Database Marketing and Privacy Issues

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Questions and Answers

What is the primary purpose of database marketing?

To enhance brand awareness through social media.

To develop a large computerized file of customer profiles. (correct)

To create personal relationships with customers.

To increase store foot traffic.

Behavioral targeting utilizes data to enhance the effectiveness of which type of advertising?

Online advertising (correct)

Television advertising

Print advertising

Event marketing

Which act primarily addresses privacy concerns regarding personal information?

Data Security Regulation Act

Identity Theft Prevention Act

Privacy Protection Act

Personal Information Protection and Electronic Documents Act (correct)

What role do marketing research aggregators play in the industry?

They acquire and resell published research reports. Signup and view all the answers

What type of system is a Decision Support System (DSS)?

An interactive information management system. Signup and view all the answers

Which of the following is NOT a major aggregator in the marketing research field?

Amazon.com Signup and view all the answers

Which GIS function focuses on displaying data geographically?

Visualizing different types of data Signup and view all the answers

What is the first step in the marketing research process?

Identifying the research problem Signup and view all the answers

What is a key characteristic of a focus group moderator?

Interest in people and knowledge of the product Signup and view all the answers

Which of the following is NOT a source for recruiting focus group participants?

Friends and family of the researchers Signup and view all the answers

What is the average length of a focus group session?

90 minutes Signup and view all the answers

What is one reason longer focus groups tend to be more effective?

More time to complete time-consuming tasks and interact Signup and view all the answers

Which component is included in the three stages of a discussion guide?

Provoking intensive discussion Signup and view all the answers

During which phase does instant debriefing occur?

Immediately after the final focus group Signup and view all the answers

How many participants are typically involved in a focus group?

8 - 12 participants Signup and view all the answers

What should be avoided when selecting focus group participants?

Professional respondents Signup and view all the answers

What is a primary advantage of natural observation situations?

Offers real-world inference Signup and view all the answers

Which factor is essential for using observation research effectively?

Behavior is observable and predictable Signup and view all the answers

What type of observation focuses on current behavior?

Direct observation Signup and view all the answers

What is a disadvantage of using observation research?

Data collection can be slower for frequent behaviors Signup and view all the answers

Why might disguised observation be preferred over open observation?

Participants behave more naturally Signup and view all the answers

Which of the following represents indirect observation?

Analyzing waste patterns in households Signup and view all the answers

What is a major drawback of contrived observation situations?

It may not represent real-world conditions Signup and view all the answers

What is the primary focus of observation research?

Patterns of occurrences or behaviors Signup and view all the answers

What is a significant limitation of using ranking scales when a respondent's actual first choice is not included?

The respondent may inaccurately rank their second choice as their first. Signup and view all the answers

What type of data does a typical ranking scale provide?

Ordinal data Signup and view all the answers

What is one major disadvantage of mail surveys?

Non-response bias Signup and view all the answers

What is the main purpose of Q-Sorting?

To identify respondents with similar attitudes for segmentation. Signup and view all the answers

Which method is considered the cheapest for conducting surveys?

Online surveys Signup and view all the answers

Which scale type is recommended when attitudes are expected to be evenly distributed between positive and negative?

Balanced Scale Signup and view all the answers

Which factor is important to consider for sampling precision in survey methods?

Incidence rate of the population Signup and view all the answers

When designing a scale for customer satisfaction, what should be considered regarding the scale’s wording?

It should reflect the definition of satisfaction being measured. Signup and view all the answers

Why might a researcher choose an unbalanced scale for their survey?

To represent skewed attitudes towards a particular extreme. Signup and view all the answers

What is a potential issue with online surveys regarding sample representation?

They may include inaccurate sampling if unrestricted Signup and view all the answers

What is a common drawback of self-administered questionnaires?

Respondents may not understand the questions Signup and view all the answers

What is a disadvantage of using a 3-point scale in research surveys?

It often yields insufficient data for analysis. Signup and view all the answers

When is face-to-face survey method more suitable?

When longer and less structured questionnaires are needed Signup and view all the answers

What is a key consideration when choosing between forced and non-forced choice scales?

Whether to include a neutral point. Signup and view all the answers

What could be a disadvantage of conducting an online survey?

They may not reach the intended research population if email is not available Signup and view all the answers

What is one advantage of using mail surveys?

They can be easily managed over time Signup and view all the answers

Study Notes

Internal Database Marketing

Database marketing uses customer and potential customer data to create a targeted marketing mix.
Database marketing can send personalized messages through direct mail.

Online and Web Behavior

Behavioral targeting uses data to understand consumer habits, demographics, and social networks to improve online advertising effectiveness.

Privacy

The growth of databases raises privacy concerns.
Identity theft occurs when someone uses your personal information to assume your identity.
The Privacy Act and Personal Information Protection and Electronic Documents Act are examples of governmental action to protect privacy.

Marketing Research Aggregators

Companies that acquire, catalogue, re-format, segment, and re-sell research reports published by various firms.
They play a growing role due to bigger, more comprehensive databases.
Major aggregators include AllNetResearch.com, Profound.com, Bitpipe.com, USADATA.com, and MarketResearch.com.

Information Management

Decision Support Systems (DSS) are interactive personalized information management systems used by individual decision-makers.
Geographic Information Systems (GIS) use data to generate maps displaying data geographically.

The Marketing Research Process - Step 1: Identifying The Research Problem

Managers need to respond to changes in the external environment.
For example: if customers are not returning, the business may need to improve products or services.

Focus Groups - Step 1: Recruit Participants

Researchers prepare sampling criteria and screening questions.
Sources of focus group participants include mall-intercept interviewing, random telephone screening, influentials, target market, marketing professionals, and prosumers.
Avoid "professional" respondents.

Focus Groups - Step 2: Choose the Moderator

The moderator is hired to lead the focus group.
Key skills for a moderator include backgrounds in psychology, sociology, or marketing, as well as good business skills.
Other desirable attributes include an interest in people, product knowledge, listening and observation skills, communication skills, attention to detail, and research knowledge.

Focus Groups - Step 2: Create Discussion Guide

A written outline of topics to be covered during a focus group discussion.
Based on research objectives and information needs.
Three stages include establishing rapport, provoking intensive discussion, and summarizing and testing significant conclusions.

Focus Groups - Step 3: Conduct the Group - Length

Average length is 90 minutes.
Longer groups (over 2 hours) can lead to more participant involvement and time for completing tasks and interacting.
Length is intertwined with the number of questions in the discussion guide.

Focus Groups - Step 4: Focus Group Report

After the final focus group, the moderator can brief the client on initial impressions - this is called instant debriefing.
Instant debriefing is not the official analysis or results.
It’s a brainstorming session between client observers and the moderator.

The Nature of Observation Research

Systematic process of recording patterns of occurrences or behaviors without communication with the people involved.
Observed by humans or machines.
Conditions for using observation include observable, repetitive or predictable behavior of relatively short duration.

Why Use Observation Research?

Offers a more accurate understanding of behaviors compared to self-reporting.
Some data can be gathered more quickly through observation.
Useful when participants cannot account for their own behaviors.

Why Not Use Observation Research?

Only behavioral and physical characteristics can be examined.
Only public behavior can be observed.
Behavior may not be projectable into the future.
Can be time-consuming and costly if behavior is infrequent.

Natural vs. Contrived Situations

Natural situation: Participants are observed in their natural setting without knowing they are under observation.
Contrived situation: Participants are observed in a simulated environment after being recruited.

Open vs. Disguised Observation

Open observation: Individuals know they are being watched.
Disguised observation: Individuals are unaware they are being watched.

Direct vs. Indirect Observation

Direct observation: Focuses on current behavior.
Indirect observation: Focuses on past behavior, inferred from other indicators.

The Scale Has Several Limitations

If the respondent’s actual top choice is not included, they will choose their second best, leading to misleading results.
If the scale includes choices the respondent would never consider, they’ll still have to rank them, which is also misleading.
The scale only offers ordinal data.

Q-Sorting

Respondents sort cards with items into piles (e.g. Important, neutral, unimportant).
Objective is to identify respondents with similar attitudes for segmentation.

Paired Comparisons

Respondents are presented with two items and asked to choose which they prefer.
Used to understand preferences between options.

Constant Sum Scales

Respondents allocate points across different attributes, with a total fixed sum (e.g., 100 points).
Used to measure relative importance of different attributes.

Considerations in Selecting a Scale

Nature of the construct being measured: How the scale is defined impacts wording and questions.
Type of scale: Commercial researchers prefer scales suitable for phone or internet administration.
Balanced vs. Unbalanced Scales: Balanced scales are used for evenly distributed attitudes, while unbalanced scales are used for skewed attitudes.
Number of categories: 5 or 7 categories are most reliable.
Forced vs. Non-Forced Choice: Forced choice requires a selection, while non-forced choice allows respondents to skip or say "don't know."
Even or Odd (include neutral point or not): Consider the inclusion of a neutral point.
Include a "Don't Know" option or not?: Determine the necessity of a "don't know" option.

Advantages of Structured Questionnaires

No interviewer bias.
More suitable for quantitative data collection.

Disadvantages of Structured Questionnaires

Respondents may not understand the questions.
Respondents may leave questions unanswered.

Mail

Ad hoc mail surveys: Questionnaires sent once.
Mail panels: Questionnaires sent multiple times over a period.
Advantages: high-quality sample, cheaper than earlier methods.
Disadvantages: low response rates, non-response bias.

Online Surveys

Surveys administered over the internet.
Advantages: fast, cheap, personalized, high response rates, easier to reach respondents, easier to organize and manage for longitudinal studies.
Disadvantages: sample might not be representative, inaccurate sampling, can't reach research population without email addresses.

Which Survey Method to Use?

Depends on factors like sampling precision, budget, requirements for respondent reactions, quality of the data, questionnaire length, structure, incidence rate, and study time frame.

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Description

Explore the nuances of database marketing, including its applications in targeted advertising and the implications for consumer privacy. This quiz covers behavioral targeting, privacy laws, and the role of marketing research aggregators in the digital landscape.