Operating data

It is perhaps surprising that many companies start by commissioning outside marketing research before organizing an internal desk research system. An entirely human reason is that it is often easier to commission an outside research agency than to persuade heads of functional departments, such as accounting and production, to produce records in a form that is of value in marketing decision making.

An earthenware manufacturer made a range of tableware such as plates, cups and saucers, together with a range of earthenware mugs. Having been very successful it was keen to open a second factory. The decision it had to make was how much of the new capacity should be devoted to the tableware and how much to mugs. The first piece of information required was to know what proportion each of these lines currently contributed to turnover and profit. Unfortunately the company's accounting system only produced customer invoices indicating a final cash figure. Customers of different sizes were given different discounts but these were not shown on invoices. Prices had changed several times during previous years but goods supplied were not itemized. No records of production output or breakages were kept. Any goods remaining at the end of the week were taken away by jobbers, with only a cash value being recorded. As a result, the company had no internal data on which to base its decision.

The increased availability and affordability of computer power mean that basic recordkeeping, which would have provided this company with at least a starting point for its decision-making problem, is easy to undertake. The first step is for the researcher to cooperate with relevant departments to ensure that appropriate records are instituted and maintained. The critical factor in this lies in the design of record-keeping in such a way that the statistics produced will be useful both to the originating department and to the management decision maker.

Decisions about the form in which the data is to be produced, its frequency of production and how it is to be analysed need to be taken before the system is initiated. No data-collection system should be initiated that will not or cannot be used; this is the quickest way to ensure that any research will never be taken seriously by the organization. One factor to be taken into account may be the period for record-keeping; for example, it is common to use four-

week periods (i.e. 13 'months' per year). These are more comparable than calendar months, having the same number of working days in them on a year-on-year basis, which is often not the case when calendar months are used. Differences in the number of working days can account for apparent sales fluctuations in year-on-year monthly comparisons. Examples of data useful to the researcher include sales statistics, expenditure and operations statistics.

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