Global Information

Systems and Market

Research

LTARNING OBJECTIVES
6-1 Discuss the roles of informatron and exPlarn some of the waYs global
technologY, management informa- marketers adaPt them.
tion systems, and big data in a global 6-4 Compare the way a multinationalfirm
company's decision-maktng processes organizes the marketing research effor-i
5-2 Describe the various sources of with the way a global or transnational
market information, including direct firm approaches the organtzing issue'
percePtion. 5-5 Explain how information's role as a
6-3 ldentify the individual steps in the strategic asset affects the structure
traditronal market research process, of global corPorations.

cAsE 6-1
ffiig Llxrt: ""ruLlil:,h*r {}e:s \'v;ili} it }4-tr}tur{'.
is'e tk* &"tusi* {r:*itastr"--v

models have bee-

r-s*rhe olobal recorded music industry is in transition, as decades-old business
permit peerto-peer sharing of di9=
A ,t.i1l.i J'gi*f revolution. Disruptive technologies
rVif,1"
pirate Bay and similar sites, and sales of physical cDs have
been falling steadily for yea:
music files on
of Apples iTunes store-often single so";s
Revenue from legal paid downloads during the heyday
rather than full albums-was not sufficient to offset the resulting
losses'

Now, however, the music business is showing new signs

of life, Music lovers have embracec a
-'P
has given way to music "renting "
new generation of streaming services, and music ownership
now exceeds the 100 million mark The trerd
number of worldwide paid streaming music subscriptions
playlists featuring a new generation of artists s::n
has been boosted by the popularit/of streaming
,,Bodak yellow,i was the first song by a solo female rap artist to reach Numbe-'
as Cardi B, whose
(see Exhibit 6-1)
on the Billboard Hot 100 chart in more than two decades
43 million subscribers;.A?*
Spotify is the g|obaI streaming leader, with more than Y::i::],:
was on track to take:
,or.'ii..'ro ,irriJn"rror.ribers, ranks second By early 2018, though, AppleMusic' Gooqle Play M-;
include Amazon
lead in U.S. paid subscriptions. Other streaming services
of the revenues they generate to re'
Deezer, and Tidal. Most services pay about three-fourths
companies, music publishers, and songwriters
 Exhibit 6-1 Ad Age rnagazine
included CarCi B in its 2017 Creatrvity
50 lisl of "the year! most rnfluential
creative figures." At the 60th Annual
Grammy Awards telecast in New York
City, she sat with Takeoff, Quavo, and
Offset of hip-hop trio Miqos.
Source: .IANEK 5KARZYNSK /AFP/Gettv
mages.

Even so, many recording artists are struqgling to adapt to the on Ihe Tonight Show with limmy Fallon or The Grammys and cor-
-:w music economy. ,A common complaint is that they don't see responding concert appearances in New York City or Los Angeles
3nificant financial returns even after a song rs streamed millions with social media posts. Big data allows executives to see which
'
:'times, lndeed, superstar Taylor Swift made headlines rn 2014 factors "move the needle" across a variety of metrics, To learn
,^en she removed her music from Spotify to protest against low more about the way the music industry uses big data to stay ahead
.': st royalties. When.Swift released her sixth album, Reputation, of trends in this fast-moving industry, turn to the continuation of
- ;all 2017, oniy four songs were available to stream, However, Case 6-1 at the end of the chapter.
',"s ("Swifties") snapped up 2 million physical albums and digital The music indusirys use of big data shows how information
::..,,nloads in the f irst week alone I about buyer behavior and the overall business environment is vital
Of course, the majority oi recording artists do not come close to effective managerial decision making. When researching a mar-
': achieving the same level of global success as Swi{t, Adele, Cardi ket, seeking a solution to any problem, or trying to answer key
: :d Sheeran, or lay-Z. To supplementtheir incomes, many artists questions, marketers must know where to go to obta n informa-
tion, They must also know which subject areas to investigate and
",e opted to tour constantly, hoping to
generate income from
':<et ancl merchandise sales, As global social media usage has which information to look for, which ways they can acquire infor-
.-:..,,n, musicians have sought to interact with and engage fans mation, and how the various iypes of analyses will yield important
, :acebook, lnstagram, Twitter, and other online platforms. For insights and understanding.
. :np1e, Chance the Rapper uploads his music to SoundCloud, It is the marketerS good fortune that a veritable cornucopia
-:r'e it is available at no charge, and he posts thousands of tweets of market information is available on the lnternet. A few key-
- - s millions of Twitter followers. strokes can yield literally hundreds of articles, research findings,
Now, artists and the major record labels-including Universal and Web sites that offer a wealth of information about market-
..> c Group, Warner Music Group, and Sony Music Entertain- ing-related issues. Even so, marketers must do their honrework
:^i-are leveraging data from music sales, media buzz, and if they are to make the most of modern information technol-
^e airplay to gain insights that will heLp them make better ogy. First, they need to understand the importance of informa-
,'<eting decisions-and make more money. In short, the music tion technology and marketing information systems as strategic
:-siry has embraced information science and big data, assets. Second, they should have a general understanding of
3 g data allows record executives and band managers to find the formal market research process. Finaily, they should know
, .::rns and discern market trends and fan preferences, often how to manage the marketing information collection system and
"=a time. For example, data analytics permits record company the marketing research effort. These topics are the focus of this
.:-,t ves to overlay information about, say, an artistS appearance chapter.
 CHAPTER 6 . cLOBAL INFORMATTON SYSTEMS AND MARKET RESEARCH 203

6-6. Coach has been described as. "a textbook lesson on how to revitalize a brand." The
same could be said for Burterry, the British fashion goods company discussed in
Chapter 1. Locate some articles about Burberry and read about the research its
management has conducted and the formula it used to polish the brand, Are the
approaches evident at Burberry and Coach similar? Are they competitors?
6-7. Below is a table similar to Table 6-3 that contains eight sports sedan nameplates.
You can perform a rudimentary analysis along the fines of multidimensional scaling
by ranking them by similarity. Do some research on the different models and see
which pair you find to be the most similar. Which pair is the most different? Using
these eight brands, create a rough perceptual map, What dimensions would you use
to label the axes?

MDs sruDY INPUTS: slMILARlw JUDGMENT scALEs FoR PAIRS oF sPoRT sEDANs

Very Similar Very Different

BN{W328i/Volvo 560
BMW328i/Acura TL
BMW328i/Cadi1lac AIS
BMW328i/Audi,{4
BMW328i/Llercedes-
BenzC2SO
BMW328i/LexusIS
BMw328i/Infiniti G37
Volvo S60/Acura TL
Volvo S60/CadillacAIS
Volvo S60/Audi ,{4
Volvo S60[Vlercedes-
BenzC250
Volvo S60l[-exus IS
u"1':"1-6'-P1]":i o.1
"... -_

CASE 6-1 (Continued from pase 175)

Big Data Transforms the Music Business and Artist Careers

I Jntil recently, onlya few low-tech metrics were available to help Hot 100 incorporates data from two types of streaming services: pro-
LJ record companies track the popularity of artists and songs. ln grammed online radio stations (e.9., Pandora) and on-demand services
the early part of the twentieth century, for example, sheet music sales (e.9., Amazon Music, Apple Music, Spotify, and YouTube).
were one indication of a song's popularity. By the 1 950s, Billboard . Today, a typical album may generate thousands of separate lines of
magazine's charts were tracking and reporting record sales. Of course, sales data. Media analytics-including music as well as television and mov-
the charts reporied only what people were buying, not how many ies-is now a multi-billion-dollar global business. As Gregory Mead, CEO
times they listened to a particular song or artist. Latel Billboard added of a firm whose businesses include analytics, notes, "For a big artist like
information reported by radio stations and jukebox owners to its charts. Katy Perry, there's about 1 9,000 different signals we have just for that art-
ln the new millennlum, sales data tracked by Nielsen's SoundScan ist. Each video, in each territory, on each platform, each release, and each
unit are still published each week tn Sillboard's charts, including the song, and so on. No one's going to be able to look at that lby hand]."51
closely watched Hot 100. Some data are gathered from point-of-sale Evidence of the increased importance of quantitative data comes
barcode scans of individual albums. Reports of radio play are another from the recent spate of startups and acquisitions in the musie,industry.
widely used measure, but it can take days or weeks for that informa- For example, Beats Music bought Topspin, a platform that connects
tion to become available. Launched in 2010, Billboard's Social 50 offers artists with their fans; Apple, in turn, acquired Beats Music. Spotify,
rankings based on artists' social media mentions. Currently, Billboard's the music streaming service that started in Sweden, acquired The Echo
204 FART 3 r APpROA(HING GLOBAL MARKETS

dntd plo\'rder whose servtce is designerl to

:o=r:alie-:d back-e[rd
Next Big Serunti conrpilel music eonsumptron data fot' nrore tlr;'
Ne:t, a
600,0Qr1 reerrrelinq drtist$ (see Fxhibit 6-6) lt trackr, all malnr loc:
enhanee listener-r' exrlerrBnc0$ by helpirrq them discover new rlrLrsic
meciia platfornrs, incluelinq Faee'
that they lif,e al i.ve-1i ar [oRnect wrln oldei" mu:ic.
book, lwitter, Ytlultrbc, 5ound'
Ck:ud,'futni.rlr, ard lnltaqram.
Next Big Sounel i: r::i i..:... il
Type in nn artist's n*rRe, and .,_,,_::: I

i5 I'lext
0ne company in thr: vonquarri c;f the data anaiyties movement Next Big 5ornd ean qive Yeiu aley Rae, Chief ExeEutive Offree'
e
Big Sount1,;\g ttntr:d itn its Web srte, rt ofiers "lntuitlon, bar:ked by
(rrllpo5l
" lVoncybalL oal,l ;bo,.t aud:e''ar: ( Future 0f Mulic CPalitie n
inielligence " Fori,'es n'raiJaeine has called Nexl Biq 5ound t on (e"rl., proportion 'ri rnlllel to
fcrr"Music";the reierrencr: is to a l-lollywood movie about Billy Beane' females), audienee rcat:h and enqagenrent, and an as:eSsrnerlt Qf
;''
the statisiirt=c;ir:e:lcd qleneral ma-naql€r of thc Oakland A's ha:eball artist't "social stagc," F.or example, a ?Q18 query for F"1ils Liolden Mt'r'
hi:
team, C[r],Alex Wirite founcled Next Biq Sournd in 2009 durinq senqer, an emerging at'|st, returns the followinq metr li:
has parl-
serniot year i,rt Nt-rrthrvestern l-.Jniversity. Toriay, Next Biq 5ound
nershiprs wiih iipotrly, iionv l\'1ulie, anel Unlversal Musie Ciroup' where " Merderate " aLrdience re*ch
white on{e lnt*r nrrj, Nert Brg 5ouneJ ts the basis for Billboard s Soelal " lVoderate" eudiens:e engaqefirent
50 chart nierntioRed s'tdrlier,

Exhibit 6-6 qq11 fticl 5rrLrnrl :,p""i ali:res

i' data analytit.s lrtr t'iii.'tlLrrir. irdLlctry
Soulre: Ne)<t L1 q 'rir! rrd

{2o/a FomilG lilan,ngotl!"lf ilf,xT Elo !otlttS il rrr, l'rrrrll: rtitlr thL: 'lat'r-tI irrt:
gaq& Mrlq rrrL,rrtrrr:url,lri,rtrr llrrrl rlfq(l irJ '!1lolIl' irrJ 'irrrf iil\
rrilrir l,), Lri.'l rrr;rlictirrq l1r'rri1

i]!r li !li6Sailrr i, an il ) !n 4 air1

 CHAPTER 6 . GLOBAL INFORMATION SYSTEMS AND MARKET RESEARCH 205

FIGURE 6-6 Next Big Sound's Data

Pyramid

"Slowing" metric trend five stages in Next Big Soundb classification include "undiscovered,"
"Promising" artist social stage "promising," "established," "matnstream," and "epic."
Still, there is more work to be done with the data. The information
By contrasi, established superstars such as Beyonc6 and Taylor
layer doesn't necessarily answer questions such as "What do these
Swift show "enormous" audience reach (key metric: lnstagram follow-
numbers mean?" and "Are these numbers good?" The fourth and
ers) and "epic" social stage. (Fun fact: Only 0.2 percent of all recording
final layer, inteiligence,looks at information such as Twitter followers
artists-about 1,200 in all-make it to the "epic" stage") Moreover,
and Twitter mentions for various artists; data models can project the
Next Big Sound can tell an artist's record label how many million views
expected number of weekly Twitter mentions for any given follow-
his or her latest YouTube video has accumulated. The company can also
ing size. ln other words. as defined by Next Big Sound, intelligence is
tell whether listeners, say, streamed music during the workweek but
knowledge applied.
downloaded singles on the weekend. Such measures of fan reach and
For example, if an artist has experienced a significant increase or
engagement have not been available until recently.
decline in Twitter mentions in any given week, data analysis can help
Next Big Sound's data framework is similar to that shown in Figure
explain why this happened (e.g., i{ the artist dropped a new single
6-'1 , but it takes the form of a data pyramid (see Figure 6-6). The lowest
in the prior week), and whether it is "good" or "bad." For Next Big
layer is simply historical data; it includes raw numbers such as Pandora
Sound, the bottom line is this: A number without context can be
radio spins, YouTube subscribers, and Facebook likes. Such data are a
deceiving and lead to bad data-driven decisions.
good start, but say little about the recording artist's status within the
Joel Zimmerman is a booking agent with the William Morris
music industry at any given moment.
Endeavor (W.M.E.) agency. During a recent negotiation on behalf of
The next layer of the pyramid, information, enables an artist to
Martin Garrix, a Dutch EDN/ DJ, Zimmerman illustrated how data met-
visualize numbers in the form of tables or other elements that can be
rics such as those described previously could help him make the case
sublected to analysis such as filtering and sorting. While a step in the
when booking a slot for his client at the Coachella music festival, As
right direction, this layer has its own limitations: lt is essentially a "silo"
he explained:
that says nothing about the artist in the context of the overall music
industry. And, as with the data layer, it lacks benchmarks to help an All the artists are on lnsta. lt's fhe platform. Before that, it was
artist understand where he or she stands in career terms. Twitter, and before that it was Facebook. Martin has ten mil-
The third layer, knowledge, is built on top of the previous two. lion . . . and Martin has 78 percent engagement. To me, that's
At this level, the artist is finally tapping into context. Or, as a Next Big a great measuring stick.52
Sound product manager might say, "Knowledge has a point of view."
The knowledge layer tells the artist what the numbers actually mean, Pandora
by looking holistically across all 600,000 artists being tracked by the
Pandora, the digital radio service, acquired Next Big Sound in May
company. Needless to say, that involves a lot of data!
2015. Pandora provides another example of how the music industry
One interesting takeaway: Very few artists have extensive reach
is using quantitative data collected about users. Founder/entrepreneur
and engagement on Facebook. ln fact, Next Big Sound has determined
Tim Westergren's pioneering Music Genome Project uses an algorithm
thatjust 5 percent of recording artists are responsible for 95 percent of
to analyze every song by parsing it into approximately 450 different
all artist-related activity on Facebookl That fact iilustrates the concept
distinct pieces of data. For example, a track might be described as hav-
of Pareto's law, also known as "the 80/20 rule." The data also allow
ing "electronica roots," "light rock influences," "arpeggiated synths,"
Next Big Sound to arrive at a way to classify artists in terms of their
and so on,
stage of development, taking into account the fact that artists differ
Pandora's software experts also design algorithms that help the
in terms of their audiences on different social media platforms. The
company offer customized music streams that match an individual
205 PART 3' APPROACHING GLOBAL MARKETS

again'
business model appeared to be out o{ sync with the times Once
user's tastes and preferences, The mcre finely tuned Pandora's music of 2017' Apple
Apple proved to be the companyb savior: At the end
recommendation englne is, the longer users wi I listen Although
Pan-
milllon
the option to pay a monthly subscription fee in announced it was acquiring Shazam for approximately $400
dora offers listeners
The tech giant plans to rntegrate Shazam with Apple Music and
lever-
to ads, most of the company's revenues are generated
lieu of listening
aqe the rpp ut, source of data about users'llstening hablts'
from advertising.
Pandora has proprietary data sets for its 200 million registered
users; rt also has informatron about which type of
device a listener New Trends
is using to log on. ln an effort to leverage all those data' Pandora is Themusicindustrycontinuestoevolveasnewdata.drivenapproaches
.,1,:Ii;,? bustness is that
Juu.ropinq wlys to send risteners appear, one criticlsm of the current state of the music
llii#,lil!"Iffi5J record labels often respond uncritically to public listening data And'
':i ' examines data at the individual as rock legend Todd Rundgren recentiy observed, many contempo-
;i 1i.i i-ii iiI iil i: tistener level, seeking correla- rary artistiaspire to be "brands"; they don't think of themselves
as

Number of Shazam users tions that will lead to better musicians.

consumeT lnsights Because To address these types of issues, a data startup called
indiefy col-
worldwide artists
Pandora users Provide their ZIP lects and analyzes data and maps them to provide inslghts about

,i i;il where
Number of countries
::i?:.:itTJfl,:ilJ,';i,[:
consumers geographically.
who are trend ng. The goal is to 9o "beyond the data" by assessing
whether social media stars whose viral videos have attracted massive
numbers of online followers are actually good candidates for long-terrn
Shazam is available career development by recoid labels.
Shazam
The Pudding is a Web site that, in its own words, "explains
ideas
Shazam, the song recognltlon
debated in culture with visual essays." For example, blogger Coli'
'i;
3.i.il illiii:i:l; app, uses a similar aPProach.
Morris, author of "Are Pop Lyrics Getting More Repetitive?"'
usec
Number of active Shazam Cofounder Chris Barton came uP to examine 20 years'worth of sonq
an algortthm called Lempel-Ziv
users every month with the idea for Shazam while
lvrics. The question at hand: Many songs sound like they have repei
-

studying for an MBA at the Uni- (The answer: Yesl) Ma::

tlve lyrics, but are there clata to prove it?
versity of California-BerkeleY's " a-
Daniels's blog, "The Largest Vocabulary in Hip-Hop, includes
HaasSchoolofBusiness.Amusicfanwhodidn,thavethetinreto infographic that ranks rappers by the number of unique words tl^::
keep up with the lateSt bands, Barton's challenge was to create
a ser-
such as
tf,e5iused in the first 35,000 words of songs recorded as of 201'
vice that would recognize songs even in noisy environments The baseline for comparison: Shakespeare's use of 28,829 wor3:
a bar. Barton teamed up with Avery Wang, an audio expert with a (7'39-
Wang realized in his collected works, Who ranks number'1 ? Aesop Rock
PhD in electrical engineering from Stanford University include Ghostface Killa' V" -'
unique words used). Other contenders
that each song has a "numeric signature"-like a fingerprlnt-and
he
and lanq Llan, ano l(zA.
created an aigorithm that recognized certain sound frequencies
matched them to song tracks in ShazamS database'
pre-smartphone Discussion Questions
Shazam, which is based in London, began life in the
the early as a text servlce. As its novelty wore of{' the com- 6-8. Do you think that the technology available today ref lects
era of 2OOOs
how people have always related to rnusic? Or has the tec--
pany s fortunei dwindled and its f uture was in doubt Then, an unexpected
in a nology itself changed how people relate to music?
savitr arrived tn the form of the lPhone. After Shazam was featured
App the appl popularity surged' 6-9. Some in the music industry think that this industry shoulc ::
television ad for Apple s Store,
driven by the eyes, ears, and 9ut instinct of industry taste-
Today,ssmar.tphonesoffermuchmoresophisticatedlevelsoffunc-
who makers rather than by math and algorithms Do you agre:-
tionality. Worldwide, Shazam has more than O0 million users
'1

"Shaza,m" 17 million songs every day, or some 500 million songs each 6-10. How can big data help artists, artlst managers, concert;':-
rnoters, and record labels make better decisions?
month. Although Shazam,s service is free, it generates tens of
milIions
revenue from fees generated when users buy a The r i= -'
of dollars in annual sources: Annabeile Zee and Julien Benatar, "Hov,/ Artists Are Redefining
song from tTunes, Amazon, or Google Play' with Daia," Panel Presentation, SXSW Music, March 16' 2018; "Mo'Da:= l

Ur.r, .rn "5hazam" a song they hear on the radio, a TV show' or Problems:MusicintheAgeofData,"PanelPresentatlon,SXSWlnteractive"''"
Pidge:-':"
14, 2018); Caitlin Lopilato, "Your Data ls Shaping the Future of Music"'
rr

commerclalbyopeningtheappandho|dingtheirmobiledevicesnear Nic Fildes -:: '

Planes.com (November 22,2017); Tim Bradshaw, Allya Ram, and
a speaker. fhe app then delivers content information such as the name Nails down Muslcal Match with Deal for Shazam," Financral Tmes
(Dece-::
also share
of the song, the name of the artist, and the lyrics Users can
the content on social media platforms such as Facebook and Pinterest lournal (Novembe t 16, 2017)' p 41 1; Brian l'4oon, "How Data ls Transfor-
- : -t
Shazam's fan behavior data show' in IVusic lndustry," The Conversatton (May 21, 2017); Anna Nicolauo'
"Str€"- :'
and e-mail sonqs to their frlends. "MusiclndustrySigns-:::::r
particular song is spiking in popuiarity. Findncialllnres(January 17,2Afl), p 9; NicFildes,
real trme, wheie and when a (December 3-1 ::' :
l
with record label to Help Tailor Servrces ior Fickle Lrsteners," Financial Tirnes
shazam can then share its proprietary fan activity data 12; BenSisario,"AnArtistClimbsTheMetrlcsSaySo,"IhetVewYarkTime:::: -*
it*

executives, who can use the information to make declsions

about holv
Zai, Za:|), pp. C1, C2; Hannah Karp, "Music Plays Big Data's
Tune"' Ihe '
of Data "": :
Nc ::
to allocate Promotional dollars. Journal (December 15,2o14), p. 84; Elizabeth Dwoskin, "Tons
Advertisers also use Shazam to make television ads interactive toUse,"fheWallstreetJournalRepart:C-Suite(October20'2014)'p?:tr'-t -'np
into the F- -':
sweep- Shubber, "lvlusic Analytlcs ls Helping the Music lndustry See
During Super Bowl broadcasts, for example, viewers can enter '12;
Guardian (April 9, 2014), p. Data Help lvlusic lndus:-'
Eric Cheml, "Can Big
: ' : 'rii*
stakes" and access exclusive online content Needless
to say' these
PerfectBackbeatT",BloombergBusinessweek(March7,2A14)'p'35'E-i?':]IL
(February 1-2 . - - :!r
viev;er interactlons provide data about consumer behavior that
are "The App That Calls the Tun e," Financial Times-Life & Arts :::
very valuable to advertisers. 1,2; SteveKnopper, "CanShazamPredicttheNextBigNil?"'Rolling stc'' ''Nl{nh

Zn,ZolAl,p.7; Natasha Singer, "Listen to Pandora, and lt [is1665 !6q["'

r': : '1{r
ln recent year5, as consumer preferences moved from down- Imes (.JanuarY 5, 2014), P. Bu3.
loads to streaming on services such as Pandora and Spoti{y' Shazam's