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Chapter 5: Managing Customer Information to Gain Customer Insights
Chapter Objectives
1. Explain the importance of information in gaining insights about the marketplace and
customers.
3. Outline the marketing research process, including defining the problem and research
4. Explain how companies analyze and use marketing information.
Teaching Suggestions
The following explanations and suggestions are outlined based on the Chapter Objectives.
1. Explain the importance of information in gaining insights about the marketplace
and customers.
In carrying out their marketing responsibilities, marketing managers need a great deal of
information. Information is power. Despite the importance and growing supply of
information, managers often lack enough of the right kind of information or have too
2. Explain the concept of the marketing information system.
A marketing information system (MIS) consists of people, equipment, and procedures to
gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers. The MIS begins and ends with marketing managers, but
managers throughout the organization should be involved in the MIS. The functions of
the MIS include:
intelligence activities, and the marketing research process.
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3. Outline the marketing research process, including defining the problem and
research objectives, developing the research plan, implementing the research plan,
and interpreting and reporting the findings.
(1) Define the problem and research objectives: Managers and marketing researchers
(2) Develop the research plan: Determining the needed information and developing a
4. Explain how companies analyze and use marketing information.
Chapter Outline
I. Marketing Information and Customer Insights [Slide 5-3]
II. The Marketing Information System (MIS). An MIS consists of people, equipment, and
procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate
information to marketing decision makers.
A. Assessing Information Needs. A good marketing information system balances
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1.Internal records. Internal records information consists of information
2.Guest Information Management
C. Marketing intelligence. Marketing intelligence includes everyday information
about developments in the marketing environment that help managers to prepare
and adjust marketing plans and short-run tactics. Marketing intelligence can come
from internal sources or external sources. [Slide 5-5]
1.
III. Marketing Research. Marketing research is a process that identifies and defines
marketing opportunities and problems, monitors and evaluates marketing actions and
performance, and communicates the findings and implication to management. Marketing
research is project oriented and has a beginning and an ending. It feeds information into
the marketing information system that is ongoing. The marketing research process
consists of four steps: defining the problem and research objectives, developing the
research plan, implementing the research plan, and interpreting and presenting the
findings. [Slides 5-6 to 5-7]
A. Defining the problem and research objectives. There are three types of objectives
for a marketing research project: [Slide 5-8]
2.Descriptive. To describe the size and composition of the market.
3.Causal. To test hypotheses about cause-and-effect relationships.
B. Developing the research plan for collecting information [Slide 5-9]
1.Determining specific information needs. Research objectives must be
translated into specific information needs. To meet a m
3.Research approaches. Three basic research approaches are observations,
surveys, and experiments. [Slide 5-10]
4.Contact methods. Information can be collected by mail, telephone, or
personal interview. [Slide 5-11]
a. Sampling plan. Marketing researchers usually draw conclusions
about large consumer groups by taking a sample. A sample is a
segment of the population selected to represent the population as a
whole. Designing the sample calls for four decisions: [Slide 5-12]
Who will be surveyed?
How many people should be surveyed?
How should the sample be chosen?
When will the survey be given?
b. Ethnographic Research
c. Research instruments. In collecting primary data, marketing
C. Implementing the research plan. The researcher puts the marketing research plan
into action by collecting, processing, and analyzing the information.
D. Interpreting and reporting the findings. The researcher must now interpret the
findings, draw conclusions, and report them to management.
1.Information analysis. Information gathere
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IV. International Marketing Research. International marketing researchers follow the same
steps as domestic researchers, from defining the research problem and developing a
Answers to Discussion Questions
1. What role should marketing research play in helping a firm to implement the
marketing concept?
2. You own an elegant, high-priced restaurant in your area and want to improve the
level of service offered by your 30-person staff. How could observational research
help you accomplish this goal?
Observational research can include studying the entire flow of operations from the time
of customer arrival (when they enter the premises and step out of their transport to enter
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3. Compare and contrast internal databases, marketing intelligence, and marketing
research as a means for developing marketing information.
Internal databases are strong only to the extent that they are populated with
correct information. They do not cover any additional potential sources of
customer bases.
Internal and external sources of marketing intelligence contribute to formulating
4. Researchers usually start the data-gathering process by examining secondary data.
What secondary data sources would be available to the manager of a full-service
restaurant that wanted to research consumer trends?
Assign this task to your students. Encourage them to use the internet and other sources to
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5. Discuss the advantages and disadvantages of using guest comment cards in a
restaurant.
Customers who fill out comment cards are usually very unhappy with some part of the
service or product and use these cards as a means to alert management. Occasionally the
response is for extraordinarily good service; but rarely is the card filled out for ordinary
events. Because the cards usually represent extremes, the sample is skewed and does not
represent the average guest.
6. Which type of research would be most appropriate in the following situations, and
why?
This is an excellent discussion questions for your students. Break them into five groups,
assign a scenario to each group and have them present their answer and justification to
the class.
a. A fast food restaurant wants to investigate the effect that children have on
the purchase of its products.
Primary.
b. A business hotel wants to gather some preliminary information on how
business travelers feel about the menu variety, food, and service in its
restaurants.
Combination of primary and secondary. Focus groups can be used to provide this
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c. A casual restaurant is considering locating a new outlet in a fast-growing
suburb.
Secondary followed by primary. In selecting a site for a new outlet, the casual
restaurant needs information on population density in different areas, income
d. A fast food restaurant wants to test the effect of two new advertising themes
for its roast beef sandwich sales in two cities.
e. The director of tourism for your state wants to know how to use her
promotion dollars effectively.
Primary. Focus groups with visitors, visitor surveys and discussions with
7. Focus group interviewing is both a widely used and widely criticized research
technique in marketing. What are the advantages and disadvantages of focus
groups? What are some kinds of questions that are appropriate for focus groups to
investigate?
Ask your students to pick which side of this debate they stand on. Have each side prepare
and present the advantages or disadvantages of using focus groups.
Focus groups are advantageous in terms of being able to provide subjective feedback in a
relatively non-structured way as compared to a questionnaire or an interview. The
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Advantages: Focus groups are fast and cheap; they are good for generating
hypotheses when little is known about a situation; they reduce the distance
Disadvantages: Focus groups should not be treated as representative of a
8. What is Big Data and what opportunities and challenges does it provide for
marketers?
Far from lacking information, most marketing managers are overloaded with data and
often overwhelmed by it. This problem is summed up in the concept of Big Data. The
Big Data is characterized by three Vs:
Volume: large amounts of information from hundreds of terabytes to petabytes
Most marketing managers are overloaded with data and often overwhelmed by it. Still,