E-Marketing Research

Data Drive Strategy

 Data are collected from a myriad of sources, filtered into databases,

and turned into marketing knowledge that is then used to create
marketing strategy.
 Information overload is a reality for most consumers and marketers
alike. It is an especially difficult problem for marketing decision
makers as they gather survey results, Web analytics, call center data,
product sales information, secondary data about competitors, social
media conversations, and much more. The problem is compounded by
automated data gathering at Web sites, brick-and-mortar points of
purchase, and all other customer touch points.
Data Drive Strategy

 Data
without insight or application to inform
marketing strategy are worthless.
 Knowledge is more than a collection of
information but something that resides in the
marketer, not the computer.
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, partners, and former
employees as well.
 A complete marketing knowledge database includes all the
data about customers, prospects, and competitors, the
analyses and outputs based on the data, and access to
marketing experts, all available 24/7 through a number of
digital receiving appliances.
Marketing Knowledge Management

A marketing information system (MIS) is the

process by which marketers manage knowledge.
The MIS is a system of assessing information
needs, gathering information, analyzing it, and
disseminating it to marketing decision makers.
Marketing Knowledge Management

Source 1: Internal Records

Internal records, such as sales data comprise one important
source of marketing knowledge. Accounting, finance, and
production personnel collect and analyze data that provide
valuable information for marketing planning.
For Example :
Sales Data
Customer Characteristics and Behavior
Marketing Knowledge Management

 Sales data come from accounting systems and the

company Web site log, retrieved via the Web
analytics When a customer purchases online, the
transaction is recorded in a database for access.
Marketing managers review and analyze these
data to determine conversion rates (proportion of
visitors who purchase online) and to see if online
ads and other communication are driving sales.
Marketing Knowledge Management

 Customer Characteristics and Behavior

The most important internal marketing data involve individual customer
activity. It gives a hypothetical scenario for a computer company that
collects data from its customers online and by telephone and uses the
information to improve its products.
A complete customer record will include data from every customer touch
point (contact with the company), including internet orders and e-mail
interaction, and product purchases and coupon redemption at the retail
store. Data on in-store behavior are gathered through scanning UPCs (bar
codes) on products.
Marketing Knowledge Management

Source 2: Secondary Data

When faced with a need for specific information not
available in company or partner databases, the e-marketer
first looks for secondary data, which can be collected more
quickly and less expensively than primary data—especially on
the internet, where up-to-date information from more than
200 countries is available 24/7, from home or work,
delivered in a matter of seconds. Syndicated research is
available via the internet with a credit card sign-up and a
password entry.
Marketing Knowledge Management

Source 2: Secondary Data

 secondary data may not meet the e-marketer’s information
needs, because they were usually gathered for a different
purpose than the one at hand.
 Another common problem is the quality of secondary data.
For example, when writing this book we often find many
conflicting statistics on particular topics—results vary
depending on the methodology and survey sample
characteristics.
 Finally, secondary data are often out of date.
Marketing Knowledge Management

What type of information do marketing managers need?

 Demographic trends
 Competitors
 Technological forces
 Natural resources
 Social and cultural trends
 World and local economies
 Legal and political environments
Marketing Knowledge Management

 Source 3: Primary Data

 When secondary data are not available to assist in planning,
marketing managers may decide to collect their own information.
Primary data are information gathered for the first time to solve a
particular problem.
 Gathering primary data is usually more expensive and time
consuming than it is to gather secondary data; on the other hand, the
data are current and more relevant to the marketer’s specific
problem.
 In addition, primary data have the benefit of being proprietary and,
thus, unavailable to competitors.
Marketing Knowledge Management

Source 3: Primary Data

Primary Research Steps A primary data collection project
includes five steps
 1. Research problem.
 2. Research plan.
 3. Data collection.
 4. Data analysis.
 5. Distribution of findings/Addition to the database.
 Marketing Knowledge Management

 Source 3: Primary Data

1. Research problem. As with secondary data, specificity is vital. Exhibit
6.10 shows some typical internet marketing research problems that
electronic data can help solve.
2. Research plan.
• Research approach. On the basis of the information needed,
researchers choose from among experiments, focus groups, observation
techniques, and survey research, or Web conversation monitoring, real-
time, and real-space techniques.
• Sample design. At this stage, researchers select the sample source and
the number of desired respondents.
Marketing Knowledge Management

 Contact method. Ways to contact the sample include

traditional methods such as the telephone, mail, and in
person, as well as the internet and other technology
enabled approaches.
• Instrument design. If a survey is planned, researchers
develop a questionnaire. For other methods, researchers
develop a protocol to guide the data collection.
3. Data collection.
Researchers gather the information according to plan.
Marketing Knowledge Management

4. Data analysis
Researchers analyze the results in light of the original
problem. For quantitative research, this step includes using
statistical software packages for traditional survey data
analysis or data mining and other approaches to find patterns
and test hypotheses in databases.
5. Distribution of findings/Addition to the database.
Research data might be placed in the marketing knowledge
database and be presented in a written or oral form to
marketing managers.
Real-Space Approaches

 Real-space primary data collection refers to technology- enabled approaches

to gather information offline that is subsequently stored and used in
marketing databases.
 The most important real-space techniques are bar code scanners and credit
card terminals at brick-and-mortar retail stores, although computer entry by
customer service reps while talking on the telephone with customers might
also be included here.
 Real-space primary data collection occurs at offline points of purchase.
Offline data collection is important for e-marketing because these data, when
combined with online data, paint a complete picture of consumer behavior
for individual retail firms. Smart card and credit card readers, and bar code
scanners are mechanisms for collecting real-space consumer data.
Real-Space Approaches

 Even though the UPC, also known as the bar code, has
been in grocery stores since 1974, its use has grown to the
point where such codes are now scanned billions of times
a day. Product sales data gathered by scanning the UPC at
retail stores are currently used primarily for inventory
management. As UPC data go from the cash register into
the computer, the software reduces accounting inventory
levels automatically and sends communication to suppliers
for replenishment of physical goods. This immediate
inventory updating is quite efficient for retailers,
wholesalers, and manufacturers.
Marketing Databases and Data
Warehouses
 Regardless of whether data are collected online or offline, they are
moved to various marketing databases. Product databases hold
information about product features, prices, and inventory levels;
customer databases hold information about customer characteristics
and behavior. Transaction processing databases are periodically
copied into a data warehouse.
 Data warehouses are repositories for the entire organization’s
historical data (not just marketing data). They are designed
specifically to support analyses necessary for decision making.
 Sometimes the data in a warehouse are separated into more specific
subject areas (called data marts) and indexed for easy use. These
concepts are important to marketers because they use data
warehouse information for planning purposes.
Data Analysis and Distribution

 Data collected from all customer touch points are stored

in the data warehouse or cloud knowledge management
system, ready for analysis and distribution to marketing
decision makers. Four important types of analysis for
marketing decision making include data mining, customer
profiling, RFM analysis (recency, frequency, monetary
value), and report generating.
Data Analysis and Distribution

 Data mining involves the 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. For example, a marketer might
want to know whether a product’s heaviest users tend to
purchase more during particular months, or how many
people in a social network share applications with others.
Patterns uncovered by marketers help them to refine
marketing mix strategies, identify new-product
opportunities, and predict consumer behavior.
Data Analysis and Distribution

 Customer profiling uses data warehouse information to

help marketers understand the characteristics and
behavior of specific target groups. Through this process,
marketers can really understand who buys particular
products and how they react to promotional
offers and pricing changes.
Data Analysis and Distribution

 Some additional uses of customer profiling include the

following:
• Selecting target groups for promotional appeals.
• Discovering the best way to engage customers in social media.
• Finding and keeping customers with a higher lifetime value to the firm.
• Understanding the important characteristics of heavy product users.
• Directing cross-selling activities to appropriate customers.
• Reducing direct-mailing costs by targeting high-response customers.
Data Analysis and Distribution

 RFM analysis scans the database for three criteria. First,

when did the customer last purchase (recency)? Second,
how often has the customer purchased products
(frequency)? Third, how much has the customer spent on
product purchases (monetary value)?
 This process allows firms to target offers to the customers
who are most responsive, saving promotional costs, and
increasing sales.
Data Analysis and Distribution

 Report generators automatically create easy to-read,

high-quality reports from data warehouse or cloud
information on a regular basis. These reports may be
placed in the marketing knowledge database on an
intranet or extranet for all to access.
Knowledge Management Metrics

 Marketing research is not cheap. Marketers often 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.
Knowledge Management Metrics

 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? For hardware storage space
(either on site or in the cloud), ROI usually means total cost savings divided by
total cost of the installation . Notably, companies use ROI to justify the value of
other knowledge management systems as well.
Total Cost of Ownership (TCO). Largely a metric used by information technology
managers, TCO includes not only the cost of hardware, software, and labor for
data storage but also other items such as cost savings by reducing Web server
downtime and labor requirements.