Several studies have looked at the use of the MKIS in companies. One by Li et al. (2001)
examined Fortune 500 companies to reveal their pattern in MKIS usage. The findings were
compared with previous studies. In this study, marketing managers reported a decrease in the
existence of MKIS in their firms. However, the study does show that many firms link marketing
plans to their information resources.
The scholars say: ‘Besides telephone, facsimile, and email, electronic commerce is widely adopted in
these large firms. Most importantly, many marketers today are using computers and the Internet. They
are more and more knowledgeable about computer technologies and actively taking part in creating
computer applications to meet their own information needs’.
This is tangible confirmation that database issues have come to the top of the agenda for the
information professional. The most basic function of the database is to facilitate transactions
between buyer and seller, but there are many other extra functions that derive from this. It is
useful to remember that databases contain numbers and text, but can also carry static and
moving images. The study also shows that research, traditionally part of the MKIS, is changing the
emphasis of databases and the MKIS is being replaced by different types of support system.
On the topic of marketing metrics, Barwise and Farley (2004) looked into such measures and how
they are used in 697 firms in five countries. They show that most firms ‘regularly report one or more
of six marketing metrics to the board’. This is evidence that research, which provides such
measures, is of extreme importance. The same academics isolate two metrics as the most used:
market share, by 79 per cent, and perceived product/service quality, by 77 per cent of informants.
The study also shows that multinational subsidiaries and larger firms tend to use more metrics than
others. Another difference exists between countries: Germany is an above-average user compared
with Japan, which is a below-average user, but there is no difference by industry type.
The six important metrics identified by Barwise and Farley are:
1. Market share
2. Perceived product/service quality
3. Customer loyalty/retention
4. Customer/segment profitability
5. Relative price
6. Actual/potential customer segment lifetime value.
Compiled by Nigel Bradley 2012.
Sources:
Barwise, P. and Farley, J.U. (2004) Marketing metrics: status of six metrics in five countries, European Management Journal,
June, 22(3), pp. 257–262.
Li, E.Y., McLeod, R., and Rogers, J.C. (2001) Marketing information systems in Fortune 500 companies: a longitudinal analysis
of 1980, 1990, and 2000, Information and Management, April, (38)5, pp. 307–322.
Questions
1 Is the use of the MKIS increasing or decreasing? Why might this be?
2 Who uses marketing metrics more than other groups?
3 Identify the most important metrics and explain how they might be created. Provide full
definitions for each one.
Chapter 1 Introduction to marketing research
13
The use of marketing metrics by companies is helpful in understanding who commissions research and for what reasons. Our defi nition of a ‘marketing metric’ is a measurement that may be indicative of fi nancial performance. There are several key marketing metrics such as market share, customer loyalty, and quality of service. Other items that have been defi ned as metrics are profi tability of customer, customer satisfaction, duration of relationship, advertising eff ectiveness, sales, and repeat behaviour. Two items that are sometimes added to the list are brand equity and return on investment (ROI).
Customer insight
A recent development has been the emergence of new departments that carry the word
‘insight’ in their titles. We see ‘customer insight departments’, ‘insight management units’,
‘consumer insight’, and so on. This extends to the job titles of executives working in those areas.
Now, as customer insight manager, my job is more like that of a marketing consultant. We adopt a distinct approach that aims
to squeeze every drop of knowledge from projects.
Markus Graw of BP Retail
One reason for this development was a realisation that the emphasis of results from individual research projects needed to be shifted to a wider understanding of the dynamics operating
in the full marketplace. Another reason was the impact of information technology. Progress in technology gave way to the availability of masses of information found in databases. However,
it is obvious that huge quantities of data with little meaning could not assist the marketing function; indeed, the burden created by huge quantities of paper was a major obstacle. Market researchers therefore took a new role of data mining and assimilating information from many more sources than before. These ‘insight’ managers were actively seeking missing parts, rather than being instructed to collect and report. This is a proactive management of knowledge, rather than simple data handling. ‘Insight’ is a diffi cult term to defi ne. Jeremy Garlick, head of Sainsbury’s Customer Insight, describes it as a penetrating discovery that unlocks value.
It need not necessarily be new, but something we look at in a different way. It is a creative process, more of an art than a science, but crucially, it must be information that you can act upon, and make money from . . . I believe that it is more than a rebranding of the function, but a fundamental difference in mindset; with insight all information meshes together.
The advantages of insight management are numerous. By making use of all existing information, there is less need to consult customers, thereby minimising unnecessary contact and costs. Segmentation and targeting is enhanced by drawing a full picture of the marketplace. Existing services and products can be delivered more productively and new initiatives can be developed for the marketplace. The value of individual customers can be more accurately derived from a combination of sales sources, survey results, and prospect databases. There is a synergy in allowing all resources to be used together.
The marketing manager must know of all of the information collected by the organisation; therefore regular MR Audits are recommended. The TOOLBOX provides a checklist of items that allow the manager to discover information that has already been collected.
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Part 1 Research preparation
14
Quantitative and qualitative research
It is almost impossible to talk about qualitative research without referring to quantitative
research. Practitioners have a tendency to use word-clippings and this fi eld is no exception;
they often abbreviate the terms down to ‘qual’ and ‘quant’, so ‘quallies’ are people who work
in qualitative research. Let us think about the two research paradigms: phenomenology
and positivism. The phenomenological paradigm focuses on the subjective meaning of the
subject under investigation (or phenomena). Conversely, the positivist paradigm focuses on
the facts or causes of social phenomena. ‘Qual’ is phenomenological and ‘quant’ is positivist.
Quantitative data can be distinguished from qualitative data by numbers: in quantitative, there
are plenty of them; in qualitative, there are none.
We can distinguish qualitative from quantitative in many ways, for example qualitative
research is unstructured not structured; in qualitative research, there is an emphasis on
understanding rather than measurement. Qualitative research centres on words, narrative,
images, and concepts, rather than on numerical values. Qualitative analysis begins during data
collection, whereas, traditionally, quantitative analysis begins after data collection. Quantitative
analysis is guided by standard techniques, and fi ndings are communicated in standard ways.
These diff erences are outlined in Table 1.3.
Ethics
Ethics concerns good practice. It is important for researchers to behave properly because,
otherwise, they risk losing respondents and people to fund their work. From an ethical
viewpoint, there are numerous issues that impact on the insight manager. The Market
Research Society Code of Conduct and data protection legislation place specifi c demands on
managers who wish to combine customer databases with marketing research information. If a
respondent is assured of confi dentiality at an interview, then personal details cannot be input
into a database and be identifi ed there. This is a contradiction that needs to be resolved.
There are also European laws to which to adhere. The laws and regulations diff er by country,
but, in general, they all aim to protect the privacy of an individual with particular reference to
personal data. These laws require that the principles of transparency and consent are put into
practice. When an individual is asked to provide personal data, it is made clear why such data is
Distinctions between qualitative and quantitative
Qualitative Quantitative
Words, narrative, images, concepts Numbers
Analysis begins during data collection Analysis begins after data collection
Analysis adapted to each project Analysis guided by standard techniques
Original ways to communicate results Standard ways to communicate results
Table
1.3
Chapter 1 Introduction to marketing research
15
needed and what the organisation collecting the data is using it for. This is known as the ‘principle
of transparency’. When an individual gives permission to gather and use personal data, agreement
is secured for this and any future contact. This is known as the ‘principle of consent’. In the UK, these notions are encompassed in the Data Protection Act 1998. This Act defi nes ‘personal data’
as that ‘which relates to a living individual who can be identifi ed from the data, or from the data and
other information in the possession of, or likely to come into the possession of, the data controller’.
There are eight principles in UK data protection legislation. These are shown in Table 1.4.
The structure of the
MR sector
There are several professional associations or ‘trade bodies’ that look after the interests of research suppliers, research users, and other communities. One of these is the European Society for Opinion and Market Research (ESOMAR), which brings together many agencies located worldwide. In the UK, the Market Research Society (MRS) has over 8000 members
The eight principles in UK data protection legislation
Description
1 Personal data shall be processed fairly and lawfully
2 Personal data shall be obtained only for one or more specifi ed and lawful purposes, and shall not be further processed in any manner incompatible with that purpose
or those purposes
3 Personal data shall be adequate, relevant, and not excessive in relation to the purpose or purposes for which they are processed
4 Personal data shall be accurate and, where necessary, kept up to date
5 Personal data processed for any purpose or purposes shall not be kept longer than
is necessary for that purpose or those purposes
6 Personal data shall be processed in accordance with the rights of data subjects under this Act
7 Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data
8 Personal data shall not be transferred to a country or territory outside the European Economic Area (EEA), unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing
of personal data Source: http://www.informationcommissioner.gov.uk
Table
1.4
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and claims to be the ‘world’s largest international membership organisation for professional
researchers’.
The MRS has several schemes to support professional standards. These include: giving
advice to members on interpretation of the MRS Code of Conduct; and the Interviewer
Identity Card Scheme, whereby over 90,000 cards are issued to interviewers working for
research agencies as reassurance for respondents. MRS Freephone allows respondents to verify
whether an organisation is ‘bona fi de’. The MRS supplies ‘Thank you’ leafl ets to be given to
respondents, again as a reassurance.
A similar pattern emerges elsewhere in the world, so, in the USA, we fi nd the American
Marketing Association (AMA), with 45,000 members. Over in France, Syntec, the French
Market Research Society has 45 corporate members and the German Market Research Society
(ADAM) has a similar number of corporate members. AEDOMO, the Spanish Market Research
Society, has around 900 individual members. The list continues around the world.
Broadly speaking, market research agencies off er three types of information service.
These services describe market sizes and are known as industrial (for numbers of production
units, etc.), trade (numbers of retail outlets, etc.), and consumer (numbers of consumers, etc.).
These same three groups can be researched to help in the marketing process. They can be
asked about: products (size, package, and name); prices (margin, expectation, competition);
promotions (reactions to adverts, source of knowledge); or place (point of sale, display impact).
Some US$29,000 million are spent each year on marketing research (ESOMAR 2011). This is
a fi gure for the world, and using a few guidelines from various sources, we can say that there is
an 80:20 pattern evident in the fi gures:
• 80 per cent is quantitative and 20 per cent is qualitative
• 80 per cent of qualitative money goes to focus groups
• Online data capture (around 20 per cent) is being used more than face-to-face and
telephone quantitative studies.
From industry sources, we also know the methods that are most used in supplying clients
with information for their decisions. Table 1.5 shows the spend on the types of research by
ESOMAR members, suggesting a dominance of online, in terms of money allocated to research.
This is a major change from 2000, where there was a clear dominance of face-to-face methods.
World spending on quantitative research
Method Share of spend in 2009 (%)
Online 22
Phone interviews 15
Face-to-face 12
Postal 4
Automated digital/electronic 14
Source: ESOMAR 2011
Table
1.5
Chapter 1 Introduction to marketing research
17
Researchers could be reckless. They could phone respondents at midnight, block the public highway to catch respondents, and intrude in many other ways. It is important that the marketing research process is undertaken in an ethical and professional manner. This acts as a safeguard to society in general and to the research community. Researchers must conform to the professional codes of conduct and the relevant data protection laws.
All professional bodies work towards ensuring that clients, employees, and the general public are fairly treated. This is done by means of continuous training, disciplinary procedures, regular meetings, and publications. There are also codes of conduct and other guidelines.
Codes of conduct that have been created by professional bodies do not constitute legal advice and should not be relied upon as such. Legal advice should be taken from a professional practitioner in relation to specific issues. However, the researcher must be aware of the laws that impact on any planned activities.
The MRS in the UK has had a self-regulatory code that has been in existence since 1954. It applies to all members of the society. The MRS says: ‘Assurance that research is conducted in an
ethical manner is needed to create confidence in, and to encourage cooperation among, the business community, the general public, regulators and others’. The code goes into detail and some areas
are expanded in documents called ‘guidelines’. There are guidelines for research among children, Internet research, mystery customer research, qualitative research, and questionnaire design.
In 1976, the International Code of Marketing and Social Research Practice was established. This was created jointly by the International Chamber of Commerce (ICC) and ESOMAR. These codes are self-regulatory, which means that any breaches may result in membership to this body being withdrawn or suspended, and the news of such an event may be published and made known to what is actually a small community of researchers.
Many other schemes exist or have existed: for example, the Interviewer Quality Control Scheme (IQCS) is responsible for providing minimum service standards for data collection. Member companies are subject to an annual independent audit. The Market Research Quality Standards Association (MRQSA) was established to develop minimum standards for market research, data collection, and data processing. These standards have now evolved into ISO 20252.
Compiled by Nigel Bradley 2012.
Sources:
Data Protection Act 1998 (online at http://www.ico.gov.uk).
ICC/ESOMAR Code (online at http://www.esomar.org/knowledge-and-standards/codes-and-guidelines.php).
MRS Code of Conduct (online at http://www.mrs.org.uk/standards/codeconduct.htm).
Other standards online at http://www.mrs.org.uk/standards/other.htm
Questions
1 What can researchers do to upset respondents?
2 What professional bodies are mentioned above?
3 What do these professional bodies provide? And who benefits?