Chapter 6:
E-Marketing Research
Learning Objectives
Data Drive Strategy
The advent of the Internet has brought about a new phenomenon – information
overload. E-marketers are saddled with the burden of sorting through the
enormous amounts of data available and to analyze the useful information.
Big Data
Marketers are drowning in data. Data growth rates are astounding, at over 30
Marketing Knowledge Management
Knowledge management is the process of managing the creation, use and
dissemination of knowledge. Marketing knowledge is the digitized “group mind”
or “collective memory” of the marketing personnel and sometimes of consultants,
partner, and former employees as well.
The Electronic Marketing Information System
A marketing information system (MIS) is the process by which marketers
manage knowledge. It assesses information needs, gathering information,
analyzing it, and disseminating it to marketing decision makers. Many
firms store electronic marketing data in data warehouses or a product
database.
Source 1: Internal Records
Internal records comprise one important source of marketing knowledge
and can include data from accounting, finance, and production.
Sales Data – Sales information systems (sales force automation
software) allow employees to input sales calls to prospects and
current customers. Competitive and industry information can also
Source 2: Secondary Data
Secondary data can be collected more quickly and less expensively than
primary data. The Internet offers up-to-date information from over 200
countries and is available 24/7. However, secondary data was gathered for
a different purpose, so it may not meet the needs of the e-marketers. One
of the Internet’s benefits is the accessibility of environmental factors and
trends.
Publicly Generated Data – Most U.S. and foreign agencies provide
online information in their respective areas. U.S. governmental
agencies, universities, libraries and other not-for-profit
organizations make research available online.
Privately Generated Data – Online research firms make their
results and data available, but information can also be collected
from a company’s website. Several different services that generate
Information Quality – Secondary and primary data are subject to
many limitations. E-marketers should be wary of data, especially if
Source 3: Primary Data
Primary data are information gathered for the first time to solve a
particular problem. This is usually more expensive and time-consuming,
but is more current and relevant to the marketer’s specific problem.
Primary Research Steps – Consists of five steps: (1) research
Other Technology-Enabled Approaches
The Internet is an excellent place to observe user behavior because the technology
automatically records actions in a format that can be easily, quickly, and
automatically manipulated for analysis.
Client-Side Data Collection
This refers to collecting information about consumer surfing right at the
Server-Side Data Collection
Software on a website can record how many users view each page, the
Real-Space Approaches
Real-space primary data collection occurs at offline points of purchase. This can
be done with smart card and smart card readers, interactive point of sale
machines, and bar code scanners. UPC codes, or bar codes, have been used for
this purpose since 1974. Marketers also use UPC information in grocery stores to
generate coupons based on customer’s purchases.
Marketing Databases and Data Warehouses
Upon collection, data are moved to various marketing databases. These databases
hold information about product features, prices, inventory levels, customer
Data Analysis and Distribution
Four important types of analysis for marketing decision making include data
mining, customer profiling, RFM analysis (recency, frequency, monetary), and
report generating. Data mining involves the extraction of hidden predictive
Knowledge Management Metrics
Chapter Summary
E-marketers need data to guide decisions about creating and changing
marketing mix elements. These data are collected from a myriad of sources,
filtered into databases, and turned into marketing knowledge that is then used to
develop marketing strategy. Knowledge management is the process of managing
the creation, use, and dissemination of knowledge. A marketing information
(2) develop a research plan, (3) collect data, (4) analyze the data, and (5)
distribute findings. Internet-based research may include any of the following
activities conducted online: experiments, focus groups, observations, and surveys.
Surveys may be conducted by e-mail invitation to a website. Advantages to online
surveys are that they are fast and inexpensive, have broad reach, reduce errors,
elicit honest responses, can be restricted to authorized participants, and are easy to
tabulate. Disadvantages include poor generalizability of results due to poor
sample selection, self-selection bias, and inability to confirm the respondent’s
authenticity, frivolous or dishonest responses, and duplicate submissions.
Online panels are increasingly being used to combat sampling and
Chapter Outline
Opening Vignette: The Purina Story
Have the class read the opening vignette on the Nestle Purina Pet Care Company.
The Purina websites are used for advertising and have increased off-line buying.
The firm manages over 30 branded websites in the consumer, veterinarian,
nutritionist, and breeder areas. Were the three questions that Nestle asked to
determine the level of business to be conducted online sufficient? Has anyone
purchased Purina products online? See how many Nestle/Purina web pages you
can find as a class. How would you go about sorting through hundreds of millions
of pieces of data about 21.5 million consumers?
I. Data Drive Strategy
A. Information Overload
1. Information is gathered through
a. Twitter / social media
2. Information overload is compounded by
B. What To Do With the Data
1. Filter into a database
3. Use to create marketing strategy
II. Big Data
A. Marketers are drowning in data
B. Astounding data growth rates
C. A sorting process is required
III. Marketing Knowledge Management
Knowledge management is the process of managing the creation, use, and
dissemination of knowledge. Marketing knowledge is the digitized “group mind”
or “collective memory” of the marketing personnel and sometimes of the firm’s
partners.
A. The Electronic Marketing Information System
A marketing information system (MIS) is the process by which
marketers manage knowledge.
1. Data warehouse – enables marketers to obtain valuable,
appropriate, and tailored information
3. Secondary data – helps marketer understand competitors,
4. Primary data – information gathered for a specific reason
B. Source 1: Internal Records
Accounting, finance, production personnel collect and analyze data
that is valuable for marketing planning
1. Sales data
2. Customer characteristics and behavior
a. Many e-commerce sites require registration before
purchase
b. Provides detailed information about characteristics
C. Source 2: Secondary Data
Secondary data can be collected more quickly and less expensively
than primary data, especially on the Internet. However, secondary data
may not meet the e-marketer’s needs, because it was collected for a
different purpose. Marketers scan the external environment (called
business intelligence), which gives information on: demographic
trends, competitors, technological forces, natural resources, social and
cultural trends, world and local economies, and legal and political
environments.
1. Publicly generated data
a. U.S. agencies
2. Privately Generated Data
a. Company websites
3. Competitive Intelligence Example
a. CI involves analyzing the industries in which a firm
operates as input to the firm’s strategic positioning
b. Intelligence cycles include the following steps:
i. Planning and direction
ii. Published information collection
4. Facebook Example
a. Engagement metrics available on:
5. Information Quality
a. Data are subject to limitation, so marketers should use
caution
b. Site design does not equal accuracy or credibility
c. Steps can be taken to identify the authenticity of the
information
d. Steps to verify online information accuracy
1. Discover the Web site’s author
3. Check to see when the site was last updated
5. Try to validate the research data by finding
6. Check the site content for accuracy.
D. Source 3 – Primary Data
Information gathered for the first time to solve a particular problem
1. Two electronic sources of primary data
2. Methods
a. Experiments
3. Primary Research Steps
a. Research problem
b. Research plan
4. Internet-Based Research Approaches
a. Creative test
5. Online Experiments
a. Cause-and-effect relationships
6. Online Focus Groups
a. A qualitative methodology that attempts to collect in-
depth information from a small number of
7. Online Observation
a. Monitors people’s behavior by watching them in
8. Online In-Depth Interviews (IDIs)
a. Semi-structured conversation with a small number of
9. Content Analysis
a. Examines text or images in order to evaluate the
10. Online Survey Research
a. Currently the most widely used methodology
11. Web Surveys
a. Post questionnaires on the webpage
ads
12. Online Survey Research Advantages
a. Fast and inexpensive
13. Online Survey Research Disadvantages
a. Sample representativeness
b. Measurement validity
14. Online Panels
15. Ethics of Online Research
a. Marketing research on the Web has become a “gift
culture”
b. Unsolicited e-mails can be considered spam
IV. Other Technology-Enabled Approaches
The Internet is an excellent place to observe user behavior because the
technology automatically records actions in a format that can be easily, quickly,
and mathematically manipulated for analysis.
A. Client-Side Data Collection
1. Collecting information about consumer surfing at the user’s PC
2. Cookie files are useful
3. Measure user surfing patterns by installing a PC meter on a
B. Server-Side Data Collection
1. Software on websites can report on:
a. Who views each page
2. Registration information can assist in one-to-one marketing
3. Real-time profiling
a. Instantaneous changes to Web pages
V. Real-Space Approaches
A. Occurs at offline points of purchase
2. Smart cards and credit card readers
4. Bar code scanners
B. Universal Product Code (UPC)
2. Many brick-and-mortar stores use for promotional and advertising
purposes
VI. Marketing Databases and Data Warehouses
Regardless of whether data are collected online or offline, they are moved to
various marketing databases.
A. Product databases
1. Features
3. Inventory levels
B. Customer databases
2. Customer behaviors
C. Transaction processing database
2. Entire historical data
1. A network of online Web servers in remote locations
3. Accessible by many users through mobile devices
4. Data processing can also take place in the cloud
VII. Data Analysis and Distribution
A. Data mining
2. Patterns uncovered help define marketing mix strategies
B. Customer Profiling
2. Helps marketers understand characteristics and behavior of
specific target groups
C. RFM Analysis (recency, frequency, monetary value)
1. When did the customer last purchase?
D. Report Generating
VIII. Knowledge Management Metrics
A. ROI
2. Total cost savings / total cost of the installation
B. TCO
2. Cost of hardware, software, labor and downtime