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Chapter 2.1 : Understanding consumers: the essential role played by market research

2.1 – 1Author/Consultant: Peter Mouncey

Chapter 2.1

Understanding consumers: the

essential role played by market

research

This chapter includes:

�� Definitions: What is market research (and what it isn’t!)?

�� The applications of market research

�� The market research process: Commissioning a project

Methodologies

Data collection and processing

Specialist forms of quantitative

research

Sampling

Designing effective surveys

Data analysis

Judging quality

The research process in action

�� Ethics, standards and the impact of data privacy legislation

�� The marriage of market research and database marketing

�� A holistic model for today’s business environment

About this chapter

This chapter describes the unique role played by market research

methodologies in understanding the needs, behaviour and attitudes of

consumers. It is aimed at those who commission market research projects

or use research findings as an input to decision making, rather than at research

specialists. The key objective is to help readers gain the maximum value from

market research projects.

2.1 – 2


Peter Mouncey FMRS, F IDM

E-mail: [email protected]

Peter left the AA in 2000

after 29 years, latterly as

a member of the senior

management team

responsible for Group Marketing Services and

CRM strategy, to be an independent marketing

services consultant. In this role, Peter has

undertaken consultancy projects for several

leading international organisations. He is also a

Senior Associate Consultant for Marketing Best

Practice and AAA a Visiting Fellow at Cranfield

University School of Management, teaching and

researching various marketing related topics. His

role at Cranfield includes Director of the Return

on Marketing Investment (RoMI) Research Club.

He is also Director of Research at the Institute of

Direct Marketing.

Peter is a Fellow of both the Market Research

Society (MRS) and the Institute of Direct

Marketing (IDM); a former Chairman of the MRS

and a past member of the IDM Council. Peter has

also chaired the Association of Users of Research

Agencies, and the Research Development

Foundation. He is a long-term member of the

MRS Market Research Standards Board, and has

worked with the MRS, and other market research

industry bodies, on developing and

implementing strategy in response to the Data

Protection Act 1998 and writing the Society’s

guidelines on this topic. He also runs seminars on

data privacy and survey research.

Peter has presented, and written, many papers

on market research, database marketing, CRM

and related topics. Finally, Peter is Editor-in-

Chief of the International Journal of Market

Research (the journal of the MRS) and also serves

on the executive editorial board of the IDM

journal.

Chapter 2.1

Understanding consumers: the

essential role played by market

research

This chapter focuses on ‘market research’, rather than ‘marketing research’.

In effect the former is an important subset of the latter.

Definition: What is marketing research?

The term ‘marketing research’ is usually defined as:

The systematic collection from sources inside and outside the organisation of any

information about markets and the analysis of this information for supporting market

planning and business decisions.


2.1 – 3

This process is traditionally viewed as comprising two main components:

� Secondary data

� Primary data

Secondary data is drawn from information that is already available and which has

been collected, collated or summarised for some other reason than the specific

task in hand. Sources such as sales and customer statistics, management

accounts, market reports (from sources such as Mintel, Datamonitor etc.) and

information services/libraries, journals/financial press, annual reports, past

market research surveys, the census and electoral roll, bought in data from

lifestyle databases/prospect lists, websites etc. can all be classified as secondary

data. A customer database analysis project would be classified as secondary data.

In comparison, primary data is ‘new’ information collected for a specific purpose,

usually from source. In the context of this chapter, primary data is defined as the

commissioning of a market research survey, designed to collect new data or

update information collected in a past survey.

Studying secondary data is often the first step in defining the requirements for a

primary data market research survey. Secondary data is also a very valuable

context in which to view the findings from research projects.

Increasingly, new terms are being used instead of marketing research, such as

‘customer insight’ to describe a ‘holistic’ process within companies, which

attempts to create differentiation through a deeper understanding of the

consumer. This is covered in more detail as part of a holistic marketing research

model discussed at the end of this chapter.

This chapter concentrates on all aspects of market research surveys as a primary

data source.

Definition: What is market research?

How providers of goods and services keep in touch with the needs and wants of consumers.

The prime function of market research is to decrease the level of risk in decision

making. It has also been called an organisation’s ‘window on the world’ – enabling

it to objectively keep in touch with changes in the marketplace and understand

the needs and wants of consumers. Some organisations, such as the US-based

financial software company, Quicken, have taken this a step further and have

developed a ‘listening posts’ culture where traditional market research forms part

of a company-wide focus on keeping in touch with the needs of the market. A well

designed survey should be a ‘dialogue’ between the suppliers of products or

services and respondents rather than simply a question and answer session.

The definition used by the Market Research Society, the professional body for

those employed in market research in the UK, in the fully revised Code of

Conduct (published November 2005) describes the basis of ‘classic’ survey or

market research as:

2.1 – 4


‘The collection and analysis of data from a sample or census of individuals or organisations

relating to their characteristics, behaviour, attitudes, opinions or possessions.’

Many of the foundations of market research are based on the principles of

statistical theory. Without this base resulting data would not be sufficiently robust

to support effective decision making. Methodologies have also been derived from

sociological, psychological and ethnographical sources.

It is very important to understand the difference between collecting and using

personal data within market research and for database marketing purposes.

Market research aims to provide objective information and perceptions of people’s

attitudes and behaviour. Output is usually based on aggregated data with names,

addresses and other personal identifiers removed to preserve the anonymity of

respondents. The guarantee of confidentiality and anonymity is a vital component

of the research process assuring respondents that, for example, they will not be

directly subjected to any follow-up activity based on information obtained about

them during the interview. These issues are covered in more detail within the

section of this chapter covering ethics and legislation.

In comparison, direct, or database, marketing has a very different aim. The

objective is to use personal data to sell or promote goods and services to specific

individuals or individual organisations. The International Chamber of Commerce

Direct Marketing Code states that no direct marketing activity should be

represented to the consumer as market research. Such practices are called

‘sugging’ (‘selling under the guise of market research’).

The role of market research

Throughout much of the rise of marketing in the last half of the twentieth century,

the main source of information available on consumers, or customers, was

through the various quantitative or qualitative market research techniques,

described later on in the chapter.

Today, market research sits alongside a host of other data sources on consumers

and purchasing behaviour – such as customer databases, ‘lifestyle’ databases,

scanner data, loyalty schemes and credit data. In the early days of computerised

customer databases some viewed traditional market research as an outdated

process, with one of the financial benefits resulting from this investment being a

saving in expenditure on research surveys. Testing, together with database

profiling (now called ‘data mining’) was seen as meeting direct marketers’

informational needs.

That view has proved inaccurate as market research remains a very important

input, mainly due to five unique advantages of research-based methodologies:

1. The most important and unique role is identifying the ‘why factor’ –

explaining the reasons behind consumer decision making and behaviour.

For example, why a customer decided to buy your brand rather than those

of competitors on the most recent purchase occasion or why recipients

decided not to reply to a mail shot. Usually, a customer database is rich in

transaction data but is unlikely to hold information on attitudes or

behaviour.


2.1 – 5

2. Profiling and segmenting customers. Market research can provide a very

rich source of consumer profile data – age, sex, sociodemographic group,

family composition, media usage etc. In addition, research-sourced data

enables companies to build a multidimensional segmentation of their

market, rather than simply relying on a product/sector structure.

3. Understanding the needs and wants of consumers in terms of products

and service delivery standards etc. This is a vital part of developing a

differentiated customer-centric strategy.

4. Information on the market. Other data sources usually only contain data

on customers, or a segment of the market. Market research can place an

organisation’s position in context. For example, internal data shows that

customer numbers are increasing whilst market research can identify

whether the market share is increasing, declining or remaining constant.

5. Robust, evidence-based, methodologies. Data collected by statistical,

sociological and psychological principles, provides a more reliable source

for decision making than simply relying on management intuition.

In addition, ‘direct’ has developed from being a low-cost channel, used by under-

invested small-scale businesses, to a core route to market for established brands,

as part of a multi-channel strategy in the new era of customer relationship

management. Market research is an established tool routinely used within these

organisations. Magnus Wood, Director of European Planning at MRM Partners

says:

“DM agencies have often been guilty of focusing too much on the numbers and the final

deliverables; what it costs to mail the pack, for example, rather than getting to grips with

the target audience in order to generate a powerful idea”

(Research World, ESOMAR, December 2004)

The real issue facing management today is how best to harness all available

information and use it to make better decisions.

The principles, processes and applications described in this chapter apply equally

well to scenarios covering business-to-consumer, business-to-business and

government/public policy (where there is an increasing requirement to understand

the needs, wants and attitudes of citizens).

Uses of market research

These are many and varied, as the following list shows. Many of these are as

applicable to those working in direct or interactive marketing as they are to those

using other channels to market:

1. Concept testing and new product development. Market research is an

essential tool when significant investment in new products is at stake.

2. Advertising/promotional campaigns and media selection. Market research

can be used to develop effective creative material, identifying target

audiences and how to reach them, tracking the effectiveness of campaigns.

There are many research companies that specialise in meeting the needs of

advertisers and their agencies.

2.1 – 6


3. Identifying and understanding consumer needs.

4. Customer service. Measuring customer service has become a major sector of

the research industry, helping to define standards from a consumer

perspective and tracking performance against these standards over time.

5. Developing packaging.

6. Understanding consumer behaviour and attitudes, and the language used by

consumers.

7. Identifying customers’ use of competitors (‘share of wallet’).

8. Identifying reasons for non-response (and response) to direct campaigns.

9. Identifying channel preference.

10. Understanding brand values and image. There are several specialist

methodologies that have been developed to measure brand image.

11. Building market segmentations.

12. Measuring opinions and developing policy in central and local government

and the public services.

Examples drawn from within this list will be used to illustrate points later in this

chapter.

Research by Harvard Business School (Learning from customer defections,

Frederick Reichheld, Harvard Business Review, Vol. 74, no. 2, 1996) has

identified that the reasons why customers defect is often due to a slowly eroding

relationship over time that can be difficult to detect unless there is a process in

place to track attitudes at all key points of contact .The following chart in figure

2.1.1 illustrates how market research can be used to track over time the

relationships customers have with an organisation. It comprises a number of

continuous research surveys which can help develop effective strategies by

identifying the strengths and weaknesses in relationships, including monitoring

those of competitors. Many organisations simply try to establish reasons why

customers have defected. The following model enables organisations to study the

issues at all the key points of contact (‘moments of truth’) with customers, via all

channels, over time. For example, researching new customers provides an ideal

opportunity to learn about the activities of competitors and regularly researching

customers at points of contact enables trends to be identified and remedial action

taken quickly, or, enable effective decisions about where investments in improving

service will have the greatest impact on customers’ attitudes.

For example, in the mid-1990s the AA launched continuous research to help

improve service standards based on random daily samples of members using the

roadside service. This led to a cultural shift throughout the organisation from an

internalised view of service provision to one that responded to the needs of

customers, reflecting the then positioning: ‘to our members we’re the fourth

emergency service’.

Organisations often do not undertake research among those who register

complaints and thereby fail to identify the root causes of complaints or

understand how to develop effective processes to prevent reoccurrences. One

leading research company, MORI, developed originally for the public sector, a

methodology for researching complaint handling.


2.1 – 7

Figure 2.1.1 Learning from listening

The market research process

Figure 2.1.2 describes the various stages in a typical market research project.

This diagram details the topics covered within this section, including

methodology and questionnaire design. The key to success in undertaking a

market research project is good project management. The parts of the process

shown in bold italics are those that clients need to ensure that they are fully, and

appropriately, involved in. The remainder are normally the agency’s responsibility.

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2.1 – 8


Figure 2.1.2 Stages in a market research project

Commissioning a market research project

The assumption in this section is that you, as the client, have identified a

situation (the problem) where you feel that market research could provide an

effective input to help decision making. This could be concerns about customers’

likely attitudes towards the creative treatment within a proposed direct mail pack;

concerns about a proposed new product; understanding the likely impact of a new

launch from a competitor or designing an effective website etc.

Once the issue has been identified, the next step is to prepare a briefing document

(research brief) that can be issued to agencies as a basis for developing proposals.

The emphasis here is on producing a written brief and recognising that this will

be the main control document for the life of the project. The value is not just to

enable agencies to provide a response, it is also the main document within the

organisation to describe the issues that market research is going to be used to

address, the objectives and how research will be applied.

The following provides a ‘best practice’ template for developing a research project

brief and is based on the approach recommended in The Guide to Best Practice

in Market Research Management published by Strategic Research in association

with AURA (the trade body for client-side market research managers):

Checklist for research project brief

� Title, author and date.

� Relevant background information on the company.

� Business objectives (i.e. the context of the overall issue and what you want

to achieve).

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2.1 – 9

� Research objectives (i.e. what questions you want the research to answer

and how you will judge whether the research has met these objectives).

� What the results will be used for (this could have a bearing on the

methodology or sample size).

� Preferred research process methodology (optional – could depend on

previous projects and prior experience etc.).

� Sample details (describe who the target population group is; whether the

agency must recruit those in the sample or whether the client’s customer

database will be used).

� Provide details of any previous relevant research (especially if the project is

designed to update an earlier one).

� Any other relevant background information.

� Whether any accompanying material will be used in the project (e.g. creative

material, product descriptions ) and who will be responsible for providing it

at the right time.

� Precision required – the accuracy expected from the results and the depth of

analysis expected (e.g. key subgroups for analysis).

� Timings for the project (be realistic – a detailed large-scale quantitative

project could take three months to complete), including when a decision to

commission the chosen agency will be made.

� The expected deliverables (e.g. a single presentation and copies of the

slides, management summary and detailed written report).

� Budget (or some honest assessment of what funds will be available for the

project).

� Terms and conditions (if applicable).

� Any constraints/practicalities to consider (e.g. not undertaking interviews in

the town where your company employs a lot of staff).

� Key personnel – those working on the project and those who have a

significant interest in the findings (e.g. Board members if a presentation at

Board level is necessary). This may require different deliverables to suit the

different audiences.

� Contact details for the project.

A good source of information for agencies or consultants is the Research Buyers Guide,

published annually by the Market Research Society and updated regularly on the MRS

website. To be in the guide, an organisation must have at least one full member of the

MRS.

The proposals (research proposal) from agencies will include their recommended

research design for the project, plus costings and timescales. The Market

Research Society recommends approaching no more than three or four agencies

for quotations.

2.1 – 10


The selection of research supplier needs to consider the added value that the

supplier will provide. For example, unlike choosing an advertising agency where

exclusivity within your sector is usually the norm, research agencies are routinely

selected due to their proven experience of working in a particular sector. Also,

while competing agencies may recommend similar methodological solutions, the

final selection should be based not simply on price, but on any indications within

the proposal that a particular agency is going to provide that extra knowledge or

experience that will make all the difference when they are interpreting the

findings. All this experience should be leveraged to the full, especially at the

‘debrief ’ stage. The key here is the need for solid advice and recommendations in

the context of the business issues that you are trying to address, and not simply

a list of key findings from the research. Too often clients deny research agencies

the opportunity to provide a consultancy input, relegating them to simply the role

of a commodity service provider rather than treating them as a business partner.

At the end of this chapter, the process described above is compared to a more

holistic model.

Market research methodologies

Methodologies fall broadly into two groups: ‘qualitative’ and ‘quantitative’.

Qualitative research

The purpose of using qualitative research is to gain an in-depth understanding of

consumers’ behaviour, attitudes, motivations, knowledge and the language they

use to describe the product or service being covered by the project. It helps

identify and scope the issues. Qualitative research trades depth of information

against statistical reliability. The output is ‘descriptive’ and ‘indicative’, rather

than numeric.

The most common techniques used are the group discussion (or ‘focus group’)

and depth interviews. Sometimes ‘observational techniques’ are used; for

example, video diaries that record consumer behaviour. ‘Ethnographic’ research

falls into this category.

For example, the electronic manufacturer, LG, has used ethnographic research in

order to improve product design by setting up cameras in respondents’ utility

rooms and kitchens to record how consumers use appliances such as washing

machines and tumble driers.

A further qualitative-based technique is ‘semiotics’ – identifying the cultural

messages in brands, products, packaging, advertising and media etc.

Group discussions comprise small numbers of target consumers (normally six to

nine per group) invited to a central location (either the home of the recruiter, or

more commonly today a specialist research facility) to discuss the topic in depth.

The discussion is based on a framework (or discussion guide), rather than a

questionnaire, and this discussion is led by a trained moderator who will

normally also undertake the analysis. Central facilities contain viewing rooms

with one-way mirrors, enabling a number of observers to be present. The

discussions are normally video, or audio, and are recorded. This is for analysis

purposes only – tapes which can identify individual respondents cannot, for

ethical or legal reasons, normally be made available to clients (see the section in

this chapter on ethics and legislation). Groups can be a highly effective medium,

providing a richer source of information due to the differing viewpoints and the

interactions between respondents. It is a methodology often used as the first stage


2.1 – 11

in a larger project (see figure 2.1.2, above), in order to ensure that the full range

of issues and attitudes is built into a subsequent questionnaire and that the use of

language in the questions is respondent-friendly. When conducting groups, there

is usually a point where new insights are becoming marginal, and most projects

comprise no more than eight groups in total.

On occasions, an in-depth view is required without interaction with others.

Examples might be research on financial, health and sexual issues, or when

undertaking commercially sensitive business-to-business research. Sometimes

the scattered nature of the target population is such that it would be impractical

to hold a group. These are all occasions when individual depth interviews are

used instead of group discussions.

In order to explore peoples’ views and attitudes in sufficient depth, various

techniques, based mainly on methodology developed in psychological research,

are commonly used in qualitative market research, rather than simply holding a

discussion or conducting an interview. Common examples are ‘projective’ and

‘enabling’ techniques – used to explore the subconscious mind. Other, ‘task-

driven’ techniques include sentence completion, card sorting, making montages

from magazine pictures and advertising, making clay/paper models, psycho-

drawings and writing obituaries (e.g. for a brand). These techniques can be group

activities and also enable respondents to communicate in non-verbal ways.

Improved knowledge of how the brain works, through neuroscience, is leading to

new techniques being developed in market research to understand how human

beings make decisions.

In addition to being used to help develop the right approach for a larger,

quantitative survey, qualitative research is also applied as the core method in

certain types of projects. For example, groups are extensively used to help develop

advertising material, including direct mail packs, where alternative creative

approaches, often in storyboard or narrative tape formats are the prime focus of

the discussion. The qualitative process can explore the varying impacts of

differing tones of voice, copy content (credibility, level of persuasion, clarity),

format, imagery/illustrations, branding and symbolism etc.

An example of qualitative research applied to understanding consumers’

attitudes towards direct marketing was the programme of research funded

by the direct marketing industry through DMA (West) and conducted by the

Bristol Business School Research Unit in Marketing. The research consisted

of two qualitative phases – the first being a series of 40 depth interviews,

using an unstructured interview format, designed to explore consumers’

values, relationships with organisations and experiences of direct marketing.

The second phase comprised nine group discussions using a semi-

structured discussion guide in order to harness the group dynamics and

interactions between participants. Respondents were recruited in South

Wales, the West of England and the South East to meet specific demographic

profiles, and with the requirement that they must have received some direct

marketing communications within the previous two weeks. Within the

groups homogeneity was maintained using gender, age and socio-economic

quotas at recruitment. All interviews were audiotaped, using unabridged

transcripts for undertaking the analysis.

Techniques for undertaking qualitative research over the internet are also being

used. For example, one advertising agency developed a two-stage process whereby

traditional focus groups are used in the initial creative concept testing and then

the groups are reconvened online to discuss revised executions.

2.1 – 12


Quantitative research

The key objective of undertaking quantitative research is to create ‘measures’,

based on interviewing representative samples drawn from the target population

group, using a fully structured questionnaire. These measures are possible, due

firstly to the larger samples used in quantitative research and secondly, to the fact

that all respondents in the survey will be asked a common set of questions.

Quantitative research provides information on how many people undertake a

given activity or hold a particular attitude and what type of people they are etc.

This also enables comparisons to be made between different groups in the overall

sample and trends to be identified. The data can be used to help identify the most

appropriate option for future action, develop forecasts and also build models for

asking ‘what if ’ questions. Finally, a range of analysis tools can be applied to the

data set to explore the relationships within the information, for example in

developing segmentations or deciding levels of media spend. Quantitative projects

are generally ‘ad hoc’ (specifically commissioned surveys) or sometimes

‘continuous’ (collecting information over time from the same, or similar, samples

of respondents).

Traditionally, the three main interviewing methods are:

1. Field – is conducted by trained interviewers, on-street, in the home of

respondents or in the workplace (in the case of business-to-business

research). This methodology is sometimes called ‘personal’ or ‘face-to-face’

interviewing. Increasingly, technology is being used to conduct the

interviews (Computer Assisted Personal Interviewing – CAPI) also enabling,

for example, television commercials to be shown to respondents during an

interview.

2. Telephone – usually outbound interviews from specialist research call

centres using samples either drawn from telephone directory lists, client-

supplied customer databases or prospect databases, or using random-digit

dialling based on the structure of the BT numbering system. Inbound

research can be conducted by encouraging the target population to

telephone a number and complete an automated questionnaire. Most

interviewing uses Computer Assisted Telephone Interview (CATI) software.

3. Postal – mailing questionnaires to the selected sample.

There are other more specialised methods, which will be described later. The

growth area is the use of internet- and email-based interviewing methods,

described below under ‘online research: the role of new technologies’.

The decision to use a particular methodology is based on a number of factors

such as:

� Types of questions/concepts covered in the questionnaire and the

complexity and length of the interview

� Availability and geographic spread of the sample

� Budget

� Timescale for the project

� Appropriateness of the methodology in terms of the topic and

characteristics of the sample


2.1 – 13

The advantages and disadvantages of each method are summarised below:

Table 2.1.1 Field research

Pros Cons

� Control of the interview � Higher cost

� Higher response rates � Cluster samples for cost reasons

� Flexibility in the questionnaire design � Local, not central, control

� Handle longer/complex interviews � Availability of respondents

� Use illustrative material � Interviewer may affect or bias

� Strict order of questioning � Inconvenience to respondents

� Interaction with respondents

� Persuade co-operation

Table 2.1.2 Telephone research

Pros

� Lower cost

� Central control

� Unclustered samples

� Speed

� Convenience to respondents

Cons·

� Growing use of mobile networks

with no directory lists of subscribers

� Intrusive – lower response/co-

operation rates (impact of cold/

silent calls)

� Restricted questionnaire content/

length/format

� Ex-directory households

Table 2.1.3 Mail research

Pros

� Low cost

� Calculate response rates

� High response rates

� Unclustered samples

� Convenient for respondent

� Length of questionnaire

� Confer with others

� Same channel as direct mail

� No interviewer bias

� Enable large samples to be used

Cons·

� Low response (due to inappropriate

use)

� Availability of lists for sampling

� Timescale (slow response)

� No control of respondent

� Question design, complexity

� Prior knowledge of topics/ questions

� Part-completed answers

2.1 – 14


Table 2.1.4 Internet/email research

Pros

� Low cost

� Automatic process

� Speed

� Global

� Control question order

� Central control

� Convenience for respondent

� Flexibility

Cons

� Access to technology

� Cost (to respondent)

� Inconvenient to access/complete

� Sample bias

� No control of respondent/identity

� Other technology issues

� Cultural/www effects

� DIY surveys/‘pop-ups’

� Privacy issues/trust

� Generating response/creating

awareness

Field interviewing remains the most effective methodology for many types of

surveys, but it is more costly and generally requires more time than either

telephone-based or internet-based surveys. Telephone-based interviewing has

rapidly grown in importance as it is relatively cheap and fast, but is not always an

appropriate solution. Mail can be particularly effective when undertaking research

where direct mail is the prime channel for communicating with customers; for

example, researching product development, demand forecasting and mailshot

development. The reasons for this are as follows:

� The methods replicate the medium used for marketing, promotion and

fulfilment. Mail surveys can be particularly useful for forecasting demand

and testing responses to different concepts.

� Mail research is most effective where there is a benefit in responding. This

is usually highest where consumers have an identified relationship with an

organisation, as do those on a customer database. This also applies, but to

a lesser extent, to telephone research.

� Designing an effective survey ‘pack’ for a mail survey embodies similar

principles underpinning successful direct mail campaigns.

� Households can confer in answering mailed questionnaires.

Tips to encourage response for mail surveys include:

� The use of low-value and appropriate incentives

� Follow-up mailings to non responders

� Questions which are known topics of interest to customers of the

organisation.

� Pre-notification postcards

� Using short telephone follow-ups where a high response needs to be

encouraged while it might not be cost-effective or practical to conduct the

full interview by telephone


2.1 – 15

The impact of some of these factors on response rates in mail surveys is shown

below:

Table 2.1.5 The impact of factors on response rates

Increase in response %

Established relationship and up-to-date information (e.g. customer database) +150

1st reminder (letter) +26

2nd reminder (telephone) +25

High-interest questions section +19

Appropriate incentive +18

2nd reminder (letter, questionnaire, envelope) +12

1st/2nd stamped addressed return envelope + 6

Source: MRDF Conference on Increasing Response, Nov. 1985

Designing an effective mail survey requires a similar approach to that needed for a

mailshot:

� The database used as a sampling frame must be up to date and designed to

enable random samples of records to be selected.

� A pre-notification postcard can boost response.

� The send-out envelope needs to be appropriately designed to encourage

recipients to open it.

� The covering letter needs to ‘sell’ to the recipient the benefits of responding,

instilling a sense of urgency. Secondly, it must reassure the recipient that

this is a genuine research survey and that the information provided will only

be used for research.

� The questionnaire must be carefully designed, with clearly worded

questions and routing instructions (see page 21 on questionnaire design),

and piloted, as there is no interviewer present. Length depends on the topic

and the relationship between recipient and sending organisation, but

inclusion of a known high-interest topic at the start can boost response.

� The incentive needs to be appropriate. Prize draws can be very effective in

stimulating rapid response, especially if there is a closing date. (The

legislation is the same as for a direct mail campaign.)

� A reply-paid envelope is essential; it needs to be of adequate size for the

questionnaire and a stamp improves response compared with business-

reply.

� Reminders are essential – a letter initially at least, but second follow-ups are

sometimes used; either a telephone call or a second letter plus another copy

of the questionnaire.

� Codings to track response can be used, but recipients should be aware of

why a code appears.

2.1 – 16


Telephone and mail methods, sometimes in combination where a short telephone

interview may gain co-operation in completing a more detailed self-completion

questionnaire, are often used in business-to-business research. Field interviews

are normally used for executive interviews.

Online research: the role of new technologies

While the current proportion of market research conducted using the web is still

very small, there is likely to be substantial growth in the next few years for both

business-to-consumer and business-to-business surveys. The main current

benefits of the web are to enable data to be delivered online, aided by the

development of open standards for data transfer, including questionnaire design.

Increasingly, the necessary software to analyse the data is also available through

the web. The data can then be incorporated into an intranet to enable the results

to be more widely and quickly available across the organisation. Web-based

interview tools are also available – particularly useful for undertaking employee

and business-to-business surveys. Email surveys can also be undertaken, either

with the questionnaire embedded in the email or as an attachment.

Whichever way the web is used to collect data in a survey, the same principles of

good questionnaire and survey design described earlier still apply, and these are

incorporated into the better software products available to design an online

survey.

However, the use of the web for conducting surveys and transmitting data is just

one perspective in the relationship between market research and the new

technologies. Some of the techniques commonly used in online research include:

� Access panels: these are large databases of consumers with profile and

basic information on product preferences, buyer behaviour etc, where

participants have agreed to take part in future surveys. Samples for surveys

are drawn from the database, selection being based on the topic being

researched. This methodology is being widely used as a basis for online

research, some of the databases being international.

� Customer samples: similar to the process that might be used for other

methodologies, usually based on email addresses.

� ‘Pop-up’: administered automatically to a sample or all of the people

accessing a website.

� Email: the email is either used to deliver a website link to access the

questionnaire, or the questionnaire is embedded within/attached to the

email.

� Accompanied web ‘surfs’ or ‘clinics’: used to help develop effective

websites by studying how people use the internet.

� Chat room-type technique: a form of focus group conducted online.

Traditional techniques such as qualitative research can be used to help develop

effective site designs and banner advertising. The stimulus material could be a

web-surf session during the group. Revised executions can be tested among a

group of people who already understand the objectives of the proposed campaign.

One research company has developed the concept of email groups where

respondents provide feedback over a period of time, the discussion being

developed through the circulation, by email, of new responses. For some

respondents email is easier to use than the internet technology employed for

online groups.


2.1 – 17

Depth interviews can also be conducted over the web. A further technique,

developed from a qualitative technique, whereby a researcher accompanies a

respondent on a shopping trip, is ‘accompanied surfs’ – watching how

respondents use websites and exploring with them the issues raised. These can

be conducted in respondents’ homes or at ‘viewing labs’ set up in qualitative

viewing facilities.

Solutions are also available to measure and profile website traffic, assess the

effectiveness of different media in driving traffic to the site, measure the impact of

site redesigns and to optimise the design. These are based on ‘pop-up’ windows

superimposed on top of the browser screen, which take no more than a couple of

minutes to complete. The software incorporates sampling routines, with cookies

being used to ensure that site visitors are not subjected to repeat questionnaires

on subsequent visits. These surveys are very cheap to set up and provide

constantly updated results.

As might be expected, the online bank Egg uses the internet to meet some of their

research needs. However, as shown below Egg fully recognises that online

methodologies are often inappropriate:

Online research at Egg

• Online tool: Egg use a tool developed by the survey software company SPSS to

design, administer and analyse the surveys;

• The surveys are set up via a portal with SPSS acting as an application service

provider (ASP).

• Database of willing customers: those who have consented to be contacted

through the internet for research;

• Transparency reusage of data: customers are given clear and concise

information about how the data collected in the surveys will be used;

• Two-way links with the database: the survey data is combined with data held

by Egg about its customers. This is part of the consent process;

• Complements other research methods: Egg recognise that internet

methodologies are inappropriate for addressing some of the issues they need to

research and therefore also use other techniques;

• Internet methodologies have primarily replaced telephone/postal based

surveys amongst customers. Costs have been reduced (40% saving) and the

average duration of fieldwork has been reduced to hours, instead of days or weeks/

higher speed (hours not days/weeks);

• Survey topics: internet surveys are primarily used for measuring customer

satisfaction, website and product development.

(Source: based on Joined up research on the eHighway,

Mark Pearson and Tim Macer, ESOMAR Congress, September 2001)

Online research can be low cost and generate a very quick response; however, like all

market research methodologies, the decision to use this channel should be based on

whether this is the most appropriate technique to achieve the objectives of the project

rather than cost.

2.1 – 18


Further information:

� Interactive Marketing Vol. 4 No. 2 contains a paper by Peter Comley, ‘Online

survey techniques: current issues and future trends’, describing online

survey techniques in detail.

� The Market Research Society publishes on its website a detailed guideline

covering all aspects of conducting research online (www.mrs.org.uk).

Data collection and processing

Paper-based questionnaires are traditionally processed into computers in batches

using manual data entry. This is expensive and error-prone. Increasingly,

technology is being employed in the interview and data entry stages. As mentioned

above, in field interviews, small laptop devices are being used (Computer Assisted

Personal Interviewing – CAPI) to administer the questionnaire. Completed

interviews are then downloaded via a modem at the end of each day or session,

speeding up the interview process, eliminating manual data entry and enabling

tighter quality control. Most centralised interview call centres use CATI

(Computer Aided Telephone Interview) systems to manage the interview where the

questionnaire is often more like a script.

Self-completion questionnaires can be formatted so that the answers can be

computer-read, although this can restrict the complexity and content of the

questionnaire.

Specialist forms of quantitative research

� Hall tests: recruiting samples of people, often in town/shopping centres, to

a central point to be interviewed. This method is especially useful where the

survey requires respondents to see complex material or test new products

(e.g. food) in a controlled environment.

� Observation: studying behaviour, such as how shoppers move round a

store, or motorists use a filling station. The observation can use CCTV

equipment and the observed behaviour is often backed up with a personal

interview. Ethnographic research has already been described.

� Omnibus surveys: surveys based around a core of profile information about

the respondents. The remainder of the questionnaire is composed of a

number of individual questions or ‘mini’ surveys conducted on behalf of a

number of clients. Most major agencies offer weekly household-based or

adults-based omnibus surveys, costs being rate-card based. Specialist

omnibus surveys cover population groups such as teenagers and motorists

etc. The advantage can be low cost and speed, especially if the survey is

telephone-based. The main disadvantage is that individual sections need to

be relatively short and it is not a cost-effective way to conduct a detailed

study of consumers.

� Panels: based on representative samples of respondents providing

information at regular or frequent intervals over time – for example,

supermarket shopping trips purchases. Sometimes the information is

provided via diaries, but bar-coded products and a modem link enable

purchases to be recorded through scanner equipment in respondents’

homes (TNS Superpanel). Panels enable large volumes of data to be

collected and trends measured. Impact of new product launches, advertising


2.1 – 19

campaigns, test markets, coupon/price promotions, brand shares, profiles

of ‘heavy’ and ‘light’ brand users and regional differences etc can be studied.

The major issues associated with panels are firstly set-up and operation

costs and secondly, maintaining a representative sample. The cost issue is

addressed by having a number of subscribing organisations – often

comprising industry sectors. Maintaining a representative sample is key.

Other examples of panels are:

� BARB: the panel of households where TV viewing is monitored by a

combination of technology and interviews. This sets the pricing of TV spots

by providing information on audience numbers and profiles.

� Syndicated surveys: surveys based on a number of organisations

commissioning or subscribing to a survey. An example is the Financial

Research Survey, operated by NOP. This provides information on

consumers’ product holdings across the financial services industry. (MORI

provides a similar product.) The data is collected on a monthly basis using

the research companies’ omnibus surveys.

� Media surveys: usually operated by joint industry committees (JICs)

representing those interested in specific media. Examples include BARB,

JICTAR – managing research on newspaper and magazine readership and

JICRAR – research on radio listening.

� Target Group Index (TGI): conducted by BMRB International, is an annual

survey measuring product/brand purchasing across all major consumer

goods sectors, plus consumption across all major media channels, and

includes a section on attitudes. The survey is based on 25,000 interviews,

with participants being recruited using personal interviews in-home and

then completing a detailed self-completion questionnaire.

� Customer service measurement and mystery shopping: customer service

measurement has grown substantially in recent years. Mystery shopping is a

specialist field of research, where interviewers are trained to act as

consumers in retail and restaurant outlets in order to test product

knowledge and standards of customer service.

Figure 2.1.3 shows an example of an approach towards ensuring an organisation

meets consumers’ needs when providing service. This SERVQUAL model

identifies potential ‘gaps’ between the needs of customers and the culture, service

delivery strategy, operational processes, training and communications within an

organisation. It can be used to identify where in the service delivery chain

problems lie that lead to customers’ needs and expectations not being met. For

example, advertising messages can make promises about the standard of service

delivery which lead to increased expectations among customers that the

organisation is unable to subsequently meet, thereby creating dissatisfaction. This

is an example of ‘Gap 4’. Market research conducted among customers, and

among staff and management within the organisation, can help pinpoint problem

areas and identify solutions in each of the gaps.

2.1 – 20


Figure 2.1.3 The service quality model

Sampling and samples

There are three issues to consider:

? How can the sample be found (population)?

? How many people should be interviewed (sample)?

? How should those to be interviewed be selected (sampling method)?

Methods used in quantitative research are usually ‘quota’ or ‘random probability’.

Due mainly to cost factors, quota methods are the primary sampling method used

in many field and telephone- based surveys. This method predefines the number,

or quota, of interviews for different categories within the target population, often

with the resulting data set being weighted to reflect the characteristics of the

profiles within the overall population (e.g. age, sex, geographic distribution and

social class). Random probability methods give each and every member of the

population an equal chance of being selected. In both cases, interviews are usually

clustered in certain areas (sampling points) for cost reasons, with statistical

methods being used to select these areas to ensure the resulting samples are

representative. For in-home interviews, starting points for the interviews in a

selected geographic area are also statistically selected unless specific individuals

need to be interviewed. Since their inception in the late 1970s, geodemographic

systems, such as ACORN and MOSAIC have been used to aid sampling.

Many surveys used to support direct marketing and measure customer service are

based on samples drawn from client organisation-owned customer databases.

Special care needs to be taken when sampling from customer databases. In

particular:

? Is the database up to date?

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2.1 – 21

? Can random samples be selected, or does the structure of the database lead

to potential bias if using a ‘1 in n’ sampling method?

? Will it be necessary to add telephone numbers for interviewing purposes?

? Has the owner of the database included ‘research’ as a potential use when

notifying the Information Commissioner under the 1998 Data Protection

Act?

The size of the sample used in the project obviously has implications for the

accuracy of the results (sampling error), especially if an important consideration

is to be able to compare findings for subsets within the overall sample (e.g.

comparing the likelihood-to-buy between males and females aged 25 to 34). This

reduces significantly up to samples of around 400 and then tails off. In most

projects increased accuracy from using larger samples needs to be traded against

marginal gains in data quality and the associated substantial increase in project

cost.

So, the key common-sense attitude towards sampling can be summed up as

follows:

Are the people who are going to be interviewed a reasonable cross section of

those relevant to the survey and is the sample size large enough to meet

likely analysis needs?

Designing effective surveys

The key principles to consider in achieving ‘best practice’ in questionnaire design

are:

? Has the respondent got the information?

? Will the respondent understand the question?

? Is the respondent likely to give a true answer? Respondents rarely

deliberately lie, but sometimes they are questioned about topics about

which they have no real experience, or it’s one of extremely low interest to

them; they are unable to understand the questions or an inappropriate

fieldwork method has been used.

? Are the questions objective or do they aim to prove a particular view? For

example, there maybe a temptation on behalf of the client to press for

questions to be phrased in such a way that they will lead to an unduly

favourable response. This could lead to erroneous information being

collected which leads in turn to an inappropriate decision being made that

could prove very expensive (and career limiting!).

? Is the flow of the questionnaire logical and are the routings correct?

? Does the overall questionnaire content and design provide a balanced

approach to the topic?

Points to consider in achieving this aim include ensuring that the topic and the

questions are likely to be within the experience of respondents, and do not

include unfamiliar words or concepts. Avoid questions which:

2.1 – 22


a) Are ambiguous, ask two questions in one, are vague, deal with abstract

concepts or hypothetical scenarios, seek to lead respondents, are biased,

too detailed/complex or overlong, contain double concepts or double

negatives, require detailed recall of past events

b) Are likely to conflict with the respondents’ self-image

c) Treat sensitive topics with a lack of sensitivity

Examples of the problems that can occur, and how to avoid them, are contained

in the next chapter.

When designing questions, or content, think about the very limited

vocabulary contained within a mass-market tabloid newspaper. Levels of

literacy can be very low in certain sectors of UK society, and many words in

common use may not in fact be well understood. For example, in a word

comprehension survey conducted some years ago by the Transport and Road

Research Laboratory to help design the Highway Code, only 44 per cent of

males and 42 per cent of females gave the correct answers overall for terms

such as stalling, straddle, diversion, off side and roadworthy etc.).

The questionnaire should be limited in content to the minimum number of

questions necessary to achieve objectives, but it is best practice to include a final

question allowing respondents to mention any factors which might be important

to them which are not covered in the rest of the questionnaire.

Where possible, draft questionnaires should be ‘piloted’ – preferably among

people representative of the target population group. Question design and content

need to take into account the interview method – an approach developed for field

interviews may not work in a telephone survey, or online.

The following describes ‘best practice’ for interviews, based on findings from a

major project on ‘respondent co-operation’ conducted by the Research

Development Foundation in 1996:

� Respondent feels ‘in control’ – meaning that the respondent has the

opportunity to have their say and doesn’t feel coerced by the interviewer or

exploited by the client

� Respondents can clearly see the benefits to them, other consumers or

society etc. of participating in the survey

� The topic and questions are relevant to the respondents

� Honesty – for example, interview length, confidentiality of the answers, who

is the client/sponsor, how the findings will be used (research purpose only)

and the source of the respondents name/address/telephone number/email

address

� Collect the minimum of personal details about respondents and their

households

� A creative and engaging interview

� In-home interview location


2.1 – 23

When designing a questionnaire, or selecting an interview methodology, put

yourself in the shoes of a typical respondent in the sample and think about

whether they would be comfortable taking part in the interview and be able to

answer the questions easily.

Data analysis

Most quantitative surveys are analysed using specific software, such as SPSS,

SNAP etc. to produce data tabulations. Statistical methods such as ‘factor’,

‘cluster’ and CHAID programs are also used in order to detect patterns in the data

and identify common groups or segments of respondents. A further statistical tool

used in some research projects is ‘conjoint analysis’, used to identify key

preferences where there are a number of potential options; for example, the

factors that contribute towards customer satisfaction with a trip by aeroplane.

Outputs: reporting the findings

The brief for the project should have described the outputs expected from the

survey – the requirements for presentations, written reporting and tabulations

etc. – and the media to be used (e.g. paper-based computer tabulations, disks or

CDs). As described earlier on, the output provided should be actionable: it should

provide recommendations to help solve the business problems posed in the brief.

The agency should have applied all the most appropriate analysis techniques to

the data, and brought to bear all their varied experience and the data available

from within the organisation.

The MRS Code of Conduct states that members must ensure “that reports

include sufficient information to enable reasonable interpretation of the validity of

the results”. The following minimum details will enable the quality of the survey

to be judged and a repeat survey to be commissioned in the future; for example,

to study changes or identify trends:

� How many people were interviewed?

� How were they selected?

� What questions were asked?

Judging the quality of a research survey

In their book Inside Information, Smith and Fletcher identify those points that

differentiate a good survey from a bad one. The following is based on their

analysis and provides a summary checklist covering the main points in survey

design and the market research project processes described in this chapter:

2.1 – 24


Table 2.1.6 ‘Good’ and ‘bad’ surveys

Good survey

� Adequate sample size

� Unbiased sampling

� Appropriate respondents

� Designed to reflect the

consumers’ agenda

� Best practice questionnaire

design

� Appropriate methodology

� Caveats re any errors/

problems

� Optimum analysis

� Holistic approach to

analysis/reporting

� Meets research and

business objectives

Bad survey

� Questions not in context/lack

salience

� Response rate well below 65%

� Not the target respondents

� Poor design of questions

� Poor grasp of statistical theory

� Inappropriate method

� Project lacks integrity

� ‘Pedestrian’ presentation/report

� Findings out of context

� Research and business objectives not

met

The research process in action

The following provides a summary of the whole process in action, using the

development and launch of a new credit card as an example.

The decision is taken by a national retailer X to enter the highly competitive

marketplace for credit cards in the UK, as a further expansion of their growing

range of financial services products. The objective is to increase ‘share of wallet’

spend with the retailer, and the new card would be linked to the existing loyalty

scheme. The product development and marketing teams recognise that this

project will need to be supported by an extensive marketing research programme,

which is mapped out with the Consumer Insight department. The agreed

programme contains the research project plan shown in figure 2.1.4:


2.1 – 25

Figure 2.1.4 Research project plan

Project 1: commissioning the competitive intelligence team within the Consumer

Insight department to produce a detailed report based on existing data covering

the market, competitors and trends etc. as background information. The team

draws on the extensive data available through the research department’s

subscriptions to the continuous NOP Financial Research Survey and BMRB Target

Group Index, together with internal data taken from previous research surveys

and customer profiles drawn from the loyalty scheme. The report provides an

overall picture of the marketplace, including the market shares of current brands

and an indication of some target segments for a new card product among the

current customer base.

Project 2: the market research team within the Consumer Insight department

prepares a detailed brief to commission qualitative research to gain an in-depth

understanding of whether there is a market opportunity which the proposed card

could fill. A written brief outlining the business objectives and what is required

from the research is prepared, agreed with the development team, and sent to

three leading qualitative agencies for proposals. This leads to a project

comprising 8 group discussions, each group comprising 10 customers. The

people invited to attend the groups reflect the different segments identified in the

secondary research, covering age, sex, demographics and store usage. The

customer database is not used for recruiting as this is deemed to be less cost-

effective than sending out recruiters into neighbourhoods likely to have

concentrations of store users. Locations for the groups are selected in the Greater

London, Bristol and Manchester areas, to reflect likely regional differences in

attitudes and behaviour. The product development team works with a product

development agency to produce some product concept boards to illustrate the

benefits of the proposed card and how it will differ from those available

elsewhere. Members of the development team, new product development

consultants and advertising agency attend some of these groups, held in a viewing

centre. From this research, the development team gains valuable insights which

help refine the overall benefits package and positioning for the card and also

develop some card designs for future evaluation.

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2.1 – 26


Project 3: based on the results of the qualitative research, a benefits package is

developed for testing. The research team prepares a brief for quantitative research

to help finalise the best package of benefits, as well as developing segmentation

for targeting the launch and estimating likely demand. The brief is sent to three

agencies that specialise in financial services and retailing research. The final

survey is conducted among a nationally representative sample of 2,000

customers, using 100 sampling points selected to represent the geographic

distribution of customers. Interviewers then use random walk methods in

residential areas to find and interview customers in their homes. This method for

interviewing is chosen because the interview requires respondents to read and

evaluate in detail the proposed benefits package during the interview. The results

help build a segmentation which is then modelled onto the customer database to

develop estimates for demand among the identified target segments.

Project 4: the research team commissions a further qualitative project to help

finalise the design of the card and the launch advertising campaign, using

primarily direct mail to target segments plus in-store promotions. Eight group

discussions are conducted, the main focus of the discussion centring on three

different card designs and two different mailing packs in rough and storyboard

form linked to in-store promotions. Those recruited for the groups represent the

key target segments of existing store users. A final card design and two packs for

a direct mail test are now developed based on the findings. As in project 2, the

groups were held in viewing facilities and attended by those working on the

project, including members of the advertising agency team.

Project 5: the retailer already conducts a quarterly advertising/brand-tracking

survey to assess the effectiveness of the above-the-line advertising campaigns, and

those of competitors. A new series of questions is designed to monitor the launch

and ongoing impact of the new card. These questions measure awareness of the

card, attitudes towards the benefits package and impact on brand loyalty. The

measures are built from existing key performance indicators used by the retailer

to help optimise marketing spend.

Ethics, standards and legislation

Industry codes of conduct

Mention has already been made to the definition of ‘classic’, or confidential,

market research, which forms the basis of the Market Research Society Code of

Conduct. This code, rewritten in 2005 and binding on all members of the MRS, is

comparable to the International Chamber of Commerce Code for market research,

adopted by the European Society for Market and Opinion Research (ESOMAR)

and by market research professional bodies throughout the world. The ICC Code

was first introduced in the late 1940s and the MRS Code in the early 1950s –

nearly forty years before the initial data protection legislation containing some

similar principles to protect the consumer/citizen was introduced within Europe

in the 1980s.

These codes cover the core ethical elements necessary when collecting data from

respondents and managing market research projects – identifying what

researchers must do.

The eight key principles within the MRS Code are:

� Market researchers will conform to all relevant national and international

laws


2.1 – 27

� Market researchers will behave ethically and will not do anything which

might damage the reputation of market research

� Market researchers will take special care when carrying out research among

children and other vulnerable groups of the population

� Respondents’ co-operation is voluntary and must be based on adequate, and

not misleading, information about the general purpose and nature of the

project when their agreement to participate is being obtained, and all such

statements must be honoured

� The rights of respondents as private individuals will be respected by market

researchers and they will not be harmed or disadvantaged as the result of

co-operating in a market research project

� Market researchers will never allow personal data they collect in a market

research project to be used for any purpose other than market research

� Market researchers will ensure that projects and activities are designed,

carried out, reported and documented accurately, transparently, objectively

and to appropriate quality

� Market researchers will conform to the accepted principles of fair

competition

The MRS Code is supported by a number of schemes and guidelines:

� Foremost of these is the Interviewer Identity Card Scheme – most agencies

subscribe to this scheme

� Freephone MRS – which enables anyone invited to take part in an interview

to check the identity of the market research company

� MRS Codeline – a telephone-based query and enquiry line

� Guidelines which provide members with detailed interpretation of the code

in the context of different research techniques

� Independent disciplinary structure

Quality control standards in market research are maintained through the

Interviewer Quality Control Scheme and the Market Research Quality Standards

Association (BS7911). The latter is a TQM scheme with standards designed to

improve the quality of the research process, whereas the former applies to the

interview stage of a survey. In both cases, agencies are required to ‘back-check’ a

proportion of completed interviews by recontacting respondents and checking

who they are and a number of the answers they gave. Compliance with either

scheme is verified through rigorous and independently conducted audits. An

international, ISO, standard is currently being finalised.

Data protection legislation (N.B. this is covered more fully in chapter 12.1)

The basis of the 1998 Data Protection Act is to codify the principles of informed

consent and transparency – in market research this means that respondents

must have given their consent to their personal data being used for research

purposes and understand what this means and how their data will be used.

2.1 – 28


So, for example:

� Personal data collected in a ‘classic’ confidential market research survey

cannot be used for other purposes. Interviews or surveys where some of the

data will be used for market research and some or all of the data used for

other purposes (e.g. training staff or enhancing a customer database) cannot

be positioned as confidential market research or adhering to the MRS Code.

� If a respondent asks the interviewer the source of their name and address

etc., then this information must be provided at some point in the interview.

� Video and audio tapes of group discussions that enable individuals to be

identified cannot be provided to clients, even solely for research purposes,

without permission having been gained from all respondents at the time the

group was conducted.

� If it is thought that a further interview might be required with a respondent,

then this permission must be sought at the initial interview.

� Research findings at individual respondent level cannot be passed back to

the client by the agency, even for research purposes only, without the

explicit consent of the respondent at the time of the interview.

� Where ‘sensitive’ data as defined in the Act is being collected within a

survey, then provided that the prospective respondent has consented to be

interviewed this counts as the necessary explicit consent required within the

Act. However, the respondent must have given ‘informed consent’ – i.e.

understood that the information collected in the survey is for confidential

survey purposes only.

N.B. Under the Act samples drawn from a customer database used for

market research purposes in the UK, and registered as such with the

Information Commissioner do not need to be pre-screened against the

MPS, TPS or other preference services, or have general ‘do not contact

for marketing purposes’ suppression-marked records excluded.

A description of the impact of the 1998 Act on market research is described

in the Legal and Regulatory Update, Interactive Marketing, Vol. 4 No. 2,

October 2002.

Also, the Market Research Society website (www.mrs.org.uk) contains the

MRS Code of Conduct and detailed guidelines covering data protection and

market research, including one developed with the client-side market

research trade body, the Association of Users of Research Agencies (AURA).

The marriage of market research and database marketing

As described earlier, ‘classic’ market research is no longer the only source of

information about consumers and markets. Many organisations have developed

customer databases and are seeking ways to use the results from classic research

surveys to add ‘colour’ and depth to the transaction data, but without breaking

either the ethical codes of the market research industry or the 1998 Data

Protection Act.


2.1 – 29

There are essentially two main models that can be adopted to try and achieve

greater insights on consumer behaviour in this way:

1. Database as a sample source

The first model as shown in figure 2.1.5 simply uses the database as a sampling

frame to help develop new products or services and target these to the most

appropriate segments of customers. This model is of particular relevance to direct

marketing, as it integrates the traditional testing cycle and replicates the

marketing process. While this model was originally built for developing direct

mail campaigns, this can be readily adapted for online direct marketing.

Figure 2.1.5 Database as a sampling frame

The first two steps are based on drawing samples from the database to undertake

initial qualitative and quantitative research to help develop a new product, define

the target customer segments and assess likely demand etc. The quantitative

stage (2) is based on quantitative research, where a number of concept variations,

including price, can be tested at low cost. The following example illustrates this

type of concept test and the demand forecasting applied to the results by

including a control concept with known demand characteristics.

This survey was based on testing 30 concept variations, each one being mailed to

samples of 600 customers. Demand was based on a four-point rating scale (very

interested; quite interested; uninterested; no interest). Non-response was treated

as indicating ‘no interest’ in terms of developing a forecast. The control is based

on the actual sales achieved through a previous product mailing and provides a

figure to adjust the forecast from the concept test.

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Control product Test cell A

1. Questionnaires mailed 600 600

2. Very Interested 48 35

3. Quite Interested 73 60

4. Forecast (VI+QI)/2 (48 + 73)/2 = 10.1% (35 + 60)/2 = 7.9%

6 6

5. Control take-up 8.9%

6. Forecast adjustment 8.9 = 0.881

10.1

7. Adjusted forecast 10.1 x 0.881 = 8.9% 7.9 x 0.881 = 7.0%

The third stage (3) is to extract samples for conducting group discussions among

customers on the creatives for the direct mail pack. The fourth stage (4) is the

standard direct mail testing process, based on the results of stage 2 in terms of

the target groups and product offer, with the packs also based on the learning

from stage 3. Stage 5 is the launch mailing and stage 6 is the crucial follow-up

survey among samples of non-responders and responders to the launch mailing to

confirm reasons for either responding or not responding to the mailing.

Models based on the above have been used very successfully over many years by

early adopters of direct mail database marketing, such as Readers Digest and the

Automobile Association.

2. Integrating research into a database

The second type of core model is based on a process which matches the actual

results from a customer survey at personal record level with the records held on

the database. These ‘enriched’ records are then used to model the results across

the database. The final data set is totally anonymised, and the matching/modelling

to produce the final database is normally undertaken by an agency. The process

therefore meets the requirements of the MRS Code of Conduct and the 1998 Act.

The example in figure 2.1.6 shows the ‘First T’ model developed by dunnhumby

and BMRB International. The survey data is derived from matching a three-year

data set of the Target Group Index respondents (75,000 records), which provides

a very rich source of demographic data, product/brand consumption, media

consumption and attitude profiles etc.


2.1 – 31

Figure 2.1.6 ‘First T’ matching process

Source: First T (dunnhumby/BMRB)

The following two examples show the type of additional profile information that

can be developed from this type of model based on a real-life project using the

‘First T’ model:

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Taking a holistic view

In today’s increasingly complex world, competitive advantage from information

requires a re-thinking of the traditional role of market research in order to ensure

that it becomes fully integrated into other sources of knowledge - internal and

external. New marketing (see New Consumer Marketing by Susan Baker) needs

new market research; new research on how we make everyday decisions in our

lives requires a new approach to understanding consumer behaviour (see Blink by

Malcolm Gladwell); more knowledge needs new ways to process the additional

information and make it relevant to and valued by decision makers (See Blink,

and, The art and science of interpreting market research evidence by David

Smith and Jonathan Fletcher).

Earlier on in this chapter, the market research project process was described in

detail (see fig 2.1.2). The following figure, 2.1.7, shows how this model needs to

be expanded in order to provide organisations with a wider and more in-depth

view of a particular situation in order to make more informed decisions:

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2.1 – 33

Figure 2.1.7 New market research model: Ading real value

At the heart of the ‘new’ process is a joint client/agency team to drive the project.

The research methodologies include a separately defined stage to gather together

existing information (‘desk’ research). A further additional step is to research the

views of acknowledged experts - inside and outside the organisation. Some

market leading organisations, such as Procter & Gamble are increasingly using

creative workshops within the research process, combining the expertise of the

marketing team, R&D, advertising/brand specialists, market researchers - and

most importantly, consumers. This process played a significant role, for example,

in repositioning the P&G Olay brand. The model also includes the potential use of

specialist techniques, such as semiotics and ethnography where appropriate,

perhaps in addition to traditional qualitative techniques. All of this creates

significant additional depth at the analytical stage, including additional inputs

from sources such as the customer database and intuition (harnessing the

knowledge and experience of team members and other management) - and the

need to identify the key underlying messages (‘thin-slicing’ the data: Malcolm

Gladwell) and present them to decision makers in highly motivational ways, the

evidence-based recommendations presented through narrative-based

presentations recommended by Smith &Fletcher.

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