Principles of Marketing - Chapter 4

Principles of Marketing - Chapter 4

• This chapter focuses on managing marketing information to gain customer insights
• Learning Objectives:
  • Explain the importance of information in gaining insights about the marketplace and customers
  • Define the marketing information system and discuss its parts
  • Outline the steps in the marketing research process
  • Explain how companies analyze and use marketing information
  • Discuss the special issues some marketing researchers face, including public policy and ethics issues
• Customer insights are crucial for creating value, engagement, and building strong customer relationships. However, obtaining these insights can be challenging
• Marketing information, by itself, has little real value. The value lies in the customer insights marketers derive from that information and how they use those insights to improve decision-making
• Marketers need to manage marketing information effectively, drawing from many sources
• Businesses need an effective Marketing Information System (MIS) to collect, analyze, and disseminate the right information (in a timely and useful format) to their managers for decision-making

Marketing Information and Customer Insights

• To create value and develop meaningful relationships with customers, businesses need to gain deep insights into what customers need and want
• Customer insights are fresh marketing information that provide deep understandings of customers and the marketplace. This becomes the foundation for creating customer value, engagement and relationships, however, obtaining them can be challenging

Assessing Marketing Information Needs

• Businesses need to design effective marketing information systems that provide timely and useful information to managers to create customer value and strong customer relationships
• An MIS provides information that is useful for marketing and other managers as well as to external partners like suppliers, resellers and marketing service agencies
• A good MIS balances the information users would like to have against the information they actually need and what is feasible to provide

Marketing Information and Customer Insights (Figure 4.1)

• The diagram shows a cyclical process
• It begins by assessing information needs
• Then the company develops the required information, employing internal databases, marketing intelligence, and marketing research
• Finally, the collected information is analyzed and used to provide insightful information

Developing Marketing Information - Internal Databases

• Internal databases are collections of customer and market information. These are obtained from sources within a company's network, and the data is usually more readily and cost-effectively accessed compared to external sources.
• Internal databases can contain a wealth of information like customer characteristics, sales transactions, website visits, customer satisfaction and service records, records of sales costs, and cash flows, and reports on production, shipments, inventories, reseller reactions, competitor activities, and point-of-sale transaction data.
• However, a challenge in managing internal databases is keeping the data current, accurate, and in the appropriate form, as it is often collected for other purposes

Developing Marketing Information - Competitive Marketing Intelligence

• This is the process of systematically gathering and analyzing publicly available information about competitors and developments in the broader marketing environment
• This can aid strategic decision-making by understanding consumer behaviour, assessing competitor actions, and anticipating future opportunities and threats for the company.
• Some examples of how this data can be collected include observing consumers, quizzing the company's own employees, monitoring competitor activities, and researching the Internet for relevant information

Learning Objective 3 - Steps in the Marketing Research Process

• Marketing research is a systematic process aimed at gathering, analyzing, and reporting on data relevant to specific marketing situations
• Marketing research aids marketers by providing deeper insights into customer motivations, purchase behaviour, customer satisfaction, market potential, market share, and the overall effectiveness of various marketing activities (pricing, products, distribution, and promotion)
•  There are different steps involved in the research process:
  • Defining the problem and research objectives
  • Developing the research plan
  • Implementing the research plan
  • Interpreting and reporting the findings

Steps in Marketing Research - Defining the Problem and Research Objectives

• Identifying an issue or opportunity that the company needs to address—and understanding the related marketing information needed for improved business decisions
• 3 types of research objectives: exploratory, descriptive, and causal.

Steps in Marketing Research - Developing the Research Plan

• Determining how to collect the data to answers the research questions. This encompasses deciding on the research design, the methods for data collection (surveys, interviews, etc.), and the sampling approach
• A written research plan is frequently needed for large or complex research tasks
• The plan should outline the management issues, the research goals, vital information to be collected, how these findings will enhance management decisions, and the project budget.

Steps in Marketing Research - Implementing the Research Plan

• This entails collecting the information, processing the related data, and analyzing the results to derive meaningful business insight.
• Mechanical research tools are an alternative to questionnaires
  • People meters
  • Checkout scanners
  • Biometric measures
  • Neuro-marketing

Steps in Marketing Research - Interpreting and Reporting Findings

• Interpretation of gathered data
• Drawing conclusions from the analysis of the data
• Reporting the findings to the relevant management team

Learning Objective 4 - Special Issues in Marketing Research

• Public policy and ethics issues are important concerns that marketing researchers occasionally face

Other Marketing Information Considerations

• Marketing research in small businesses and non-profit organizations
• International marketing research
• Public policy and ethical considerations in marketing research—especially customer privacy and the misuse of research findings

Explore the management of marketing information to gain crucial customer insights in this chapter. Understand the marketing information system, the research process, and the ethical considerations involved in marketing research. Learn how effective information management can lead to better decision-making and stronger customer relationships.