E-MARKETING 5/EJUDY STRAUSS AND RAYMOND FROST

Part III: E-Marketing StrategyChapter 6: E-Marketing Research

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Chapter 6 Objectives

After reading Chapter 6, you will be able to: Identify the three main sources of data

that e-marketers use to address research problems.

Discuss how and why e-marketers need to check the quality of research data gathered online.

Explain why the internet is used as a contact method for primary research and describe the main internet-based approaches to primary research.

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Chapter 6 Objectives, cont.

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Describe several ways to monitor the Web for gathering desired information.

Contrast client-side, server-side, and real-space approaches to data collection.

Highlight four important methods of analysis that e-marketers can apply to data warehouse information.

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Nestle Purina PetCare wanted to know whether their Web sites and online advertising increased off-line behavior.

Nestle Purina developed 3 research questions: Are our buyers using our branded Web

sites? Should we invest in other Web sites? If so, where should we place the

advertising?

The Purina Story6-4

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The Purina Story, cont.

They combined online and off-line shopping panel data and found that: Banner click-through rate was low (0.06%). 31% of subjects who were exposed to both

online and off-line advertising mentioned Purina.

The high exposure group mentioned Purina more than the low exposure group.

Home/health and living sites received the most visits from their customers.

Can you think of other Web sites besides petsmart.com and about.com that would be appropriate for Purina PetCare ads?

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Data Drive Strategy

Organizations are drowning in data. E-marketers must determine how to glean

insights from billions of bytes of data. Marketing insight occurs somewhere

between information and knowledge. Purina, for example, sorts through

hundreds of millions of pieces of data about 21.5 million consumers to make decisions.

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From Data to Decision: Purina

Knowledge

Information

Data

Decision

Let’s put banner ads on about.com

Dog owners who see ads online are likely to buy Purina ONE. We know the sites they visit: about.com, www.petsmart.com. 1. Purina buyers are 20% more likely to visit about.com. 2. 36% of dog owners who see Purina ads would buy the brand. 016030102 (Buyer 1 bought Purina puppy chow on March 1)

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Knowledge management is the process of managing the creation, use, and dissemination of knowledge.

Data, information, and knowledge are shared with internal decision makers, partners, channel members, and sometimes customers.

Examples of the uses of knowledge management can be found in Exhibit 6.3.

Marketing Knowledge Management

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Uses of Knowledge Management

Use in the Telecom Industry Representative Firm

Scanner Check-Out Data AnalysisCall Volume AnalysisEquipment Sales AnalysisCustomer Profitability AnalysisCost and Inventory AnalysisPurchasing Leverage with SuppliersFrequent-Buyer Program Management

AT&TAmeritechBelgacomBritish TelecomTelestra AustraliaTelecom IrelandTelecom Italia

Use in the Retail Industry Representative Firm

Scanner Check-Out Data AnalysisSales Promotion TrackingInventory Analysis and DeploymentPrice Reduction ModelingNegotiating Leverage with SuppliersFrequent-Buyer Program Management Profitability AnalysisProduct Selection for Markets

Wal-MartKmartSearsOsco/Savon DrugsCasino SupermarketsW. H. Smith BooksOtto Versand Mail OrderAmazon.com

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The Electronic Marketing Information System

Marketers manage knowledge through a marketing information system (MIS). Many firms store data in databases and data

warehouses. The internet and other technologies have

facilitated data collection. Secondary data provides information about

competitors, consumers, economic environment, etc.

Marketers use the Net and other technologies to collect primary data about consumers.

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Source 1: Internal Records

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Accounting, finance, production, and marketing personnel collect and analyze data. Sales data Customer characteristics and behavior

Universal product codes Tracking of user movements through web pages

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Source 2: Secondary Data

Can be collected more quickly and less expensively than primary data.

Secondary data may not meet e-marketer’s information needs. Data was gathered for a different purpose. Quality of secondary data may be unknown. Data may be old.

Marketers continually gather business intelligence by scanning the macroenvironment.

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Public and Private Data Sources Publicly generated data

U.S. Patent Office CIA World Factbook American Marketing Association Wikipedia

Privately generated data comScore Forrester Research Nielsen/NetRatings

Commercial online databases

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Source 3: Primary Data

Primary data are information gathered for the first time to solve a particular problem.

Primary data collection enhanced by the internet: Experiments Focus groups Observation Survey research

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Primary Research Steps

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Exhibit 6.10

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Exhibit 6.15

Advantages & Disadvantages of Online Research

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Ethics of Online Research

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Companies conducting research on the Web often give respondents a gift or fee for participating.

Other ethical concerns include: Respondents are increasingly upset at getting

unsolicited e-mail requests for survey participation. “Harvesting” of e-mail addresses from newsgroups

without permission. “Surveys” for the sole purpose of building a

database. Privacy of user data.

Monitoring the Social Media

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Companies must now monitor numerous web pages, blogs, and photo sites in order to learn what is being said about their brands or executives.

Companies can hire public relations firms or online reputation management firms to help.

They can also set up automated monitoring systems using e-mail, RSS feeds, or special software.

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Other Technology-Enabled Approaches Client-side Data Collection

Cookies Use PC meter with panel of users to track

the user clickstream. Server-side Data Collection

Site log software Real-time profiling tracks users’

movements through a Web site.

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Real-Space Approaches

Data collection occurs at off-line points of purchase.

Real-space techniques include bar code scanners and credit card terminals.

Catalina Marketing uses the UPC for promotional purposes at grocery stores.

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Marketing Databases & Data Warehouses

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Product databases hold information about product features, prices, and inventory levels; customer databases hold information about customer characteristics.

Data warehouses are repositories for the entire organization’s historical data, not just for marketing data.

Data are stored in the data warehouse system and used for analysis by marketing decision makers.

Data Analysis and Distribution

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Four important types of analysis for marketing decision making include: Data mining Customer profiling RFM (recency, frequency, monetary value)

analysis Report generating

Knowledge Management Metrics

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Two metrics are currently in widespread use: ROI: total cost savings divided by total cost

of the installation. Total Cost of Ownership (TCO): includes

cost of hardware, software, labor, and cost savings.

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