collection of data. The data are typically organized to model relevant aspects of reality (for example, the availability of rooms in hotels), in a way that supports processes requiring this information (for example, finding a hotel with vacancies).
A database is an organized collection of data that is typically organized to model relevant aspects of reality (for example, the availability of rooms in hotels) in a way that supports the processes that require this information (for example, finding a hotel with vacancies). In market research, a database contains information that is collected, aggregated, and used to define segments of homogeneous consumers.
Consumer Databases in Market Research
Researchers keep consumer databases up-to-date with as much available data as possible regarding consumer behavior and product consumption. This customer information oftentimes includes, but is not limited to, a variety of data, including name and address, history of shopping and purchases, demographics, and brand and product consumption. When companies want to conduct consumer market research, they call on these research facilities to request consumers who fit a specific demographic and behavioral profile so that these prospective respondents can then be contacted to participate in research studies.
Companies may also acquire prospect data directly through the use of sweepstakes, contests, online registrations, and other lead generation activities.
Database Research
Database research provides the raw data that has already been contributed by the purchaser when they complete brief surveys that ask for their contact and demographic information during or after a product purchase. Marketers can use database research to identify common buying patterns among consumers. Lists that can be found in existing databases include: credit card holders, smokers, drinkers, car buyers, video buyers.
Customers asked for information at counter: Retail outlets such as pharmacies can request customer’s contact information at check-out for specific products as a way to help build a consumer database.
Database research is considered an extremely helpful tool in market segmentation research. For example, from zip code lists, marketers may determine where the wealthy consumers live in a city. That list can be merged with a list of moms of children 0-5 years old. The resulting list can be merged with another list of women who are Hispanic and African American to further target this niche demographic. The final list will deliver a potential market for a new baby product to be introduced and profiled in Hispanic and African American women’s magazines. The people on the potential buyers’ list could then be mailed an invitation to come test this new baby product.
Decision Support Systems
Decision support systems are tools that help companies assess and resolve business questions in a timely and effective manner.
LEARNING OBJECTIVES
Demonstrate the uses and effectiveness of decision support systems from a marketing perspective
KEY TAKEAWAYS
Key Points
- Companies across all industries rely on decision support tools, techniques, and models to help them assess and resolve business questions.
- A DSS is a computer-based information system that helps businesses or organizations make better decisions by providing a flexible tool for analysis.
- In addition to helping management, DSSs also serve the operations and planning levels of an organization by helping them make decisions.
- Decision support systems can be either fully computerized, human, or a combination of both.
- A key component to any DSS is business intelligence reporting tools, processes, and methodologies.
- The top benefits of decision support systems include: speeding up the process of decision making, increasing organizational control, speeding up problem solving in an organization, helping automate managerial processes, improving personal efficiency, and eliminating value chain activities.
Key Terms
- Decision Support System: A computer-based information system that supports business or organizational decision-making activities.
Decision Support Systems
Companies across all industries rely on decision support tools, techniques, and models to help them assess and resolve business questions. One example of this is a decision support system (DSS). A DSS is a computer-based information system that helps businesses or organizations make better decisions by providing a flexible tool for analysis. With supporting software and hardware, this tool collects data that helps an organization gather and interpret relevant business information. It then converts the information into a basis for marketing action.
Example of a DSS: A decision support system helps a company resolve business questions.
Decision support systems enable managers to obtain and manipulate information as they are making decisions. In addition to helping management, DSSs also serve the operations and planning levels of an organization by helping them make decisions, which may be rapidly changing and not easily specified in advance. Decision support systems can be either fully computerized, human, or a combination of both.
A key component to any DSS is business intelligence reporting tools, processes, and methodologies. DSSs also include knowledge-based systems and an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models.
Typical information that a decision support application might gather and present includes:
- Comparative sales figures between one period and the next
- Projected revenue figures based on product sales assumptions
Decision support systems can be developed to support the types of decision-making faced by managers in specific industries such as the airline and real estate industry. For example, American Airlines produced a DSS that helps to decide how much to overbook and how to set prices for each seat so that a plane is filled and profits are maximized. Decision support systems have become critical and useful across all types of business. In today’s global marketplace, it is imperative that companies respond quickly to market changes. Companies with comprehensive decision support systems have a significant competitive advantage.
The top benefits of decision support systems include:
- Speeding up the process of decision making
- Increasing organizational control
- Speeding up problem solving in an organization
- Helping automate managerial processes
- Improving personal efficiency
- Eliminating value chain activities
Competitive Intelligence
Competitive Intelligence (CI) is a hybrid process of marketing research and strategic analysis that can give companies a competitive advantage.
LEARNING OBJECTIVES
Describe the characteristics of competitive intelligence or (CI)
KEY TAKEAWAYS
Key Points
- Competitive intelligence entails defining, gathering, analyzing, and distributing information about products, customers, and competitors.
- Competitive intelligence seeks to make the organization more competitive relative to its entire environment and stakeholders: customers, competitors, distributors, technologies, and macro-economic data.
- There are many synonyms for competitive intelligence such as business intelligence, market intelligence, and corporate intelligence.
- At the core of this concept is the ability to understand the competition’s position and predict the likely moves that competing companies will employ based on basic business principles.
- Although the Internet is a first stop in information gathering, CI typically entails spending more time and effort gathering information by means of primary research, such as speaking with one’s own employees, customers, suppliers, or outside industry experts.
- Competitive intelligence can be executed via the following methods: primary research, secondary research, and analysis.
Key Terms
- Primary Research: The research that involves the collection of data that does not yet exist.
- primary data: information collected by the investigator conducting the research
- competitive intelligence: The action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization.
- Secondary Research: This process involves the summary, collation, and synthesis of existing research rather than primary research, where data is collected from subjects or experiments.
Competitive Intelligence (CI) in marketing research involves defining, gathering, analyzing, and distributing information about products, customers, and competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization. Although the term CI is also considered synonymous with competitor analysis, competitive intelligence extends beyond analyzing competitors. CI seeks to make the organization more competitive relative to its entire environment and stakeholders: customers, competitors, distributors, technologies, and macro-economic data.
There are many synonyms for competitive intelligence such as business intelligence, market intelligence, and corporate intelligence.
The CI field has been growing exponentially as it is becoming a must-have core competency for many businesses. At the core of this concept is the ability to understand the competition’s position and predict the likely moves that competing companies will employ based on basic business principles.
Internet: The Internet is one method that’s used to gather information for competitive analysis.
Although the Internet is a first stop in information gathering, CI typically entails spending more time and effort gathering information by means of primary research, such as speaking with one’s own employees, customers, suppliers, or outside industry experts. CI can typically be executed via the following methods:
- Primary research – This process involves the use of a human network to access meaningful intelligence.
- Secondary research – This process involves the use of secondary research sources, such as by gathering published information.
- Analysis – This process involves the use of analytical tools.
In essence, CI is a hybrid process of marketing research and strategic analysis that ultimately seeks to provide companies and their products with a competitive advantage in the marketplace.