DECISION

SUPPORT
SYSTEMS AND
MARKETING
RESEARCH
Prepared by
Angela Zigras, Seneca College
Deborah Baker, Texas Christian University
 You will learn to ...

1. Explain the concept and purpose of a

marketing decision support system.

2. Define marketing research and explain its

importance to marketing decision making.

3. Describe the steps involved in conducting

a marketing research project.
 You will learn to ...

4. Discuss the growing importance of

scanner-based research.

5. Explain when marketing research should

and should not be conducted.
Marketing Intelligence

Everyday information about

developments in the
marketing environment that
managers use to prepare
and adjust marketing plans.
Decision Support System

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

Interactive
Interactive

Flexible
Flexible

Discovery-Oriented
Discovery-Oriented
Characteristics
Characteristics
of
of aa
DSS
DSS System
System Accessible
Accessible
Database Marketing

The creation of a large

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

The process of planning,

collecting, and analyzing
data relevant to a marketing
decision.
 Defining Market Research (1)

 Research is the systematic and objective

approach to investigate a specific
problem that needs a solution.
 Research is a process by which a series
of well thought out and carefully
executed activities enable one to
enquire, investigate or examine a
problem to discover new facts to deal
with the problem.
 Defining Research (2)

 Systematic : well organised and planned

 Objectivity : unbiased and unemotional
 The information is used to identify and define
opportunities and problems, and make
recommendations on solutions
 Market Research links consumer, customer and
the public to the marketers through information.
 Generate, refine and evaluate marketing
actions, performance and the marketing
process.
 Issues to consider with Problem definition

  Past information (secondary

P data/MIS)
 R  Resources and constraints
 O  Objectives
 B  Buyer behaviour (human or
organisational)
 L  Legal environment
 E  Economic environment
 M  Marketing and technological
skills
 Roles of Marketing Research

Marketing
Marketing Research
Research
has
has three
three roles:
roles:

Descriptive
Descriptive Predictive
Predictive

Diagnostic
Diagnostic
Roles of Marketing Research

 Gathering and presenting

Descriptive factual statements

Diagnostic  Explaining data

 Attempting to estimate
Predictive the results of a planned
marketing decision
 Management Uses of
Marketing Research

 Improve the quality of decision making

 Trace problems

 Focus on keeping existing customers

 Understand the ever-changing

marketplace
 Steps in a Marketing Research
Project
Define
Define
Problem
Problem
Plan
Plan Design/
Design/ Specify
Specify
Primary
Primary Data
Data Sampling
Sampling
Procedure
Procedure
Collect
Collect
Data
Data
Analyze
Analyze
Data
Data
Prepare/
Prepare/
Present
Present
Report
Report
Follow
Follow Up
Up
 Marketing Research

Marketing
Marketing Determining what information is needed
Research
Research and how that information can be
Problem
Problem obtained efficiently and effectively.

Marketing The
The specific
specific information
information needed
needed
Marketing to
Research to solve
solve aa marketing
marketing research
research problem;
problem;
Research the
the objective
objective should
should provide
provide insightful
insightful
Objective
Objective decision-making
decision-making information.
information.

Management
Management A
A broad-based
broad-based problem
problem that
that
Decision
Decision requires
requires marketing
marketing research
research in
in order
order
Problem
Problem for
for managers
managers to
to take
take proper
proper actions.
actions.
 Objective setting example 1

 Management Problem:
Should a new product be launched?

 Research Objective:
Determine consumer preference and
purchase intentions for the proposed
new product.
 Objective setting example 2

 Management Problem:
Should the ad campaign be
changed?

 Research Objective:
To determine effectiveness of the
current campaign.
 Objective setting example 3

 Management Problem:
Should the price of the brand be
increased?

 Research Objective:
To determine the price elasticity of
demand and the impact on sales and
profits of various levels of price changes.
Sources of Secondary Data

Internal Information

Marketing Research Firms

Trade and Industry Associations

National Research Bureaus

Professional Associations

Commercial Publications
Secondary Data

Data previously collected

for any purpose other
than the one at hand.
 Advantages of Secondary Data

 Saves time and money if on target

 Aids in determining direction for primary data

collection

 Pinpoints the kinds of people to approach

 Serves as a basis of comparison for other data

Disadvantages of Secondary Data

 May not be on target with the research

problem

 Quality and accuracy of data may pose

a problem
 The New Age of
Secondary Information
The
The Internet
Internet
 Search Engines www
and Directories

 Sites of Interest to
Marketing Researchers

 Discussion Groups

 Periodical, Newspaper, and Book Databases

 Basic Types of Directories

 Academic and Professional

Directories

 Commercial Portals
Research Design

Specifies which research

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

Which
Which research
research How
How and
and when
when
questions
questions will
will data
data be
be
must
must be
be answered?
answered? gathered?
gathered?
?
How
How will
will
the
the data
data
be
be analyzed?
analyzed?
Primary Data

Information collected for

the first time. Can be
used for solving the
particular problem
under investigation.
 Advantages of Primary Data

 Answers a specific research question

 Data are current

 Source of data is known

 Secrecy can be maintained

 Disadvantages of Primary Data

 Expensive

 Quality declines if interviews are lengthy

 Reluctance to participate in lengthy

interviews
Survey Research

The most popular technique

for gathering primary data in
which a researcher interacts
with people to obtain facts,
opinions,
and attitudes.
 Forms of Survey Research

Mall
Mall Intercept
Intercept Interviews
Interviews Mail
Mail Surveys
Surveys

Computer-assisted Internet
Internet Surveys
Surveys
Personal Interviewing

Telephone
Telephone Interviews
Interviews Focus
(Home
(Home and
and Central
Central Location)
Location)
Focus Groups
Groups
Mall Intercept Interview

Survey research method

that involves interviewing
people in the common
areas of shopping malls.
Computer-Assisted Personal
Interviewing

An interviewing method in
which the interviewer reads
the questions from a
computer screen and enters
the respondent’s data
directly into the computer.
 Impact of the Internet

 Allows better and faster decision making

 Improves ability to respond quickly to
customer needs and market shifts
 Makes follow-up studies and research
easier
 Slashes labour-and time-intensive
research activities
 Advantages of Internet Surveys
Rapid
Rapid development,
development,
Real-time
Real-time reporting
reporting

Reduced
Reduced costs
costs

Advantages
Advantages ofof Personalized
Personalized questions
questions
Internet
Internet Surveys
Surveys and
and data
data

Improved
Improved respondent
respondent
participation
participation

Contact
Contact with
with the
the
hard-to-reach
hard-to-reach
 Internet Samples

Unrestricted
Unrestricted AA survey
survey in
in which
which anyone
anyone with
with
Internet
Internet aa computer
computer andand modem
modem can
can fill
fill out
out
Sample
Sample the
the questionnaire.
questionnaire.

Screened
Screened An
An Internet
Internet sample
sample with
with quotas
quotas
Internet
Internet based
based onon desired
desired sample
sample
Sample
Sample characteristics.
characteristics.

Recruited
Recruited A
A sample
sample inin which
which respondents
respondents
Internet
Internet are
are prerecruited
prerecruited and
and must
must
Sample
Sample qualify
qualify to
to participate.
participate.
 Other Uses of the Internet
Distribution
Distribution ofof requests
requests
for
for proposals
proposals

Collaboration
Collaboration inin the
the
management
management of
of aa research
research project
project
Other
Other Internet
Internet
Uses
Uses Data
Data management
management and and
by
by Marketing
Marketing on-line
on-line analysis
analysis
Researchers
Researchers
Publication
Publication and
and distribution
distribution
of
of reports
reports

Viewing
Viewing of
of presentations
presentations of
of
marketing
marketing research
research surveys
surveys
Focus Group

Seven to ten people who

participate in a group
discussion led by a
moderator.
 Advantages of
On-Line Focus Groups

 Speed
 Cost-effectiveness
 Broad geographic
scope
 Accessibility
 Honesty
 Questionnaire Design

An
An interview
interview question
question that
that
Open-Ended
Open-Ended encourages
encourages anan answer
answer phrased
phrased in
in
Question
Question respondent’s
respondent’s own
own words.
words.

An
An interview
interview question
question thatthat asks
asks
Closed-Ended
Closed-Ended the respondent to make a selection
Question the respondent to make a selection
Question from
from aa limited
limited list
list of
of responses.
responses.

Scaled-
Scaled- A
A closed-ended
closed-ended question
question
Response
Response designed
designed to to measure
measure the
the intensity
intensity
Question
Question of
of aa respondent’s
respondent’s answer.
answer.
 Questionnaire Design

Clear
Clear and
and Concise
Concise

No
No Ambiguous
Ambiguous Language
Language

Qualities
Qualities Unbiased
Unbiased
of
of
Good
Good
Questionnaires
Questionnaires Reasonable
Reasonable Terminology
Terminology
Observation Research

A research method that

relies on three types of
observation:
people watching people

people watching an activity

machines watching people

 Observation Research

People
People Mystery Shoppers
Watching
Watching
People
People One-Way Mirrors

Types
Types of
of People
People
Observation
Observation Watching
Watching Audits
Research
Research an
anActivity
Activity

Machines
Machines Traffic Counters
Watching
Watching
People
People Passive People Meter
Mystery Shoppers

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

A method a researcher uses

to gather primary data.
 Sampling Procedure

Sample
Sample A
A subset
subset from
from aa large
large population.
population.

The
The population
population from
from which
which
Universe
Universe aa sample
sample will
will be
be drawn.
drawn.
 Probability Samples

A
A sample
sample inin which
which every
every element
element inin
Probability
Probability the
the population
population has
has aa known
known statistical
statistical
Sample
Sample likelihood
likelihood of
of being
being selected.
selected.

A
A sample
sample arranged
arranged soso that
that every
every
Random
Random element
element of
of the
the population
population has
has an
an
Sample
Sample equal
equal change
change ofof being
being selected.
selected.
 Nonprobability Samples

Any sample in which little or no

Nonprobability
Nonprobability attempt is made to get a representative
Sample
Sample cross-section of the population

A
A form
form of
of nonprobability
nonprobability sample
sample
Convenience
Convenience using
using respondents
respondents whowho are
are
Sample
Sample convenient
convenient oror readily
readily
accessible
accessible to
to the
the researcher.
researcher.
 Sampling Procedure

Sample

Universe
Probability
Probability
Samples
Samples
Non-Probability
Non-Probability
Samples
Samples
 Types of Errors

Measurement
Measurement Error
Error

Sampling
Sampling Error
Error

Frame
Frame Error
Error
Errors
Errors
Associated
Associated
with
with Sampling
Sampling Random
Random Error
Error
 Types of Errors
Error
Error when
when there
there is
is aa difference
difference
Measurement
Measurement between
between the
the information
information desired
desired and
and the
the
Error
Error information
information provided
provided by by research
research

Sampling
Sampling Error
Error when
when aa sample
sample somehow
somehow does
does not
not
Error
Error represent
represent the
the target
target population.
population.

Error
Error when
when aa sample
sample drawn
drawn from
from aa
Frame
Frame population
population differs
differs from
from the
the
Error
Error target
target population.
population.
Error
Error because
because thethe selected
selected sample
sample is
is
Random
Random an
an imperfect
imperfect representation
representation of
of
Error
Error the
the overall
overall population.
population.
Field Service Firm

A firm that specializes in

interviewing respondents on a
subcontracted basis.
 Collecting Data

Field Service Firms Provide

 Focus group facilities
 Mall intercept locations
 Test product storage
 Kitchen facilities
 Retail audits
 Types of Samples
Probability
Probability Non-Probability
Non-Probability
Samples
Samples Samples
Samples

Simple Random Convenience

Sample Sample
Stratified Judgment
Sample Sample
Cluster Quota
Sample Sample
Systematic Snowball
Sample Sample
Cross-Tabulation

A method of analyzing data

that lets the analyst look at
the responses to one
question in relation to the
responses to one or more
other questions.
 Preparing and Presenting
the Report

 Concise statement of the research

objectives

 Explanation of research design

 Summary of major findings

 Conclusion with recommendations

 Following Up

 Were the recommendations followed?

 Was sufficient decision-making

information included in the report?

 What could have been done to make

the report more useful?
Scanner-Based Research

A system for gathering

information from a single
group of respondents by
continuously monitoring
the advertising, promotion,
and pricing they are
exposed to and the things
they buy.
When Should Marketing
Research be Conducted?

 Where there is a high

level of uncertainty

 When value of research

information exceeds the
cost of generating the
information