Chapter 4
MANAGING MARKETING INFORMATION TO GAIN
CUSTOMER INSIGHTS
MARKETING STARTER: CHAPTER 4
Ferrero: Managing Marketing Information and Customer Insights
Synopsis
When Ferrero entered India in 2004, the country did not really have a ready market for premium chocolates. Since
India is a very price-sensitive country, most brands offer products at low prices in small packs. To gain and manage
the appropriate marketing information and consumer insights, Ferrero decided to go to the market on its own to
better understand the Indian customer. By 2014, despite being available mostly during festivals, Ferrero Rocher had
captured 14 percent of the share in the box chocolate category in India. The success behind Ferrero’s product
launches lies in its ability to manage market information and gain customer insights. The company’s ability to
capitalize on its management of the marketing information gained and using it to improve decision-making has
definitely proved to be a valuable asset.
Discussion Objective
A focused 10-minute discussion of Ferrero’s customer insights research will reveal just how much corporations need
to focus on the opinions and needs of their customers. The chapter-opening story underscores the importance of
recognizing one’s problems, gaining customer insights, and then taking steps to position a product or its branding.
This discussion should also illustrate how Ferrero adapted to the consumer’s lifestyle changes and customs. It is
adapting to who its customers are.
Starting the Discussion
Start this discussion by asking students whether they have had Ferrero Roche chocolates. When was the last time
they had one? Was it a special occasion of some sort? How often do they have premium chocolates? Focus on the
big ideas behind this case: recognizing issues that emerge through marketing research, gaining customer insights,
and re-inventing one’s strategies when necessary. Use the questions below to guide the discussion.
Discussion Questions
1. How did a premium chocolate maker like Ferrero enter a country that had no market for it? (Consider how
companies can leverage their position in entering a market by conducting proper market research,
examining customer preferences, checking out the competition, and double-checking their assumptions.)
2. How did Ferrero gain key customer insights into the underlying needs of its customers? How did it apply
these customer insights in the development of Kinder Joy and Tic Tac? (Here’s a chance to dig into one of
the main points of the story—that companies must listen closely to their customers and assess their
products and how they market them.)
3. How does Ferrero’s story relate to the major points made in the rest of the Managing Marketing
Information chapter? (The chapter discusses sources and approaches for obtaining and managing marketing
information. But perhaps the most important point is made early in the chapter and is emphasized in the
story: The real value of marketing information lies in how it is used—in the customer insights that it
provides. A great place to start in Chapter 4 is with the top box in Figure 4.1.)
CHAPTER OVERVIEW
Use Power Point Slide 4-1 Here
This chapter looks at how companies develop and manage information about important market-
place elements. This chapter is an examination of marketing information systems designed to
assess the firm’s marketing information needs, develop the needed information, and help
managers to use the information to gain actionable customer and market insights.
CHAPTER OBJECTIVES
Use Power Point Slide 4-2 here
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.
4 Explain how companies analyze and use marketing information.
5 Discuss the special issues some marketing researchers face, including public policy and
ethics issues.
CHAPTER OUTLINE
p. 122 INTRODUCTION
While Ferrero is a well-established global brand, there was
virtually no market for its offerings in India, but it was
confident that there were consumers willing to pay a
premium price.
Ferrero determined that the company needed to create a
customer insights team to analyze the local market across all
relevant aspects.
Based on the feedback, Ferrero distributed through modern
retail stores throughout the year and to smaller stores during
festival months.
Ferrero also introduced Tic Tac and Kinder Joy into the
market at premium prices and added new flavors after
extensive in-depth marketing research.
Talking to customers, hearing what they have to say, and
acting on the resulting insights can pay big dividends.
p. 123
Photo: Ferrero
Opening Vignette Questions
1. In the beginning, how did Ferrero approach the
price-sensitive Indian market?
2. How did Ferrero utilize marketing research to
learn about its customers and their wants and
needs?
3. If you were Ferrero’s CEO, what else would you
have done to address the initial marketing
challenge?
p. 124
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p. 125
PPT 4-4
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PPT 4-7
p. 126
PPT 4-8
Explain the importance of information in gaining insights
about the marketplace and customers.
MARKETING INFORMATION AND CUSTOMER
INSIGHTS
Far from lacking marketing information, marketers are
overloaded with data and often overwhelmed by it.
The value is in the customer insights gained from the
information and how marketers use these insights to make
better decisions.
The real value of marketing research and marketing
information lies in how it is used—in the customer insights
that it provides.
Customer insights teams collect customer and market
information from a wide variety of sources.
To create value for customers and build meaningful
relationships with them, marketers must first gain fresh, deep
insights into what customers need and want. Such customer
insights come from good marketing information. Companies
use these customer insights to develop a competitive
advantage.
Companies are forming customer insight teams that include
all company functional areas. Their job is to develop
actionable insights from marketing information and work
strategically with marketing decision makers to apply those
insights.
A 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.
Figure 4.1 shows that MIS begins and ends with information
users—marketing managers, internal and external partners,
and others who need marketing information.
Learning Objective
1
p. 125
Photo: PepsiCo
p. 125
Key Terms: Big
data, Customer
insights
p. 125
Key Term:
Marketing
information system
(MIS)
p. 126
Figure 4.1: The
Marketing
Information System
Review Learning Objective 1: Explain the importance of
information in gaining insights about the marketplace and
customers.
Assignments, Resources
Use Discussion Question 4-1 here
Use Individual Assignments 1 here
PPT 4-9 Define the marketing information system and discuss its
parts.
Learning Objective
2
p. 126
PPT 4-10
PPT 4-11
ASSESSING INFORMATION NEEDS AND
DEVELOPING DATA
MIS provides information to the company’s marketing and
other managers and external partners such as suppliers,
resellers, and marketing service agencies.
A good marketing information system balances the
information users would like to have against what they really
need and what is feasible to offer. Too much information can
be as harmful as too little.
The MIS must monitor the marketing environment to
provide decision makers with information and insights they
should have to make key marketing decisions.
The company must decide whether the value of insights
gained from additional information is worth the costs of
providing it, and both value and cost are often hard to assess.
p. 126
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DEVELOPING MARKETING INFORMATION
Marketers obtain information from internal data, marketing
intelligence, and marketing research.
Internal Data
Internal databases are electronic collections of consumer
and market information obtained from data sources within
the company network.
Information in the database can come from many sources
and is available quickly and cheaply.
Problems with internal data:
It may be incomplete or in the wrong form for
making marketing decisions.
p. 127
Key Term: Internal
databases
p. 127
Ad: USAA
p. 127
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p. 129
p. 130
Keeping the database current requires a major effort
because data ages quickly.
Managing all of the information requires highly
sophisticated equipment and techniques.
Competitive Marketing Intelligence
Competitive marketing intelligence is the systematic
collection and analysis of publicly available information
about consumers, competitors, and developments in the
marketplace.
Social media makes it easier than ever for people to
converse, share opinions, needs, ideas, and complaints.
Companies use specialized software to track trends and
better respond to consumers.
Competitive marketing intelligence gathering has grown
dramatically.
Firms use competitive intelligence to gain early warnings of
competitor moves and strategies.
Much competitor intelligence can be collected from people
inside the company.
Competitors often reveal intelligence information through
their suppliers, resellers, key customers, and the Internet.
The gathering of competitive marketing intelligence raises a
number of ethical issues. Most companies are now taking
steps to protect their own information.
Review Learning Objective 2: Define the marketing
information system and discuss its parts.
p. 127
Key Term:
Competitive
marketing
intelligence
p. 128
Photo: MasterCard
Assignments, Resources
Use Discussion Question 4-2 here
p. 130
PPT 4-15
PPT 4-16
p. 130
Outline the steps in the marketing research process.
MARKETING RESEARCH
Marketing research is the systematic design, collection,
analysis, and reporting of data relevant to a specific
marketing situation facing an organization.
Learning Objective
3
p. 130
Key Term:
Marketing research
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PPT 4-19
p. 132
p. 132
PPT 4-20
PPT 4-21
p. 138
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The marketing research process has four steps (see Figure
4.2).
Defining the Problem and Research Objectives
Defining the problem and research objectives is often the
hardest step in the research process.
A marketing research project might have one of three types
of objectives.
1. Exploratory research: to gather preliminary
information that will help define the problem and
suggest hypotheses.
2. Descriptive research: to describe things, such as the
market potential for a product.
3. Causal research: to test hypotheses about
cause-and-effect relationships.
Start with exploratory research and later follow with
descriptive or causal research.
Developing the Research Plan
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 research plan should be presented in a written proposal
that covers the management problems addressed, research
objectives, information needed, how the results will help
management decisions, and budget.
Secondary data consist of information that already exists
somewhere, having been collected for another purpose.
Primary data consist of information collected for the
specific purpose at hand.
Gathering Secondary Data
Researchers usually start by gathering secondary data.
p. 130
Figure 4.2: The
Marketing Research
Process
p. 131
Key Terms:
Exploratory
research,
Descriptive
research, Causal
research
p. 131
Photo: Chipotle
p. 132
Key Terms:
Secondary data,
Primary data
Using commercial online databases, marketing researchers
can conduct their own searches of secondary data sources.
Secondary data is usually obtained more quickly and at a
lower cost than primary data.
Secondary sources can provide data an individual company
cannot collect on its own.
Secondary data can present problems.
The needed information may not exist.
The data might not be very usable.
oRelevant (fits research project needs)
oAccurate (reliably collected and reported)
oCurrent (up-to-date enough for current decisions)
oImpartial (objectively collected and reported)
p. 132
Photo: LexisNexis
Assignments, Resources
Use Discussion Question 4-4 here
Use Critical Thinking Exercise 4-6 and 4-8 here
Use Additional Projects 1 here
Use Outside Example 1 here
Troubleshooting Tip
Although today’s students have grown up with
computers, the idea of an “information system” may
be very new to them. They typically will not have
conducted much research, and any jobs they’ve held
will most likely have entailed very basic, entry-level
tasks. To get them past this, you could discuss the
type of information the university has for each
student—their major, coursework, grades, current
address, home address, parents’ names, whether they
are paying full tuition or are on scholarship, what
high school they attended and their grade point
average there, what sports they play or activities they
participate in, and so forth. Then discuss how the
university might use that information to understand
the current student population to determine how to
target future students who are in high school. This
should help them grasp how data gets turned into
information, and then to knowledge.
p. 133
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Primary Data Collection
Research Approaches p. 133
Table 4.1: Planning
PPT 4-25
p. 134
p. 134
PPT 4-26
p. 134
p. 134
Observational research involves gathering primary data by
observing relevant people, actions, and situations.
Observational research can obtain information that people
are unwilling or unable to provide through questioning.
Ethnographic research involves sending trained observers
to watch and interact with consumers in their “natural
habitat.”
Ethnographic research often yields the kinds of details that
don’t emerge from traditional research questionnaires or
focus groups.
Disadvantages:
Some things cannot be observed.
Long-term or infrequent behavior is also difficult to
observe.
Observations can be very difficult to interpret.
Survey research, the most widely used method for primary
data collection, is the approach best suited for gathering
descriptive information.
The major advantage of survey research is its flexibility.
Disadvantages:
Sometimes people are unable to answer survey
questions.
People may be unwilling to respond to unknown
interviewers or about things they consider private.
Respondents may answer survey questions even
when they do not know the answer.
Busy people may not take the time, or they might
resent the intrusion into their privacy.
Experimental research is best suited for gathering causal
information. Experimental research tries to explain
cause-and-effect relationships.
Contact Methods
Mail, Telephone, and Personal Interviewing
Primary Data
Collection
p. 133
Key Term:
Observational
research
p. 133
Key Term:
Ethnographic
research
p. 134
Ad: Landor
Families
p. 134
Key Term: Survey
research
p. 134
Key Term:
Experimental
research
p. 135
p. 135
PPT 4-27
Mail questionnaires can be used to collect large amounts of
information at a low cost per respondent.
Respondents give more honest answers to personal
questions.
No interviewer is involved to bias the respondent’s answers.
Disadvantages:
Not very flexible
Take longer to complete
Very low response rate
As a result, more marketers are now shifting to
email and online surveys.
Telephone interviewing is the one of the best methods for
gathering information quickly, and it provides greater
flexibility than mail questionnaires.
Interviewers can explain difficult questions.
Response rates are higher than with mail questionnaires.
Disadvantages:
Cost per respondent is higher than with mail
questionnaires.
People may not want to discuss personal questions
with an interviewer.
Introduces interviewer bias
Different interviewers may interpret and record
responses differently.
Increasingly high rates of hang-ups
Personal interviewing takes two forms—individual and
group interviewing.
Individual interviewing involves talking with people
one-on-one.
Group interviewing (focus group interviewing)
consists of inviting six to ten people to meet with a
trained moderator to discuss a product, service, or
organization.
p. 135
Key Term: Focus
group interviewing
p. 135
Photo: The Mom
Complex
Many companies are now moving away from
traditional, formal research approaches and
employing new ways of listening to consumers.
p. 136
PPT 4-28
Online Marketing Research
Increasingly, researchers are collecting primary data through
online marketing research.
Online research usually costs much less than research
conducted through mail, phone, or personal interviews.
The Internet is well suited to quantitative research, but
researchers are also adopting qualitative approaches.
A primary qualitative Web-based research approach is online
focus groups.
Web-based research has drawbacks, including control of who
is in the online sample. In addition, consumer privacy is a
major ethical concern.
p. 136
Key Term: Online
marketing research
p. 136
Photo: Snap
Surveys
p. 137
Key Term: Online
focus groups
p. 137
Photo: FocusVision
p. 138
Key Term:
Behavioral targeting
Assignments, Resources
Use Real Marketing 4.1 here
Use Additional Projects 2, 3, and 4 here
Use Individual Assignments 2 here
p. 138
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PPT 4-30
p. 139
Sampling Plan
A sample is a segment of the population selected for
marketing research to represent the population as a whole.
Designing the sample requires three decisions.
1. Who is to be studied (what sampling unit)?
2. How many people should be included (what sample
size)?
3. How should the people in the sample be chosen (what
sampling procedure)?
The two types of samples are:
1. Probability samples
2. Nonprobability samples
Research Instruments
p. 138
Key Term: Sample
p. 139
Table 4.2: Types of
Samples
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PPT 4-32
The questionnaire is the most common data collection
instrument.
Closed-end questions include all the possible answers, and
subjects make choices among them.
Open-end questions allow respondents to answer in their
own words.
Care should be given to the wording and
ordering of questions.
Researchers also use mechanical instruments to monitor
consumer behavior. People meters and checkout scanners are
examples.
Neuromarketing techniques can measure consumer involve-
ment and emotional responses, but these can be difficult to
interpret.
p. 140
Photo: Mechanical
Instruments
p. 140
PPT 4-33
Implementing the Research Plan
The data collection phase of the marketing research process
must be carried out carefully to make sure the plan is
implemented correctly.
Researchers must process and analyze the collected data to
isolate important information and findings.
Interpreting and Reporting the Findings
Researchers should present important findings and insights
that are useful in the major decisions faced by management.
However, interpretation should not be left only to
researchers. Managers should work closely alongside them.
Review Learning Objective 3: Outline the steps in the
marketing research process.
Assignments, Resources
Use Critical Thinking Exercise 4-7 here
Use Video Case here
Use Think-Pair-Share 1-4 here
Use Small Group Assignment 2 here
Use Outside Example 2 here
Troubleshooting Tip
Most students will be unfamiliar with the market research
process. They have not had to collect information in any
large-scale process, although they might have been involved
with collecting information from members of a student
organization regarding group activities. One effective way to
discuss this issue is to talk about end-of-year course
evaluations. Explain that the evaluations are not to rate
instructors but to provide valuable feedback to the university,
the department, and the instructor on course offerings, course
content, and instructor competence. Also, give examples of
poorly designed surveys and show how they lead the
respondent to answer in a given way. Especially helpful are
questionnaires that use leading or loaded questions, or
double-barreled questions that are difficult to answer.
p. 140
PPT 4-34
p. 141
PPT 4-35
PPT 4-36
p. 143
Explain how companies analyze and use marketing
information
ANALYZING AND USING MARKETING
INFORMATION
Customer Relationship Management (CRM)
Companies capture information at every possible customer
touch point.
Customer relationship management (CRM) is used to
manage detailed information about individual customers and
carefully manage customer touch points to maximize
customer loyalty.
CRM integrates everything that a company knows about
individual customers to provide a 360-degree view of the
customer relationship.
By using CRM to understand customers better, companies
can provide higher levels of customer service and develop
deeper customer relationships. They can use CRM to pin-
point high-value customers, target them more effectively,
cross-sell the company’s products, and create offers tailored
to specific customer requirements.
Big Data and Marketing Analytics
Marketing analytics consists of the analysis tools,
technologies, and processes by which marketers dig out
meaningful patterns in big data to gain customer insights and
gauge marketing performance.
Learning Objective
4
p. 141
Key Term:
Customer
relationship
management
p. 141
Key Term:
Marketing analytics
p. 144
PPT 4-37
The most common CRM mistake is to view CRM as a
technology and software solution only. Technology alone
cannot build profitable customer relationships.
CRM is just one part of an effective overall customer
relationship management strategy.
Distributing and Using Marketing Information
The marketing information system must make the
information available to managers and others who make
marketing decisions or deal with customers.
Many companies use a company intranet to facilitate
information distribution. The intranet provides ready access
to data, stored reports, and more.
Companies are increasingly allowing key customers and
value-network members to access account and product
information, along with other information, through extranets.
Review Learning Objective 4: Explain how
companies analyze and use marketing information.
p. 143
Photo: Kraft
p. 144
Photo: Zappos
Assignments, Resources
Use Discussion Question 4-3 here
Use Marketing by the Numbers here
Use Real Marketing 4.2 here
Use Small Group Assignment 1 here
p. 144
PPT 4-38
PPT 4-39
Discuss the special issues some marketing researchers
face, including public policy and ethics issues.
OTHER MARKETING INFORMATION
CONSIDERATIONS
Marketing Research in Small Businesses and Nonprofit
Organizations
Managers of small businesses and nonprofit organizations
can obtain marketing insights through observation or
informal surveys using small convenience samples.
Many associations, local media, and government agencies
provide special help to small organizations.
Managers can glean a wealth of competitive data and
information by turning to the Internet.
Learning Objective
5
p. 145
Photo:
Bibbentuckers
p. 145
p. 146
p. 147
p. 147
p. 148
International Marketing Research
International marketing researchers follow the same steps as
domestic researchers.
The international researcher may have a difficult time
finding good secondary data.
International researchers frequently must collect their own
primary data.
Reaching respondents is often not easy in other parts of the
world.
Cultural differences from country to country cause additional
problems for international researchers.
Language is the most obvious obstacle.
Even when respondents are willing to respond, they may not
be able to because of high functional illiteracy rates.
Although the costs and problems associated with
international research may be high, the costs of not doing it
might be even higher.
Public Policy and Ethics in Marketing Research
Intrusions on Consumer Privacy
Many consumers strongly resent or even mistrust marketing
research.
Increasing consumer resentment has led to lower survey
response rates in recent years.
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.
Most major companies have now appointed a chief privacy
officer (CPO).
Misuse of Research Findings
p. 146
Ad: Nielsen
p. 147
Photo: Target
p. 148 Many research studies appear to be little more than vehicles
for pitching the sponsor’s products.
Several associations have developed codes of research ethics
and standards of conduct.
In the end, unethical actions cannot be regulated away. Each
company must accept responsibility for its own conduct.
Review Learning Objective 5: Discuss the special
issues some marketing researchers face, including
public policy and ethics issues.
Assignments, Resources
Use Discussion Question 4-5 here
Use Marketing Ethics here
Use Online, Mobile, and Social Media Marketing
here
Use Company Case here