COMM 223 — Marketing Management
Chapter 4: Managing Marketing Information to Gain Customer Insights
Based on: Armstrong, Kotler et al., Marketing: An Introduction, 7th Canadian Edition
Chapter Overview:
This chapter is about one of the most fundamental capabilities a marketer can have:
the ability to gather, manage, and use information to gain deep customer insights. In
a world overflowing with data, the challenge is no longer finding information — it is
turning raw data into actionable intelligence. The chapter covers the five-part
marketing information system (MIS), the full four-step marketing research process,
the tools and methods used to collect primary and secondary data, and how
companies analyze and distribute information through CRM, big data analytics, and
artificial intelligence. The chapter closes with special topics: marketing research for
small businesses and nonprofits, international marketing research, and the public-
policy and ethics dimensions of gathering consumer data. The central thesis: good
products and good marketing programs begin with good customer information and
deep customer insights.
1. Marketing Information and Customer Insights
To create value for customers and build meaningful relationships with them, marketers
must first gain fresh, deep insights into what customers need and want. Such customer
insights come from good marketing information. Companies use these insights to
develop a competitive advantage.
Although customer and market insights are important for building customer value and
engagement, these insights can be very difficult to obtain. Customer needs and buying
motives are often anything but obvious — consumers themselves usually cannot 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.
Marketing Information and Today’s “Big Data”
With the recent explosion of information technologies, companies can now generate
and find marketing information in great quantities. The marketing world is filled to the
brim with information from innumerable sources — not just data collected from the
company’s marketing research and internal customer transaction data, but real-time
data flowing in from social media monitoring, connected devices, and other digital
sources.
Consumers themselves generate enormous amounts of marketing information. Through
their smartphones, PCs, and tablets — via online browsing and blogging, apps and
social media interactions, texting and video, and geolocation data — consumers now
volunteer a tidal wave of bottom-up information to companies and to each other.
,Far from lacking information, most marketing managers are overloaded with data and
often overwhelmed by it. This problem is captured by the concept of big data, which
refers to the huge and complex data sets generated by today’s sophisticated
information generation, collection, storage, and analysis technologies. Every day, the
people and systems of the world generate nearly 2.3 trillion gigabytes of data. Roughly
90 percent of the data in the world today has been created in only the past two years.
Big data presents marketers with both big opportunities and big challenges. Companies
that effectively tap this glut of data can gain rich, timely customer insights. However,
accessing and sifting through so much data is a daunting task. When a large consumer
brand such as Coca-Cola or Apple monitors online discussions about its brand, it might
take in a stunning 6 million public conversations a day — more than 2 billion a year.
That is far more information than any manager can digest.
Key Insight:
Marketers don’t need more information; they need better information. And they need
to make better use of the information they already have. As one data expert puts it:
“When it rains, you can’t just drink the water. It must be collected, purified, bottled,
and delivered for consumption. Big data works the same way. It’s a raw resource that
is a few important steps away from being useful.”
Managing Marketing Information
The real value of marketing information lies in how it is used — in the customer
insights that it provides. Based on such thinking, companies ranging from PepsiCo,
Starbucks, and McDonald’s to Google and GEICO have restructured their marketing
information and research functions. They have created customer insights teams, whose
job it is to develop actionable insights from marketing information and work strategically
with marketing decision makers to apply those insights.
Real-World Example — PepsiCo:
Years ago, PepsiCo’s various marketing research departments were mainly data
providers. Today they are integrated “customer insights teams” charged with
delivering insights at the centre of the brand, the business, and consumers. The
teams gather insights from a rich and constantly evolving variety of sources —
ranging from grocery-store cash registers, focus groups and surveys, and
subconscious measures, to mingling with and observing customers in person and
monitoring their digital and social media behaviours. They form actionable consumer
insights with real business implications and share these insights with brand teams
from Pepsi, Mountain Dew, Aquafina, and other PepsiCo brands.
The PepsiCo North America Beverages (NAB) Consumer Insights team has even
developed a consumer insights app that disseminates custom-designed data and
content to marketing and brand decision makers. “We drive decisions that ultimately
lead to sustainable growth,” says a senior PepsiCo executive. “And everything we do
impacts the bottom line.”
, Thus, companies must design effective marketing information systems (MIS) 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, engagement, and stronger customer
relationships.
Formal Definition: Marketing Information System (MIS) —
People and procedures dedicated to assessing information needs, developing the
needed information, and helping decision makers use the information to generate and
validate actionable customer and market insights.
The MIS begins and ends with information users — marketing managers, internal and
external partners, and others who need marketing information and insights. First, it
interacts with these users to assess information needs. Next, it interacts with the
marketing environment to develop needed information through internal company
databases, marketing intelligence activities, and marketing research. Finally, the MIS
helps users to analyze and use the information to develop customer insights, make
marketing decisions, and manage customer engagement and relationships.
2. Assessing Information Needs and Developing Data
Assessing Marketing Information Needs
The MIS primarily serves the company’s marketing and other managers. However, it
may also provide information to external partners, such as suppliers, resellers, or
marketing services agencies. For example, Walmart’s Retail Link system gives key
suppliers access to information on everything from customers’ buying patterns and store
inventory levels to how many items they’ve sold in which stores in the past 24 hours.
A good MIS balances the information users would like to have against what they really
need and what is feasible to offer. Some managers will ask for whatever information
they can get without thinking carefully about what they really need, leading to data
overload. Others may omit things they ought to know. The MIS must monitor the
marketing environment to provide decision makers with information they should have to
make key marketing decisions.
Finally, the costs of obtaining, analyzing, storing, and delivering information can mount
quickly. The company must decide whether the value of insights gained from additional
information is worth the costs of providing it. Both value and cost are often hard to
assess.
Developing Marketing Information
Marketers can obtain the needed information from three main sources: internal data,
marketing intelligence, and marketing research.
Internal Data
Chapter 4: Managing Marketing Information to Gain Customer Insights
Based on: Armstrong, Kotler et al., Marketing: An Introduction, 7th Canadian Edition
Chapter Overview:
This chapter is about one of the most fundamental capabilities a marketer can have:
the ability to gather, manage, and use information to gain deep customer insights. In
a world overflowing with data, the challenge is no longer finding information — it is
turning raw data into actionable intelligence. The chapter covers the five-part
marketing information system (MIS), the full four-step marketing research process,
the tools and methods used to collect primary and secondary data, and how
companies analyze and distribute information through CRM, big data analytics, and
artificial intelligence. The chapter closes with special topics: marketing research for
small businesses and nonprofits, international marketing research, and the public-
policy and ethics dimensions of gathering consumer data. The central thesis: good
products and good marketing programs begin with good customer information and
deep customer insights.
1. Marketing Information and Customer Insights
To create value for customers and build meaningful relationships with them, marketers
must first gain fresh, deep insights into what customers need and want. Such customer
insights come from good marketing information. Companies use these insights to
develop a competitive advantage.
Although customer and market insights are important for building customer value and
engagement, these insights can be very difficult to obtain. Customer needs and buying
motives are often anything but obvious — consumers themselves usually cannot 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.
Marketing Information and Today’s “Big Data”
With the recent explosion of information technologies, companies can now generate
and find marketing information in great quantities. The marketing world is filled to the
brim with information from innumerable sources — not just data collected from the
company’s marketing research and internal customer transaction data, but real-time
data flowing in from social media monitoring, connected devices, and other digital
sources.
Consumers themselves generate enormous amounts of marketing information. Through
their smartphones, PCs, and tablets — via online browsing and blogging, apps and
social media interactions, texting and video, and geolocation data — consumers now
volunteer a tidal wave of bottom-up information to companies and to each other.
,Far from lacking information, most marketing managers are overloaded with data and
often overwhelmed by it. This problem is captured by the concept of big data, which
refers to the huge and complex data sets generated by today’s sophisticated
information generation, collection, storage, and analysis technologies. Every day, the
people and systems of the world generate nearly 2.3 trillion gigabytes of data. Roughly
90 percent of the data in the world today has been created in only the past two years.
Big data presents marketers with both big opportunities and big challenges. Companies
that effectively tap this glut of data can gain rich, timely customer insights. However,
accessing and sifting through so much data is a daunting task. When a large consumer
brand such as Coca-Cola or Apple monitors online discussions about its brand, it might
take in a stunning 6 million public conversations a day — more than 2 billion a year.
That is far more information than any manager can digest.
Key Insight:
Marketers don’t need more information; they need better information. And they need
to make better use of the information they already have. As one data expert puts it:
“When it rains, you can’t just drink the water. It must be collected, purified, bottled,
and delivered for consumption. Big data works the same way. It’s a raw resource that
is a few important steps away from being useful.”
Managing Marketing Information
The real value of marketing information lies in how it is used — in the customer
insights that it provides. Based on such thinking, companies ranging from PepsiCo,
Starbucks, and McDonald’s to Google and GEICO have restructured their marketing
information and research functions. They have created customer insights teams, whose
job it is to develop actionable insights from marketing information and work strategically
with marketing decision makers to apply those insights.
Real-World Example — PepsiCo:
Years ago, PepsiCo’s various marketing research departments were mainly data
providers. Today they are integrated “customer insights teams” charged with
delivering insights at the centre of the brand, the business, and consumers. The
teams gather insights from a rich and constantly evolving variety of sources —
ranging from grocery-store cash registers, focus groups and surveys, and
subconscious measures, to mingling with and observing customers in person and
monitoring their digital and social media behaviours. They form actionable consumer
insights with real business implications and share these insights with brand teams
from Pepsi, Mountain Dew, Aquafina, and other PepsiCo brands.
The PepsiCo North America Beverages (NAB) Consumer Insights team has even
developed a consumer insights app that disseminates custom-designed data and
content to marketing and brand decision makers. “We drive decisions that ultimately
lead to sustainable growth,” says a senior PepsiCo executive. “And everything we do
impacts the bottom line.”
, Thus, companies must design effective marketing information systems (MIS) 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, engagement, and stronger customer
relationships.
Formal Definition: Marketing Information System (MIS) —
People and procedures dedicated to assessing information needs, developing the
needed information, and helping decision makers use the information to generate and
validate actionable customer and market insights.
The MIS begins and ends with information users — marketing managers, internal and
external partners, and others who need marketing information and insights. First, it
interacts with these users to assess information needs. Next, it interacts with the
marketing environment to develop needed information through internal company
databases, marketing intelligence activities, and marketing research. Finally, the MIS
helps users to analyze and use the information to develop customer insights, make
marketing decisions, and manage customer engagement and relationships.
2. Assessing Information Needs and Developing Data
Assessing Marketing Information Needs
The MIS primarily serves the company’s marketing and other managers. However, it
may also provide information to external partners, such as suppliers, resellers, or
marketing services agencies. For example, Walmart’s Retail Link system gives key
suppliers access to information on everything from customers’ buying patterns and store
inventory levels to how many items they’ve sold in which stores in the past 24 hours.
A good MIS balances the information users would like to have against what they really
need and what is feasible to offer. Some managers will ask for whatever information
they can get without thinking carefully about what they really need, leading to data
overload. Others may omit things they ought to know. The MIS must monitor the
marketing environment to provide decision makers with information they should have to
make key marketing decisions.
Finally, the costs of obtaining, analyzing, storing, and delivering information can mount
quickly. The company must decide whether the value of insights gained from additional
information is worth the costs of providing it. Both value and cost are often hard to
assess.
Developing Marketing Information
Marketers can obtain the needed information from three main sources: internal data,
marketing intelligence, and marketing research.
Internal Data
