Kotler 2020 Chapter 4 Marketing Research PDF

CHAPTER 4 – Marketing research to gain consumer insights Mini contents Real Marketing: social media command centres: listening to and engaging customers in social space ◦ Marketing information and consumer insights Gaining consumer insights Assessing marketing information needs Developing m...

CHAPTER 4 – Marketing research to gain consumer insights Mini contents Real Marketing: social media command centres: listening to and engaging customers in social space ◦ Marketing information and consumer insights Gaining consumer insights Assessing marketing information needs Developing marketing information The marketing research process Analysing and using marketing information ◦ Big data and marketing analytics ◦ Ethnographic research and big data - two approaches to understand customers Real Marketing - Netflix streams success with big data and marketing analytics Marketing research does not always create the whole picture International marketing research Public policy and ethics in marketing research Chapter preview In this chapter we continue our exploration of how marketers gain insights into consumers and the marketplace. We look at how companies develop and manage information about important marketplace elements - customers, competitors, products and marketing programmes. To succeed in today's marketplace, with an enormous supply of information, companies must know how to turn mountains of marketing information into fresh customer insights that will help them deliver greater value to customers. Good products and marketing programmes begin with good information about where, how, when, and why consumers buy. Companies also need an abundance of high-quality information on competitors, resellers and other actors and marketplace forces. But more than just gathering information, marketers must use the information to gain powerful customer and market insights. One company that has managed to do this in a smart way is Mastercard. Learning objectives After reading this chapter, you should be able to: 1. Explain the importance of information in gaining insights about the marketplace and customers. 2. Define the marketing information system and discuss its parts. 3. Outline the steps in the marketing research process. Explain how companies analyse and use marketing information. Marketing information and consumer insights Marketing research is a core activity in marketing and often builds on a thorough under- standing of the marketing environment, an area that you learned about in the last chapter. Marketing research is the eyes with which marketers can see, and a tool to understand what they see. It has the potential to inspire new and better marketing activity but it can also be used to test ideas, designs, packaging, and various types of marketing campaigns. It can also deliver useful insights by monitoring the launch of a new brand or product. Marketing research generates and defines marketing problems and in this chapter we'll take closer look at various techniques for conducting marketing research. But remember - it's not only about techniques Only by looking around and seeing the world is it possible to identify marketing problems and opportunities. And while marketing research is often thought of as giving answers, it might be the easy way out. Even though it can boost sales, it may not give answers to bigger questions- such as why young consumers are not enjoying the company's products cf. the case of McDonald's in Chapter 12, In a narrow sense, marketing research is the systematic design, collection, analysis and reporting of data relevant to a specific marketing s situation facing an organization. Compa- nies use marketing research in a wide variety of situations. For example, marketing research gives marketers insights into ustomer motivations, purchase behaviour and satisfaction. It can help them to assess market potential and market share Or to measure the effectiveness of pricing, product, marketing channels and promotional activities. Some large companies have their Own research departments that work with marketing managers on marketing research projects. This is how big companies handle marketing research. These companies, like their smaller counterparts, frequently hire outside research specialists to consult with management on specific marketing problems and conduct marketing research studies Sometimes firms simply purchase data collected by outside companies to aid in their decision-making. Data, information and insights Three core concepts in knowing consumers and markets better are data, information and insight, all of which willbe used in this chapter. Data is the raw numbers that are captured. Here, it's important to make sure that all the like details are being measured in the same way so that data can be compared. Information is a collection of data points with a meaning added, i.e. it could be used to understand something. We may be running a fast-food chain that is not very sustainable. We have lots of consumer data and some information that could help us in designing marketing offers. However, there is one component missing: consumer insights. We could certainly get suffi- cient information to segment markets with many data points,which together make up useful information. But insights go beyond information. Insights are gained by analysing data and information to understand what is going on in, for instance, the minds of consumers or professional buyers. Insights are at the core of make more informed and better decisions. When you purchase a McFish burger from McDonald's, you produce a set of data. Together with other consumers who bought milkshakes, French fries and Chicken burgers, some patterns could easily be found in the rich data material, such as the age and sex of users of various products and the percentage of French fries buyers who also decided to go for a Diet Coke. It's information, but it's not insights. Insight helps us understand why younger buyers are choosing other food options than older buyers, and why excellent offers in the app doesn't make sense to some buyer segments. Why are youngsters sceptical about fast food overall, and why are electric car drivers reluctant to eat French fries or choose curry dip sauce? Clever answers might be insights that help marketers come up with greater offers and communicate them more smartly. Gaining consumer insights Marketing information by itself is of little value. The value is in the customer insights gained from the information and how these insights are used to make better marketing decisions. To create value for customers and to build meaningful relationships with them, marketers must first gain fresh, deep insights into what customers need and want. Companies use such customer insights to develop competitive advantage. A classic example was Apple's successful iPod. It wasn't the first digital music player, but Apple was the first to get it right. Apple's research uncovered a key insight about how people want to consume digital music they want to take all their music with them but they want personal music players to be unobtrusive This insight led to to key design goals make it as small as a deck of cards and build it to hold thousands of songs. Add a dash of, Apple's design and usability magic to this insight, and you have a recipe for a blockbuster. Starting with the iPod, Apple developed and introduced a range of products and services including the iPad, the iPhone, the iCloud, and the i Watch, all connected in the same eco-system. Customer and market insights may be very difficult to obtain. Customer needs and buying motives are often anything but obvious - as we will analyse deeper in Chapter 6, consumers themselves usually can't tell you exactly what they need and why they buy. To gain good customer insights, marketers must effectively manage marketing information from a wide range of sources. Today's marketers have ready access to plenty of marketing information. In fact, most marketing managers are overloaded with data and indeed often overwhelmed by it. Despite this data glut, marketers frequently complain that they lack enough information of the right kind. A classic expression among marketers is: 'Half the marketing spending would be enough; the problem is to know which half. Volvo Car's successful campaign in 2014 illustrates what we're talking about here: it built on Zlatan, Robyn and Swedish House Mafia, but Zlatan was by far the most successful part of the campaign. As a result, the emphasis soon changed towards exposing Zlatan in the campaign. Despite research having been made before a campaign is launched, it is very difficult to know how the campaign is perceived by consumers. Customer insights – Fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships. Marketers don't need more information, they need better information. And they need to make better use of the information they already have, A company's marketing research and information system must add value to the vast amount of information that is normally avail- able, thus providing customer insights. Companies that gather, disseminate and apply deep customer insights have the opportunity to obtain powerful, profitable, and sustainable competitive advantages. Based on such thinking, many companies are now restructuring and renaming their marketing research and information functions. For example, the head of marketing research at Kraft Foods is called the director of consumer insights and strategy. Customer insights groups collect customer and market information from a wide variety of sources, ranging from traditional marketing research studies, mingling with and observing consumers, and monitoring consumer online conversations about the company and its products. In this process. however, companies must be careful not to gO too far and become customer- controlled. The idea is not to give customers everything they request. Rather, it's o understand customers to the core and give them what they need. Marketing information system (MIS) Marketing information system (MIS) – People and procedures for assessing informational needs, developing the needed information and helping decision-makers to use the information to generate and validate accurate customer and market insights. Marketing information systems are people and procedures for assessing informational needs, developing the needed information and helping decision-makers to use the information to generate and validate actionable customer and market insights. Companies must design effective marketing information systems that give managers the right consists of people and procedures for assessing informational needs, developing the needed information, in the right form, and at the right time. A marketing information system (MIS) information and helping decision -makers to use the information to generate and validate actionable customer and market insights. Figure 4.1 shows that the MIS begins and ends with information users marketing managers, internal and external partners, and others who need marketing information. It interacts with these information users to assess information needs and with the marketing environment to develop needed information through internal company databases, marketing intelligence activities and marketing research. Moreover, the MIS helps users to analyse and use the information to develop customer insights, make marketing decisions and manage customer relationships. Assessing marketing information needs The MIS primarily serves the company's marketing and other managers, but may also provide information to external partners such as suppliers , resellers or marketing services agencies. In designing an information system, the company must consider the needs of all of these users. A good marketing information system balances the information users would like to have against what they really need and what is feasible to offer. Some managers will ask for what- ever information they can get without thinking carefully about what they really need. Too much information can be as harmful as too little. Some managers may omit things they oug ht to know, or they may not know to ask for some types of information they should have. For example, managers might need to know about surges in favourable or unfavourable consumer discussions about their brands in social media channels. Because they do not know about these discussions, they do not think to ask about them. The MIs must monitor the marketing environment in order to provide decision-makers with information they should have in order to better understand customers and make key marketing decisions. Sometimes the company cannot provide the needed information, either because it is not available or because of MIS limitations. For example, a brand manager might want to know how competitors will change their advertising budgets next year and how these changes will affect industry market shares. The information on planned budgets is unlikely to be available. Even if it is, the company's MIS may not be advanced enough to forecast resulting changes In market shares. Finally, the costs of obtaining, analysing., storing and delivering information can mount quickly. The company must decide whether the value of insights gained from additional information is worth the cost of providing it, and both value and cost are often hard to assess. In many cases, additional information will do little to change or improve a manager's decision, or the costs of the information may exceed the returns from improved customer insights and decision-making. Developing marketing information Internal database – Collection of consumer and market information obtained from data sources within the company network. The problem isn't finding information but finding the right information from inside and outside sources and turning it into customer insights. Marketers can obtain the needed information from internal data, marketing intelligence and marketing research. Internal data Many companies build extensive internal databases, electronic collections of consumer and market information obtained from data sources within the company network. Marketing managers can readily access and work with information in the database to identify marketing opportunities and problems, plan programmes and evaluate performance. Information in the database can come from many sources. The marketing department furnishes information on customer transactions, demographics, psychographics and buying behaviour. The customer service department keeps records of customer satisfaction or service problems. The accounting department prepares financial statements and keeps detailed records of sales, costs and cash flows The operations department reports on production schedules, shipments and inventories. The: sales force reports on reseller reactions and competitor activities and marketing channel partners provide data on point-of-sale transac- tions. Harnessing such information can provide powerful customer insights and competitive advantages. Internal databases can usually be accessed more quickly and cheaply than other informa- tion sources, but they also present some problems. Because internal information has often been collected for other purposes, it may be incomplete or in the wrong form for making marketing decisions For example, sales and cost data used by the accounting department for preparing financial statements must be adapted for use in evaluating the value of a specific customer segment, sales force or channel performance. We don't need to disturb customers by asking them to fill in a survey and these data are often free of charge- they already exist in the accounting system and the enterprise's system. However, data can become outdated quickly; keeping the database current requires a major effort. In addition, a large company produces mountains of information, which must be well integrated and readily accessible so that managers can find it easily and use it effectively. Managing so much data requires highly sophisticated equipment and techniques. Marketing intelligence Marketing intelligence – The systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplace. Marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplace. The goal of marketing intelligence is to improve strategic decision-making by understanding the consumer environment, assessing and tracking competitors* actions, and providing early warnings of opportunities and threats. Marketing intelligence gathering has grown dramatically as more and more companies are now busily eavesdropping on the marketplace and spying on their competitors. Techniques range from monitoring internet buzz or observing consumers first-hand, to quizzing the company's own employees, benchmarking competitors' products, researching media chan- nels, lurking around industry trade shows, and even rooting through rivals rubbish bins. Useful? Yes, but ethically questionable. Good marketing inteligence can help marketers to gain insights into how consumers talk about and connect with their brands. Many companies send out teams of trained observers to mix and mingle with customers as they use and talk about the company's products. Other companies routinely monitor consumers' online chatter. Companies also need to actively monitor competitors' activities. Firms use competitive intelligence to gain early warnings of competitor moves and strategies, new-product launches, new or changing markets, and potential competitive strengths and weaknesses. Much competitor intelligence can be collected from people inside the company executives, engineers and scientists, purchasing agents and the sales force. The company can also obtain important intelligence information from suppliers, resellers and key customers. Or it can acquire good information by observing competitors and monitoring their published information. It can buy and analyse competitors' products, monitor their sales, check for new patents and examine various types of physical evidence. Even checking out competitors' parking lots may be useful. Full parking lots even beyond traditionally busy times might indicate plenty of work and prosperity while half-full parking lots might suggest hard times. Some companies have even rifled through their competitors' garbage, which is legally considered abandoned property once it leaves the premises. In one classic garbage-snatching incident, Procter & Gamble (P&G) admitted to 'dumpster diving at rival Unilever's headquar- ters. Unilever's dumpsters yielded a wealth of information about strategies for Unilever's hair care brands. However, when news of the questionable tactics reached top P&G managers, they were shocked and immediately stopped the project. Although P& G claims it broke no laws, it noted that dumpster raids violated its business policies. Badwil" costs are difficult to estimate but might be extensive. Competitors often reveal intelligence information through their annual reports, business publications, trade show exhibits, press releases, advertisements and web pages. The Web has become an invaluable source of competitive intelligence. Using search engines, marketers can search specific competitor names, events or trends and see what turns up. Moreover, most companies now place volumes of information on their websites, providing details to attract customers, partners, suppliers, investors or franchisees. This can provide a wealth of useful information about competitors' strategies, markets, new products, facilities and other happenings. Investigating competitors' job advertisements is useful in understanding what the competitors are going to do next. Intelligence seekers can also pore through any of thousands of online databases. Some are free. For example, the ESMA, the European Securities and Markets Authority, provides a huge stockpile of financial information on public competitors, and the European Patent Office database reveals patents that competitors have filed. For a fee, companies can subscribe to thousands of online databases and information search services. The growing use of marketing intelligence raises a number of sustainability and ethical issues. Although most of the preceding techniques are legal, and some are considered to be shrewdly competitive, some may involve questionable ethics. Clearly, companies should take advantage of publicly available information. However, they should not stoop to snooping. With all the legitimate intelligence sources now available, a company does not need to break the law or accepted codes of ethics to gain good intelligence. The marketing research process The marketing research process has four steps (see Figure 4.2): defining the problem and research objectives, developing the research plan, implementing the research plan, and inter- preting and reporting the findings. Defining the problem and research objectives Marketing managers and researchers must work closely together to define the problem and agree on research objectives. The manager best understands the decision for which informa tion is needed; the researcher best understands marketing research and how to obtain the Information. Defining the problem and research objectives is often the hardest step in the research process, The manager may know that something is wrong without knowing the specific causes. After the problem has been defined carefully, the manager and researcher must set the research objectives. A marketing research project might have one of three types of objectives. The objective of exploratory research is to gather preliminary information that will help define the problem and suggest hypotheses. This approach is suitable in situations where marketing researchers have few ideas about how to deal with the marketing problem at hand, for example how self-driving cars would create opportunities to drive kids to their sports activities or pick up parcel and food deliveries for the car owner, or how consumers would consider genetically modified food options. When there is little evidence available explora. tory research makes sense. Exploratory research – marketing research to gather preliminary information that will help define problems and suggest hypotheses. Descriptive research – Marketing research to better describe marketing problems, situations or markets, such as the market potential for a product or the demographics and attitudes of consumers. Causal research – Marketing research to test hypotheses about cause-and-effect relationships. Descriptive research aims at describing things such as the market potential for a product or the demographics and attitudes of consumers who buy the product. The objective of causal research is to test hypotheses about cause- and- effect relationships, e.g. elasticity in prices, For example Would a 10 per cent decrease in tuition at an MBA university programme result in an enrolment increase sufficient to offset the reduced tuition? Managers often start with exploratory research and later follow with descriptive or causal research. The statement of the problem and research objectives guides the entire research process. The manager and researcher should put the statement i in writing to be certain that they agree on the purpose and expected results of the research. Developing the research plan Once the research problems and objectives have been defined, researchers must determine the exact information needed, develop a plan for gathering it efficiently, and present the plan to management The research plan outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans and instruments that researchers will use to gather new data. Research objectives must be translated into specific information needs. The proposed research might call for the ollowing specific information: The demographic, economic and lifestyle characteristics of current users. Characteristics and usage patterns of targeted new users: what do they need and expect from the product, where do they buy it, when and how do they use it, and what existing brands and price points are most popular (if similar products are already available)? Retailer reactions to the proposed new product line: would they stock it and where would they display it? Failure to get retailer support would hurt sales. Forecasts ofs sales to both new and current customers. Will the new product increase the company's overall profits? The research plan should be presented in a written proposal. It's especially important when the research project is large and complex or when an outside firm carries it out. The proposal should cover the management problems addressed and the research objectives, the informa- tion to be obtained, and the way in which the results will help management decision-making. The proposal also should include research costs. To meet the manager's information needs, the research plan can call for gathering secondary data or primary data, or both. Secondary data consists of information that already exists somewhere, having been collected for another purpose. Primary data consists of informa tion collected for the specific purpose at hand. Secondary data – Information that already exists somewhere, having been collected for another purpose. Primary data - Information collected for the specific purpose at hand. Gathering secondary data Researchers usually start by gathering secondary data. The company's internal database provides a good starting point. However, the company can also tap into a wide assortment of external information sources, including commercial data services and government sources. Companies can buy secondary data reports from outside suppliers or collect secondary data on their own. Using commercial online databases, marketing researchers can conduct their own searches of secondary data sources. General database services put huge amounts of information at the disposal of marketing decision-makers. Beyond commercial websites offering information for a fee, almost every industry association, government agency, business publication and news medium offers free information to those tenacious enough to find their websites. Well-designed online searches Can be a good starting point to any marketing research project. Secondary data can usually be obtained more quickly and at a lower cost than primary data. Also, secondary sources can provide information that is not available to a company or would be too expensive to collect. However, secondary data must be evaluated carefully to make certain it is relevant (fits research project needs), accurate (reliably collected and reported), current (up-to-date enough for current decisions) and impartial (objectively collected and reported). A useful secondary data source is the multitude of consultancy reports that are Written 0n various issues, such as digital doctors, the future of food retailing, sustainability and public transport, the future of healthcare, immigration, or anything else. These reports build on extensive data sets and provide useful insights into possible future outcomes. However, One has to be careful the consultancy reports are created to make readers, and in particular business executives, insecure about the future. The reports are with few exceptions provided for free - and the companies providing them expect to sell a lot of advisory services in return, Primary data collection Just as researchers must carefully evaluate the quality of secondary information, they also must take great care when collecting primary data to make sure that it will be relevant, accu rate, current and unbiased. Designing a plan for primary data collection calls for a number o decisions on research approaches, contact methods, sampling plan and research instruments qualitative and quantitative nature (see Table 4.1). Research approaches Research approaches with the purpose of gathering primary data include observation, surveys and experiments. Observational research involves gathering primary data by observing relevant people, actions and situations. For example, a bank might evaluate possible new branch locations by checking traffic patterns, neighbourhood conditions and the location of competing branches. The toy company Fisher-Price has set up an observation laboratory in which it can observe the reactions of children to new toys. The Fisher-Price Play Lab is a sunny, toy-strewn space where lucky youngsters get to test Fisher-Price prototypes, under the watchful eyes of designers who hope to learn what will get children worked up into a new-toy frenzy. Observational research – A type of research where the researcher observes people, actions and situations in order to find patterns and correlations. Some companies employ eye-tracking in their research. The eye of the consumer holds a wealth of valuable information, and yet sometimes it doesn't tell the whole story. In today's media-saturated markets, it is often necessary to go beyond traditional marketing research methods to fully explore how a consumer reacts to a given product, advertisement or website. Eye-tracking combines advanced visual behaviour analyses with traditional marketing- research techniques to provide a comprehensive evaluation of the entire consumer experi- ence. Hence, eye-tracking provides insights into what consumers first look at and how long they look at different elements when seeing an ad, in what order and perhaps most impor- tantly, what they're missing. As eye-tracking reveals what consumers are thinking as they're exposed to the advertisement, this helps marketers create more effective campaigns. In addition to reducing marketing communications costs, it also makes the company contribute less to media saturation, and it leaves a better impression of the company as it communicates more smartly with presumptive buyers. Observational research can obtain information that people are unwilling or unable to provide, In some cases, observation may be the only way to obtain the information needed. In contrast, feelings, attitudes and motives, or private behaviour are difficult to observe, The same holds for long-term OI infrequent behaviour. Consumers may be reluctant to partici- pate in primary data collection since it takes up their time and they are often busy with other things answering surveys is not the highest priority. And asking consumers specific questions may make them more critical, as these questions may inform them about aspects of the offer they hadn't thought about before they participated in the data collection programme. Finally, observations can be very difficult to interpret and the outcome will be largely dependent on the perspective from which the observation has been conducted and analysed: Sociological? Consumer behaviour? Marketing management? Financial? There are obviously many perspectives that can be used in observing a phenomenon. Due to these limitations, researchers often use observation along with other data collection methods. Danish plastic construction toy producer Lego, for example, has used anthropology in a particularly smart way. For decades, Lego was struggling with decreasing sales figures and tried to counteract this decline by introducing easy building sets with action heroes. The children could assemble these toys quickly and play according to the rules created by various media franchises. However, Lego noticed rapidly decreasing sales in their core business of building bricks -the heart and soul of the company. By using anthropology and spending many hours watching children play with Lego, the company realized that kids use Lego to escape their hectic lives; hence, the creativity was missing and Lego realized that they needed to re-introduce more creativity into their toys.3 Ethnographic research – A form of observational research that involves sending trained obseryers to watch and interact with consumers in their 'natural habitat'. Wide ranges of companies now use ethnographic research. This involves sending trained observers to watch and interact with consumers in their 'natural habitat. Municipalities applying place branding have found that an ethnographic method is necessary to go beyond the platitudes often used in communicating the characteristics and advantages of a certain place. Ethnographic research makes it possible to identify the core identity of the place and reveal characteristics that may be very useful in the marketing and branding of the place. Observational and ethnographic research often yield the kind of details that just don't emerge from traditional research questionnaires or focus groups. Whereas traditional quantitative research approaches seek to test known hypotheses and obtain answers to well-defined product or strategy questions, observational research can generate fresh customer and market insights. 'The beauty of ethnography,' says a research expert, is that it 'allows companies to zero in on their customers' unarticulated desires'. Another researcher agrees: 'Classic market research doesn't gO far enough. It can't grasp what people cant imagine or articulate.' Think of the Henry Ford quote: 'If I had asked people what they wanted, they would have said faster horses. By asking people representing the intended target groups, it is possible to go beyond established categories.* One type of ethnographic method is netnography, which is essentially ethnography on the Internet.5 It means to follow consumers and their online discussions, either through pure observation (non-participant netnography) or through interacting with them (participant netnography). Keeping track of relevant consumer discussions is a smart way to get to know one's customers better, Through netnography, conversations consumers have about life in general as well as specific areas can be gathered. As with other types of observations, it's very important to be on the right side of ethics and, for example, not use information from non- anonymous responses to the disadvantage of identifiable consumers. Survey research – Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behaviour. Survey research, the most widely used method for primary data collection, is the approach best suited for gathering descriptive information. A company that wants to know about people's knowledge, attitudes, preferences or buying behavior, can often find out by asking them directly. The major advantage of s survey research is its flexibility it can be used to obtain many different types of information in many different situations. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, in person, or on the web. However, survey research also presents some problems. Sometimes people are unable to answer survey questions because they cannot remember or have never thought about what they do and why. People may be unwilling to respond to unknown interviewers or about things they consider private. Respondents may answer survey questions even when they dc not know the answer in order to appear smarter or more informed or they may try to help the interviewer by giving pleasing answers. Respondents may not know their preferences or why they behave in a specific manner. Finally, busy people may not take the time, or they might resent the intrusion into their privacy, resulting in data being non-representative. This group of busy people with qualified jobs and high incomes might be the most profitable and if they are under-represented in surveys there is a risk that the research input moves the company and its offers in the wrong direction. In sum, an advantage of surveys is that the consumer does the job, but that's also a problem ______________________ Too many customer surveys may undermine the customer relationship Many companies use the survey method to see what their buyers think - at first sight a very clever way to map buyer attitudes. Buyers spend their time filling in surveys, and the crM (or any other) system puts everything together the company gets a report with patterns trends and deviations from expectations almost for free. However, how attractive it may sound, surveys have a number of drawbacks. Too many surveys irritate customers who think the company is asking them too much and too often. It, gives biased market feedback since normally only those who bought the products answer the surveys. And it's not as cheap as it first looks since there are employees busy with dealing with the surveys and taking corrective action. The biggest problem, maybe, the fact that customers identify issues with products and service deliveries they didn't think about before they received the survey. Carrying out customer Satisfaction surveys iS a balancing act. On the one hand, feedback from customers may be used to create competitive offers. On the other hand, extensive measures irritate buyers and make them less satisfied – exactly the opposite of the intention. Imagine you' ve just come back home from a fantastic journey with somebody you like. If you get a lengthy survey from the hotel with questions like: Was the room properly cleaned? Did the concierge do a good job in assisting you? Were all the television channels you wanted available? Did you have to wait in the reception area upon arrival? What do you think about the geographic location? Did you get information about the loyalty card? Did you like the breakfast hours, and the breakfast? Would you recommend your friends to stay in the hotel? After answering these and 6o more ques- tions, you're quite likely to have identified a couple of negative experience you didn't think of before you filled in the survey. Moreover, like in every situation where a company as seller or as employer asks, it has to do something if the results are poor. This to an extent applies to all types of market research where consumers are activated. If they are invited to a focus group or an experiment, they'll know more and may be more critical. ______________________________ Whereas observation is best suited for exploratory research and surveys for descriptive research, experimental research is best suited for gathering causal information. Experi- ments involve selecting matched groups of subjects, giving them different treatments, controlling unrelated factors and checking for differences in group responses. Thus, experi- mental research tries to explain cause-and-effect relationships. For example, before adding a new sandwich to its menu, McDonald's might use experiments to test the effects on sales of two different prices it might charge. It could introduce the new sandwich at one price in one city and at another price in another city. If the cities are similar (to the extent possible), and if all other marketing efforts for the sandwich are the same, then differences in sales in the two cities could be related to the price charged. Past experiences will help researchers identifying cities relevant for the purpose of such research. Experimental research – Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors,and checking for differences in group responses. Contact and research methods Information can be collected by mail, telephone, personal interview or online. Table 4.2 shows the strengths and weaknesses of each of these contact methods. MAIL, TELEPHONE AND PERSONAL INTERVIEW – all questionnaires can be used to collect large amounts of information at a low cost per respondent. Respondents may give more honest answers to more personal questions on a mail questionnaire than to an unknown interviewer in person or over the phone. Also, no interviewer is involved to bias the respondent's answers However, mail questionnaires are not very flexible; all respondents answer the same questions in a fixed order. Mail surveys usually take longer to complete, and the response rate (the number of people returning completed questionnaires) is often very low. As stated above, busy people in particular tend not to fill in and return questionnaires. Finally, the researcher often has little control over the mail questionnaire sample, Even with a good mailing list, it is hard to control who at the mailing address fills in the questionnaire. Some individuals may fill in the survey twice, and not all programmes will notice that. TELEPHONE INTERVIEWING – One of the best methods for gathering information quickly are telephone interviews, as they provide greater flexibility than mail questionnaires. Inter- viewers can explain difficult questions and, depending on the answers they receive, skip some questions or probe further on others. Response rates tend to be higher than with mail questionnaires, and interviewers can ask to speak to respondents with the desired characteristics or even by name. However, in many cases, the data collection is outsourced to a third party that is focused on completing the task as simply as possible. Moreover, respondents may be difficult to find, or may not do their best to contribute to the research questions. However, with telephone interviewing, the cost per respondent is higher than with mail questionnaires. Also, people may not want to discuss personal questions with an interviewet, The method introduces interviewer bias through the way interviewers talk, how they ask questions, and other differences may affect respondents' answers. Different interviewers may interpret and record responses differently, and under time pressures some interviewers might even cheat by recording answers without asking questions. Finally, in this age of do-not. call lists such as Nix and promotion-harassed consumers, potential survey respondents are increasingly hanging up on telephone interviewers rather than talking to them. Collecting data has become a general problem, since many consumers are tired of inter viewers and requests to fill in surveys. PERSONAL INTERVIEWING – This form can take two forms - individual and focus group interviewing. Individual interviewing involves talking with people in their homes or offices, ol the street, or in shopping malls. Such interviewing is flexible. Trained interviewers can guide interviews, explain difficult questions and explore issues as the situation requires. They can show subjects actual products, advertisements or packages and observe reactions and behaviour. However, individual personal interviews may cost three to four times as much as telephone interviews. Focus group interviewing – Personal interviewing that involves inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, organization or idea. The interviewer 'focuses* the group discussion on important issues. FOCUS GROUP INTERVIEWING – consists of inviting six to ten people to meet with a trained moderator to talk about a product, service, organization or idea. Participants are often paid a small sum for attending. The moderator encourages free and easy discussion, hoping that group interactions will bring out actual feelings and thoughts. At the same time, the moderator *focuses' the discussion, hence the name focus group interviewing. Researchers and marketers watch the focus group discussions from behind one-way glass and comments are recorded in writing or on video for later study. Videoconferencing and Internet technology may be used to connect marketers in distant locations with live focus group action. Along with observational research, focus group interviewing has become one of the major qualitative marketing research tools for gaining fresh insights into consumer thoughts and feelings However, focus group studies present some challenges They usually employ small samples to keep time and costs down, and it may be hard to generalize from the results. Moreover consumers in focus groups are not always open and honest about their feelings, behaviours and intentions in front of other people. Some researchers are changing the environments in which they conduct focus groups. To help consumers relax and to elicit more authentic responses, they use settings that are more comfortable and more relevant to the products being researched. There is a vast amount of literature on focus groups and some of it suggests very strict criteria for how the focus group interview should proceed.6 The internet has had a dramatic impact on the conduct of marketing research. Increasingly, researchers are collecting primary data through online marketing research,e.g. Internet surveys, online panels, experiments and online focus groups. Online marketing research – Collecting primarydata online through internet surveys, online focus groups, web-based experlments ortracking consumers' online behaviour. ONLINE RESEARCH – This type of research can take many forms. A company can use the internet or mobile technology as a survey medium: It can include a questionnaire on its web or social media sites or use email Or mobile devices to invite People to answer questions. It can create online panels that provide regular feedback or conduct live discussions or online focus groups. Researchers can also conduct online experiments. They can experiment with different prices, headlines, or product features on different web or mobile sites or at different times to learn the relative effectiveness of their offers. They can set up virtual shopping envi- ronments and use them to test new products and marketing programmes. Or a company can learn about the behaviour of online customers by following their click streams as they visit the online site and move to other sites. Web-based survey research offers some real advantages over traditional phone and mail approaches. The most obvious advantages are speed and low coSts. Researchers can distribute surveys quickly and easily to thousands of respondents simultaneously via e-mail or by posting them on selected websites. Responses can be almost instantaneous, and because respondents themselves enter the information, researchers can tabulate, review and share research data as it arrives. There are either no or very marginal costs for collecting additional survey responses: the website visitor does the job. To motivate them to answer, the respondent may get a discount voucher, e.g.SEK 5o discount for the next purchase from Lindex or 500 SJ Prio points. Beyond their speed and cost advantages, web-based surveys also tend to be more interactive and engaging, easier to complete and less intrusive than traditional phone or mail surveys. However, a major problem is controlling who's in the online sample,. Without seeing respondents, it's difficult to know who they really are. So the sampling problem may be much more serious: it's difficult to know how many have seen and considered answering the survey, and when answers are registered, there is no or limited knowledge about the person answering as opposed to traditional surveys which build on a sample process. Web- based surveys could build on a sample method too, but that's far from always being the case. Qualitative web-based research approaches such as online focus groups offer some advan- tages over traditional focus groups. Participants can log in from anywhere so it works well for bringing together people from different parts of the country or world, especially those in higher-income groups who can'it spare the time to travel to a central site. Also, researchers conduct and monitor online focus groups from just about anywhere, eliminating travel, lodging and facility COSts. Finally, although online focus groups require some advance scheduling, results are almost immediate. Online focus groups can take any of several formats.Most occur in real time, in the form of online chat room discussions in which participants and a moderator sit around a virtual table exchanging comments. Alternatively, researchers might set up an online message board on which respondents interact over the course of several days or a few weeks. Participants l0g in daily and comment on focus group topics. The focus group moderator monitors the online interactions and redirects the discussion as required to keep the group on track. This ongoing message board format gives participants a chance to reflect on their responses, talk to others and check out products in the real world as the group progresses. However, online focus groups can lack the real-world dynamics of more personal approaches. The interactivity, spontaneity and immediacy of focus groups can be kept ifit takes the form of an ongoing message board, but the eye contact, body language and direct personal interactions found in traditional focus group research will be missing. The Internet format with typed commentary and online 'emoticons' such as ) to signify happiness greatly restricts respondent expressiveness. The impersonal nature can prevent people from interacting with each other in a normal way and getting excited about a concept. Adding real-time audio and video to online focus groups iS likely to improve the quality but requires extensive scheduling. Today's marketing researchers are going beyond online surveys, focus groups, and online communities. Increasingly, they are listening to and watching consumers by actively mining the rich veins of unsolicited, unstructured, grassroots consumer conversations. Whereas traditional marketing research provides more logical consumer responses to structured and intrusive research questions, online listening provides the passion and spontaneity of unsolicited consumer opinions Tracking consumers online might be as simple as scanning customer reviews and comments or using sophisticated online-analysis tools to deeply analyse the mountains of consumer brand-related comments and messages found in blogs Or On social media sites. Listening to and engaging customers online can provide valuable insights into what consumers are saying or feeling about a brand. It can also provide opportunities for building positive brand experiences and relationships. Many companies nOw excel at listening online and responding quickly and appropriately. As noted previously, more and more companies are setting up social media command centres with which they scour the digital environment and analyse brand-related comments and conversations to gain marketing insights. Information about what consumers do while trawling the vast digital expanse - what searches they make, the online and mobile sites they visit, how they shop, and what they buy -is pure gold marketers. And today's marketers are busy mining that gold. Then, in a practice called behavioural targeting, marketers use the online data to target ads and offers to specific consumers. For example, if you place an Apple iPad in your Amazon.com shopping cart but don't buy it, you might expect to see some ads for that very type of tablet the next time you visit your favourite sports site to catch up on the latest sports scores. The newest wave of web analytics and targeting takes online eavesdropping even further from behavioural targeting to social targeting. Whereas behavioural targeting tracks consumer movements across online sites, social targeting also mines individual online social connections and conversations from social networking sites. Research shows that consumers shop a lot like their friends and are much more likely to respond to ads from brands friends use. Online listening, behavioural targeting, and social targeting can help marketers to harness the massive amounts of consumer information swirling around the Internet. However, as marketers get more adept at trawling blogs, social networks, and other Internet and mobile domains, many critics worry about consumer privacy. At what point does sophisticated online research Cross the line into consumer stalking? Proponents claim that behavioural and social targeting benefit more than abuse consumers by feeding back ads and products that are more relevant to their interests. But to many consumers and public advocates, following consumers online and stalking them with ads feels more than just a litle creepy. Some fear that the use of technologies that collect personal information online without the respondent 's consent. Failure to address such privacy issues could result in angry, less co- operative consumers and, finally, increased government intervention. Despite these concerns, most online marketing research has grown rapidly. Sampling plan Sample – A segment of the population selected for marketing research to represent the population as a whole. Marketing researchers usually draw conclusions about large groups of consumers by studying a small sample of the total consumer population. A sample is a segment of the population selected for marketing research to represent the population as a whole. Ideally, the sample should be representative so that he researcher can make accurate estimates of the thoughts and behaviours of the larger population. Designing the sample requires three decisions. First, who is to be surveyed (what sampling unit)? The answer to this question is not always obvious. For example, to study the decision- making process for a family automobile purchase, should the researcher interview the owner, the main user (who may not be the same person as the official owner), both if it's a couple, other family members, e.g. children, dealership salespeople, or all of these? The researcher must determine what information is needed and who is most likely to have it. If, as recent evidence suggests, children have a stronger influence upon their parents' urchasing deci- sions than they used to have, this should be considered by market researchers,. Second, how many people should be surveyed (what sample size)? Large samples give more reliable results than small samples but cost more, and it is not necessary to sample the entire target market or even a large portion to gain reliable results. If well chosen, samples of less than 1 per cent of a population can often give good reliability (cf. national election surveys which, based on a sample of a few thousand Swedes, give an accurate view of the percentages different parties receive in the election). Third, how should the people in the sample be chosen (what sampling procedure)? Table 4 3 describes different kinds of samples. Using probability: samples, each populationx member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error. But when probability sampling Costs too much or takes too much time, marketing researchers often take non-probability samples, even though their sampling error cannot be measured and the researcher must be aware of tendencies in the data collected. These varied ways of drawing samples have different COStS and time limitations as well as different accuracy and statistical properties. Which method is best depends on the needs of the research project. Research instruments In collecting primary data, marketing researchers have a choice of two main research instry ments the questionnaire and mechanical devices. QUESTIONNAIRES – The questionnaire is by far the most common instrument, whether administered in person, by phone or online. Questionnaires are very flexible in the sense that there are many ways to ask questions. Closed-end questions include all the possible answers, and subjects make choices among them, which might be a problem if respondents suggest that the phenomenon to be researched may not fit into the categories. Examples include multiple-choice questions and scale questions. Open-ended questions allow respondents to answer in their own words. In a survey of train travellers, sJ might simply ask, 'What is your opinion of sJ?" Or it might ask people to complete a sentence: 'When I choose a train company, the most important consideration is... These and other kinds of open-ended questions often reveal more than closed-ended questions because they do not limit respondents' answers, Open-ended questions are especially useful in exploratory research, when the researcher is trying to find out what people think but not measuring how many people think in a certain way. There may also be some restrictions placed upon the answer in measuring brand strength and profile, respondents maybe asked to name three associations to a particular brand. Closed-ended questions, on the other hand provide answers that are easier to inter- pret and tabulate. Researchers should also use care in the wording and ordering of questions They should use simple, direct, unbiased wording. Questions should be arranged in a logical order. The first question should Create interest if possible, and difficult Or personal questions should be askes last so that respondents do not become defensive (see Table 4.4). MECHANICAL INSTRUMENTS – Although questionnaires are the most common research instrument, researchers also use mechanical instruments to monitor consumer behaviour. For example, Nielsen Media Research attaches people meters to television sets in selected homes to record who watches which programmes. Retailers use checkout scanners to record shoppers' purchases. Retailers may measure the floor traffic through visitor counters. Other marketers use mobile phone GPS technologies to track consumer movements in and nea their stores. Still other researchers apply neuromarketing, using EEG and MRI technologies to track brain electrical activity to learn how consumers feel and respond. Neuromarketing measures, often combined with biometric measures (such as heart rates, respiration rates, sweat levels, and facial and eye movements), can provide companies with insights into what turns consumers on and off regarding their brands and marketing. A more classical device is used by MMs (Mediamätning i Skandinavien), a company that attaches people meters to televi- sion sets in selected homes to measure which television programmes people are watching. Advertisers use eye cameras to study viewers' eye movements while watching adverts on what points their eyes focus first and how long they linger On any given ad component. IBM'S BlueEyes technology interprets human facial reactions by tracking pupil, eyebrow and mouth movements. BlueEyes offers a host of potential marketing uses, such as marketing machines that 'know how you feel" and react accordingly. An elderly man squints at the screen of an automated teller machine (ATM), and the font size doubles almost instantly. A woman at a shopping centre kiosk smiles at a travel advert, prompting the device to print out a travel discount coupon. Neuromarketing measures brain activity to learn how consumers feel and respond. More specifically, neuromarketing studies consumers' sensorimotor, cognitive, and affective responses to marketing stimuli. Researchers use technologies such as functional magnetic resonance imaging (MRI) to measure changes in activity in parts of the human brain. In addition, neuromarketing measures changes in consumers' physiological state. One method used here is biometrics, which measures, for example, heart rate and respiratory rate in addi- tion to galvanic skin response in order to learn why consumers make the decisions they do. and which brain areas are responsible. Companies such as Google, CBS and A&E Television are using neuromarketing research to measure consumer thoughts on their products and advertisements. Although neuromarketing techniques can measure consumer involvement and emotional responses minute by minute, such brain responses can be difficult to interpret. And even though neuromarketing iS developing rapidly, particularly among large companies that have the opportunity to run their own neuromarketing research centres, and in academic researc h, neuromarketing is usually used in combination with other research approaches to gain more complete picture of what goes on inside consumers' heads. Implementing the research plan The researcher next puts the marketing research plan into action. This involves collecting, processing and analysing the information. Data collection can be carried out by the company’s marketing research staff or by outside firms. The data collection phase of the marketing research process is generally the most expensive and the most subject to error. Researchers should watch closely to make sure that the plan is implemented correctly They must guard against problems with contacting respondents, with respondents who refuse to co- operate or who give biased answers, and with interviewers who make mistakes or take shortcuts. Particularly if the data collection is outsourced to a company based on a lowest-bid principle, there may be a risk that the execution is not as good as intended and reported. At the end the day, a data collection company wants to acquire more projects and so it may not provide feedback on implementation problems to its contractors. Researchers must also process and analyse the collected data to isolate important informa. tion and findings. They need to check data for accuracy and completeness, and code it for analysis. The researchers then tabulate the results and compute statistical measures. Interpreting and reporting the findings The market researcher must noW interpret the findings, draw conclusions and report them to management. The focus should be on important findings and insights that are useful in the major decisions faced by management. However, interpretation should not be left onlyt to the researchers. They are often experts in research design and statistics, but the marketing manager knows more about the problems and the decisions that must be made. Although it increases decision-making complexity, it may make sense to include individuals holding other positions to give more input to analysing the findings. The best research means littleif the manager blindly accepts faulty interpretations from the researcher. Similarly, managers may be biased; they might tend to accept research results that show what they expected and to reject those that they did not expect or hope for. In many cases, findings can be interpreted in different ways, and discussions between researchers and managers will help point to the best interpretations. Analysing and using marketing information Information gathered n internal databases and through marketing intelligence and marketing research usually requires additional analysis. And managers may need help in applying the information to gain customer and market insights that will improve their marketing decisions. This help may include advanced statistical analysis to learn more about the relationships within a set of data, Information analysis might also involve the application of analytical models that will help marketers make better decisions. Once the information has been processed and analysed it must be made available to the right decision-makers at the right time. In the following sections, we look deeper into analysing and using marketing information. Customer relationship management (CRM) Customer relationship management (CRM) – Managing detailed information about individual customers and carefully managing customertouch points to maximise customer loyalty. We' 've talked generally about managing customer relationships throughout the book. But here, the term customer relationship management (CRM) has a much narrower data management meaning. It refers to capturing and using customer data from all sources to manage customer interactions and build customer relationships. In fact, the term CRM 'S5 of managing customer relationships, including data processing, the creation of segmented used in various ways, from a more narrow data management application to the whole system offers, and manual entries into the system (eg. Miss Karlsson wants to stay in room 214 or 314 when she's here or i Mr. Smith often make complains about the temperature in his room), Any data collection and processing technique could actually be used to increase the performance of the CRM system. The question of how best to analyse and use individual customer data presents special problems. Most companies are awash with information about their customers. In fact, smart companies capture information at every possible customer touch point, including customer purchases, sales force contacts service and support calls, website visits, satisfaction surveys, credit and payment interactions, and market research studies. The trouble is that this information is usually scattered widely across the organization. is buried deep in the separate databases and records of different company departments. To overcome such problems, many companies are now turning to CRM to manage detailed information about individual customers and carefully manage customer touch points in order to maximise customer loyalty. CRM first burst onto the scene in the early 2000s Many companies rushed in, implementing overly ambitious CR M programmes that produced disappointing results and many failures." More recently, however, companies have been moving ahead more cautiously and implementing CRM systems that really work. CRM consists of sophisticated software and analytical tools that integrate customer informa tion from all sources, that analyse It in depth and apply the results to build stronger customer relationships CRM integrates everything that a company 'S sales, service and marketing teams know about individual customers to provide a 360-degree view of the customer relationship. Companies can use CRM to pinpoint high-value customers, target them more affectively, cross-sell the company's products and create offers tailored to specific customer requirements. CRM analysts develop data warehouses and use sophisticated data mining techniques to unearth the riches hidden in customer data. A data warehouse is a company-wide electronic database of finely detailed customer information that needs to be sifted through for gems. The purpose of a data warehouse is not just to gather information, but also to pull it together into a central, accessible location. For example, IC A's loyalty card (Ica-kortet) gives customers customized offers based or purchase history. In addition to a 1 percent refund on all purchase transactions (with few exceptions, eg stamps and lottery tickets), a customer buying large amounts of frozen prawns, whole wheat bread and dark chocolate will be given a discount on the same products as a benefit in the upcoming month. Once a month, ICA cardholders get personalized mail with a refund and offers, and ICA co-operates with other companies and uses their CRM system to provide a marketing channel for other companies' products. Consumers are getting used to loyalty card data being used in this kind of way and we'll see more personalized offers as new techniques are developed and consumers begin to accept them. CRM benefits don't come without cost or risk, either in collecting the original customer data or in maintaining and mining it. The most common CRM mistake is to view CRM only as a technology and software solution. CRM is just one part of an effective overall customer relationship management strategy. Companies should be careful and avoid “spamming” customers with offers, surveys and other things - t may end up in a situation where customers get tired of the company and stops reading the information, and e-mails may be subject to anti-spam measures that definitely stop the company's opportunities to communicate. Big data and marketing analytics As noted at the start of the chapter, today's big data can yield big results. But simply collecting and storing huge amounts of data has little value. Marketers must sift through the mountains of data to mine the gems – the bits that yield customer insights. As one marketing executive puts it, 'It's actually [about getting] big insights from big data. I's throwing away 99.999 percent of that data to find things that are actionable. Another data expert says, "right data trumps big data'. That's the job of marketing analytics. Marketing analytics consists of the analysis tools, technologies, and processes by which marketers dig out meaning ful patterns in big data to gain customer insights and gauge marketing performance.' Marketers apply marketing analytics to the large and complex sets of data they collect from web, mobile, and social media tracking; customer transactions and engagements; and other big data sources. For example, Netflix maintains a bulging customer database and uses sophisticated marketing analytics to gain insights, which it then uses to fuel recommendations to subscribers, decide what programming to offer, and even developing its own exclusive content in the quest to serve its customers better. Ethnographic research and big data – two ov approaches to understand consumers Many companies want to capture as much customer data as possible, and chase customers with surveys, loyalty cards, self-scanners, bonuses, and they track every move, where possible. Adapting and exploiting big data has become somewhat of a new sport for many managers. Big data, Artificial Intelligence (AI) and other buzzwords give promises to managers about the future. But if we look beyond the promises of these terms, very little is actually said about the thor- ough understanding and reflexivity that is necessary in order to gain consumer insights. Why should we care about consumer insights? It doesn't seem quite as topical as big data. But the fact is that consumer insights are exactly what companies need in order to be successful, not least when they face the current challenge of being sustainable while at the same time being profitable. Marketing research requires resources, methods, data, and analytical skills. Big data alone means very little unless there is an understanding of why such quantitative data is collected and used. Big data offers great advantages, and obviously, consumption patterns may be traced to the benefit of companies. Big data offers the opportunity to develop automated targeting strategies. Notably, it might reveal correlations that would otherwise remain unknown. But the obsession with big data risks becoming an end in itself, and might contribute to managers reproducing similar strategies based on similar data interpretations while neglecting or even ignoring more socio-cultural, contextual knowledge and a thorough understanding about how consumers think and act. Here is where ethnographic research comes in, and it has a lot to offer. In the worst case, the obsession with big data may end up in situation where companies, and their managers and marketers, are de- connected from an understanding of what really creates value and activates purchasing power. On the contrary, high-quality consumer insights, which might be obtained through ethnographic research, could generate such information. Pros and cons with big data Collecting, storing, processing, and using big data is costly and taxing On company resources. Creating a big data department, which is supposed to boost sales and profitability, may be a profitable option, but adds to the operating costs of the company. A company will need both. Great tools for data analysis cannot compensate for a lack of understanding of consumers – and understanding consumers cannot compensate for lack of data. It goes back to the classical insight that one needs both data and gut feeling to be a good marketer. There must hence be a balance between quantitative data and qualitative insights. The former might be collected through Big Data the latter through talent and following what is happening in the marketplace. With big data only, one might end up collecting data without knowing when it's enough and not having the resources to properly instil meaningful i insights. To gain insights and know what is going on in the marketplace, one has to talk to consumers too. Ethnographic methods are very useful to understand consumers and the context in whích consumption takes place, hence considering the consumption setting and its cultural facets. Life experi- ence and personal situations are difficult to capture with quantitative data, regardless of their magu nitude. Likewise, quantitative data has difficulties addressing sensory and affective experiences But most organizations need lots of quantitative data too. And not infrequently are they used in a manner that does not really help in creating consumer insights. Distributing and using marketing information As well as the marketing information that is readily available to the managers and others who make marketing decisions or deal with customers, non-routine information for special situations and on-the-spot decisions may be needed by marketing managers. For example, a sales manager having trouble with a large customer may want a summary of the account's sales and profitability over the past year. Or a retail store manager who has run out of a a best-selling product may want to know the current inventory levels in the chain's other stores. The company intranet often provides ready access to research infor- mation, reports, shared work documents, contact information for employees and other stakeholders, and more. Marketing research does not always create the whole picture There are some important limitations with marketing research. Although the method chosen is often crucial to the results, there is no single method that will completely solve the limita- tions of marketing research. Marketing research must start with an understanding and analysis of the marketing envi- ronment, i.e macro environmental forces, societal trends and discussions going on, that can help the company to see opportunities and threats. If these are not taken into account, there is a significant risk that the results will be misleading. And that's also a lesson to think about in other contexts where marketing decisions are made: if the bigger context is not understood sufficiently, there is a significant risk that the wrong strategies will be applied. Marketing research should normally serve a specific purpose, i.e. address a particular issue. Here, there is a lot to be said for the quantitative option. However, surveys are normally only sent to existing customers. And among those who answer, only a few might belong to the often most profitable segment, i.e. the average wealthy consumer who is happy with the company's offers and spend a lot - but unlikely to answer the surveys because of a lack of interest and time to do S0. The really happy and really unhappy customers are more likely to answer, but they are not likely to be as profitable. This is called selection bias and may be a problem when the survey results are being used to make general statements about a consumer, and they may pave the way for decisions that are not based on solid foundations Quantitative data and analysis in general, and big data in particular, may, despite their advantages, lead to a strong focus on collecting, processing, and using information instead of really attempting to understand the environment, consumers, and the link between them. Big data doesn't really give the answer in trying to understand why many young consumers hesitate to consume traditional fast food from McDonald's, Burger King, KFC, etc. It may demographic profile and consumption patterns. But other methods along with a thorough give important clues and reveal interesting and important links between, for example. understanding of how the world is changing may be necessary to find answers to the bigger question of reluctance to consume traditional fast food. If you run a small business... Managers of small businesses and non-profit organizations often think that marketing research can only be conducted by experts in large companies with big research budgets. However, many of the marketing research techniques discussed in this chapter can be used by smaller organizations in a less formal manner and at little expense. Managers of small businesses and non-profit organizations can obtain good marketing insights simply by observing things around them and talking to their customers. They can conduct informal surveys using small convenience samples. Small organizations can also obtain most of the secondary data available to large businesses. And many associations, local media, chambers of commerce and government agencies provide special help to small organizations. For example, the European Small Business Alliance www.esba-europe.org) offers free publications and gives advice on topics ranging from starting, financing and expanding a small business to ordering business cards. To keep costs of data collection low, students can be hired that may want to use the experience they gain in a project. Finally, small businesses can collect a consider- able amount of information at very little cost online. They can scour competitor and customer websites and use Internet search engines to research specific companies and issues. Although these informal research methods are less complex and less costly, they must still be conducted with care. Managers must think carefully about the objectives of the research, formulate questions in advance, recognize the biases introduced by smaller samples and less Skilled researchers, and conduct the research systematically.12 International marketing research International marketing researchers follow the same steps as domestic researchers. However, these researchers often face more, and different, problems. Whereas domestic researchers deal with fairly homogeneous markets within a single country and operating under the same political regime, international researchers deal with diverse markets in many different coun- tries. These markets often vary greatly in their levels of economic development, cultures and customs, and buying patterns. In many foreign markets, the international researcher may have a difficult time finding good secondary data. Some countries have almost no research services at all, Although some of the largest international research services do operate in many countries, most research firms operate in only a handful of countries. Thus, even when secondary informa- tion is available, it must usually be obtained from many different sources on a country-by- country basis, making the information diffcult to combine or compare, If you take a look at the major consultancy firms'` reports and the contact information provided, you'll find that only major markets are represented. It underlines the problem and the divide that exists between countries with access to lots of solid market information and countries with few such opportunities. Because of the scarcity of good secondary data, international researchers often have to collect their own primary data. For example, they may find it difficult simply to develop good samples. Researchers in developed countries can use current telephone directories, e-mail lists, and various sources of socio economic data to construct samples. However, such information is largely lacking in many countries. Once the sample is drawn, a European researcher can usually reach most respondents easily by telephone, by mail, via social media networks such as LinkedIn, or in person. Reaching respondents is often not so easy in other parts of the world. Researchers in Mexico cannot rely on telephone, Internet and mail data collection; most data collection is door to door and concentrated in three or four of the largest cities. In some countries, e.g. Mexico and Kenya, few people have phones or personal computers but they access the Internet through the use of mobile phones. Cultural differences between countries cause additional problems for i international researchers. Language is the most obvious obstacle, which makes interpretation a severe problem. Translating a questionnaire from one language to another is anything but easy. Many idioms, phrases and statements mean different things in different cultures. For example, a Danish executive noted: 'Check this out by having a different translator put back into English what youve translated from English. You'll get the shock of your life. I remember an example in which "out of sight, out of mind" had become "invisible things are insane".' Questionnaires must be prepared in one language and then translated into the languages of each country researched. Responses then must be translated back into the original language for analysis and interpretation. This adds to research costs and increases the risk of error. A researcher at a big Scandinavian university says that they invested a lot to include China in a survey - but the data received were not good enough. 'I don't know what we did wrong. We used professional translators, a local, Chinese company collected the data, and we did what we could to make sure all parts of the project were coherent. But somehow, something went wrong, and until this day I don't really know why.' Obviously, involving different countries is not only about translation. Consumers in different countries also differ in their attitudes towards marketing research. People in one country may be very willing to respond; in other countries, non-response can be a major problem. Customs in some countries may prohibit people from talking with strangers. In certain cultures, research questions are often considered too personal. For example, in many Latin American countries people may feel embarrassed to talk with researchers about their choices of shampoo, deodorant or other personal care products and that's difficult for researchers to deal with, since in general terms, Latin Americans are extrovert and outgoing. Similarly, in most Muslim countries, mixed-gender focus groups are taboo, as is recording female-only focus groups on camera. In some countries, illiteracy is an issue, something a person coming from a developed country may not think about. Even when respondents are willing to respond, they may not be able to because of high functional illiteracy rates. Despite these problems, as global marketing grows, global companies have little choice but to conduct such international marketing research. Although the costs and problems associated with international research may be high, the costs of not doing it in terms of missed opportunities and mistakes might be even higher. Once recognized, many of the problems associated with international marketing research can be overcome or avoided Public policy and ethics in marketing research Most marketing research benefits both the sponsoring company and its consumers. Through marketing research, companies learn more about consumers needs, resulting in more satis- fying products and services and stronger customer relationships. However, the misuse of marketing research can also harm or annoy consumers. Two major public policy and ethics issues in marketing research are intrusions on consumer privacy and the misuse of research findings. Intrusions on consumer privacy Many consumers feel positive about marketing research and believe that it serves a useful purpose. Some actually enjoy being interviewed and giving their opinions. However, others strongly resent or even mistrust marketing research. They worry that marketers are building huge databases full of personal information about customers. Or they fear that researchers might use sophisticated techniques to probe their deepest feelings, peek over their shoulders as we shop or eavesdrop on our conversations and then use any knowledge gained to manipulate our buying. There are no easy answers when it comes to marketing research and privacy. For example, is it a good or bad thing that marketers track and analyse consumers* web clicks and target adverts to individuals based on their browsing behaviour? Consumers have become more critical. Increasing consumer resentment has become a major problem for the marketing research industry, leading to lower survey response rates in recent years. Consumers may also have been taken in by previous 'research surveys' hat actually turned out to be attempts to sell them something. Still other consumers confuse legitimate marketing research studies with promotional efforts and say no' before the interviewer can even begin. Just as companies face the challenge of unearthing valuable but potentially sensi- tive consumer data while also maintaining consumer trust, consumers wrestle with the trade offs between personalization and privacy. The marketing research industry is considering several options for responding to this problem, e.g.establishing councils for Your opinion counts' and 'Respondent bill of rights'. But does it really help? We know from many contexts dealing fairly with co-workers, taking environmental responsibility, and keeping up with local society's future needs that in the end, if researchers provide value in exchange for information, customers may gladly provide it. For example, Amazon.com's customers do not mind if the firm builds a database of products they buy in order to provide future product recommendations. This saves time and provides value. Similarly, hotels.com and booking. com users gladly complete surveys rating hotels because they can view the overall ratings of others when making hotel booking decisions. The best approach is for researchers to ask only for the information they need, to use it responsibly to provide customer value, and to avoid sharing information without the customer's permission. SUMMARY To create value for customers and to build meaningful relationships with them, marketers must first gain fresh, deep insights into what customers need and want. Such insights come from good marketing informa: tion. The challenge is to transform today's vast volume of consumer information into actionable customer and market insights. A company's marketing research and information systems must do more than simply generate lots of information. The real value of marketing research and marketing information lies in how it is used in the customer insights that it provides. The marketing process starts with a complete under- standing of the marketplace and consumer needs and wants. Thus, the company needs sound information in order to produce superior value and satisfaction for customers. The company also requires information on competitors, resellers and other actors and forces in the marketplace. Increasingly, marketers are viewing information not only as an input for making better decisions but also as an important strategic asset and marketing tool. The marketing information system (MiS) consists of people and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. A well. designed information system begins and ends with users. The MIS first assesses information needs, primarily to serve the company's marketing manager and other managers. Then, the Mis develops information from internal databases, marketing intelligence activities and marketing research. Internal databases provide information on the company's own operations and departments. Such data can be obtained quickly and cheaply but often needs to be adapted for marketing decisions. Marketing intelligence activities supply everyday information about developments in the external marketing environment. Market research consists of collecting information relevant to a specific marketing problem faced by the company. Lastly, the MiS helps users to analyse and use the information to develop customer insights, make marketing decisions and manage customer relationships. The first step in the marketing research process involves defining the problem and setting the research objec- tives, which may be exploratory, descriptive or causal research. The second step consists of developing a research plan for collecting data from primary and secondary sources. The third step calls for imple- menting the marketing research plan by gathering. processing and analysing the information. The fourth step consists of interpreting and reporting the find- ings. Additional information analysis helps marketing managers apply the information and provides them with sophisticated statistical procedures and models from which to develop more rigorous findings. Both internal and external secondary data sources often provide information more quickly and at a lower cost than primary data sources, and they can sometimes yield information that a company cannot collect by itself, However, the required information might not exist in secondary sources, Researchers must also evaluate secondary information to ensure that it is relevant, accurate, current and impartial. Primary research must also be evaluated for these features. Each primary data collection method observational, survey and experi mental- has its own advantages and disadvantages Similarly, each of the various research contact methods, mail, telephone, personal interview and online alse has its own advantages and drawbacks Information gathered in internal databases and through marketing intelligence and marketing research usually requires more analysis. This may include advanced statistical analysis or the application of analytical models that will help marketers make better decisions To analyse individual customer data, many companies have now acquired or developed special software and analysis techniques called customer relationship management (CRM) that integrate, analyse and apply the extensive customer data contained in their data- bases. The Mis must make the information available to the managers and others who make marketing decisions or deal with customers. In some cases, this means providing regular reports and updates; in other cases it means making non-routine information available for special situations and on-the-spot decisions. Today's marketing managers can gain direct access to the information system at any time and from virtually any location. Marketing research can also be conducted effectively by small businesses and non-profit organizations with limited budgets by applying methods in a less formal manner. International marketing researchers follow the same steps as domestic researchers but often face more, and different, problems. All organizations need to act responsibly with regard to major public policy and ethical issues surrounding marketing research, including issues of intrusions on consumer privacy and misuse of research findings. KEY TERMS Causal research Customer insights Customer relationship management (CRM) Descriptive research Ethnographic research Experimental research Exploratory research Focus group interviewing Internal databases Marketing information system (mis) Marketing intelligence Marketing research