Decision Support Systems and Marketing Research

Decision Support Systems
and Marketing Research
Chapter 7
Prepared by
Deborah Baker
Texas Christian University
Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 1

©2005 South-Western/Thomson Learning
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.

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.

1 Learning Objective
On
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http://www.fws.gov
http://www.duckstamp.com
http://www.duckstamp.com
Explain the concept

and purpose of a
marketing decision
support system.

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

1 DSS System Characteristics
Interactive
Interactive
Flexible
Flexible
Discovery-Oriented
Discovery-Oriented
Characteristics
Characteristics
of
of aa
DSS
DSS System
System Accessible
Accessible

1 Database Marketing
The creation of a large

computerized file of
customers’ and potential
customers’ profiles and
purchase patterns.

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

2 Marketing Research
The process of planning,

collecting, and analyzing data
relevant to a marketing
decision.

2 Roles of Marketing Research
 Gathering and presenting

Descriptive factual statements
Diagnostic  Explaining data
 Attempting to estimate the

Predictive results of a planned
marketing decision

Management Uses of
2
Marketing Research
On
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http://british-airways.com
 Improve the quality of decision making

 Trace problems
 Focus on keeping existing
customers
 Understand the ever-changing
marketplace

Describe the steps

involved in
conducting a
marketing research
project.

3 The Marketing Research Process
Define
Define
Problem
Problem
Plan
Plan Design/
Design/ Specify
Specify
Primary
Primary Data
Data Sampling
Sampling
Procedure
Procedure
Collect
Collect
Data
Data
Analyze
Analyze
Data
Data
Prepare/
Prepare/
Present
Present
Report
Report
Follow
Follow Up
Up

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

any purpose other
than the one at hand.

3 Sources of Secondary Data
Internal
Internal Corporate
Corporate Information
Information
Government
Government Agencies
Agencies
Trade
Trade and
and Industry
Industry Associations
Associations
Marketing
Marketing Research
Research Firms
Firms
Commercial
Commercial Publications
Publications
News
News Media
Media
3 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
3 Disadvantages of Secondary Data
 May not be on target with the research

problem
 Quality and accuracy of data may pose

a problem

The New Age of Secondary
3
Information: The Internet
On
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http://www.coca-colastore.com
http://www.coca-colastore.com
 Search Engines www

and Directories
 Sites of Interest to
Marketing Researchers
 Discussion Groups
 Periodical, Newspaper, and Book Databases

3 Research Design
Specifies which research

questions must be answered,
how and when the data will be
gathered, and how the data
will be analyzed.

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

3 Primary Data
Information collected for the

first time. Can be
used for solving the particular
problem
under investigation.

3 Advantages of Primary Data
 Answers a specific research question

 Data are current
 Source of data is known
 Secrecy can be maintained

3 Disadvantages of Primary Data
 Expensive
 Quality declines if interviews

are lengthy
 Reluctance to participate in lengthy

interviews
Disadvantages
Disadvantages are are
usually
usually offset
offset by
by the
the
advantages
advantages
of
of primary
primary data!
data!
3 Survey Research
The most popular technique for

gathering primary data in which a
researcher interacts with people
to obtain facts, opinions,
and attitudes.

3 Forms of Survey Research
On
OnLine
Line
http:/www.hersheys.com
http:/www.hersheys.com
In-Home
In-Home Interviews
Interviews Mail
Mail Surveys
Surveys
Mall
Mall Intercept
Intercept Interviews
Interviews Executive
Executive Interviews
Interviews
Telephone
Telephone Interviews
Interviews Focus
(Home
(Home and
and Central
Central Location)
Location)
Focus Groups
Groups

3 Mall Intercept Interview
Survey research method that

involves interviewing people
in the common areas of
shopping malls.

3 Executive Interviews
A type of survey that involves

interviewing businesspeople
at their offices concerning
industrial products
or services.

3 Focus Group
Seven to ten people who

participate in a group
discussion led by a
moderator.

Advantages of
3
On-Line Focus Groups
 Speed
 Cost-effectiveness
 Broad geographic
scope
 Accessibility
 Honesty

Characteristics of Traditional
3
Forms of Survey Research

3 Questionnaire Design
An
An interview
interview question
question that
that
Open-Ended
Open-Ended encourages
encourages anan answer
answer phrased
phrased in
in
Question
Question respondent’s
respondent’s own
own words.
words.
An
An interview
interview question
question thatthat asks
asks
Closed-Ended
Closed-Ended the respondent to make a selection
Question the respondent to make a selection
Question from
from aa limited
limited list
list of
of responses.
responses.
Scaled-
Scaled- A
A closed-ended
closed-ended question
question
Response
Response designed
designed to to measure
measure the
the intensity
intensity
Question
Question of
of aa respondent’s
respondent’s answer.
answer.

Types of Questions in
3
Questionnaire Design

3 Questionnaire Design
On
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http://www.createsurvey.com
http://www.createsurvey.com
Clear
Clear and
and Concise
Concise
No
No Ambiguous
Ambiguous Language
Language
Qualities
Qualities Unbiased
Unbiased
of
of
Good
Good
Questionnaires
Questionnaires Reasonable
Reasonable Terminology
Terminology

3 Observation Research
On
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http://www.bmiltd.com
http://www.bmiltd.com
A research method that relies

on three types of observation:
people watching people
people watching an activity
machines watching people

3 Observational Situations

3 Observation Research
People
People Mystery
MysteryShoppers
Shoppers
Watching
Watching
People
People One-Way
One-WayMirrors
Mirrors
Types
Types of
of People
People
Observation
Observation Watching
Watching Audits
Audits
Research
Research an
anActivity
Activity
Machines
Machines Traffic
TrafficCounters
Counters
Watching
Watching
People
People Passive
PassivePeople
PeopleMeter
Meter

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

3 Experiment
A method a researcher uses

to gather primary data.

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

3 Probability Samples
A
A sample
sample inin which
which every
every element
element in
in
Probability
Probability the
the population
population hashas aa known
known
Sample
Sample statistical
statistical likelihood
likelihood of
of being
being
selected.
selected.
A
A sample
sample arranged
arranged soso that
that every
every
Random
Random element
element of
of the
the population
population has
has an
an
Sample
Sample equal
equal chance
chance ofof being
being selected.
selected.

3 Nonprobability Samples
Any
Any sample
sample inin which
which little
little or
or
Nonprobability
Nonprobability no
no attempt
attempt is
is made
made to
to get
get aa
Sample
Sample representative
representative cross-section
cross-section
of
of the
the population.
population.
A
A form
form of
of nonprobability
nonprobability sample
sample
Convenience
Convenience using
using respondents
respondents whowho are
are
Sample
Sample convenient
convenient oror readily
readily
accessible
accessible toto the
the researcher.
researcher.

3 Sampling Procedure
Universe Sample
Probability
Probability
Samples
Samples
Non-Probability
Non-Probability
Samples
Samples

3 Types of Samples
Probability
Probability Non-Probability
Non-Probability
Samples
Samples Samples
Samples
Simple Random Convenience

Sample Sample
Stratified Judgment
Sample Sample
Cluster Quota
Sample Sample
Systematic Snowball
Sample Sample

3 Types of Samples

3 Types of Errors
Error
Error when
when there
there is
is aa difference
difference
Measurement
Measurement between the information desired and the
Error between the information desired and the
Error information
information provided
provided by by research
research
Sampling
Sampling Error
Error when
when aa sample
sample somehow
somehow does
does not
not
Error
Error represent
represent the
the target
target population.
population.
Error
Error when
when aa sample
sample drawn
drawn from
from aa
Frame
Frame population
population differs
differs from
from the
the
Error
Error target
target population.
population.
Error
Error because
because thethe selected
selected sample
sample is
is
Random
Random an
an imperfect
imperfect representation
representation of
of
Error
Error the
the overall
overall population.
population.
3 Field Service Firm
On
OnLine
Line
http://www.greenfieldonline.com
http://www.greenfieldonline.com
A firm that specializes in

interviewing respondents on a
subcontracted basis.

3 Field Service Firms
Provide:
 Focus group facilities
 Mall intercept locations
 Test product storage
 Kitchen facilities
 Retail audits

3 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.

Preparing and Presenting
3
the Report
 Concise statement of the research

objectives
 Explanation of research design
 Summary of major findings
 Conclusion with recommendations

3 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 to management?

Discuss the
profound impact of
the Internet on
marketing research.

4 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

4 Advantages of Internet Surveys
Rapid
Rapid development,
development,
Real-time
Real-time reporting
reporting
Reduced
Reduced costs
costs
Personalized
Personalized questions
questions
and
and data
data
Improved
Improved respondent
respondent
participation
participation
Contact
Contact with
with the
the
hard-to-reach
hard-to-reach
4 Internet Samples
Unrestricted
Unrestricted AA survey
survey in
in which
which anyone
anyone with
with
Internet
Internet aa computer
computer andand modem
modem can
can fill
fill out
out
Sample
Sample the
the questionnaire.
questionnaire.
Screened
Screened An
An Internet
Internet sample
sample with
with quotas
quotas
Internet
Internet based
based onon desired
desired sample
sample
Sample
Sample characteristics.
characteristics.
Recruited
Recruited A
A sample
sample inin which
which respondents
respondents
Internet
Internet are
are prerecruited
prerecruited and
and must
must
Sample
Sample qualify
qualify to
to participate.
participate.
Other Uses of the Internet by
4
Marketing Researchers
Distribution
Distribution of
of requests
requests for
for
Proposals
Proposals (RFPs)
(RFPs) and
and proposals
proposals
Collaboration
Collaboration inin the
the
management
management of
of aa research
research project
project
Data
Data management
management and and
on-line
on-line analysis
analysis
Publication
Publication and
and distribution
distribution
of
of reports
reports
Viewing
Viewing of
of presentations
presentations of
of
marketing
marketing research
research surveys
surveys
Discuss the growing

importance of
scanner-based
research.

5 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.

When Should Marketing
5 Research be Conducted?
 Where there is a high level

of uncertainty
 When value of research

information exceeds the
cost of generating the
information

Explain the concept

of competitive
intelligence.

6 Competitive Intelligence
On
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http://www.scip.org
http://www.scip.org
An intelligence system that

helps managers assess their
competition and vendors in
order to
become more efficient and
effective competitors.

6 Competitive Intelligence
 Can help identify a competitor’s

advantage
 Can help determine how

the competitor’s advantage
was achieved

Advantages of
6
Competitive Intelligence
 Predict changes in business

relationships
 Identify marketplace opportunities
 Guard against threats
 Forecast a competitor’s strategy
 Discover new or potential competitors
 Learn from the success or failure of others
 Learn about new technologies and impact of
government regulations

Sources of
6
Competitive Intelligence
Internet
Internet UCC
UCC Filings
Filings
Company
Company Personnel
Personnel Suppliers
Suppliers
Experts
Experts Newspapers/Periodicals
Newspapers/Periodicals
CI
CI Consultants
Consultants Yellow
Yellow Pages
Pages
Government
Government Agencies
Agencies Trade
Trade Shows
Shows

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Decision Support Systems

and Marketing Research

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 1

1. Explain the concept and purpose of a

2. Define marketing research and explain its

3. Describe the steps involved in conducting

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 2

4. Discuss the profound impact of the Internet

5. Discuss the growing importance of

6. Explain the concept of competitive

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 3

Explain the concept

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 4

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 5

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 6

The creation of a large

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 7

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 8

The process of planning,

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 9

 Gathering and presenting

Diagnostic  Explaining data

 Attempting to estimate the

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 10

 Improve the quality of decision making

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 11

Describe the steps

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 12

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 13

Data previously collected for

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 15

 Saves time and money if on target

 May not be on target with the research

 Quality and accuracy of data may pose

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 18

 Search Engines www

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 19

Specifies which research

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 20

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 21

Information collected for the

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 22

 Answers a specific research question

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 23

 Quality declines if interviews

 Reluctance to participate in lengthy

The most popular technique for

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 25

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 26

Survey research method that

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 27

A type of survey that involves

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 28

Seven to ten people who

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 29

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 30

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 31

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 32

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 33

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 34

A research method that relies

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 35

Chapter 7 Essentials of Marketing 4e Lamb Hair McDaniel 36