9 16 2013 MK4 Marketing Research Virtual stores 3D Marketing research set of techniques and principles for systematically collecting recording analyzing and interpreting data that can aid decision makers involved in marketing goods services or ideas The Marketing Research Process 1 Defining Objectives and Research Needs 2 Designing the research a Identify data needed and research necessary to gather it 3 Data Collection Process a Secondary data pieces of information that have been collected prior to the start of the focal research project b Primary data data collected to address specific research needs c Sample a group of customers who represent the customers of interest a Data raw numbers or other factual information that on their own have limited value 4 Analyzing Data and Developing Insights to marketers Information interpreted data b 5 Action Plan and Implementation Secondary Data There is inexpensive or free data or can purchase data from specialized research firms Syndicated data available for a fee from commercial research firms Scanner data used in quantitative research obtained from scanner readings of UPC labels at check out counters Panel data information collected from a group of consumers organized into panels over time o Records of purchases as well as responses to surveys that the client gives to the panel firm to ask the panelists Data warehouses large computer files that hold millions and billions of individual data Data mining uses a variety of statistical analysis tools to uncover previously unknown patterns in the data or relationships among variables Churn the number of participants who discontinue use of a service divided by the average number of total participants Customer life value CLV expected financial contribution from a particular customer to the firm s profits over the course of their entire relationship CLV profit at t X retention rate t 1 1 i t 1 Primary Data Collection Techniques Qualitative research used to understand the phenomenon of interest through broad open ended responses Quantitative research structured responses that can be statistically tested Observation examining purchase and consumption behaviors through personal or video camera scrutiny best method Social media booming source of data for marketers blogs o Building online communities for companies Sentiment mining collect consumer comments about companies and their products on Facebook Twitter etc o Social engagement joining the online conversation with customers In Depth interview trained researchers ask questions listen to and record the answers and then pose additional questions to clarify or expand on a particular issue Focus Group Interviews small group of persons usually 8 to 12 come together for an intensive discussion about a particular topic led by moderator o Also online eFocusGroups Survey a systematic means of collecting information from people using a questionnaire most popular type of quantitative primary collections Questionnaire a form that features a set of questions designed to gather information from respondents and therby accomplish the researchers objectives o Unstructured questions open ended and allow respondents to answer in their own words o Structured questions closed ended questions for which a discrete set of response alternatives or specific answers is provided for respondents to evaluate o Online surveys becoming popular and easy Panel and Scanner Bases Research also used to collect primary data Experimental research a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on other variables Emerging Technology and the Ethics of Using Customer Information American Marketing Association provides three guidelines for market research o Prohibits selling or fundraising under the guise of conducting research o Supports maintaining research integrity by avoiding misrepresentation or the omission of pertinent research data o Encourages the fair treatment of clients and suppliers Privacy is a major issue Biometric data one or more physical traits such as facial characteristics iris scans or fingerprints Neuromarketing can read consumers minds Appendix Customer lifetime value CLV expected financial contribution from a particular customer to the firm s profits over the course of their entire relationship To estimate firms use past behaviors to forecast future purchases gross margin from these purchase and costs associated with servicing the customers o Costs are communications CLV profit at t X retention rate t 1 acquisition costs 1 i t 1 Assuming payments come at beginning of year T total number of years expected to do business with customer Profit based on sales costs of merchandise and costs of servicing and retaining customer Retention rate is the average percentage of customers who continue to purchase from the firm from one time period to another Discount rate i use it to adjust future profits and determine a customer s value today for customer s purchases in future For infinite time horizon CLV profits X 1 Retention Rate 1 discount rate retention rate acquisition costs