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Data comes from a variety of sources. Online resources such as company websites, journal databases, and e-commerce locations could provide valuable resources to someone opening a new business. For instance, if a new product is to be sold, some companies will review competitors’ websites to glean information about comparable pricing before setting their price. Marketing information can be derived from many sources. We will review three types in this section—internal data, external data, and competitive intelligence.
A database is a collection of related data. For instance, at the school you are currently attending, there are multiple databases—one for current students, one for alumni, and still another for faculty. Within each of these databases, there is information about that specific population. The current student database will be a list of all students who are enrolled in courses this term, with additional information such as what courses they are enrolled in, any past enrollments, grades earned, major, hometown, and academic advisor’s name.
External data is data that originates from outside the organization. Examples of external data would be information gleaned from customers through a customer service survey or reviews of a competitor’s website. Previously we learned about big data and the volume of information that is available daily. These data pieces would also be considered external data. Competitive and market intelligence is often gathered through these external sources of material.
Data sources can include:
Critical marketing intelligence can be data that already exists in the company’s databases. This data is called internal data and gives the company a historic view of what has worked in the past as well as identifies times when the company did not meet its goals.
Internal data includes:
IN CONTEXT
Sometimes the data desired is best collected by watching the actions of consumers. For instance, how many cars pass a specific billboard in a day? What website led a potential customer to the company’s website? When are consumers most likely to use the snack vending machines at work? What time of day has the highest traffic on a social media post? What is the most streamed television program this week?
Observational research is the collecting of data based on actions taken by those observed. Many data observations do not require the researched individuals to participate in the data collection effort to be highly valuable. Some observation requires an individual to watch and record the activities of the target population through personal observations. Unobtrusive observation happens when those being observed aren’t aware that they are being watched. An example of an unobtrusive observation would be to watch how shoppers interact with a new stuffed animal display by using a one-way mirror. Marketers can identify which products were handled more often while also determining which were ignored. Other methods can use technology to collect the data instead. Instances of mechanical observation include the use of vehicle recorders, which count the number of vehicles that pass a specific location. Computers can also assess the number of shoppers who enter a store, the most popular entry point for train station commuters, or the peak time for cars to park in a parking garage.
Taking the benefits of an interview and applying them to a small group of people is the design of a focus group. A focus group is a small number of people, usually 8 to 12, who meet the sample requirements. These individuals together are asked a series of questions where they are encouraged to build upon each other’s responses, either by agreeing or disagreeing with the other group members. Focus groups are similar to interviews in that they allow the researcher, through a moderator, to get more detailed information from a small group of potential customers. One of the benefits of a focus group over individual interviews is that synergy can be generated when a participant builds on another’s ideas. Additionally, for the same amount of time, a researcher can hear from multiple respondents instead of just one. Of course, as with every method of data collection, there are downsides to a focus group as well.
Combining a variety of questions on one instrument is called a survey or questionnaire. Collecting primary data is commonly done through surveys due to their versatility. A survey allows the researcher to ask the same set of questions of a large group of respondents. Surveys are flexible and can collect a variety of quantitative and qualitative data. Questions can include simplified yes or no questions, select all that apply, questions that are on a scale, or a variety of open-ended types of questions.
Marketing research can be conducted on every aspect of business and marketing. Understanding the competition and its strengths and weaknesses through an analysis of the industry and competing forces gives a company a competitive edge. Competitive intelligence is the collection of that information from the marketplace. A company’s position must be examined to determine if it matches with the needs of the customers. This competitive intelligence may be related to any of the marketing mix elements: product, price, distribution, or promotion. Checking prices of competitors’ products to make sure a company’s pricing is competitive, conducting a promotional audit to verify reach of the messages, or examining the competitive industry’s distribution channels may allow the company to identify a new location—and all help to make the company more educated on future decisions.
Marketing research can come in many forms and helps managers to make data-driven decisions. Once this data is collected, it becomes part of the company's or organization’s internal data cache.
EXAMPLE
Through careful study of the customer and the analytics available in online and in-person shopping patterns, Nordstrom has developed a more robust system that allows for seamless coordination between all Nordstrom properties. In developing a better customer experience, Nordstrom worked to really understand how customers live and behave. From customer interactions, observation, online data, and careful marketing research, Nordstrom Local emerged. One key piece of information was that 35% of customers who place an online order first visited a store to help guide the purchase decision. With Los Angeles and New York as the top markets, Nordstrom needed methods to connect with and help ease the purchase process for its customers in these locations. One significant aspect of the purchase process was to make online ordering easier, allowing for quick in-store pickups and returns while also including a method of getting alterations when and where it was most convenient. The creation of Nordstrom Local was the answer. Through Nordstrom Local, available in the top markets, the customer could get the Nordstrom experience—closer to home.Source: THIS TUTORIAL HAS BEEN ADAPTED FROM OPEN STAX’S PRINCIPLES OF MARKETING COURSE. ACCESS FOR FREE AT https://openstax.org/details/books/principles-marketing. LICENSE: CREATIVE COMMONS ATTRIBUTION 4.0 INTERNATIONAL.
