David Robinsonfaculty.haas.berkeley.edu/robinson/ugba106

Haas School of BusinessHaas School of Business

ugba 106

Marketing

© D. Robinson, 2008

Lecture 5: Marketing Information Systems

Marketing Information Systems

Marketing Research provides a basis for rational decision making

The Marketing Information System(A&K Fig 4.1)

How do we go about Marketing Research?

1. What’s the problem?

2. Develop the research plana. What do we want to know?

b. About which group of people?

How do we go about Marketing Research?

3. Implementation and analysisa. What do we have in our own records?

b. Purchase syndicated data

c. Run our own studies

d. Outsource: Get an expert to run the studies

4. Interpreting, reporting . . . and action!

Marketing Information Systems: Part 1 Internal Data

Firms have a lot of information without commissioning primary

research

Internal Sources of Data

• Sales records by store, time of day, etc• Example: Firms can easily research seasonality

• Customer account analysis

• Known-customer response to Direct promotion

• Sales response to Mass Media advertising

Using Internal Databases

Internal Data Analysis

• Most firms have transaction level data in a data warehouse

• Need to analyze this with– Common sense & creativity– Artificial intelligence

• Why?

• This is called data mining• Data base is particularly useful when

transactions are linked to customers

Example: Safeway Select Soups

Counter-example

Digital Dashboards are Common

Why Kraft-General Foods has an easier time than you do launching a new product

• Most “marketing firms” have:– Extensive intranets with data (see text p.115)– Highly technical analysis

• Example conjoint elasticities when competitors also change prices

– “Rules of thumb” (previous experience)• E.g. Willingness to pay for new product

Marketing Information Systems: Part 2 Buying Research

Before we commissioning primary research we look for “Secondary Data”

Secondary Data Comes First

• Definition: Data collected for another purpose, such as government data

• Consider using proxies• Example: How many “wealthy” families in

Shanghai ≈ how many have children in private schools ?

• Limitations on Secondary data• Timeliness• Quality• Relevance

Admin of the Day

Commissioning Primary Research

A Note on Syndicated Research

Is it “Primary” or “Secondary” data (the difference may be academic)?

The role of syndicated research

• Typically questionnaire, often by phone• Gartner and IDC in tech• IRI, Nielsen Simmons in consumer products• Very cost effective and often quick• Very good data • The third-party researchers are essential to get

around anti-trust• B2B many specialty firms, will interview e.g. oil

exploration managers’ purchase intentions

1. Poorly defined objectives for research

2. Irrelevant subject pool

3. Overly complicated research (example Snapple case)

4. Research that sits on the shelf and isn’t disseminated (timeliness)

5. Failure to act on the information at hand

Typical marketing research failures

Failure to act on the information at hand: Olds Aurora

Two types of primary research

Qualitative Quantitative

• Questionnaires & interviews

• Online data collection

• Scanner data

• Experimentation e.g. “taste tests” different ad spending

Good research will use some of each

• Observational data

• Focus groups

• Story telling, drawing

Two types of primary research

Qualitative

• Observational data

• Focus groups

• Story telling, drawing

Observation

• What to customers actually do?

• Do most people go shopping with their friends?

• Do people touch the goods on before they buy?

Suggested book on observations

• See “Marketing easy reads” on my web-page

Focus Groups

• Selection of participants

• Leading a group• Beware of the

executive behind the one-way glass

Qualitative: Observational

Qualitative:Thematic Apperception Test

Make up a story that reflects what you think is happening in this picture.

Two types of primary research

Quantitative

• Questionnaires & interviews

• Online data collection

• Scanner data

• Experimentation e.g. “taste tests” different ad spending

New Physiological Measures

• Eye movement cameras• GSR (lie-detector machines)• even Magnetic Resonance Imaging

• Scanner data• IRI and Nielsen• Supermarkets make a bit of money from this• “Panel data” is a select group of customers• Types of information companies get from

scanner data:• Time, frequency of purchase• Goods that go together• Response to competitor promotions• Price elasticity

“Behavioral” Data

• Dummy stores

• Miniature “natural experiments”• Best of these are “split-halves” experimental and

control designs• Example: Bear Minimum: Three for the price of two

—today only• Almost every business can run these

Experimentation

Limitations of various approaches

• Focus groups– Loud mouths and over-

interpretation

• Online– Fast but not a random

sample—at all• Mall intercept

– Who are you getting?

• Questionnaires– Only get the answer to what

you are asking

Asking the right question

• Do you think Ronald Reagan is the greatest American who ever lived?

Why we use both types of research

Qualitative Quantitative

• Rich source of ideas

• Insights the firm doesn’t have

• Not “scientific”

• Statistically reliable

• Only answers the questions you ask

• Won’t come up with the ones you forgot to ask

Usually comes first

We us Qualitative to generate the right questions to ask in Quantitative

The Mechanics of the Research Process

How to do it

The Marketing Research Process(A&K Fig 4.2)

What don’t we know? How would our

decision making change if we knew this?

The Marketing Research Process(A&K Fig 4.2)

What method are we going to use?

What sampling plan?

Who

How many?

How chosen?

Focus group

Observation

Survey

“Behavioral” (scanner)

Experiment

How many groups?

Types of Samples

Probability

• Simple random

• Stratified random

• Cluster • e.g. City blocks

Nonprobability

• Convenience

• Judgment• Good prospects

for information

• QuotaJust be a good consumer of

information—ask how the sample

was chosen

The Marketing Research Process(A&K Fig 4.2)

• Make a plan with a timeline

• Collect the data without bias

• Make sure the data are “clean”

• Analyze and summarize

Assessing Marketing Effectiveness

The sorts of measures we consider in a Marketing Audit

Marketing Metrics(how to assess the effectiveness of our marketing effort)

External• Awareness• Market share• Relative price• Customer satisfaction

(JD Power surveys and “would you recommend us to a friend?)

• Total number of customers

• Loyalty, repurchase

Internal• Awareness of Marketing

Plan• Commitment to goals• Active support• Resource adequacy• Staffing levels

Characteristics of Good Marketing Research

• Uses scientific method– Aware of possible bias– Uses good selection– Avoids causation fallacies

• Uses multiple methods to create a complete picture

• Balances cost with effectiveness• Is interpreted with caution

– Don’t over extend what you know• Never uses research as an unethical selling

program