Decision Support Systems and Marketing Research

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Prepared by Deborah Baker Texas Christian University

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Learning Objectives
1. Explain the concept and purpose of a marketing decision support system.

2. Define marketing research and explain its importance to marketing decision making. 3. Describe the steps involved in conducting a marketing research project.

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Learning Objectives (continued)

4. Discuss the profound impact of the Internet on marketing research.

5. Discuss the growing importance of scanner-based research. 6. Explain the concept of competitive intelligence.

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Learning Objective

Explain the concept and purpose of a marketing decision support system.

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Decision Support System
An interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions.

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DSS System Characteristics
Interactive

Flexible

Discovery-Oriented

Characteristics of a DSS System

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Database Marketing
The creation of a large computerized file of customers and potential customers profiles and purchase patterns.

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Learning Objective
Define marketing research and explain its importance to marketing decision making.

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Marketing Research
The process of planning, collecting, and analyzing data relevant to a marketing decision.

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Roles of Marketing Research
Marketing Research has three roles:

Descriptive Diagnostic

Predictive

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Roles of Marketing Research
Gathering and presenting Descriptive factual statements

Diagnostic Explaining data

Attempting to estimate the results of a planned marketing decision
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Predictive

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Management Uses of Marketing Research

Improve the quality of decision making
Trace problems Focus on keeping existing problems Understand the ever-changing marketplace
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Learning Objective
Describe the steps involved in conducting a marketing research project.

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The Marketing Research Process
Define Problem Plan Design/ Primary Data Specify Sampling Procedure

Collect Data

Prepare/ Present Report

Follow Up
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Analyze Data

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Marketing Research
Marketing Research Problem
Marketing Research Objective Management Decision Problem
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Determining what information is needed and how that information can be obtained efficiently and effectively.
The specific information needed to solve a marketing research problem; the objective should provide insightful decision-making information. A broad-based problem that requires marketing research in order for managers to take proper actions.
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Secondary Data

Data previously collected for any purpose other

than the one at hand.

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Sources of Secondary Data
Internal Corporate Information
Government Agencies Trade and Industry Associations Marketing Research Firms Commercial Publications

News Media
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Advantages of Secondary Data
Saves time and money if on target
Aids in determining direction for primary data collection Pinpoints the kinds of people to approach Serves as a basis of comparison for other data
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Disadvantages of Secondary Data
May not be on target with the research problem Quality and accuracy of data may pose a problem

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The New Age of Secondary Information

The Internet

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www

Search Engines and Directories

Sites of Interest to Marketing Researchers

Discussion Groups Periodical, Newspaper, and Book Databases
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Basic Types of Directories
Academic and Professional Directories Commercial Portals

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Research Design
Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

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Planning the Research Design
Which research questions must be answered? How and when will data be gathered?

How will the data be analyzed?

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Primary Data
Information collected for the first time. Can be used for solving the particular problem under investigation.

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Advantages of Primary Data
Answers a specific research question
Data are current Source of data is known Secrecy can be maintained

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Disadvantages of Primary Data
Expensive Quality declines if interviews are lengthy

Reluctance to participate in lengthy interviews Disadvantages are usually offset by the advantages of primary data!
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Survey Research
The most popular technique for gathering primary data in which a researcher interacts with people to obtain facts, opinions, and attitudes.

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Forms of Survey Research
In-Home Interviews Mail Surveys

Mall Intercept Interviews Telephone Interviews

(Home and Central Location)

Executive Interviews

Focus Groups

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Mall Intercept Interview
Survey research method that involves interviewing people in the common areas of shopping malls.

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Executive Interviews
A type of survey that involves interviewing businesspeople at their offices concerning industrial products or services.

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Focus Group
Seven to ten people who participate in a group discussion led by a moderator.

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Advantages of On-Line Focus Groups

Speed
Cost-effectiveness Broad geographic scope Accessibility Honesty

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Questionnaire Design
Open-Ended Question
Closed-Ended Question ScaledResponse Question
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An interview question that encourages an answer phrased in respondents own words. An interview question that asks the respondent to make a selection from a limited list of responses. A closed-ended question designed to measure the intensity of a respondents answer.
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Questionnaire Design
Clear and Concise

No Ambiguous Language Qualities of Good Questionnaires Unbiased

Reasonable Terminology

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Observation Research
A research method that relies on three types of observation:
people
people

watching people
watching an activity watching people

machines

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Observation Research
People Watching People
Mystery Shoppers One-Way Mirrors

Types of Observation Research

People Watching an Activity Machines Watching People

Audits

Traffic Counters Passive People Meter

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Mystery Shoppers
Researchers posing as customers who gather observational data about a store and collect data about customer/employee interactions.

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Experiment

A method a researcher uses to gather primary data.

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Sampling Procedure
Sample Universe
A subset from a large population. The population from which a sample will be drawn.

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Probability Samples
Probability Sample Random Sample
A sample in which every element in the population has a known statistical likelihood of being selected. A sample arranged so that every element of the population has an equal change of being selected.

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Nonprobability Samples
Any sample in little or no Nonprobability attempt is made to whichrepresentative get a Sample cross-section of the population

Convenience Sample

A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher.

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Sampling Procedure

Universe

Sample
Probability Samples

Non-Probability Samples
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Types of Samples
Probability Samples
Simple Random Sample
Stratified Sample Cluster Sample Systematic Sample
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Convenience Sample
Judgment Sample Quota Sample Snowball Sample
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Types of Errors
Measurement Error Sampling Error Frame Error Random Error

Errors Associated with Sampling

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Types of Errors
Measurement Error Sampling Error Frame Error Random Error
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Error when there is a difference between the information desired and the information provided by research Error when a sample somehow does not represent the target population.

Error when a sample drawn from a population differs from the target population.
Error because the selected sample is an imperfect representation of the overall population.
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Field Service Firm

A firm that specializes in interviewing respondents on a subcontracted basis.

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Field Service Firms
Provide
Focus group facilities Mall intercept locations Test product storage Kitchen facilities

Retail audits
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Cross-Tabulation
A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions.

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Preparing and Presenting the Report

Concise statement of the research objectives
Explanation of research design Summary of major findings Conclusion with recommendations
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Following Up
Were the recommendations followed?
Was sufficient decision-making information included in the report? What could have been done to make the report more useful?

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Learning Objective
Discuss the profound impact of the Internet on marketing research.

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Impact of the Internet

Allows better and faster decision making
Improves ability to respond quickly to customer needs and market shifts

Makes follow-up studies and research easier

Slashes labor-and time-intensive research activities
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Advantages of internet Surveys

Rapid development, Real-time reporting Reduced costs

Advantages of Internet Surveys

Personalized questions and data Improved respondent participation Contact with the hard-to-reach

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Internet Samples
Unrestricted Internet Sample
Screened Internet Sample Recruited Internet Sample
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A survey in which anyone with a computer and modem can fill out the questionnaire. An Internet sample with quotas based on desired sample characteristics. A sample in which respondents are prerecruited and must qualify to participate.
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Other Uses of the Internet

Distribution of requests for proposals

Collaboration in the management of a research project

Other Internet Uses by Marketing Researchers

Data management and on-line analysis Publication and distribution of reports Viewing of presentations of marketing research surveys

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Learning Objective

Discuss the growing importance of scanner-based research.

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Scanner-Based Research

A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.
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When Should Marketing Research be Conducted?

Where there is a high level of uncertainty When value of research information exceeds the cost of generating the information

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Learning Objective

Explain the concept of competitive intelligence.

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Competitive Intelligence
An intelligence system that helps managers assess their competition and vendors in order to
become more efficient and effective competitors.

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Competitive Intelligence
Can help identify a competitors advantage Can help determine how the competitors advantage was achieved

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Advantages of Competitive Intelligence

Predict changes in business relationships
Guard against threats Forecast a competitors strategy Develop a successful marketing plan
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Sources of Competitive Intelligence

Internet UCC Filings

Company Personnel
Experts CI Consultants Government Agencies
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Suppliers
Newspapers/Periodicals Yellow Pages Trade Shows
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