5-1

Chapter Five

Continuous
Learning About
Markets

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

 5-2
Illustrative Example: The
Bombay Company

 Turnaround strategy at The Bombay Company

started with customer research examining
shopping experiences and what consumers really
wanted from a home furnishings supplier
 This drove major changes in how goods were
displayed and presented to overcome perceptions
of confused merchandizing and pricing
 Stores were re-merchandized around themes to
overcome consumer feelings that the company
was too “stuffy”
 The research showed that catalogs were used for
decorating ideas not product listings, so they were
restyled around lifestyle choices
 The Bombay Company strategy is driven by
extensive market research and response to
customer feedback
 5-3

Strategies for Obtaining Information

Internal Data
Collect existing
information
Published
information

Subscription
Strategy Use standardized
alternatives research services
Single purchase

Exploratory
Conduct
research study
Full-scale
 Advantages and Limitations 5-4
of Questioning Methods
Advantages Limitations
Personal Interviews
Most versatile and High cost
flexible Possibility of interviewer
Long questionnaires bias
handled more easily Possibility of cheating by
Presence of interviewer interviewer due to lack
allows more flexibility of supervision
in procedure Project time often lengthy
More enjoyable for
respondents
Fewer refusals

Telephone Interviews
Fewer interviewers needed More noncommittal
Relatively inexpensive answers
Rapid method of data Some households
collection overrepresented
Can reach large number of Lengthy and detailed
households questions often not
More control over interviewers feasible

Mail surveys
Higher-quality information Questionnaire cannot be
Better for collecting changed
information on possibly Complex
embarrassing subjects Can be completed by
Relatively cheaper to conduct person other than intended
No interviewer bias Follow-up expensive
Response often slow in
coming

Source: Harper W. Boyd, Jr., Ralph Westfall, and Stanley F. Stasch, Marketing Research:
Text and Cases, 5th ed. (Homewood, IL Richard D. Irwin, 1981), Chap. 4.
 5-5

Special Research Studies

Problem
Definition

Information
Required

Research
Method

Sampling
Plan

Questionnaire
Design

Data
Collection

Analysis and
Report
 5-6

Screening A New
Research Supplier

1. Client  Would you recommend

this supplier?
2. Supplier  Do you have
sufficient funds for this project?
3. What parts of the project will be
subcontracted, and how do you
manage subcontractors?
4. May I see your interviewer’s
manual and data entry manual?
5. How do you train and supervise
interviewers?
 5-7

6. What percentage of interviews are

validated?
7. May I see a typical questionnaire?
8. Who draws your samples?
9. What percentage of your data entry
is verified?
10. Managers  What do you think
about this supplier?

Source: Seymour Sudman and Edward Blair,

Marketing Research, A Problem-Solving Approach, Irwin/McGraw-Hill, 1998, 67.
 5-8

Impact of the Internet on

Marketing Costs and
Availability

 Online Surveys
– Fast
– Inexpensive
– Limitations in population coverage
– Resistance to excessive Web communications
 Customer feedback and peer-to-peer Web
communications
 Monitoring customer Web behavior
 5-9

Illustrative Example:
Knowledge Sharing at
Buckman Labs
 Buckman has more than 50 Internet
discussion groups focused on its main
products – employees post 50-100
messages a day
 The company has amassed an easily
searchable database of in-house expertise
and past lessons learned, all accessible to
employees and customers
 The Web harnesses the brainpower of an
entire global speciality chemicals company
around customer problems
 Knowledge sharing is the foundation for
superior learning about customers
 5-10

Marketing Decision-Support
System Components

Database Display

Analysis
Capabilities Models
 Marketing Intelligence and
5-11

Knowledge Management
 Market sensing does not rely on
hard data alone
– intelligence from publications, sales
calls, customer visits, social contacts,
Internet, rumor
 Knowledge management
 Role of the Chief Knowledge
Officer
 Leveraging customer
knowledge
– creating “customer knowledge
development dialogues”
– operating enterprise-wide “customer
knowledge communities”
– capturing customer knowledge at the
point of customer contact
– management commitment to
customer knowledge
 5-12

Ethical Issues in
Collecting
and Using Information

 Invasion of customer privacy

– e.g., use of medical databases to
sell healthcare products
 Information and ethics
– e.g., guidelines for sharing of
confidential information
– e.g., collecting data from children