Market information and research

Market Information and Research This page intentionally left blank Market Information and Research Matthew Housden AMSTERDAM • BOSTON • HEIDELBERG • LONDON •NEW YORK • OXFORD PARIS • SAN DIEGO •SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Butterworth-Heinemann is an imprint of Elsevier Butterworth-Heinemann is an imprint of Elsevier The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2008 Copyright Ó 2010, 2008 Published by Elsevier Limited All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (+44) (0) 1865 843830; fax: (+44) (0) 1865 853333; email: permissions@elsevier.com Alternatively visit the Science and Technology Books website at www.elsevierdirect.com/rights for further details Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress ISBN: 978-0-08-096661-8 For information on all Butterworth-Heinemann visit our website at elsevierdirect.com Printed and bound in Great Britain 10 11 12 10 Contents CHAPTER The role of information in marketing Introduction Marketing and information The role of customer information Marketing planning and the role of information The database and marketing research The internet, intranets and extranets Summary Bibliography Websites 11 18 23 23 24 25 CHAPTER The database and CRM 27 The marketing database What data are held on a database? Where does data come from? What we with data? Geo-Demographic and lifestyle profiling The process of setting up a marketing database Hardware and software The marketing decision support system Data mining Marketing research and the database Codes of practice and guidelines The DMA code of practice Summary Bibliography Websites 29 30 31 32 35 39 44 47 51 53 58 59 59 61 62 v vi Contents CHAPTER The scope and nature of the research industry 63 Introduction The marketing research industry The marketing research brief Managing the agency relationship Ethics, regulation and codes of practice in market research Summary Bibliography Websites 66 66 81 88 90 92 94 94 CHAPTER Secondary data 95 Introduction What is secondary or desk research? The strengths and weaknesses of secondary data Evaluating secondary data Sources of secondary data Information on online markets Searching online Summary Bibliography Websites 96 96 97 98 100 107 108 110 113 113 CHAPTER Observation research 115 Introduction Definitions of observation research Observation strengths Other observation techniques Ethics in observation research How is observation research used? Summary Bibliography Websites 116 117 117 127 130 131 133 134 134 CHAPTER Qualitative research 135 Introduction Qualitative research defined Research applications Data collection techniques in qualitative research Online qualitative research Analysis of qualitative data Summary Bibliography Websites 137 137 138 139 151 152 154 157 157 Contents CHAPTER Quantitative data 159 Introduction What are quantitative data? Survey methods Face-to-face interviews In-home or doorstep interviews Telephone interviewing Web-based interviews Self-administered surveys Omnibus surveys Other methods Summary Bibliography Websites 161 161 161 162 164 168 171 171 175 176 178 183 183 CHAPTER Sampling 185 Introduction What is a sample? The sampling process Choosing a sampling method Determining the sample size Implementing a sampling procedure Summary Bibliography Websites 186 187 188 190 195 202 204 205 205 CHAPTER Questionnaire design 207 Introduction The questionnaire design process What type of questions can be asked? Select wording and phrasing Sequencing Pilot Questionnaire checklist Summary Bibliography Websites 208 209 212 218 222 226 226 227 229 229 CHAPTER 10 Quantitative analysis and the presentation of results 231 Introduction Editing and coding Tabulation and basic statistical analysis Tabulations, hole counts and frequency 232 233 235 237 vii viii Contents Descriptive statistics Statistical significance Hypotheses about means Measuring relationships Software packages Presentation of the results The written report The oral presentation Use of graphics Summary Bibliography Website 238 239 241 242 245 245 247 251 256 260 262 262 A P PE N D IX : FE E D B A C K A N D A N SW E R S 26 IN D E X 27 CHAPTER The Role of Information in Marketing Learning objectives By the end of this unit you will be able to & Discuss the need for information in marketing management and its role in the overall marketing process & Identify the role of information on customers & Identify the need for and scope of information on competitors and stakeholders & Understand the nature of the marketing environment and PEST research & Understand the nature of marketing information and its role in describing, comparing and diagnosing marketing problems & Evaluate the impact of information technology on the marketing function and discuss the challenges facing organisations in collecting valid, reliable and measurable information to support the decision-making process & Identify the growth in information sources & Identify the role of the Internet, intranets and extranets & Understand the role of online communities, discussion boards and blogs & Describe the nature of customer databases and other decision support systems & Evaluate the variability and reliability of information sources 266 Appendix Socio-cultural considerations, changing culture and demographics & Population demographics & Gender, age, ethnicity, race, religion, working age population & Income distribution & Social mobility and stratification & Lifestyle changes & Attitudes to life, work and leisure & Consumerism & Levels of education and training & Social change and changing social attitude Technological considerations, the role of innovations and technical change & Government spending on research & Government and industry focus on technological effort & New discoveries/developments & Speed of technology transfer & Rates of obsolescence & Levels of research and development & Subsidies for research and development Environmental considerations, the role of green issues & Waste disposal & Energy consumption & Impact of fossil fuels, carbon reduction & Raw material resource depletion & Air and soil contamination & Protection of the environment & Conservation Appendix & Re-cycling & Alternative forms of energy Legal considerations, legislative constraints and changes & Competition law & Employment law & Health and safety & Product safety & Environmental protection laws & Business ownership laws & Company law & Disclosure laws & Planning and property law Activity 1.5 You may have covered some or all of the following: & Employee knowledge and competencies, for example the sales force, call centre staff and so on & Experiential knowledge at individual and group level, for example work with other companies on other projects & Informal shared knowledge, the internal beliefs and values that sustain a business & Task-based knowledge, as a result of certain functional specialisms or activity & Knowledge from the database, for example accounts, operations, logistics and so on & Knowledge from internal structures, for example intranets, the relationship between departments and internal suppliers & Knowledge from external structures, for example extranets, supplier and intermediary relationships 267 268 Appendix & Knowledge of customers through all touch points, for example research, Internet analysis, customer databases, CRM systems, sales force, contact centres and so on Chapter Activity 2.1 You probably have a few points of similarity and they may include the following: & The database may be manual or computerised, but, almost always, today it will be computerised & It is a source of accurate up-to-date information or data about our past, present and current customers & It is relevant to the organisation’s goals & Data are collected systematically & Data are maintained and monitored & It is used to formulate strategy & It supports the formulation of marketing objectives of the enterprise Activity 2.2 So, what you have? Below are some of the data elements you might have written down We will start with consumer markets What data should be collected? Consumer identification data & Customer reference number & First name & Last name & Title – Mr, Mrs, Dr and so on & Suffixes, for example BA, MA, PhD, MCIM and so on & Date of birth Appendix & Address & Postcode & Telephone & E-mail & Sales area & Media sales area & Fax & Account number Demographic data & Gender & Age & Occupation & Employment status & Marital status & How many children? & What age are the children? & Financial & Job title & Income & What is their credit history and rating? & Are they a homeowner? & What is the value of their home? & Do they own a car? & Share ownership & Do they have a credit card? & What insurance products they have? 269 270 Appendix Lifestyle & Life stage – student, retired and so on & Number of holidays per year & Where they holiday? & What leisure interests they have? & Media reading & TV viewing Shopping behaviour & When did they last buy? – Recency & How often they buy? – Frequency & What is the value of their purchases? – Value & What profit does the customer generate for the business over time? – Lifetime value & Loyalty scheme member Other & Length of time at current address & Have they responded before? & To what campaign? & Customer service history & Complaints & Are they a VIP? & Data protection issues & Have they opted out of or into communications? & Are they a shareholder? Now let us look at business data Business data are often more complex to collect due to the nature of the business decision-making process There is generally more than one person in the decision-making unit and there may be multiple locations to consider Appendix Business identification data & Company name & Trading name & Trading status & Credit rating & Contact name or names in the decision-making unit & Job title & Areas of responsibility & Address & Website address & Postcode & Key contact & Contact name & Job & Telephone & Fax & E-mail & Account number & VAT number & Region & Territory & Salesperson Business details & Size of business & Turnover & Employees & Number of offices 271 272 Appendix & Head office & Budget & Financial year end Transaction data & Account number & Purchase history & Recency, frequency and value & Order size & Service history & Response & Method of acquisition Sector & Standard Industrial Classification (SIC) code & Type of business Activity 2.4 You may have covered some or all of the following and may have others Any contact between the organisation and its customers is capable of generating data & Sales & Warranty registrations & Enquiries/help line & Complaints & Sales Promotions Appendix & Prize draws & Competitions & Coupon redemptions & Marketing research & surveys, with due attention to data protection & Accounts & Third parties & marketing partners & Branches & channels & Servicing & Direct response to communications & PR events Chapter Activity 3.3 Quite a few things to consider – are not there Amongst others you may have the following: & Is there a market for whisky-based drinks? & What is the market worth? & Who is the target market? & What are their characteristics? & What is the reaction of the retail and catering trade? & How will the competition react? & What brand strategy should we pursue? & What shall we call the product? & How much will it cost to produce? & What price should we charge? How should we promote the product? and so on The list is long 273 274 Appendix Chapter Activity 6.1 Your discussion guide should follow a similar structure to the example on page 143 You may have not been quite as precise with the timings for the various activities Activity 6.2 Volvo is interesting; despite the millions spent in advertising Volvo as an exciting car to drive, non-Volvo drivers will invariably describe the Volvo as: & Male & Middle class & Married with children (2.5) & Two black Labradors and a pair of green willies & While Volvo owners may present a different view this tends to be the perception of non-Volvo drivers Chapter Activity 9.2 Are you single? (A sensitive question; ask the respondent to state what their marital status is.) What is your average weekly disposable income? (A sensitive question and hard for respondents to work out.) How regularly you come here? (Ambiguous Once a year or once a week.) Do you buy green vegetables? (Cabbage, fair trade or organics?) Do you by frozen and canned foods? (Spelling is poor, and two questions in one.) What about our chilled and ambient ready meals? (Two questions in one, and what are ambient ready meals? Will the respondent understand the question?) Appendix How much did you spend on food last year? (Can you remember this?) Most people say our new store layout is really good What you think? (A leading and loaded question.) Does your husband come with you? (Assumption about marital status.) When you leave the car? (Assumption and ‘when’ does the researcher mean? – Overnight? When we go on holiday?) Are you against drug abuse? (A leading question, this would not produce a varied response.) You don’t think council tax is too high, you? (Use of negative and a leading question.) If we moved to the high street would you come more often? (A hypothetical question.) How old are your children? 03 35 510 1015 15ỵ (Overlapping categories and what about parents of grown-up children or step parents?) 275 This page intentionally left blank Index A Agency managing relationship, 88–90 selecting, 86 B Balanced scales, 216 BARB (Broadcaster’s Audience Research Board), 125–126 Brand mapping, 149–150 Brand personality, 148–149 British Market Research Association (BMRA), 71 C CHAID (Chi-squared automatic interaction detection), 33–35, 60 Chi-square test, 235, 240 Closed questions, 212–213 Cluster analysis, 33–34, 244 Cluster sampling, 191–192, 204 Code of Advertising Practice, 59 Codes of practice, 58, 90–92 Coding data, 233–234 Comparative assessments in scaling, 215 Computer assisted personal interviewing, 167 Computer assisted telephone interviewing, 170 Confidence interval, 199–200 Conjoint analysis, 244–245 Convenience sampling, 193, 204 Correlation, 242–243 Cross-tabulations, 237–238 Customer information, 8–9 Customer profiling, 32–33 Customer relationship management, 52–53 D Data analysis, 22, 68–69, 80, 85, 154, 203, 233, 249, 250, 260 Data audit, 39–40, 60 Database, 18–22, 27–61 and customer relationship management, 52–53 and financial services, 47 and marketing research, 18–22 hardware and software, 44–47 Data capture, 32, 39, 45, 60, 73, 79, 91, 123, 129, 169, 177, 180, 249 Data coding, 80, 233–234 Data collection, 78–80, 97, 106, 111, 137, 139–151 in qualitative research, 151–152 Data editing, 80, 167, 233–234 Data entry, 43, 167, 179, 235 Data fusion, 110, 113 Data input, 73, 80 Data marts, 47–50 Data mining, 51 Data protection, 54–56 Data Protection Act 1998, 58 Data silos, 21–22 Data sources, 36, 41, 44, 48, 98, 103 Data strategy, 32, 39–42, 60 Data uses, 33, 37, 53–55, 79 Data verification, 39–40, 43, 60 Data warehouse, 47–51 De-duplication, 43–44, 60 Degrees of freedom, 240 Depth interviews, 71, 75, 137, 139, 144–146, 151–152, 154–155, 165, 250–251 Descriptive statistics, 238, 261 Design of questionnaire, 167, 172– 178, 180–182, 202–203, 207– 229 Direct Marketing Association, 41, 57, 59, 71–72 Discussion forums, 23, 110 Discussion guide, 142–144 for focus groups, 143–144 Dispersion, measures of, 238 E E-mail surveys, 174 Ethics in market research 90–94 Ethics in observation research, 130 Ethnography, 127–128 Euromonitor, 101–103 Executive interviewing, 165 Eye cameras, 128 F Face-to-face interviews, 78, 162–165, 167, 169–170, 179, 192, 213 Factor analysis, 244 Fax surveys, 173 Fieldwork agencies, 80 Financial data, sources of, 105–106 Focus groups, 75, 139–140, 144, 151, 155, 250 Forced scales, 215–216 Forum voting, 177–178 G Geo-demographic profiling, 103 Governments, as data sources, 102–103 Graphics in presenting results, 256–260 H Hall tests, 176 Hardware and software for databases, 60 Hypothesis testing, 239–240 I Information in planning, 11–18 role of, 1–24 277 278 Index International issues, 132 Interval data, 235–236 Interviewer, requirements, 165–168 K Knowledge management, 20–21 L Lifestyle profiling, 35–38 Likert scales, 217–218 M Marketing definition, and information, 1–24 Marketing database, 7, 18–19, 21, 29–30, 39–44, 53, 169 Marketing decision support, 47–50 Marketing environment, and PEST research, 10–11 Marketing planning, 11–18 Marketing research, 16 and the database, 18–22, 53–58 brief, 77, 81–88 industry, 66–81 process, 72 Measures of dispersion, 238 Media measurement, 125–127 Moderator, requirements, 140, 155 Mosaic groups, 36–38 Multiple discriminant analysis, 244 Multi-stage sampling, 192 Multivariate analysis techniques, 243–245 N Newsgroups, 110 Nominal data, 235 Non-probability sampling, 190–191, 193, 204 Normal distribution, 198–199 Null hypothesis, 239–240 O Observation research, 115–134 applications of, 131 definitions, 117–130 mechanical methods, 128 methodologies, 119–121 types, 119–127 Omnibus surveys, 175–176 Open-ended questions, 213–214 Oral presentation, 251–255 Ordinal data, 235–236, 242 P Panels, 177, 185, 195, 203 Perceptual mapping, 244 PESTEL model, 11 PEST research, 10–11 Pilot stage, 73, 79–80, 226 Placement tests, 160, 176 Population, for sampling, 188 Postal surveys, 171–173 PowerPoint slides, 260 Preference services, 59 Presentation oral, 251–252 of results, 245–247 tips, 252–255 Primary research, 75, 78–80, 100, 175, 250 Probability sampling, 190 Professional bodies, 58, 64, 71–72 Q Qualitative data analysis, 152–154 Qualitative research, 139–151 online, 151–152 Quantitative data, 159–183 Question and response formats, 209–210, 228 Questionnaire checklist, 226–227 design, 207–229 design process, 209–211 layout, 225 wording, rules, 219–222 Question topics, 209–211 R Random sampling methods, 191–193 Ratio data, 235, 237 Regression analysis, 33–34, 243 Relationships in statistical analysis, 242–245 Report format, 247–248 Research brief, 81–88 Research companies, 68, 69, 74, 88, 89, 108 Research design, 77–78 Research process, 72 Research proposal, 64, 74, 84, 92, 139 Research services, 67–68, 70, 106–107 Results, presentation, 245–247 S Sample, 189 Sample frame, 189 Sample size, 195–201 Sampling error, 202–203, 239 Sampling method, 190–195 Sampling procedure implementing, 202–204 Sampling process, 188–189 Scaling questions, 214 Search engines, 109 Searching online, 108–109 Secondary data, 95–113 evaluating, 98–100 sources, 100–107 strengths and weaknesses, 97–98 Secondary research, 75, 78, 101 Semantic differentials, 217–218 Sequencing, 222–225 Simulated test markets, 176–177 Social networking, 23, 110 Software packages for data analysis, 245 Stakeholders, Standard deviation, 200, 236, 238–239, 241 Statistical analysis and tabulation, 235–237 Statistical significance, 239–240 Statistics descriptive, 238 T Tabulation and statistical analysis, 235–237 Tabulations, 237–238 Tachistoscopes, 128 Target Group Index, 36, 106, 110 Telephone interviewing, 168–170, 181 Test markets, 176–177 Thematic apperception tests (TAT), 150 TNS Superpanel, 122 Trade associations, 103–104, 112 Trade organisations as data sources, 103 Index V Validation, 44 Variance, 196–198 Verification, 39–40, 43–44, 60, 127, 188 W Web-based interviews, 171 Web surveys, 173–174 Wording and phrasing, 218–222 279 This page intentionally left blank ... Marketing and information The role of customer information Marketing planning and the role of information The database and marketing research ... market research almost interchangeably The distinction is not important Market research has come to be seen as a subset of marketing research Market research refers to research on markets whereas marketing... looking at markets and customers, segmentation and our brands, products and services Research and the database inform the configuration of the marketing mix Finally, it helps us to measure and evaluate