by Michaela Mora

as published on April 30, 2010 by the Dallas Business Journal

Bad economic news has been a daily event for the last 24 months. We have heard about thousands of companies filing for bankruptcy and millions of people losing their jobs. Last year, most companies slashed marketing expenses and reduced market research budgets to almost nothing. It’s survival time, but I would argue many companies are going about it all wrong. Now, more than ever, market research can help companies to invest wisely the few resources they have. Ideally, this is the time to get creative and find cost-effective ways to conduct market research.

So, how can you do good market research on a small budget? Here are points to consider:

• CONTROL FOR RESEARCH SCOPE. Look long and hard at the business issues at hand and separate “nice-to-know” from “need-to-know” information. Focus on the most critical issues to reduce survey length and time needed for data processing and data analysis.

• REDUCE SAMPLE SIZE. ample size requirements should be carefully considered, taking into account the impact on estimate accuracy. As samples get larger, estimate accuracy and sample costs increase, but there is a point where the gains in estimate accuracy don’t justify the increased cost. Recently, I had a client who wanted to conduct an online survey with a sample of 1,000 respondents, which would give a statistical accuracy of +/-3.1%, but it would cost $8,000. On the other hand, a sample of 400 respondents would give a statistical accuracy of +/-4.9% and cost $3,400. As you can see, a 135% increase in sample cost would only yield a 60% gain in statistical accuracy. The client opted for the smaller sample.

• USE CUSTOMER DATABASES. Customers’ feedback often provides invaluable insights given the relationship they already have with a company. What’s more, a customer database is the cheapest source of sample for research purposes, since it is already in-house. However, be aware of its potential limitations given the profile of your customers and the type of data you have gathered about them. Know how the database was sourced. For example, if most of your customers are small businesses or females younger than age 25 and you are interested in understanding how your products will perform in other market segments, then your customer database is not the right sample source for a market segmentation study.

• USE ONLINE DATA COLLECTION TOOLS. In the past few years an explosion of online survey tools has reduced the cost of data collection significantly and shortened the research process time line. However, there are a couple of caveats:

 Market research is the field in which the principle of “garbage in, garbage out” has the most application. Programming and deploying online surveys is easier and cheaper than ever, however the online tools that facilitate this don’t provide the content of the actual survey. You still need expertise in questionnaire design, research methodology, sampling and data analysis to be able to extract useful insights from the survey data.

Online surveys are not always the most appropriate methodology for the research objectives and target sample. For example, consumers in lower income brackets are less likely to have Internet access, therefore they would be underrepresented in an online-only sample. In this case, it would be more appropriate to reach them by phone or in person.

• HIRE SMALL MARKET RESEARCH AGENCIES. There are many small market research agencies with big agency capabilities and experienced market researchers, but low overhead cost. They are often very responsive and flexible and can do the job with the same — and sometimes better — quality than bigger research firms for a fraction of what larger firms would charge.

Market research doesn’t have to be expensive to be well done. Consider these points and find a research partner that is willing to invest in your success. This will allow you to do market research on the smallest budgets.

To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.

by Michaela Mora

Posted on April 15, 2010

Brand tracking studies allow marketers to monitor the health of the brand and provide insights into the effectiveness of marketing programs implemented by the company.

WHAT SHOULD BE TRACKED?

Each brand faces different issues, which often required customized tracking surveys. Nonetheless, at Relevant Insights, we always recommend our clients to include measurements of awareness, usage, brand attitudes, perceptions, and purchase intent in brand tracking studies.

• Awareness: both recall and recognition measures should be collected. They are different indicators of the strength of the competition among brands in the minds of the consumers. A brand that first comes to mind in certain situations is more likely to be considered than one that is only recognized when it is prompted to the consumer.

• Usage: this can be measured through recency, frequency of usage, and total spending in the brand, and product category. These brand tracking measures, not only tell us about consumer shopping behavior and preferences, but also are indicators of market share and “share of wallet,” which is the amount of consumer spending a brand is capturing and has a direct impact on a company’s revenues and profits.

• Brand Attitudes and Perceptions: this is usually captured through questions related to brand image and associations that consumers develop as they experience the brand and are exposed to its positioning message through PR, advertising and promotional programs. Many brand associations are often beliefs about product-related attributes and benefits. However, brand associations also include non-product-related and symbolic benefits. Product and non-product associations, as well as those related to price and value are important sources of brand equity and should be part of brand tracking studies. Some brand associations are stronger than others, are more easily recalled and are enough appealing that they become an important factor in a consumer’s decision to buy a brand. Some brands may be perceived as unique, but without strong and favorable brand associations, uniqueness really doesn’t matter (Keller, Strategic Brand Management, 1998).

  Many times, attitudes towards a brand go beyond the product to include attitudes toward the company. We are all aware how Toyota’s image has been tarnished, not only by the car recall due to defective accelerator pedals in several car models, but more so by how the company failed to promptly notify car owners, ending up with a fine of $16 million imposed by the US government. A survey conducted by Consumer Reports in February 2010 reported that the number of Toyota owners who would buy another Toyota next time they are in the market for a new car has declined by 10 percentage points from a survey conducted in December 2009. Another before-and-after-the-recall study conducted by Lightspeed and Ad Age, also showed how the number of Toyota owners that consider the brand reliable has decreased significantly, indicating how fast a brand image can deteriorate when the company doesn’t react quickly enough.

• Purchase intent: measures of likelihood to buy a brand or switch to a competitor are also indicators of brand health and should be part of brand tracking studies, but these questions should be put in context regarding specific product or brand, reason for the purchase, time, channel, price and other relevant factors to the purchase decision, so they can be predictive of actual purchase behavior.

WHEN AND WHO TO TRACK?

Brand tracking studies usually involve collecting quantitative data from consumers on a regular basis. One way to do it is to continuously collect information, which allow us to control for unusual marketing activities, in the analysis, and provide a more representative picture of how the brand stands in consumers’ mind and against competitors. However, this type of brand tracking may not be feasible due to budget and resources constraints, and there are other ways to do it (monthly, quarterly, annually, etc.) that can be equally effective.

When determining the frequency of data collection in brand tracking studies, we recommend clients to consider:

• Frequency of product purchase: for example durable goods with long purchase cycles can be tracked less frequently.

• Marketing activity in the product category: a category where brands are constantly launching marketing programs and promotions should be monitor more often.

• Level of competition in product category: highly competitive product categories, where new products and competitors are constantly trying to break in, should be tracked regularly.

• Stability of brand associations: brands with an established image that don’t show appreciable changes over time, can afford a less frequent brand tracking.

Brand tracking studies are often conducted with current customers, but monitoring non-users of the brand can prove to be invaluable to the development of an acquisition and market penetration strategy in search for business growth.

HOW TO INTERPRET BRAND TRACKING MEASURES?

Given the comparative nature of brand tracking studies, brand tracking measures tend to stay the same over time. However, they should be revised from time to time to assess their reliability and sensibility. They may be stable over time and thus reflect stability of brand associations, but they can also be unable to capture important shifts in the market due to changes in sociodemographic trends, competitive landscape and economic macrotrends.

Another issue with brand tracking measures is defining what constitutes the desirable level of a particular metric. Is a 50% level awareness good enough? It depends. It is all relative to the product category and the competitive environment. In low involvement product categories and those with many competitors, it may be difficult to get very high levels of awareness and strong brand associations, so the benchmark for what it is a good level for a metric differs across industries and product categories.

Finally, each brand tracking study should be customized to capture the brand associations that contribute the most to brand equity and the marketing activities that are effective at strengthening it. The goal is to identify key drivers that have an impact on consumers’ brand choice and purchase behavior and develop marketing tactics that can lead to brand growth and sustainability.

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To learn more about our consumer data service visit Consumer Shopping Behavior Insights. To request consumer shopping behavior data and insights don’t hesitate to contact us.