Chapter 5 Marketing ResearchMarketing Information’s Systems and Research• Harrah’so Why has Harrah’s been so successful? Everyone at Harrah’s will quickly tell you it’s all about managing customer relationshipso What sets Harrah’s apart is the way it relates to its customers and creates customer loyalty During the past decade, Harrah’s has become the model for good CRM and customer-loyalty managemento At the heart of the Harrah’s CRM strategy is its pioneering card0based Total Rewards Program The gaming industry’s first and by far most successful loyalty programo Total rewards members receive points based on the amount they spend at Harrah’s facilitieso Total rewards forms the basis for a two-part CRM process…o More than 80% of Harrah’s customers worldwide—40 million customers—use a Total Rewards card The data provides insight into the characteristics and behavior of individual customers• Who they are, how often they visit, how long they stay and how much they gamble and entertaino From its Total Rewards data, Harrah’s has learned that 26% of its customers produce 82% of revenueso And these best customers aren’t the high rollers that have long been the focus of the industry. They are ordinary folks from all walks of lifeo Most often, these customers visit casinos for an evening rather than staying overnight at the hotel and are more likely to plat at the slots than at the tableso Using such insights, Harrah’s focuses its marketing and service development strategies on the needs of its best customers• Marketing Information and Customer Insightso To create value for customers and build meaningful relationships with them, marketers must gain fresh, deep insights into what customers need and want Such insights come from the good marketing informationThe Marketing Information System• Obtaining Datao The company must estimate the value of having an item of information against the costs of obtaining it Value depends on how it will be used, and this judgment is highly subjectiveo Sometimes additional information contributes little to improving a manager’s decision The cost may exceed the benefit• Developing Informationo The answers to the questions in Table 5-1 will help managers assess their marketing information needsoMarketing Research• Introductiono The Marketing Research ProcessFigure 5-2 Marketing research process.• Conducting Researcho A company can conduct marketing research by employing its own researchers or hiring outside researcherso Most large companies—more than 73%-- have their own marketing research departments Even companies with their own departments hire outside firms to do fieldwork and special tasks• Defining the Problem and Research Objectiveso Managers must work closely with researchers to define the problem and research objectiveso Assuming the problem is well defined, the manager and researcher must set research objectives• The research Plan—Specific Information Needso The second marketing research step it determining needed information and making a data collection plan Research objectives must be translated into specific information needso To meet a manager’s information needs, researchers can gather secondary data, primary data, or both Primary data consist of information collected for the specific purpose at hand Secondary data consist of information already in existence somewhere, having been collected for another purpose• Research Approacheso The basic research approaches are observations, surveys, and experimentso Observational research is gathering of primary data by observing relevant pieple, actions, and situations This can yield information people normally unwilling or unable to provide Companies now use ethnographic research, observers who watch and interact with consumers Feelings, beliefs, and attitudes that motivate buying behavior cannot b observed Long-run or infrequent behavior is also difficult to observeo Survey research, best suited to gathering descriptive information, can be structured or unstructured Structured use formal lists of questions asked of all respondents in the same way Unstructured let the interviewer probe respondents and guide the interview according to their answers  The major advantage of survey research is its flexibilityo Experimental research is designed to capture cause-and-effect relationships by eliminating competing explanations of the observed findings The most scientifically valid research Experiments call for subjecting matched groups of subjects to different treatments, controlling extraneous variables and checking whether observed response differences are statistically significant If the experiment is well designed and executed, managers can have confidence in the conclusions• Online Interviewso Online research is estimated to make up over 35% of all survey based researcho Internet surveys are quick and can be inexpensive Response rate can be a problem if they are no properly designed and targetedo Simple technology for a consumer market is critical  Don’t expect respondents to wait for graphics to load• Focus groups and In-depth Interviewso Focus Groups are usually conducted by inviting 6-10 people to gather with a trained moderator to talk about a product, service, or organizationo The moderator starts with broad questions before moving to more specific issues Encouraging open and easy discussion to foster group dynamics that will bring out true feelings and thoughtso In-depth surveys, another form of qualitative personal interviewing, can be used when it is difficult to put together a focus group• Sampling Plano Marketing researchers usually draw conclusions about large consumer groups by taking a sample A segment of the population selected to represent the population as a wholeo Ideally, the sample should allow accurate estimates of the thoughts and behaviors of the larger population o Designing the sample calls for four decisions Who? How many people? How should the sample be chosen? When will it be given?• Research Instrumentso In collecting primary data, marketing researchers have a choice of primary research instruments The interview (structured and unstructured), mechanical devices, and structured models such as a test marketo Structured interviews use a questionnaire, by far the most common survey instrument Because there are many ways