Objective 5

I Discuss the special issues some marketing researchers face, including public policy and ethics issues.

Blockbuster Llc Ethical Issues

▲ Key customer insights, plus a dash of Apple's design and usability magic, have made the ¡Pod a blockbuster. It now captures more than 75 percent market share.

world," states a marketing expert, "the race for competitive advantage is really a race for customer and market insights." Such insights come from the good marketing information.2

Consider Apple's phenomenally successful iPod. A The iPod wasn't the first digital music player but Apple was the first to get it right. Apple's research uncovered a key insight about how people want to consume digital music—they want to take all their music with them but they want personal music players to be unobtrusive. This insight led to two key design goals—make it as small as a deck of cards and build it to hold 1,000 songs. Add a dash of Apple's design and usability magic to this insight, and you have a recipe for a blockbuster. Apple's expanded iPod line now captures more than 75 percent market share.

However, although customer and market insights are important for building customer value and relationships, these insights can be very difficult to obtain. Customer needs and buying motives are often anything but obvious— consumers themselves usually can't tell you exactly what they need and why they buy. To gain good customer insights, marketers must effectively manage marketing information from a wide range of sources.

Today's marketers have ready access to plenty of marketing information. With the recent explosion of information technologies, companies can now generate information in great quantities. In fact, most marketing managers are overloaded with data and often overwhelmed by it. For example, Wal-Mart refreshes sales data from checkout scanners hourly, adding a billion rows of data a day, equivalent to about 96,000 DVD movies. That's a lot of data to analyze.3 Still, despite this data glut, marketers frequently complain that they lack enough information of the right kind. They don't need more information, they need better information.

▲ Key customer insights, plus a dash of Apple's design and usability magic, have made the ¡Pod a blockbuster. It now captures more than 75 percent market share.

Customer insights

Fresh understandings of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships.

Marketing information system (MIS)

People and procedures for assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights.

And they need to make better use of the information they already have. Says another marketing information expert, "transforming today's vast, ever-increasing volume of consumer information into actionable marketing insights ... is the number-one challenge for digital-age marketers."4

Thus, a company's marketing research and information system must do more than simply generate lots of information. The real value of marketing research and marketing information lies in how it is used—in the customer insights that it provides. "The value of the market research department is not determined by the number of studies that it does," says a marketing expert, "but by the business value of the insights that it produces and the decisions that it influences." Says another expert, "Companies that gather, disseminate, and apply deep customer insights obtain powerful, profitable, sustainable competitive advantages for their brands."5

Based on such thinking, many companies are now restructuring and renaming their marketing research and information functions. They are creating "customer insights teams," headed by a vice president of customer insights and made up of representatives from all of the firm's functional areas. For example, the head of marketing research at Kraft Foods is called the director of consumer insights and strategy.

Customer insights groups collect customer and market information from a wide variety of sources—ranging from traditional marketing research studies to mingling with and observing consumers to monitoring consumer online conversations about the company and its products. Then, they use the marketing information to develop important customer insights from which the company can create more value for its customers. For example, Unilever's customer insights group states its mission simply as "getting better at understanding our consumers and meeting their needs."

In gathering and using customer insights, however, companies must be careful not to go too far and become customer controlled. The idea is not to give customers everything they request. Rather, it's to understand customers to the core and give them what they need— to create value for customers as a means of capturing value for the firm in return.6

Thus, companies must design effective marketing information systems that give managers the right information, in the right form, at the right time and help them to use this information to create customer value and stronger customer relationships. A marketing information system (MIS) consists of people and procedures for assessing informational needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights.

♦ Figure 4.1 shows that the MIS begins and ends with information users—marketing managers, internal and external partners, and others who need marketing information. First, it interacts with these information users to assess information needs. Next, it interacts with the

The Marketing Information System

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