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ELC 310 Day 7 ©2006 Prentice Hall Agenda • Questions? • Assignment 2 Graded • 3 A’s, 2 B’s and 1 C • Only one more assignment • Rest of Grade is from Marketing Plan, exams, Case study analysis and Case study creation • Exam 1 Graded • 3 A’s and 3 B’s • No one got extra credit question • You should be working on your eMarketing Plans • Due Oct 31, Presentations on Oct 31 • Suggestions • Do an eMarketing plan for the Admissions office for your discipline • Discussion on Marketing Knowledge ©2006 Prentice Hall Assignment 2 Prepare a two to three page paper (not less than 500 and not more than 1000 words) that answers the following questions. What does digital privacy mean to you? (25%) Does your notion of digital privacy change when (40%) a) you are at work? b) you are at school? c) you are at home? d) you are using a publicly accessible computer such as one at a library? Is your notion of digital privacy supported by Law? If so, which ones? (25%) What actions do you take to protect your digital privacy? (10%) ©2006 Prentice Hall The Marketing Information System • Marketers manage knowledge through a marketing information system (MIS). • Many firms store data in databases and data warehouses. • The Internet and other technologies have facilitated data collection. • Secondary data provides information about competitors, consumers, the economic environment, etc. • Marketers use the Net and other technologies to collect primary data about consumers. ©2006 Prentice Hall 6-10 Sources of data: Internal records • Accounting, finance, production and marketing personnel collect and analyze data. • Nonmarketing data, such as sales and advertising spending • Sales force data • Customer characteristics and behavior • Universal product codes • Tracking of user movements through web pages ©2006 Prentice Hall 6-11 1) Customer orders 10 new co mputers. 3) database trends Sales rep Where is the %@#& “on” switch? Hmmm, 21% of customers can’t find “on” switch. Customer Database 4) Redesign computer switch 2) Customer calls co mpany Customer service rep A hypothetical scenario for a computer company that is learning from its customers as a whole and using the information to improve products. E-Marketers Learn From Customers Source: Adaptation of ideas from Brian Caulfield (2001), “Facing up to CRM” at www.business2.com ©2006 Prentice Hall Secondary data • Can be collected more quickly and less expensively than primary data. • Secondary data may not meet e-marketer’s information needs. • Data were gathered for a different purpose. • Quality of secondary data may be unknown. • Data may be old. • Marketers continually gather business intelligence by scanning the macroenvironment. ©2006 Prentice Hall 6-12 Public and Private Data Sources • Publicly generated data • U.S. Patent Office • American Marketing Association • Privately generated data • Forrester Research • Nielsen/NetRatings • Online databases • Secondary data help marketers understand: • • • • • • Competitors, Consumers, The economic environment, Political and legal factors, Technological forces, Other factors in the macro-environment affecting an organization. ©2006 Prentice Hall 6-13 Public Sources of Data in the U.S. Web site Information Stat-USA www.stat-usa.gov U.S. Department of Commerce source of international trade data. U.S. Patent Office www.uspto.gov Provides Trademark and Patent Data for Businesses. World Trade Organization www.wto.org World Trade Data. International Monetary Fund www.imf.org Provides information on many social issues and projects. Securities and Exchange Commission www.sec.gov Edgar database provides financial data on U.S. public corporations. Small Business Administration www.sbaonline.gov Features information and links for small business owners. University of Texas at Austin advweb.cocomm.utexas.edu/world Ad World with lots of links in the ad industry. Federal Trade Commission www.ftc.gov Shows regulations and decisions related to consumer protection and anti-trust laws. U.S. Census www.census.gov Provides statistics and trends about the U.S. population. ©2006 Prentice Hall Sampling of Sources of Privately Generated Data in the U.S. Web site Information AC Nielsen Corporation www.acnielsen.com Television audience, supermarket scanner data and more. The Gartner Group www.gartnergroup.com Specializes in e-business and usually presents highlights of its latest findings on the Web site. Information Resources, Inc. www.infores.com Supermarket scanner data and new product purchasing data. Arbitron www.arbitron.com Local-market and Internet radio audience data. The Commerce Business Daily www.cbd.savvy.com Lists of government requests for proposals online. Simmons Market Research Bureau www.smrb.com Media and ad spending data. Dun & Bradstreet www.dnb.com Database on more than 50 million companies worldwide. Dialog library.dialog.com Access to ABI/INFORM, a database of articles from 800+ publications. Hoovers Online www.hoovers.com Business descriptions, financial overviews, and news about major companies worldwide. ©2006 Prentice Hall Primary Data • Primary data = information gathered for the first time to solve a particular problem. • When secondary data are not available managers may decide to collect their own information. • They are more expensive and time-consuming to gather than secondary data. • They are current and more relevant to the marketer’s specific problem. • They are proprietary = unavailable to competitors. • Each primary data collection method can provide important information, as long as e-marketers understand the limitations. Remember that Internet research can only collect information from people who use the Internet, which leaves out a huge portion of the population. ©2006 Prentice Hall Source 3: Primary Data Electronic sources of primary data collection: • The Internet: Focus groups, observation, in-depth interviews (IDI), and survey research. Online panels: popular survey research method _ single-source research. Real-time profiling at Web sites and computer client-side or serverside automated data collection. • The real-space Refers to technology-enabled approaches to gather information offline that is subsequently stored and used in marketing databases. Techniques = bar code scanners and credit card terminals at brick-andmortar retail stores, computer entry by customer service reps while talking on the telephone with customers. ©2006 Prentice Hall Proportion Using Firms Using Online Primary Research 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Online surveys ©2006 Prentice Hall E-mail surveys Online focus groups 6-15 Bulletin Web site board focus use groups measures 5 Steps for Primary Research Research Problem Primary Research Steps ©2006 Prentice Hall Research Plan Data Collection Data Analysis Distribute Results Primary Research Steps 1. Research problem. Specificity is vital. 2. Research plan. • • • • Research approach. Choose from experiments, focus groups, observation techniques, in-depth interviews, and survey research, or nontraditional real-time and real-space techniques. Sample design. Select the sample source and number of desired respondents. Contact method. Telephone, mail, in person, via the Internet. Instrument design. For survey = a questionnaire. For other methods = a protocol to guide the data collection. ©2006 Prentice Hall Primary Research Steps 3. Data collection. Gather the information according to plan. 4. Data analysis: Analyze the results in light of the original problem. Use statistical software packages for traditional survey data analysis or data mining to find patterns and other information in databases. 5. Distribute finding / add to the MIS. Research data might be placed in the MIS database and be presented in written or oral form to marketing managers. ©2006 Prentice Hall Some typical e-marketing research problems that electronic data can help solve. Online Retailers Web Sites Improve online merchandising Forecast product demand Test new products Test various price points Test co-brand and partnership effectiveness Measure affiliate program effectiveness Pages viewed most often Increase site “stickiness” (stay longer) Test site icons and organization Path users take through the site—is it efficient? Site visit overall satisfaction Customers and Prospects Promotions Identify new market segments Test shopping satisfaction Profile current customers Test site customization techniques Test advertising copy Test new promotions Check coupon effectiveness Measure banner ad click-through Typical Research Problems for E-Marketers ©2006 Prentice Hall Online Research Advantages & Disadvantages • Advantages • Can be fast and inexpensive. • Electronic Surveys may reduce data entry errors. • Respondents may answer more honestly and openly. • Disadvantages • Sample representativeness. • Measurement validity. • Respondent authenticity. • Researchers are using online panels to combat sampling and response problems. ©2006 Prentice Hall 6-17 Other Technology-Enabled Approaches • Client-side Data Collection • Cookies • Use PC meter with panel of users to track the user clickstream. • Server-side Data Collection • Data log software • Real-time profiling tracks users’ movements through a web site. ©2006 Prentice Hall 6-18 Real-Space Data Collection, Storage, and Analysis • Offline data collection may be combined with online data. • Transaction processing databases move data from other databases to a data warehouse. • Data collected can be analyzed to help make marketing decisions. • • • • Data Mining Customer Profiling Recency, Frequency, Monetary (RFM) Analysis Report Generating ©2006 Prentice Hall 6-19 Marketing Databases and Data Warehouses • Regardless of whether data are collected online or offline, they are moved to various marketing databases. • Product databases = product features, prices, and inventory levels. • Customer databases = customer characteristics and behavior. • Transaction processing databases are important for moving data from other databases into a data warehouse. • Data warehouses: • Store entire organization’s historical data. • Designed specifically to support analyses necessary for decision making. • The data in a warehouse are separated into more specific subject areas (called data marts) and indexed for easy use. ©2006 Prentice Hall UPC Scanner Product Database Transaction Database Data Warehouse Customer Database Real-Space Data Collection and Storage Example ©2006 Prentice Hall Data Analysis and Distribution • Data collected from all customer touch points are: • Stored in the data warehouse, • Available for analysis and distribution to marketing decision makers. • Analysis for marketing decision making: • Data mining = extraction of hidden predictive information in large databases through statistical analysis. Here, marketers don’t need to approach the database with any hypotheses other than an interest in finding patterns among the data. Patterns uncovered by marketers help them to: Refine marketing mix strategies, Identify new product opportunities, Predict consumer behavior. ©2006 Prentice Hall Data Analysis and Distribution • Customer profiling = uses data warehouse information to help marketers understand the characteristics and behavior of specific target groups. Understand who buys particular products, How customers react to promotional offers and pricing changes, Select target groups for promotional appeals, Find and keep customers with a higher lifetime value to the firm, Understand the important characteristics of heavy product users, Direct cross-selling activities to appropriate customers; Reduce direct mailing costs by targeting high-response customers. ©2006 Prentice Hall Data Analysis and Distribution • RFM analysis (recency, frequency, monetary) = scans the database for three criteria. When did the customer last purchase (recency)? How often has the customer purchased products (frequency)? How much has the customer spent on product purchases (monetary value)? => Allows firms to target offers to the customers who are most responsive, saving promotional costs and increasing sales. • Report generators: automatically create easy-to-read, high-quality reports from data warehouse information on a regular basis. Possible to specify information that should appear in these automatic reports and the time intervals for distribution. ©2006 Prentice Hall Knowledge Management Metrics • Marketing research is not cheap: • Need to weigh the cost of gaining additional information against the value of potential opportunities or the risk of possible errors from decisions made with incomplete information. • Storage cost of all those terabytes of data coming from the Web. • Two metrics are currently in widespread use: • ROI. Companies want to know: • Why they should save all those data. • How will they be used, and will the benefits in additional revenues or lowered costs return an acceptable rate on the storage space investment? • Total Cost of Ownership (TCO). Includes: • Cost of hardware, software, and labor for data storage. • Cost savings by reducing Web server downtime and reduced labor requirements. ©2006 Prentice Hall