MBADM821:

Lesson 1.1. Overview

We’ll kick off the course by defining marketing, talking about its functions, and explaining its importance for business success. We’ll also review marketing as a profession, discussing associated skill sets and career opportunities.

Learning Objectives

After completing this lesson, you should be able to do the following things:

1. Define marketing.
2. Describe the key functions and roles of marketing.
3. Draw connections between marketing and the larger organization.
4. Describe the career path of a marketer: positions, skills, and growth paths.

Lesson Activities

By the end of this lesson, make sure you have completed the assignments and readings found in the Course Schedule.

Marketing Defined

When you think about the word marketing, what comes to mind?

Some of the words you thought of may have included

• advertising,
• sales,
• social media
• digital
• price,
• money,
• purchase,
• communication,
• ecommerce,
• products,
• market share,
• research, and
• brands.

Marketing is an umbrella term that encompasses all of these concepts and many more. Many people equate advertising with marketing. Advertising is certainly a component of marketing, but modern marketing has a relationship with (and impact on) almost every business function in today’s organization. Without marketing, brands and products cannot be successful.

That’s a quite a definition—and it's certainly encompassing. But let’s simplify it a bit.

Some marketers define marketing as a critical business function that has the ultimate goal of building and maintaining relationships with customers. Anything that can impact those relationships, from the product to the supply chain, is something that marketers need to be concerned about. 

As you can see from these definitions, the heart of marketing is communication and connection—making customers aware of brands and offerings and converting that awareness into key behavioral outcomes, such as purchases, loyalty, and recommendations. Seems simple enough, right? Ha! Most marketers would heartily acknowledge that marketing, especially in today’s consumer environment, is quite challenging.

Marketing as an Art and Science

Good marketing has become increasingly vital for business success. And good marketing is no accident, but a result of careful planning and execution. Marketing management is an art and a science; it involves getting, keeping, and growing a customer base through creating, delivering, and communicating value. In the pursuit of business success, marketers must engage in many activities, including the following:

• examining the characteristics of customers through research;
• identifying and characterizing appropriate markets;
• determining the duties and responsibilities of marketing employees within the organization and making appropriate resource-allocation decisions;
• determining customer needs and aligning products with them;
• developing marketing programs, plans, and strategies;
• communicating brand and product value;
• building and maintaining brand equity;
• setting the right pricing;
• identifying the most appropriate channels for distribution;
• planning the retail environment;
• selecting the most effective communication channels;
• supporting customer relationship development and management;
• managing the holistic customer experience (across product, purchasing, and after-purchase experiences); and
• measuring company performance results and evaluating progress.

You can see from this list that marketing covers many areas. All of these activities can be grouped into two main categories: demand creation and demand fulfillment. These activities represent a company's efforts to satisfy customer wants and needs by offering products and services that create value and satisfaction. The company should evaluate its value creation and delivery processes from the customer's point of view. If there are deficiencies in value delivery and enhancement, the company then redesigns those processes to make sure that they create satisfaction and value. A company that does this is said to have a marketing orientation. More recently, the term customer orientation has come into use, reflecting a focus on individual customers rather than groups of customers. Companies that have another orientation, such as a production orientation or a sales orientation, will generally not be as successful over the long run, though they may achieve short-term success. We’ll talk more about this in an upcoming lesson.

To become more successful in competitive markets, companies need to monitor and scan the market environment constantly and act appropriately. Both marketing-research and demand-forecasting techniques are utilized for gathering necessary information from the marketplace. The information collected is useful in the development of strategic marketing plans, programs, and strategies. It also facilitates the marketing decision-making process, guiding marketing managers in developing effective corporate-level, business (divisional) unit–level, and strategic business unit–level marketing plans. Your textbook discusses the marketing management process and the organizational marketing orientation, providing the main characteristics of marketing concepts and strategies with company examples.

The Four-P Model of Marketing

At its heart, marketing is the act of getting the right product (with the right price) in front of the right people with the right message. It’s this alignment that facilitates consumer interest, engagement, and purchase behavior. McCarthy’s four-P model buckets marketing functions into four main areas: product, price, promotion, and place.

+ Figure 1.1.1 Text Alternative

4P Model Marketing Mix

• Product
  • Product Variety
  • Quality
  • Design
  • Features
  • Brand Name
  • Packaging
  • Sizes
  • Services
  • Warranties
  • Returns
• Price
  • List price
  • Discounts
  • Allowance
  • Payment Terms
  • Credit Terms
• Promotion
  • Sales Promotion
  • Advertising
  • Sales Force
  • Public Relations
  • Direct Marketing
• Place
  • Channels
  • Coverage
  • Assortments
  • Locations
  • Inventory
  • Transport

Marketing Functions Across the Organization

In the old days, marketing functions and activities were often siloed, whereby marketers had little connectivity with other parts of the organization. In the past, marketing’s functions were largely focused on advertising communications, such as media selection and management, creative (copy development), and packaging design. Likewise, there were few connections with other business units—perhaps with the sales and product divisions, but loosely.

Today, marketing is becoming more and more integrated within organizations. Marketers are expected to work closely with most business units to ensure that the marketing strategy is effective and integrated across the business. In turn, marketing’s visibility, relevance, and status within organizations have significantly increased. Let’s talk a little more about this within the context of specific business units:

Sales

Certainly, one of marketing’s most fundamental functions is to make customers aware of and to communicate the value of the company’s offerings. The sales teams then take that momentum and move customers through the funnel toward purchase. Sales and marketing folks should work together in a feedback loop where marketing provides important information about target markets to help sales better connect with customers and sales provides marketing with frontline information from the customers themselves. (This information could be captured in the form of qualitative data from informal discussions or quantitative data from a customer relations management system like Salesforce.)

Supply Chain

Fundamentally, supply chain management is the act of ensuring that product is available to meet customer demand. Given that a primary marketing function is connecting customers with products, you can see that there’s a logical relationship between these two business units. If marketing engages in a media push or new campaign to ramp up sales, the organization needs to be ready to provide product to eager customers. Therefore, it’s essential that these two groups have a close partnership.

Information Technology

There are several important ways that marketing and IT fit together. The first relates to marketing’s traditional function of content delivery and messaging, which ties into website and mobile management (including e-commerce). Today, if marketing and IT aren’t working together to produce digital experiences that enhance customer impressions and facilitate key business outcomes, there’s likely to be a huge breakdown. The second way that IT and marketing work together relates to data management: With the proliferation of big data and data-driven marketing (more on these in an upcoming lesson), there’s a significant demand on IT to support the technical infrastructure needed for data capture, storage, and access.

Customer Service

Good customer service (CS) is a critical component of overall customer experience. Businesses that have direct customer-service functions (e.g., aftermarket support) should pair CS with marketing to ensure that CS is executing the customer-experience strategy, which is usually managed by marketing. Likewise, CS is an important resource for understanding the customer, which marketing can use to calibrate messaging and other aspects of customer communication and interaction.

Research and Development (R&D)

Marketing plays a significant role in informing new product development; because marketers are customer focused, they can provide developers with valuable market and product information during the idea-generation phase of R&D. Likewise, as a new product moves through the development life cycle, marketing can help calibrate the offering through concept and product testing, packaging refinement, and product-line fit. In addition, marketing can provide other customer- and market-receptivity assessments to ensure that the product will be successfully received.

Marketing Strategy

Marketing strategy is the combination of vision and goals that leads an organization to capture and retain customers. A marketing strategy, like any strategy, is conceptual by nature but is a necessary element of effective business operation. (We'll talk in a minute about the marketing plan, which is the tactical road map for executing the strategy.)

In recent years, marketing strategy has shifted away from a product focus and toward a market focus. This means that marketing strategy is taking an outside-in perspective, focusing on meeting (and exceeding) customer needs instead of creating and selling a discrete offering. This shift puts the focus on what businesses can do for customers, not what customers buy from them—and it has fundamentally changed marketing strategy.

Marketing Plans

The tangible, tactical element of marketing strategy is the marketing plan. Here’s the ugly truth: The marketing plan is the culmination of lots and lots of hard work—many (too many!) meetings, heaps of market research and competitive intelligence, hours of brainstorming and whiteboarding, bucketloads of revisions (and maybe even a few do-overs), probably some tears and pulling of hair, and a sigh of relief when it’s done. Whew!

Marketing plans include both

• strategic elements, or the conceptual and visionary components of the marketing road map (i.e., the guiding reasons for why and what), and 
• tactical elements, or the marketing tactics that will be employed to achieve the strategy itself (i.e., the how-to).

Good marketing plans explicitly connect the elements of strategy with tactical execution (the why with the how). They include operational elements like timelines and budgets, as well as supporting background research (such as SWOT analyses). Progress also needs to be measured through metrics. Identifying and tracking key metrics determines the success or failure of the marketing effort. Analyzing these performance and marketing metrics can also help with adapting future marketing efforts. 

Marketing plans typically cover such areas as

• branding,
• pricing, 
• promotion strategy,
• distribution channels, and
• communications strategy.

We’re going to cover all the main elements of the marketing plan throughout this course so that, by the end of the semester, you know a bit about each.

Under the umbrella of the overall marketing strategy fall individual strategies for each major component, including brand strategy, product strategy, distribution and retail strategy, and marketing communications strategy. All of these areas are woven together to create a cohesive overall strategy that will lead the business forward in a unified direction. Organizations that lack a cohesive marketing strategy often suffer from poor performance.

Marketing Within Organizational Structures

Though roles and job titles are pretty consistent, marketing organizations come in all shapes and sizes. Smaller companies may have a single person responsible for all marketing functions and activities, while mid-sized and larger organizations will have varying reporting structures. Some focus on channels, others on products, and still others are organized by target market or brand.

There’s no one right organizational structure; however, all modern marketing organizations should be organized with one thing in mind: the customer. In the next lesson, we’ll talk about the "Age of the Customer" and how it’s had a game-changing impact on marketing. Before we do that, consider the following infographic from Simple. (Use the arrows or dots to move through the slide carousel below and view each portion of the infographic.)

Marketing as a Career

Perhaps we've piqued your interest in a career in marketing. It’s a fabulous area and certainly a strong field. The U.S. Bureau of Labor notes that the 2021 annual median salary of advertising, promotions, and marketing managers was $133,380, with a 10% growth rate for the next 10 years (2021–2031), faster than the 5% average across all industries. Let's spend some time sketching a picture of what marketing as a profession and career looks like.

Regardless of role, effective marketers have several key skills:

• a passion for communicating: At its heart, marketing is a communication effort (specifically, persuasive communication). Marketers need to have an understanding of the communication process and enjoy engaging in that process on behalf of an organization. Likewise, marketers need to connect with various business units, so the ability to listen, analyze, and translate is essential for successful collaboration. 
• curiosity: Curiosity mitigates complacency. In today’s customer-driven markets, organizations cannot rest on their laurels. Effective marketers constantly seek out new ways to achieve market success. 
• an understanding of consumer behavior: Whether the organization is selling to end consumers (B2C) or businesses (B2B), successful marketers understand the fundamentals of how and why consumers select and use products, goods, and services.
• business acumen: It’s probably clear by now that marketing doesn’t work in a vacuum. The integration of marketing within the organization requires marketers to have a strong understanding of their role in organizational success. They need to understand the markets they serve, how the business serves them, and what the success factors will be. Likewise, to effectively connect with other business units, marketers need to understand their functions and know-how marketing supports their success.
• data skills: The digital age has brought with it unprecedented amounts of data on customers and markets. Increasingly, marketers are being required to use data in their decision-making (often referred to as data-driven marketing, which we’ll talk more about in Lesson 1.3). As such, basic data skills, such as knowing how to interpret data charts and decipher forecasts, are now a requirement for anyone in this industry.

Marketing Roles

In an organization, individuals are assigned to specific marketing functions and, therefore, have formal marketing titles: marketing manager, marketing director, sales and marketing specialist, account executive, and so on. And then there are those who have marketing responsibilities assigned as part of their job, like communications directors, event managers, community relations managers, development directors, sales managers, program or product managers, and the like. Regardless, to fully leverage the benefits of marketing, you must understand the marketing management process, not necessarily just the tactics and components of marketing.

Here are some of the many roles within the marketing function:

• chief marketing officer: Chief marketing officers (CMOs) are responsible for setting the overall marketing strategy and ensuring its relevance and adoption within the context of other business units and the CEO's agendas. CMOs should have a deep understanding of the markets they serve, the ability to lead (often in large organizations), and strong business acumen. Because of the digital nature of marketing and the proliferation of data available today, CMOs are increasingly expected to work closely with IT and the CTO. Take a look at how one marketer transformed her role.
• marketing executive/manager: Marketing executives are responsible for ensuring that the CMO’s strategy is executed on a day-to-day basis. They manage workflow, hiring, vendors, agencies, budgets, media relationships and campaigns, promotion strategy, and marketing mix allocation. Most marketing executives have about five to eight years of experience.
• marketing associate/analyst: Associates and analysts execute the tactical duties required to achieve the marketing strategy. These roles engage in developing messaging, managing content and media, analyzing data, and reporting insights. They may specialize in one area or cover a gamut of services, largely dependent on company size and investment into the marketing function. Specific areas an associate or analyst may focus on include
  • content marketing,
  • digital marketing,
  • product marketing,
  • data analytics,
  • market research, and
  • media/PR.
• market researcher: While market research may be a function under a marketing analyst role, it can also be a standalone position in larger organizations. The market researcher is responsible for gathering and analyzing market and customer data. This role requires a background in research methodology and data analysis.
• statistician: With the proliferation of big data, many firms are adding a role within marketing that can support the sophisticated analytics required to mine these data. This role requires significant data analysis experience and often a background in mathematics or machine learning. 

Lesson 1.1 Summary

In this lesson we’ve reviewed how marketing is defined, its functions, and its importance to business success. You should understand that marketing is an integrated function, with the sole purpose of connecting with customers and converting those connections to sales. You should have an understanding of marketing as a profession and know some of the key positions held by marketers.

References and Resources

American Marketing Association. (2017). Definitions of marketing. https://www.ama.org/the-definition-of-marketing-what-is-marketing/

U.S. Bureau of Labor Statistics. Occupational Outlook Handbook. Advertising, Promotions, and Marketing Managers (2021). https://www.bls.gov/ooh/management/advertising-promotions-and-marketing-managers.htm

Ander, W. N., & Stern, N. Z. (2004). Winning at retail: Developing a sustained model for retail success. John Wiley & Sons, Inc.

Arline, K. (2015, January 26). What is a value chain analysis? Business News Daily. www.businessnewsdaily.com/5678-value-chain-analysis.html

Clark, M. (2006). The bear necessities of business. John Wiley & Sons, Inc.

Connellan, T. K. (1997). Inside the Magic Kingdom: Seven keys to Disney's success. Peak Performance Press.

Hemingway, E. (2014). The sun also rises (The Hemingway Library ed.). Simon & Schuster, Inc.

Lafley, A. G., Martin, R., & Riel, J. (2013). A playbook for strategy: The five essential questions at the heart of any winning strategy. Rotman Magazine. Available from https://store.hbr.org/product/a-playbook-for-strategy-the-five-essential-questions-at-the-heart-of-any-winning-strategy/ROT185

Lesson Summary

In this lesson, we’ve reviewed how marketing is defined, its functions, and its importance to business success. You should understand that marketing is an integrated function, with the sole purpose of connecting with customers and converting those connections to sales. You should have an understanding of marketing as a profession and know some of the key positions held by marketers.

References

American Marketing Association. (2013). About AMA. Retrieved from www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx

Ander, W. N., & Stern, N. Z. (2004). Winning at retail: Developing a sustained model for retail success. Hoboken, NJ: John Wiley & Sons, Inc.

Arline, K. (2015, January 26). What is a value chain analysis? Business News Daily. Retrieved from http://www.businessnewsdaily.com/5678-value-chain-analysis.html

Clark, M. (2006). The bear necessities of business. Hoboken, NJ: John Wiley & Sons, Inc.

Connellan, T. K. (1997). Inside the Magic Kingdom: Seven keys to Disney's success. Peak Performance Press.

Hemingway, E. (2014). The sun also rises (The Hemingway Library ed.). New York, NY: Simon & Schuster, Inc.

Lafley, A. G., Martin, R., & Riel, J. (2013). A playbook for strategy: The five essential questions at the heart of any winning strategy. Rotman Magazine. Retrieved from https://services.hbsp.harvard.edu/services/proxy/content/39068788/39125845/ca750f06651d97948579232ab6a23fcd*

Lesson 1.2. Overview

Technology has dramatically changed the way that businesses support and interact with customers. Today, more than ever, customers have significant influence over brands, products, and services. In this lesson, we’ll talk about the Age of the Customer and how customer-obsessed organizations are successful in this new market environment.

Learning Objectives

After completing this lesson, you should be able to do the following things:

1. Recognize the role of the customer in business success.
2. Describe the Age of the Customer and its importance as a business concept.
3. Identify tactics that businesses can adopt to implement a customer-obsessed strategy.

Lesson Activities

By the end of this lesson, make sure you have completed the assignments and readings found in the Course Schedule.

The Age of the Customer

In the past 20 years, we’ve seen a technology explosion. Some of you may remember when cell phones came out and the internet was born; these two pieces of technology have dramatically shaped connectivity and interconnectivity—how we communicate, how we shop, how we purchase products and services, and whom and what we have access to. Even developing nations enjoy high levels of mobile technology adoption, effectively leapfrogging traditional telecom offerings (like landlines) for more advanced technology like smartphones and mobile web connections. It’s been nothing short of revolutionary.

In the old days, before this tech boom, competitive markets were more limited, customers had little influence over product offerings, and marketing was a one-way flow of communication. As you read last week in the textbook, technology advancement has forever changed how businesses serve and interact with customers. Today, customers' influence is undeniable. They demand that organizations provide high-quality, targeted customer experiences—and they’ll use their voices and buying power to make these requirements known. Forrester Research, a world-class technology consulting firm, has dubbed this the Age of the Customer (Fontanella, 2020).

In the Age of the Customer

• Customers have more access to what’s available in the market—product availability is no longer limited to what’s stocked on the shelves of their local stores. This creates wider markets, making competition even fiercer.
• They’re savvier—customers have significant access to information about brands, products, and services, and they use it to make purchase decisions.
• They have communication power—online consumer ratings, social media, and other platforms give them a global forum to express their opinions about brands and offerings. These communications can have serious business impacts.

  Listen | Watch | Read

Putting the "customer" into customer experience: The CX Leader

I Was Seduced by Exceptional Customer Service: TED Talk

What is the Age of the Customer, and What Does It Mean for Your Business?: HubSpot

Being Customer Obsessed

So, what does the Age of the Customer mean for businesses and marketers?

Well, gone are the days of inside-out strategy. Organizations that don’t approach their offerings and customer experience with a customer-first attitude will fail to win and retain customers. Forrester Research calls this being customer obsessed, whereby the organization, throughout every function, department, and role, approaches business with the customer in mind (Leaver et al., 2016).

According to Forrester, customer-obsessed organizations do the following things (adapted from Leaver et al., 2016):

• Propagate this approach throughout the organization, making it a company culture. This means that leadership models through example, pushing this philosophy down through the organization. With everyone in the organization on board, a customer-led approach will permeate every possible touchpoint a customer might have.
• Have organizational structures and processes that facilitate this approach. That includes the right hiring and retention practices, a lack of departmental silos, and agile change mechanisms. These things make collaboration and the ability to pivot easier.
• Capture the right success metrics and use them to generate insights. Customer-obsessed organizations go beyond traditional customer-satisfaction assessments and dig deep into the minds, hearts, and lives of customers to understand how they can be better served and reached. They analyze their data using more sophisticated techniques and move beyond these data to situate the results within the context of the business, generating rich, actionable insights.

+ Six Levers Operating Model Text Alternative

Structure: The structure of the organization

Culture: The shared values and beliefs that drive behavior

Talent: Hiring, development, and retention practices

Metrics: The strategic measurements that drive business decisions

Processes: The ways people work and make decisions

Technology: The systems and tools that enable processes

Facilitating Customer Obsession

Marketers facilitate customer obsession in a number of ways, including the following:

Employing customer first marketing communications

Within the context of their own roles, marketers must ensure that the media and messaging they're using are customer-centric. This means incorporating market research to test branding, packaging, ads, media channels, and other touchpoints to ensure that they align with customer needs and expectations and that they have the desired impacts.

Always incorporating digital into media planning

Customers expect a digital experience, period. Marketers must include digital communication components in the marketing strategy—for some organizations that may be as simple as having a website, but for many others it's about creating a sophisticated, seamless experience across platforms and devices.

Collecting the right data using appropriate methodologies

It’s important that marketers know how to identify relevant key performance indicators (KPIs) and other metrics and then gather suitable data. Having a formal research strategy and program can help in assessing customer experience by outlining the information needed.

Being connectors

Because marketing functions touch so many parts of the organization, marketers have a unique opportunity to assist with connectivity and collaboration. This can be informal, such as bringing the right people together for projects, or more formal, such as leading cross-functional ideation sessions. Leveraging their inherent connectivity allows marketers to support the structure, culture, and processes necessary for customer obsession.

Customer Obsession Isn't Easy

In theory, being customer-obsessed seems like it might be fairly easy, right? But many organizations have had a hard time pivoting to this strategy, often struggling in a few key areas:

• lack of buy-in at the executive level: Customer obsession requires a top-down approach. If there are dissenters at the highest levels, then employees further down the chain won’t be persuaded to fully get on board.
• complex organizational structures: Organizations with ambiguous departments or complex matrix management often suffer from confusion over roles and responsibilities; in addition, larger organizations often create silos to facilitate structure. These situations inhibit collaboration and reduce the agility needed to quickly meet customers' needs and pivot toward their ever-changing desires.
• lack of investment: It takes the right people in the right roles with the right tools to support true customer obsession—and all of these things require financing. Companies that fail to invest in these areas have a harder time making significant shifts to being customer-first in every area.
• failure to bring technology up to par (or to exceed it): As mentioned, the Age of the Customer is driven by technology. Thus, customers today expect a technological brand and product experience. Among other things, customers demand superior website and mobile experiences. Without meeting customer needs in these areas, a customer-obsessed approach is dead in the water.

Lesson 1.2 Summary

References

Halkett, R. (2022, November 7). Using customer obsession to drive rapid innovation. Forbes. https://www.forbes.com/sites/aws-transformation/2022/11/07/using-customer-obsession-to-drive-rapid-innovation/?sh=170ac2e15c13

Leaver, S., Moorehead, M., & Pattek, S. (2016). The operating model for customer obsession. Forrester Research, Inc.

Fontanella, C. (2020, October 14). What is the Age of the Customer, and what does it mean for your business? HubSpot. https://blog.hubspot.com/service/age-of-the-customer#:~:text=Forrester%20marks%20the%20Age%20of,about%20their%20experiences%20with%20different

Lesson 1.3. Overview

In this lesson, we'll talk about one of the most valuable resources marketers have at their disposal: market research. Market research helps us understand our customers and the markets we serve. Without it, we would make our decisions from intuition alone (and we all know how reliable that would be!). It's essential that marketers understand what market research is, how to analyze data, and how to apply data to marketing decisions and strategy.

Learning Objectives

After completing this lesson, you should be able to do the following things:

1. Define market research.
2. Identify common ways that marketers use research.
3. State the types of data and several common sources of data.
4. Explain the process of applying data in order to address business challenges.

Lesson Activities

By the end of this lesson, make sure you have completed the assignments and readings found in the Course Schedule.

Data-Driven Marketing

Just as technology has ushered in the Age of the Customer, so too has it facilitated a data glut. Any device connected to the internet—from our cell phones and tablets to our TVs and refrigerators—is collecting data on our behaviors, locations, and preferences. Likewise, point-of-service systems and credit, debit, and loyalty cards track purchases and spending. You may have heard of the Internet of Things (IoT), the interconnected web of online devices. If you haven't, take a look at this video.

All these devices are collecting valuable data about customers. This is great news for marketers because it helps us understand our customers and the markets we serve with astonishing clarity.

Marketers use research and data for all kinds of purposes, including

• characterizing groups of consumers,
• understanding customer attitudes and perceptions about brands and products,
• identifying new market opportunities,
• tracking brand equity,
• predicting new-product reception and sales,
• calibrating product offerings, and
• determining the right media channels and messaging.

Sources of Data

Marketers get data in two main ways: by collecting it themselves (primary data) or purchasing it from a vendor (secondary data).

Primary Data

Data that your organization collects (under your guidance) is considered primary research, even if you contract with market research or other type of firms for help. Common types of primary data include the following:

• customer data: Many organizations, especially those in the B2B space, keep track of their direct customer information, including location, company size, products purchased, and annual spending.
• market data: Market data is captured through the assessment of potential or actual customers. This kind of data typically captures the attitudes, perceptions, and behaviors of the marketplace with an aim toward better understanding how to connect with and serve target groups. A survey is the most common method of data collection; however, behavioral and sentiment tracking is also quite popular—including website and social media tracking.
• sales data: Most organizations track their sales in a variety of ways. Common sales metrics include inventory scanning data (scanner), revenue, and win–loss. Sales data can be combined with other types of data, especially customer data, to create powerful predictive models.

Secondary or Syndicated Data

Secondary data is data that has been collected by another source (without the purchaser’s explicit direction). An example of commonly used secondary data is U.S. Census data.

Not all secondary data is freely available. Syndicated data is secondary data that is collected for the express purpose of mass sale; companies like Gartner, Forrester Research, Simmons, and ComScore are in the syndicated data business. Regardless of where the data comes from, it has been collected to meet some purpose that may not be (and probably isn’t!) directly addressing the particular needs of a specific organization (the way that primary data does).

Sources of Data: Pros and Cons

There are advantages and disadvantages to collecting data from both types of data sources. The following table provides an overview of both.

Challenges With Market Research

There are many challenges associated with market research and data. In fact, it’s never totally easy to collect, manage, or analyze data—something’s always going a bit awry! You could conduct market research and analyze marketing data for a decade, and it might never become a smooth process. Here are some of the common challenges you could run into:

• budget: Running primary research or buying syndicated data costs money—often a lot! Purchasing samples for primary studies can be very expensive if you need to work with a niche population or B2B professionals. This is because the cost per interview (CPI) increases as the size of the population decreases (supply and demand). Likewise, collecting data in countries outside the United States or in rural or emerging markets is also expensive because you may need to use one of the pricier methodologies (like door-to-door) or translate surveys into local languages. Finally, the research methodology itself can increase costs—online surveys tend to be less expensive than focus groups or face-to-face interviews, for example.
• survey questionnaire design: Survey questionnaires are written, programmed (if online), and administered by humans. Thus, they’re subject to human error. Market research questionnaires tend to be complicated and often long, with lots of logic and skip patterns, in order to make the most of the respondent’s time and capture as much data as possible. Even though questionnaires are pretested for mistakes, invariably there’s something wrong that someone missed: a typo, a bad skip pattern, or a filter that’s not working correctly. Any mistakes in the questionnaire translate into bad data that may be costly to re-collect or just unusable.
• data management: Once the data has been collected, data files need to be created and managed. Many quantitative market research data files are thousands to tens of thousands of rows, with hundreds of variables. Data scientists and market researchers must clean the data to put it into standard, structured formats to be used in statistical analyses. This is often done through writing code and syntax. Any mistakes in manipulating data can lead to errors in the data file—and it does happen!
• unresponsive interviewees: Interviews can be tough when you’re working with folks who aren’t talkers. It’s like pulling teeth!

Using Data in Decision-Making and Strategy

As mentioned, working with data is a key component of a marketer’s role today—you may be helping to collect the data, analyzing it, or just using it to inform decisions. Regardless of the application, you’ll most likely be working with data a lot if you go into marketing.

Using data in business decision-making requires us to translate the business needs into data and then interpret the results in ways that are insightful and meaningful for the business. This is called data mapping, and a five-phase process guides it.

1. Challenge

   identifying and understanding the business challenge: In this phase, we first determine what needs to be addressed—for example, why is our customer satisfaction declining? Then, we break down that need into conceptual components, associating them with metrics and data.

2. Metrics and Analyses

   selecting the right metrics and marketing analyses: In this phase, we determine the appropriate metrics for measuring our concepts. We also determine where our data will come from—Will we conduct a study internally, hire a market research firm, or use existing or syndicated data?—and what statistics we'll use to analyze the data.

3. Results

   identifying meaningful results: When you’ve got lots of data, selecting the best nuggets requires careful consideration. You’ll want to target data results that illuminate the problem at hand and are statistically significant.

4. Insight

   developing actionable insights: It's not enough to simply identify meaningful data results. Those results need to then be interpreted within the context of the marketing challenge and the business itself. A perspective and context should situate the data results.

5. Application

   recommending strategic applications: Here’s where we put the data and insights into action. This requires aligning the insights with action-oriented recommendations. 

The most important part of this process is the beginning, which ensures that your data is well matched to the business challenge at hand. Making decisions based on data that’s not directly illustrative of the things you’re trying to understand will lead only to misaligned strategy. It’s very important that the folks who get the data—those designing the studies or working with the vendors to purchase data—have both strong research skills and strong business acumen so that they can accurately match data to business needs.

Lesson 1.3 Summary

This lesson has reviewed what data-driven marketing is, how market research is useful for marketers, and what the fundamentals of market research are. You should have a basic understanding of the types and sources of marketing data, the pros and cons of each, and the process of applying data to business decision-making.