Chapter 3:

Collecting and Analyzing Marketing

Information

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 Chapter Objectives

By the end of this chapter, you should be able to:

• Define big data

• Describe how marketing information is collected and analyzed through a situation analysis

• Differentiate the internal environment, the customer environment, and the external environment

• Understand how marketing data and information is collected

• Identify problems that can occur during data collection

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 INTRODUCTION

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 Marketing Analytics

• Optimizing insight from data collected to make marketing more efficient and
effective
• How effective are our current marketing efforts?

• Marketing $ should be efficiently and effectively deployed

• Marketing and advertising should be agile and flexible

• Focuses on customer behavior, customer intelligence, and marketing optimization

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 Big Data

• Big data: large data sets from massive structured and unstructured sources
• Can be analyzed and used to support strategic planning
• Only as good as the analysis of the data
• Must develop useful actionable information in a timely manner
• Enormous opportunities/challenges
• Sources include:
• Mobile devices and internet search
• Credit card transactions
• Beacons
• AI monitoring
• Observation

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 Benefits of Big Data

Trend prediction Price information Demand forecast

Personalized Service
Sales increase
approach improvement

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 Situation Analysis and Marketing Analytics

• Internal environment
• Objectives, strategy, and performance
• Resources
• Culture and structure
• Customer environment
• Current customers; product use; where and when purchased and why do they (or don’t they) buy
our product
• External environment
• Competition
• Economic growth and stability
• Political trends and legal and regulatory
• Technological advancements and sociocultural trends

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 CONDUCTING A SITUATION ANALYSIS

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 Situation analysis
The situation analysis is process of assessing the current situation
facing the organisation, arriving at a set of assumptions about
the future, and identifying key strategic issues that are likely to
confront the organisation. The aim is to:
identify forces that are the potential drivers of change
determine the likely impact of these forces of change and to make
assumptions about the future
determine how our organisation is positioned to compete
successfully in that future
 The Human Element

• Situation analysis does not replace intuition/insights (manager empowerment)

• Data does not talk or think-interpret/manage the data/process
• May involve dissecting…
• Target markets (heavy users from occasional users)

• Product (features vs customer needs)

• Competitors (benchmarking them against you)

• Goes beyond what AI and machine learning can produce (alone)

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 Data, Analytics, and Insights Are Not the Same

Data Analytics Insights

The facts and details of... The discovery of trends and The value of data and
patterns within the data via analytics, as these outcomes
• Customers
analysis techniques identify useable information
• Product use that helps to improve
• User inputs operations and performance
of marketing activity

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 Situation Analysis Should Be Used Strategically

• Any effort at situation analysis should be well-organized, systematic, and supported

by sufficient resources (e.g., people, equipment, information, and budget)
• Most important aspect of the analysis is that it should be an ongoing effort
• It’s valuable only to the extent that it improves the quality of the resulting
marketing plan
• It is a challenge to track all three environments (internal, customer, external)
simultaneously

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The Relationship Among the Internal, Customer, and External
Environments

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 THE INTERNAL ENVIRONMENT

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 Review of Current Objectives, Strategy, and Performance

• Metrics for evaluation

• Sales performance, market share, and/or growth rate
• Dashboard
• Visually represents the results of measured metrics
• Real time monitoring (brand, product line, market, business unit…)
• Causes for concern
• Wrong marketing goals/objectives
• Flawed marketing strategy
• Poor implementation
• Macro changes
• Tech changes
• Changes in consumer sentiment

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 Ford Motor Company Strategy Shift
• Moved “head of strategy” to COO

• Eliminated slow selling smaller cars

• Developing and delivering new electric vehicles
• Data and AI will play a pivotal role in servicing (connected cars)

• Dedicated commercial line of vehicles

• Focus on the #1 vehicle sold in the United States: F-150s

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 Availability of Resources

• Predictive analytics to use historical data inputs to predict the future

• Informs coping mechanisms to make up for shortfalls
• Financial…but HR and technology too
• Trying to improve productivity

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 Organizational Culture and Structure

• Marketing manager should review current and anticipated cultural and structural
issues that could affect marketing activities
• Consider internal culture of firm: Is marketing respected and central to a customer focus?
• Culture and structure are relatively stable at most firms

• Changing structure is time consuming

• Many now shifting toward customer success orientation

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 THE CUSTOMER ENVIRONMENT

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 The Customer Environment

• During this analysis, information should be collected that identifies…

• the firm’s current and potential customers

• the prevailing needs of current and potential customers

• the basic features of the firm’s competitors’ products perceived by customers as

meeting their needs
• anticipated changes in customers’ needs

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 The 5W Model

Who
What
Where
When
Why

(or how) do
are our current do customers do customers do customers
customers
and potential do with our purchase our purchase our
purchase our
customers? products? products? products?
products?

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 Who Are Our Current and Potential Customers?

• Who is the purchaser?

• Demographic, geographic, and psychographic

• Are purchasers different from users?

• Who has influence on purchase decision?
• Who is financially responsible for purchase?

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 What Do Customers Do With Our Products?

• Quantities/combinations purchased
• Heavy user versus light user differences
• Do buyers use complementary products?
• Derived demand is when the demand for one product depends on (is derived from) the demand of
another product

• What is done with the product after use?

• Any recycling of products or packaging?

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 Where Do Customers Purchase Our Products?

• What types of vendors?

• Online or in-store?

• Direct from the seller?

• E-commerce, direct marketing, catalogs

• Are purchases from non-stores increasing?

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 When Do Customers Purchase Our Products?

• Is there a seasonality to buying?

• Weather impacts

• Do promotional events affect buying?

• Are there other variables that impact when a purchase occurs?
• Physical/social surroundings
• Drinking a particular beverage when out

• Purchasing habits change on vacation

• Time pressures

• Purchase task

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 Why/How Do Customers Purchase Our Products?

• How do our products compare to competitors?

• How do our products meet consumer needs?

• Are customer needs changing?

• How are the products paid for?

• Consumers loyalty or transactional

• How can we enhance customer relationships?

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 Why Do Customers NOT Purchase Our Products?

• What needs do our products not meet?

• What “beats us” in competitive advantage?
• Marketing mix misalignment with the market
• What is the potential for noncustomer conversion?
• Social media has given good cues with online reviews and social posts

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 THE EXTERNAL ENVIRONMENT

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 Competition

Brand competitors Product competitors Generic competitors Total budget

competitors
market products compete in the market very compete for the
with similar same product different products limited financial
features and class, but with that solve the resources of the
benefits to the products that are same problem or same customers.
same customers at different in satisfy the same
similar prices. features, benefits, basic customer
and price. need.

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 Example: Soft Drinks

Brand competitors Product competitors Generic competitors Total budget

competitors
Coca-Cola Zero Tea Tap water Candy
Diet Coke Orange juice Gum
Pepsi Cola Bottled water Potato chips
Diet Pepsi Energy drinks
Sparkling water

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 Stages of Competitive Analysis

Identify current and potential brand, product, generic, and

Identification total budget competitors

Assess size, growth, profitability, objectives, strategies, and

Characteristics target markets of each competitor

Assessment Assess each key competitor’s strengths and weaknesses

Capabilities in terms of products, distribution, promotion, and

Capabilities pricing.

Estimate each competitor's most likely strategies and responses

Response under different environmental situations

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 Economic Growth and Stability

• Change and uncertainty is inevitable

• Overall economic conditions in our markets
• Economic health of our industry (growing…)
• Consumer optimism/pessimism on economy
• Buying and spending patterns within the industry
• COVID-19 pandemic was one such event

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 Political Trends

• Have recent elections changed the economy?

• Political landscape

• What types of industry (de)regulation trends?

• How do we maintain good relations with elected officials?

• How effective have these been (donations, etc.)?

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 Legal and Regulatory Issues

• What regulatory changes can affect marketing?

• Do recent court decisions inform strategy?

• Do recent rulings modify our marketing activities?
• Federal, state, and local regulations

• Impact of changes in global trade agreements

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 Technological Advancements

• Technology changes impact:

• Operations and production
• Unlock greater efficiency in marketing activities
• Product survival/obsolescence
• New product development
• Frontstage technology is most noticeable to customers
• Backstage technology advances are not as apparent
• Radio frequency identification (RFID) is both frontstage and backstage
• Digital data is encoded in RFID tags and is captured by reading radio waves
• Uses in inventory, asset tracking, ID badges, controlled access, supply chain management,
personnel tracking, counterfeit protection

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 Sociocultural Trends

• How are demographics and cultural values changing?

• Aging population

• Increasing number of single-parent families

• Greater focus on ethics and social responsibility

• More value-oriented consumption

• What challenges/opportunities have changed our diversity (both customers and

employees)?
• What is the societal attitude toward our industry?
• What social or ethical issues should we address?

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 The U.S. Labor Force by Age Group

Source: Bureau of Labor Statistics, “Employment Projections,” https://www.bls.gov/emp/graphics/2019/labor-force-share-by-age-group.htm

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COLLECTING MARKETING DATA AND INFORMATION

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 Secondary Information Sources

• Internal data sources

• Customer purchase data
• Government sources
• Economy, census, business trends
• FTC, Edgar Database, U.S. Small Business Administration
• Periodicals/books
• Subscription services, major trade associations, academic journals
• Social media/online
• Social media activity, reviews, comments
• Commercial data sources
• Nielsen Company and IRi: POS data
• NPD Group: online consumer panels

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 Beyond the Pages: Instagram Uses Big Data to Discover Trends

• Instagram keeps users engaged with personalized experience using artificial

intelligence (AI) and big data
• Uses data gathered from user app usage
• Machine learning…
• Creates curated experience for users
• Populates the Explore page so users can discover content
• Adjust feed based on engagement
• Uses insights to drive product development
• Combines AI with the human element
• Uses its data to sell highly targeted advertising

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 Primary Data Collection

• Advantages and disadvantages

• Expensive and time consuming
• Gives an option to “incomplete/dated” data
• Allows pinpointing your particular needs
• Trustworthy due to the level of control

• Source include:
• Direct observation
• Focus groups
• Surveys
• Experiments

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 Overcoming Problems in Data Collection

• Incomplete information
• Define the problem clearly

• Expensive to collect environmental data

• Find alternate partners (collaborate with a college)

• Time consuming process

• Online data retrieval sources (secondary data)

• Challenging to organize vast data amounts

• Convert the data and information into a form that will facilitate strategy development

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 Marketing Analytics Trends

• Real-time data analytics

• Accurate picture of needs, wants, and how customers engage

• Rise of customer relationship management (CRM)

• Personalized customer experience

• Content creation fueled by AI

• E-mail marketing, blogs, web pages, etc.

• Automation will optimize multichannel marketing

• Will increase response rates

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