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Observation and Archival Techniques

Observation and Archival Techniques. MAR 6648: Marketing Research January 13, 2010. Overview. What is observational research? What can it do? What can’t it do? What is archival research? What can it do? What can’t it do? What are modern methods of each?. The Marketing Research Process.

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Observation and Archival Techniques

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  1. Observation and Archival Techniques MAR 6648: Marketing Research January 13, 2010

  2. Overview • What is observational research? • What can it do? What can’t it do? • What is archival research? • What can it do? What can’t it do? • What are modern methods of each?

  3. The Marketing Research Process

  4. Observational Research • Infant mortality and illness rates stopped improving • Doctors thought they had simply hit the limit • Dr. Virginia Apgar suggested that they simply report the physical condition of newborns • Adoption of the score revealed variation in hospital performance, identified at-risk babies, and improved infant health

  5. Observation and Grocery Stores • Why are frequently bought items (milk, bread) in the back? • How far shoppers walk (not time spend) • Greater incidental purchases • Why the grocery cart? • Often determines the amount you shop • Begin with the produce or bakery section • Shoppers who are physiologically sensitized buy more • Store brands are placed right of Name brands • Easier to reach (most people are right handed) • High-profit items on right side of aisle • Predominant traffic direction • Limit # per shopper • People tend to buy the limit, or at least buy more • Froot Loops, Cocoa Puffs, etc., on lower shelf than Shredded Wheat, etc. • Children’s eye level

  6. Why We Buy • Taking anthropology into the store • Hidden cameras, stopwatches, sophisticated data analysis… • Most important: The Tracking Sheet • Simply a structured way to record what people actually do

  7. Why We Buy • What can be learned? • Shoppers go to the right • The “butt-brush” effect • Who actually buys the dog biscuits? • When do people read signs? • “Conversion Rate”

  8. Ethnography • From anthropology • Immerse yourself in a culture • Usually done by trained anthropologists or sociologists • Requires extended videotaping, sophisticated coding and editing • Objectives • Direct observation of customer • Experience ins and outs of customers’ daily lives

  9. Ethnography • Good for… • Noting nonstandard uses • Understanding how consumers interact with their environment • In complex situations • In low involvement situations • Figuring out unarticulated needs

  10. Observational Research • Conducting observational research: • Keep your goals in mind: Descriptive vs. Inferential vs. Evaluative • Identify a behavior (or behaviors) you want to study • Define them extraordinarily carefully • Determine the unit of analysis (e.g., person, time, product, etc.) • Unobtrusively count • Ideally, check your count against someone else’s

  11. Modernizing Observation • Measuring media consumption • Radio moves to the web, the web moves to TV, and TV to VOD, cellphones, and iPods • What is the right measure? • Originally people completed paper diaries • Then the “People Meter”—an electronic device attached to the TV set • Portable People Meters • Small device clipped to belt • Measures radio and TV usage • Automatically uploads data to the central office at the end of the day

  12. Arbitron’s Portable People Meters • Radio stations encoded with a unique signal identifiable by the PPM • 10 years, $80 million • The PPM captures any media exposure in the vicinity of the wearer • What are the shortcomings of this measure? • Consider adding GPS to identify proximity to billboards

  13. PPM in Action

  14. PPM in Action • AFC Championship Game: NY Jets vs. Indianapolis Colts (Jan. 31, 2010) • 40,000 panelists • Findings: • Many men watched the game away from home. • So do women. • The game was particularly popular in New York. • Are these novel insights? • Are they actionable? • What other information should Arbitron try to observe?

  15. Consumer Generated Media • “Consumer Generated Media” (CGM) encompasses the millions of consumer-generated comments, opinions, and personal experiences posted in publicly available online sources on a wide range of issues, topics, products, and brands” • Why care about CGM? • Marketers can easily lose control of the message • Consumers can talk to each other at an unprecendented speed

  16. Case: Kryptonite

  17. Case: Kryptonite

  18. Case: FedEx Furniture

  19. Case: FedEx Furniture

  20. Keep in Mind… • The Streisand Effect • “The Net interprets censorship as damage and routes around it.”

  21. Advantages of Observational Research • Conclusions are externally valid • Inferences are broadly unassailable • Data collection is (generally) inexpensive • Plausibly unbiased

  22. Disadvantages of Observational Research • All but impossible to discern cause • Limited ability to manipulate critical variables • Concerns about reactivity • Can only measure overt behavior

  23. What Can Archival Research Do? • Do people become more aggressive the hotter it gets? • Police and weather reports • Rioting and high temperature • Hit by pitch in baseball

  24. Archival Research • General well-being and trends • Content analysis • Song lyrics, blogs, etc. • ngrams

  25. Industrial Archival Data • Available, focused, but often expensive • Different industries collect different info in different ways • Packaged goods • Retail • Direct Mail • E-commerce • Entertainment

  26. Packaged Goods • Household scanner data • Consumer behavior • Trends • POS scanner data • Nielsen BASES • Product development • Line extensions • E-Concept testing

  27. Retail • Loyalty card databases • Frequent shopper programs • Allows the retailer to track households’ in-store behavior over time • Uses: • Who are my most valuable customers? • Optimal coupon design and targeting • Effects of competition—who do I lose?

  28. Case: Wal-Mart vs. … • Frequent shopper data from a retailer covering about 2 years • A Wal-Mart Supercenter entered the market about halfway through the period • Why the dip? • Fewer customers, different customers, or fewer purchases? • Loyalty card data can answer the question

  29. Direct Mail • Catalog companies • “The house file”: Database on past mailings and purchase history for each customer • Non-profit solicitations • “The house file”: Database on past contacts and donation history • Uses: • Design optimal contact strategies • Customer Lifetime Value calculations

  30. E-commerce • comScore Networks • This is similar to Nielsen/IRI home scanner panels—only for the web • Monitor web activity for a large sample of households • Clickstream • Online purchase behavior

  31. Entertainment Industry • Companies in the media and entertainment industry operate in “fast” markets: • Lifespan of product is short • Consumers are constantly exposed to and are trying new products • Need to know: “Where is the market now and where is it going?” • Traditional and modern approaches • Traditional: Nielsen TV ratings, BookScan, SoundScan, etc. • Modern: iTunes sales, Big Champagne, Buzzmetrics, CGM

  32. Summary • Observational research can let you know what happens out in the world • Our beliefs and the data often don’t match; observation can tell you when, and give you ideas for what to do • Archival research can give you data on small-scale and large-scale trends

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