But even if a manager would like
in order to make a decision, it is
not always wise for her to conduct the research that would be required. One reason is that
the time
ved may be too great. Another more compelling reason is that the cost of the
may exceed its contribution. In principle, it is easy to understand how such a cost
test might be applied . If the cost of conducting the research is less than its contribution to
the improvement of the decision, the research should be carried out. If its cost is greater,
it should not be conducted. The application of this ptinciple in actual practice is somewhat
more complex. Finally, good research
help integrale marketing with the other areas
of the business.
INTEGRATED MARKETING
•
RESEARCH BRINGS IT TOGETHER
It's the bane of modern business: too many data, not enough
national calling to be looking for, too? Or in the number of
information. Computers are everywhere, accumulating giga-
calls made to MCl's customer-service lines?
bytes galore. Yet it only seems to get harder to find the
To find out, MCI regularly fires up its IBM SPI2 super-
est for the trees-to extract significance from the blizzard of
computer-its "data warehouse"-which identifies the most
numbers, facts, and stats. But help is on the way, in the form
telling variables to keep an eye on. So far, the SPI2 has com-
of a new class of software technology known broadly as
piled a set of 22 detailed-and highly secret-statistical pro-
mining. First developed to help scientists make sense of exper-
files based on repeated crunching of historical facts. None of
imental data, this software has enough smarts to "see"
them could have been developed without data-mining pro-
meaningful patterns and relationships-to see patterns that
grams, says Lance Boxer, MCT's Chief Information Officer.
might otherwise take tens of man-years to find. That's a huge
Data-mining
itself is a relatively tiny market: sales of
leap beyond conventional computer databases, which are pow-
such programs will grow to maybe $750 million by 2001. But
erful but unimaginative. They must be told precisely what to
the technology is crucial in getting a big payoff from what
look for. Data-mining tools can sift through immense col-
information technology
think will be an immensely
lections of customer, marketing, production, and financial data,
important growth area in coming years: data warehousing.
and, using statistical and artificial intelligence techniques, iden-
There are the enormous collections of data-sometimes tril-
tify what's worth noting and what' s not.
lions of bytes-compiled by mass marketers, retailers, or serv-
The payoffs can be huge, as MCI Communications is learn-
ice companies as they monitor transactions from millions of
ing. Like other phone companies, MCI wants to keep its best
customers. Data warehouses, running on ultrafast computers
customers. One way is to identify early those who might be
with specialized software, are the basis on which companies
considering jumping to a rival. If it can do that, the Cartier
hope to operate in real time-instantly adjusting product
can try to keep the customer with offers of special rates and
inventory levels, cash reserves, marketing programs, or other
services, for example.
factors to changing
conditions.
How to find the customers you want to keep from among
the millions? MCl's answer has been to comb marketing data
Source: John W. Verity, "Coaxing Meaning out of Raw Data,"
on 140 million households, each evaluated on as many as
Business Week , February 3, 1997, pp. 134-138; "Researchers Inte-
10,000 attributes-characteristics such as income, lifestyle,
grate Internet Tools in Their Work," R&D Magazine , June 2000,
and details about past calling habits. But which set of those
vol. 24, No.6, p. E13 ; "Smarter Kids. Com Chooses Quadstons-
attributes is the most important to monitor, and within what
The Smartest Customer Data Mining Solution," Business Week,
July 31, 2000.
range of values? A rapidly declining monthly bill may seem
like a dead give-away, but is there a subtler pattern in inter-
THE WALL STREET JOURNAL.
IN PRACTICE
WSJ Yogi is a free software applica-
Marketing research is a scientific
tion that works like a personal
and controlled process, but ulti-
assistant, automatically suggesting
mately, decisions are based on a
relevant content to you as you
blend of facts and intuition. U nder-
browse the web. The WSJ Yogi will
standing marketing research allows
ga ther links to related stories as you
managers to intelligently evaluate
read. D ownload the
Yogi now.
findings and recommendations.
R eturn again to th e Interactive
Determining the purpose and
Journal's Front Section. U nder
scope of the research is the first
Resources in the left menu, select
critical activity in any ma rketing
Special Reports. This section offers
research project. All subsequent
links to special reports that have
decisions are results of this process.
appeared as supplements to The
Creating the research design, con -
Wall
Journal print edition.
ducting the investigation, and pro-
These reports provide a thorough
cessing the data are the re maining
analysis and review of various
critical activities. Both primary and
ics such as e-commerce, Small Busi-
secondary data are accumulated
ness, and World Business. Rev;ew
when conduction research. Using
recent Special Reports now.
this informa tion to produce good
research allows managers to inte-
D E LIVE RABLE
grate marketing with other areas of
With the information provided in
the business.
this section about web resources,
Secondary sources of data
use the Interactive journal and rel-
online include associations and
evant web links to conduct
business information sites. Check
res ea rch on recent trends in
out the A merican Marketing Asso-
e-commerce. Find at least five
ciation's website at
sources of secondary data online
www.ama.org/resource for a list of
that will help you identify relevant
resources and guides. For links to
trends in e-commerce advertising,
business directories, media sites,
marketing, and business strategies.
and marketing-related
check out A Business Researchers
DISCUSSION
Interests at www.brint.com.
1. How can
research
Your subscription to the In ter-
help managers create successful
active Journal allows you to access
product lines and customer rela-
articles in various D ow Jones publi-
tionships?
cations. Under More Dow Jones
2. Most people conduct research
Sites in the left menu, click on Dow
when buying certain "big ticket"
Jones & Co. From here you will be
items like
or computers. How
able to access Dow Jones Web Links
do you
marketing
which offers you links to dozens of
research for these typ es of items?
business and news websites. Click on
3. H ow has the Internet impacted
several of these links now.
consumers and their purchase
Retu rn to the
What about tne impact
nal's Front Section. Under Tools in
on companies?
the left menu , select WSJ Yogi. The
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