Developing the Research Plan

The second step of the marketing research process calls for determining the information needed, developing a plan for gathering it efficiently and presenting the plan to marketing management. The plan outlines sources of existing data and explains the specific research approaches, contact methods, sampling plans and instruments that researchers will use to gather new data.

exploratory- research Marketing research Co gather preliminary information that will help better to define problems and suggest hypotheses.

descriptive research Marketing research to better describe marketing problems, situations or markets, suc/i as the market potential for a product or the demographics and attitudes e/consumers, causal research Marketing research to test hypotheses about cans e - and-effect relationships.

European firms lag behind their Japanese and American competitors in gathering competitive intelligence. In Japanese companies it is a long-established practice, for, as Mitsui's corporate motto says: "Information is the life blood of the company.' In thy United States, competitive intelligence gathering has grown dramatieaHy as more and more companies need to know what their competitors are doing. Such well-known companies as Ford, Motorola, Kodak, Gillette, Avon, Kraft, Mitsubishi and the 'Big Six' accounting firms arc known to be busy snooping on their competitors, TMA, FC1 and Kirk Tyson International specialize in this sort of business. The techniques they use to collect intelligence fall into four main groups.

Getting Information from Published Materials and Public Documents Keeping track of seemingly meaningless published information can provide competitor intelligence. For instance, the types of people sought in help-wanted ads can indicate something about a competitor's new strategies and products. Government agencies are another good source. For example, according to Fortune:

Although it is often illegal for a company to photograph a competitor's plant from the air ... Aerial photos often are on file with geological survey or environmental protection agencies. These arc public documents, available for a nominal fee.

According to Leonard Fuld. founder of FCl; 'in some countries the government is a rare font of information ... France has the Minitel, in the US we have an opus of information databases and networks.'

Getting Information by Observing Competitors or Analyzing Physical Evidence Companies can get to know competitors better by buying their products or examining other physical

Marketing

Highlight evidence. An increasingly important form of competitive intelligence is benchmarking, taking apart competitors' products and imitating or improving upon their best features. Benchmarking has helped JGB keep ahead in earth-moving equipment. The company takes apart its international competitors' products, dissecting and examining them in detail. JGB also probed the manufacturing operations, the types of machine tools used, their speeds, manning levels, labour costs, quality control and testing procedures, and raw material. It built up a profile of all its main competitors' operations and performance ratios against which to benchmark. In this way, the company knew the extent to which competitors could vary their prices, what their strengths and weaknesses were, and how JCB could exploit these data to its advantage.

Beyond looking at competitors' products, companies can examine many other types of physical evidence:

In the absence of better information on market share and the volume of product competitors are shipping, companies have measured the rust on rails ot" railroad sidings to their competitors' plant or have counted the tractor-trailers leaving loading bays.

Some companies even rifle their competitors' rubbish:

Once it has left the competitors' premises, refuse is legally considered abandoned property. While some companies now shred the paper coming out of their design labs, they often neglect to do this for all most revealing refuse from the marketing or public relations departments.

Avon hired private detectives to paw through Mary Kay Cosmetics' rubbish skips. Although an outraged Mary Kay sued to get its rubbish back, Avon claimed that it had done nothing illegal. The skips had been located in a public car park and Avon had videotapes to prove it.

Getting Information from People who Do Business with Competitors Key customers can keep the company informed about competitors and their products:

For example, a while back Gillette told a large account the date on which it planned to begin selling its new Good News disposable razor. The distributor promptly called Bic and told it about the impending product launch. Bic put on a crash programme and was able to start selling its razor shortly after Gillette did.

Intelligence can also be gathered by infiltrating customers' business operations:

Companies may provide their engineers free of charge to customers ... The close, cooperative relationship that the engineers on loan cultivate with the customers' design staff often enables them to learn what new products competitors are pitching.

Getting Information from Recruits and Competitors* Employees

Companies can obtain intelligence through job interviews or from conversations with competitors' employees.

When they interview people for jobs, some companies pay special attention to those who have worked for competitors, even temporarily.

Companies send engineers to conferences and trade shows to question competitors' technical people.

Companies sometimes advertise and hold interviews for jobs that don't exist in order to entice competitors' employees to spill the beans.

In the United States one of the most common ploys is to telephone competitors' employees and ask direct and indirect questions. 'The rule of thumb,' says Jonathan Lax, founder of TMA, 'is to target employees a level below where you think you should start, because that person often knows just as much as his or her senior, and they are not as frequently asked or wary.' Secretaries, receptionists and switchboard operators regularly give away information inadvertently.

One European company is now being accused of beating the Americans at their own game. When Spanish-born Jose" Ignacio Lopez de Arriotua defected from General Motors to Volkswagen to be its new purchasing and production chief, he took seven GM executives with him.

Why Europe is Different

Niame Fine, founder of Protce Data, believes there are two main differences between US and European companies. Language and cultural blocks limit cross-border intelligence gathering. Approaching competitors' employees is a subtle business and people are often put on their guard if approached by someone from a different country. She also says Europeans have greater loyalty than their job-hopping American counterparts.

Although most of these techniques are legal and some are considered to be shrewdly competitive, many involve questionable ethics. The company should take advantage of publicly available information, but avoid practices that might be considered illegal or unethical. A company does not have to break the law or accepted codes of ethics to get good intelligence. So far European businesses 'do as they would be done by' and linger at the ethical end of the spectrum of competitive intelligence. Will they be able to stay there?

Sources; Excerpts from Steven Flax, 'How to snoop on your competitors', Fortune (14 May 1984), pp. 29-33; Brian Dttmaine, 'Corporate spies snoop to conquer', Forticne (7 November 1988), pp. 68-76; Jeremy Main, 'How to steal the best ideas around', Fortune (19 October 1992), pp. 102-6. Copyright © 1984, 1988 and 1992, Time Inc. All rights reserved. Also see Wendy Zeliner and Bruce Jiager, 'Dumpster raids ? That's not very ladylike, Avon', Business Week (1 April 1991), p. 32; Michele Galen, 'These guys aren't spooks, they're "competitive analysts'", Business Week (14 October 1991), p. 97; Richard S. Teitalbaum, 'The new race for intelligence', Fortune (2 November 1992), pp. 104-8; 'Mr Lopez's many parts', The Economist (23 May 1993), p. 89; Tony MeBurnie and David Clutterbtiek, The Marketing Edge (London: Penguin, 1988); Kate Button, 'Spies like us', Marketing Business (March ¡¡994), pp. 7-9.

secondary da tii

Information that already exists somewhere, having been collected for another purpose.

primary data Information collected for [he specific purpose at hand.

DETERMINING INFORMATION NEEDS. Research objectives need translating into specific information needs.

Bolswessanen, the Dutch food and drinks company, decides to conduct research to find out how consumers would react to a new breakfast cereal aimed at the adult market. Across Europe young health-conscious people are abandoning croissants in France, rolls in Belgium and lonely espresso in Italy. Since Nestle and General Mills set up Cereal Partners Worldwide as a joint venture, they have been very active in the market and the project has started to develop. The European breakfast cereal market has been growing fast, but own labels dominate the adult sector.14 Can Bolswessanen successfully compete with Kellogg's, the market leader, and the aggressive new competitor, Cereal Partners Worldwide? The company's research might cail for the following specific information:

• The demographic, economic and lifestyle characteristics of current breakfast cereal users. (How do social and demographic trends affect the breakfast cereal market?)

• Consumer-usage patterns for cereals: how much do they eat, where and when? (Will all the family eat the cereal or does each family member have their favourite?)

• Retailer reactions to the new product. (Failure to get retailer support could hurt its sales.)

• Consumer attitudes towards the new product. (Will consumers switch from own brands and is the product attractive enough to compete with Kellogg's?)

• Forecasts of sales of the new product. (Will the new packaging increase Bolswessanen's profits?)

Bolswessanen's managers will need this and many other types of information to decide whether to introduce the new product.

GATHERING SECONDARY INFORMATION. TO meet the manager's information needs, the researcher can gather secondary data, primary data or both. Secondary data is information that already exists somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand.

Researchers usually start by gathering secondary data. Table 8.1 shows the many secondary data sources, including internal and external sources." Secondary data are usually quicker and cheaper to obtain than primary data. For example, a visit to the library might provide all the information Bolswessanen needs on cereal usage, at almost no cost. A study to collect primary information might take weeks or months and cost a lot. Also, secondary sources can sometimes provide data that an individual company cannot collect on its own - information that either is not directly available or would be too expensive to collect. For example, it would be too expensive for Bolswessanen to conduct a continuing retail store audit to find out about the market shares, prices and displays of competitors' brands. But it can buy Neilsen's Scantrack service.

Secondary data also have problems. The needed information may not exist -researchers can rarely obtain all the data they need from secondary sources. For example, Bolswessanen will not find existing information about consumer reactions to a new product that it has not yet placed on the market. Even when data arc found, they might not be very usable. The researcher must evaluate

Table 8.1

Sources of secondary data

Internal sources

Internal sources include company profit and loss statements, balance sheets, sales figures, sales call reports, invoices, inventory records and prior research reports.

Government publications

Statistical Abstract, usually updated annually, provides summary data on demographic, economic, social and other aspects of the economy and society.

Industrial Outlook provides projections of industrial activity by industry and includes data on production, sales, shipments, employment, etc.

Marketing Information Guide provides a monthly annotated bibliography of marketing information. Other government puhlications include the Annual Survey of Manufacturers; Business Statistics; Census of Manufacturers; Census of Population; Census of Retail Trade, Wholesale Trade, and Selected Service Industries; Census of Transportation; Federal Reserve Bulletin; Monthly Labor Review, Survey of Current Business; and Vital Statistics Report.

Periodicals and books

Business Periodicals Index, a monthly, lists business articles appearing in a wide variety of business publications.

Standard & Poor's Industry Surveys provide updated statistics and analyses of industries.

Moody's Manuals provide financial data and names of executives in big companies.

Encyclopaedia of Associations provides information on every large trade and professional association in the United States.

Marketing journals include (he Journal of Marketing, Journal of Marketing Research,. Journal of Consumer Research and International Journal, of Research in Marketing.

Useful trade magazines include Advertising Age, Chain Store Age, Progressive Grocer, Sales and Marketing Management, Stores, Marketing Week and Campaign.

Useful general business magazines include Business Week, Fortune, Forbes, The Economist and Harvard Business Review.

Commercial data

Here are just a few of the dozens of commercial research houses selling data to subscribers:

AC. Nielsen Company provides supermarket scanner data on sales, market share and retail prices (Scantrack), data on household purchasing (Scantraek National Electronic Household Panel), data on television audiences (Nielsen National Television Index) and others.

IMS International provides reports on the movement of Pharmaceuticals, hospital laboratory supplies, animal health products and personal care products.

Information Resources, Inc. provides supermarket scanner data for tracking grocery product movement (InfoScan) and single-source data collection (BehaviorSean).

MRB Group (Simmons Market Research Bureau) provides annual reports covering television markets, sporting goods and proprietary drugs. The reports give lifestyle and geodemographic data by sex, income, age and brand preferences (selective markets and media reaching them).

jVFO Research provides data for the beverage industry (SIPS), for mail order businesses (MOMS), and for carpet and rug industries (CARS). It also provides a mail panel for concept and product testing, attitude and usage studies, and tracking and segmentation (Analycor).

International data

Here are only a few of the many sources providing international information:

United Nations publications include the Statistical Yearbook, a comprehensive source of international data for socioeconomlc indicators; Demographic Yearbook, a collection of demographies data and vital statistics for 220 countries- and the Internatumal Trade Statistics Yearbook, which provides information on foreign trade for specific countries and commodities.

Europa Yearbook provides surveys on history, politics, population, economy and natural resources for most countries of the world, along with information on the chief international organizations.

Political Risk Yearbook contains information on political situations in foreign countries, with reference to US investment. It predicts the political climate in each country.

Foreign Economic Trends and Their Implications for the United States provides reports on recent business, economic and political developments in specific countries.

International Marketing Data and Statistics provides marketing statistics by country, including data on consumer product markets for countries outside the United States and Europe.

Other sources include Country Saulics, QECQ Kcatiomic Surveys, Economic Nurvey of Europe, Asian Kccinomic

Eantibtjok and International Financial Sratistics.

qualitative research Kxptoratory research used to uncover consumers' motivations, attitudes and behaviour. Focus-group interviewing, elicitation intervitruDS ami repertory grid techniques arc typical methods used in this type of research.

quailtit:tlive research Research which involves data collection by mail or personal interviews from a sufficient volume of customers to allow statistical analysis.

observational research The gathering of primary data by observing relevant people, actions and situations.

secondary information carefully to make certain it isrelevant (fits research project needs), accurate (reliably collected and reported), current (sufficiently up to date for current decisions) and impartial (objectively collected and reported).

Secondary data provide a good starting point for research and often help to define problems and research objectives. In most cases, however, secondary sources cannot provide all the needed information and the company must collect primary data.

Continue reading here: Planning Primary Data Collection Good decisions require good

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