Multimedia Marketing/Marketing.iso/market/chapter4.6p

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SECTION 4.6 Determining needed information

INSTRUCTIONS Think about how marketing researchers can decide what kind of
information they require. Then pursue this section to expand your insights into this area.

EXAMPLE

It is necessary to consider what kind of information to collect.
To illustrate, a dog food producer did an extensive market study,
testing demand, the package size, the design, and the advertising
program. Then the firm launched the product with a major campaign,
acquired the proper intermediaries, and received very large initial
sales. Several months later sales plunged. An expert was called in,
who took the product to a dog pound, where he found that the dogs
would not touch it. The firm had done a major marketing study but
had not acquired information as to whether the dogs liked the
product.

DETAILS

An important step in marketing research is to determine the types
of information needed to test the hypotheses and/or achieve the
research objectives. The researchers may decide that data from a
secondary source, new data, or some combination of both is needed.

Marketing research projects produce primary data--the information
analysts collect for the specific purposes of a particular study.
But researchers also use data originating in secondary sources,
such as census  or trade association publications. Some impatient
researchers and managers believe that they must rush out and gather
new data through some kind of survey whenever management needs new
information. But it is foolish to try to reinvent the wheel.
Researchers should always begin by checking to see if the appropriate
data can be found in the company MIS or in other secondary sources.

Frequently the data available in secondary sources do not provide all
the information needed for a particular research project. Researchers
must then resort to collecting original data, called primary data.

Secondary sources may be dated. The last U.S. Census, for example,
was taken in 1990. Even though some of the data has been updated
through forecasts, it is not possible to obtain current figures for
many variables. Also, secondary data may be classified in ways that
do not suit the researcher. The Bureau of the Census, for example,
does not use the same income categories that many marketing researchers
do. This can make comparisons of different data sets different.

Some secondary sources are biased, as in the case of trade association
publications which attempt to place the industry in a favorable
light. Even United Nations statistics are subject to error because
this organization depends upon individual countries to provide
population and income figures and some countries falsify the data
to make their countries appear to be more prosperous than they
really are.

Practically all primary data collection efforts in  marketing research
gather information from representative samples of existing or
potential customers which researchers use to make inferences about
all customers.

PROBLEM 1

A marketing researcher employed by a company that markets sunglasses
collects primary data when he:

A. Uses a computer to access census figures on population growth.
B. Accesses the internet to acquire information about a competitor.
C. Reads a research report published by a local university.
D. Conducts a survey where consumers are asked about what they like
   and dislike about various sunglass tints.

WORKED
A marketing researcher that markets sunglasses collects primary
data when he conducts a consumer survey and asks consumers
what they like and dislike about various sunglass tints. Primary
research takes place when data are acquired to solve a particular
marketing problem. In this case, the researcher does not use data
that were collected by others, but directly engages in data
collection. This helps insure that the data will be exactly what
is needed. In the case of secondary data, the units of measurement
or classifications used in reporting the data may be wrong for
the current study's purposes.

ANSWER  D

INSTRUCTIONS Think about how marketing researchers can decide what kind of
information they require. Then pursue this section to expand your insights into this area.

EXAMPLE

It is necessary to consider what kind of information to collect.
To illustrate, a dog food producer did an extensive market study,
testing demand, the package size, the design, and the advertising
program. Then the firm launched the product with a major campaign,
acquired the proper intermediaries, and received very large initial
sales. Several months later sales plunged. An expert was called in,
who took the product to a dog pound, where he found that the dogs
would not touch it. The firm had done a major marketing study but
had not acquired information as to whether the dogs liked the
product.

DETAILS

In the case of primary data collection, samples are taken from
populations. A population refers to all persons or objects about
which a research team would like information; they may be customers,
trucks, warehouses, retail stores, or any other group. For example, if
a marketing researcher for a political candidate wishes to predict
voting behavior during an upcoming election, the population probably
includes only registered voters in the election district.

Defining the relevant population in marketing research is not always
simple. Is the relevant population for a presweetened cereal adults
or children or both? Another problem is that some individuals
naively assume that people listed in directories such as telephone
books and city directories make up an entire population. Such
directories often exclude many potential prospects.

Two major categories of sampling designs are available: probability
and nonprobability samples. In the case of the former, each population
member has a known nonzero chance of being sampled. Random selection
determines whether or not a particular population member is included--
researcher biases do not influence whether or not a certain subject
is chosen. Probability samples are the only type that permit drawing
statistical inferences.

Nonprobability samples allow personal judgments of researchers to
determine which members of the population will be included. As
a result, biases may enter into the selection and render the results
nonrepresentative of the population. If there is little variation
in subject responses, however, nonprobability samples can yield
results that are representataive of the population. Normally
nonprobability samples are taken in order to economize on time and
cost. An example is a convenience sample, where subjects are selected
on the basis of convience to the researcher, as when members of a
college class are chosen.

A number of equations are available for determining the proper
sample size. The main point is that researchers can extract much
information with a high degree of precision from relatively small
samples.

PROBLEM 2

A brewer wants to conduct a probability sample of the population
of a city. Which of the following would qualify?

A. Interview every consumer who enters a shopping center.
B. Interview an arbitrarily chosen home in every city block.
C. Telephone interview every tenth name in the telephone book.
D. Send a mail questionnaire to every tenth name in the city
   directory.

WORKED

If a brewer wants to conduct a probability sample of the population
of a city it can interview an arbitrarily chosen home in every city
block, using detailed maps of the city. Interviewing every consumer
who enters a shopping center would not work, since many consumers will
not enter the shopping center on the days the study is done. Telephone
interviews will miss unlisted numbers, not at homes, and those without
telephones. City directories do not include all residents of the city.

ANSWER  B
INSTRUCTIONS Think about how marketing researchers can decide what kind of
information they require. Then pursue this section to expand your insights into this area.

EXAMPLE

It is necessary to consider what kind of information to collect.
To illustrate, a dog food producer did an extensive market study,
testing demand, the package size, the design, and the advertising
program. Then the firm launched the product with a major campaign,
acquired the proper intermediaries, and received very large initial
sales. Several months later sales plunged. An expert was called in,
who took the product to a dog pound, where he found that the dogs
would not touch it. The firm had done a major marketing study but
had not acquired information as to whether the dogs liked the
product.

DETAILS

There are three means used to collect primary data: observation,
surveys, and experiments. Sometimes researchers can best collect
needed data simply by observing and recording the actual behavior
of consumers. Traffic counters count the number of vehicles traveling
on a street or road. An analysis of licence plate numbers outside a
retail store or mall can reveal the identity of the shoppers.
Observers can record consumer reaction to in-store displays, moniter
traffic direction in stores, and determine consumer difficulties in
following product directions.

Observation is advantageous in that it can be inexpensive, it is
objective, and subject cooperation need not be sought. However it
can be time consuming. Further it is difficult to infer motivations,
perceptions, and other psychological variables. Just because a
consumer examines a product in a store does not mean that she is
interested in buying it. She may be curious and wonder "Who would
ever buy such a thing."

Surveys are one of the more widely used methods for obtaining opinions
and attitudes. Surveys provide information to define market targets,
develop strategy, plan promotional mixes around media exposure
habits, and develop distribution channels to satisfy target customer
needs.

The major types of surveys are personal interviews, telephone interviews,
and mail interviews. Direct mail is the most common type, since it
permits economical surveying of widely dispersed subjects from one
central point. Personal and telephone interviews, in contrast, permit
far greater persuasion in gaining subjects' cooperation, flexibility
in answering their questions, and in learning unanticipated information.

A problem with all kinds of surveys is nonresponse. Many consumers
do not fill out and return mail questionnaires. This can be partially
overcome by using personal addresses, stamps rather than metered mail,
and a small monetary reward (such as a dollar bill) given to the
respondent. Personal and telephone interviews may also run into
resistence. If the respondent is informed that his or her replies
will be held in strict confidence and that the study is a worthy one,
response is likely to be better.

PROBLEM 3

A furniture store manager wants to survey consumers in the community
surrounding the store to determine the store image. He plans to use
personal, rather than mail interviews: Advantages of using personal
interviews include:

A. Personal interviews are less expensive than mail surveys.
B. Personal interviews can reach a larger group than mail surveys.
C. Personal interviews can yield unanticipated information.
D. Personal interviews require less research employee training than
   do mail interviews.

WORKED

A furniture store manager wants to survey consumers in the community
surrounding the store to determine the store image. He plans to use
personal, rather than mail interviews. An advantages of using personal
interviews is that they can yield unanticipated information. Often
interview respondents will make comments or inferences that can be
of interest to the company. Some may state that they are having
certain problems with the product under study, for instance. Others
may relate that the product is not widely-enough stocked--they cannot
find it in retail stores. Mail surveys cannot uncover this kind of
information.

ANSWER  C
INSTRUCTIONS Think about how marketing researchers can decide what kind of
information they require. Then pursue this section to expand your insights into this area.

EXAMPLE

It is necessary to consider what kind of information to collect.
To illustrate, a dog food producer did an extensive market study,
testing demand, the package size, the design, and the advertising
program. Then the firm launched the product with a major campaign,
acquired the proper intermediaries, and received very large initial
sales. Several months later sales plunged. An expert was called in,
who took the product to a dog pound, where he found that the dogs
would not touch it. The firm had done a major marketing study but
had not acquired information as to whether the dogs liked the
product.

DETAILS

Focus groups are a special kind of survey. An interviewer questions
members of a group that are assembled together (normally 10-15
subjects). Respondents are allowed to spontaneously discuss the
topic under consideration (such as merits of a product) and to
reveal their feelings. This allows for group interactions. The
interviewer serves mainly as a means for getting the group to talk
and to stay on track on the subject.

Experiments test a group of representative subjects on a dependent
variable (such as favorable attitudes toward a brand). Then the
same subjects are exposed to a treatment (such as reading an
advertisement featuring that brand). After the treatment, the subjects
are tested again. The assumption is that any difference between the
pretreatment and postreatment scores is due to the treatment,
provided that the researchers have conrolled extraneous variables.
Often experimenters compare the performance of subjects in test
groups to that of control groups who have not experienced the
treatment.

Experiments are more useful than observation and surveys in tracing
cause and effect. However, they can be expensive and time consuming.
Test markets, where products are sold and the results measured are
examples. These can take years to complete and are very costly,
both in terms of direct costs and in delaying the product from
being introduced to the total market.

PROBLEM 4

A marketing researcher for a firm that produces ice cream bars wants
to know if a price decrease would bring about increases in sales.
The best technique for investigating this problem is:

A. Conduct an experiment where prices are lowered in some stores
   but not in others.
B. Conduct a survey of current heavy brand users and obtain their
   opinions on how a price decrease would affect their purchases.
C. Observe ice cream bar shoppers in retail stores to determine
   if they are heavily interested in prices.
D. Send a mail questionnaire to a large sample of consumers and
   ask them what factors are most important when they chose a
   particular ice cream bar for purchase.

WORKED

An ice cream bar company desiring to determine consumer reaction to
a price decrease should conduct an experiment where prices are
lowered in some stores but not in others. This will be useful in
measuring the degree to which the price reduction (treatment) brings
about sales changes (dependent variable). By not reducing prices in
some stores, the researchers will have a control group with which to
compare the results of the experimental group (consumers shopping in
stores where price is decreased). If the researcher measures sales
changes in the two groups of stores and compares these measures,
the impact of the price decrease can be gauged.

ANSWER  A