Chapter 5 Marketing Research Marketing Information s Systems and Research Harrah s Total Rewards Program program spend at Harrah s facilities o Why has Harrah s been so successful Everyone at Harrah s will quickly tell you it s all about managing customer relationships o 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 management o At the heart of the Harrah s CRM strategy is its pioneering card0based The gaming industry s first and by far most successful loyalty o Total rewards members receive points based on the amount they o 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 entertain o From its Total Rewards data Harrah s has learned that 26 of its customers produce 82 of revenues o 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 life o 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 tables o Using such insights Harrah s focuses its marketing and service development strategies on the needs of its best customers Marketing Information and Customer Insights o 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 information The Marketing Information System Obtaining Data o 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 subjective o Sometimes additional information contributes little to improving a manager s decision The cost may exceed the benefit Developing Information o The answers to the questions in Table 5 1 will help managers assess their marketing information needs o Marketing Research Introduction o The Marketing Research Process Conducting Research Figure 5 2 Marketing research process o A company can conduct marketing research by employing its own researchers or hiring outside researchers o Most large companies more than 73 have their own marketing research departments Even companies with their own departments hire outside Defining the Problem and Research Objectives firms to do fieldwork and special tasks o Managers must work closely with researchers to define the problem o Assuming the problem is well defined the manager and researcher and research objectives must set research objectives The research Plan Specific Information Needs o The second marketing research step it determining needed information and making a data collection plan Research objectives must be translated into specific information needs o 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 o The basic research approaches are observations surveys and Research Approaches experiments o 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 observe o 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 flexibility o 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 o Online research is estimated to make up over 35 of all survey based o Internet surveys are quick and can be inexpensive Online Interviews research Response rate can be a problem if they are no properly designed and targeted o Simple technology for a consumer market is critical Don t expect respondents to wait for graphics to load Focus groups and In depth Interviews o Focus Groups are usually conducted by inviting 6 10 people to gather with a trained moderator to talk about a product service or organization o 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 thoughts o In depth surveys another form of qualitative personal interviewing can be used when it is difficult to put together a focus group o 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 whole o Ideally the sample should allow accurate estimates of the thoughts Sampling Plan 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 Instruments o 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 market o Structured interviews use a questionnaire by far the most common survey instrument Because there are many ways to ask questions the questionnaire is very flexible o Questionnaires should be developed and tested carefully before being used on a large scale To avoid errors in a carelessly prepared