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McDaniel&Gates–MarketingResearch,12thEdition Instructor’sManual
Copyright?2021JohnWiley&Sons,Inc. 10-
CHAPTER10
MarketingAnalytics
LEARNINGOBJECTIVES
1.Understandwhat’sincludedinmarketinganalytics.
2.Reviewtechniquesforanalyzingdata.
3.Gainagreaterunderstandingofbigdata.
4.Exploredatamining.
5.Understanddifferencesinanalyticalforbigandlittledata.
6.Defineartificialintelligence,machinelearninganddeeplearning.
7.Outlinethekeyissuesregardingconsumerprivacy.
KEYTERMS
ArtificialintelligenceorAI
Backpropagation
Behavioraltargeting
Bigdata
CRISP-DMFramework
Datamining
Datavisualization
Deeplearning
Descriptiveanalytics
Machinelearning
Marketinganalytics
Marketingdashboard
Neuralnetworks
Predictiveanalytics
Prescriptiveanalytics
Surgepricing
CHAPTERSUMMARY
Thischapterwilllookatsomeofthetoolsthatenableresearcherstoanalyzeandgaininsightsfromalltypesofdata.Itbeginswithadiscussionofmarketinganalytics,whatitisandwhattheprocessis.Next,itdiscussesbigdata.Thisincludesitsbackground,howitworks,andnowtoanalyzeit.
Next,itdiscussesdescriptive,predictive,andprescriptiveanalytics.Afterthat,itdiscussesdatamining,artificialintelligence,machinelearning,anddeeplearning.Thechapterthistransitionsintobehavioraltargetingandsurgepricing.Next,itdiscussesdatavisualization.Aspartofthatdiscussion,itcoversinfographicsandmarketingdashboards.Itconcludeswithadiscussionofprivacyissues.
QUESTIONSFORREVIEWANDCRITICALTHINKING
Definemarketinganalytics.Whyisitsoimportanttocompanies?
AsdefinedinChapter1,marketinganalyticsisthediscovery,interpretation,andcommunicationofmeaningfulpatternsindata.Thisboilsdowntopredictionorclassificationandtheassociatedinsights.
Marketinganalyticsisimportantbecausecompanieshavetounderstandtheirmarketsinordertoproduceproductsorservicesthataredemandedbytheirmarketsandinordertobeabletorespondtochangesintheirmarket.
Namesometypesofinformationthatmightbefoundinanycompany’sdatabaseandthesourcesofthisinformation.
Anyinformationthefirmcollectsfromitscustomers,suppliers,andothersourcesislikelystoredintheirdatabase.Forexample,Visa,MasterCard,AmericanExpressandothershavemassivedatabaseswhereawiderangeofpurchasesfromretailstores,restaurants,hotels,airlines,onlineretailers,serviceorganizationsandsooncanbeassociatedwithspecificpurchasersaboutwhomthecreditcardcompanieshaveagreatdealofpersonalinformationcoveringage,gender,income,occupation,placeofresidence,andalltheotherinformationyouprovidewhenyoufilloutacreditcardapplication.
Whatismeantbythetermdatamining?Brieflyexplainhowitisdone.
Dataminingisanumbrellatermforanalytictechniquesthatfacilitatefastpatterndiscoveryandmodelbuilding,particularlywithlargedatasets.Thetermislooselyappliedtoanytypeoflarge-scaledataorinformationprocessingaswellasanyapplicationofartificialintelligence,machinelearning,ordeeplearning.Dataminingisperformedusingartificialintelligence,machinelearning,anddeeplearning.
IthasbeensaidthatBigDataanalyticsturnsthescientificmethodonitshead.Whatdoesthismean?
Thescientificmethodisatypeofresearchwhereaproblemisdescribed,relevantdataiscollected,aresearchhypothesis(orhypotheses)isformulated,andthenthehypothesisistestedempirically.Withbigdata,thedataiscollectedfirstandthenanalyzedtofind,notreallyhypotheses,butrathertofindanswerstoquestions.
Whyhasbehavioraltargetingbecomesopopularwithmarketers?Whyisitcontroversial?
Behavioraltargetingistheuseofonlineandofflinedatatounderstandaconsumer’shabits,demographics,andsocialnetworksinordertoincreasetheeffectivenessofonlineadvertising.Thisallowscompaniestoimprovetheirabilitytomarkettotheircustomers.Forexample,Amazonmakingrecommendationstoitscustomers.Behavioraltargetingiscontroversialbecauseoftheprivacyimplicationsandthewayssomeofthedataiscollectedonline.
Whatisdeeplearning?Howisitdifferentfrommachinelearning?HowdotheserelatetoAI?
Machinelearningiswheremachinescanlearnbyexperienceandacquireskillswithouthumaninvolvement.Deeplearningisasubsetofmachinelearningwhereartificialneuralnetworks,algorithmsinspiredbythehumanbrain,learnfromlargeamountsofdataasinmachinelearningbutnowweaddbackpropagationwheremachineslearnfromtheirmistakes.
Bothmachineanddeeplearningareimplementationsofartificialintelligence,wherewecanteachmachinestodothingsthattypicallyrequirehumanintelligence.
Inconnectionwithdeeplearning,whatisbackpropagation?
BackpropagationiswherethedeeplearningAIrealizesithasmadeanerrorandmakesadjustmenttoimprovepredictions.
Whatisdatavisualization?Whyisitimportant?
Datavisualizationconsistsofgraphictoolsthatmakedataunderstandabletoawideraudiencethanjustanalystsanddatascientists.Datavisualizationisimportantbecausehumansunderstanddatamuchquickerandbettervisuallythanbylookingatnumbers.
Whatisamarketingdashboard?Howcanitbeused?
Marketingdashboardsareareportingtoolthatprovidesacomprehensivesnapshotofperformance-basedanalytics,keyperformanceindicators(KPIs),andothermarketingmetrics.Itcanbeusedtovisuallypresentanymarketinginformationcollectedbythefirm.
Dividetheclassintogroupsoffourorfive.EachteamshouldgototheInternetandlookupBigDataanalytics.EachteamshouldthenreporttotheclassonhowaspecificcompanyiseffectivelyusingBigDatatoimprovetheirmarketingefficiency.
Studentresponseswillvary.
REAL-LIFERESEARCH
Case10.1AffiliatedParkingSystemsLookstoNewPricingApproach
KeyPoints
APSownsandoperatesover300parkinglotswithslightlyover33,000parkingplaces.
APShasbeenstruggling,searchingfornewideastoincreaserevenuesfromexistinglots.
APSiswonderingifsurgepricingcouldhelpthem.
APSisinterestedindoingallfeecollectionfromtotallyelectronicallytofurtherreducevariablecosts.
APSwantstovarypricingbasedonthelevelofdemandforparkinginrealtime.
Questions
WouldyousaythatBillisontherighttrackregardingtheneedforartificialintelligencetoimplementdynamicpricing?Whydoyousaythat?
Studentopinionswillvary.However,withafixedinventoryofparkingspaces,dynamicpricingoffersabouttheonlyoptiontheyhaveforincreasingrevenue.
Ifheweretopursuetheideafurther(heobviouslywouldneedhelpfromaconsultingfirm),whatdatawouldbeneededtoimplementsurgeordynamicpricing?
Sincetheyown300parkinglots,thisistheperfectopportunitytopilottest(e.g.testmarket)theconceptifthatisdesired.
Inordertoimplementsurgepricing,theywouldneedtoknowhowdemandvarieswithtime-of-day,day-of-week,andspecialevents.Theycouldbeginbycollectingdemandfromtheelectronicsystemsandattendants.Somelotshavemanualsystemsandthesewouldbeincompatiblewithbothdatacollectionandsurgepricingsotheywouldneedtobeupgradedforthesystemtowork.
Wouldmodelsbeneeded?Whatwouldthemodelsdo?Howmighttheybedeveloped?
Machinelearningwouldberequiredtomodeldemandandadjustpricingonanongoingbases,raisingpriceswithspacesareinhighdemandandloweringpriceswhenspacesareinlowdemand.
Describetheultimatesystemthatwouldbeneededintermsofinputsneeded,howthoseinputswouldbecaptured,modelsneeded(justageneralsenseofwhatthemodelswouldneedtodo),howpricingwouldbecommunicatedtoperspectiveusersandhowfeeswouldbecollected.Mappingitalloutinadiagramwithafewcommentsonwhatisoccurringateachstepisprobablyagoodapproachtoansweringthisquestion.
WhilethisinitiallysoundssimilartosurgepricingwithUber,itisactuallyverydifferent.WithUber,youagreeonthepriceaheado
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