Chapter 8 MR

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Chapter 8 - Marketing ResearchInformation System and Management

Information systems management is an organisedongoing and continuous system of providinginformation to decision makers at all levels of management.

Only an efficient management system can survive in acompetitive and dynamic environment . It hasimplications in the following areas i.e., it gives thecomputer department an edge when it comes toinformation. It will not merely treated as an computer

department it will be assuming the importance of thecentre of information processing. It also encouragesMIS, Executive Information system (EIS), DecisionSupport Systems(DSS), Electronic Data Interchange(EDI), BPR (Business Process Re-engineering)





Management of Change:

A common definition used for changemanagement is a set of processes that isemployed to ensure that significant changes areimplemented in an orderly, controlled and

systematic fashion to effect organizationalchange. One of the goals of change managementis with regards to the human aspects of overcoming resistance to change in order for

organizational members to buy into change andachieve the organizations goal of an orderly andeffective transformation.



What is MkIS?MkIS (MIS) is a set of procedures and methodsfor the regular, planned collection, analysis andpresentation of information for use inmarketing decisions

American Marketing Association

The MkIS increases the number of optionsavailable to decision-makers and supports

every element of marketing strategy. MkISaffects marketings interfaces with customers,suppliers and other partners.



A marketing information system (MkIS) is intended to bring

together different items of data into a rational body of

information.An MkIS also provides methods for interpreting the information

the MIS provides.

Characteristics of MkIS:

1. Its an Continuous and Consciously developed plan.2. It an Integrated process as all the departments are

integrated with the systems department.3. It aids in decision making as an equipment in todays

dynamic environment.

4. It takes in modern management tools such as Statistical,Operations Research to analyse the data for decisions.

5. As it is integrated ,top management gets steady flow of information and right information at the right time.



Components of MkIS:They are categorised as:

1.Internal Reporting System

2.Market Research system

3.Market Intelligence System

4.Marketing Models.



1. Internal reporting systems: All enterprises which havebeen in operation for long period of time have a

wealth of information. However, this information oftenremains under-utilised because it iscompartmentalized. That is, information is usuallycategorised according to its nature so that there are,

for example, financial, production, manpower,marketing, stockholding and logistical data. Often theentrepreneur, or various personnel working in thefunctional departments holding these pieces of data,do not see how it could help decision makers in other

functional areas. Similarly, decision makers can fail toappreciate how information from other functionalareas might help them and therefore do not request it.



The internal records that are of immediate value to marketingdecisions are: orders received, stockholdings and sales invoices.These are but a few of the internal records that can be used by

marketing managers, but even this small set of records iscapable of generating a great deal of information. Below, is a listof some of the information that can be derived from salesinvoices.

Product type, size and pack type by territory, type of account ,industry , customer

Average value and/or volume of sale by territory, type of account , industry , customer

By comparing orders received with invoices an enterprise can

establish the extent to which it is providing an acceptable levelof customer service. In the same way, comparing stockholdingrecords with orders received helps an enterprise ascertainwhether its stocks are in line with current demand patterns.



2.Marketing research systems: Marketing research is aproactive search for information. The data is collected

in a purposeful way to address a well-defined problem. These monitoring or tracking exercises are continuousmarketing research studies, often involving panels of farmers, consumers or distributors from which thesame data is collected at regular intervals.

3.Marketing intelligence systems: Whereas marketingresearch is focused, market intelligence is not. Amarketing intelligence system is a set of proceduresand data sources used by marketing managers to sift

information from the environment that they can use intheir decision making. This scanning of the economicand business environment can be undertaken in avariety of ways,



Unfocused scanning: The manager, by virtue of what

he/she reads, hears and watches exposes him/herself to information that may prove useful. While thebehaviour is unfocused and the manager has nospecific purpose in mind, it is not unintentional

Semi-focused scanning: Again, the manager is not insearch of particular pieces of information that he/she isactively searching but does narrow the range of mediathat is scanned. For instance, the manager may focusmore on economic and business publications,broadcasts etc. and pay less attention to political,scientific or technological media.



Informal search: This describes the situation where a fairlylimited and unstructured attempt is made to obtaininformation for a specific purpose. For example, themarketing manager of a firm considering entering thebusiness of importing frozen fish from a neighbouring countrymay make informal inquiries as to prices and demand levels of frozen and fresh fish. There would be little structure to thissearch with the manager making inquiries with traders he/she

happens to encounter as well as with other ad hoc contacts inministries, international aid agencies, with trade associations,importers/exporters etc.

Formal search: This is a purposeful search after information insome systematic way. The information will be required to

address a specific issue. Whilst this sort of activity may seemto share the characteristics of marketing research it is carriedout by the manager him/herself rather than a professionalresearcher. Moreover, the scope of the search is likely to benarrow in scope and far less intensive than marketingresearch



How to improve marketing intelligence system?

1. Train the sales force

2. Motivate the distributors

3. Do purchase competitors product and

analyse them

4. Setup customer advisory panel

5. Purchase information from research firms

6. Gathering information from the

employees.



4.Marketing models: Within the MIS there has to be themeans of interpreting information in order to give

direction to decision. These models may be computerisedor may not.

Typical tools are:

Time series sales modes

Brand switching modelsLinear programmingElasticity models (price, incomes, demand, supply, etc.)Regression and correlation modelsAnalysis of Variance (ANOVA) modelsSensitivity analysisDiscounted cash flowSpreadsheet 'what if models



Key Elements of MkIS:

1. Information

2. Intelligence Development Process:3. Computer Systems

4. Organisational Focus

Ten Steps to Success:

1. Define the customers

2. UnderstandNeeds

3. Map various uses of Information

4. Implement a Sourcing Strategy

5. Define Information Policies and Standards

6. Select a Pilot Project7. Appropriate Technology

8. Nurture the Intelligence Processes

9. Focus Dissemination (Disbursal)

10. Market the Capability



Benefits of MkIS:

1. Encourage the employees to focus better towards the

product and customers.

2. Through MkIS organisations can tap the new opportunities

easily.

3. Well established MkIS can give early warning of Competitors

moves.4. Investment risks can be taken off if the MkIS gives the early

warning and proper data.

5. Market Positioning and Segmentation will be efficient if the

MkIS is efficient.6. Efficient and effective information is available only if the MkIS

is implemented in an organizaiton.

7. Customer satisfaction is achieved through MkIS as it gives

feedback immediately.



Marketing Research: Marketing research is the systematic

gathering, recording, and analysis of data about issues relating

to marketing products and services.

The goal of marketing research is to identify and assess how

changing elements of the marketing mix impacts customer

behavior.

The term is commonly interchanged with market research;

however, market research is concerned specifically with markets,while marketing research is concerned specifically about marketing

processes.

Marketing research is categorised based on the target market-

Consumer marketing research, and

Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach-

Qualitative marketing research, and

Quantitative marketing research



Elements of Marketing Research:1. Market Research. It covers the aspects regarding size

and nature of the market including export marketsdividing the consumers in terms, of their age, sex,income (market segmentation), economic aspects of marketing etc.

2. Sales Research. This relates to the problem regionalvariations in sales fixing sales territories,measurement of the effectiveness of salesman,evaluation of sales methods and incentives, etc.

3.Product Research. This relates to the analysis of

strengths and or weakness of existing product testingproblems relating to diversification, simplification,trading up and trading down (all product linedecisions), etc.



4. Packaging Research. In essence, it is a part of product research.But the recent development in packaging and its contribution inthe advertising made it to occupy an independent position. This

necessitates a separate study concerning the aspects of packageto know its impact and response in the market.

5. Advertising Research. It undertakes a study relating to thepreparation of advertisement copy (copy research), media to beused (media research) and measurement of advertisingeffectiveness.

6. Business Economic Research. Problems relating to input outputanalysis, forecasting, price and profit analysis, and preparation of break -even charts are the main fields of the research.

7. Export Marketing Research. This research is intended to studythe export potentials of the product. In such cases any or allkinds of research mentioned above become necessary.



What is the Importance of Marketing Research?

1.To Make Marketing Decisions: Marketing research helps the

marketers to make a decision about the product or service.Sometimes a marketer might believe that the new product orservice is useful for the customers. However, research may showthat customers do not need a product or are meeting their needswith a certain competitor product and so on. Similarly goodmarketing research strives to provide options for the successful

introduction of new products and services. This makes the marketentry of a new product or service less risky.

2.Survive the Competition: Marketing research helps inascertaining and understanding competitor information such astheir identity, marketing network, customer focus and scale of operations. This helps in surviving and in certain cases, even leavingbehind the competition. Moreover, with market research you canalso help understand the under-served consumer segments andconsumer needs that have not been met.



3Helps to Decide Target Markets: Research helps providecustomer information in terms of their location, age, buyingbehavior and gender. This helps the marketers zero in on the targetmarkets and customers for their products and services.

4.Maximize Profits: Apart from profit maximizing steps such asitem optimization, customer profitability analysis, and priceelasticity, marketing research allows you to find out methods thatcan help you maximize profits. For example, a product's priceelasticity research can help you ascertain the impact of an

increased price on the sales and the profits of a product. Thisemphasis on profitability also helps the company's focus to shiftfrom maximizing sales to increasing the profits of a company. Thishelps the company survive in the long run and maximize its profits.

5.Increasing the Sales: Increasing the sales of your products or

services helps a company in maximizing its profits. Byunderstanding the customer's needs, wants and attitude towardsthe products and determining whether your products fit the bill,marketers can increase their sales. This helps in not only increasingthe sales to the target customers and people already using theproduct but also converting the non users into customers for the

product.



Objectives of Marketing Research:

The type of information sought from market research willdetermine how much time and effort a business should

invest in it. The objectives of market research may include:

1. Market Attractiveness Evaluation:

� Market sizing - estimating the size of a total market,how much is accessible by the business, and/or what

market share ambitions would be realistic.� Competitive presence and customer preference.

� Customer spending patterns, budget cycles, andintent.

� Channel trends, preferences, and allegiances.

2. Customer Insight: Specific customer needs, aspirations,buying behaviors, usage patterns, decision models,preferences, favorability, intentions, etc



3. Competitive Forces: Current and potential basis of competition in a market.

4. Communications Planning:What information sourcesdo prospective customers pay attention to, how toreach them, opportunities / vehicles for influencingtarget customers and which are most effective.

5. Product Testing: Evaluation of product improvements,alternatives, packaging etc.

6. Concept Testing: Evaluation of potential products andsolutions, clarification of needs, wants, andpreferences.

7. Advert Testing: Evaluation of alternative brandpromises, impact / cut through ability,persuasiveness, strength of call to action, out-takeversus intent, etc.



8. Customer Satisfaction: Measurement of quality

of customer experience, perceptions, reaction,loyalty, intent, etc.

9. Pricing: Testing of price / feature / quality /packaging / positioning combinations, price

points, promotions, loyalty schemes, terms andconditions, etc.

10.List Building: Compilation of information aboutprospective customers for direct marketingpurposes (NB may not be compatible withethical guidelines followed by many marketresearch practitioners).



The Six Steps in Conducting Quantitative

Marketing Research- MR Process1. Identifying and defining your problem

2. Developing your approach

3. Establishing research design and strategy4. Collecting the data

5. Performing data analysis

6. Reporting and presentation



� Step 1: This step is always the first of the marketing research steps.At this point, the problem will have been recognized by at least onelevel of management, and internal discussions will have taken

place. Sometimes, further definition of the issue or problem isneeded, and for that there are several tools you can use.

� Here at the outset of the marketing research steps, the mostcommon tools are internal and external secondary research.Secondary research intelligence consists of information that was

collected for another purpose, but can be useful for other purposes

� Examples of internal secondary research are sales revenues, salesforecasts, customer demographics, purchase patterns, and otherinformation that has been collected about the customer. Oftenreferred to as data mining, this information can be critical indiagnosing the problem for further exploration and should beleveraged when available and appropriate. The amount of internalsecondary information that can be applied is typically limited.



External secondary research is typically far more available, especially

since the Internet age. Most external secondary information is

produced via research conducted for other purposes, financial

performance data, expert opinions and

analysis, corporate executive interviews, legal proceedings,

competitive intelligence firms, etc.

Leading sources for external secondary research resources include:

Newspapers/Magazine Articles

Television

Newsletters

Competitive Intelligence Firms

Industry Reports

Trade Associations & Business Directories Government Publications &Websites

Search Engines

CompetitiveWebsites

Friends & Colleagues



Step 2:

Once the problem is better defined, you can move onto

developing marketing research approach, which will generallybe around a defined set of objectives.

Clear objectives developed in Step 1 will lend themselves tobetter marketing research approach development. Developingthe approach should consist of honestly assessing teams

market research skills, establishing a budget, understandingthe environment and its influencing factors, developing ananalysis model, and formulating hypotheses.

Project Analysis

How difficult is the project to execute?

Is it a large sample (500+) or small sample (<200)?Will the project need advanced analysis?

What are the likely methodological approaches?

Is in-depth and detailed reporting or executive summaryreporting needed?



� Step 3: Based upon a well-defined approach

from Step 2, a framework for designing yourmarketing research design should be

described.

± Marketing research design is the most important

of all steps in the marketing research process,

requiring the greatest amount of thought, time

and expertise and is the point at which those

less experienced with market research will obtain

assistance from an internal market research

expert or perhaps partner with an external

marketing research provider.



Elements of marketing research design include:

A) The Questionnaire Design Process

B) Measuring & Scaling

C) Sample Size Calculator

D) Basic Statistical Testing

Step 4:

Marketing research data collection (often called surveyfielding) is the point at which the finalized questionnaire(survey instrument) is used in gathering information amongthe chosen sample segments. There are a variety of datacollection methodologies to consider.

Selecting which is the most appropriate marketing researchdata collection methodology for a particular researchproject takes place during Steps 2 & 3 of the marketingresearch process.



Market research data collection methods include:

Computer Assisted Telephone Interviewing (CATI)

Internet survey

Interactive Voice Response (IVR)

Mail surveyMall intercepts

Traditional telephone interviewing

Internet panelMail panel

In-home panel



Step 5:

Any survey data analysis will depend on how the

survey questionnaire was constructed. Less complexsurvey data analysis can be handled with any of anumber of office suite tools, while more complexquestionnaire data analysis requires dedicated marketresearch analysis programs.

Types of statistical survey data analysis that might beperformed are simple frequency distributions, crosstabanalysis, multiple regression (driver analysis), clusteranalysis, factor analysis, perceptual mapping(multidimensional scaling), structural equation

modeling and data mining. The more complex theneeded level of statistical data analysis is, the moretime and cost it will take to execute.



Step 6: Marketing Research Reports

Market research reports and presentations are

easily the second most important step, if not thefirst.

Any critical information and knowledge that comesfrom your market research investment will be

limited by how your market research reports arepresented to decision makers.

There are as many reporting styles as there aremarket research reports, but some are definitely

better than others, and there are definitely trendsto be aware of. The style depends on thecorporate culture and requirement.





Methods of data collection

Primary Data are collected afresh & for thefirst time, specially for the designated study.

Secondary Data have already been collected &compiled by someone else.

Primary Data are collected through variousmethods-

1.Survey Approach:

a) Mail Survey or Postal Enquiry b) Personal Interview

c) Telephone Survey.



2.Panel Research

3.Observation Research

4.Experimental Research

a) Mail Survey or Postal Enquiry (Silent Salesman)-

This is most cost effective method of conducting

survey. Printed questionnaire with covering letter and

stamped reply-paid envelope will be posted to the

respondent on the mailing list.

Advantages-

Acts as a Silent Salesman in convincing the

almost unreachable customers.

Follow-up act as a reminder which secures

maximum response.



Disadvantages-

Response may be low or high.

Questionnaire may be answered or not.

b)Telephone Survey: When information is

needed immediately. It gives the factual

answers to few questions. It can quick and

low cost but, the information may not be

accurate. People may not be willing to givepersonal information over the phone. It is

suitable in urban areas.



c)Field Survey or Personal Interview-It is direct

form of investigation which involves face-to-

face communication. Unstructured

communication is possible and visual aids can

be used.

Panel Research:

The researchers use the same sample group

of respondents two or more times or secure

data from them on more occasions. Panelsare made up of respondents who regularly

and routinely report their buying behaviour.



Observation Research: It is more objective in

nature. It is concerned with the accuracy and

eliminates the subjectivity.

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Chapter 8 MR