Marketing

Custom Social Networks:

Del Monte Unleashes Dog-Lover Insights

When Del Monte Foods—maker of such well-known dog food brands as Kibbles 'n Bits, Gravy Train, and Milk-Bone—was considering a new breakfast treat for dogs, it sent out a note to an online community of dog owners, called "I Love My Dog," asking them what they most wanted to feed their pets in the morning. The consensus answer was something with a bacon-and-egg taste. The result: Del Monte introduced Snausages Breakfast Bites, born out of insights that a dedicated segment of dog owners love to share holiday events and mealtimes with their pets. The Snausages Breakfast Bites are flavored like bacon and eggs and contain an extra dose of vitamins and minerals, which the dog owners said was also important to them.

The "I Love My Dog" online community isn't some random chat room or yet another Web site for dog enthusiasts—it's a custom social network created by Del Monte working with research firm MarketTools. Its 400 members were handpicked to join the private social network, which the company uses to help create products, test marketing campaigns, and stir up buzz. "The idea is to develop a relationship ... create ad hoc surveys and get feedback," says Del Monte Senior Customer Insights Manager Gala Amoroso. "If one of the brand managers has a new product idea or a different positioning, instead of

Designing the sample requires three decisions. First, who is to be surveyed (what sampling unit)? The answer to this question is not always obvious. For example, to study the decision-making process for a family automobile purchase, should the researcher interview the husband, wife, other family members, dealership salespeople, or all of these? The researcher must determine what information is needed and who is most likely to have it.

Second, how many people should be surveyed (what sample size)? Large samples give more reliable results than small samples. However, larger samples usually cost more, and it is not necessary to sample the entire target market or even a large portion to get reliable results. If well chosen, samples of less than 1 percent of a population can often give good reliability.

Third, how should the people in the sample be chosen (what sampling procedure)? • Table 4.4 describes different kinds of samples. Using probability samples, each popula--tion member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error. But when probability sampling costs too much or takes too much time, marketing researchers often take nonprobability samples, even though their sampling error cannot be measured. These varied ways of drawing samples have different costs and time limitations as well as different accuracy and statistical properties. Which method is best depends on the needs of the research project.

just internal brainstorming within the company and before putting real research dollars behind it, we'll float it with the [online] community."

Such online networks are now rapidly spreading. They are often cheaper and more effective than phone surveys or traditional focus groups because companies can draw on the participants in a much broader and deeper way than they could in an offline setting.

Del Monte found that traditional market research techniques simply weren't providing enough depth of customer understanding. Traditional qualitative methods (such as ethnographies and focus groups) were either too time-consuming or too shallow. Surveys and other quantitative methods, although helpful in answering specific questions, did not allow for interactive exploration. In contrast, the custom dog-lover network lets Del Monte continuously observe and interact with Important customers to obtain authentic, in-depth insights.

The "I Love My Dog" site and other custom networks bear a resemblance to other online social networking sites, where members create profile pages and post to discussion boards. Companies use them to administer polls, chat in real time with consumers, and even ask members to go to the store to try out specific products. The rapid back-and-forth between the company and the online community can help to substantially shorten the product-development cycle, a process that typically takes a year or more from the time a company comes up with a product idea until the item arrives in stores.

For Snausages Breakfast Bites, that process took only six months. During that time, Del Monte contacted "I Love My Dog" members dozens of times, both as a group and individually. The company has also tapped network members for prelaunch Insights into other products, including its Pup-Peroni treat that recently landed on store shelves. "It is not just a focus group that you see for three hours; you are developing a relationship with these pet parents," says Amoroso.

As with any social-networking site, these private networks face the constant risk of member boredom and, ultimately, member dropout. There can be a fair amount of turnover on the private networks, and to keep members around, the companies that set them up have to constantly add games and other features, along with incentives such as coupons, giveaways, and sneak peeks at new products. Properly tended, however, networks such as "I Love My Dog" help remove some of the guesswork for marketers by letting brands know exactly to whom they are talking and giving them more control over the discussions.

Based on the success of the "I Love My Dog" network, Del Monte has now worked with MarketTools to create another custom network, this one consisting of 10,200 moms. It plans to tap this Moms Insight Network for advice and collaboration on current brands as well as new product launches. One key insight already gleaned from the moms network is that moms trust experts less than ever and are more interested in hearing from other moms in similar situations. This finding lends even greater importance to the Moms Insight Network, which not only seeks in-depth inputs from mothers but connects them with each other in the context of Del Monte brands.

Amoroso has high hopes for Del Monte's custom social networks. "The online community Web sites give us a wealth of information about our target consumers' pains and needs and provides a platform for us to explore and understand their attitudes and behaviors," she says. "It helps us anticipate and identify opportunities, and it enables us to collaborate with our target market to develop new solutions that truly meet their needs. It's different than receiving a report from a study. It's about taking the time to go to the community and listen."

Sources: Portions adapted from Emily Steel, "The New Focus Groups: Online Networks," Wall Street Journal, January 14, 2008, p. B6; with quotes and other information from Abbey Klaassen, "Del Monte to Take Its Cues from Moms," Advertising Age, July 2, 2007, accessed at http://adage.com/print?article_id=118908; and "Del Monte Foods Turns to Dog Owners to Unleash Innovation," MarketTools Case Study, May 2008, accessed at http://www.markettools.com/resources/files/CS_DelMonte.pdf.

table I 4.4 Types of Samples

Probability Sample

Simple random sample Stratified random sample

Cluster (area) sample Nonprobability Sample

Every member of the population has a known and equal chance of selection.

The population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group.

The population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to Interview.

Convenience sample Judgment sample

Quota sample

The researcher selects the easiest population members from which to obtain information.

The researcher uses his or her judgment to select population members who are good prospects for accurate information.

The researcher finds and interviews a prescribed number of people in each of several categories.

Research Instruments

In collecting primary data, marketing researchers have a choice of two main research instruments—the questionnaire and mechanical devices.

Questionnaires. The questionnaire is by far the most common instrument, whether administered in person, by phone, or online. Questionnaires are very flexible—there are many ways to ask questions. Closed-end questions include all the possible answers, and subjects make choices among them. Examples include multiple-choice questions and scale questions. Open-end questions allow respondents to answer in their own words. In a survey of airline users, Singapore Airlines might simply ask, "What is your opinion of Singapore Airlines?" Or it might ask people to complete a sentence: "When I choose an airline, the most important consideration is. . . ." These and other kinds of open-end questions often reveal more than closed-end questions because they do not limit respondents' answers.

Open-end questions are especially useful in exploratory research, when the researcher is trying to find out what people think but not measuring how many people think in a certain way. Closed-end questions, on the other hand, provide answers that are easier to interpret and tabulate.

Researchers should also use care in the wording and ordering of questions. They should use simple, direct, unbiased wording. Questions should be arranged in a logical order. The first question should create interest if possible, and difficult or personal questions should be asked last so that respondents do not become defensive. A carelessly prepared questionnaire usually contains many errors (see • Table 4.5).

Mechanical Instruments. Although questionnaires are the most common research instrument, researchers also use mechanical instruments to monitor consumer behavior. Nielsen Media Research attaches people meters to television sets in selected homes to record who watches which programs. Retailers use checkout scanners to record shoppers' purchases.

Other mechanical devices measure subjects' physical responses. For example, advertisers use eye cameras to study viewers' eye movements while watching ads—at what points their eyes focus first and how long they linger on any given ad component. IBM's BlueEyes technology interprets human facial reactions by tracking pupil, eyebrow, and mouth movements. BlueEyes offers a host of potential marketing uses, such as marketing machines that "know how you feel" and react accordingly. An elderly man squints at the screen of an automated-banking machine, and the font size doubles almost instantly. A woman at a shopping center kiosk smiles at a travel ad, prompting the device to print out a travel discount coupon.29

Still other researchers are applying "neuromarketing," measuring brain activity to learn how consumers feel and respond. Marketing scientists using MRI scans have learned that

• table I 4,5 A "Questionable Questionnaire"

Suppose that a summer camp director has prepared the following questionnaire to use in interviewing the parents of prospective campers. How would you assess each question?

1. What is your income to the nearest hundred dollars? People don't usually know their income to the nearest hundred dollars, nor do they want to reveal their income that closely. Moreover, a researcher should never open a questionnaire with such a personal question.

2. Are you a strong or weak supporter of overnight summer camping for your children? What do "strong" and "weak" mean?

3. Do your children behave themselves well at a summer camp? Yes ( ) No ( ) "Behave" is a relative term. Furthermore, are yes and no the best response options for this question? Besides, will people answer this honestly and objectively? Why ask the question in the first place?

4. How many camps mailed or e-mailed information to you last year? This year? Who can remember this?

5. What are the most salient and determinant attributes in your evaluation of summer camps? What are salient and determinant attributes? Don't use big words on me!

6. Do you think it Is right to deprive your child of the opportunity to grow into a mature person through the experience of summer camping? loaded question. Given the bias, how can any parent answer yes?

"strong brands trigger activity in parts of the brain associated with self-identification, positive emotions, and rewards." According to one observer, it "turns out the Nike's swoosh is more than just a feel-good brand logo. It actually lights up your brain." A Similarly, when researchers strapped electrode-loaded caps on the noggins of test subjects during last year's Super Bowl, America's championship football game, to measure advertising engagement, they learned that brain activity soared for some ads but lagged for others.30 Here's an example of neuromarketing at work:31

Thirty-four bathroom-cleanser users recently went to a research lab to watch "Prison Visitor," the much-awarded TV spot for Unilever's Vim line of home cleaners, positioned as a product that "deals with the toughest dirt." The ad shows a young girl visiting her distraught mother, who appears to be behind a prison glass but is revealed to be scrubbing a grimy shower. Researchers wanted a "clean read" on the ad, so they tested consumers in places where the ad never aired and where the product wasn't yet available. Participants reacted strongly to a "hands on glass" sequence, particularly during a dramatic "I love you, Momma!" "I love you too, baby!" exchange. However, the scenes showing the product demonstration and brand message evoked a much weaker response. In all, the ad stirred up very strong, mostly negative emotions. Follow-up interviews showed that consumers actually hated the ad. How did researchers measure viewers' response to such emotionally charged advertising? Easy. Each participant in the study was asked how they felt about the ad. Oh, and even more telling, there were six electrodes attached to each person's head. Welcome to the world of neuromarketing, which peers into consumers' minds by measuring brain activity to discover how consumers respond to brands and marketing.

Although neuromarketing techniques can measure consumer involvement and emotional responses minute by minute, such brain responses can be difficult to interpret. Thus, neuromarketing is usually used in combination with other research approaches to gain a more complete picture of what goes on inside consumers' heads.32

Implementing the Research Plan

The researcher next puts the marketing research plan into action. This involves collecting, processing, and analyzing the information. Data collection can be carried out by the company's marketing research staff or by outside firms. The data collection phase of the marketing research process is generally the most expensive and the most subject to error. Researchers should watch closely to make sure that the plan is implemented correctly. They must guard against problems with contacting respondents, with respondents who refuse to cooperate or who give biased answers, and with interviewers who make mistakes or take shortcuts.

Researchers must also process and analyze the collected data to isolate important information and findings. They need to check data for accuracy and completeness and code it for analysis. The researchers then tabulate the results and compute statistical measures.

Interpreting and Reporting the Findings

The market researcher must now interpret the findings, draw conclusions, and report them to management. The researcher should not try to overwhelm managers with numbers and fancy statistical techniques. Rather, the researcher should present important findings and insights that are useful in the major decisions faced by management.

Neuromarketing: When researchers strapped electrode-loaded caps on the noggins of test subjects during last year's Super Bowl, they learned that brain activity soared for some ads but lagged for others.

However, interpretation should not be left only to the researchers. They are often experts in research design and statistics, but the marketing manager knows more about the problem and the decisions that must be made. The best research means little if the manager blindly accepts faulty interpretations from the researcher. Similarly, managers may be biased—they might tend to accept research results that show what they expected and to reject those that they did not expect or hope for. In many cases, findings can be interpreted in different ways, and discussions between researchers and managers will help point to the best interpretations. Thus, managers and researchers must work together closely when interpreting research results, and both must share responsibility for the research process and resulting decisions.

Author I We've talked generally Comment | about managing customer relationships throughout the book. But here, "Customer Relationship Management" (CRM) has a much narrower data-management meaning. It refers to capturing and using customer data from all sources to manage customer interactions and build customer relationships.

Customer relationship management (CRM)

Managing detailed information about individual customers and carefully managing customer "touch points" in order to maximize customer loyalty.

Analyzing and Using Marketing

Information (pp 144-146)

Information gathered in internal databases and through marketing intelligence and marketing research usually requires additional analysis. And managers may need help applying the information to gain customer and market insights that will improve their marketing decisions. This help may include advanced statistical analysis to learn more about the relationships within a set of data. Information analysis might also involve the application of analytical models that will help marketers make better decisions.

Once the information has been processed and analyzed, it must be made available to the right decision makers at the right time. In the following sections, we look deeper into analyzing and using marketing information.

• Customer Relationship Management (CRM)

The question of how best to analyze and use individual customer data presents special problems. Most companies are awash in information about their customers. In fact, smart companies capture information at every possible customer touch point. These touch points include customer purchases, sales force contacts, service and support calls, Web site visits, satisfaction surveys, credit and payment interactions, market research studies—every contact between the customer and the company.

The trouble is that this information is usually scattered widely across the organization. It is buried deep in the separate databases and records of different company departments. To overcome such problems, many companies are now turning to customer relationship management (CRM) to manage detailed information about individual customers and carefully manage customer touch points in order to maximize customer loyalty.

CRM first burst onto the scene in the early 2000s. Many companies rushed in, implementing overly ambitious CRM programs that produced disappointing results and many failures. More recently, however, companies are moving ahead more cautiously and implementing CRM systems that really work. By 2012, U.S. companies will spend an estimated $6.6 billion on CRM systems from companies such as Oracle, Microsoft, Salesforce.com, and SAS.33

CRM consists of sophisticated software and analytical tools that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships. CRM integrates everything that a company's sales, service, and marketing teams know about individual customers to provide a 360-degree view of the-customer relationship.

CRM analysts develop data warehouses and use sophisticated data mining techniques to unearth the riches hidden in customer data. A data warehouse is a companywide electronic database of finely detailed customer information that needs to be sifted through for gems. The purpose of a data warehouse is not just to gather information, but to pull it together into a central, accessible location. Then, once the data warehouse brings the data together, the company uses high-powered data mining techniques to sift through the mounds of data and dig out interesting findings about customers.

These findings often lead to marketing opportunities. For example, Wal-Mart's huge database provides deep insights for marketing decisions. A few years ago, as Hurricane Ivan roared toward the U.S. Gulf Coast, reports one observer, the giant retailer "knew exactly what to rush onto the shelves of stores in the hurricane's path—strawberry Pop Tarts. By mining years of sales data from just prior to other hurricanes, [Wal-Mart] figured out that shoppers would stock up on Pop Tarts— a breakfast food that doesn't require refrigeration or cooking."34

By using CRM to understand customers better, companies can provide higher levels of customer service and develop deeper customer relationships. They can use CRM to pinpoint high-value customers, target them more effectively, cross-sell the company's products, and create offers tailored to specific customer requirements.

For example, AHarrah's Entertainment, the world's largest casino operator, uses CRM to manage day-to-day relationships with important customers at its Harrah's, Caesars, Horseshoe, Bally's, Flamingo, and Showboat casinos around the world. During the past decade, Harrah's Total Rewards Program has become the model for good CRM and customer-loyalty management.35

More than 80 percent of Harrah's customers worldwide—40 million in all—use a Harrah's Total Rewards card. Information from every swipe of every card at each of Harrah's 40 casinos is sent to a central computer, creating a vast customer database. Harrah's carefully mines this mother lode of information to gain insights into customer characteristics and behavior. It then uses these insights to manage day-today customer relationships. In fact, Harrah's now processes customer information in real time, from the moment customers swipe their rewards cards, creating the ideal link between data and the customer experience.

Harrah Consumer
Customer relationship management: Harrah's CRM system helps the company to focus its branding, marketing, and service development strategies on the needs of its most important customers. "We're trying to figure out which products sell, and we're trying to increase our customer loyalty."

Based on up-to-the-minute customer information, casino personnel know which customers should be rewarded with free show tickets, dinner vouchers, or room upgrades. Says Harrah's chief information officer, "A person might walk up to you while you're playing and offer you $5 to play more slots, or a free meal, or maybe just wish you a happy birthday." Compared with nonmembers, Total Rewards customers visit the company's casinos more frequently, stay longer, and spend a lot more of their dollars in Harrah's rather than in rival casinos. Through smart CRM, Harrah's has hit the customer-loyalty jackpot. In just the past five years, the entertainment giant's sales have nearly tripled while profits have more than doubled.

CRM benefits don't come without cost or risk, either in collecting the original customer data or in maintaining and mining it. The most common CRM mistake is to view CRM only as a technology and software solution. But technology alone cannot build profitable customer relationships. "CRM is not a technology solution—you can't achieve ... improved customer relationships by simply slapping in some software," says a CRM expert. Instead, CRM is just one part of an effective overall customer relationship management strategy. "Focus on the R," advises the expert. "Remember, a relationship is what CRM is all about."36

When it works, the benefits of CRM can far outweigh the costs and risks. Based on a study by SAP, customers using its mySAP CRM software reported an average 10 percent increase in customer retention and a 30 percent increase in sales leads. Overall, 90 percent of the companies surveyed increased in value from use of the software and reported an attractive return on investment. The study's conclusion: "CRM pays off."37

Distributing and Using Marketing Information

Marketing information has no value until it is used to gain customer insights and make better marketing decisions. Thus, the marketing information system must make the information readily available to the managers and others who make marketing decisions or deal with customers. In some cases, this means providing managers with regular performance reports, intelligence updates, and reports on the results of research studies.

But marketing managers may also need nonroutine information for special situations and on-the-spot decisions. For example, a sales manager having trouble with a large customer may want a summary of the account's sales and profitability over the past year. Or a retail store manager who has run out of a best-selling product may want to know the current inventory levels in the chain's other stores. Increasingly, therefore, information distribution involves entering information into databases and making it available in a timely, user-friendly way.

Many firms use a company intranet to facilitate this process. The intranet provides ready access to research information, reports, shared work documents, contact information for employees and other stakeholders, and more. For example, iGo, a catalog and Web retailer, integrates incoming customer service calls with up-to-date database information about customers' Web purchases and e-mail inquiries. By accessing this information on the intranet while speaking with the customer, iGo's service representatives can get a well-rounded picture of each customer's purchasing history and previous contacts with the company.

In addition, companies are increasingly allowing key customers and value-network members to access account, product, and other data on demand through extranets. Suppliers, customers, resellers, and select other network members may access a company's extranet to update their accounts, arrange purchases, and check orders against inventories to improve customer service. For example, Wal-Mart's RetailLink extranet system provides suppliers with a two-year history of every product's daily sales in every Wal-Mart store worldwide, letting them track when and where their products are selling and current inventory levels. And retailer Target's PartnersOnline extranet lets its supplier/partners review current sales, inventory, delivery, and forecasting data. Such information sharing helps Target, its suppliers, and its customer by elevating the performance of the supply chain.38

Thanks to modern technology, today's marketing managers can gain direct access to the information system at any time and from virtually any location. They can tap into the system while working at a home office, from a hotel room, or from the local Starbucks through a wireless network—anyplace where they can turn on a laptop and link up. Such systems allow managers to get the information they need directly and quickly and to tailor it to their own needs. From just about anywhere, they can obtain information from company or outside databases, analyze it using statistical software, prepare reports and presentations, and communicate directly with others in the network.

Other Marketing Information Considerations (PP i46-i52>

This section discusses marketing information in two special contexts: marketing research in small businesses and nonprofit organizations and international marketing research. Finally, we look at public policy and ethics issues in marketing research.

Marketing Research in Small Businesses and Nonprofit Organizations

Just like larger firms, small organizations need market information and the customer and market insights that it can provide. Start-up businesses need information about their potential customers, industries, competitors, unfilled needs, and reactions to new market offers.

Before opening Bibberituckers dry cleaner, owner Robert Byerly conducted research to gain insights into what customers wanted. First on the list was quality.

Existing small businesses must track changes in customer needs and wants, reactions to new products, and changes in the competitive environment.

Managers of small businesses and nonprofit organizations often think that marketing research can be done only by experts in large companies with big research budgets. True, large-scale research studies are beyond the budgets of most small businesses. However, many of the marketing research techniques discussed in this chapter also can be used by smaller organizations in a less formal manner and at little or no expense. A Consider how one small-business owner conducted market research on a shoestring before even opening his doors:39

After a string of bad experiences with his local dry cleaner, Robert Byerley decided to open his own dry-cleaning business. But before jumping in, he conducted plenty of market research. He needed a key customer insight: How would he make his cleaners stand out? To start, Byerley spent an entire week in the library and online, researching the dry-cleaning industry. To get input from potential customers, using a marketing firm, Byerley held focus groups on the store's name, look, and brochure. He also took clothes to the 15 best competing cleaners in town and had focus group members critique their work. Based on his research, he made a list of features for his new business. First on his list: quality. His business would stand behind everything it did. Not on the list: cheap prices. Creating the perfect dry-cleaning establishment simply didn't fit with a discount operation.

With his research complete, Byerley opened Bibbentuckers, a high-end dry cleaner positioned on high-quality service and convenience.

It featured a bank-like drive-through area with curbside delivery. A computerized bar code system read customer cleaning preferences and tracked clothes all the way through the cleaning process. Byerley added other differentiators, such as decorative awnings, refreshments, and TV screens. "I wanted a place . . . that paired five-star service and quality with an establishment that didn't look like a dry cleaner," he says. The market research yielded results. Today, Bibbentuckers is a thriving three-store operation.

"Too [few] small-business owners have a . . . marketing mind-set," says a small-business consultant. "You have to think like Procter & Gamble. What would they do before launching a new product? They would find out who their customer is and who their competition is."40

Managers of small businesses and nonprofit organizations can obtain good marketing insights simply by observing things around them and talking with their customers. They can conduct informal surveys using small convenience samples. Small organizations can also obtain most of the secondary data available to large businesses. And many associations, local media, chambers of commerce, and government agencies provide special help to small organizations. For example, the European Small Business Alliance offers dozens of free publications and a Web site (www.esba-europe.org) that give advice on topics ranging from starting, financing, and expanding a small business to ordering business cards. Finally, small businesses can collect a considerable amount of information at very little cost on the Internet. They can scour competitor and customer Web sites and use Internet search engines to research specific companies and issues.

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In summary, secondary data collection, observation, surveys, and experiments can all be used effectively by small organizations with small budgets. However, although these informal research methods are less complex and less costly, they still must be conducted with care. Managers must think carefully about the objectives of the research, formulate questions in advance, recognize the biases introduced by smaller samples and less skilled researchers, and conduct the research systematically.41

International Marketing Research

International marketing research has grown tremendously over the past decade. In 1995, the top 25 global marketing research organizations had total combined revenues of $5.7 billion, with 45 percent of these revenues coming from outside companies' home countries. By 2006, total revenues for these organizations had grown to $15.5 billion, and the out-of-home-country share had grown to more than 55 percent.42

International marketing researchers follow the same steps as domestic researchers, from defining the research problem and developing a research plan to interpreting and reporting the results. However, these researchers often face more and different problems. Whereas domestic researchers deal with fairly homogenous markets within a single country, international researchers deal with diverse markets in many different countries. These markets often vary greatly in their levels of economic development, cultures and customs, and buying patterns.

In many foreign markets, the international researcher may have a difficult time finding good secondary data. Some countries have almost no research services at all. Some of the largest international research services do operate in many countries. AFor example, ACNielsen Corporation (owned by The Nielsen Company, the world's largest marketing research company) has offices in more than 100 countries, from Hong Kong to Nicosia, Cyprus.43 However, most research firms operate in only a relative handful of countries. Thus, even when secondary information is available, it usually must be obtained from many different sources on a country-by-country basis, making the information difficult to combine or compare.

Because of the scarcity of good secondary data, international researchers often must collect their own primary data. For example, they may find it difficult simply to develop good samples. Researchers in developed countries, can use current telephone directories, e-mail lists, census tract data, and any of several sources of socioeconomic data to construct samples. However, such information is largely lacking in many countries.

Once the sample is drawn, the U.S. researcher usually can reach most respondents easily by telephone, by mail, on the Internet, or in person. Reaching respondents is often not so easy in other parts of the world. Researchers in Mexico cannot rely on telephone, Internet, and mail data collection—most data collection is door to door and concentrated in three or four of the largest cities. In some countries, few people have phones or personal computers. For example, there are only 189 phone lines, 460 cell phone subscribers, and 136 PCs per thousand in Mexico. In Kenya, the numbers drop to 8 phone lines, 135 cell

Some of the largest research services firms have large international organizations. ACNielsen has offices in more than 100 countries, here Germany and Japan.

phone subscribers, and 9 PCs per thousand people. In some countries, the postal system is notoriously unreliable. In Brazil, for instance, an estimated 30 percent of the mail is never delivered. In many developing countries, poor roads and transportation systems make certain areas hard to reach, making personal interviews difficult and expensive.44

Cultural differences from country to country cause additional problems for international researchers. Language is the most obvious obstacle. For .example, questionnaires must be prepared in one language and then translated into the languages of each country researched. Responses then must be translated back into the original language for analysis and interpretation. This adds to research costs and increases the risks of error.

Translating a questionnaire from one language to another is anything but easy. Many idioms, phrases, and statements mean different things in different cultures. For example, a Danish executive noted, "Check this out by having a different translator put back into English what you've translated from English. You'll get the shock of your life. I remember [an example in which] 'out of sight, out of mind' had become 'invisible things are insane.'"45 Consumers in different countries also vary in their attitudes toward marketing research. People in one country may be very willing to respond; in other countries, non-response can be a major problem. Customs in some countries may prohibit people from talking with strangers. In certain cultures, research questions often are considered too personal. For example, in many Latin American countries, people may feel embarrassed to talk with researchers about their choices of shampoo, deodorant, or other personal care products. Similarly, in most Muslim countries, mixed-gender focus groups are taboo, as is videotaping female-only focus groups. Even when respondents are willing to respond, they may not be able to because of high functional illiteracy rates.

Despite these problems, as global marketing grows, global companies have little choice but to conduct such international marketing research. Although the costs and problems associated with international research may be high, the costs of not doing it—in terms of missed opportunities and mistakes—might be even higher. Once recognized, many of the problems associated with international marketing research can be overcome or avoided.

Public Policy and Ethics in Marketing Research

Most marketing research benefits both the sponsoring company and its consumers. Through marketing research, companies learn more about consumers' needs, resulting in more satisfying products and services and stronger customer relationships. However, the misuse of marketing research can also harm or annoy consumers. Two major public policy and ethics issues in marketing research are intrusions on consumer privacy and the misuse of research findings.

Intrusions on Consumer Privacy

Many consumers feel positive about marketing research and believe that it serves a useful purpose. Some actually enjoy being interviewed and giving their opinions. However, others strongly resent or even mistrust marketing research. They worry that marketers are building huge databases full of personal information about customers. Or they fear that researchers might use sophisticated techniques to probe our deepest feelings, peek over our shoulders as we shop, or eavesdrop on our conversations and then use this knowledge to manipulate our buying.

There are no easy answers when it comes to marketing research and privacy. For example, is it a good or bad thing that marketers track and analyze consumers' Web clicks and target ads to individuals based on their browsing behavior? (See Real Marketing 4.2.) Should we applaud or resent the fact that ConAgra, the giant food company known for its frozen turkeys and microwave meals, listens in on consumer Web discussions to learn all it can about diet trends and reactions to its brands?

On the one hand, most online chatter is public information, and listening in helps ConAgra to improve its products and bring more value to customers. On the other hand, although it tracks only public forums, the company does not inform consumers or obtain participants' formal consent. Many consumers would find it disconcerting to learn that ConAgra and other companies are tuning in on their online conversations.

Behavioral targeting: Wherever you go on the Internet, marketers are looking over your shoulder, then targeting you with ads based on your Web browsing behavior. Is it smart marketing or just "a little bit creepy"?

On the Internet today, everybody knows who you are. In fact, legions of Internet companies also know your gender, your age, the neighborhood you live in, that you like fast cars, and that you spent, say, three hours and 43 seconds on a Web site for pet lovers on a rainy day in January. All that data streams through myriad computer networks, where it's sorted, cataloged, analyzed, and then used to deliver ads aimed squarely at you, potentially anywhere you travel on the Web. It's called behavioral targeting—tracking consumers' online browsing behavior and using it to target ads to them.

Targeting ads on the Web is nothing new. Sites such as Google and Yahoo! routinely do "contextual targeting"—placing ads related to keyword searches alongside the search results. Most of Google's more than $10 billion in revenues come from search-related advertising. But consider this revealing fact: Internet users spend a mere 5 percent of their time actually searching. The rest of the time, they're trolling the vast expanse of Internet space. To fill that space more effectively, online advertisers are now deploying a new breed of supersmart, supertargeted display ads geared to individual Web-browsing behavior.

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Responses

  • swen
    What path was chosen to market del monte snausages?
    8 years ago

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