Essentials of Marketing Research (Second Edition)

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Essentials of Marketing Research (Second Edition)

• Kumar, Aaker Day
• Instructors Presentation Slides

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Chapter Five

• Secondary and Standardized Sources of Marketing
  Data

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Data Sources

• Secondary Data
• Collected by persons other than the researcher
  for other purposes.

• Primary Data
• Collected by the researcher for solving the
  problem at hand.

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Sources of Secondary Data

• Sales/patronage results (outcomes)
• Marketing activity (inputs)
• Cost information
• Distributor reports and feedback
• Customer feedback

Primary data sources

• Government
• Trade associations
• Periodicals
• Newspapers
• Books
• Annual reports
• Private studies

Internal records
Data Sources
Electronic
Secondary data sources
Published data
Printed

• Store audits
• Warehouse withdrawal services
• Consumer purchase panels
• Single source data
• Nielsens television index
• Starch scores
• Arbitron panel
• Multimedia services

External sources
Standardized sources of marketing data
Internet
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Uses of Secondary Data

• Can solve the problem on hand all by its own
• Can lead to new ideas and other sources
• Helps to define the problem more clearly
• Can help in designing the primary data
  collections process
• Helps in defining the population / sample
• Can serve as a reference base

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Internal Sources of Secondary Data

• Internal Records
• Accounting Data
• Sales Reports
• Inventory Management
• Customer Database incl. customer feedback

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External Sources of Secondary Data

• Published data sources (e.g., Census,
  publications of various trade associations)
• Trade directories
• Computer retrievable databases ("online"
  databases)
• Syndicated marketing research services

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Benefits and Limitations of Secondary Data

• Benefits
• Low cost
• Less effort
• Less time
• Some information only from secondary sources

• Limitations
• Collected for other purpose
• No control over data collection
• Potential accuracy problem
• May not be reported in required form
• May be outdated
• May not meet requirements

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Appraising Secondary Sources

• Factors to Be Considered
• Who has collected the data (did they have
  adequate resources)?
• Why was the data collected (how the interests of
  agency match with ours)?
• How the data was collected (to determine the
  quality of data on-hand)?
• What data was collected (geographic and
  demographic limitations)?
• When the data was collected (how old/obsolete is
  the data)?

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Applications of Secondary Data

• Monitoring the Environment
• Demand Estimation
• Segmentation and Targeting
• Business Intelligence System

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Applications of Secondary Data in International
Research

• There Are Four Types of Data Analysis Useful in
  Demand Estimation in International Markets
• Lead-lag Analysis
• Surrogate Indicators
• Cross-sectional Data / Barometric Procedures
• Econometric Forecasting Model

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Population Census

• Bureau of census is largest publisher of
  statistical data worldwide! (http//www.census.gov
  )
• Every 10 years, ending with 0
• Mail Survey to 119 million residential addresses
• Population characteristics for states, counties,
  cities, and towns
• Age, gender, race, migration, living
  arrangements, social and economical
  characteristics

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Population Census

• Levels of Aggregation
• 1. City block
• 2. Block group 254,000
• 3. Census tract (gt4000 persons) 68,000
• 4. Metropolitan statistical area (MSA) 335
• 5. Consolidated MSA
• 6. Regions

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Economic Census

• Conducted every 5 years (years ending with 2 and
  7)
• Industries agriculture, construction,
  manufacturing, mineral industries, retailing,
  services, transportation, wholesale

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SIC / NAIC Code

• Standard Industrial Classification System / North
  American Industrial Classification
• Uniform numbering systems for classifying firms
• Up to 7 digits
• Total economy is divided into 11 divisions

Classification SIC Description Major
group 57 Home furniture and equipment
stores Subgroup 571 Home furniture and
furnishings Detailed industry 5712 Furniture
stores 5713 Floor covering stores
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TIGER http//tiger.census.gov/cgi-bin/mapsurfer

• Topologically Integrated Geographic Coding and
  Referencing
• Initiated 1990
• Digitized street map of entire US
• Down to block level
• Links topographic information to demographic data

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Sources of Secondary Data for International
Marketing Research

• Economic Data
• United Nations
• World Bank
• Business International Publications
• Euromonitor
• World Casts

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Sources of Secondary Data for International
Marketing Research (Contd.)

• Industry Data
• United Nations yearbooks
• U.S. Department of commerce
• The Economist (publication)
• World Casts
• Background Data
• Dun and Bradstreet publications (e.g. Exporter's
  guide)
• Price Waterhouse publications

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Growth of Standardized Sources

• Factors
• Multitude of information users having common
  information needs
• When cost of satisfying individual user's need is
  prohibitive
• The increasing use of scanner systems at the
  check out points

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Standardized Sources

• Syndicated sources of marketing data
• Store audits
• warehouse withdrawal services
• consumer panels
• scanner based systems and single source data

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Motivation for using standardized data

• Pipeline Effect in distribution channels
• Unknown competitor actions
• Store behavior unknown (i.e. promotion execution)

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Example for packaged goods sales margarine brand
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Motivation for using standardized data
Factory Sales Peak
Retail Sales Peak
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Growth of Standardized Sources

• Factors
• Multitude of information users having common
  information needs
• When cost of satisfying individual user's need is
  prohibitive
• The increasing use of scanner systems at the
  check out points

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Retail Store Audits

• Personally record store inventories and movements
  for any brand and size
• Basic measurement tool in lieu of scanning data
• Common categories Health and Beauty, Durable,
  Confectionery, Liquor.
• Example Nielsen Retail Index

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Retail Store Audits

• Beginning Inventory
• Deliveries
• - Ending Inventory
• Sales for Period

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Nielsen Retail Index

• Biggest research company in the world
• Their auditing services cover four groups
• Grocery products
• Drugs
• Mass merchandisers
• Alcoholic beverages

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Audits and Surveys National Market Audit

• Bimonthly audit focused on products irrespective
  of the outlet carrying the product

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Consumer Purchase Panels

• Audits and scanner data do not cover
• Who buys (consumer demographics)
• Frequency of purchases
• Switching behavior between brands and stores
• Level of deal sensitivity

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What is a Panel?

• Representative sample of households
• Records all purchases made over time
  (cross-section/time-series)
• Records all coupons used
• Receive incentive for co-operation
• ACNielsens Consumer Panel HomescanConsists
  of 40,000 demographically balanced U.S.
  households that use hand-held scanners to record
  every bar-coded item purchased

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Consumer Purchase Panels

• To Cover the Gap Between Warehouse Withdrawal
  Audits and Actual Purchases Following Methods Can
  Be Used
• Home Audit Approach
• Panel member agrees to permit an auditor to check
  the household stocks of certain product
  categories at regular intervals
• Mail Diary Method
• Panel member records the details of each purchase
  and returns the diary by mail at regular
  intervals

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Advantages of Panels

• Can Provide Information On
• Aggregate Sales Activity
• Brand Shares
• Shifts in Buyer Characteristics
• Shifts in Retail Outlets

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Limitations of Consumer Panels

• Possibility of
• Selection Bias
• Mortality Effect
• e.g. move, illness, refusal
• Testing Effects
• first month records are discarded

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Scanner Data

• Have revolutionized grocery (and retail )
  industry
• Generates huge amounts of data
• Main suppliers IRI, Nielsen
• Kraft Food spends more than 30 million per year
  on scanner data
• In comparison to survey research scanner data
  reveal actual consumer behavior

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Single-source Systems

• Combine scanner data, panels, and TV-measurement
• Usually set up in self-contained communities with
  their own newspapers and cable TV and are roughly
  representative of the demographics of the country
• A test panel of community households is recruited
  and monitored
• Example BehaviorScan by IRI

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Single-source Systems

• Experiment like setting
• Control of
• advertising exposure in TV, newspapers,
• couponing
• buying behavior

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Advantages of Single Source Systems

• Availability of exclusive pre-test records
• Immediate availability of test results
• Ability to compare households prior to and after
  exposure to the message
• Ability to control settings

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Media Related Standardized Sources

• Nielsen Media Research (previously Nielsen
  Television Index)
• A system for estimating national TV audiences
• Arbitron Diary Panel
• Both regional and national radio and TV panels
• Starch Scores
• Print media
• Multi Media and Web Services

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Nielsen Media Research(http//www.nielsenmedia.co
m)

• Nielsen Media Research (New York)
• National People Meter Service audience estimates
  for all national programming sources, including
  six broadcast networks, 41 cable networks.
• Used by more than100 advertising agencies and
  45 advertisers.

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(No Transcript)
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Roper Starch (http//www.roper.com)

• Starch Ad Readership Reports measure ad
  readership within specific publications
• Covers over 500 magazine issues and about 25,000
  ads each year.
• Raw readership scores (the percent of readers who
  saw the ad and read the copy)
• Ad is ranked against other ads in the issue.
• Ad is ranked against other ads in its product
  category over the past two years.
• Interviews are conducted in person
• Standard demographic breakdowns

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Expert Systems Based on Single-source Services

• Since users of scanner data are flooded with
  massive amounts of data, expert systems are used
  to help the users understand the data quickly
• Examples of Expert Systems Are
• Apollo Space Management Software
• Cover Story
• Sales Partner
• Promotion Stimulator
• Spotlight

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Marketing Decision Support Systems

• typical marketing manager receives some or all of
  following data
• Factory shipments or order
• Syndicated aggregate (industry) data services
• Sales reports from sales personnel
• Consumer panel data
• Scanner data
• Demographic data
• Internal cost and budget data
• Purpose of MDSS is to combine marketing data
  from diverse sources into single database

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Applications of Standardized Sources of Data

• Measuring product sales and market share
• Panels, audits, scanner data, internal records
• Measuring advertisement exposure and
  effectiveness
• Starch Scores, Nielsen Media Research, Arbitron

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Applications of Standardized Sources of Data

• Measuring promotion effectiveness
• scanner data, panels
• Estimation and evaluation of models
• scanner data, starch scores, panels, internal
  records