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Foundation Level
Recommended Study Text
Nishan C. Perera
MBA(Sri.J), Chartered Marketer(UK), Dip.M (UK)
Certified Professional Marketer(Asia Pacific)
Selladurai Srikanth
B.Pharm(Ind), DipM (UK), PG.Dip Psychology(Col), MBA(UK)
Certified Professional Marketer (Asia Pacific)
Manick Pratheeban
MABE (UK), MBA(UK), MA(UK)
Understanding Consumers
Graduate/Postgraduate
Diploma in Marketing
M & N Solutions (Private) Limited
1st Edition, June 2005
ISBN 955-1244-03-6
© Copy Rights Reserved.
No part of this text should be reproduced without prior written permission of M&N Solutions
(Private) Limited.
CONTENTS
Module One
Understanding Consumer Behaviour
Chapter 01 – Consumer and the Decision Making Process
03
Chapter 02 – Customer and the Decision Making Unit
21
Chapter 03 – Consumer Perceptions
43
Chapter 04 – Consumer Motivation
59
Chapter 05 – Consumer Attitude Formation
75
Chapter 06 – The Influence of Culture on Consumer Behaviour
89
Module Two
Investigating Consumers
Chapter 07 – Introduction to Consumer Research
102
Chapter 08 – Developing the Research Plan and Collection of Data
115
Chapter 09 – Analysis of Data
153
Chapter 10 – Presenting Research Findings
188
iii
DETAILED CONTENTS
Module One
Understanding Consumer Behaviour
Chapter 01 – Consumer and the Decision Making Process
1.
Definition of a Consumer
03
2.
Is the Customer and Consumer the same?
04
3.
Levels of Consumer Decision Making
05
4.
Views of Consumer Decision Making
06
5.
Models of Consumer Decision Making
09
6.
Consumer Decision Making and the Marketers Role
19
7.
Beyond the decision – The consumption and the possession process
19
Chapter 02 – Consumer and the Decision Making Unit
1. The Decision Making Unit of a Customer
21
2. DMU – Individual
23
3. DMU – Individual in Groups
28
4. DMU – Individual in the family
33
5. DMU – Within organizations
34
Chapter 03 – Consumer Perceptions
1. Definition of Perception
43
2. Elements of Perception
44
3. Dynamics of perception
48
4. Consumer Imagery
53
v
DETAILED CONTENTS
Chapter 04 – Consumer Motivation
1. Consumer Needs, Wants and Goals
2. Understanding Motivation
59
61
67
3. Motivation Theories
Chapter 05 – Consumer Attitude Formation
1. What are Attitudes?
75
2. The Tri Component Attitude Model
77
3. Attitude Formation
79
4. Attitude Change
82
5. Attitude Formation Theories
86
6. Importance of the Attitude Theory to Understand Consumers Better
88
Chapter 06 – The Influence of Culture on Consumer Behaviour
1. Understanding Culture
89
2. How Culture is brought to life
93
3. Core Values of the Local Culture Understudy
96
4. The Profile of the Local Consumer Understudy
97
Module Two
Investigating Consumers
Chapter 07 – Introduction to Consumer Research
1. Understanding Marketing Research
102
2. Consumer Research Process
104
vi
DETAILED CONTENTS
Chapter 08 – Developing the Research Plan and Collection of Data
1. Desk Research (Secondary Data Collection)
115
2. Primary Research (Primary Data Collection)
122
3. Sampling Design
138
4. Collection of Data
146
Chapter 09 – Analysis of Data
1. Measures of Location
153
2. Measures of Dispersion
158
3. Probability Distributions
163
4. Sampling Theory
168
5. Correlation
179
6. Regression
184
7. Multiple Regression - Introduction only
187
Chapter 10 - Presenting Research Findings
Tools to Present Research Findings
1. Tables
188
2. Charts
190
3. Histograms
196
4. Graphs
197
5. Ogives
198
6. Lorenz Curves
199
7. Z charts
Written and Oral Presenting Research Findings
200
8. Preparing Research Reports
200
9. Preparing for Oral presentations
207
vii
Foundation Level
Understanding Consumers
Recommended Study Text
Module One
Understanding Consumer Behaviour
Graduate/Postgraduate
Diploma in Marketing
Chapter 1
Consumer and the Decision Making Process
This chapter will cover the following areas
1.
2.
3.
4.
5.
6.
7.
Definition of a Consumer
Is the Customer and Consumer the same?
Levels of Consumer Decision Making
Views on Consumer Decision Making
Models of Consumer Decision Making
Consumer Decision Making and the Marketers Role
Beyond the Decision – The Consumption and the Possession Process
1. Definition of a Consumer
Every day, we marketers meet many people from different walks of life and they come in to
contact with us. In many day to day matters among these people whom we meet there are
two very important people to any marketer, namely the Customer and the Consumer. Firstly
let us examine who this Customer and Consumer are?
Who is a Customer? Is it the purchaser, User, the person who pays money or is it the person
who buys the product or is it the person who uses the product? Even though the term
Customer could carry many meanings, broadly, a customer could be referred to as the person
who purchases a product.
My Working Definition
The famous leader of India – Mahatma Gandhi had the following to say about the Customer
•
•
•
•
A Customer is the most important visitor on our premises. He is not dependent on us;
we are dependent on him
He is not a interruption to our work; he is the purpose of it
He is not an outsider in our business; he is a part of it
We are not doing him a favour by serving him; he is doing us a favour by providing
us the opportunity to do so.
So, who is a consumer? As we have already defined a customer, it is now clear that the
Consumer is the end user, users or the persons who really consume the product or the service
with or without paying for it.
Chapter 01 – Consumer and the Decision Making Process
3
2. Is the Customer and Consumer the same?
As discussed earlier, the Consumer and the Customer could be one and the same person. For
example
•
•
In obtaining a service like a Hair cut, the person who obtains the service could be the
customer as well as the consumer.
If you a buy a cup of coffee and drink it there you would be playing the roles of the
Customer as well as the Consumer.
Is this always the case? Can the customer and the consumer be one and the same? Not
necessarily. At times as a customer may or may not be the consumer. Likewise the consumer
may or may not be the customer.
† Key Concepts
1.
Customer
A customer is an individual (or an organisation), which may purchase an item. One
who is involved in the buying decision.
2.
Consumer
A consumer is an individual (or an organisation) who may consume the product.
‡ Activity
1. Identify or recall a situation where you have been a customer, not a consumer.
2. Identify or recall a situation where you were exclusively a consumer where you had not
purchased the product.
3. Identify or recall a situation where you were a consumer where you had purchased the
product.
Talk to your friend and find out which of the following three activities are common i.e Are
there more customers? more consumers?
‡ Activity
Identify 5 key differences between Customer & Consumer
Criteria
Customer
Chapter 01 – Consumer and the Decision Making Process
Consumer
4
3. Levels of Consumer Decision Making
Consumer decisions vary from consumer to consumer and situation-to-situation, where as
decision-making depends on a multitude of factors. We could categories these decisions into
groups based on the effort spent on the decision. Some purchase decisions require extensive
effort which could be an exhaustive process.
There would be certain other purchase decisions, which is merely a re-buy of the same
product involving minor effort. However, if all purchases become routine there would not be
any novelty or pleasure. Based on the effort
taken on decision-making, we could distinguish three specific levels of decision-making.
3.1 Extensive Problem Solving
Extensive problem solving is carried out when the consumer has no established criteria for
evaluating a product category and also when the consumer needs a large amount of
information to make the decision or to judge which brand to purchase. Generally this type of
decision-making takes place when the purchase is for a specialised or a costly product. Eg
Speciality goods.
‡ Activity
List down 5 situation where you were involved and had to make extensive problem solving
3.2 Limited Problem Solving
When consumer has already established the basic criteria for evaluating the product category
and various brands in the category, but when he has not fully established preferences in
selecting a specific group of product, the decision requires limited decision to be made on the
final selection. Eg Shopping Good
‡ Activity
List down 5 situations where you were involved and had to make limited problem solving
3.3 Routinized Response Behaviour
When consumers have some experience with the product category and a well-established set
of criteria with which to evaluate the product. In many situations, they may search for a small
amount of additional information, in other instances they simply review what they already
know. E.g. Convenience Goods
‡ Activity
List down 5 situations where you made a routinized problem solving
Chapter 01 – Consumer and the Decision Making Process
5
‡ Activity
1. Recall some of the product which you or your family had purchased during the past six
months and categorise them based on the level of decision-making.
2. What level of decision making would the following products require if you were to
make the decision to purchase them
a) Peppermint with a hole
b) Mosquito coil
c) Mobile Phone
d) Television
e) Luxury Apartment
f)
Fairness cream
g) Medicine for blood pressure
h) Wedding Ring
i)
Shoes for jogging
j)
Tooth paste
3.
If Bill Gates (Microsoft), one of the richest persons in the world were to decide on the
above products, would the same levels of decision-making be applied as you would or
would it differ? If it would differ, why?
4. Views on Consumer Decision Making
Before understanding how consumers make different decisions and the decision making
process, different schools of thought on the decision-making process should be established.
These models explain as to why and how individual behave as they do. Specifically, there are
four common views or models they are,
4.1 Economic view
The theoretical world of economics portrays the world of perfect competition and the
consumers have often been characterised as making rational logical decisions. This is the
assumption of the economic view or model which is also called the Economic Man Theory.
However, this model attracts some criticism due to several reasons In short, to behave in the
economic sense, a consumer would have to
• Be aware of all available product alternatives.
• Be capable of ranking each alternative in terms of their benefits and limitations
correctly.
• Be able to identify the best alternative.
In reality, consumers rarely have all the information or sufficient accurate information to
make the economically perfect decision. It has been argued that the classical economic model
of an all – rational consumer is unrealistic and as consumers operate in an imperfect world
this model is generally rejected as too idealistic and simplistic.
‡ Activity
Chapter 01 – Consumer and the Decision Making Process
6
1. Discuss how practical Economic view in Sri Lanka is?
2. As Sri Lanka is a small market, is it not possible to have an Economic view by means
of information available to the consumers. Is this statement valid? Argue with your
friend
4.2 A passive view
Opposite to the rational economic view of consumers is the passive view, which specifies
consumers as basically submissive to self-serving interests and promotional efforts of
marketers. According this view consumers are perceived impulsive and irrational purchasers,
ready to yield to the aims and powerful campaigns of the marketers. According to this view,
marketers and sales people regard the consumer as an object to be manipulated.
However, this model too has its limitation, in failing to recognise that the consumers play an
equal, if not dominant, role in many buying situations. Therefore, sometimes this simple and
single-minded view is also rejected as unrealistic.
‡ Activity
Your friend argues that Impulsive buying or passive view supports exploitation of the
consumer by the marketer, Do you agree to such thinking or how would you defend the
marketers stance on passive view?
4.3 A cognitive view
This model paints the consumer as a thinking problem solver, thus it pictures consumers as
either receptive to or actively searching for products that fulfil and satisfy their needs.
Consumers are viewed as information processors and the focus is on for processes by which
consumers seek and evaluate information about selected brands.
The cognitive view is more pragmatic as it acknowledges that the consumer is unlikely to
even attempt to obtain all available information regarding every choice. Instead, the
consumer stops the search for information when they perceive that they have sufficient
information about some of the alternatives to make a satisfactory decision. This model also
suggests that consumers make shortcut rules to facilitate decision-making process called
Heuristics. This model falls between the extremes of Economic and passive views.
‡ Activity
In a country like Sri Lanka is it possible to find consumers who follow a cognitive view, Is
education a key determinant of converting consumers to a cognitive man or what are the
other influencing factors?
4.4 An emotional view
Chapter 01 – Consumer and the Decision Making Process
7
This model extends beyond the normative theoretical models and perceives reality in a deeper
sense. According to this model, consumers are likely to associate deep feeling or emotions
such as fear, happiness, fantasy and sexuality. This emotion makes more involvement in the
purchase decision. For instance, a person who belongs to a specific school or club would look
for memorabilia of that institution for the belongingness. For example he might look for a Tshirt or cap of his school although he has many T-shirts or caps.
When consumers make emotional purchase decisions less emphasis is placed on the search
for pre purchase information. Instead, more emphasis is placed on the current mood or
feeling. Some emotional decisions are expressions that “ you deserve it” or “ treat yourself”.
This model also considers the influence of Moods in decision-making. For example, when a
consumer is in a good or a positive mood it affects his purchase behaviour and studies have
proved that an individual in a positive mood recalls more information about products than
one in a negative mood.
‡ Activity
Has mood influenced your purchase decision at any time of your life if so, when? Do you
agree to mood stimulating activities at store? If there are mood stimulating activities at a
store is it likely that you would stay more at the store? Discuss your opinion with your
colleagues.
‡ Application
Following is an Interesting article which was written by Dr. Helga Dittmar of School of
Social Sciences at University of Sussex, Brighton,
SYMBOLIC MEANINGS OF GOODS AS DETERMINANTS OF IMPULSE
BUYING BEHAVIOUR : SUMMARY OF FINDINGS
"I shop, therefore I am" has become the stereotype of modern consumerism. Interlinked
social and economic changes in Britain over the last two decades, such as dramatic
increases in disposable income and credit facilities, have produced a different climate in
which individuals make consumer choices. The traditional economic and consumer
behavior models assume a "rational", discerning, thoughtful consumer, who gathers
information strategically and buys goods according to functional cost-benefit
considerations.
However, this view has been challenged, particularly in the context of widening consumer
choices. Consumer goods play an increasingly stronger psychological role in people's lives
because they can and do function as material symbols of who a person is and who they
would like to be.
Buying goods in order to bolster one's self-image is probably a motivation that plays some
Chapter 01 – Consumer and the Decision Making Process
8
role in most buying behavior, but it might be particularly important when people engage in
non-planned "spur of the moment" purchases. Such impulsive buys, without careful
deliberation and prior intent, often result in regret. Although most people experience the
occasional lapse of judgment in purchasing, in an extreme form it can result in excessive
buying behavior. This affliction, more commonly labeled "shopping addiction" or
"compulsive buying", affects an estimated 2 to 5 per cent of adults in developed Western
economies, including Britain, and can leave sufferers severely distressed and financially
crippled.
Current explanations of impulsive and excessive buying in economics, marketing and
psychology fail to give convincing accounts of why some goods, such as clothes, are
bought on impulse more frequently than others such as basic kitchen equipment.
5. Models of Consumer Decision Making
Definitions of Buying Behaviour:
Buying behaviour is the decision process and actions of people, involved in buying and
using products. (Baker: 1991)
Those acts of individuals directly involved in obtaining and using economic goods and
services, including decision processes that precede and determine these acts
(Blackwell, Engel and Miniard: 1986)
My Working Definition
Models are attempts to translate different logical relationships into diagrams that explain and
represent the influential factors and their interrelated nature. This chapter explains three
different models of consumer buying behaviour and tries to establish a coherent view on
buying behaviour.
Customer behaviour involves a wide variety of personal and situational variables. There are
various ways of making a decision. But in general terms, the ways in which customers make
decisions are common and can be outlined in a number of models. The general view of the
consumer buying behaviour could be listed in a three-phase model as
Illustration 01 – The three phase model
Input
Process
Chapter 01 – Consumer and the Decision Making Process
Output
9
The input component
This draws on external influences that serve as sources of information about a product that
influence the consumer’s attitude and behaviour towards the product. It includes marketingmix activities and sociocultural influences and would be seen in detail in the next few
Chapters.
The process component
This is concerned with how consumers make decisions. These psychological concepts
represent the internal influences such as motivation, perception, learning, personality and
attitudes that affect the decision making process.
The output component
This covers the post-decision behaviour-purchase, trial, repeat purchase and post purchase
evaluation. There are several models from simple to very complex models of buyer
behaviour. The following is a simple model of consumer behaviour. It is called the “Six stage
Consumer Behaviour Model”.
Model 1
The Six Stage Model
This model is associated with new products and has six steps and is as follows
Illustration 2 – The Six Stage Model
Awareness
Interest
Evaluation
Trail
Adoption
Post Adoption Confirmation
•
Awareness - The consumer becomes aware of the new product/ service by word of mouth
or marketing efforts.
•
Interest - The consumer is stimulated to look for information.
Chapter 01 – Consumer and the Decision Making Process
10
•
Evaluation - The consumer weighs the relative advantages of the new product against
those of other products and decides whether to try it.
•
Trial - The consumer then decides to try the product.
Adoption - The consumer decides whether or not to begin to buy and use the product.
The post-adoption confirmation - This stage comes when the product has been adopted
and the consumer is seeking assurance that he made a sensible decision.
•
•
‡ Activity
Apply the above model to a purchase, which you had made recently, where the product
was totally new to the market. Did your decision pass through all six stages or was it
bypassing few stages?
Model 2
Five - stages of the Consumer Buying Process
Actual purchasing is only one stage of the process. Not all decision processes lead to a
purchase. All consumer decisions do not always include all 5 stages, determined by the
degree of complexity
Illustration 3 – Five Step Problem Solving Consumer Behaviour Model
Problem Recognition
Information Search
Not satisfied with
alternatives
Internal Search
External Search
Evaluation of
alternatives
Satisfied with alternatives
Purchase Decision
Abandon/Postpone
the Purchase
Situational factors will
affect purchase
Post Purchase
Evaluation
If you analyze the above model, you may note that the actual purchase is only one stage of
the process. Before the purchase and after the purchase the consumer goes through several
decision points.
Chapter 01 – Consumer and the Decision Making Process
11
It should be stated that the above decision cycle is dependent on the nature of the product (i.e.
convenience goods, shopping goods, speciality goods) . For example in purchasing a house or
a wedding ring the consumer may go through all the above steps and might take a longer
period to go through the cycle. On the contrary, in purchasing a chewing gum you may not
even go through some of the above stages and the cycle might be very short.
It should also be stated that even if a consumer goes through the pre purchase stages, there is
no guarantee that it will lead to purchase. The above process will be determined based on the
complexity of the purchase.
The 5 stages are:
1. Problem Recognition
A problem refers to "a discrepancy between a desired state and an ideal state which is
sufficient to arouse and activate a decision process." Thus, problems can be major (e.g., a
consumer has an immediate need to purchase a rare cancer medicine) or minor (e.g., the
consumer needs a chocolate to gift his brother), and the broader and more ambiguous a
problem is, the more potential solutions are generally available. Problem recognition occurs
when the consumer perceives a difference between the desired and current state of affairs.
When this is present, the consumer is motivated to reduce the difference. In other words, the
consumer identifies that there is a need that has not been fulfilled.
Desired state
Need / Problem
Current state
Consumers often note problems by comparing their current, or actual, situation, explicitly or
implicitly, to some desired situation. In terms of the "big picture," what is compared may be
the totality of one’s lifestyle. Once a discrepancy is found, a determination is found as to
whether this is large enough to warrant action, in which case a search for solutions is
initiated. Problems come in different types. A problem may be an active one (e.g., you have a
headache and would like as quick a solution as possible) or inactive-- you are not aware that
your situation is a problem (e.g., a consumer is not aware that he or she could have more
energy with a new vitamin). Problems may be acknowledged (e.g., a consumer is aware that
his or her car does not accelerate well enough or unacknowledged (e.g., a consumer will not
acknowledge that he or she consumes too much alcohol). Finally, needs can be relatively
specific (generic), as in the need for enjoyment (which can be satisfied many different ways),
or specific, as in the need for professional attire to wear at a new job.
Chapter 01 – Consumer and the Decision Making Process
12
The marketer’s role is to effectively show the need of consumer eg through advertisements or
by creating needs (Arguably higher needs). For example let us take a situation where a person
is hungry. This is a need which is a gap between your desired level of food and the current
level of food in your system. The need or the gap that is in existence would be identifying the
problem. This would be the problem recognition stage of the buying cycle.
‡ Activity
Identify three current problems of your or your family with regard to some product or
service you need and draw the above situation graph
2. Information Search
The next step in this process is how the hungry consumer would proceed to search for
information to find a solution to his hunger thus to bridge the gap between the desired level
and the current state. The information sought may be to evaluate criteria or alternative
solutions. More information would be needed if the problem is less familiar and the more
riskier the area in which the decision must be made.
Information could be searched either through internal or external means.
•
•
Internal search, could be through the memory based on what consumers already
know.
External search would be done if more information is needed. Friends, relatives and
family members (word of mouth) would act as the primary source of information
here. Other sources for this search would be marketer dominated sources, comparison
shopping, public sources etc.
Thus, it is important for certain firms to advertise to consumers before they actually need the
product. If you decide to go out for fast food, you may not consult any directories, but instead
search your memory for fast food restaurants located conveniently. A problem is that some
excellent ones, which are not remembered, or have never been heard of, are not considered.
External searches get people to either speak to others (getting information by word of mouth)
or use other sources (such as advertisements now sought out or yellow page listings).
Because the yellow pages or Sunday newspapers are often the first place to which people
turn, this medium is able to charge very large advertising rates.
A successful information search leaves a buyer with possible alternatives, the evoked set. In
this case if you are hungry and want to go out and eat, evoked set is
• Chinese food
• Indian food
• Sri Lankan food
In the internal search one may retrieve a solution stored in one’s memory from a past
experience. However, if a person does have little or no experience in the type of purchase that
he is planning to make, then he may rely on external information to find details. In this
example of being hungry one may further look for how hunger could be fulfilled. In this
Chapter 01 – Consumer and the Decision Making Process
13
process you may arrive at several options of food that you may consume to satisfy the need of
hunger. The following options were found as a consequence of the information search
• Rice
• Bread
• Red meat
• Vegetable Soup
• Vegetable courses
‡ Activity
With regard to the problems stated in the activity above how would you seek information
and what are the probable options you would arrive at? List them for all three problems.
3. Evaluation of Alternatives
This is the stage where the consumer would apply different criteria of different importance to
the alternative solutions that were found during the information search process. Consumers
do not often consider all alternatives. The options that were found would be placed in one of
three categories, which are described as follows.
•
•
•
•
The evoked set – Will contain the alternatives that will be actively considered during
the final choice.
The inert set – Alternatives to which the consumer is neutral will be placed here, once
known but are not readily accessible in memory
Inept set – Alternatives the consumer will reject will be placed here, ruled out as
unsatisfactory
Unawareness set – Alternatives that are not known
Stemming from our earlier example of being hungry, if the concerned consumer is a
vegetarian the following will be placed in each of the above categories.
Evoked set – Vegetable soup, Vegetable courses
Inert set – Bread, Rice
Inept set – Red meat, fish burgers
If not satisfied with your choice, then the customer may turn to the information search
process and return to the search phase. The amount of effort a consumer puts into searching
depends on a number of factors such as
•
•
•
The market (how many competitors are there, and how great are differences between
brands expected to be?),
Product characteristics (how important is this product? How complex is the product?
How obvious are the indications of quality?),
Consumer characteristics (how interested is a consumer, generally, in analyzing
product characteristics and making the best possible deal?),
Marketers have an opportunity to influence alternatives by “framing” them in different ways.
Chapter 01 – Consumer and the Decision Making Process
14
Illustration 4 – Framing different alternatives
All Brands
Known Brands
Acceptable
Brands
Evoked Set
Unknown Brands
Unacceptable
Brands
Indifferent
Brands
Inept Set
Overlooked
Brands
Inert Set
My Working Definition
Define in your own language with examples
Evoked Set
Inept Set
Inert Set
Unawareness Set
‡ Activity
Based on the above listed alternatives classify them as Evoked Set, Inept Set, Inert Set
assuming that you are to purchase them.
Chapter 01 – Consumer and the Decision Making Process
15
‡ Activity
Assume that you are to purchase
a) Television
b) Refrigerator
c) Car
d) Cool Drink
Apply the tree structure diagram and list out Evoked Set, Inept Set, Inert Set in the above
give context.
4. Purchase Decision
This is the final step of the purchase Decision Making Process. In doing so, the consumer will
choose the best alterative among the alternatives placed in the evoked set. Consumers will
choose buying alternative, based on product, package, store, method of purchase etc. Two
interesting issues in decisions are variety seeking (where consumers seek to try new brands
not because these brands are expected to be "better" in any way, but rather because the
consumer wants a "change of pace," and "impulse" purchases.
Impulse purchases are, generally unplanned, but represent a rather indistinct group. For
example, a shopper may plan to buy vegetables but might decide only in the store whether to
buy Beans or Tomato. Alternatively, a person may buy an item, which is currently offered on
sale, or one that he or she suddenly remembers that is needed once inside the store only E.g,
Mosquito coil. At times the consumer may abandon or postpone the purchase decision. If the
consumer decides to purchase, then other decisions such as where to buy, when to buy and
how to pay will also have to be made. The final purchase decision could also get affected by
other situational factors. These may include the physical surroundings, social surroundings,
others such as mood , availability of credit/money etc.
‡ Activity
Think of some purchases you or your family did and classify them into the following
categories based on your knowledge on Marketing Fundamentals.
Impulse goods
Convenience Goods
Chapter 01 – Consumer and the Decision Making Process
16
Shopping Goods
Speciality Goods
5. Post Purchase Evaluation
Once the product is purchased and the consumption begins, the post purchase evaluation will
start to take place. If the chosen alternative performs as expected the consumer will feel
satisfied. If it fails, based on the expectations of the consumer, dissatisfaction will then be the
result. Both satisfaction and dissatisfaction are forms of feedback.
Another form of post purchase evaluation would be “Cognitive Dissonance”. This is a
psychologically uncomfortable conflict between different beliefs and attitudes. It often occurs
when the chosen alternative has some drawbacks and the rejected alternatives have some
positive characteristics. In essence the consumer will ask himself “ Did I make the right
decision?” . The consumer may try to seek additional information in trying to reduce the post
purchase dissonance.
‡ Activity
Recall some of the products, which you or your family had purchased during the past six
months, and analyse how the decision was arrived using one of the consumer buying
behaviour models. Apply the above models, completely on an assumed purchase situation
of the following products
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Chewing Gum
Mosquito coil
Luxury Watch
Washing Machine
Bare Land for building a house
Cosmetic cream
Medicine for blood pressure
Wedding Ring
Tie for office wear
Shaving Foam
Model 3
A Simplified Model of Consumer buying Behavior
Chapter 01 – Consumer and the Decision Making Process
17
This model incorporates the above models and presents a cohesive view on Consumer buying
decision process and the influences on it based on Schiffman and Kanuk.
‡ Activity
Refer a text book and draw a consumer buying model. Construct a consumer buying model
with your colleagues. Refer the text “Consumer Behaviour” by Leon G Schiffman, Leslie
Lazar Kanuk and complete the following model
External Influences
Input
Consumer Decision Making
Process
Post Decision Behaviour
Output
6. Consumer Decision Making and the Marketers’ Role
Essentially, consumer buying behaviour refers to the buying behaviour of the ultimate
consumer. A firm needs to analyse buying behaviour for many reasons. Some of them are
Chapter 01 – Consumer and the Decision Making Process
18
•
•
•
Buyer’s reaction to the firms marketing strategy has a great impact on the firm’s
success.
The marketing concept stresses that a firm should create a marketing mix that satisfies
(gives utility to) customers. Therefore, the need to analyze what, where, when and
how consumers buy is very important.
Marketers can make better predict jonson how consumers will respond to marketing
strategies.
Further it is important for a marketer to know the above consumer buying process, so that
•
•
•
The marketer can influence the stages, which the consumer goes through in order to
quickly reach the purchase level favourable to the marketer’s product.
The marketer could reduce post purchase dissonance to a very large extent by giving
reinforcing information.
A marketer can direct various elements of communication at each stage that the
consumer goes through in the purchasing procedure.
‡ Activity
List down the Importance of knowing the customer and the benefit s it could give you and
your organisation
7. Beyond the Decision – The Consumption and the Possession Process
This chapter has so far discussed about the consumer buying decisions and behaviour.
However, consumer purchases are not only dependent upon the above basis of discussion and
there are many more facets to the behaviour of the consumer. The experiences of using
products and services, as well as a sense of pleasure from possessing, collecting or
consuming things and experiences contribute to the happiness of the consumer.
Some examples of possession or experience may be
•
•
•
•
•
•
A Home theatre system
Rare Stamps
Antiques
Numismatic products
Faraway Vacation to an Exotic place
Visit on Religious places etc
The changing world today has given rise to another important segment of decisions by means
of decisions on possession and consumption. Thus a marketer needs to understand about the
consumption and possession process. The following model based on Shiffman and Kanuk
could be used to understand the process of consumption.
Illustration 5 – The consumption and possession process
Input
Chapter 01 – Consumer and the Decision Making Process
19
Choice or Purchase Decision
Consumption Set
Added to one’s assortment or portfolio
Consuming Style
How the individual fulfils his or her
consumption requirements
Process
Consuming and possessing things and experiences
Using, Possessing, collecting, disposing
Output
Feelings, Moods, Attitudes, Behaviour
Altered consumer satisfaction, change in lifestyle and quality of life, learning
and knowledge, expressing and entertaining oneself
♪
My Short Notes
Chapter 01 – Consumer and the Decision Making Process
20
Chapter 2
Customer and the Decision Making Unit
This chapter will cover the following areas
1. The Decision Making Unit of a Customer
2. DMU – Individual
3. DMU – Individual in Groups
4. DMU – Individual in the family
5. DMU – Within organizations
1. The Decision Making Unit of a Customer
Although it is useful to use the word ‘customer” as a single unit, it is important from the start
to understand that purchases are made both by individuals and groups of people involved in
the decision making process.
The term, customer refers to the purchaser of a product or a service. As discussed in the
previous chapter they may be or may not be the consumer. The term, consumer refers to the
end user of a product or a service. They may or may not be the customer. The term DMU
refers to the decision-making unit, that is the group of people who decide whether to buy a
product/service.
1.1 What is a DMU?
My Working Definition – Customer
My Working Definition – Consumer
My Working Definition – Decision Making Unit
Chapter 02 – Customer and the Decision Making Unit
21
1.2 Components of a DMU
Even though there is no fixed composition of a DMU, the following are key members of the
DMU
•
User
Users of the product are often included in the DMU. Their opinion is very important since
they will be using the product after it is purchased. For example, before a photocopier is
purchased, the opinion of the secretaries may be sought since they would be the primary users
of the product. Their comments will be valuable in making a decision as to which model to be
purchased.
•
Influencer
As the term implies, an influencer does not make a decision, but does influence the decision
making process. In the case of a purchase of a photocopier the influencers might include
engineers. They would define the specifications the photocopier should meet and would
evaluate various makes of photocopiers.
•
Buyer
The buyer is the member of the buying centre who negotiates the purchase. In many cases the
buyer is the purchase agent or a member of the purchasing department. Buyers often initiate
contact with potential suppliers, negotiate pricing and service contracts, set delivery dates and
issue purchase orders.
•
Decision maker
The decision maker is the member of the buying centre who actually decides what is ordered
and from whom. In expensive, high-risk decisions the decision maker may be a senior
manager or even a company director/CEO. In more routine decisions a purchasing
agent/procurement manager may be the decision maker.
•
Gatekeeper
The gatekeeper is any member of the buying centre who regulates the flow of information
from suppliers to other members of the buying centre. The purchasing agent who declines to
identify or allows the access sales representative to other members of the buying centre is
considered a gatekeeper. Similarly, in the examples of the photocopier a secretary who
decides which suppliers would get appointments with the office manager, is acting as a
gatekeeper.
Implications to Marketers and sellers
A successful marketer would need to identify and satisfy the various intentions, requirements
of the DMU, if a successful sale is to be made for the organisation.
Chapter 02 – Customer and the Decision Making Unit
22
‡ Activity
Identify different roles played by each of the members in the DMU in an Individual buying
process and organizational buying process.
User
Influencer
Buyer
Decision maker
Gate keeper
2. DMU - Individual
2.1 Understanding the Individual Buying Decisions
We examined the individual customer decision making in the chapter 1 of this text and we
explored various models attempting to translate different logical relationships into diagrams
that explain and represent the influential factors and their interrelated nature. This last chapter
explained three different models on consumer buying behaviour, which tried to establish a
coherent view on buying behaviour.
Individual Customer behaviour involves a very wide variety of personal and situational
variables. There are various ways of making a decision, but in general terms, the ways in
which customers make decisions are common and can be outlined in a number of models.
The general view of the consumer buying behaviour could be listed in a three-phase model as
Input
Process
Chapter 02 – Customer and the Decision Making Unit
Output
23
•
The input component
This draws on external influences that serve as sources of information about a product that
influence the consumer’s attitude and behaviour towards the product. It includes marketing
mix activities and sociocultural influences and would be seen in detail in the next few
chapters
•
The process component
This is concerned with how consumers make decisions. These psychological concepts
represent the internal influences such as motivation, perception, learning, personality and
attitudes that affect the decision making process.
•
The output component
This covers the post-decision behaviour-purchase, trial, repeat purchase and post purchase
evaluation.
‡ Activity
Discuss the usefulness of some of the models discussed in the chapter one and find out the
relationship between them and buying motives.
2.2 Understanding Buyer Motives
Although the model explains the rational ways in how the consumer arrives at a buying
decision, it is much more complex when we analyse the motive behind each consumer’s
behaviour. The motives may be due to the different need/ Want of the consumer. Abraham
Maslow (Discussed in detail in the Chapter 3) identifies 5 types of needs and different
motives corresponding to those needs
a) Motives
A motive is an internal energizing force that orients a person's activities toward satisfying a
need or achieving a goal. Actions are affected by a set of motives, not just one. If marketers
can identify motives, then they can develop a marketing mix.
MASLOW hierarchy of needs, which is explained in greater detail in later chapters explains
the following 5 types of different types of needs and elated motives
•
•
•
•
•
Physiological
Safety
Love and Belonging
Esteem
Self Actualization
Motives often operate at a subconscious level and therefore are difficult to measure.
Chapter 02 – Customer and the Decision Making Unit
24
‡ Activity
Identify and analyse 5 of your or your friends’ buying decisions in the recent past and list
out the motives of such purchase based on the needs as
•
•
•
•
•
Physiological
Safety
Love and Belonging
Esteem
Self Actualization
2.3 Psychological influences on buyer behaviour – Perception, attitudes, learning,
personality
Various factors influence consumer buying behaviour or decision making and could be listed
as
• Personal factors
• Psychological factors
• Social factors
• Cultural factors
Psychological factors include:
a) Perception
Perception is the process of selecting, organizing and interpreting information inputs to
produce meaning. i.e. we chose what information we pay attention to, organize it and
interpret it. Information inputs are the sensations received through sight, taste, hearing, smell
and touch.
•
Selective Exposure
Select inputs to be exposed to our awareness. More likely if it is linked to an event, satisfies
current needs, intensity of input changes (sharp price drop).
•
Selective Distortion
Changing/twisting current received information, inconsistent with beliefs. Advertisers that
use comparative advertisements (pitching one product against another), have to be very
careful so that the consumers do not distort the facts and perceive that the advertisement was
meant for the competitor.
•
Selective Retention
Remembers inputs that support beliefs, forgets those that don't. Average supermarket shopper
is exposed to thousands of products in a shopping visit lasting 30 minutes-60% of purchases
are unplanned. Exposed to 1,500 advertisement per day. Can't be expected to be aware of all
these inputs, and certainly will not retain many.
Chapter 02 – Customer and the Decision Making Unit
25
Interpreting information is based on what is already familiar, on knowledge that is stored in
the memory.
‡ Activity
Discuss with your colleagues on recent TV advertisements and list examples for
Selective Exposure
Selective Distortion
Selective Retention
b) Learning and Knowledge
Need to understand individual’s capacity to learn. Learning, changes a person's behaviour
owing to information and experience. Therefore, to change the consumers' behaviour towards
your product one needs to give them new information re: product...free sample etc.
When making buying decisions, buyers must process information.
•
Knowledge
The familiarity with the product and expertise.
Inexperienced buyers often use prices as an indicator of quality more than those who have
knowledge of a product. Non-alcoholic Beer example: consumers choose the most expensive
six-pack, because they assume that greater the price greater the quality is.
•
Learning
The process through which a relatively permanent change in behavior results from the
consequences of past behavior.
‡ Activity
Identify 5 situations where Learning would influence or had influenced purchase behaviour
of you or your friends
c) Attitudes
Knowledge and positive or negative feelings about an object or activity-maybe tangible or
intangible, living or non- living drive perceptions The individual acquires attitudes through
experience and interaction with other people. Consumer attitudes towards a firm and its
products greatly influence the success or failure of the firm's marketing strategy.
Chapter 02 – Customer and the Decision Making Unit
26
Attitudes and attitude change are influenced by consumers’ personality and lifestyle.
Consumers screen information that clash with their attitudes. There is a difference between
attitude and intention to buy (ability to buy).
d) Personality
Personality is the unique patterns of enduring thoughts, feelings, and actions that characterise
a person. Personality refers to the unique pattern of psychological and behavioural
characteristics by which each person can be compared and contrasted with other people. All
the internal traits and behaviour make a person unique. Uniqueness arrives from a person's
heredity and personal experience. Examples include:
• Friendliness
• Adaptability
• Ambitiousness
• Dogmatism
• Authoritarianism
• Introversion
• Extroversion
• Aggressiveness
• Competitiveness.
Traits affect the way people behave. Marketers try to match the store image to the perceived
image of their customers.
There is a weak association between personality and Buying Behavior, this may be due to
unreliable measures. Consumers buy products that are consistent with their self-concept.
‡ Activity
List down the personalities which could be associated with following products or brand
purchases.
Mercedes Benz car
A Strong perfume
Beetle Car
Red colour shirt
Peoples bank Account
Latest Mobile phone
Omega Watch
Typewriter
Pager
Singer TV
Paracetol Tablet
Signal Toothpaste
Chapter 02 – Customer and the Decision Making Unit
27
3. DMU – Individual in Groups
3.1 What is a Group?
People are naturally sociable. There is a strong desire amongst most people to form a part of a
group. This group may be a family, a group of friends at office, or members in a social club.
A group may be defined as two or more people who interact together and share some
common attitudes and/or behaviours.
This definition is by no means comprehensive. It is perhaps easier to define a group in terms
of its characteristics.
3.2 Attributes of a Group
A collection of people that possesses most of the characteristics listed are usually deemed to
constitute a group:
•
•
•
•
•
•
•
More than one person.
Sufficient interaction between members.
Perception of themselves as a group.
A certain set of agreed/ accepted values (called norms).
Allocation of specific roles (different activities) to members.
Social (affective) relations between members.
Shared aims
‡ Activity
Analyse a group you belong to and examine how many of the attributes mentioned are
there in between the group members.
3.3 Group influence on Individual Behaviour – Group Norms
a) Group influence
Most research work by psychologists has shown that groups exert a strong influence on the
way we behave. One of the most quoted experiments – performed by Professor Elton Mayo –
was the Drawing Office experiment popularly known as the Hawthorne study/ Experiment.
Chris Rice (1993) explains:
Here the problem lies in low morale, which was blamed on the lighting. Mayo split he
department into two – the first group was the experimental group, the second group acted as
the control group and their lighting remained unaltered throughout the experiment. When the
intensity of the lighting of the experimental group was increased the expected improvement
in morale and output occurred. What was unexpected was the rise in morale and output of the
Chapter 02 – Customer and the Decision Making Unit
28
control group in exactly the same way. This puzzled Mayo who proceeded to reduce the
intensity for the experimental group – output of both groups rose again! His conclusion was
that the changed behaviour had nothing to do with the intensity of the lighting, but was a
group phenomenon.
Interestingly, culture plays a strong role in the degree of conformance exhibited by an
individual. Isolated members of a culture within a group (for example, a white man in a group
of black females) are more likely to conform than if they are in a group with members of their
own culture. It also seems that certain cultures are more likely to conform than others.
‡ Activity
Conduct a literature survey on Hawthorne Study and critically evaluate the findings of the
study and analyse the related behaviour in groups
b) Group membership: roles and norms
When you join a group you accept certain norms, which govern the behaviour of the group,
and take on a certain role (whether it be active or passive). Norms may apply to any aspect of
the behaviour of the group. If you joined Blue Cross, the Animal protection action group, you
would be expected to agree with their ‘direct action’ method of campaigning. You might also
be expected not to buy Animal Unfriendly products where alternatives were available, to
avoid animal products, and to vote for the party supporting Animal Rights. Norms commonly
affect the following aspects of the group culture:
•
•
•
•
•
Physical appearance and dress.
Social and leisure activities (even when these are not the main business of the group)
Language and gestures used.
General opinions, attitudes and beliefs.
The way in which the group carries out its own business.
Roles within a group are decided, primarily, on how we see ourselves and what others expect
of us. If we see ourselves as leaders we are likely to try for this role. Alternatively, if others
see us as ‘leadership material’ we are likely to be offered this role.
Within any group a number of role types commonly exist. Most roles inevitably fall into the
first two categories:
1. Task roles
A member or members concerned with pursuing the goals of the group (often referred to
as the members who ‘get things done’)
2. Maintenance roles
A member or members concerned with keeping the group operational and efficient (these
may be the group administrators or act as emotional supporters of the group).
Chapter 02 – Customer and the Decision Making Unit
29
3. Comedy role
A member who is a joker or willing to crack jokes.
4. Observer role
A passive observer of proceedings.
5. Deviant role
A member who constantly disagrees and challenges the group norms.
6. Specialist role
A member who is held as being a specialist in the technical activities of the group.
7. Spokesperson role
A member who communicates the activities of the group to non-group members.
3.4 Groups as Decision-Making Units
We have discussed in the Individual decision-making earlier part of this chapter. It is also
common especially in the Asian culture to see group taking decisions. In organisations it is
common to see decision being made in groups the best example is the DMUs.
‡ Activity
Identify 5 groups you belong to
Example : Sports Team , Family , Organising Committee , Group of Friends
Explain how your role in these groups Influence purchasing behaviour
3.5 Reference Groups
From a marketing perspective, reference groups are useful in that they are influential in the
formation of consumer behaviour. A teenager may, for instance, decide to dress in a certain
way because of the influence of her schoolmates. In this example, the schoolmates are the
reference group.
There are two common types of reference groups:
•
Normative groups – These are groups which shape the basic attitudes and behaviour of
an individual. The most prevalent normative group is the individual’s family.
•
Comparative groups – These are groups which are used to compare and contrast one’s
existing attitudes and behaviours. In UK common parlance, if you are doing well, in
comparative terms, it is often said that you are ‘keeping up with the Joneses’. That is,
your lifestyle is comparable to others that you perceive to be in the same social class.
Chapter 02 – Customer and the Decision Making Unit
30
Reference groups are frequently categorized on the following dimensions:
•
Ascribed versus acquired group
Ascribed groups are those to which an individual naturally belongs, e.g. gender, family
unit. Acquired groups are those to which an individual actively seeks membership, e.g.
health club.
•
Formal versus informal groups
A formal group is well defined in terms of its structure and purpose, e.g. parliament.
Informal groups are less structured and exist primarily to fulfil a social function, e.g. a
group of drinking ‘buddies’.
•
Primary versus secondary groups
Primary groups are usually small and associated with more personal contact, e.g. close
friends, colleagues at work. Secondary groups are usually larger with communication,
which is generally less personal, e.g. colleges, large work groups.
There are two important reference groups to which an individual does not belong:
•
Aspirational groups
These are groups which an individual aspires to join, e.g. musicians, artists, Sports
personalities.
•
Dissociative groups
These are groups which an individual actively avoids membership of, e.g. for some
people a group of thugs or Underworld gang might be such a group others might actively
avoid working in the arms industry.
From a marketer’s viewpoint, informal, primary groups are of pivotal interest as they are
likely to exert most influence on an individual’s consumer behaviour. In addition,
Aspirational groups are the most important non- membership groups for the same reason.
‡ Activity
Categorize the following groups on the dimensions:
•
•
•
•
Ascribed / acquired,
Formal/informal,
Primary . secondary.
Note whether they might also be aspirational or dissociative.
1.
2.
3.
4.
5.
6.
Dance troupe
Friends at your SLIM class
Local branch of political party
Business Club
Football Team
Association of Marketers
Chapter 02 – Customer and the Decision Making Unit
31
a) Consumer-referent groups
Marketers have identified the groups which have the most impact on consumer behaviour:
1. Family - Family as a decision making unit.
2. Peer groups – Through school, our teenage years and into adulthood, we are constantly
surrounded by people of our own age and social class. These are usually informal and often
social groups of friends. In conjunction with the family, close friends exert the greatest
influence on our consumer behaviour.
3. Consumer or lobbying groups – In recent years consumers who feel that they are getting a
‘bad deal’ have formed groups with the specific purpose of pressurizing manufacturers and
service providers. Such groups may address a single issue or provide a more general service
as a ‘watchdog’.
4. Work groups – People at work form both formal groups (departments, divisions and so
on) as well as more informal groups ( company sailing club, after-work drinking ‘buddies’,
office squash league, and so on ). The amount of time that people spend at work in the
company of their work Colleagues provides ample opportunity for influence.
b) Mass media and the use of referent groups
The appeal of certain types of referent groups is used in advertising to influence the consumer.
Three general approaches are:
1. Aspirational appeal – presents the product in a situation, or uses a celebrity or type of
person, to which the consumer aspires. Examples include showing the product in the
context of a beautiful house or using an athletic actor.
2. Peer appeal – present the product by a person to whom the consumer can relate. For
instance, an advert aimed at selling car phones to working women may show a business
woman stranded in the middle of nowhere with a broken down car.
3. Expert appeal - An expert, who may be known or unknown, with the aim of convincing
the consumer that the product does the job for which it was designed, endorses the
product. The more trustworthy the expert, the more convincing the appeal. Eg. Sports
personalities have been used on several occasions for this very reason.
The benefits of using reference groups in the ways described above are that they reduce the
perceived risk of purchase and increase product awareness. As we have seen in earlier units,
these are two of the most decisive barriers to successful marketing.
‡ Activity
Look for 5 good advertisements which utilises reference groups or popular personalities
and discuss the appeal they make. Trace the Advertisements on Anchor with Rosy
Senanayake, Keels sausage with Aravinda De Silva and Milo with Sanath Jayasuriya
Evaluate its success.
Chapter 02 – Customer and the Decision Making Unit
32
4. DMU – Individual in the family
4.1 Interpretation of a Family
To everyone, family is an important part of life. As a majority of us spend a reasonable a size
of our time with the family. Family has great influence on the behaviour of members of the
family.
4.2 Family Decision Making Roles
a) Family Purchasing
The most comprehensive marketing model on family purchasing and decision-making
assumes that children are growing up in a two-parent family structure. In reality, family
structures today include not only married couples with children but also a variety of
alternative family structures, including female and male-headed single parent families.
Family purchasing decisions can be made autonomously or jointly: on one’s own behalf, on
behalf of one or more family members, or for the family as a unit.
b) Family purchase
Example: a child’s purchase – toy
User
: child
Influencer
: child’s friends
Decider
: Mother
Buyer
: Father
‡ Activity
Analyse a few recent purchases by your family in terms of Decision making units and
explain the different roles played by different members of your family
Discuss the same activity with your friend
4.3 The Family DMU – the influence of gender, the influence of children
To day the change in culture and involvement of Females in the work force have led to
greater female decision-making and influence on Purchase
‡ Activity
“Today much of the decision making is done by the Female (Mother) of the family” Do
you agree to the above statement, argue in the context of Sri Lanka and the Western world?
If you agree to the statement, What implication does this make to marketers?
Chapter 02 – Customer and the Decision Making Unit
33
5. DMU – Within Organizations
5.1 Features of Industrial Buying Decisions
a) The business buyer behaviour
It refers to the buying behaviour of organizations that buy goods and services to be used in
the production of other products and services that are sold, rented, or supplied to others. This
includes retailers and wholesalers (these firms rent or resell at a profit).
b) The business buying process
It is the decision-making process by which business buyers determine which products and
services their organizations need to purchase, and then find, evaluate, and choose from
alternative suppliers and brands.
The business market is large in size. In the world, it consists of millions of organizations that
buy trillions worth of goods and services each year. In many ways business markets are like
consumer markets, but they differ greatly as well. Points of contrast can be seen in areas of
market structure and demand, the nature of the buying unit, and the types of decisions and the
decision process involved.
It can be observed that business markets usually have fewer but larger (volume) buyers who
are more geographically concentrated and use more rational methods for making their
purchasing decisions. In addition, there are usually more individuals involved in the business
buying decision (for example, purchasing by committee). These professional buyers are also
usually better trained and skilled at negotiation than their counterpart consumer buyers.
c) Characteristics of Business Markets
The business market is large. In fact, business markets involve more money and items
than do consumer markets.
As previously explained, Business markets also have their own characteristics. In some ways,
they are similar to consumer markets, but in some aspects they are very different. The main
differences include:
•
Market structure and demand.
1.
2.
3.
4.
5.
6.
7.
They typically deal with fewer but larger buyers.
They are more geographically concentrated.
Derived demand (business demand that ultimately comes from or derives
from the demand for consumer goods).
Inelastic demand means that the total demand for a product is not much affected by
price changes, especially in the short run.
Business markets have more fluctuating demand.
Chapter 02 – Customer and the Decision Making Unit
34
•
Nature of the buying unit.
1. Business purchases involve more decision participants.
2. Business buying involves a more professional purchasing effort.
•
Types of decisions and the decision process.
1.
Business buyers face more complex buying decisions.
2.
The process is more formalized.
3.
The groups are more dependent on each other.
o In business buying, buyers and sellers work more closely together and work to
build close, long term partnerships.
o Many customer companies are now practicing supplier relationship management
(developing a core of suppliers and working closely with them).
4.
In the long run, business marketers keep their customers by meeting current needs and
by partnering with customers to help them solve their problems.
Difficulties arise as business buying-decisions are often very complex, lengthier, and more
formal in nature. The seller must accommodate and adjust to these characteristics if success
in this market is to be obtained.
The following key questions must be answered before the business market is pursued by the
firm’s marketing efforts.
o
o
o
o
What buying decisions do business buyers make?
Who participates in the buying process?
What are the major influences on buyers?
How do business buyers make their buying decisions?
‡ Activity
Speak to a employee of an organisation and analyse
o
o
o
o
What buying decisions do they make?
Who participates in the buying process?
What are the major influences on the company?
How does that organisation make their buying decisions?
d) What buying decisions do business buyers make?
Major Types of Buying Situations
There are three major types of buying situations:
o The straight rebuy situation is a fairly routine decision. A buyer routinely reorders
something without any modifications in this situation.
o The modified rebuy is a situation in which the buyer wants to modify product
specifications, prices, terms, or suppliers.
Chapter 02 – Customer and the Decision Making Unit
35
o The new task is an industrial buying situation in which the buyer purchases a product
or service for the first time.
The buyer makes the minimum decisions in the straight rebuy and the majority in the new
decision. Many business buyers prefer to buy a packaged solution to a problem from a single
seller. This is called systems selling. This method is a two-step process:
a. First, the seller sells a group of interlocking products.
b. Second, the seller sells a system of production, inventory control, distribution, and
other services to meet the buyer’s need for a smooth-running operation.
Today, systems selling is a key industrial marketing strategy for winning and holding
accounts.
e) Who participates in the buying process?
Participants in the Business Buying Process
The decision-making unit of a buying organization is called its buying center (all those
individuals and groups who participate in the business buying decision-making process).
These parties share some common goals and risks arising from the decisions.The buying
center is not a fixed and formally identified unit within the buying organization. It is a set of
buying roles assumed by different people for different purchases. The size and structure of
the buying center will vary for different products and for different buying situations. The
roles in the buying center as discussed before include:
o Users – members of the organization who will use the product or service. In
many cases, users initiate the buying proposal and help define product
specifications.
o Influencers – affect the buying decision. They often help define specifications and
also provide information for evaluating alternatives. Technical people are particularly
important influencers.
o Buyers—have the formal authority to select the supplier and arrange terms of
purchase. Buyers may help shape product specifications, but they play their
major role in selecting vendors and in negotiating.
o Deciders—have formal or informal power to select or approve the final
suppliers. In routine buying, the buyers are often the deciders, or at least the
approvers.
o Gatekeepers—control the flow of information to others. An example of a
gatekeeper would be a purchasing agent who often has the authority to prevent
salespersons from seeking users or deciders within the organization.
The major challenge of the buying center concept for the marketer is to find out:
a. Who is part of the decision?
Chapter 02 – Customer and the Decision Making Unit
36
b. What decisions do they influence?
c. What is their relative degree of influence?
d. What evaluation criteria does each decision participant use?
f) What are the major influences on buyers?
•
Major Influences on Business Buyers
Among the many factors that can affect business-buying behaviour, economic, and personal
factors have been found to be the most important. The manager however, must not forget that
emotions can play a role. Buyers can react to reason and emotion at the same time.
Influences can be grouped as:
o Environmental (economic) Factors. These factors include such things as
shortages of raw materials (specifically) or technology, political, competitive,
culture, and customs (generally).
o Organizational Factors. Every buying organization has its own set of
objectives, policies, procedures, structure, and systems. Questions in this area
include:
a. How many people are involved in the buying decision?
b. Who are they?
c. What are their evaluative criteria?
d. What are the company’s policies and limits on its buyers.
o Interpersonal Factors. The business marketer must try to understand the
interpersonal factors and group dynamics as they affect the buying process.
Knowing your customer well is a beginning. These factors are often very
suitable and require research.
o Individual Factors. Each participant in the business-decision process brings in
personal motives, perceptions, and preferences. These are affected by age, income,
education, professional identification, personality, and attitudes toward risk. The
different styles of buyers may be taken into account.
g) How do business buyers make their buying decisions?
•
The Business Buying Process
At the most basic level, marketers want to know how business buyers will respond to various
marketing stimuli. As in the consumer-buying model, marketing and other stimuli affect the
buying organization and produce certain buyer responses. Marketing stimuli centers on the
four Ps—product, price, place, and promotion. Other stimuli include major forces in the
environment: economy, technology, politics, culture, and competition.
These stimuli enter the organization and are turned into buyer responses, product or service
choices, supplier choice, order quantity, delivery, service, and payment terms. In order to
Chapter 02 – Customer and the Decision Making Unit
37
design a sound marketing program for this market, the marketer must understand how the
stimuli are converted into responses.
In the organization, buying activity consists of two major parts:
•
The buying center (made up of people involved in the buying decision) and
•
The buying decision process.
The buying center and the buying decision process shows that influences come from internal
organizational, interpersonal, and individual factors, as well as external environmental
factors.
h) Organizational buying behaviour model
As described earlier the organizational buying behaviour rests on the members of the DMU.
The decision making process would be either a quick or a slow process depending on the
complexity of the purchase and the functioning of the DMU. A typical organizational buying
behaviour model is described as follows.
Illustration 1 – Organisational Buying behaviour
Problem Recognition
General need description
Product specification
Supplier search
Proposal solicitation
Supplier selection process
Order routine specification
Performance review
There are eight stages in the business buying process. Buyers who face a new task buying
situation usually go through all the stages. Buyers making a modified or straight rebuy will
skip some of the stages. The stages are:
1. The buying process begins with problem recognition. In this stage, the company
recognizes a problem or need that can be met by acquiring a good or service.
Chapter 02 – Customer and the Decision Making Unit
38
2. The next stage in the buying process is general need description. In this stage the
company describes the general characteristics and quantity of a needed item.
3. Product specification is the third stage. Here the buying organization decides on and
specifies the best technical product characteristics for a needed item.
a. A value analysis engineering team will often develop the item’s
specifications.
b. Value analysis is an approach to cost reduction in which components are
carefully studied to determine if they can be redesigned, standardized, or
made by less costly methods of production.
4. In the next stage a supplier search (where the buyer tries to find the best endors) is
conducted.
a. Sources of information include trade directories, computer search, or
asking other companies for recommendations.
b. The buyer compiles a small list of qualified suppliers.
5. In the fifth stage, there is a proposal solicitation. Here the buyer invites qualified
suppliers to submit proposals.
6. It is then necessary to have a supplier selection process in which the buyer reviews
proposals and selects a supplier or suppliers. Factors that influence this process are:
o
o
o
o
o
o
o
o
o
o
7.
Quality products and services.
On-time delivery.
Ethical corporate behavior.
Honest communication.
Competitive prices.
Repair and servicing capabilities.
Technical aid and advice.
Geographic location.
Performance history.
Reputation.
The seventh stage is order routine specification. This is the stage in which the buyer
writes the final order with the chosen supplier(s), lists the technical specifications,
quantity needed, expected time of delivery, return policies, warranties, and so on.
a. A blanket contract creates a long-term relationship in which the supplier
promises to re-supply the buyer as needed at agreed prices for a set time
period.
b. Blanket contracting leads to more single-source buying and more items
from that source.
Chapter 02 – Customer and the Decision Making Unit
39
8. The final stage is performance review. In this final stage, the buyer rates its
satisfaction with suppliers, deciding whether to continue, modify, or drop them.
The seller’s job is to monitor the same factors that the buyer is using, so it can make sure
that it is providing the expected satisfaction to the buyer.
Each organization buys in its own way and each buying situation has its own requirements.
i) Differences between consumer and industrial buying
•
Many buyers prefer to deal with suppliers who can offer complete systems.
•
There are fewer customers than the consumer marketer.
•
•
The market is clearly segmented – a supplier may know all potential customers and a
potential buyer may know all potential suppliers.
•
Some large organizations have enormous purchasing power.
•
The practice of reciprocal buying may exist.
•
•
The external environment will influence the organization in different ways. For
example:
the level of primary demand, the cost of money
•
Many organizational markets have inelastic demand.
•
Decisions are made through a group buying process.
•
Buying is often carried out by purchasing professionals.
•
An unsuccessful decision carries a greater risks than the average customer purchase, a
bad decision will affect both the individuals, the groups involved in the purchase and
the organization itself.
•
The buying process is more formal – with written reports, detailed product
specifications and purchase orders.
•
There is an interlinking customer-supplier chain of dependency and counter
dependency.
•
The demand fluctuates quite widely, a small increase in consumer demand will create
a large increase in industrial demand.
•
Much of the purchasing is done on the basis of history and ongoing relationships are
of crucial importance. Organizational marketers very often work closely with their
customers – they help them to define their needs, customize the offer and deal with
the after-sales service.
•
The organizational culture and structure will influence the buying process and they
way decisions are made.
•
Because organizations consists of many people, individual needs will be more varied
and need to be taken into account.
Chapter 02 – Customer and the Decision Making Unit
40
•
No two organizations are the same. Although the standard promotional material may
be the same the people who are in direct contact with the customer need to be aware
of the difference.
•
The buying criteria that will be used to judge ‘good value’ will be much wider. These
criteria could include: price/ discounts, technical quality, advantage and advancement,
after-sales service, reliability and continuity of supply, back-up advisory service,
credit facilities.
‡ Activity
In what way does an industrial buying situation differ from the consumer market? Use an
example of your choice.
j) Institutional and Government Markets
Institutional Markets
•
The institutional market consists of schools, hospitals, nursing homes, prisons, and
other institutions that provide goods and services to people in their care.
Institutions differ from one another in terms of sponsors and their objectives.
•
Because of low budgets and captive patrons, special selling opportunities exist.
Many marketers set up separate divisions to meet special characteristics and
needs of institutional buyers.
Government Markets
a. The government market is made up of governmental units (federal, state, and local)
that purchase or rent goods and services for carrying out the main function of
government. These governments consist of more than 82,000 different units.
To succeed in the government market, sellers must:
o Locate key decision makers.
o Identify factors that affect buyer behavior.
o Understand the buying-decision process.
b. Government organizations typically require suppliers to submit bids, and normally
they award the contract to the lowest bidder.
c. Government organizations tend to favor domestic suppliers over foreign suppliers.
d. Government purchasing is carefully watched by a variety of segments in the public.
e. Most governments provide would-be suppliers with detailed guides describing how to sell
to the government. Cutting through red-tape is always a key to doing successful usiness
with governments.
f. Government buyers are increasingly favoring suppliers from depressed areas and
small businesses that are minority-owned. To be successful in winning government
contracts, firms must demonstrate that they avoid discrimination in race, sex, and age
issues. Many firms today have constructed separate government marketing departments
because of the unique needs of this segment of business.
Chapter 02 – Customer and the Decision Making Unit
41
‡ Activity
•
•
•
Identify or recall a situation where you have been a customer and not a consumer
Identify or recall a situation where you were exclusively a consumer and you had
not purchased the product
Identify or recall a situation where you were a consumer and you had purchased the
product
Talk to your friend and find out which of the following three activities are common i.e Are
there more customers, more consumers?
♪
My Short Notes
Chapter 02 – Customer and the Decision Making Unit
42
Chapter 3
Consumer Perception
This chapter will cover the following areas
1. Definition of Perception
2. Elements of Perception
3. Dynamics of perception
4. Consumer Imagery
Human beings have an exclusively individualistic view of the world around. We all tend to
see the world in our own special way. Hence four different individuals, if confronted with
a stimuli, would report a story quite different to the others. What makes people interpret a
similar stimuli in diverse and varying degrees? This is simply because of the fact that for
each individual, reality is a totally personal phenomenon, based on a personal needs,
wants, values and personal experiences. Thus reality is merely an individual’s perception
of what is out there. As a result individuals act and react on the basis of their perceptions,
not on the basis of objective reality.
This chapter examines the Psychological and Physiological bases of human perception and
strives to discuss the fundamental principles that control our perception and interpretation
of the world we see. The ramifications of these factors will have a variety of implications
in the world of marketing, especially in advertising and promotions.
1. Definition of Perception
“ Perception”, is defined as a process by which an individual selects, organizes and
interprets stimuli into a meaningful and coherent picture of the world.”
It can be further described as “The way we see the world around us.”
My Working Definition – Perception
Thus the submission is that, how each person recognizes, selects, organizes and interprets
stimuli, is based on a highly individualized process, based on individual needs, values and
expectations.
Chapter 03 – Consumer Perception
43
2. Elements of Perception
2.1. Sensation
Sensation can be described as the immediate and direct response of the sensory organs to a
simple stimuli (e.g. An advertisement, a brand name etc). A stimulus is any unit of input to
any of the senses. Seeing, hearing, touching, smelling, tasting, feeling the positions of
joints and the tension of muscles, balance, temperature, pain... begins with the stimulation
of sensory neurons. Each sense involves highly evolved cells which are sensitive to a
particular stimulus: Pain receptors respond to certain chemicals produced when tissues are
damaged. Touch receptors involve cells with hairs which, when bent, cause signals to
travel down the cell's axon. Balance, movement, and even hearing involve similar hair
cells. Temperature sensitive neurons have hairs that expand and contract in response to
heat and cold. Taste and smell receptors respond to environmental molecules in the same
way that other neurons respond to neurotransmitters. And the neurons of the retina
respond to the presence of light or the specific frequency ranges of light we perceive as
color.
But perception is more than just passive reception of information. Perception is an active
process: Touch, for example, requires movement, something that is referred to nowadays
as "scanning." Touch includes information about you (e.g. your muscles, joints) as well as
about what you are touching. We can say the same about hearing. We should really call it
listening! The sound itself is intrinsically moving, of course, it is constantly changing. If it
didn’t, we would stop hearing it!
The same is true about vision. Vision involves constant movement of our eyes, head, and
body, or of the things we see or all of the above. The outer parts of our retina are
particularly sensitive to motion, so when something comes into our field of vision, our
attention is drawn to it. Even the fact that we have two eyes (binocular vision) is a kind of
movement where the two views are slightly different! If we focus our eyes on a singular
scene our vision would be all white!. We should also keep in mind that perception is not
something done with the eyes or the ears or any specific sense organ. It is a multi-sensory,
full bodied thing, totally involving: "A one-year-old child standing on the floor of a room
will fall down if the walls are silently and suddenly moved forward a few inches, although
nothing touches him." (Lee and Aronson, 1974).
Chapter 03 – Consumer Perception
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My Working Definition - Sensation
2.2. The Absolute Threshold
The lowest level at which an individual can experience a sensation is called the “Absolute
threshold”. The point at which a person can detect a difference between “something” and
“nothing” is that person’s absolute threshold for that stimulus.
Sensory adaptation is a problem that concerns many advertisers. Hence, we often speak of
“getting used to” certain stimuli as odors, cold, warmth etc. The term that is used to
describe this phenomenon in perception is referred to as adaptation or in other words
“getting used to” a certain sensation, becoming accommodated to a certain level of
stimulation. Therefore marketers need to cut through the clutter and ensure that the
consumers notice their advertisements.
They use various mechanisms to achieve this result. Some use increased sensory inputs.
For example buying all the space available in a medium, like what Apple Computers did
with the Newsweek magazine. And some use the complete opposite by decreasing the
sensory input. Some advertisements use silence to generate attention. Further scientific
experiments have tried to quantify the absolute thresholds for various sensations, and are
as follows,
•
•
•
•
•
Vision – A candle seen lit 30 miles away, in a dark clear night is the absolute threshold
for vision.
Hearing – A tick of a time watch heard, 20 ft away in a quiet night is the absolute
threshold for hearing.
Smell – A drop of perfume diffused in a six room apartment, is the absolute threshold
for smell.
Taste – A teaspoon of sugar dissolved in two gallons of water is the absolute threshold
of taste
Touch – The fluttering of the wing of a fly, felt one-centimeter away from your cheek,
is the absolute threshold for touch
My Working Definition – Absolute Threshold
Chapter 03 – Consumer Perception
45
‡ Activity
Identify the absolute threshold of yours and one of friend or family member compare
and discuss.
Sense
Yours
Friend/ Family Member
Vision
Hearing
Smell
Taste
Touch
2.3 The Difference Threshold
The minimal difference that can be detected between two similar stimuli is called the
difference threshold or the Just noticeable difference (J.n.d). A nineteenth century,
German scientist named Ernst Weber, discovered that the j.n.d between two stimuli was
not an absolute amount, but an amount relative to the intensity of the first stimulus, this is
referred to as Weber’s law. For example if the world oil prices, rise from current $ 50 to
say $ 52, it might not be noticed as apart to say $ 80.
My Definition – Weber Law
Chapter 03 – Consumer Perception
46
Marketing Applications of J.N.D
Weber’s law as came to be known, has various applications in marketing. Marketers
endeavor to determine the relevant j.n.d for their products for two different reasons:
1. Negative changes – reductions in product size, quality or increases in product price are
not readily discernible to the customers.
2. Product improvements – improved or updated packaging , larger sizes or lower prices
are perhaps very apparent to consumers without being unnecessarily extravagant.
Some of the local and international examples, which used this concept, are listed below,
1)
Benson & Hedges
---
B&H ----
2)
Head & Shoulders
---
H&S
3)
Lexmark’s gradual change in brand name
&
Figure 1 – Gradual Changes of a brand name – below the j.n.d (Adapted from Schiffman
and Kanuk, Consumer Behaviour 7th edition)
‡ Activity
Identify a situation in the Sri Lankan context where the concept of j.n.d can be applied.
List 5 such situations and discuss with your friend. Does he too feel the same way you
feel?
Chapter 03 – Consumer Perception
47
2.4 Subliminal Perception
It is widely described in literature and scientific experiments that people can be motivated
below their level of conscious awareness. Further people can be stimulated below their
level of conscious awareness. It means people can perceive stimuli without being
consciously aware of it . Stimuli that are too weak or too brief to be consciously seen or
heard may nevertheless be strong enough to be perceived by one or more receptor cells.
This process is called “Subliminal perception”. Because the stimuli is beneath threshold,
or the “limen” of conscious awareness, though not beneath the absolute threshold.
(Perception of stimuli that are above the level of conscious awareness technically is
referred as “supra-liminal perception” or usually referred to as perception).
The famous experiment in this area in 1957 created much furor when it was tested. In New
jersey, USA, researchers used a drive in a movie for the experiment, the words “Drink
Coke” and “Eat popcorn” were flashed whilst the movie was on, on the screen in 1/ 100th
of a second. The exposure times were s short that viewers were unaware of seeing this
message. It was subsequently reported that after a six-week period the Popcorn sales
increased by 58 % and coca Cola sales increased by 18 %. However no scientific controls
were used and the researchers were never able to replicate the results. Despite many
studies undertaken since the 1950’s, there is no evidence that subliminal advertising
persuades people to buy goods and services.
‡ Activity
o Identify or recall a situation where you have been influenced by some form of
subliminal perception
o Discuss that with your friend, and has the same stimuli influenced him
o Identify some other powerful subliminal stimuli applied in marketing (Local or
International)
3. Dynamics of Perception
3.1 Perceptual Selection
Here we look at the major principals of perception, Raw sensory inputs itself does not
produce or explain the coherent picture of the world that most adults posses. Indeed, the
study of perception is largely the study of what we subconsciously add or subtract from
raw sensory inputs to produce our own private picture of the world.
3.2 Nature of the Stimulus
Marketing stimuli include an enormous number of variables that affect the consumer’s
perception, such as the nature of the product , its physical attributes, the package design,
the brand name. With these stimuli bombarding the customers, a few factors have a
profound impact on the nature of perception.
Chapter 03 – Consumer Perception
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3.3 Factors that affect perception
Essentially, there are two factors that affect the nature of attention, which are described as
internal factors and external factors. External factors relate to the physical character of the
stimulus, while internal factors include our motives and expectations, These are
considered below:
a) Internal factors
Customers do not receive messages passively. Customers take the message given by
marketers and then actively use them to fit into their own internal world and also to give
them clues about the brand’s capability. It is what customers do with the marketing mix in
their minds that need to be assessed.
•
Expectation
People usually see what they expect to see, and what they expect to see is usually based on
familiarity, previous experience or preconditioned set (expectation). Expectation refers to
the way people respond in a certain way to a given situation or a set of stimuli. This may
be the result of either known or unknown past experiences. People often perceive what
they expect to perceive rather than the message they actually receive. Thus in a marketing
context, people tend to perceive products and product attributes according to their own
expectations. For example you have been told that a movie that you wish to watch was
very boring, you will think so even after the movie as well.
•
Motives
People tend to perceive the things they need or want, the stronger the need, the greater the
tendency to ignore unrelated stimuli in the environment. This comes about because of the
heightened awareness of the stimuli that are relevant to one’s needs and interests, and
decreased awareness of stimuli that are irrelevant to those needs. An individual’s
perception process simply attunes itself more closely to those elements in the environment
that are important to that person. For example someone who is hungry is more likely to
spot a restaurant sign than someone who needs cash to spot the ATM sign etc.
b) External factors
External factors relate to the physical character of the stimulus, these are considered
below: External factors influencing attention
•
Physical properties
Physical properties of the stimulus include: intensity, size, position, contrast, novelty,
repetition and movement.
•
Intensity and size
The brighter the light or the louder a sound a person is more likely to attend.
Chapter 03 – Consumer Perception
49
•
Position
In magazines greater readership is obtained by having advertisements on the covers or
within the first 10% of the pages. An advertisement placed next to a compatible editorial
in both newspapers and magazines is thought to attract more readers. In Sri Lankan
context the advertisement placed on the second page on the extreme right bottom tends to
attract better attention.
•
Contrast
o A black and white advertisement with a spot of colour in it will attract attention
because of the contrast.
o Colour advertisements are thought to be more effective than black and white
advertisements.
o Alternating the use of large and small sizes, loud and soft tones, and primary and
pastel shades will attract more attention than using only one stimulus.
o A quiet commercial after a loud programme can attract attention.
o Showing an object out of its normal setting will also attract attention such as a car
o travelling across sand dunes or along a beach.
•
Novelty
Anything, which is different from what we would normally expect, will tend to attract our
attention. For example, an unusual dress, a unique perfume smell in a store and so on.
•
Repetition
Advertisements are repeated continuously.
•
Movement
Advertisers use moving billboards, mobiles at point of purchase displays and artwork that
is created to inject a feeling of movement into it.
‡ Activity
Collect a number of advertisements and think about whether you can see how the above
techniques are applied to attract the attention of the reader. Place them into your file
with your comments. The more you look the more you will be able to apply your
understanding.
3.4 Important concepts concerning Selective Perception
The consumers “selection” of stimuli from the environment is based on the interaction of
expectation and motives with the stimulus itself. These factors give rise to a number of
concepts
Chapter 03 – Consumer Perception
50
Selective attention
People may only choose to listen to certain aspects of the advertising message and only
decide to see and hear a part of what is being communicated.
Selective exposure
Through selective exposure people avoid coming into contact with anything that may
contradict strongly held beliefs and attitudes.
Selective reception, comprehension and retention
This means that only certain aspects of the advertising message will then be retained in
memory in order to support existing beliefs and attitudes.
Perceptual vigilance or defence
This refers to the way in which people maintain their prior beliefs, for example: dealing
with a customer who is upset with the way they have been treated by customer service,
even though it is the customer who behaved badly.
Most advertising campaigns will involve at least two or more of these uses. The main
value of these points is to be able to answer the following question. ‘What is the
advertisement trying to achieve: and also ‘Which role is the primary role?’
3.5 Perceptual Organization
People do not experience the numerous stimuli they select from the environment as
separate and discrete sensations, rather they tend to organize them into groups and
perceive them as unified wholes. This method of perceptual organization considerably
simplifies life for the individual. The principles of organizing are referred to by the name
“Gestalt’s psychology”, the school of psychology that first developed it. (Gestalt, in
German means patterns or configurations). Three of the most basic principles of
perceptual organization are, Figure and ground, Grouping, Closure.
a) Figure and ground
Stimuli that contrast with their environment are more likely to be noticed. A sound louder
or softer, a colour brighter or paler. The simplest visual illustration consists of a figure on
the ground (Background). The figure is perceived more clearly because in contrast to it’s
ground, it appears to be well defined., solid and in the forefront. Consider the stimulus of
music. People can either “bathe” in music or listen to music. In the first case music is
simply background to other activities, in the second it is a figure. Hence advertisers, have
to plan their adverts carefully to ensure that the stimulus they want noted is seen as a
figure and not as a ground. For eg- The musical background must not overwhelm the
jingle; the background of an advertisement must not detract the product.
Chapter 03 – Consumer Perception
51
b) Grouping
Individuals tend to group stimuli so that they form a unified picture or an impression. The
perception of stimuli as groups or chunks of information, rather than as discrete bits of
information, facilitates their memory and recall. Marketers who try to imply certain
desired meanings in connection with their products can use grouping advantageously, for
eg- an advertisement for tea may show a young man and woman sipping tea in a
beautifully appointed room before a blazing fire place. The overall mood implied by the
grouping of stimuli leads the consumer to associate the drinking of tea with romance, fine
living.
•
Closure
Individuals have a need for closure. They express this need by organizing their perceptions
so that they form a complete picture. Thus, the law of closure says that, if something is
missing in an otherwise complete figure, we will tend to add it. A triangle, for example,
with a small part of its edge missing, will still be seen as a triangle. We will “close” the
gap. The need for closure has some interesting implications for marketers. The
presentation of an incomplete advertising message, “begs” for completion by consumers,
and this very act gets them deeply involved in the message.
Chapter 03 – Consumer Perception
52
4. Consumer Imagery
Consumer images or imagines thing around him in the world, through a process of
perception. They have a number of enduring perceptions or images and it is very important
for the marketers who wants to study about consumer behavior.
Product and Brands have symbolic value for individuals; they analyze and evaluate these
with their pictures in mind on the products. They look for a consistency on the
expectations and the experiences the product or brand delivers. Some products seem to
match the individual’s self image while some do not. However the consumers attempt to
preserve or enhance their self image by patronizing only the products they believe are
consistent with their self image.
My Working Definition – Consumer Imagery
4.1 Product Positioning and Repositioning
a) Positioning
The image that a product has in the mind of the consumer can be described as the position
the product holds and the process which places the product into the minds of the consumer
is called Positioning. Positioning is, undoubtedly one of the simplest and most useful tools
for marketers. After segmenting a market and then targeting a consumer, you would
proceed to position a product within that market. In 1972 two highly creative New York
advertising professionals named Al Reis and Jack Trout created a unique marketing
concept called Positioning. Their objective was to position products, companies, or
services in the minds of potential customers in a way that differentiated them from the
clutter and confusion of the marketplace.
Positioning is all about 'perception'. As perception differs from person to person, so do the
results of the positioning map e.g what you perceive as quality, value for money, etc, is
different to your friend’s perception. However, there will be similarities.
Products or services are 'mapped' together on a 'positioning map'. This is also called
Perceptual mapping and allows products or brands to be compared and contrasted in
relation to each other. Marketers decide upon a competitive position, which enables them
to distinguish their own products from the offerings of their competition (hence the term
'positioning strategy').
Chapter 03 – Consumer Perception
53
My Working Definition – Positioning
The marketer would draw out the map and decide upon a label for each axis. They could
be price (variable one) and quality (variable two), or Comfort (variable one) and price
(variable two). The individual products are then mapped out next to each other. Any gaps
could be regarded as possible areas for new products.
The term 'positioning' refers to the consumer's perception of a product or a service in
relation to its competitors. You need to ask yourself, what is the position of the product
in the mind of the consumer?
Trout and Ries suggest a six-step question framework for successful positioning:
1.
2.
3.
4.
5.
6.
What position do you currently own?
What position do you want to own?
Whom you have to defeat to own the position you want?
Do you have the resources to do it?
Can you persist until you get there?
Are your tactics support the positioning objective you set?
‡ Activity
List down few products which comes to your mind when you think of FMCG products
and draw a Perceptual Map +
Do the same exercise for five Services
Chapter 03 – Consumer Perception
54
b) Repositioning
Although marketers position there products strongly in the consumers mind it is necessary
at times to be forced to re position it in response to market events and change in the
marketing environment, such as a change in trend or competitor attracting existing
customers etc. Many leading brands have change their positioning and repositioned
successfully, in the Sri Lankan context Elephant house repositioned the Elephant SODA
and Elephant Ginger Beer effectively. The Ginger Beer is now turned to EGB. Another
example is how Munchee repositioned the cream cracker as a Super cream cracker and is
used as a mini snack between meals. Kentucky fried chicken turned to KFC to avoid the
word fried.
‡ Activity
List down some companies that have repositioned themselves or their products.
Were they successful or failure? Separate the list of successes and failures in the above
positioning cases.
4.2 Positioning of Services
Due to the fact that services are Intangible, positioning becomes difficult with services.
Unlike goods marketing, here service offering has to be positioned, as the offering is
intangible, image factor in service becomes one of the key factors of differentiation from
the competitions. Therefore, service marketers should try to link specific image with
specific brand name.
Many service marketers try to provide visual images and tangible reminders of their
service offering, where for example in a hotel they provide specially packed soaps and
shampoo. It is important that service marketers are careful to avoid perceptual confusion
among the customers. The other factors need to be taken into consideration by the service
marketers are the extended three P’s when positioning their services and pay attention to
the image created by the service providers (People), the service process and the physical
evidence of the service environment.
‡ Activity
•
Identify two examples of service companies in Sri Lanka and analyse the concept of
positioning. Analyse how these companies have positioned themselves; Draw a
perceptual map for both the service companies.
•
Is Positioning of Services difficult than Positioning of goods, What makes it
difficult and how do you overcome such difficulties
Chapter 03 – Consumer Perception
55
‡ Activity
Identify 5 key differences between positioning of Goods and Services
Differentiator
Goods
Services
a) Corporate image
A corporate image doesn’t simply refer to the design of a company’s logo or buildings. In
reality a corporate image goes much deeper and cover the way a business relates to its
entire social and cultural context. This is very important for service organisations as
corporate image adds value. It is not only brands that customers create a relationship with,
but also the organization itself.
As much as brands become ‘in the mind’ in product marketing, in service marketing so
does organizations. Both for the people working within them and for their customers. If
the people working within an organization feel bad about it, you can be sure their
colleagues and customers will feel the same way. If customers feel bad about an
organization, the employees will feel the same way as well. This phenomenon is also
called a parallel process.
‡ Activity
List down leading Sri Lankan organisations and analyse how much does their image
contribute to their sales?
Is there any company who has a good Image but does not have enough sales? If yes, is
Image important?
4.3 Perceived Price
Consumers perceive value in brands when:
• It costs less to buy them than competing brands offering similar benefits, i.e. costdriven brands.
• They have unique benefits, which offset their premium prices, i.e. value-added
brands.
Chapter 03 – Consumer Perception
56
A number of research studies confirm the view that consumers rely on price as an
indicator of product quality. This happens particularly when they have little information to
go on or they are not confident of their own ability to make the decision on other grounds
such as familiarity with the brand name and experience with the product. This also applies
to services although the price / quality relationship will depend on the particular category
of service.
a) Reference pricing
Consumers carry reference prices in their minds. This knowledge may come from previous
experience, remembering and noting prices or analysing prices within the context of the
current buying situation. Department stores are known for separating products by price
and quality. Retailers often put expensive items next to less expensive items. Sale prices
will show the original price. A reduction of just 10 rupees can make a difference – Rs 105
as opposed to Rs 95.
b) Advertising and perceived benefit
We come to our decisions as a result of what has been called the principle of competitive
persuasion’. Advertising helps to create images in people’s minds. A brand’s image is
what people believe it is. Advertising turns a product into a brand by adding psychological
intangibles as well as the functional tangible value. The intangible values are self-image,
lifestyle and benefits. It uses images and feelings to create equity for brand. It takes a
product and makes it into an asset, something that has ‘cash value’. Brands form the basis
of a company’s assets and are valued on them.
c) Sales promotion and perceived value
Below-the-line promotions can be split into price-and non-price-related activities:
1. Price-related
•
•
•
•
•
•
•
Consumer price promotions.
Trade advertising allowances.
Dealer promotions.
Free goods.
National accounts discounting.
Over-riders.
Trade bonuses.
2. Non-price-related
•
•
•
•
In-store display.
Merchandising.
Competitions.
Self-liquidating premiums.
Chapter 03 – Consumer Perception
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Some promotions, such as price reductions, do not reinforce the belief that the brand is
worth paying for and draw particular attention to price as a choice determinant.
Continuous, indiscriminate and badly executed price-cutting is clearly dangerous.
However, to ignore the role of normal price and short-term price reduction, as a key
weapon in the marketer’s armoury is equally dangerous at a time when more and more
purchasing decisions are being made at the point of sale.
The role of promotion is to encourage purchase by temporarily improving the value of the
brand. Added-value promotions can enhance people’s perception of the brand, whereas
price reductions may reduce it.
‡ Activity
Discuss a situation where you had perceived a brand based on its price?
Does BMW or Mercedes Benz get an image and a quality perception due to their
high price?
Can you list any product, which is high in Price but low in quality perception?
•
•
•
4.4 Perceived Risk
Because of the uncertain outcomes of decisions regarding purchase of good or services the
consumer perceives some degree of risk in making the purchase decision. This is called
the Perceived Risk and defined as the uncertainty that consumers face when they cannot
foresee the outcomes of their purchase decisions.
So Perceived risk is attribute to two elements
•
•
Uncertainty
Consequences
Types of Perceived Risk
•
•
•
•
•
•
Functional Risk
Physical Risk
Financial Risk
Social Risk
Psychological Risk
Time Risk
The perception risk varies, depending on the customer, the product or Brand, the Culture
and the situation of purchase. However consumers, or customers manage the risk by
means of
•
•
•
•
•
•
Seeking Information
Becoming Brand Loyal
Selecting Brand Image
Relying on Store Image
Buying most expensive models
Seeking re assurance
Chapter 03 – Consumer Perception
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Chapter 4
Consumer Motivation
This chapter will cover the following areas
1. Consumer Needs, Wants and Goals
2. Understanding Motivation
3. Motivation Theories
1. Consumer Needs, Wants and Goals
As per the definition of marketing, identifying, anticipating and satisfying consumer needs
is an integral part of a marketer’s job. In attempting to understand the consumer,
identifying how he/she behaves is an important part of the process. As an introduction to
this discussion, the meaning of what consumer needs and wants are presented in this
section.
1.1 Understanding Human Needs
The nucleus of marketing revolves around satisfying needs. What is a need? The
Marketing Guru Phillip Kotler has defined “Need” as a “state of human felt deprivation”.
My Working Definition - Needs
Illustration 1 – Definition of a Need
Desired state
Need
Current state
Every individual has needs. These needs can be broadly classified into two categories and
they are:
Chapter 04 – Consumer Motivation
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•
•
Innate needs
Acquired needs
What is an innate need?
Innate needs are referred to, as Physiological/Biogenic needs. These are the fundamental
human needs required to sustain human life; these are food, water, air, clothing, shelter
and sex etc. These are also considered as Primary needs.
What is an acquired need?
Acquired needs are referred to, as Psychological/Psychogenic needs. These are needs that
we learn in response to our culture or environment that we live in. Some of the acquired
needs are self-esteem, prestige, affection, belonging, knowledge and power etc. These are
also considered as Secondary needs. Human needs are very complex and intense. Do
marketers invent human needs? Or are they fundamental composition of human makeup?
How do humans satisfy their needs? These are fundamental questions that marketers
attempt to answer.
1.2 How is a Human Want different from a Need?
What is a want? The Marketing Guru Phillip Kotler has also defined “WANT” as “The
form taken by human needs as they are shaped by culture and individual personality”.
Therefore the essence of want can be described as an object that will satisfy a need.
Human wants are unlimited; however the resources that we have to fulfil these wants are
limited. Therefore in fulfilling a want the consumer chooses out of the available
alternatives, the optimum satisfaction-giving alternative. Hence, when a want is backed by
buying power, it becomes a demand. Need is an inner drive or desire that an individual
has, whereas want is instrument that enables an individual to fulfil that felt deprivation. A
want cannot exist without a need.
‡ Activity
Can marketers create a need or a want?
Differentiate and distinguish the difference between a need and want and list out
example of needs and co-relating wants
• What is more important is a Sri Lankan Context? Is it innate needs or acquired
needs?
Discuss these issues with your friends and understand the principle.
•
•
Needs are not invented by marketers. They are a fundamental composition of all humans.
It is an inner force, which impels an individual to accomplish his or her yearning. The
needs can be innate or acquired. A need is satisfied through a want. A want may be
something tangible or intangible that will satisfy this individual’s yearning. A want can
take the shape many forms based upon the social, economical and psychological
perspective of an individual.
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1.3 Goals – Meaning, Nature
What is a goal? A “GOAL” can be defined as “The objective we would like to achieve
given the current situation”. A person fulfils a need by attaining a goal. Goals are
situationally determined and are specific to given behaviour or action. If we have not had
much sleep our goal for the evening might be going to bed early. Goals can be broadly
classified in to the following two categories.
•
•
Generic Goals
Product specific goals
a) What is a generic goal?
The term, generic relates to, not being specific, general or specific. Therefore generic
goals can be defined as the general class or categories of goals that consumers select to
fulfil their needs.
b) What is a product specific goal?
Product specific goals are specifically branded or labelled products which the consumers
select to fulfil their needs.
‡ Activity
• During the recent English cricket tour to Sri Lanka, an internationally reputed tea
company advertised “drink our ABC Brand ice tea to beat the Sri Lankan heat”.
List out what the generic goal is and what the product specific goal is.
Generic Goal
: Quenching your thirst
Product specific goal : ABC Brand iced tea
• Similarly discuss with your colleagues some examples and identify what the generic
goals and what the product specific goals are.
For any given need there are many different and appropriate goals. The goals selected by
an individual will depend on their personal experience, physical capacity prevailing
cultural values and norms and social environment. The needs and goals are
interdependent. One cannot exist without the other. Therefore needs and goals are like two
sides of the same coin.
2. Understanding Motivation
Adlai Stevenson in his speech in Columbus, Ohio on 3rd October 1952 stated
“Understanding Human needs is half the job of meeting them”. The rationale herein
for marketers is to understand the consumer’s mind so that they are in a better position to
address their needs. We have been brought up to believe that differences among people are
what make life truly interesting.
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However the diversity in human behaviour often causes us to overlook the fact that people
are really very much alike. These underlying similarities explain and clarify consumption
behaviour. Psychologists and consumer behaviourists agree that most people tend to
experience the same kind of needs and motives (factors that compel a consumer to take
particular action). Needs is the basis of all modern marketing.
2.1 Definition of Motivation
Motivation is an inter-relationship between needs, behaviour aimed at overcoming needs
and fulfilment of those needs. It can be simplified and described “motivation” as the
driving force that thrust individual/individuals into action. Therefore, motivation revolves
around satisfying needs.
My Working Definition –Motivation
2.2 Understanding the Motivational Process
Motivation is a dynamic process, which in its simplest sense, can be thought of having
three separate stages.
•
•
•
Motive/Drives or Needs
Instrumental Behaviour
Objective or goal
Illustration 2 – Simple model of motivation process
Motive
(Hunger)
Instrument Behaviour
(Visit to supermarket)
Goal
(Food)
A simple model of motivation process
A person who has been without food for a day will experience hunger. The hunger drive
will result in behaviour directed towards obtaining food. Having eaten, the individual will
no longer pursue the need for food since the individual has achieved the goal.
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Illustration 3 – Model of motivation process
Model of the Motivation Process
Learning
Unfulfilled needs,
wants and desires
Tension
Drive
Behaviour
Goal or need
fulfillment
Cognitive
processes
Tension
Reduction
2.3 Positive and Negative Motivation
In your day-to-day life you would have experienced a driving towards or away from an
object. Your need or desire is the motivation. Therefore it can be stated that motivation
can be Positive and Negative in direction. Clinical psychologist and Consumer
behaviourists refer positive motivation as needs, want and desires, where as negative
motivation as fears or aversions.
Let us look at an example and understand this concept. A person may feel hungry. His/her
need is Hunger. His/her instrument behaviour will impel the individual towards a
restaurant to fulfil his/her goal (food). However, if that person has to use a motorcycle as a
mode of transportation to get to the restaurant and has apprehensions about this mode of
transportation it will drive the individual away from that mode of transportation and will
look for alternatives.
Why it is important for marketers to understand positive and negative motivation is due to
the fact that positive and negative motivation serves to initiate and sustain human
behaviour. Understanding the relevance will enable marketers to server consumers better
than competitors and will be able to retain customers.
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63
‡ Activity
Looking at the above-mentioned example as marketers discuss with your friends, how
you could find solutions to the negative motivation and make the customer happy and
retain the customer. Discuss more than one solution.
As explained above needs and goals are like two sides of the same. Therefore similar to
needs, goals too can be positive and negative. Positive goals are behaviour, which is
directed towards an object, and this referred to as approach object. A negative goal is one
from which behaviour is directed away and thus some times is referred to as avoidance
object.
•
The Dynamic Nature of Motivation
In our everyday life we are exposed to multitude of experiences. These experiences shape
our behaviour, attitude and perceptions. Our experiences will also shape our needs and
wants. Therefore, motivation too is highly dynamic because of our experiences. The
reason for dynamic state of motivation is, the fact that needs and goals are constantly
changing.
Needs and goals are constantly growing and changing because of interaction with others,
physical condition, environment and experiences. When an individual attain one goal they
develop another new one. If an individual does not attain his goal, he strives for the old
goal or they may develop substitute goals. Some reasons why need-driven goals human
activity never ceases is due to the following.
•
Needs are never fully satisfied
Most human needs are never completely or lastingly satisfied. At fairly regular intervals
individuals experience hunger needs that must be satisfied. Also individual seek
companionship and approval from others to satisfy their social needs. Even psychological
needs are rarely satisfied.
•
Existing goals are never satisfied
As needs become satisfied, new and advanced needs emerge that cause tension. People
who achieve their goals set new and higher goals for themselves.
•
New needs emerge as old needs are satisfied.
Most of the motivational theorists believe that hierarchy of needs exist and the new, higher
needs emerge as lower order needs are fulfilled.
For example, a man who has largely satisfied his basic psychological needs may turn his
efforts to achieving acceptance among his new neighbours by joining their management
Chapter 04 – Consumer Motivation
64
committee. Having achieved acceptance, he then may look at becoming a committee
member seeking to fulfil his esteem need.
•
Multiplicity of needs
A consumer’s behaviour often fulfils more than one need. In fact specific needs are
selected because they fulfil several needs. For example, we buy clothes for protection as
well as numerous personal and social needs. However, there is one overriding (prepotent
need) that initiates behaviour.
For example a woman may want to loose weight because she would like to wear stylish
clothes, also she may be concerned about her physical state (High blood pressure/ heart),
in addition she may notice that her husband is admiring slimmer girls. However, if the
cumulative tension provided by each of these needs is high she will diet. On the other hand
if one of the reasons (husband’s roving eyes) may serve as trigger mechanism that would
be the prepotent need.
•
Needs and goals vary among individuals
One cannot accurately infer motives from behaviour. Individuals with different needs may
seek fulfilment through selection of the same goal, while people with same needs may
seek fulfilment through different goals.
•
Success and failure influence Goals
A number of researchers have studied the nature of goals individuals set for themselves. In
general, they conclude that, those who accomplish their goals set new and higher standard
of goals; that is they raise their levels of aspiration. This is probably due to the fact that
success makes them more confident of their ability of achieving higher goals. On the other
hand, those who do not achieve their goals some times lower their levels of aspiration.
Therefore, goal selection is often a function of success or failure.
•
Substitute Goals
When an individual cannot attain a specific goal or type of goal to satisfy a certain need
behaviour, he may be directed towards a substitute goal. Although, the substitute goal
may not be as satisfactory as the primary goal, it may be sufficient to dispel uncomfortable
tension. Continued deprivation of a primary goal may result in the substitute goal
assuming the primary goal status. For example, a person who cannot afford a BMW may
convince himself/herself that a Toyota has an image that the individual is looking for.
Substitute goals may be defensive reaction to frustration.
•
What is Frustration?
Frustration is the feeling that individuals have when they are unable to attain their gaols.
Some of the main factors that will lead to frustration may be personal. These personal
factors are limited physical or financial resources. In addition, the physical and social
Chapter 04 – Consumer Motivation
65
environment too could be reasons for frustration at certain times. Some times people adopt
to protect their egos from failure when they do not attain their goals. This is generally
referred to as defence mechanism. Some of the forms of defence mechanism are
aggression, realization, regression, withdrawal, projection autism, identification and
repression.
Aggression
Individuals who experience frustration may resort aggressive
(violent/destructive) behaviour to protect their self esteem.
Rationalization Individual will redefine a frustrating situation by inventing a plausible
reason for being unable to attain their goal, or may decide the goal is
not worth pursuing.
Regression
Individuals who react to frustrating situations with childish or
immature behaviour.
Withdrawal
Frustration is often resolved simply withdrawing from the situation.
Projection
Individuals who project blame on others (objects or persons) for
his/her failure in a frustrating situation.
Autism
Refers to an individual who is completely dominated by needs and
emotions, with little effort made to relate to reality. By day dreaming
or fantasizing it will enable the individual to attain imaginary
gratification.
Identification
People who resolve their feelings of frustration by subconsciously
identifying with other persons or situations that they consider relevant.
Repression
Individuals avoid the tension arising from frustration by repressing the
unsatisfied need
•
Arousal of Motives
Generally most of our needs are dormant much of the time. Needs are aroused through
stimuli. This arousal can be triggered by Physiological arousal, Emotional arousal,
Cognitive arousal and Environment arousal.
Physiological Bodily needs at any one specific moment in time are rooted in an
Arousal
individual’s physiological condition at that moment. For example a
decrease in body temperature will induce shivering.
Most of the physiological cues are involuntary; however they arouse
related needs that cause uncomfortable tension until they are fulfilled.
For example the shivering man may heat his home to relieve his
discomfort.
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Emotional
Arousal
Sometimes day dreaming results in arousal or stimulating latent needs.
People who are frustrated or bored often imagine themselves in allsorts
of desirable situations in attempting to achieve their goals. These
thoughts tend to arouse dormant needs, which will produce
uncomfortable tension that will propel goal-oriented behaviour. For
example a person who dreams of becoming a famous actor may join
acting classes.
Cognitive
Arousal
Sometimes, random thoughts or personal achievements can lead to
cognitive awareness of a need.
Environment The sets of needs activated at a particular time are often determined by
Arousal
specific cues in the environment. Without these cues the need might
remain dormant. For example, smell of baking fresh bread might arouse
need for food.
It is imperative for marketers to understand the dynamic nature of motivation, so that they
could better understand consumer behaviour.
‡ Activity
•
•
Collect few recent advertisement and analyse how it arouses a want in you? Do you
agree that marketers can arouse want?
Some argue that marketers arouse need and make people purchase unwanted
products? Do you agree to this and is this practice ethical?
3. Motivation Theories
Psychologists and others interested in human behaviour have attempted to develop
exhaustive lists of human behaviour and motives. Some of the postulated motivational
theories are McGregor’s Theory X and Theory Y, Hertzberg’s Motivation – Hygiene
Theory, Vroom’s Expectancy Theory, Ouchi’s Theory Z (The Japanese Approach),
Clayton Alderfer's ERG Theory (Existence, Relatedness, and Growth) and Maslow’s
Hierarchy of needs.
3.1 Maslow’s Hierarchy of Needs
Dr. Abraham Maslow, a clinical psychologist carried out research between 1939-1943 and
introduced a theory based upon human needs and this theory is referred to as “Maslow’s
hierarchy of needs”. It categorised human needs into five groups in a hierarchy of
Importance. The five groups of needs were formulated from lower level to higher level.
Chapter 04 – Consumer Motivation
67
Illustration 4 – Maslow’s Hierarchy of Needs Model
Self-Actualization: Is the drive to become
what one’s capable of becoming, which
includes growth, achieving one’s potential
and self fulfilment.
Esteem: Includes internal esteem factors
such as self respect, autonomy,
achievement and external esteem such as
status, recognition & attention.
Love
(Social): Includes
affection,
belongingness, acceptance and friendship
Safety: Includes security and protection
from physical and emotional harm
Physiological: Includes the very basic
needs such as air, water, food, sleep, sex
and other bodily needs.
Understanding the hierarchy of needs model
a. Physiological Needs
Physiological needs are the very basic needs such as air, water, food, sleep, sex, etc. When
these are not satisfied we may feel sickness, irritation, pain, discomfort, etc. These feelings
motivate us to alleviate them as soon as possible in order to establish homeostasis. Once
they are alleviated, we may think about other things.
b. Safety Needs
Safety needs have to do with establishing stability and consistency in a chaotic world.
These needs are mostly psychological in nature. They are security, stability, dependency,
protection, freedom from fear, anxiety, order, and law etc. We need the security of a home
and family. However, if a family is dysfunction, i.e., an abusive husband, the wife cannot
move to the next level because she is constantly concerned about her safety.
Love and belongingness have to wait until she is no longer cringing in fear. Many in our
society cry out for law and order because they do not feel safe enough to go for a walk in
their neighborhood. Many people, particularly those in the inner cities, unfortunately, are
stuck at this level. In addition, safety needs sometimes motivate people to be religious.
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68
Religions comfort us with the promise of a safe secure place after we die and leave the
insecurity of this world.
c. Social/Belonging/Love Needs
Love and belongingness are next on the ladder. Humans have a desire to belong to groups:
clubs, work groups, religious groups, family, gangs, etc. We need to feel loved (nonsexual) by others, to be accepted by others. Performers appreciate applause. We need to be
needed.
d. Esteem Needs
There are two types of esteem needs. First is self-esteem which results from competence
or mastery of a task. Second, there's the attention and recognition that comes from others.
This is similar to the belongingness level, however, wanting admiration has to do with the
need for power. People, who have all of their lower needs satisfied, often drive very
expensive cars because doing so raises their level of esteem. Some of the esteem needs are
status, fame and glory, dominance, recognition, attention, importance, dignity, or
appreciation etc.
e. Self-Actualization
The need for self-actualization is “the desire to become more and more what one is, to
become everything that one is capable of becoming.” People who have everything can
maximize their potential. They can seek knowledge, peace, easthetic experiences, selffulfillment, and oneness with God, etc.
‡ Activity
•
•
Identify different types of your need
List the goods you bought for yourself or your family and classify them into the
above 5 types of needs
Maslow’s hierarchy of needs has often been illustrated by means of a pyramid structure.
The pyramid structure shows the relationship between various groups of needs, not only in
terms of their position in the hierarchy but also in relation to their importance.
The ordering of these groups of needs is of significance, firstly because it is the order in
which needs tend to appear during development, and secondly because it is the order in
which they need to be satisfied. As soon as the needs of a lower level of the hierarchy are
satisfied, those on the next level will emerge and demand satisfaction.
Thus people in poor societies will tend to be primarily concerned with the satisfaction of
Physiological Needs, Safety Needs and will not be particularly interested in the higher
needs. In more affluent societies, however, the basic needs such as Physiological Needs,
Safety Needs will be easily satisfied and greater emphasis will be placed on esteem needs
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and self- actualization. Maslow’s theory implies that motivation must be cyclical in
nature. As soon as one group of needs are fulfilled, other drives become predominant.
These higher levels of drives will modify goal directed, or instrumental behaviour at lower
level. For example, a person who has fulfilled a physiological need for shelter and safety
needs for security may begin to look for his abode as a means of satisfying social/esteem
need by moving into an exclusive area.
Illustration 5 – The cycle nature of motivation
Goal
Motive
Instrumental
Behaviour
Maslow’s theory also distinguishes between needs according to whether they fulfil a
deficit or growth function. All the needs included in the first four levels of Maslow’s
hierarchy (Physiological Needs, Safety Needs, Love Needs and Esteem Needs) are deficit
needs. They are stimulated by the absence of something required; for example lack of
food, lack of affection or lack of prestige. Meeting these needs will results not in
satisfaction but the reduction of satisfaction.
Maslow’s fifth need Self Actualization is an inner need to develop one’s full potential, is
the only growth need and sole potential source of happiness. It means different things to
different people. Each individual has his own potentialities. For one individual it will
mean achievement in creative or scientific field, whereas for another it will mean bringing
up a well balanced family. It is a feeling of accomplishment and of being satisfied with
oneself.
‡ Activity
Identify different needs of a few people based on the Maslow’s hierarchy of need and
write differences in the need amongst people
Basic Needs
Safety Needs
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70
Social Needs
Self Esteem Needs
Self Actualisation Needs
Usefulness of the model as an operational tool – segmentation, positioning
applications, etc
In the preceding chapters the concept of segmenting, targeting and positioning were
discussed. Segmentation is division of a heterogeneous market consisting of buyers with
different needs and wants into a homogeneous subdivision with similar needs and wants.
Therefore, the essence of segmentation is subdividing the total market into distinct subsects customers.
Segmentation is a very important tool in the marketing arsenal. Among many things
segmentation enables marketers to address and serve customer and markets with similar
needs and wants. Hence the concept of Maslow’s hierarchy of needs orbits around
consumer needs and wants. This concept could be used to understand consumer
perceptions and attitudes in relation to consumer behaviour and their needs.
The concept of positioning is relatively a new phenomenon introduced by Al Ries and
Jack Trout in 1981 in their book “Positioning: The battle for your mind”. The rationale of
Positioning is about mind space rather than market share, “once in consumers mind keep it
locked in”. Positioning is very powerful tool which can be used by marketers in their
marketing communication and advertising effort.
Maslow’s hierarchy offers a framework for marketers to use in determining what they
need their products and services to be shown satisfying. Advertising campaigns can then
be designed to show how a brand can fulfil these needs. Marketers also recognize that
different market segments emphasize different need levels. Foe example, a young single
person may be attempting to satisfy social or self esteem need in purchasing a car, while a
family with children will focus more on safety needs.
Criticisms of the model
Maslow’s hierarchy of needs was widely accepted in many social disciplines because it
attempts to reflect the assumed or inferred motivations in our society. The five levels of
need suggested by the hierarchy sufficiently encompass most of the individual needs in
society.
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71
Some critics however maintain that Maslow’s concept is too general. Specifically it is
unlikely that needs will always be fulfilled in the exact manner specified by the hierarchy.
For example, some consumers place a higher priority in buying lottery tickets than
acquiring necessities such as food and clothing. Hierarchy also ignores the intensity of
needs. It is not simply the existence of needs but rather their intensity that affects
motivation.
In addition, the other major problem with the theory is that it cannot be tested empirically.
The issue is that how you measure a need satisfaction before the next level becomes
operative. The need hierarchy also appears to be very closely bound to the contemporary
American Culture.
3.2 Herzberg’s – Hygiene Two Factor Model
Herzberg's Two Factor Theory is a “content theory” of motivation. Herzberg theory is
more applicable in th organisational context and has narrow application in marketing.
Herzberg analysed the job attitudes of 200 accountants and engineers who were asked to
recall when they had felt positive or negative at work and the reasons why. From this
research, Herzberg suggested a two-step approach to understanding employee motivation
and satisfaction:
Illustration 6 – Hertzberg’s two factor model
Traditional View
Satisfaction
Dissatisfaction
Herzberg’s view
Motivators
Satisfaction
No satisfaction
Hygiene factors
No dissatisfaction
Dissatisfaction
3.3 Marketing Applications of the above Motivational Theories
Consumer’s needs, values and goals have some important implications for marketers.
First, motivation can be enhanced by appealing to consumer’s needs, values and goals.
The intensity of a given need is at a particular point in time, the greater the consumer’s
motivation to engage in the need related behaviour.
For example, a consumer with a functional need for a car is likely to notice
advertisements, testimonials and advertorials relating automobiles and will think about it
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72
contents critically and is most likely to remember its contents. Similarly, an individual
with a family is likely to address the issue of protecting the families and the loved ones. In
contrast, consumers are unlikely to be motivated to process information from ads or other
communications that do not appeal to their needs.
In addition, marketers can also identify currently unfulfilled needs or need satisfying
alternatives and delivery satisfaction. For example, diaper manufacturers have developed a
whole line diapers to solve functional needs by accommodating different sizes and gender
of babies.
Illustration 7 – Comparison between Maslow’s Hierarchy and the Two Factor Theory
Also, needs can be used to segment markets. For example financial services industry has
developed different packages of services to appeal to affluent and non-affluent consumers.
The affluent want advice on tax shelters, investment plans and non-affluent are more
interested in savings accounts and advise on retirement plans.
Furthermore, by understanding consumer needs, products could be positioned to impel the
desired behaviour. For example, the makers of Head and Shoulders Shampoo recognized
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73
that consumers have a strong need to be accepted by others. They appealed to this need by
suggesting that having dandruff will lead to rejection. The commercial implied that
negative situation can be avoided by using this product. Thus understanding consumer
needs products could be positioned effectively.
Communication campaigns could be developed towards desired target audiences by
identifying the needs to maximise resources and achieve optimum results.
In conclusion, Maslow’s hierarchy will enable marketers to understand the consumer
needs, and this theoretical model can be used as a basis for segmentation, positioning and
in the communication campaigns. Whereas Herzberg’s two factor theory is widely being
used for organizational behaviour. However, the principle of Herzberg’s two factor theory,
Motivators and Hygiene from a consumer behaviour perspective could be looked in the
following manner. The basis of Motivators is that employees expect a congenial working
environment to deliver employer desired results. Lack of congenial environment will lead
to dissatisfaction. Similarly, consumers expect a certain quality and standards from the
organizations products and services. However, elimination of dissatisfaction will not lead
to satisfaction only to state of neutrality. Therefore, it is imperative to deliver what is
promised.
Consumer behaviour is a complex process; there is no one single formula to infer a
successful model to understand this complex concept. Understanding this complex nature
and utilizing the available tools will enable marketers achieve betters results. Motivation is
one such tool. Understanding process, the process of motivation and by harnessing the
resources marketers will be able to impel and propel buying behaviour. Therefore,
understanding the concept of motivation can bring an organization and marketers profound
benefits.
♪
My Short Notes
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Chapter 5
Consumer Attitude Formation
This chapter will cover the following areas
1. What are Attitudes?
2. The Tri Component Attitude Model
3. Attitude Formation
4. Attitude Change
5. Attitude Formation Theories
6. Importance of the Attitude Theory to Understand Consumers Better
1. What are Attitudes?
In the dynamic world today where change has become the order of the day due to the
revolution in information technology, global village etc the choice of products flooding
into the market place is unlimited. A consumer is given a wide range of options to select
from. Yet, we see consumers consistently buying a particular brand of product, talking
favourably about that particular product and recommending them to their peer group. For
example: a young mother purchasing Nestle cereals for her infant. What can be inferred
from this is that the mother who is the consumer has developed a positive disposition that
is positive attitude towards Nestle products.
Stemming from the above, attitude is simply the expression of like or dislike for a
particular object. Attitudes are not directly visible but can be inferred from what people
say or what they do. The technical definition of attitude is a mental and neural state of
readiness organised through experience, exerting a directive, or dynamic influence upon
the individual’s response to all objects & situations with which it is related to. In a
consumer behaviour context,
“An attitude is a learned predisposition to behave in a consistently favourable or
unfavourable way with respect to a given object”.
Each part of the definition describes an important attribute of an attitude and is crucial to
understanding the role of attitudes in consumer behaviour.
My Working Definition – Attitude
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Understanding attitudes of an individual is important, as it is the primary condition of
understanding product appeal or relevance. Therefore, in marketing, a greater emphasis
has been given to attitudes as a subject. Since human beings are complex, understanding
attitude formation, changing attitudes, relationship between attitude and behaviour and
attitude theories is important.
1.1 The Attitude “OBJECT”
The word object in our consumer-oriented definition of attitude should be interpreted
broadly to include specific consumption-or marketing-related concepts, such as product,
product category, brand, service, possessions, product use, causes or issues, people,
advertisement, Internet site, price, medium or retailer.
In conducting attitude research, we tend to be object specific. For example, if we were
interested in researching consumer attitudes towards major brands of sportswear, our
“object” might include Nike, Reebok, Adidas and Puma; if we were examining consumer
attitudes toward brands of perfumes, our “object” might include Christian Dior, Givenchy,
Calvin Klein, Estee Lauder, Paul Smith etc.
1.2 Attitudes as a Learned Pre-disposition
There is a common belief that attitudes are learned i.e. Consumers behave the way they do
as a result of a previous direct experience with the product, word-of-mouth information
acquired from others, or from exposure to mass media advertising, internet and several
other forms of direct marketing such as the retailer’s catalogue.
It is important to remember that although attitudes may result from behaviour, they are not
synonymous with behaviour. Instead, they reflect either a favourable or an unfavourable
evaluation of the attitude object. As learned predispositions, attitudes have a motivational
quality; that is, they might propel a consumer towards a particular behaviour or repel the
consumer away from a particular behaviour.
1.3 Attitudes being Consistent with Behaviour
Attitudes are relatively consistent with behaviour they reflect i.e. we usually expect
consumers’ behaviour to correspond with their attitudes. However, despite their
consistency, attitudes are not necessarily permanent; they do change due to circumstances
or situational influences. For example: a couple living together reported preferring a 29”
Sony TV. However, after the break-up, the matter of affordability may intervene, and one
individual would rather settle for a 14” Singer TV.
1.4 Attitudes affected by Situations
We have earlier identified that there is a positive correlation between attitudes and
behaviour. However, situations i.e. events or circumstances may distort the above
relationship and prove
it to be inconsistent.
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It is important to understand how consumer attitudes vary from situation to situation. For
eg: Shyan gets his monthly hair cut at Cutting Station which is premium priced and is
tedious as it involves getting a prior appointment at least a week before. On one occasion
when he received a short notice for a dinner meeting with some foreign expats, he felt the
need to groom up. However, he couldn’t get an appointment at his favourite hair dresser.
Instead he just walked into Super Salon and got his hair done at a less price. This was not
due to his wish to economise but this arose because of the circumstance.
Therefore, it is necessary to consider the situation in which behaviour happens, or it may
lead to the misinterpretation of the relationship between attitudes and behaviour.
Examples of how situations might influence Attitudes
Product/ Service
Situation
Attitude
Omega Watch
Shopping for a watch
Sri Lanka Insurance
After Tsunami
Spoons, Hilton
Fine dining
Sifani’s Diamond ring
Engagement
“ I want to own the brand for
which Aishwarya Rai is the Brand
ambassador”
“To insure property against
natural disasters”
“I need to impress my fiancé.
She’s special”
“ Diamonds are forever”
The role situations play in influencing consumer attitudes towards specific brands of
products
or services shouldn’t be ignored.
2. The Tri Component Attitude Model
Several models have been developed to understand the relationship between attitudes and
behaviour. This text will discuss only the tri-component model, which will help you to
comprehend the above relationship to a large extent. According to the tri-component
model, attitude consists of three components: namely a cognitive component, an effective
component, and a conative component.
•
The Cognitive Component
The first component of the model, which consists of a person’s cognitions that is the
person’s information (acquired through direct experience or gathered from various
sources) or beliefs
about the attitudinal object.
For e.g.: Shivani, a 9th grader, is thinking of purchasing a mobile phone. Her choices have
narrowed down to choosing between a Nokia or a Sony Erickson. Both brands consist of
Chapter 05 – Consumer Attitude Formation
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the same basic attributes: SMS, MMS, GPRS, Chat and easy to use. However, she has
heard from some of her friends that Nokia is far more user friendly than Erickson. She
wishes to find out more before making her selection.
‡ Activity
Refer the core reading text and draw the tri-component attitude model in the given space.
•
The Affective Component
A consumer’s emotions or feelings towards the liking or disliking of the object
constitute the affective component of an attitude. Research indicates that emotional states
such as happiness, sadness, shame, disgust, anger, distress, guilt or surprise may enhance
positive or negative experiences and that later recollections of such experiences may
influence what comes to mind and how the individual acts.
For example, MTV, Sirasa TV, Shakthi TV and Shakthi FM have created a “ Media
Hype” with 9.0 / 2004 Tsunami Broadcast and Relief Programmes. The song specially
developed also captured the hearts of millions. This has a positive enlistment to the
corporate image of Maharajah Group and especially Shakthi FM radio station which was
not at the “top of the pops” with the inhabitants of Trincomalee and Batticalo. More
people are now tuning into Shakthi FM from Suriyan FM, which was the most popular
station before this disaster occurred.
Consumer researchers as primarily evaluative in nature treat these emotions and feelings
as they capture an individual’s direct or global assessment of the attitude object in terms of
it being either favourable or unfavourable.
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In addition to the above, consumer researchers also use point scale evaluation schemes as
given below in Table 1 to gauge feelings and emotions.
Table 01
Selected Evaluative scale to gauge Consumers’ Attitudes Towards Neutrogena
Compared to other face moisturisers, Neutrogena is:
[1] [2] [3]
[4]
[5]
[6]
Good
[4]
[5]
[6]
[1] [2] [3]
Positive
[4]
[5]
[6]
[1] [2] [3]
Pleasant
[4]
[5]
[6]
Appealing [1] [2] [3]
•
[7]
[7]
[7]
[7]
Bad
Negative
Unpleasant
Unappealing
The Conative Component
The final component of the tri-component model is concerned with the person’s
behavioural tendencies towards the object.In marketing and consumer research, the
conative component is frequently treated as an expression of the consumer’s intention to
buy. Buyer intention scales are used to assess the likelihood of a consumer purchasing a
product or behaving in acertain way. Table 2 provides several examples of common
intention-to-buy scales.
Table 02
Two examples of Intention-to-Buy Scales
Which of the following statements best describes the chance that you will buy St Ives
moisturiser the next time you purchase a moisturiser?
_ I definitely will buy it
_I probably will buy it
_I am uncertain whether I will buy it
_I probably will not buy it
_I definitely will not buy it
How likely are you to buy St Ives during the next three months?
_Very Likely
_Likely
_Unlikely
_Very Unlikely
3. Attitude Formation
Consider how you formed your attitude towards things at an initial stage, for example the
clothing you wear –innerwear, outerwear etc. Were you brand specific and into labels such
as CK shirts, Nike shoes, Levi jeans, Triumph/ Crocodile innerwear? Where would you
purchase them from – a retail outlet or a department store like ODEL? How did your
family and friends, inspiring celebrities, internet and advertisements influence you in
forming these attitudes? Why do some attitudes persist while others change over time?
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It is of utmost importance for Marketers to find the answers to the above in order to
understand how attitudes are formed so that they can influence consumer attitudes or
behaviour.
Attitude formation is divided into three areas:
• How attitudes are learned
• Sources of influence on attitude formation
• Impact of personality on attitude formation
3.1 How Attitudes are Learned
Here we are talking about switching positions from a stance of “no attitude” towards a
given object( e.g. a mobile phone) to having some attitude towards it (e.g. having a mobile
phone is
“wow” when you want to sms, send MMS etc).
The shift from no attitude to an attitude (i.e. the attitude formation) is a result of learning.
Research has proven that consumers always purchase new products that are associated
with a favourably viewed brand name. This positive attitude toward the brand name is
frequently the result of repeated satisfaction with other products produced by the same
company.
In terms of classical conditioning, an established brand name is an unconditioned stimulus
that through which past positive reinforcement resulted in a favourable brand attitude. A
new product, yet to be linked to the established brand, would be the conditioned stimulus.
To illustrate, introduction of hair colour under the well-known and respected family name,
Revlon. Revlon is counting on its already well-established brand name to extend positive
attitude towards the new product. Research suggests that the “fit” between a parent brand
(e.g. in this case Revlon) and a brand extension (e.g. in this case hair colour) is a function
of two Factors.
•
The similarity between the pre existing product categories already associated with the
parent brand (i.e. mostly cosmetics ) and the new extension
•
The fit or match between the images of the parent brand and the new extension.
Sometimes attitudes follow the purchase and consumption of a product. For example, a
consumer may purchase a brand name without having a prior attitude toward it because it
is the only product kind available of its kind. (e.g. the last bottle of aspirin in a gas station
mini-mart). Consumers also make trial purchases of new brands from product categories in
which they have little personal involvement. If they find the purchased brand to be
satisfactory, then they are likely to develop a favourable attitude towards it. When
consumers try to seek to solve a problem or satisfy a need, they are likely to form attitudes
(either positive or negative) about products on the basis of their own cognition (knowledge
and beliefs) and information exposure. However, regardless of available information,
consumers are not always ready or willing to process product-related information.
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Furthermore, consumers often use only a limited amount of the information available to
them. Research suggests that only two or three important beliefs about a product dominate
in the formation of attitudes and that less important beliefs provide little additional input.
This important finding suggests that marketers should fight off the impulse to include all
the features of their products and services in their ads; rather, they should focus on the few
key points that are at the heart of what distinguishes their product from the competitors.
3.2 Sources of Influences on Attitude Formation
The formation of consumer attitudes is strongly influenced by personal experience, the
influence of family and friends, direct marketing, and mass media.
Consumer’s direct experience in trying and evaluating goods and services is identified as
primary means of attitude formation. Recognising the importance of direct experience,
marketers have attempted to stimulate trial of new products by offering discount coupons
(or even free samples (e.g. sample perfumes, tampons etc). The marketer’s objective is to
get consumers to try the product and then to evaluate it. If a product proves to be to their
liking, then it is probable that consumers will form a positive attitude and be likely to
repurchase the product. In addition, from the information on the coupon (e.g. name and
address) the marketer is able to create a database of interested consumers.
From our early stages in life, our peer group (family, close friends, associations has an
influence in the way we form attitudes in our lives. Family plays an important role in the
formation of attitudes as they provide us with the basic values and beliefs. For instance,
young children who are rewarded for good behaviour with sweet food items and candy
often retain a taste for (and positive attitude toward) sweets as adults.
Marketers are increasingly using highly focused direct-marketing programs to target small
consumer niches with products and services that fit their interests and lifestyles. Marketers
very carefully target customers on the basis of their demographic, psychographic, or geodemographic profiles with highly personalised product offerings (Hot Shots pool parlour
….. nice people….great coffee…) and messages that show that they understand their
special needs and desires. Direct marketing has a good hit rate as it is targeted at the
individual segment’s need with products and service offerings and promotional messages
carefully designed to influence target consumers’ attitudes favourably.
Mass-media such as newspapers, television channels, magazines are constantly exposing
consumers to a variety of new ideas, products, opinions and advertisements. Consumers
who lack direct experience with a product may be induced by exposure to an emotionally
appealing advertising message, which is likely to create an attitude toward the product
than for consumers who have secured direct experience beforehand with the product
category. These findings suggest that emotional appeals are most effective with consumers
who lack direct product experience.
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However, a shortcoming of the impact of advertising messages on attitude formation is the
level of realism that is associated with it. Research has proven that attitudes developed
through direct experience (eg.product usage) are far more enduring and reinforce
confidence, and more resistant to attack than those developed via indirect experience (e.g.:
watching a television advertisement)
3.3 Personality Factors
An individual’s personality also plays a critical role in attitude formation. For e.g.
individuals with a high need for cognition (i.e. those who crave for information and enjoy
thinking) are likely to form positive attitudes in response to ads or direct mail that are rich
in product related information (consumer seeking to purchase a DVD player).
On the other hand, consumers who are relatively low in need for cognition are more likely
to form attitudes in response to ads that feature an attractive model or well-known
celebrity. (Shah Rukh Kan for Pepsi may appeal to a certain category of consumers).We
can conclude attitudes towards new products and new consumption situations are strongly
influenced by specific personality characteristics of consumers.
4. Attitude Change
A key challenge facing marketers is altering consumer attitudes. Characteristics that
predominate attitude formation predominate attitude change. In other words, attitude
changes are learned; they are influenced by personal experience and other sources of
information, and personality affects both the receptivity and the speed with which attitudes
are likely to be altered.
For market leaders who enjoy a significant proportion of customer goodwill and loyalty,
their overriding goal is to retain their customers so that they will not be won over by
competitor’s special offers and inducement. For instance: Dialog GSM has been the leader
in GSM communication technology in Sri Lanka and now the recent non commercialised
3G communication technology. Competitors take aim at market leaders when developing
their marketing strategies. Their objective is to change the attitudes of the market leaders’
customers and win them over.
Among the attitude change strategies that are available to them are
•
Changing the consumer’s basic motivational function
•
•
•
•
Associating the product with an admired group or event
Resolving two conflicting attitudes
Altering components of the multi attribute model and
Changing consumer beliefs about competitors’ brands.
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4.1 Changing the Basic Motivational Function
By making particular needs prominent it is possible to change consumer attitudes
effectively towards a product or a brand. One method for changing motivation is known as
the functional approach. According to this approach, attitudes can be classified in terms of
four functions: the utilitarian function, the ego-defensive function, the valueexpressive function, and the knowledge function.
•
Utilitarian Function
We have certain brand attitudes partly because of a brand’s utility. Our attitude tends to be
favourable towards a product which has been useful or helpful in the past. One way of
changing attitudes in favour of a product is by highlighting that it can serve a utilitarian
purpose for which it may have not been considered. For e.g: Harpic cleaner with bleach
stresses its utilitarian benefit in terms of superior cleaning ability.
•
The Ego-Defensive Function
Most people want to protect their self-images from inner feelings of doubt-they want to
replace their uncertainty with a sense of security and personal confidence. Ads for
cosmetics and personal care products, by acknowledging this need, increase both their
relevance to the consumer and the likelihood of favourable attitude change by offering
reassurance to the consumer’s self-concept. For example: Rexona’s Anti Perspirant
stresses, “ if you can smell body odour on others, they can on you ”
•
The Value-Expression Function
Attitudes are an expression or reflection of the consumer’s general values, lifestyle and
outlook. If a segment of consumers has a positive attitude towards being “in fashion then
their attitudes toward high-fashion clothing are likely to reflect this viewpoint. Thus, by
knowing target consumers’ attitudes, marketers can better anticipate their values, lifestyle,
or outlook and can reflect these characteristics in their advertising and direct marketing
efforts.
•
The Knowledge Function
Consumers have a strong desire to know and understand the people and things they
encounter. The consumer’s “need to know,” a cognitive need, is important to marketers
concerned with product positioning. Indeed, many product and brand positioning are
attempts to satisfy the need to know and to improve the consumer’s attitudes towards the
brand by emphasising its advantages over competitive brands. For instance- Lifebuoy
Gold soap 99% protection against germs. It supports its claims by being endorsed by the
International Laboratories. An important characteristic of the advertising is its appeal to
consumer’s need to know.
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a. Combining several functions
Different consumers may like or dislike the product or service for different reasons. Hence
a functional framework for examining attitudes can be useful. For instance: Clarin’s face
wash- one may be stimulated by the fact that the product works very well (the utilitarian
function); the second may have the inner confidence to agree with the point “ the beauty
secret ” ( an ego-defensive function). The third consumer’s favourable attitudes may be
due to French Cosmetics are superior in association with the inbuilt value system and
knowledge function – endorsement by an International Cosmetic Association.
b. Combining functions using Tri Component Model
Tri component model is a model to attempt how attributes are functioning in a wholistic
manner. It is bringing in cognitive, affective, connative aspects into attitudes and how each
could contribute in the buying process. BMW as a car is positioned as the ultimate driving
machine & elite. Those who look at it rationally, there are enough positive attributes to
think positive about BMW, for its stylish design ,to impress ,the car has enough emotional
drivers compared to others .
However, when you look at the connative aspect one would wonder how likely this
purchase would take place among everybody. Therefore, the BMW buyer behaviour
relatively depends on the connative aspect eventhough attitudes of people towards others
were strongly positive. Depending on the product or service, one could decide which
aspect of the tri-component model to be used initially for possible change of attitude.
Practical Marketing Situation Model
Situation One
Advertising
Message
Positive
Cognition
(Think)
Lets try
some
Connation
Positive
I liked
that
Positive
Attitude
Change
Affectivity
Situation two
Advertising
Message
Affectivity (Feel)
Positive
Finds it
tasty
Cognition
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Positive
I’ll buy
some
Positive
Attitude
Change
Connation
84
Situation Three
Price Promotion(Connation)
Positive
It tastes better(Cognition)
Feel Good & healthy(Affectivity)
Positive
Attitude
change
Associating the product with a special group, event, or cause
Attitudes are related, atleast in part, to certain groups, social events, or causes. It is
possible to alter attitudes toward products, services, and brands by pointing out their
relationships to particular social groups, events or causes.
For example: Dialog GSM sponsors merit students who wish to pursue career in
Engineering to study overseas. This will augment local consumers’ positive attitudes
toward Dialog (which is a 100% subsidiary owned by Telekom Malaysia) and it will
remove any form of alienation by local customers.
Resolving Two conflicting attitudes
Attitude-change strategies can sometimes resolve actual or potential conflict between
two attitudes. Specifically, if consumers can be made to see that their negative attitude
toward a product, a specific brand, or its attributes, is not really in conflict with another
attitude, they may be induced to change their evaluation of the brand.(or move form
negative to positive)
For example:- Karen a secretary working for a MNC is considering switching to contact
lens from spectacles. However, she feels it involves a lot of hassle. But when she finds out
it is possible to get a surgery done with inbuilt contacts she is convinced of the idea, thus
resolving her conflicting attitudes.
Altering Components of the multi attribute Model
Multiattribute models portray consumers’ attitudes with regard to an attitude object as a
function of consumers’ perception and assessment of the key attributes or beliefs held with
regard to the particular attitude “object.”
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These models have implications for attitude-change strategies: specifically, they provide
us with additional insights as to how to bring about attitude change: (1) change the relative
evaluation of attributes, (2) changing brand beliefs, (3) adding an attribute, and (4)
changing the overall brand rating
•
Changing the relative evaluation of attributes
A product category is naturally divided according to distinct product features or benefits
that appeal to a particular segment of consumers. Marketers usually have an opportunity to
persuade consumers to “cross over” that is , to persuade consumers who prefer one version
of the product (Pringles) to shift their favourable attitudes towards another version of the
product (Lays).
•
Changing Brand Beliefs
Cognitive –oriented brand strategy which focuses on changing beliefs or perceptions about
the brand itself. Advertisers constantly remind us that their products are superior in terms
of some product attribute. e.g:-Signal Toothpaste with extra fluoride protection
•
Adding an attribute
Another cognitive strategy consists of adding an attribute which has been previously
ignored or one that represents an improvement or a technological innovation. e.g. Sony
Erickson Blue Tooth phones
•
Changing the overall brand rating
Yet another cognitive-oriented strategy which consists of attempting to alter consumers’
overall assessment of the brand directly, without attempting to improve or change their
evaluation of any single brand attribute. Such a strategy frequently relies on some form of
global statement or a similar claim that sets the brand apart from all its competitors (e.g.
Commercial Bank –Best Bank for two consecutive years)
Changing Beliefs about Competitors’ Brands
Another approach to attitude change strategy involves changing consumer beliefs about
the attributes of competitive brands or product categories. For instance, an ad for
Paracetamol comparing two lemons makes a dramatic assertion saying why pay more for
the same which was targeted directly at Panadol. Comparative advertising can boomerang
by giving visibility to competing brands and claims.
5. Attitude Formation Theories
Previously we have understood that “attitude precedes behaviour”. That is consumers
develop their attitudes before taking action. There are alternatives to this. Firstly,
understanding of theories of attitudes is essential.
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5.1 Balanced Theory
The balance theory conceptualises individuals concerned to be in an attitudinally balanced
state. Due to environmental activities the individual can experience unbalanced situations.
In such situations individuals always tend to change the original attitudes to achieve some
degree of attitudinal balance. This is used in personal selling.
5.2 Congruity Theory
This is used in advertising models. Brands/products or services could be segregated into
awareness set and unawareness set. In the awareness set it is important to find out whether
the brand is in the evoked set, inert set or inept set. Depending on the attitude one has
towards the brand, one could bring the brand to most appealing levels by using marketing
mix strategies.
Congruity theory can be used as a method of improving negative disposition towards the
brand by way of getting a personality who is highly positively disposed to talk about the
brand. This theory is effectively used in advertising in getting popular personalities to talk
about products which have low attitudinal rating. To maintain the congruency the
customer may rationalise to think positively about the product.
5.3 Cognitive Dissonance Theory
The cognitive dissonance theory provides a different explanation as to why behaviour
might precede attitude formation.
According to cognitive dissonance theory, discomfort or dissonance occurs when a
consumer holds conflicting thoughts about a belief or an attitude object. For example,
when consumers have made a purchase by placing a down payment or placed an order for
a product, especially an expensive one such as an automobile or a home, they often begin
to feel cognitive dissonance when they think of the unique, positive qualities of the brands
not selected. (“left behind”). Because purchase decisions often require some form of
compromise, post purchase dissonance is quite normal. It is likely to leave consumers
with an uneasy feeling about their prior beliefs or actions-a feeling they tend to resolve by
changing their attitudes to conform with their behaviour.
Post purchase dissonance is relevant to marketing strategists in the sense it propels
consumers to reduce the unpleasant feelings created by rival thoughts. A variety of tactics
are available to consumers to reduce post purchase dissonance. The consumer can
rationalise the decision as being wise, seek out ads that support the choice (while avoiding
dissonance creating competitive ads), try to “sell” friends on the positive features of the
brand, or look to known satisfied owners for reassurance.
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6. Importance of the Attitude Theory to Understand Consumers Better
The process of selling should be done in a manner to minimise post purchase dissonance.
Marketers can relieve consumer dissonance by including messages in its advertising
specifically aimed at reinforcing consumers’ decisions by “complimenting their wisdom”,
increasing the effectiveness of its services, or providing detailed brochures as to how to
use its products correctly. Beyond these dissonance reducing tactics, marketers are
increasingly developing affinity or relationship programs designed to reward good
customers and to build customer loyalty and satisfaction.
♪
My Short Notes
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Chapter 6
The Influence of Culture on Consumer Behaviour
This chapter will cover the following areas
1. Understanding Culture
2. How Culture is brought to life
3. Core Values of the Local Culture Understudy
4. The Profile of the Local Consumer Understudy
1. Understanding Culture
1.1 Definition of Culture
Culture can be defined as the sum total of learned beliefs, values, and customs that serve
to direct the consumer behaviour of members of a particular society.
Beliefs in the definition of culture consist of the broad number of mental or verbal
statements that reflect upon a person’s assessment of something (another person, a
product, a brand).
Values are also beliefs. However, they differ from beliefs in the sense they are enduring
and difficult to change, they are not tied to specific objects or situations and they are
widely accepted by the members of a society.
My Working Definition - Culture
My Working Definition- Beliefs
Examples:
My Working Definition - Values
Examples:
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Both beliefs and values are mental images that affect a person’s attitudes influencing the
way a person will respond in a specific situation. eg: Malaysian Vs Japanese electrical
equipments (an individual’s choice will narrow down to his or her preference based on
values perceptions as to what constitutes quality and the meaning of the country of origin
and specific beliefs (particular perceptions about the quality of Malaysian Vs Japanese
Electrical equipments)
Customs on the other hand “are overt modes of behaviour that constitute culturally
approved or acceptable ways of behaving in specific situations” Customs consist of
routine behaviour. For example: putting ketchup on burger, having plain tea, eating rice
for lunch and not bread etc.Sociologists use the term to describe the physical and social
environment which results in shared attitudes and behaviours, a fact, which is of interest to
marketers.
My Working Definition – Customs
Examples:
Culture
The values, attitudes, beliefs, ideas, artefacts and other meaningful symbols represented in
the pattern of life adopted by people that help them interpret, evaluate and communicate as
members of a society.
Influences from institutions and other elements of society (such as education, politics, and
the law) combine in complex ways to provide us with culture, customs and rituals, which
are expressed as attitudes and behaviours.
Keith Williams, Behavioural Aspects of Marketing (1990) describes five main
characteristics of culture:
•
•
•
•
•
It exists to serve the needs of a society. For example, most cultures have some form of
‘wedding’ ceremony.
It is acquired socially. That is, we are not born with any cultural knowledge but
acquire it throughout our lifetime.
It is learned by interacting with other members of the culture.
It is cumulative. Culture is transferred from generation to generation with new
influences constantly being added to the cultural ‘soup’.
It is adaptive. Culture changes in response to the needs of the society.
In other words, culture is the way we do things.
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1.2 Culture Driving Behaviour
Why do people do certain things? “Because it is the right thing to do.” Such is the impact
of culture that it seems so natural and way of life. We realise how we belong to a specific
culturally moulded society and behaviour only when we come into contact with people
who have different cultural values or customs (for e.g. a person from a Southern province
has different customs and values which can be observed at occasions like a wedding
/funeral from a Western province resident). Thus, an appreciation of the influence that
culture has on our daily life requires some knowledge of at least another society with
different cultural characteristics.
Culture has implications for:
•
•
•
•
•
The way business is done (legalistic in the US, relationship based in Japan)
The way products are promoted
Social attitudes (e.g. roles of men and women in the household and in the society)
The type of products that can be sold
The workplace (level of Education)
By understanding the nature of culture, and the cultural differences that exist in the
population, the marketer can do much to prevent potential problems arising when
marketing to different cultural groups. A thorough understanding of a particular culture
can also be used in a positive way to market within that culture more effectively.
Culture is important in the conduct of business dealings. Business etiquette in Japan, for
instance, is very different to that in the West. It is considered polite in Japan to exchange
gifts with a new business colleague, exchange business cards as part of an introductory
ritual and for the chair of any meeting to sit facing the door. Many Western companies
provide training for those executives undertaking business abroad.
Apart from the more obvious aspects of culture, such as language, there are many cultural
differences that need to be taken into account. These will be discussed in this unit. By way
of an introduction, here are some specific examples of cultural differences that have
adversely affected the marketing of products.
•
Austin Rover (as it then was) produced a speaking car. A polite, demure female voice
informed the driver when the doors were open, the seat belt undone and so on. This
was found to be unacceptable to Italian males for whom their car was very much a
male
•
White teeth are a sign of health in western countries, but not in certain sub-cultures
within Southeast Asia where the chewing of betel nuts, which discolours the teeth, is
associated with status. Toothpaste manufacturers relying on a ‘white is good’ message
have not had much success!
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National cultural characteristics are frequently used to market products, not just within that
culture, but to other cultures:
•
The German reputation for quality engineering has been used to market a range of
products form cars to cans of beer.
•
The Japanese reputation for producing value-for-money consumer electrical goods has
been exploited by one clever European manufacturer who gave themselves a Japanesesounding brand name (‘Matsue’)
•
French ‘chic’ has been used in marketing make-up, fashion and food.
‡ Activity
List down few examples as to how culture had shaped your behaviour, and discuss how
does the same situation influence a friend who has a different culture?
1.3 Culture Satisfying Needs
With its “tried-and-tested” methods of satisfying physiological, personal, and social needs
by offering order, direction and guidance, culture exists to satisfy the needs of people
within a society.
For example (1): It provides standards on how to dress for occasions. Like in some
cultures white symbolises purity in the West while white or black symbolises death in the
East.
Example (2) Tanzanian women do not give eggs to their children in the belief that it will
make them impotent.
In some cultures, clubbing is considered taboo especially in Eastern Cultures. However, in
western cultures it is the norm with the onset of the weekend. However, this is also
gradually changing and so is culture continually evolving to meet the needs of the society.
‡ Activity
•
•
•
Analyse the traits of Sri Lankan Culture
Find out how those traits shape the needs and satisfy them
Identify few advertisements and Products, which are based on the cultural norms of
Satisfaction.
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2. How Culture is brought to life
2.1 Elements of Culture
Culture is exhibited by the customs, language, symbols and rituals within a society. These
are the observable elements of the culture.
•
Customs are the established ‘rules’ of behaviour within a society. They define what
is, and what is not, acceptable.
•
Language and symbols are the means by which members of a particular culture
communicate with one another. This communication can be verbal (using words)
or non-verbal (using images which convey ideas directly or indirectly).
•
Rituals are patterns of behaviour, often quite complex, which a society shares.
Ritual behaviours include religious services, attainment parties (18th birthday,
retirement, engagement, etc.) and private routines such as the Saturday morning
shopping trip and the Sunday walk in the park.
Customs
Williams (1990) defines four classes of customs:
Folkways – these are the everyday customs of the culture. Greetings are one such
example.
Conventions – these are more formally observed folkways, ones which might start to
cause more long-term offence if ignored. For example, the sending of Christmas
presents.
Mores – these are formally recognized rules of behaviour such as respect for your
parents.
Adherence to them is seen as being of wider significance within a culture.
Laws – those mores which society wishes to control are governed by laws.
•
•
•
•
•
•
‡ Activity1
•
•
List down some customs amongst Sri Lankans and Sri Lankan Subcultures
Analyse how marketers can utilise them in their activity
2.1 Use of Language and Symbols
Marketers involved in multi-lingual operations must be aware of the implications of
selling their products to speakers whose native language is not English. The use of
language in advertising copy also requires attention.
The use of language ‘tricks’ is extremely common in advertising where a short phrase or
‘word play’ is used to convey the promotional message.
• Word rhyming
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•
•
•
Double-meaning
Colloquialisms
Culturally-bound
‡ Activity
Identify Sri Lankan examples for the following types of Words or Brands or
Communication Messages
• Word rhyming
• Double-meaning
• Colloquialisms
• Culturally-bound
The word- plays described are very much surface features of a language. It is also
common for language, and objects, to have other meanings and associations other than
those that might appear in a dictionary. For instance, a crudely drawn heart (f) conveys a
meaning of innocent love. The phrase ‘he fought like a tiger’ only makes sense because of
the symbolism we associate with the word ‘tiger’ (courage, cunning, stealth). Such words
and objects are said to be ‘symbolic’. Symbols add richness to communication within a
culture.
Symbols can be simple and blunt or subtle and complex. The richness of symbolic
meaning can be used in marketing to associate certain qualities with your product or
convey more complex meanings in shorthand from (which can thus be understood and
absorbed more quickly). For example, the United National Party used the Elephant as a
symbol in their election campaign to represent the qualities of strength, nobility, power
and sovereignty in the hope that these values would enhance their public image.
‡ Activity
Identify Sri Lankan examples for 10 commonly used symbols and what they mean in
reality
2.2 Rituals
From a marketing perspective, rituals and rites represent a substantial opportunity. In
particular, if it is possible to associate an object or other event, known as artefacts, with a
ritual then the persistence of the ritual will ensure the continuing use of the artefact .One
example is the red and white Santa Claus costume. This has become so closely associated
with Christmas that many people believe it to be historic. In fact, the red and white
costume was ‘invented’ by Coca Cola as a marketing promotion. It has ensured that the
combination of red and white (the Coca Cola colours) has a continuing positive
association with fun and jollity.
‡ Activity
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•
•
Identify Sri Lankan examples for 10 Common Sri Lankan rituals and typical
artefacts
If you have ever been abroad, think of the things you found strange about the host
country’s culture. Try to list 5 things. Were these customers, language / symbols or
rituals?
2.3 Core Values
Core values both affect and reflect the character of a society. We will explore this in
relation to “American core values” as American society is unique in expressing
themselves and it is believed that US is a source of inspiration to other societies and it has
a “rubbing off” effect to those who try to keep up with the same trends. United States is a
diverse country consisting a variety of subcultures (religious, ethnic, regional, racial, and
economic groups).
America is a dynamic society that has undergone almost constant change in response to
the development of new technology. This makes it difficult to monitor changes in cultural
values. Finally, the existence of contradictory values in the American society is confusing.
For instance: Americans express themselves explicitly. There is a lot of individualism and
freedom of choice. Yet simultaneously, they tend to conform to rest of the society in the
form of furnishing, life style etc. It is difficult to reconcile these contradictory values.
Three criteria have been established to evaluate this:
•
The value must be pervasive –a significant proportion of the society must accept the
value and use it as a guide for their attitudes and actions
•
The value must be enduring—the specific value must have influenced the actions of
the people over an extended period of time
•
The value must be consumer-related -The specific value must provide insights that
help us to understand the consumption actions of the people and society.
A number of basic values constitute the building blocks of the concept called the
“American culture”
•
•
•
•
•
•
•
•
•
•
Achievement and Success
Activity
Efficiency and Practicality
Material Comfort
Individualism
Freedom
External Conformity
Humanitarianism
Youthfulness
Fitness and Health
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‡ Activity
•
•
Identify some of the core value of Sri Lankans
How is this similar to the other Asians?
2.4 Cultural Change
a) Dynamic nature of culture
Culture is constantly changing but we are so much a part of it that these changes often go
unnoticed. It is only when we compare our current culture with that of the past that the
differences become apparent.
Marketers should be aware of cultural trends so that they do not get ‘left behind’ or,
conversely, do not miss the opportunity to be the first in field to market based on an
emerging cultural characteristic. Promotions aimed at young people must be particularly
careful in this respect.
A marketer has to constantly monitor the socio cultural environment especially the role of
women in society need to be re looked at. Today, most women are working and career
oriented. They do not count on men to provide them with the luxuries such as perfumes,
watches, jewellery etc.
The changing nature of culture has implications for marketers who have to be “on the ball”
investigating why consumers are now doing what they do, who are the purchasers and the
users of their products, when they do their shopping, how and where they can be reached
by the media, and what new products and services are emerging.
New opportunities can be exploited based on evolving cultural trends thus increasing the
overall profitability of the firm. For example: Seylan Asset Management TV
advertisement featuring a young female talking about investments and securities shows
how marketers have identified the changing role of women and a sense of communicating
with female consumers as there is a “paradigm” shift and women are also regarded as
those who have good business acumen.
3. Core Values of the Local Culture Understudy
Discussion on the core values of the local culture and how it would relate to the behaviour
of the local consumer.
‡ Activity
Based on the learnings under American core values as presented above, tabulate the
following information in the local context
Value
Successful
General Features
Relevance to Consumer Behaviour
Men equate self esteem with To justify acquisition of goods –eg: an
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at work
Spirituality
their accomplishments
expensive mobile phone “after all it is
my hard earned money. I deserve it.”
“ I feel good. My mind is at Most do not consume beef as cow is
solidarity when I pray”
considered sacred among Hindhus.
Liquor is not sold on Poya days.
4. The Profile of the Local Consumer Understudy
4.1 Local research carried out on the profiles of consumers in the context understudy
Each Culture contains many sub cultures based on
•
•
•
•
Ethnicity and/or religion
Age (e.g.: “youth culture”)
Social Class
Sex (e.g.: women’s magazines)
There are six broad sub-cultures in the UK based on ethnicity, age, geography, religion,
gender occupational and social class.
•
Ethnicity
This includes not only indigenous population groups, such as the Welsh and Scots, but
also from those groups that have settled in the UK.
•
Age
Within society there are certain values and attitudes which are shared by persons of a
similar age. For instance, people brought up during the war years shared some very
extreme changes in society such as rationing and life-threatening situations which few
persons have since experienced.
•
Geography
The physical separation of people can lead to the development of distinct cultures
different regions.
•
in
Religion
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Those who subscribe to a particular religion are strongly influenced by its customs and
practices. Most religions dictate rules which their followers must abide. These often
include dietary, social and ethical requirements.
•
Gender
Traditionally, in our culture, women have been considered ‘home makers’ whilst men
have been considered the ‘bread winners’. Whilst these descriptions are no longer accurate
or relevant, many advertisers perpetuate, or otherwise use these stereotypes, and other
gender differences to market products.
•
Occupation and social class
These characteristics of UK culture are often used interchangeably. Many organizations,
such as the Market Research Society, define social class in terms of occupation.
Occupation is a product of many things such as the occupation of one’s parents, education,
intelligence, aptitude and opportunity. People with similar occupations tend to share
similar lifestyles and incomes. It is common for insurance companies, for instance, to
target specific occupations which have been proven to be of a lower risk. Police officers
are one such occupational group.
4.2 Market Segmentation using Culture
It is possible to segment a market according to the micro-cultures that exist within the
target population.
You might decide to market to women, for instance, to try to increase their consumption
of lager. You could get more specific and decide to target businessmen under 35 in the
south east to increase sales of a new cure for baldness.
Measurement of culture
The multifaceted nature of culture necessitates that a range of measurement techniques are
used. With the exception of content analysis, these are described elsewhere in this book.
•
•
•
•
•
Projective tests – These are frequently used to assess motivation and personality.
Attitude measurement – This is frequently used to determine beliefs and values.
Depth interviews and group discussions – These are useful to discover emerging
cultural characteristics.
Observation – This can provide valuable insights into the more obscure aspects of
culture which may not be amenable to direct questioning. For instance, a consumer
may not be aware of the fact that some of their behaviours are ritualized.
Content analysis – As the name implies, this technique uses an analysis of past and
present media to identify cultural changes. This can also be undertaken on a cross-
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cultural basis. Such a survey carried out in the early 1990s found a shift in trends in
household furnishings away from greys with primary spot colours towards pastel
tones.
4.3 Developing a Profile of the Local Consumer
‡ Activity
Consider the impact culture has on your day to day life. Think of few examples such as
food eating habits, values on marriage/ living together, social issues. You can refer Dr
Liyanage’s text on “Profiling the Sri Lankan Consumer”. Carry a survey among 50
people and tabulate their view on these areas. *(This exercise will only help you to
understand a broad range of opinions and may not serve as research material due to the
size of the sample and other factors not being considered)
Situation/Issue
Opinion
Remarks( You agree/ Disagree)
Fast Food
Home Made Food
Clubbing
Smoking (Male/
Female)
Drinking (Male/
Female)
Living Together
Single Parent
Working Woman
Housewife
♪
My Short Notes
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Foundation Level
Understanding Consumers
Recommended Study Text
Module Two
Investigating Consumers
Graduate/Postgraduate
Diploma in Marketing
Chapter 7
Introduction to Consumer Research
This chapter will cover the following areas
1. Understanding Marketing Research
2. Consumer Research Process
1. Understanding Marketing Research
1.1 Definitions on Marketing Research
There are many definitions related to marketing research. Some of them are as follows.
A formalized means of obtaining information to be used to make marketing decisions
( Donald Tull, 1998)
The systematic design, collection, analysis and reporting of data and findings relevant to a
specific marketing situation facing the company (American Marketing Association, 2000)
The systematic gathering, recording, analyzing, and use of data relating to the transfer and
sale of goods and services from producer to consumer
Is the systematic and objective identification, collection, analysis and dissemination of
information for the purpose of improving decision making related to the identification and
solution of problems and opportunities in marketing. (ESOMAR Directory, 2005)
A branch of social science which uses scientific methods to collect information about
markets for goods and services (Stephan Dalh, 2002)
As many of the definitions state, marketing research has many functions and it relates to a
process from design, collection, analysis to reporting of information which could be used for
marketing decision making.
My Working Definition on Marketing Research
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1.2 Relationship between Marketing Research and Consumer Research
The field of consumer research developed as an extension of the field of marketing research,
focusing almost exclusively on consumer behavior rather than on other aspects of the
marketing process. Just as the findings of marketing research were used sizes
to improve managerial decision making so too were the findings of consumer research. The
initial reason for studying consumer behavior was to enable marketers to predict how
consumers would react to promotional messages and to understand why they
made the purchase decisions they did. Marketers assumed that if they knew everything there
was to know about the consumer decision-making process, they could design marketing
strategies and promotional messages that would influence the consumer in
the desired way. (that is, to purchase the marketer’s product or service).
The early consumer researchers gave little thought to the impact of mood, emotion, post, or
situation on consumer decisions. They believed that marketing was simply applied
economics, and that consumers were rational decision makers who objectively evaluate
the goods and services available to them and selected only those that gave them they
the highest utility (satisfaction) at the lowest cost. Despite their assumptions that consumers
were logical problem solvers who engaged in careful thought processes (i.e. information
processing) to arrive at their consumption decisions, researchers soon realized that consumers
were not always consciously aware of why they made the decisions they did. Even when they
were aware shop of their basic motivations, consumers were not always willing to reveal
those reasons.
1.3 Consumer Research Paradigms
Consumer researchers today use two different types of research methodology to study
consumer behavior. They are quantitative research and qualitative research.
a) Quantitative Research
Quantitative research is descriptive in nature and is used by researchers to understand
the effects of various promotional inputs on the consumer, thus enabling marketers
to “predict” consumer behavior. This research approach is known as positivism, and
consumer researchers primarily concerned with predicting consumer behavior are
known as positivists. The research methods used in positivist research are borrowed primarily
from the natural sciences and consist of experiments, survey techniques, and observation. The
findings are descriptive, empirical, and, if collected randomly (that is, using a probability
sample), can be generalized to larger populations. Because the data collected are quantitative,
they lend themselves to sophisticated statistical analysis.
b) Qualitative Research
Qualitative research methods consist of depth interviews, focus groups, metaphor
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analysis, collage research, and projective techniques. Qualitative techniques are administered
by a highly trained interviewer-analyst who also analyses the findings. They tend to be
somewhat subjective. Because sample sites are necessarily small, findings cannot be
generalized to larger populations. They are primarily used to obtain new ideas for
promotional campaigns.
c) Combining Qualitative and Quantitative Research Findings
Because of the limitations of qualitative research findings, some marketers use a combination
of quantitative and qualitative research to help make strategic marketing decisions. They use
qualitative research findings to discover new ideas and to develop promotional strategy, and
quantitative research findings to predict consumer reactions to various promotional inputs.
Sometimes ideas stemming from qualitative research are tested empirically and become the
basis for the design of quantitative studies.
Marketers have discovered that, rather than conflicting, these two research paradigms are
really complementary in nature. The prediction made possible by positivist research and the
understanding provided by qualitative research together produce a richer and more robust
profile of consumer behavior than either research approach used alone.6 The combined
findings enable both for-profit and not-for-profit marketers to design more meaningful and
effective marketing strategies. Together they also provide a firmer basis for public policy
decisions.
2. Consumer Research Process
There is a series of steps in the consumer research process. They are as follows
• Defining the objectives of the research.
• Developing the research plan
• Collecting and evaluating secondary data
• Designing a primary research study.
o Quantitative research design
• Data collection methods - observational research, experimental
research, survey research
• Data collection instruments - questionnaires
o Qualitative research design
• Data collection methods – depth interviews, focus groups,
projective techniques, metaphor analysis
o Sampling
• Collecting primary data
• Analyzing the data
• Preparing a report on the findings
The following paragraphs will further elaborate the above steps.
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2.1 Developing Research Objectives
The first step in the consumer research process is to carefully define the objectives of the
study. The following could be some questions that are raised to support the above
o Is it to segment the market for wide-screen television?
o To find out consumer attitudes about on-line shopping?
o To determine what percentage of households use e-mail.
It is important for the marketing manager and the researcher to agree at the on the purposes
and objectives of the study to ensure that the research design appropriate A carefully thoughtout statement of objectives helps to define the type and level of information needed. For
example, if the purpose of the study is to come up with new ideas for products or promotional
campaigns, then a qualitative study is usually undertaken, in which respondents spend a
significant amount of time face-to-face with highly trained professional interviewers.
Because of the high costs of each interview, a fairly small sample of respondents is studied
thus; the findings are not projectable to the marketplace.
If the purpose of the study is to find out how many people in the population (that is. what
percentage) use certain products and how frequently they use them, then a quantitative study
that can be computer-analyzed is undertaken. Sometimes, in designing a quantitative study,
the researcher may not know what questions to ask. In such cases, before undertaking a fullscale study, the researcher is likely to conduct a small-scale exploratory study to identify the
critical issues to include in the data collection instrument (e.g., questionnaire).
2.2 Collecting Secondary Data
A search for secondary data generally follows the statement of objectives. Secondary
information is any data originally generated for some purpose other than the present research
objectives. It includes findings based on research done by outside organizations, data
generated in-house for earlier studies, and even customer information collected by the firm’s
sales or credit departments. Locating secondary data is called secondary research. (Original
research performed by individual researchers or organizations to meet specific objectives is
called primary research.)
Secondary research findings sometimes provide sufficient insight into the problem at hand to
eliminate the need for primary research most often; it provides clues and direction for the
design of primary research. Government agencies, private population data firms, consumer
research, marketing research companies, and advertising agencies are all important sources of
secondary market data. For example, the censes department of Sri Lanka collects data on the
age, education, occupation, and income of residents of areas as small as a city block.
Additional information on rents, places of work, automobile ownership, and patterns of
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migration is provided by the government in studies of census tracts within major metropolitan
areas. Retailers and not-for-profit organizations often have directly relevant demographic and
usage information available in their own records. They can use credit and charge account data
or mail-order records to identify just who their customers are, what products and brands they
purchase, and how frequently they buy.
If more detailed information on purchasing patterns or product usage is needed or if
psychological or socio-cultural consumer information is sought, then primary data must be
collected. Research to secure such information is more costly and more time consuming than
secondary research but is likely to yield a more accurate picture than studies based on
secondary data alone.
+ Activity
List down examples for each of the secondary data sources listed below
Sources
Examples
Marketing-Related Mailing Lists
Library Resources
Internet Search Engines
Government Sources: Demographic,
Economic and Social Data
Commercial/Academic Sources:
Demographic, Economic and Social Data
Company/Industry information
Syndicated Sources: Surveys
Syndicated Sources: Diary and Mail
Panels
Syndicated Sources: Electronic Scanner
Services
Syndicated Sources: Audits
Databases: Bibliographic & Full Text
Databases: Directories
Hardcopy Directories
Sources of secondary data will be further discussed in the next chapter.
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2.3 Designing Primary Research
The design of a research study is based on the purposes of the study. If descriptive
information is needed, then a quantitative study is likely to be undertaken; if the purpose is to
get new ideas (for instance, for repositioning a product), then a qualitative study may be in
order. Because the approach for each type of research differs in terms of method of data
collection, sample design, and type of data collection instrument used, each research
approach is discussed separately below.
a) Quantitative Research Designs
The design of a quantitative research study includes the method for collecting the data, the
sample design, and construction of the data collection instrument (a questionnaire for
example).
•
Data Collection Methods There are three basic ways to collect primary data in
quantitative research: by observing behavior, by experimentation (in a laboratory or in the
field, such as in a retail store). or by survey (that is, by questioning people).
o Observational Research.
Observational research is an important method of consumer research, because
marketers recognize that the best way to gain an in-depth understanding of the
relationship between people and products is by watching them in the process of
buying and using products.
Many large corporations and advertising agencies use cultural anthropologists to
observe and often videotape consumers in stores, malls, and their own homes (that is.
to engage in ethnographic research). By watching people Interact with products,
observational researchers gain a better understanding of what the Product symbolize
to a consumer and greater insight into the bond between people and product that is the
essence of brand loyalty. Observational research is also widely used by researchers to
understand the buying and consumption process.
o Experimentation.
It is possible to test the relative sales appeal of many types of variable able
such as package designs, prices, promotional offers, or copy themes through
experiments designed to identify cause and effect. In such experiments (called causal
research), only one variable is manipulated at a time (the independent variable), while
all other elements are kept constant.
A controlled experiment of this type ensures that any difference in outcome (the
dependent variable) is due to different treatments of the variable under study and not
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to extraneous factor. For example, if IBM wanted to test the sales appeal of black
laptops versus ivory-colored laptops, it could select two computer stores (or groups of
stores) matched in terms of size, appearance, and type of neighborhood, and place a
display of black laptops in one and the same model in ivory in the other.
If one store sells significantly more units than the other during a specific time frame,
the researcher could conclude that the difference in sales was due ting solely to the
specific color of the computer, because all other factors (such as model, price, type of
customer, and type of promotional appeal) were kept constant. Experiments are also
conducted in laboratories with the use of special instrumentation, such as eye cameras
that study the eye movement of subjects as they view competitive advertisements.
o Surveys.
If researchers wish to ask consumers about their purchase preferences, they can do so
in person, by mail, by telephone, or on-line. Each of this survey method has certain
advantages and certain disadvantages that the researcher must weigh when selecting
the method of contact. The following is a comparison between different contact
methods.
Basis of
Comparison
Cost per completed
survey
Mail, Internet and
Fax Surveys
Telephone
Surveys
Usually the least
Moderately
expensive, assuming expensive,
adequate return rate assuming
reasonable
completion rate
Personal Interview
Surveys
Most expensive
because of
interviewer’s time
and travel
expenses
Ability to probe and Little, since self
ask complex
administrated.
questions
Format must be
short and simple
Some, since
interviewer can
probe and
elaborate on
questions
Opportunity for
interviewer to bias
results
Some, because of Significant,
voice inflection because of voice
of interviewer
and facial
expressions of
interviewer
None, since form is
completed without
the interviewer
Much, since
interviewer can
show visuals,
probe, establish
report
Personal interview surveys most often take place in the home or in retail shopping
areas. The latter, referred to as mall intercepts, are used more frequently than home
interviews because of the high incidence of not-at-home working women and the and
reluctance of many people today to allow a stranger into their home.
Telephone surveys are also used to collect consumer data; however, evenings
and weekends are often the only times to reach the working homemaker, who tends to
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be less responsive to calls that interrupt dinner, television viewing, or general
relaxation.
Mail surveys are conducted by sending questionnaires directly to individuals at
their home. One of the major problems of mail questionnaires is a low response rate,
but researchers have developed a number of techniques to increase returns, such as
enclosing a stamped, self-addressed envelope, using a provocative questionnaire
sending pre notification letters and follow-up letters.
On-line surveys are sometimes conducted on the Internet. Respondents are directed to
the marketer’s (or the researcher’s) Web sites by computer ads or home pages; thus,
the samples tend to be self-selected and the results therefore cannot be projected to the
larger population.
•
Data Collection Instruments
Data collection instruments are developed as part of a study’s total research design to
systematize the collection of data and to ensure that all respondents are asked the same
questions in the same order.
Data collection instruments include questionnaires, personal inventories, attitude scales,
and, for qualitative data, discussion guides. Data collection instruments are usually pre
tested and “debugged” to assure the validity and reliability of the research study.
A study is said to have validity if it does, in fact, collect the appropriate data needed to
answer the questions or objectives stated in the first (Objectives) stage of the research
process. A study is said to have reliability if the same questions, asked of a similar
sample, produce the same findings. Often a sample is systematically divided in two, and
each half is given the same questionnaire to complete. If the results from each half are
similar, the questionnaire is said to have split-half reliability.
o Questionnaires.
For quantitative research, the primary data collection instrument is the questionnaire,
which can be sent through the mail to selected respondents for self- administration or
can be administered by field interviewers in person or by telephone. In order to
motivate respondents to take the time to respond to surveys, researchers have found
that questionnaires must be interesting, objective, unambiguous, easy to complete, and
generally not burdensome.
To enhance the analysis and facilitate the classification of responses into meaningful
categories, questionnaires include both substantive questions that are relevant to the
purposes of the study and pertinent demographic questions.
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The questionnaire itself can be disguised or undisguised as to its true purpose. A
disguised questionnaire sometimes yields more truthful answers and avoids responses
that respondents may think are expected or sought. Questions can be open-ended
(requiring answers in the respondent’s own words) or closed-ended (the respondent
merely checks the appropriate answer from a list of options). Open-ended questions
yield more insightful information, but are more difficult to code and to analyze;
closed-ended questions are relatively simple to tabulate and analyze, but the answers
are limited to the alternative responses provided (that is, to the existing insights of the
questionnaire designer).
Great care must be taken in wording each question to avoid biasing the responses. The
sequence of questions is also important: The opening questions must be interesting
enough to “draw” the respondent into participating, they must proceed in a logical
order, and demographic (classification) questions should be placed at the end, where
they are more likely to be answered. The format of the questionnaire and the wording
and sequence of the questions affect the validity of the responses and, in the case of
mail questionnaires, the number (rate) of responses received. Questionnaires usually
offer respondents confidentiality or anonymity to dispel any reluctance about selfdisclosure. This will be discussed in length in the next chapter.
o Personal Inventories.
Sometimes, instead of a list of questions, the data collection instrument presents a
series of statements—a personal inventory—to which respondents are asked to
indicate their degree of agreement or disagreement. The basic difference between an
inventory and a questionnaire is that the inventory presents a list of statements, while
the questionnaire asks a series of questions.
b) Qualitative Research Designs.
In selecting the appropriate research format for a qualitative study, the researcher takes into
consideration the purpose of the study and the types of data needed. Although the research
methods used may differ in composition, they all have roots in psychoanalytic and clinical
aspects of psychology, and they stress open-ended and tree-response types of questions to
stimulate respondents to reveal their innermost thoughts and beliefs.
•
Data Collection Methods
The choice of data collection techniques for qualitative studies includes depth interviews,
focus groups, and projective techniques. and metaphor analysis. These techniques are
regularly used in the early stages of attitude research to pinpoint relevant product-related
beliefs or attributes and to develop an initial picture of consumer attitudes (especially the
beliefs and attributes they associate with particular products and services).
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o Depth Interviews.
A depth interview is a lengthy (generally 30 minutes to an hour), non structured
interview between a respondent and a highly trained interviewer, who minimizes his
or her own participation in the discussion after establishing the general subject to be
discussed. (However, as noted earlier, interpretative researchers often take a more
active role in the discussion.)
Respondents are encouraged to talk freely about their activities, attitudes, and
interests in addition to the product category or brand under study, transcripts,
videotapes, or audiotape recordings of interviews are then carefully studied together
with reports of respondents’ moods and any gestures or “body language” that might
have used to convey attitudes or motives. Such studies provide marketers with
valuable ideas about product design or redesign and provide insights for positioning
or repositioning the product.
For purposes of copy testing, respondents might be asked to describe in depth various
ads they are shown. Other techniques include auto driving in which researchers show
respondents photos, videos, and audiotapes of their own shopping behavior and ask
them to explicitly comment on their consumption actions.
o Focus Groups.
A focus group consists of 8 to 10 respondents who meet with a moderator-analyst for
a group discussion “focused” on a particular product or product category (or any other
subject of research interest). Respondents are encouraged to discuss their interests,
attitudes, reactions, motives, lifestyles, feelings about the product or product category,
usage experience, and so forth.
Because a focus group takes about 2 hours to complete, a researcher can easily
conduct two or three focus groups (with a total of 30 respondents) in 1 day, while it
might take that same researcher 5 or 6 days to conduct 30 individual depth interviews.
Analysis of responses in both depth interviews and focus groups requires a great deal
of skill on the part of the researcher. Focus-group sessions are invariably taped, and
sometimes videotaped, to assist in the analysis. Interviews are usually held in
specially designed conference rooms with one-way mirrors that enable marketers and
advertising agency staff to observe the sessions without disrupting or inhibiting the
responses.
Respondents are recruited on the basis of a carefully drawn consumer profile (called a
screener questionnaire) based on specifications defined by marketing management,
and usually are paid a fee for their participation. Sometimes users of the company’s
brands are clustered in one or more groups, and their responses are compared to those
of nonusers interviewed in other groups.
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Some focus groups take the form of collage research, in which the participants are
given scissors, paste, paper, and magazines, and asked to make a collage representing
themselves, as well as their relationship with the product category under study.
Some marketers prefer focus groups to individual depth interviews because it takes
less time overall to complete the study, and they feel that the freewheeling group
discussions and group dynamics tend to yield a greater number of new ideas and
insights than depth interviews. Other marketers prefer individual depth interviews
because they feel that respondents are free of group pressure and thus are less likely to
give socially acceptable (and not necessarily truthful) responses, are more likely to
remain attentive during the entire interview, and—because of the greater personal
attention received—are more likely to reveal private thoughts.
o Projective Techniques.
Projective techniques are designed to tap the underlying motives of individuals
despite their unconscious rationalizations or efforts at conscious concealment. They
consist of a variety of disguised “tests” that contain ambiguous stimuli, such as
incomplete sentences, untitled pictures or cartoons, ink blots, word-association tests,
and other-person characterizations.
Projective techniques are sometimes administered as part of a focus group, but more
often are used during depth interviews. A projective test can take the form of a wordassociation test (“What is the first word you think of when I say ‘beer’?”), or a
sentence completion test (“When I go to a ball game, I ………”). or, the respondent
may be asked to complete, describe, or explain the meaning of various ambiguous
stimuli. The theory behind projective tests is that respondents’ inner feelings influence
how they perceive such stimuli. The stories they tell or the sentences they complete
are actually projections of their inner thoughts, even though subjects may attribute
their responses to something or someone else. Thus, their responses are likely to
reveal their underlying needs, wants, fears, and motives, whether or not the
respondents are fully aware of them.
o Metaphor Analysis.
A new stream of consumer research suggests that most communication is nonverbal,
and that people do not think in words, but in images.’ If consumers’ thought processes
consist of a series of images, or pictures in their mind, then it is likely that many
respondents cannot adequately convey their feelings and attitudes about the research
subject (such as a product or brand) through the use of words alone.
Therefore, it is important to enable consumers to represent their images in an
alternate, nonverbal form—through the use, say, of sounds, music, drawings, or
pictures. The use of one form of expression to describe or represent feelings about
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another is called a metaphor. A number of consumer theorists have come to believe
that people use metaphors as the most basic method of thought and communication.
In metaphor analysis, respondents are given magazines, scissors, paste, and paper and
asked to cut pictures from magazines that represent their “feelings” about the product
category under study. They then organize these clippings into a “meaningful” collage,
which is then explicated with the help of the researcher. The collage research method
described earlier is a form of metaphor analysis.
c) Sampling
An integral component of a research design is the sampling plan. Specifically, the sampling
plan addresses three questions:
• Whom to survey (the sampling unit)
• How many to survey (the sample size)
• How to select them (the sampling procedure).
Deciding whom to survey requires explicit definition of the universe or boundaries of the
market from which data is sought so that an appropriate sample can be selected (such as
working mothers). Interviewing the correct target market or potential target market is basic to
the validity of the study
.
The size of the sample is dependent both on the size of the budget and on the degree of
confidence that the marketer wants to place in the findings. The larger the sample, the more
likely the responses will reflect the total universe under study. It is interesting to note,
however, that a small sample can often provide highly reliable findings, depending on the
sampling procedure adopted. This will be further discussed in the next chapter.
2.4 Data Collection
As indicated earlier, qualitative studies usually require highly trained social scientists to
collect data. A quantitative study generally uses a field staff that is either recruited and
trained directly by the researcher or contracted from a company that specializes in conducting
field interviews. In either case, it is often necessary to verify whether the interviews have, in
fact, taken place. This is sometimes done by a postcard mailing to respondents asking them to
verify that they participated in an interview on the date recorded on the questionnaire form.
Completed questionnaires are reviewed on a regular basis as the research study progresses to
ensure that the recorded responses are clear, complete, and legible.
2.5 Analysis
In qualitative research, the moderator or test administrator usually analyzes the responses
received. In quantitative research, the researcher supervises the analysis. Open-ended
responses are first coded and quantified (that is, converted into numerical scores); then all of
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the responses are tabulated and analyzed using sophisticated analytical programs that
correlate the data by selected variables and cluster the data by selected demographic
characteristics.
2.6 Report Preparation
In both qualitative and quantitative research, the research report includes a brief executive
summary of the findings. Depending on. the assignment from marketing management, the
research report may or may not include recommendations for marketing action. The body of
the report includes a full description of the methodology used and, for quantitative research,
also includes tables and graphics to support the findings. A sample of the questionnaire is
usually included in the appendix to enable management to evaluate the objectivity of the
findings.
♪
My Short Notes
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Chapter 8
Developing the Research Plan and Collection of Data
This chapter will cover the following areas
1. Desk Research (Secondary Data Collection)
2. Primary Research (Primary Data Collection)
3. Sample Design
4. Collection of Data
1. Desk Research (Secondary Data Collection)
1.1 Why Secondary Data is called Desk Research
Secondary data refers to data potentially useful in solving a current problem but that was
collected for a different reason. It is called desk research because a researcher could get
hold of this data by reviewing books, publications, research reports, internet and it could
be collected with out any field work.
1.2 Nature of Secondary Data
Secondary data is data that was developed for some purpose other than helping to solve
the problem at hand.
1.3 Advantages of Secondary Data
There are several advantages of getting secondary data in comparison to collecting
primary data. They are as follows
•
•
•
•
It is relatively cheaper to collect secondary data since information is already available.
It is relatively quicker to extract secondary data rather than primary data which
requires an effort.
One would not require extra expertise in extracting secondary data in comparison to
primary data.
In many situations, multiple sources are available to collect secondary data and to
verify it.
1.4 Problems Encountered with Secondary Data
Secondary data tend to cost substantially less than primary data and can be collected In
less time. Why, then, do we ever bother with primary data?
Before secondary data can be used as the only source of information to help solve a
marketing problem, they must be available, relevant, accurate, and sufficient. If one of
these criteria are not met, primary data may have to be used.
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•
Availability
For some marketing problems, no secondary data is available For example, suppose a
retail company is interested in obtaining consumer evaluations of the physical layout of
the company’s current store. If there has not been a research done before , it is unlikely
that such information is available from secondary sources. It is probable that no other
organization that had collected such data would be willing to make it available.
•
Relevance
Relevance refers to the extent to which the data fits the information needs of the research
problem. Even when data is available that covers the same general topic as such required
by the research problem, they may not fit the requirements of the particular problem.
Four general problems reduce the relevance of data that would otherwise be useful. First,
there is often a difference in the units of measurement. For example, many retail decisions
require detailed information on the characteristics of the population within the “trade
area.” However, available demographic statistics may be for counties, cities, census
tracts, or ZIP code areas that do not match the trade area of the retail outlet.
A second factor that can reduce the relevance of secondary data is the necessity in some
applications to use surrogate data. Surrogate data is a substitute for more desirable data. A
third general problem that can reduce the relevance of secondary data is the definition of
classes. Social class, age, income firm size, and similar category-type breakdowns found
in secondary data do not coincide frequently with the exact requirements of the research
problem. For example, Gallup and other public opinion polls frequently collect data on
alcohol consumption and attitudes toward alcohol as part of their periodic surveys.
Bacardi Imports would like to use this readily available data.
The final major factor affecting relevancy is time. Generally, research problems require
current data. Most secondary data, on the other hand, has been in existence for some time.
For example, the Census of Retail Trade is conducted only every five years, and two
years are required to process and publish the results. A researcher using this source could
easily be using data that is over four years old. This is becoming less of a problem as
more and more data is being placed directly into electronic databases. For example, The
Wall Street Journal is available on-line before it is available in print.
•
Accuracy
Accuracy is the third major concern of the user of secondary data. The real problem is not
the obvious inaccuracy, it is the difficulty of determining how inaccurate the data is likely
to be.When using secondary data, the original source should be consulted if possible. This
is important for two reasons. First, the original report is generally more complete than a
second or third report. It often contains warnings, shortcomings, and methodological
details not reported by the second or third source. For example, most studies reported by
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the federal government, such as the Annual Survey of Housing, report the magnitude of
potential sampling errors and some give indications of the possible extent of non
sampling errors. Second, using the original source allows the data to be examined in
context and may provide a better basis for assessing the competence and ‘motivation of
the collector.
Few sources “cheat” in the sense of supplying outright false data. However, writers with a
strong point of view often report only those aspects of a study that support their position.
In addition, some sources are more competent than others, both from a technical point of
view and from the standpoint of having sufficient resources to perform the task at hand
adequately. Thus, the reputation of the source is an important criterion for deciding
whether to use a particular piece of secondary data.
•
Sufficiency
Secondary data may be available, relevant, and accurate, but still may not be sufficient to
meet all the data requirements of the problem being researched.
1.5 Sources of Secondary Data
Internal Sources of Secondary Data
Internal sources can be classified into four broad categories: accounting records, sales
force reports, miscellaneous records and internal experts.
•
Accounting Records
The basis for accounting records concerned with sales is the sales invoice. The usual sales
invoice has a sizable amount of information on it which generally includes the name of
customer, location of customer, Items ordered, quantities ordered, quantities shipped,
dollar extensions, back orders, discounts allowed, date of shipment, and method of
shipment. In addition, the invoice often contains Information on sales territory, sales
representative, and warehouse of shipment.
This information, when supplemented by data on costs and industry and product
classification, as well as from sales calls provides the basis for a comprehensive analysis
of sales by product, customer, industry, geographic area, sales territory, and sales
representative, as well as the profitability of each sales category. Unfortunately, the
accounting systems of the most firms are designed primarily for tax reasons rather than
for decision support. Currently, only a few organizations can readily retrieve the data
required for the types of analyses just described. Competitive pressures, increasingly
sophisticated managers, and enhanced computer systems are beginning to improve this
situation.
Advertising expenditures, sales force expenditures, and data on Inventories are other
types of data available from accounting records that are useful for research purposes. For
example, a management trainee was asked to estimate the “best” price reduction for a
store that frequently sold paint at a reduced price. An examination of the firm’s
advertising records allowed her to identify the timing of numerous sales at different
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discounts over the past several years. The firm’s sales records allowed a close estimate of
the units sold during each sale. By combining these two data sources, the trainee was able
to develop a useful estimate of the price elasticity of demand for the firm’s paint. In
addition, she was able to isolate one season of the year when the elasticity of demand was
unusually high and one season when it was relatively low.
•
Sales Force Reports
Sales force reports represent a rich and largely untapped potential source of marketing
Information. The word potential is used because evidence indicates that valuable
marketing information is generally not reported by sales personnel. Sales personnel often
lack the motivation and/or the means to communicate key information to marketing
managers. To obtain the valuable data available from most sales forces, several elements
are necessary: (1) a clear, concise statement, repeated frequently, of the types of
information desired; (2) a systematic, simple process for reporting the information; (3)
financial and other rewards for reporting information; and (4) concrete examples of the
actual use of the data.
•
Miscellaneous Reports
Miscellaneous reports represent the third internal data source. Previous marketing
research studies, special audits, and reports purchased from outside for prior problems
may have relevance for current problems. A firm which was a manufacturer of
specialized mouldings had a serious sales decline in one of its major lines for almost a
year. The marketing manager could not explain the decline and was considering either
revising the firm’s sales incentive plan to increase the rewards for selling this line or
reducing the price of the line. At the annual industry trade show, the manager noticed that
a major competitor had developed a clearly superior competitive product. Inquiry revealed that the launch of the competitive product-coincided with the beginning of his
line’s sales decline. None of the 73 sales people had reported the new product to
management.Why did these individuals fail to report such a significant piece of information? A variety of reasons emerged as illustrated by the following statements.
o ..I figure management knows what’s going on in the market. They don’t need me
to tell them.”
o ‘I used to tell them everything and they just ignored me. Not so much as a Thank
You. So I figure the hell with it.”
o “I’m putting 60—70 hours a week trying to make a living selling this stuff. I don’t
have time to pass on every bit of gossip in the industry.”
•
Internal Experts
One of the most overlooked sources of internal secondary data is internal experts. An
internal expert is anyone employed by the firm who has special knowledge. The
following statement by a senior research manager at a major consumer goods firm
describes why his organization developed a research reports library and how they ensure
its use.
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On the average, each brand is assigned a new brand manager every two years. These
brand managers are young, aspiring, talented MBA-types and they believe in the value of
marketing research. They also know that their own upward mobility is pegged to the mark
they leave on the brand. So, the first thing they require is marketing research,
segmentation studies or attitude/usage surveys, typically followed by lots of qualitative
studies in the copy concept or positioning fad strategy areas.
Had the marketing manager quickly asked the most obvious internal experts—members
of the sales force—to explain the sales decline, work on a competitive new product could
have begun almost a year earlier. In addition to the sales force, companies have
discovered that marketing research personnel, technical representatives, advertising
agency personnel, product managers, and public relations personnel often have expert
knowledge of relevance to marketing problems.
External Sources of Secondary Data
Numerous sources external to the firm may have data relevant to the firm’s requirements.
Seven general categories of external secondary information are described in the sections
that follow: (1) computerized databases, (2) associations, (3) government agencies, (4)
syndicated services; (5) directories, (6) other published sources, and (7) external experts.
The best way to begin a search for external secondary data is to consult a general guide to
secondary data sources.
Rather than conducting an external search in house, it is often faster and more efficient to
hire an information broker. These firms specialize in searching for external data using
both computerized and manual techniques. Large firms such as IBM and General Electric
use information brokers to supplement their in-house expertise. Smaller firms use them in
lieu of developing in-house expertise. The following are some sources of external data.
•
Computerized Databases
A computerized database is a collection of numeric data and/or textual information that is
made available in computer-readable form for electronic distribution. Databases are
available that are useful in bibliographic search, site location, media planning, market
planning, forecasting, and for many other purposes of interest to marketing researchers.
To use an on-line computerized database, the user links the receiving computer to the
sending computer by telephone, using a coupler called a modem. The user dials a local
telephone number, enters a special password to gain access to the sending computer, and
then uses the interaction language of the system to retrieve and display the information of
interest.
There is, of course, a charge for using a commercial database. The way charges are
assessed and the amounts charged for using different databases both vary substantially.
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•
Encyclopedias and Dictionaries
These are other information sources which would give current, updated information on
many of the topics that are searched.
•
Periodicals and Newsletters
Provide current developments and trends with regard to the product under search.
Specialised periodicals on the subject may give sufficient data on a given topic.
•
Trade Associations and Professional Societies
These associations generally put out various research findings on their professions which
might be of great value to the desk researcher.
•
Government Agencies
State, and local government agencies produce a massive amount of data that is of
relevance to marketers. In this section, the nature of the data produced by the federal
government is briefly described. However, state and local government data should not be
overlooked by the researcher.
The federal government maintains major agencies whose primary function is to collect
and disseminate statistical data. There are also a number of specialized analytic and
research agencies, numerous administrative and regulatory agencies, and special
committees and reports of the judicial and legislative branches of the government.
These sources produce five broad types of data of interest to marketers. There is data on
(1) population, housing, and income; (2) agricultural, Industrial, and commercial product
sales of manufacturers, wholesalers, retailers, and service organizations; (3) financial and
other characteristics of firms; (4) employment; and (5) miscellaneous reports.
a. Data on Population, income, and housing
Data of these types are of interest primarily for estimating market potential and for
segmenting markets for consumer products. The number of persons/households in a given
area, along with the distribution of income and such demographic variables as age,
marital status, education, income, and occupations are associated with the market
potential for many consumer products. These same variables, along with data on ethnic
origin, durable goods, home ownership, and home characteristics, are useful for market
segmentation.
b. Data on Industrial and Commercial Product Sales of Manufacturers, Agricultural
Producers, Wholesalers, Retailers, and Service Organizations
Sales data for product categories can be used for such purposes as locating a plant,
warehouse, retail store, or sales office, for setting sales quotas, or allocating advertising
budgets by areas. The statistics published by the government on domestic sales are the
most extensively available.
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Sales statistics are available for each of the levels of distribution — manufacturers,
agricultural producers, wholesalers, retailers for products, and suppliers for services.
c. Data on Financial and Other Characteristics of Firms
Data on the financial characteristics, product line sales, joint ventures, staffing, and
company history are valuable for market potential and segmentation studies, acquisition
analyses, and competitor analyses.
d. Data on Employment
Employment data is used as an indicator of market potential for industrial products. They
can be found in each of the economic censuses (Manufacturers, Wholesale, Trade, Retail
Trade, Services, and Agriculture)
e. Miscellaneous Reports
The government issues a staggering number of special reports each year covering a
diversity of topics. Many of these are of interest to market researchers working on
particular projects.
•
Bought-In Data And Reports
The sources of secondary data we have looked at so far have generally been free because
they are in the public domain. Inexpensiveness is an advantage which can be offset by the
fact that the information is unspecific and needs considerable analysis before being
useable.
A middle step between adapting secondary data and commissioning primary research is
the purchase of data collected by market research companies or business publishing
houses. The data tends to be expensive but less costly than primary research.
A form of continuous research which results in secondary data often bought in by
marketers is the kind which is generated by consumer panels. These constitute a
representative sample of individuals and households whose buying activity in a defined
area is monitored either continuously (every day, with results aggregated) or at regular
intervals, over a period of time. There are panels set up to monitor purchases of groceries,
consumer durables, cars, baby products and many others.
Trade audits are carried out among panels of wholesalers and retailers, and the term
‘retail audits’ refers to panels of retailers only. A research firm sends ‘auditors’ to
selected outlets at regular intervals to count stock and deliveries, thus enabling an
estimate of throughput to be made. Sometimes it is possible to do a universal audit of all
retail outlets.
The audits provide details of the following.
•
Retail sales for selected products and brands, sales by different type of retail outlet,
market shares and brand shares.
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•
•
Retail stocks of products and brands (enabling a firm subscribing to the audit to
compare stocks of its own goods with those of competitors).
Selling prices in retail outlets, including information about discounts.
2. Primary Research (Primary Data Collection)
Quantitative Research
The following will be important considerations in collecting primary data for quantitative
research.
2.1 Survey Research using Questionnaires
Survey research is a very popular means of collecting primary data. Questionnaires are
considered to be one of the widely used research instruments in survey research.
2.2 What is a questionnaire?
A questionnaire is essentially a data capturing instrument. It lists all questions to which
the researcher wants the respondent to answer and it records the response of the
interviewee. A questionnaire is often misunderstood with an interview guide. Usually the
latter does not record answers.
2.3 Types of questionnaires
There are many types of questionnaires that are used to conduct survey research. The
following are some of them.
•
Structured questionnaires
Lists all questions to be asked in a logical sequence specifying the precise wording to be
used in the response and provides categories for recording the replies.
•
Unstructured questionnaires
An unstructured questionnaire, is simply be a set of open-ended questions to which the
respondent can write replies in his or her own words.
•
A self completed questionnaire
Is completed by the respondent, having been posted to him or personally delivered by an
interviewer who may return to pick it up.
•
An interviewer completed questionnaire
Is used in face-to-face interviews or telephone interviews (in which case, answers may be
entered directly into a computer).
2.4 Question design
There are three broad categories into which questions fall in terms of what they seek to
find out.
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•
Behavioural questions find out what the respondent has done in the recent past, such
as recent purchases of washing powder. In order to help recall, it is better to ask
specific questions - ‘have you bought washing powder in the last fortnight?’ is more
likely to prompt recall then ‘how often do you buy washing powder?’
•
Attitudinal questions seek to measure relatively enduring likes or dislikes. Attitudes
frequently transform into behaviour, and so these questions are central to marketing
research. Direct approaches to measuring attitudes include:
a. Asking for ratings from positive to negative for a particular factor;
b. Instructing the respondent to pick a predefined statement that most nearly accords
with
c. his or her own attitude;
d. Asking the respondent to agree or disagree with certain statements, providing a
scale to measure the degree of agreement or disagreement.
•
Classification questions seek to discover the demographic characteristics of the
respondent, such as age, gender, marital status, occupation, accommodation. This
information is used to define the population of the survey, and to analyse how far
demographic characteristics ‘explain’ the survey’s findings.
Aside from the objective of a question - what it seeks to find out about - there are two
main ways in which questions can be asked: open-ended (unstructured) and
closed/set-choice (structured).
a. Open-ended questions
In response to open-ended questions the individual can reply in his or her own words. The
answer is filled in, word for word. Open-ended questions are used to elicit factual
responses, such as ‘what colour is your car?’ They are used where:
•
•
•
The possible responses are too many to list;
The possible responses are difficult to predict; or
The researcher does not want to introduce any pre-judging element.
Open-ended questions are unavoidable in certain circumstances and are often a good way
of relieving the tedium for respondents of filling in loads of set choice boxes. The
answers to open-ended questions are difficult and time-consuming to analyse; in essence,
the answers become qualitative data.
b. Close ended questions
Close ended question lists possible answers from which the respondent should choose.
The answers are pre-coded or numbered before the respondent completes the
questionnaire so that the answers can be entered as numbers into the computer.
Close ended questions take several forms
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•
•
Single answer questions ask for one response from a list. The possible answers should
be mutually exclusive; they can range from a simple dichotomy (yes/no) to a nominal
scale (yes/no/don’t know). An ordinal scale lists possible answers in a meaningful
order (1-5, 6-10, 11-15 etc).
Multi-answer questions allow the respondent to select more than one answer: for
example ‘Which of the following do you buy each week? (Tick all that apply)’
Milk
Bread
Eggs
Cheese
It must be made clear to the respondent whether the question is a single answer or multi
answer one – for example ‘Tick one box only’, versus ‘Tick all responses that apply to
you’.. Set-choice answers are easy to analyse on the basis of frequency, but in themselves
they may mislead the researcher since they are the answers the researcher thought would
be forthcoming, rather than the answer the respondent may have wanted to give.
2.5 Factors to consider when designing a questionnaire
When you are designing a questionnaire you should consider the following points in
advance.
• The target population.
• The main items of information you want and what form it should be in for subsequent
analysis.
• Any subsidiary information which would be of interest (for example so that you can
compare the responses of men and women or old and young).
• Whether the questionnaire will be filled in by the respondent or by an interviewer.
This determines how ‘user-friendly’ it needs to be.
The key step is to draft the key questions. They are notoriously difficult to get right. Try
them out informally on people similar to, but not from, your target population. If
respondents cannot understand or relate to the questions, it is your problem not theirs.
Rewrite the questions if necessary. After writing the questions, try to leave them for a day
or two and then re-examine them.
In including questions into the questionnaire the following needs to be looked at.
•
•
•
•
•
Is it really necessary?
Is it posed in a way that will provide the information and any subsequent analysis that
you require?
Will interviewers be able simply to read out the words, or will they need to ‘ad lib’,
which might introduce bias?
Is the question posed in a neutral, unbiased way or is it a ‘leading’ question which
inclines towards a particular answer?
Are respondents likely to find the question too personal or offensive? Can you reword
it to reduce the risk of this happening?
Open questions are difficult to analyse but can be post coded and do introduce variety. An
open question may be worded like this
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‘How did you travel to work today?
The responses may be so numerous that analysis becomes onerous and time consuming.
The designer of the questionnaire should instead try to offer a full range of possible
responses to the question, perhaps like this.
‘Please indicate how you travelled to work today (tick all boxes that apply).
By bus
By train
By private car
On foot
By bicycle/motorcycle
I did not go to work today
I work at home
Other (please give details)
The responses from this closed question will be much easier to analyse. It is important,
however, to avoid putting such lists of responses in order of supposed popularity. Avoid
questions that require respondents to perform calculations. Try to offer a list of options to
remove or reduce this. For example offer options of annual, monthly or weekly earnings.
A great deal of attention needs to be focused on the questionnaire’s wording. Long words
and complex sentences should be avoided without sounding patronising. Open-ended
questions are a good way of finding out about motivations; a duo can be particularly
useful; what do you think? why?
2.6 Factors to consider in laying out a questionnaire
The following are some important factors that researchers need to consider in laying out
the questionnaire
•
If respondents have to complete the questionnaire themselves, it must be approachable
and as short as possible. Consider the use of lines, boxes, different type faces and
print sizes and small pictures. Use plenty of space.
•
Consider the use of tick boxes. Is it clear where ticks go or how to respond in each
case? For analysis, will it be easy to transfer responses from the forms to a summary
sheet or a computer? Consider pre-coding the answers.
•
Explain the purpose of the survey at the beginning of the questionnaire and where
possible guarantee confidentiality. Emphasise the date by which it must be returned.
•
Start with quota control questions so that the interviewer can rapidly determine
whether the interviewee is the right type of person. Quota control questions might for
example identify whether the interviewee is employed or unemployed, under 40 or
over 40 and so on. Such questions enable the interviewer to terminate worthless
interviews as early as possible. We will return to quota sampling later in this chapter.
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•
Questions should be in logical order as far as possible, but if difficult questions are
necessary it may be more appropriate to put them at the end.
•
At the end of the questionnaire, thank the respondent and make it clear what the
should do with the completed questionnaire.
2.7 Attitude surveys
Attitudes are only inferred from behaviour - ‘hypothetical constructs’. However, in their
efforts to assess and change attitudes, marketers require some degree of quantification of
the strength and direction of those attitudes. The following scaling and measurement
techniques are usually followed in carrying out attitude surveys
a) The Likert scale
The likert scale will list down statements which are prepared on the topic being
researched, and a test group of respondents is asked to rate each statement on a scale from
strong agreement to strong disagreement. A numerical value is given to each response.
Example will be as follows. To what extent do you agree that passive smoking is
hazardous to one’s health
Strongly agree: 5 Agree: 4 Don’t know: 3 Disagree: 2 Strongly disagree: 1
Each respondent’s scores for all the statements are added up to give a total score for the
topic, which may reflect overall positive or negative attitudes, responses to individual
statements can also be analysed to get more meaningful information about the pattern of
responses. Likert scales are simple to prepare and administer. You may have been asked
to complete such an inventory test over the telephone, or seen one in a magazine.
However, again you should be aware of the fact that scale values have no absolute
meaning, and are limited in their statistical uses, on an ‘interval’ scale.
b) The Semantic Differential scale
This was formulated by Osgood (whose name is ‘attached’ to the method), Tannenbaum
and Suci in 1957, while studying the meanings and associations of words and
concepts.Scales are constructed on a number of ‘dimensions’ - pairs of polarised
attributes or qualities, expressed as adjectives - valued on a continuum from +3 to -3.
+3
+2
Profile of Car Model X
+1
0
1
2
Modern
Fast
Attractive
Powerful
Responsive
Glamorous
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Old fashioned
Slow
Unattractive
Weak
Unresponsive
Ordinary
126
Respondents are asked to select the position of the object being researched (in this case
the car) on each continuum, according to-the degree to which they think the adjective
describes the object. (If the car is very powerful but not terribly responsive, say, it might
rate +3 on the powerful-weak dimension, and + 1 on the responsive-unresponsive scale.).
A ‘profile’ is thus built up by each respondent.
Example of how the semantic differential scale is in use as per the above example.
Scores +3 to -3 on these scales could be mapped out as a three dimensional matrix, which
could be used like the two dimensional profile ratings. The main problem with this scale
is that there is a great sense of subjectivity attached to the language used which might
mean different things to different meanings. This may lead to subjectivity.
Another problem of measuring responses and perceptions of different attributes would be
that perceptual distortion may occur at different situations.
2.9 Data Collection methods using a Questionnaire
•
Interview surveys
Most surveys take place as face-to-face interviews. The interviewers are often freelancers
but can be employees of a market research organisation. An interview is a social
encounter, where the personal interface between interviewee(s) and interviewer is crucial.
There are five main styles of interview, classified according to where they occur.
a. Street surveys take place typically in busy town centres, with the interviewer
approaching individuals as they pass by. They need to be brief (5 minutes is too long
for most people in their lunch break or going to or from work) and should not require
too much concentration from the interviewees, so getting them to consider show
material should be avoided. A survey taking place in a shopping centre requires the
centre’s manager’s permission, and a fee may be payable.
b. Shop surveys take place inside or just outside a particular shop, obviously with the
shop’s permission.
c. Hail surveys take place in a pre-booked location such as a hotel, where people are
invited to attend to answer a few questions, usually being recruited from the street and
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being enticed by a give-away or refreshments. More complex tasks can be performed
by the interviewee, for instance a display can be permanently set up and considered.
d. Home interviews are held in the interviewee’s home (or doorstep), with the
interviewer recruiting simply by knocking on doors. They can be pre-arranged by
phone or by dropping a note through the door. Larger, in depth interviews often result
but they are time-consuming, expensive and prone to interruption. Many people are
reluctant even to answer their doors let alone let an interviewer in. So, recruiting for
home interviews is often frustrating for the interviewer.
e. Business surveys take place on the interviewee’s business premises and are always
pre-arranged. Again they are prone to interruption and/or last minute cancellation.
It must always be remembered that people taking part in interview surveys are doing the
researcher a favour, so the least one can do is ensure that the interviewer is well-prepared
and does not make the interviewee feel that his or her time is being wasted.. Good
preparation will also save time in the long run and reduce the costs of hiring freelance
interviewers. Finally, it will result in getting the data that is actually needed. It is vital,
therefore, that the questionnaire or interview schedule is clear, unambiguous, and
accurate. The interviewer’s other tasks are:
•
•
•
•
To locate respondents (stopping in street, calling house-to-house as instructed by the
researcher).
To obtain respondents’ agreement to the interview (no mean feat)
To ask questions (usually sticking strictly to the interview schedule/questionnaire’s
wording) and take down answers.
To complete records.
Since the desired outcome of the survey is useful data, it is important to consider whether
interviewer’s bias may affect the outcome. This comes about in selection of respondents
(stopping people who look ‘nice’ rather than a reasonable cross-section), handling the
interview (not annoying the respondent so his or her answers are affected) etc. The
following are some methods to over come this problem.
a. Respondent suitability can be checked at the outset by asking quota questions but
more effectively by assessment of the respondent (young man, woman shopping
with children etc), so that the target number of interviews is achieved.
b. Respondents can be encouraged to answer as fully as possible and the interview is
usually completed.
c. Questions are asked in the right order, and all relevant questions are asked.
d. The use of show material is properly administered.
e. Response rates are higher than for other forms of survey.
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•
Telephone surveys
Surveys conducted over the phone rather than face-to-face have the following advantages.
a. The response is rapid.
b. There is a standard sampling frame - the telephone directory,’ which can be
systematically or randomly sampled.
c. A wide geographical area can be covered fairly cheaply.
d. It may be easier to ask sensitive or embarrassing questions.
But there are considerable disadvantages as well.
a. A biased sample may result from the fact that a large proportion (about 10%) of
people do not have telephones (representing certain portions of the population
such as old people or students) and many of those who do are ex-directory.
b. It is not possible to use ‘showcards’ or pictures.
c. Due to telesales the refusal rate is much higher than with face-to-face interviews,
and the interview often cut short.
d. It is not possible to see the interviewee’s expressions or to develop the rapport that
is possible with personal interviews.
e. The interview must be short.
However it is possible to overcome the problem discussed above by doing as follows:
a. Redefine the target population as ‘all telephone-owning households’ rather than
‘all households’.
b. Have quotas of groups of respondents so that those who would be underrepresented have representation.
c. Adjust the data post hoc to reflect under-representation.
•
Postal surveys
Approximately 25% of market research questionnaires are completed by postal survey.
We are using the term ‘postal’ survey to cover all methods in which the questionnaire is
given to the respondent and returned to the investigator without personal contact. Such
questionnaires could be posted but might also be left in pigeonholes or on desks.
Postal questionnaires have the following advantages over personal interviews.
a. The cost per person is likely to be less, so more people can be sampled, and
central control is facilitated.
b. It is usually possible to ask more questions because the people completing the
forms (the respondents) can do so in their own time.
c. All respondents are presented with questions in the same way. There is an
opportunity for an interviewer to influence responses (interviewer bias) or miss
record them.
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d. It may be easier to ask personal or embarrassing questions in a postal
questionnaire than in a personal interview.
e. Respondents may need to look up information for the questionnaire. In these cases
it would be easier if the questionnaire is sent to their homes or places of work.
On the other hand, the use of personal interviews does have certain advantages. Over the
use of postal questionnaires.
a. Large numbers of postal questionnaires may not be returned, may be returned only
partly completed or may be returned very late. This may lead to biased results if
those replying are not representative of all people in the survey.
b. Misunderstanding is less likely with personal interviews because the interviewer
can explain questions which the interviewee does not understand.
c. Personal interviews are more suitable when deep or detailed questions are to be
asked, since the interviewer can take the time required with each interviewee to
explain the implications of the question. Also, the interviewer can probe for
further information and encourage the respondent to think more deeply.
d. Response rates are likely to be higher with personal interviews, and the
interviewer can encourage people to answer all questions.
Low response rates are a major problem with postal questionnaires, but low response
rates can be avoided by:
a. Providing a stamped and addressed envelope or a prominently sited box for the
return of the questionnaire.
b. Giving a date by which you require the completed questionnaire.
c. Providing an incentive such as a lottery number for those who return
questionnaires on time.
d. Using a good covering letter.
2.10 Omnibus Surveys
An omnibus survey is a master questionnaire which operates at a stated frequency and
with a predetermined method, run by market research companies who ‘sell’ space on the
questionnaire to marketing organisations who need data. Because the market research
companies undertake the sampling, administration, processing and analysis, and spread
the cost over the organisations needing data, it is a cost-effective method of research for
all concerned.
The master questionnaire usually contains some of the same questions (age, gender,
occupation) every time, while the remainder of the questions are either continuous (the
same questions in the same place on the questionnaire as were asked of a different group,
say, one week earlier) or ad hoc (inserted on a first-come-first-served basis but in a
sensible order).
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Omnibus surveys may cover a wide range of areas or be specific to a certain market,
depending on the population being sampled. A general consumer survey samples a crosssection of the adult population while a survey on, say, baby products samples the
population of parents with young children. A random omnibus will subject respondents at
random, while a quota survey selects on the basis of location or demographic quota
samples. Sample sizes for weekly omnibus surveys are usually 1,000 - 2,000.
Marketing organisations use omnibus surveys to measure market size and share, likely
sales of new products, the success of brands, the impact of advertising etc. They have the
following advantages:
•
•
•
•
•
They are quick and cheap (they are not used for in depth questioning);
They can be used quickly;
They are both custom-designed and confidential;
They can build up a picture of minority groups over time; and
They can be used to recruit respondents for other surveys.
2.11 Experimental Research
Experimental research takes many forms. The following would be notable methods that a
market researcher could use.
•
Laboratory experiments
An artificial environment is set up by the researcher in which most of the crucial factors
which may affect the outcome of the research are controlled. Laboratory experiments are
most often used for measuring response to advertisements, to product design and to
package design. They can take place before the item being tested is generally released
(pre-testing), or after (post-testing). In pre-tests in particular it can be difficult to design
an experiment which isolates the impact of one factor in a product or package from all the
other factors which make up the proposed item, and which are likely to be the subjects of
other experiments. Laboratary test could be of several forms
a. Monadic and comparative experiments - In a monadic test the respondents experience
only one version of the product, package or advertisement, in a comparative one they
are asked to compare two or more. Comparative tests of products are quite artificial
when compared to the actual experience of products in the market, but can be
particularly useful for taste/use comparison with the market leader or with a previous
version of the product. Since the tendency is to prefer the first-tried product, the order
in which they are presented should be rotated.
b. Hall tests - As with a hail survey, in a hail test respondents are recruited from a public
place and asked to attend a hotel or other public area for a test. A quota sample of
people is used, often being people who are already users of a particular product which
is being reformulated. As a result, comparative tests are most common.
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c. Van tests - A van test is simply a mobile hail test, with the testing environment set up
in a mobile van which can travel to selected venues, rather than in a series of locations
which will necessitate the environment constantly being dismantled and reassembled.
A van test would not be suitable for a test which requires a lot of space.
d. Test centres - A product which is sensitive, large, complicated or expensive to
dismantle can be set up in one site and respondents transported over some distance to
test it. Many motor manufacturers have car clinics where respondents can test various
factors of new cars without having the entire design unveiled to them.
•
Field experiments
In a field experiment a product is tested in realistic surroundings, that is in the.
environment in which it will be bought and/or consumed once launched. Whilst the
researcher has less control over extraneous variables, field experiments do give a more
realistic idea of future behaviour. They are still experiments, and should use before and
after tests and control groups.
Field experiments are usually made of products in what the marketer hopes is their final
form. They are expensive therefore as the product has to be made and marketed in small
quantities, and they are risky, in that competitors will inevitably get a good look.
Laboratory experiments are often preferred but there are some elements of the marketing
mix, such as distribution, which do not lend themselves to laboratory tests. There are
three main types of field experiment: in-home placement tests, store tests and test
marketing.
In-home placement tests
A sample of consumers try the product out at home and report findings, usually by
completing a questionnaire. The consumer are often members of a carefully selected
consumer panel. In home placement tests are often used for toiletry and other personal
products.
Store tests
Retail outlets are used as the site for testing merchandising, packaging and point-of sale
material. There should be a reasonable cross-section of stores, both by size and by region,
and ideally a control group. Results are measured primarily by changes in sales by store,
but sometimes also by interview surveys of consumers.
Test marketing
Test marketing is an expensive but often vital experiment in which one or more marketing
actions are tried out in limited areas of the market in order to predict sales volume,
profitability, market share, consumer, retailer and distributor behaviour and regional
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variances. It is vital that the experiment is properly controlled since the prediction of a
new product’s success, or a successful change in the marketing mix of an existing
product, very often depends on it. Mistakes can be expensive.
A test marketing experiment requires the following stages:
a. Planning: define the problem(s) to be addressed and how the results are to be
measured; select test areas.
b. Pre-testing: in experimental design terms, take ‘before’ readings of the market.
c. Main resting: sell the product in stores in the area, for example, over a period of time.
d. Post-testing: measure the dependent variables.
e. Evaluation: analyse results and predict the outcome for the whole market.
Test marketing has a number of serious disadvantages:
a. Speed and surprise are of the essence in many product launches and these are lost in
test marketing.
b. Competitors are given the opportunity to copy and/or spoil;
c. It is expensive, and being certain of success may not be worth the cost (ie eventual
revenue and profits may not cover the test marketing cost);
d. Many products have life-cycles which are so short that test marketing would create
too great a delay;
e. Making valid predictions on the basis of test marketing is notoriously difficult, since
success in a test market may be due to special inducement or the uncharacteristically
hard efforts of salesmen.
Test marketing is expensive because all the processes associated with a product launch
(plant design manufacture, advertising etc) have to be gone through for sales of product in
an area where revenue will not match costs.
Because of these problems researchers have come up with alternatives to test marketing.
These are
a. Mini-test marketing seeks to simulate test marketing conditions without market. wide
exposure and the associated costs. An example is a van fitted out as a supermarket
stocked with a variety of products and used over time by a panel of consumers, who
are primed beforehand with a magazine full of advertisements, some in embryonic
form. Not all the products nor all the ads are of tested products. Buying patterns on
product launch, and the crucial re-buy pattern, can be measured. Results are quick and
reliable but the operation over time is expensive.
b. Stimulated test marketing models use computer modelling to assess trial and repeat
purchase following hall tests with consumers.
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2.12 Observational Research
Marketing research can make use of personal observation as a method of data collection.
Observation means seeing and noting what is seen, but as a research process it cannot be
casual and subjective. For data collected by observation to be valid it must be as objective
as possible. Observation is used to collect data for two main reasons.
•
•
Because no other means are available; and
In order to confirm that data collected by other means is valid. It is not the most
rigorous means of data collection, but it can be systematic.
Behaviour is observed and recorded in a variety of ways by the researcher. In order for
data on behaviour to be collected by observation it must be:
• Observable - feelings cannot be observed, although physical symptoms could be
observed)
• Accessible - that is, the behaviour must be fairly predictable and frequent so the
researcher knows how and when to observe it over a reasonable period of time.
• Contained - each occurrence of the behaviour must happen quickly (e.g. using a debit
card to pay in a supermarket).
There are five ways in which observation can be adapted to suit the demands of the
behaviour and the needs of the researcher:
•
•
•
•
•
Open or disguised observation - where the open presence of the observer is likely to
affect behaviour, the observation process itself needs to be unobservable, say by using
a hidden camera, a one-way mirror or a disguised observer
Direct or indirect observation – observing as behaviour occurs as opposed to
examining evidence from past behaviour.
Human or technological observation: an example of the latter is a heat or temperature
monitor, say, which measures a respondent’s physiological reaction to stimuli.
Structured or unstructured observation: in the former the researcher knows what he is
looking for; in the latter, he observes and records all those actions which seem to be
relevant to the purpose of the research.
Neutral or artificial observation: the former is observation of real behaviour, such a-s
shoppers in a supermarket; the latter is the observation of behaviour taking place in
experimental surroundings, eg hail tests.
Qualitative Research
Qualitative research is the process which aims to collect qualitative primary data,
although qualitative data is also collected in the process of quantitative research,
primarily questionnaires. Its main methods are the open-ended interview, whether this be
a depth interview (one-to-one) or a group discussion (focus group). The form of the data
collected is narrative rather than isolated statements reduceable to numbers. Its main
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purpose is to understand consumer behaviour and perceptions rather than to measure
them. The key to qualitative research is to allow the respondents to say what they feel and
think in response to flexible, ‘prompting’ questioning, rather than to give their responses
to set questions and often set answers in a questionnaire.
2.13 Depth interviews
In a depth interview the key line of communication is between the interviewer and the
respondent. They have an open-ended conversation, not constrained by a formal
questionnaire, and the qualitative data is captured as narrative by means of an audio or
video tape. The factors to consider when planning a depth interview are as follows.
•
Who should the respondent be?
•
The kind of person depends on the subject being discussed. It may be a consumer
interview for discussion of consumer goods or an executive interview for discussing
industrial buying.
The number of people undergoing depth interviews in the course of the research
should be considered in the light of the time they take. 10-15 is usually more than
enough.
Respondents for consumer interviews are pre-recruited and asked to agree to the
interview. Respondents for executive interviews will be selected on the basis of their
position in the organisation.
•
•
a. Factors to consider in planning for a depth interview?
Although depth interviews are usually one-to-one, there may be more than one
respondent and there may also be an informant, there to give information about tangible
things (eg how big the organisation’s purchase budget is) but not about his own attitudes.
Of course, a respondent can also be an informant, as where a respondent in a consumer
interview informs the interviewer about his family make-up and purchase behaviour.
Family depth interviews allow a close analysis of the real mechanics behind the family
DMU.
b. How long should it be?
Genuine depth interviews go beyond the face value, looking for patterns and frameworks,
and interpreting the meanings and implications of what is said’: Raymond Kent,
Marketing Research in Action. These can take some time. By contrast a mini depth
interview may take only 1 minute, because it can focus on one predefined topic like a
pack design.
c. How structured should it be?
It can be totally open-ended, ranging over whatever topics come up, or it can be semistructured with an interview guide and perhaps the use of show material.
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d. Should show material be used?
The type of material that is commonly used includes mock-ups or prototypes, storyboards
or concept boards, narrative tapes and animatics, a form of cartoon.
e. Where should the interview take place?
Usually at home or in the workplace.
f. How should the interview be recorded?
Most respondents do not mind the interview being taped but many dislike it being
captured on video tape, either in a static interviewer or on the move between, say, home
and shops. The discussion can also be observed, either openly or secretly, by a third
person.
2.15 Group discussions
The key feature of a group discussion or focus group is that, because more than one
respondent takes part (typically 7-9) the key lines of communication are between the
group members rather than between the individual respondent and the interviewer.
Groups develop a dynamic of their own, enhancing and sometimes altering an
individual’s perceptions, so that the whole is greater than the sum of the parts.
•
Group dynamics
Groups are not static. They mature and develop. Four stages in this development are
commonly identified for formal groups.
a.
b.
c.
d.
Forming
Storming
Norming
Performing
During the first stage (forming) the group is just coming together, and may still be seen as
a collection of individuals. Each individual wishes to impress his personality on the
group, while its purpose, composition, and organisation are being established. The
individuals will be trying to find out about each other, and about the aims and norms of
the group. There will, at this stage probably be a wariness about introducing new ideas.
The objectives being pursued may as yet be unclear and a leader may not have emerged
yet.
The second stage is called storming because it frequently involves more or less open
conflict between group members. There may be changes agreed in the original objectives,
procedures and norms established for the group. If the group is developing successfully
this may be a fruitful phase.
The third stage (norming) is a period of settling down. There will be agreements about
principles but the enthusiasm and brain-storming of the second stage may be less
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apparent. Once the fourth stage (performing) has been reached the group sets to work to
execute its task. Even at earlier stages some performance will have been achieved but the
fourth stage marks the point where the difficulties of growth and development no longer
hinder the group’s objectives.
Factors to consider in planning qualitative research using group discussions.
1.
Type of group. A standard group is of 7-9 respondents, but other types may also be
used.
a. Mini-groups may only have 5 people, often children, and/or often discussing
sensitive issues.
b. Extended groups last for over 3 hours, and are used when complex tasks are
performed or a large amount of stimulus material is used.
c. Creativity groups capitalise on the brain-storming session to come up with
innovative ideas.
d. Reconvened groups meet at least twice, often performing tasks/experiencing
products in between.
2.
Membership. Who takes part in the discussion depends on who the researcher wants
to talk to (users or non-users, for instance) and whether they all need to be similar
(homogenous) - for instance, all users of the same age, or older non-users, or a cross.
section. Debate is more likely in heterogeneous groups (cross-sections) but
homogenous ones are unlikely to get so caught up in personal differences.
3.
Number of groups. Having more than 12 groups in a research project would be very
unusual, mainly because nothing new would come out of a thirteenth one.
4.
Recruitment. Usually on the basis of a quota sample: respondents are screened by a
short questionnaire to see whether they are suitable. In order to persuade them to join
in, the members are usually given an incentive plus expenses.
5.
Discussion topics. These will be decided by the researcher with regard to the purpose
of the group discussion, that is the data that is required. There should be a number of
topics since the interviewer needs to be able to restart discussion once a topic has
been fully discussed.
•
The role of the moderator
The interviewer in a group discussion is more usually known as the moderator, whose
tasks are:
a. To organise the discussion, including the venue, time and presence of stimulus
material.
b. To set the discussion rolling.
c. To focus the group if it has strayed too far from the point.
d. To introduce new topics.
e. To wind the group down.
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Most vital is for the moderator to be aware of group dynamics (forming, storming,
norming, performing) and to be consistent in his approach. He may simply observe,
occasionally interjecting; he may become one of the group; or he may be the focus of
attention throughout. Moderators should intervene in the flow of discussion when:
a. It has strayed from the subject of research.
b. An important point has been raised which needs exploring.
c. A lot of ground has been covered and a summary is needed before the discussion
can proceed further.
d. A hypothesis has been formulated by the group which then needs further testing.
Applications of qualitative research
Most commonly, qualitative research is used as an exploratory phase before a full,
quantitative research phase.
For instance, the researcher:
• May want to generate hypotheses to be quantitatively tested;
• May initially know very little about the market or country;
• May need to design a questionnaire which asks the right questions.
But it may also be used to help diagnose a perceived problem, to evaluate different
marketing strategies to solve a problem, or to generate creative ideas. Lastly, as we said
earlier, it may simply be the only research method available.
3. Sample Design
Sampling is one of the most important subjects in marketing research. In most practical
situations a population will be too large to carry out a complete survey and only a sample
will be examined. A good example of this is a poll taken to try to predict the results of an
election. It is not possible to ask everyone of voting age how they are going to vote: it
would take too long and cost too much. So, a sample of voters is taken, and the results
from the sample are used to estimate the voting intentions of the whole population.
Occasionally, a population is small enough that all of it can be examined: for example,
the examination results of one class of students. When all of the population is examined,
the survey is called a census. This type of survey is quite rare, however, and usually the
researcher has to choose some sort of sample. You may think that using a sample is very
much a compromise, but you should consider the following points.
•
•
•
•
•
In practice, a 10096 survey (a census) never achieves the completeness required.
It can be shown mathematically that once a certain sample size has been reached, very
little extra accuracy is gained by examining more items.
It is possible to ask more questions with a sample.
The higher cost of a census may exceed the value of results.
Things are always changing. Even if you took a census it could well be out of date by
the time you complete it.
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The choice of a sample
One of the most important requirements of sample data is that it should be complete. That
is, the data should cover all areas of the population to be examined. If this requirement is
not met, then the sample will be biased. For example, suppose you wanted to survey the
productivity of workers in a factory, and you went along every Monday and Tuesday for a
few months to measure their output. Would these data be complete? The answer is no.
You might have gathered very thorough data on what happens on Mondays and Tuesdays,
but you would have missed out the rest of the week. It could be that the workers, keen and
fresh after the weekend, work better at the start of the week than at the end. If this is the
case, then your data will give you a misleadingly high productivity figure. Careful
attention must therefore be given to the sampling method employed to produce a sample.
Sampling methods are broadly categorised as random sampling and non-random
sampling.
3.1 Random sampling
To ensure that the sample selected is free from bias, random sampling must be used.
Inferences about the population being sampled can then be made validly. A simple
random sample is a sample selected in such a way that every item in the population has an
equal chance of being included. For example, if you wanted to take a random sample of
library books, it would not be good enough to pick them off the shelves, even if you
picked them at random. This is because the books which were out on loan would stand no
chance of being chosen. You would either have to make sure that all the books were on
the shelves before taking your sample, or find some other way of sampling (for example,
using the library index cards).
A random sample is not necessarily a perfect sample. For example, you might pick what
you believe to be a completely random selection of library books, and find that every one
of them is a detective thriller. It is a remote possibility, but it could happen. The only way
to eliminate the possibility altogether is to take 100% survey (a census) of the books,
which, unless it is a tiny library, is impractical.
•
Sampling frames
If random sampling is used then it is necessary to construct a sampling frame. A sampling
frame is simply a numbered list of all the items in the population. Once such a list has
been made, it is easy to select a random sample, simply by generating a list of random
numbers.
0 J Absolam , 1 R Brown , 2 S Brown
Now the numbers 0,1,2 and so on can be used to select the random sample. It is normal to
start the numbering at 0, so that when 0 appears in a list of random numbers it can be
used. Sometimes it is not possible to draw up a sampling frame. For example, if you
wanted to take a random sample of Americans, it would take too long to list all
Americans. A sampling frame should have the following characteristics.
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a.
b.
c.
d.
e.
f.
Completeness. Are all members of the population included on the list?
Accuracy. Is the information correct?
Adequacy. Does it cover the entire population?
Up to date ness. Is the list up to date?
Convenience. Is the sampling frame readily accessible?
Non-duplication. Does each member of the population appear on the list only once?
Two readily available sampling frames for the human population of Great Britain are the
community charge register (list of dwellings) and the electoral register (list of
individuals).
•
Random number tables
Assuming that a sampling frame can be drawn up, then a random sample can be picked
from it by one of the following methods.
a. The lottery method, which amounts to picking numbered pieces of paper out of a box.
b. The use of random number tables.
Set out below is part of a typical random number table.
93116
32886
92052
39510
27699
92962
10274
75867
85783
16894
59780
06831
35905
06494
61773
12202
20717
47619
9895
09958
19640
85244
03152
22109
94205
82037
87481
73231
18065
99413
35159
19121
78508
50380
10268
37220
You should note the following points.
c. The sample is found by selecting groups of random numbers with the number of digits
depending on the total population size, as follows.
Total population size
1- 9
1-99
1-999
Number of random digits
1
2
3
The items selected for the sample are those corresponding to the random numbers
selected.
d. The starting point on the table should be selected at random. After that, however,
numbers must be selected in a consistent manner. In other words, you should use the
table row by row or column by column. By jumping around the table from place to
olace, personal bias may be introduced.
e. In many practical situations it is more convenient to use a computer to generate a list
of random numbers, especially when a large sample is required.
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•
Selecting random samples
An investigator wishes to select a random sample from a population of 800 people, who
have been numbered 000, 001, ...799. As there are three digits in 799 the random numbers
will be selected in groups of three. Working along the first line of the table given earlier,
the first few groups are as follows.
937 161 689 498 953 732
Numbers over 799 are discarded. The first four people in the sample will therefore be
those numbered 161,689,498 and 732.
•
Drawbacks of random sampling
The following are pertinent drawbacks of the random sampling methods
a. The selected items are subject to the full range of variation inherent in the population.
b. An unrepresentative sample may result.
c. The members of the population selected may be scattered over a wide area, adding to
the cost and difficulty of obtaining the data.
d. An adequate sampling frame might not exist.
e. The numbering of the population might be laborious.
•
Types of random sampling methods
The following are popular methods of random sampling methods used by researchers
Systematic sampling
Systematic sampling may provide a good approximation to random sampling. It works by
selecting every Nth item after a random start. For example, if it was decided to select a
sample of 20 from a population of 800, then every 40th (800 + 20) item after a random
start in the first 40 should be selected. The starting point could be found using the lottery
method or random number tables. If (say) 23 was chosen, then the sample would include
the 23rd, 63rd, 103rd, 143rd ... 783rd items.
The gap of 40 is known as the sampling interval.
The investigator must ensure that there is no regular pattern to the population which, if it
coincided with the sampling interval, might lead to a biased sampling interval or might
lead to a biased sample. In practice, this problem is often overcome by choosing multiple
starting points and using varying sampling intervals whose size is selected at random.
If the sampling frame is in random order (such as a non-alphabetical list of students) a
systematic sample is essentially the same as a simple random sample.
A systematic sample does not, however, fully meet the criterion of randomness since
some samples of the given size have zero probability of being chosen. The method is,
however, easy and cheap and hence is widely used.
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Stratified sampling
In many situations stratified sampling is the best method of choosing a sample. The
population must be divided into strata or categories.If we took a random sample of all
marketers in the country, it is conceivable that the entire sample might consist of
members of a marketing institute in commercial companies. Stratified sampling removes
this possibility as random samples could be taken from each type of employment, the
number in each sample being proportional to the total number of marketers in each type
(for example those who are lecturers, those in commerce, those in the public sector, and
those in market research and agencies).
Example: stratified sampling
The number of marketers in each type of work in a particular country are as follows.
Lecturers
Commercial companies
Public sector
Market research and agencies
Total
200
700
300
800
2000
The strata frequently involve multiple classifications. In social surveys, for example, there
is usually stratification by age, gender and social class. This implies that the sampling
frame must contain information on these three variables before the threefold stratification
of the population can be made.
Advantages of stratification are as follows.
• It ensures a representative sample since it guarantees that every important
category will have elements in the final sample.
• The structure of the sample will reflect that of the population if the same
proportion of individuals is chosen from each stratum.
• Each stratum is represented by a randomly chosen sample and therefore inferences
can be made about each stratum.
• Precision is increased. Sampling takes place within strata and, because the range
of variation is less in each stratum than in the population as a whole and variation
between strata does not enter as a chance effect, higher precision is obtainable.
(For this to occur, the items in each stratum must be as similar as possible and the
difference between the individual strata must be as great as possible.)
However, that stratification requires prior knowledge of each item in the population.
Sampling frames do not always contain this information. Stratification from the electoral,
register as to age structure would not be possible because the electoral register does not
contain information about age.
Multistage sampling
Multistage sampling is normally used to cut down the number of investigators and the
costs of obtaining a sample. An example will show how the method works.
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Example: multistage sampling
A survey of spending habits is being planned to cover the whole of Britain. It is obviously
impractical to draw up a sampling frame, so random sampling is not possible. Multi-stage
sampling is to be used instead. The country is divided into a number of areas and a small
sample of these is selected at random. Each of the areas selected is subdivided into
smaller Units and again, a smaller number of these is selected at random. This process is
repeated as many times as necessary and finally, a random sample of the relevant people
living in each of the smallest units is taken. A fair approximation to a random sample can
be obtained.
Thus, we might choose a random sample of eight areas, and from each of these areas,
select a random sample of five towns. From each town, a random sample of 200 people
might be selected so that the total sample size is 8 x 5 x 200 = 8,000 people. The main
advantage of this method is one of cost saving but there are a number of disadvantages.
•
•
•
There is the possibility of bias if, for example, only a small number of regions are
selected.
The method is not truly random as once the final sampling areas have been selected
the rest of the population cannot be in the sample.
If the population is heterogeneous, the areas chosen should reflect the full range of the
diversity. Otherwise, choosing some areas and excluding others (even if it is done
randomly) will result in a biased sample.
The sampling methods looked at so far have necessitated the existence of a sampling
frame (or in multistage sampling, sampling frames of areas, sub-areas and items within
selected sub-areas). It is often impossible to identify a satisfactory sampling frame and, in
such instances, other sampling methods have to be employed.
3.2 Non random sampling
This is a non random and a subjective method of selecting a sample. Each member in the
population does not have an equal change of being selected to the sample and it is based
on some criteria.
Types of non random sampling methods
•
Quota sampling
In quota sampling randomness is forfeited in the interests of cheapness and administrative
simplicity. Investigators are told to interview all the people they meet up to a certain
quota. A large degree of bias could be introduced accidentally. For example, an
interviewer in a shopping centre may fill his quota by only meeting people who can go
shopping during the week. In practice, this problem can be partly overcome by
subdividing the quota into different types of people, for example on the basis of age,
gender and income, to ensure that the sample mirrors the structure or stratification of the
population. The interviewer is then told to interview, for example, 30 males between the
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ages of 30 and 40 from social class C 1. The actual choice of the individuals to be
interviewed, within the limits of the quota controls, is left to the field worker.
Advantages of quota sampling
• It is cheap and administratively easy.
• A much larger sample can be studied, and hence more information can be gained
at a faster speed for a given outlay than when compared with a fully randomised
sampling method.
• Although a fairly detailed knowledge of the characteristics of a population is
required, no sampling frame is necessary because the interviewer questions every
person he meets up to the quota.
• Quota sampling may be the only possible approach in certain situations, such as
television audience research.
Disadvantages of quota sampling
• The method can result in certain biases (although these can often be allowed for
and/or may be unimportant for the purpose of the research).
• The non-random nature of the method rules out any valid estimate of the sampling
error in estimates derived from the sample.
Quota sampling cannot be regarded as ultimately satisfactory in research where it is
important that theoretically valid results should be obtained. It can be argued, however,
that when other large sources of error, such as non response, exist, it is pointless to worry
excessively about sampling error.
Example: quota sampling
The following relates to additional information relating to the gender of the marketers
based on a membership of a marketing institute of a country.
Male Female
Lecturers
100
100
Commercial companies
300
400
Public sector
200
100
Marketing research and agencies
300
500
An investigator’s quotas would be as follows.
Lecturers
Commercial companies
Other commercial
Marketing research and agencies
Male
10
30
20
30
Female
10
40
10
50
Total
20
70
30
80
200
Using quota sampling, the investigator would interview the first 10 male marketing
lecturers that he met, and the first 40 female marketers in commercial companies.
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•
Cluster sampling
Cluster sampling is similar to multistage sampling in that the population is divided into
small areas, but every item in a random selection of small areas is examined. Cluster
sampling benefits from low costs in the same way as multistage sampling.
The advantages of cluster sampling are that it is a good alternative to multistage sampling
if a satisfactory sampling frame does not exist and it is inexpensive to operate because
little organisation or structure is involved. There is, however, the potential for
considerable bias because of the non-random method of choosing clusters.
3.3 Potential faults in a sampling exercise
There are several faults or weaknesses which might occur in the design or collection of
sample data. These are as follows.
•
Bias. In choosing a sample, unless the method used to select the sample is the random
sampling method, or a quasi-random sampling method, there will be a likelihood that
some ‘units’ (individuals or households etc) will have a poor, or even zero chance of
being selected for the sample. Where this occurs, samples are said to be biased. A
biased sample may occur in the following situations.
a. The sampling frame is out of date, and excludes a number of individuals.
b. Some individuals selected for the sample decline to respond. If a questionnaire is
sent to 1,000 households, but only 600 reply, the failure of the other 400 to reply
will make the sample of 600 replies inevitably biased.
c. A questionnaire contains leading questions, or a personal interviewer tries to get
respondents to answer questions in a particular way.
•
Insufficient data. The sample may be too small to be reliable as a source of
information about an entire population.
•
Unrepresentative data. Data collected might be unrepresentative of normal conditions.
For example, if an employee is asked to teach a trainee how to do a particular job,
data concerning the employee’s output and productivity during the time he is acting as
trainer will not be representative of his normal output and productivity.
•
Omission of important factor. Data might be incomplete because an important item
has been omitted in the design of the ‘questions’.
•
Carelessness. Data might be provided without any due care and attention. An
investigator might also be careless in the way he gathers data.
•
Confusion of cause and effect (or association). It may be tempting to assume that if
two variables appear to be related, one variable is the cause of the other. Variables
may be associated but it is not necessarily true that one causes the other.
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•
Where questions call for something more than simple. ‘one-word’ replies, there may
be difficulty in interpreting the results correctly. This is especially true of ‘depth
interviews’ which try to determine the reasons for human behaviour.
One method of checking the accuracy of replies is to insert control questions in the
questionnaire, so that the reply to one question should be compatible with the reply to
another. If they are not, the value of the interviewee’s responses are dubious, and may be
ignored. On the other hand, the information that the interviewee is genuinely confused
about something, and so offers contradictory answers, may be valuable information itself,
or it may reflect the way the questions are structured.
4. Collection of Data
4.1 In house Marketing Research
a) In house research department organization
b) Limitations of in-house research
c) Considerations in collecting data through in house research
4.2 Using external research agencies to carry out research
a) Writing a research brief
b) Format of a research brief
c) Briefing the agency
d) How to handle a research agency in carrying out research
•
Introduction
Part of that communication process is a written market research brief. So, what is a
market research brief? How do you go about writing one?
•
What's a Market Research Brief?
The market research brief is a tool for bringing together the researcher and the client - ie.
YOU - to a position of mutual understanding, at the start of a research project.
Put simply, it's a process that ensures good communication and minimises future
problems.It's not a process unique to the Market Research industry. In all situations where
an outsider is asked to assist in a problem, unless they are given a clear set of instructions,
the chances of getting what you want are very low.
Think of a visit to a Doctor - what sort of questions does he or she ask and WHY? The
more history a doctor can get from you, the better (and faster) the diagnosis and
treatment, and the less time and money you spend being sick.Your corporate health can
likewise be improved by a good market research brief.
•
Why a Written Brief?
Market Research is, first and foremost an intellectual process. A research project often
involves investigation of highly abstract concepts.
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For example, think of the term "market". What is it? Where is it? How big is it? Because
you cannot "touch and feel" these concepts, it's essential to have some mechanism for
keeping the project on track. A written brief has certain factual content that is essential for
a project to be effectively completed. It ensures the project is well articulated,
conceptualised and stays on track.
A written Brief:
•
•
•
•
•
Provides a benchmark to refer back to
Provides a guide to monitor progress by
May serve as legal documentation
Improves the standard of the research
Serves to clarify the problem, may even solve it!
In practice, a verbal discussion communicates feelings and is also an essential step in the
briefing process.Where the agency has worked for you before, and is well aware of the
subject matter, a good relationship already exists between yourself and a research
consultant or the current project is the same as a previous one, a less formal brief or even
a verbal discussion may suffice.
However, most research consultants are not mind readers and they will never be as close
to your business as you are. You need to decide for yourself what decisions have to be
made and what information you need to support them. While a good consultant can
certainly help you here, in most instances, it's best to do your homework first.
Where there is no written brief, the research agency runs a very real chance of getting it
wrong. Agencies do not like producing inactionable research, so protect yourself, your
customers, your business and your agencies - always use a written brief.
•
Who Should Write the Brief?
Ideally the end-user of the information or the decision maker likely to act on it. For
example, the Marketing Director, or Product Manager.
If not the ultimate decision-maker, the person who should write the brief should be the
person who will select and brief the external agency. In this instance your responsibility is
to:
a. Articulate the problem, purpose and objectives as crisply, honestly and as fully as
possible.
b. Provide explicit directions as to the format, structure, style or other elements of the
report.
c. Be honest in stipulating due dates, and be aware of the working time frames of
research.
d. Review the draft brief with others in your company, and amend if necessary.
e. Be available for a verbal briefing session with the research agency.
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Like everything else, writing Market Research Briefs is hard until it becomes easy.
However, if you do not write them frequently, it may be difficult to prepare one when the
time comes.
•
Writing the Brief
Professionalism simply means leaving nothing to chance. To achieve that requires a
degree of intellectual discipline no matter what the endeavour. In our endeavour that
discipline is assisted by using a staged approach as described below.
The following paragraphs look at each area of the brief in more detail.
Project Title: Branding & communication
What's in a name? Lots usually. Not only is the project name a unique identifier, it
encapsulates the core purpose of the study. The title can also become a brand - a
communication tool for the results within your company.
Ironically, the process of naming a project often helps clarify in our minds what it's all
about, so it's not as frivolous an activity as it may seem. You get naming rights to your
research projects, so give it some thought for posterity.
Be aware however, that the research agency may need to change the project name in
certain circumstances to preserve anonymity and avoid biased respondents.
Background: History, what led to this project?
Put the researcher in the picture. In a few succinct paragraphs describe what you already
know about the market, the products, the problem.
Remember, you deal with your products or services every day, the researcher usually
does not. So if in doubt - provide the information and let the researcher decide if it's
relevant.
Purpose: Why do I need the Information?
The research purpose is a one-paragraph broad statement or summary that addresses
questions such as the following:
•
•
•
Why do I need this information?
Why am I doing this research?
What basic problem or opportunity am I trying to solve or achieve?
Why bother with a statement of purpose at all? The basic point of doing market research
is to learn - to find out something we did not know before.
When it comes to being specific, we all have difficulties. Sometimes we simply have not
consciously tried to articulate in words what is in the brain. As difficult as it is, the onus is
on you to find the words to express your thoughts accurately, honestly and concisely.
If you do not reveal your purpose, the researcher has no way of independently assessing if
you have asked the right questions to achieve it. No researcher should simply do what you
say - no questions asked. Deciding the purpose is the first step of any research project,
and many stop right there.
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Objectives: What am I trying to find out?
"If you don't know where you're going, any road will get you there."
As an observation, most research projects start with questions, long before a purpose is
conceptualised. Objectives simply describe what the answer to the questions might look
like if you had them. It tells the researcher what to look for.For example, a question may
be: "Will people find the cost of this new product prohibitive?". The corresponding
objective could be to "Determine price sensitivity at various levels for all market
segments".There is an important difference between the research purpose and the research
objectives. However, they both have a strong bearing on how the research is conducted.
The first addresses why you need the research, the second what you need. It's important
for the researcher to understand not just what you want to know, but why you need to
know it.
Objectives should address:
•
•
•
•
What am I trying to find out?
What questions do I want answered?
What questions should I be asking?
What hypotheses do I want tested?
Decision(s): What are the alternative courses of action?
So now you know why you want to do the research, you know what questions you want
answered, but what will you do with the answers? That's the critical next step. If you
cannot identify a decision to be made, then it's hard to justify a decision to proceed with
the research.
If you say "I don't know what I'll do until I know what the answers are", then the time has
come to engage in some "What if" scenarios. If the answer is x, we will do y, etc. If ten
answers to a research question are possible, then they cannot all lead to the same decision
outcome. If they did, why would you bother with the research?
Decision Criteria: How will you select the best alternative?
How will I decide when to take action, or what action to take? What results will engage
what alternative plans? What are the action standards?
Be specific in setting decision criteria. If for example, 50% of potential customers are
aware of your product, would you run that advertisement? If the result were 35%, or 75%,
would you do anything different? If not - don't do the research - or don't do any more, or
do a smaller study rather than a large one.
This applies to the decision to do a quantitative research stage after the qualitative. It all
boils down to how sure you need to be before you act. The surer you need to be, the more
rigorous the research design must be. It ultimately depends on how much is riding on the
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outcome of your decision. Qualitative research alone may be perfectly acceptable for a
tactical decision, where the cost of being wrong may be outweighed by the cost of further
research - but this approach may be foolhardy for a major strategic study.
So, how sure do you need to be about the validity and reliability of the research
information before you can act? If a 1% error factor means the difference between
financial success and bankruptcy, then the research design had better be tight.
Value: What is the information worth to me?
Estimating the value of the research is not easy. However, it is an important exercise to
try because it highlights the possible outcomes of a decision as well as reminding us that
research is a method of reducing the risks associated with marketing activities.
One simple rule of thumb is to ask yourself how many of my products do I need to sell to
pay for the research? Or, how many more products will this research help me sell to pay
for itself? Or, how much money is this product potentially worth if it succeeds? Or, how
much money do I stand to lose if I don't succeed?
In the case of advertising, ask yourself how much money the campaign or promotional
piece is worth; what is the potential loss if I antagonise my customers, or miss an
opportunity and give a competitor an edge?
In practice, the value of the market research is usually implicit in the budget allocated to
it. However, this approach by-passes the questions we asked previously, and can result in
a great research exercise that simply was not worth the money, or a research problem of
major strategic importance that ends up getting the broad brush treatment.
Market Research should be seen as an investment. Like any other investment, it should
provide value for money.
Timing: When should the research start and end?
Be specific and realistic about your expectations on timing. Say when you expect the
research to start and when you want the results, verbal debrief or presentation. Ask the
agency for a timetable, including contingencies. Most good agencies provide one with
their proposal.
Learn how long each phase of the research will take and why. If you have deadlines that
are not negotiable, make sure the agency knows this, so they can commit the appropriate
resource. Extra interviewers and extra shifts may be called upon to speed things up, but
there are other traps to watch out for.
Remember the time frame can have an impact on results. Agencies that are forced to meet
unreasonable deadlines are tempted to talk to respondents who are available at short
notice, rather than respondents they should talk to.
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Call-backs to people who are initially unavailable is an important way of ensuring a
randomly selected sample does not become self-selected on availability, but call-backs
take time, so be wary of going for speed, quality inevitably gets compromised
somewhere.
Some projects are so complex, require skilled interviewers or certain technical knowledge
that it is best to restrict the interviewing team to a small, experienced group. This usually
means they will need more time to complete the sample. For example, interviewing
business executives.
Scope: How far should the research go?
By scope we mean how far you want the information net flung. For example the scope
can be limited demographically (e.g., only females between the ages of 18 and 30 who
earn over Rs 500,000 p.a.) or geographically (e.g.: only people in Sydney and Melbourne)
or both. If you strongly feel that some limits apply which are not apparent from the rest of
the brief it's best to tell the researcher what these limits are.
Scope is often a function of the need to analyse subsets of the survey population. For
example if you do a study to be reported only at the national level it may be possible to
exclude one or two Australian capital cities because they are similar, thus saving money
on fieldwork without impacting significantly on the results.
It may be worth while asking yourself if any differences are likely to exist between
consumers in one province vs. another. If so - does it matter?
Contacts: Names and Titles
Don't forget the obvious. Tell the researcher who the key people in your company are
who have anything to do with this project. If further information is required, the
researcher has a record of who to ring and their extension or fax numbers if applicable. If
a project is being tendered you will need to highlight the name and title of the person to
whom proposals should be addressed, and the closing date.
Special Instructions: (Optional)
Occasionally, the need arises to convey special requirements to the agency that are not
covered under other headings. For example, the need for signed confidentiality contracts
Special study outputs such as electronic reports, presentation requirements, or special
requirements for a proposal.
•
What happens to the brief?
Your research consultant now takes over and prepares a detailed research Proposal, which
should demonstrate an understanding of your problem - not simply restate the background
- and recommend an appropriate research design. That design will include proposals for
Chapter 08 - Developing the Research Plan and Collection of Data
151
the type of research required, sample sizes and selection methods, timing, reporting,
staffing, etc.
Make sure you understand this document. If in any doubt, ask your consultant to explain
it to you, and your management in person if necessary. If the terminology used is
unfamiliar, ask for a definition. If in doubt, ask to see sample outputs, resumes, lists of
referees you can call. Make sure you know exactly what you are getting. Ask yourself
what the research would look like if you had it already, and what you could do with it.
Once you have agreed on the details, the agency must be formally notified in writing.
This is called a letter of commissioning.
The agency then proceeds to implement your project. This involves designing interview
guidelines, questionnaires, briefing interviewers and their supervisors, recruiters, data
coders, analysts, computer specification writers and other support staff. Your brief,
commitment and participation are essential to ensure that these resources are used in the
most efficient and effective way.
Be involved as much as possible. Attend focus groups if they are used. Discuss the details
of the questionnaire carefully. Have a say in how you want the data analysed and
presented.
♪
My Short Notes
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Chapter 9
Analysis of Data
This chapter will cover the following areas
1. Measures of Location
2. Measures of Dispersion
3. Probability Distributions
4. Sampling Theory
5. Correlation
6. Regression
7. Multiple Regression - Introduction only
1. Measure of Location
1.1 Arithmetic Mean
The calculation of the arithmetic mean is very simple. You simply sum all of the
observations and then divide by the number of observations.
Sometimes we wish to compute a mean value and what we have is a series of means, each
mean in the series is based upon a different number of observations (sample size).In this
case, we calculate what is called a weighted mean, in that the individual means are
weighted in the calculation by their sample size. For example, suppose that we wanted to
calculate the mean body weight of raccoons living in the Great Plains and we want to do
this from means that have been reported in the literature.
•
23 raccoons from North Dakota had a mean weight of 11.2 kg
•
•
•
7 raccoons from Nebraska had a mean weight of 9.2 kg
19 raccoons from Kansas had a mean weight of 7.7 kg
14 raccoons from Oklahoma had a mean weight of 6.5 kg
Each mean is multiplied by its corresponding sample size and then those products are
summed, the result is then divided by the sum of the sample sizes.
Note that the sample from North Dakota has the largest effect on the weighted mean
because it has the largest sample size. If you had simply added the 4 means together and
divided by 4, the answer would have been 8.65, which would have been wrong.
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a) How does it work in market research?
The following example indicates an analysis of product test between two different brands
A and B.
5
%
4.31
3.89
4
3
2
1
0
A
B
Mean for product A is 4.31 and the Mean for product B is 3.89. Since 4.31 are closer to
extremely like, product A is better than B in this product attribute.
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1.2 Mode
The mode is simply the most common observation in the data. If there are two most
common values then the distribution is said to be bimodal and it has two separate peaks.
The mode is not often used as it contains very little useable information and thus rarely
see it reported in market research. In market research, mode can be used to identify the
most common or popular aspects of a product or service (price or pack size).
1.3 Median
It is defined as the value that has an equal number of observations on either side of it. It
divides a frequency distribution in half relative to the number of observations. For
example, ages of elderly people in the home for age (90, 87, 84, 78, and 63) the median is
84.
It is that observation that has exactly the same number of observations above it as below.
In this case, there are an odd number of observations, so the median will always be one of
the observations.
1.4 Frequency Analysis
a) What do we do in frequency analysis?
Frequency distributions are a graphical representation of the frequency of occurrence of
observations across the range of observations. Frequency distributions are very useful
methods for examining your data and gaining insights into the structure of the data that
would not be obvious to you from the calculation of descriptive statistics. For example,
you may find that your data is distributed as a bimodal distribution (that is that it has two
peaks), or that the distribution is U-shaped or J-shaped and clearly not normally
distributed.
Frequency distributions take different forms depending upon whether the data is discrete
or continuous. If you are plotting discrete data, then you should use a bar graph with the
bars not touching each other to show that the data is discrete.
For example, if you were producing a graph that shows the frequency of occurrence of
numbers of species of fish in a lake, your data may consist of 2 lakes with 1 species, 4
lakes with 2 species, 5 lakes with 3 species, 7 lakes with 4 species, 6 lakes with 5 species,
3 lakes with 6 species, 1 lake with 7 species, and 1 lake with 9 species. As the number of
species can only take integral values, the data is discrete. Thus the bars used to represent
the number of species can not touch adjacent bars.
Plot the number of species along the x-axis and numbers of lakes along the y-axis. To do
this we will use a computer package called Sigma Plot. You can access this program on
the computers in SH 158. Your graph should look like the one below.
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b) Frequency distribution – preparing a frequency distribution
If you are producing frequency distributions of continuous data, then the bars will touch
each other indicating that the observations can take on any conceivable value. The data
below comes from Sokal and Rohlf and represent the femur length of 25 aphids.
3.8
3.9
4.4
3.6
4.4
4.1
4.3
3.8
3.6
3.5
4.7
4.2
4.3
3.6
3.9
3.3
4.1
4.3
4.4
3.9
4.5
4.3
3.6
3.8
3.8
We will first arrange the observations in ascending order from lowest to highest. Note
that when we record a value of 3.3, that means that the true length of the femur lies
between 3.25 and 3.35 and when we record a value of 4.2, that means that the true length
lies between 4.15 and 4.25. We are only recording our data to the nearest tenth. See the
column labeled implied limits in the table below. We have actually divided our data into
15 different classes with a class interval of 0.1. If you look closely at the column labeled
frequency, you will see several classes that have zero observations (3.4, 3.7, 4.0, and 4.6).
This is not unexpected when you have 25 observations divided among 15 classes.
c) Grouped frequency distribution – preparing a frequency distribution
Class mark represents the mid-point of the implied class limits. In this case, it
represents the actual measurement recorded for each aphid. Frequency is the number of
times that measurement with that class mark occurs in the set of data. Cumulative
frequency is the sum of the frequencies for each class from the smallest class mark up
through the class mark of interest.
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156
Class mark
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4.0
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Implied class limits
3.25 - 3.35
3.35 - 3.45
3.45 - 3.55
3.55 - 3.65
3.65 -3.75
3.75 - 3.85
3.85 - 3.95
3.95 - 4.05
4.05 - 4.15
4.15- 4.25
4.25 - 4.35
4.35 - 4.45
4.45 - 4.55
4.55 - 4.65
4.65 - 4.75
Frequency
1
0
1
4
0
4
3
0
2
1
4
3
1
0
1
Cumulative Frequency
1
1
2
6
6
10
13
13
15
16
20
23
24
24
25
Plot these data using Sigma Plot. Your graph should look like the one below.
d) Cumulative frequency distribution
Because we had so many classes with zero observations, we are next going to lump our
data into fewer classes, in this case 5 classes (see the second table below). This will
produce a graph in which it is easier for us to see the pattern in our data. Practical class
limits are the ranges of recorded values that fall within a particular class. Note here that
the class interval is 0.3
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Class
mark
3.4
3.7
4.0
4.3
4.6
Implied
class limits
3.25 - 3.55
3.55 - 3.85
3.85 - 4.15
4.15 - 4.45
4.45 - 4.75
Practical
class limits
3.3 - 3.5
3.6 - 3.8
3.9 - 4.1
4.2 - 4.4
4.5 - 4.7
Frequency
2
8
5
8
2
Cumulative
frequency
2
10
15
23
25
Plot these data using Sigma Plot. Your graph should look like the one below.
2. Measure of Dispersion
Another important characteristic of a data set is how it is distributed, or how far each
element is from some measure of central tendency (average). There are several ways to
measure the variability of the data. Although the most common and most important is the
standard deviation, which provides an average distance for each element from the
mean, several others are also important, and are hence discussed here.
2.1 The Range
Symbolically, range is computed as xmax-xmin. Although this is very similar to the formula
for midrange, please do not make the common mistake of reversing the two. This is not a
reliable measure of dispersion, since it only uses two values from the data set. Thus,
extreme values can distort the range to be very large while most of the elements may
actually be very close together. For example, the range for the data set 1, 1, 2, 4, 7
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158
introduced earlier would be 7-1=6. Recently it has come to my attention that a few books
define statistical range the same as its more mathematical usage. I've seen this both in
grade school and college textbooks. Thus instead of being a single number it is the
interval over which the data occurs. Such books would state the range as [xmin,xmax] or xmin
to xmax. Thus for the example above, the range would be from 1 to 7 or [1,7]. Be sure you
do not say 1-7 since this could be interpreted as -6.
2.2 Variance and Standard Deviation
Variance is the third method of measuring dispersion. Compare the two variance
formulae with their corresponding standard deviation formulae, and we see that variance
is just the square of the standard deviation. Statisticians tend to consider variance a
primary measure and use it extensively (ANOVA, etc.), where as scientists are very
happy to use standard deviation exclusively.
Occasionally, the abbreviations SD for standard deviation and Var for variance will be
seen. The Standard deviation is another way to calculate dispersion. This is the most
common and useful measure because it is the average distance from the mean. The
formula for sample standard deviation is as follows.
Notice the difference between the sample and population standard deviations. The sample
standard deviation uses n-1 in the denominator, hence is slightly larger than the
population standard deviation which use N (which is often written as n).
It is much easier to remember and apply these formulae, if you understand what all the
parts are for. We have already discussed the use of Roman vs. Greek letters for sample
statistics vs. population parameters. This is why s is used for the sample standard
deviation and (sigma) is used for the population standard deviation.
However, another sigma, the capital one ( ), appears inside the formula. It serves to
indicate that we are adding things up.What is added up are the deviations from the mean:
- xi. But the average deviation from the mean is actually zero—by definition of the
mean! Occasionally the mean deviation, using average distance or using the symbols for
absolute value: | - xi| is used. However, a better measure of variation comes from
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159
squaring each deviation, summing those squares, then taking the square root after
dividing by one less than the number of data elements. If you compare this with the
formula for quadratic mean you will realize we are doing the same thing, except for what
we are dividing by. That n-1 can be understood in terms of degree of freedom topic which
goes beyond this introduction. Another formula for standard deviation is also commonly
encountered. It is as follows.
This formula can be algebraically derived from the former and has two primary
applications. First, calculators and computer programs often employ it because less
intermediate results are necessary and it can be calculated in one pass through the data
set. That is, you don't have to calculate the mean first and then find the deviations.
Second, it is closely related to a formula which may be used to calculate the standard
deviation for a frequency table.
2.3 Skewness
A fundamental task in many statistical analyses is to characterize the location and
variability of a data set. A further characterization of the data includes skewness and
kurtosis. Skewness is a measure of symmetry, or more precisely, the lack of symmetry. A
distribution, or data set, is symmetric if it looks the same to the left and right of the center
point.
Kurtosis is a measure of whether the data is peaked or flat relative to a normal
distribution. That is, data sets with high kurtosis tend to have a distinct peak near the
mean, decline rather rapidly, and have heavy tails. Data sets with low kurtosis tend to
have a flat top near the mean rather than a sharp peak. A uniform distribution would be
the extreme case.
The histogram is an effective graphical technique for showing both the skewness and
kurtosis of data set. For univariate data Y1, Y2, ..., YN, the formula for skewness is:
Where Y is the mean, is the standard deviation, and N is the number of data points. The
skewness for a normal distribution is zero, and any symmetric data should have a
skewness near zero. Negative values for the skewness indicate data that are skewed left
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and positive values for the skewness indicate data that is skewed right. By skewed left,
we mean that the left tail is heavier than the right tail. Similarly, skewed right means that
the right tail is heavier than the left tail. Some measurements have a lower bound and are
skewed right. For example, in reliability studies, failure times cannot be negative.
For univariate data Y1, Y2, ..., YN, the formula for kurtosis is:
Where Y is the mean, is the standard deviation, and N is the number of data points. The
kurtosis for a standard normal distribution is three. For this reason, excess kurtosis is
defined as so that the standard normal distribution has a kurtosis of zero. Positive kurtosis
indicates a "peaked" distribution and negative kurtosis indicates a "flat" distribution.
The following example shows histograms for 10,000 random numbers generated from a
normal, a double exponential, a Cauchy, and a Weibull distribution.
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The first histogram is a sample from a normal distribution. The normal distribution is a
symmetric distribution with well-behaved tails. This is indicated by the skewness of 0.03.
The \kurtosis of 2.96 is near the expected value of 3. The histogram verifies the
symmetry.
The second histogram is a sample from a double exponential distribution. The double
exponential is a symmetric distribution. Compared to the normal, it has a stronger peak,
more rapid decay, and heavier tails. That is, we would expect a skewness near zero and a
kurtosis higher than 3. The skewness is 0.06 and the kurtosis is 5.9. The third histogram is
a sample from a Cauchy distribution.
For better visual comparison with the other data sets, we restricted the histogram of the
Cauchy distribution to values between -10 and 10. The full data set for the Cauchy data in
fact has a minimum of approximately -29,000 and a maximum of approximately 89,000.
The Cauchy distribution is a symmetric distribution with heavy tails and a single peak at
the center of the distribution. Since it is symmetric, we would expect skewness near zero.
Due to the heavier tails, we might expect the kurtosis to be larger than for a normal
distribution. In fact the skewness is 69.99 and the kurtosis is 6,693. These extremely high
values can be explained by the heavy tails. Just as the mean and standard deviation can be
distorted by extreme values in the tails, so too can the skewness and kurtosis measures.
The fourth histogram is a sample from a Weibull distribution with shape parameter 1.5.
The Weibull distribution is a skewed distribution with the amount of skewness depending
on the value of the shape parameter. The degree of decay as we move away from the
center also depends on the value of the shape parameter. For this data set, the skewness is
1.08 and the kurtosis is 4.46, which indicates moderate skewness and kurtosis.
Many classical statistical tests and intervals depend on normality assumptions. Significant
skewness and kurtosis clearly indicate that data is not normal. If a data set exhibits
significant skewness or kurtosis (as indicated by a histogram or the numerical measures),
what can we do about it?
One approach is to apply some type of transformation to try to make the data normal, or
nearly normal. The Box-Cox transformation is a useful technique in trying to normalize a
data set. In particular, taking the log or square root of a data set is often useful for data
that exhibits moderate right skewness.
Another approach is to use techniques based on distributions other than the normal. For
example, in reliability studies, the exponential, Weibull, and lognormal distributions are
typically used as a basis for modeling rather than using the normal distribution. The
probability plot correlation coefficient plot and the probability plot are useful tools for
determining a good distributional model for the data.
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3. Probability Distributions
3.1 What do we understand by Probability Distribution?
For continuous variables we can produce summary statistics which measure central
tendency and variability. Measures of central tendency describe 'typical' values and the
best-known measures are the mode, median and mean (also known as the arithmetic
mean).
These measures do not tell us anything about how much observations differ from one
another - if we have a group of people and we know that the median age is 35 and the
mean age is 36 this tells us nothing about how the ages of each individual in the group
vary from one another (i.e. they could all be aged between 30 and 40 or they could be
aged between 10 and 60). The most commonly used measure of variability is the
variance. To calculate the variance:
•
•
•
•
Subtract the mean from the value for each observation;
Square the distance of each observation from the mean;
Add together the squared distance from the mean of each observation;
Divide the sum by the number of cases minus 1.
Put another way Variance (S2) = sum of squared distances from the mean for all
observations (number of observations - 1). If the variance is 0, all of the cases have the
same value. The larger the variance, the more the values are spread out.
Why do we use the square of the distances rather than just the distance? The sum of
distances around a mean is always 0 and does not provide a measure of variability.
Why do we divide by the number of observations minus 1 rather than the number of
observations? Dividing by the number of observations would give the variation of the
observations around the sample mean but we are usually interested in generalizing our
findings to a population. We want to know how much the data values vary around the
population mean. We do not know the population mean, however, and use the sample
mean instead. This makes the sample values have less variability than they would if we
used the population mean.
Dividing by the number of cases minus 1 compensates for this.
One of the limitations of the variance is that it is not expressed in the same units as the
raw data (because it is based on squared distances from the mean). Consequently we
prefer to use the square root of the variance - this measure is called the standard deviation
(sd, SD, or σ). The standard deviation may be thought of as approximately the average
deviation (or distance) of the observations from the mean. It can be calculated fairly
straightforwardly on the basis of the following formula:
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163
sd=
Σ x2- (Σx)2/n
n -1
Where,
Σ
x
n
√
= sum of
= observations on a given variable
= number of observations
= square root
3.2 The Normal Distribution
The Normal distribution is 'by far the most important probability distribution in statistics'
(de Vaus, 1991, 51). The Normal distribution has the shape of an upside down bell - it is
symmetrical, most of the observations are bunched in the middle and fewer observations
are found as one move away from the centre in either direction. Within such a distribution
the mean has the same value as the mode and the median.
The Normal distribution is completely described by two parameters - the mean (σ or mu)
and the standard deviation. These parameters are not fixed, however, and can take on any
value. Since a Normal distribution can have any mean and standard deviation the location
of an observation is usually expressed in terms of the number of standard deviations that
it is above or below the mean.
This distance is known as the standard Normal deviate or Normal score. A Normal
distribution in which all values are given as standard scores is called the standard Normal
distribution. The standard Normal distribution has a mean of 0 and a standard deviation
of 1. Any Normal distribution can be converted into a standard Normal distribution by
subtracting the mean and dividing by the standard deviation.
Within a Normal distribution the relationship between the standard deviation and the
mean has certain known properties. This means that the percentage of cases falling within
any interval can be calculated. Given a Normal distribution, we know that 68% of cases
fall within one standard deviation of the mean and that 95% of cases fall within 1.96
standard deviations of the mean (see figure 1).
As the Normal distribution is symmetrical these proportions are split equally above and
below the mean. The proportion of cases which fall within a specified range may be
found in a Normal distribution table (see appendix). It should be evident from the table
that 0.05 (or 5%) of cases lie outside the range covered by 1.96 standard deviations from
the mean.
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164
3.3 Standard Deviation and Normal Distribution
-1.96
-1
0
1
1.96
Source - Norusis, 1997, 178.
When a set of observations has a distribution that is close to Normal distribution we
assume that, in the population, the variable actually has a Normal distribution and carry
out calculations on this basis.
Example: Suppose that scores on an IQ test are normally distributed, with a mean of 100
and a standard deviation of 15. We would expect 68% of observations to fall in the range
85-115 and 95% of them to fall in the range 71-129. Suppose an individual has a score of
140. W estimate that such a score is + 2.67 standard deviations above the mean (140100/15) and this tell us that it is among the very highest scores. Similarly, if an individual
has a score of 70, we estimate that such a score is -2.0 standard deviations below the
mean (70-100/15). As such, we know that it is in the lowest 5% of scores.
The Normal distribution helps us to relate results from a sample to the population. In
order to understand this it is important to distinguish between the standard deviation of
the observations in single sample (see above) and the standard deviation of the means of
several repeated samples
•
The standard deviation of sample means is a hypothetical quantity because in practice
we only take one sample.
•
The standard deviation of sample means is generally known as the standard error of
the mean - usually abbreviated to standard error - as this helps to distinguish it
from the standard deviation of the observations.
•
The standard error may be estimated from a single sample using the observed
standard deviation in that sample (s): i.e. standard error of the mean = s / √n.
•
The standard error is not an estimate of any quantity in the population but a measure
of the uncertainty of a single sample mean as an estimate of the population mean. It
may be used to construct a confidence interval around the mean to give a range of
values within which we are confident the true value (i.e. the mean in the population)
lies.
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The importance of the Normal distribution is not limited to variables which have a
Normal distribution in the population. Surprisingly, the distribution of sample means will
be nearly Normal whatever the distribution of the variable in the population as long as1he
samples are large enough. This is known as the Central Limit Theorem. How large is
large enough? Altman (1991, 181) defines large samples roughly as more than 100. Large
enough is, however, a relative concept. For variables with a distribution which is not too
far from Normal, sample means will have a Normal distribution even if they're based on
small sample sizes. If the distribution is very far from Normal, larger samples will be
needed for the distribution of the sample means to be Normal. The important point is that
the distribution of means gets closer to and closer to Normal as the sample size gets larger
and larger - regardless of the distribution of the original variable.
3.4 Normal Distribution Table
The Standard Normal distribution is used in various hypothesis tests including tests on
single means, the difference between two means, and tests on proportions. The Standard
Normal distribution has a mean of 0 and a standard deviation of 1. The animation above
shows various (left) tail areas for this distribution. For more information on the Normal
Distribution as it is used in statistical testing, see the chapter on elementary concept.
As shown in the illustration below, the values inside the given table represent the areas
under the standard normal curve for values between 0 and the relative z-score. For
example, to determine the area under the curve between 0 and 2.36, look in the
intersecting cell for the row labeled 2.30 and the column labeled 0.06. The area under the
curve is .4909. To determine the area between 0 and a negative value, look in the
intersecting cell of the row and column which sums to the absolute value of the number in
question. For example, the area under the curve between -1.3 and 0 is equal to the area
under the curve between 1.3 and 0, so look at the cell on the 1.3 row and the 0.00 column
(the area is 0.4032).
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3.5 Probability Distribution Theory in Research Data Analysis
Probability distributions are a fundamental concept in statistics. They are used both on a
theoretical level and a practical level. Some practical uses of probability distributions are:
•
•
•
To calculate confidence intervals for parameters and to calculate critical regions for
hypothesis tests.
For univariate data, it is often useful to determine a reasonable distributional model
for the data.
Statistical intervals and hypothesis tests are often based on specific distributional
assumptions. Before computing an interval or test based on a distributional
assumption, we need to verify that the assumption is justified for the given data set. In
this case, the distribution does not need to be the best-fitting distribution for the data,
but an adequate enough model so that the statistical technique yields valid
conclusions.
Simulation studies with random numbers generated from using a specific probability
distribution are often needed.
3.6 Use of Probability Distribution in Research Data Analysis
Binary variables have one or two possible values. For example, a person is either male of
female, left or right-handed, Rhesus positive or Rhesus negative, etc. It is obvious that if a
person is male they cannot be female. Thus, the two states of a binary variable are
mutually exclusive. This is common in biological data.
Often there is an expectation for the likely value of a binary variable. For example, when
a coin is tossed there is a prior expectation of an equal chance that the coin will land
heads or tail up. Similarly, when we meet someone we do not expect them to be colourblind. In the coin-tossing example it is a simple matter to assign values to the probabilities
of observing a head (P(Head)) or a tail (P(Tail)) both are expected to be 0.5.
The colour-blindness example is more difficult. What is your prior expectation that
someone will be colour-blind? We could only answer this question by surveying the
general population and finding the proportion of people that are colour-blind. There are
racial differences in the these proportions, for example Europeans (0.08); Navajo (0.01);
Lapps (0.06); Todas (0.13).
One of the two possible binary events is called a success the other is termed a failure.
These labels are statistical and do not tell us anything about the relative merits of the two
values. In general, and perhaps confusingly, a success is the outcome which has the lower
probability. If both have a probability of 0.5 it does not matter which is called a success.
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There is a simple relationship between the probabilities of these two outcomes. Let p =
the probability of a success and let q = the probability of a failure. Because these are
mutually exclusive events one or other must occur so their combined probabilities must
sum to 1.0
p + q = 1.0.
As a simple example consider the problem of offspring gender and how this relates to the
expected composition of families, i.e. the number of sons and daughters. Assume that
prior to birth the probability that a child will be male is 0.5, similarly the probability that
a child will be female is 0.5. What is the probability of having two boys (i.e. a boy AND
a boy)?
Because the sex of the second child is independent of the first the multiplication rule is
used to estimate this probability.
P = P(boy) AND P(boy) = P(boy).P(boy) = 0.5*0.5 = 0.25
Formally these independent events (the births) are known as trials.
Trials must meet certain requirements:
•
•
•
•
The number of trials is fixed in advance;
Each trial has two possible outcomes; success and failure;
The outcomes of all the trials are statistically independent;
All the trials have the same probability of success.
4. Sampling Theory
4.1 Sampling Distribution of a Mean
A key issue in the case of any research is: “How to sample the target group in the most
cost effective way?”
A sample represents the universe of the target group. Only in the case of a census are all
the members of the universe interviewed. All market research involves selecting a
representative group of target respondents. This selected group, called the sample, is
usually a very proportion of the universe of target respondents. For all samples (as it is
not a census) there exists some incompleteness in its representation of the target universe.
This incompleteness is indicated quantitatively through the “sampling error” of the
sample. The sampling process should attempt to minimize this error in a cost – effective
way.
All research is based on surveys conducted among a sample. And each measurement thus
arrived at is not a fact, but only an estimate. Hence, sampling by its very nature involves a
risk. So, it is critical that each measurement arrived gets qualified, as shown below.
•
•
How accurate is it likely to be?
What is the risk of it being wrong by more/less than some stated amount?
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Sampling theory is based upon two main axioms:
•
The average of all the sample estimates would be equal to the true population value
(say,n).
•
The scatter of the various sample estimates about this overall average (i.e., the correct
answer) will tend to follow a known pattern – the Normal Distribution.
A sample should represent the universe of the target
Respondents for a research
4.2 The Standard Error
When a measurement is made for any universe through one of the many possible samples,
one needs to know how wrong it might be. A good estimate can be obtained from the
results of a single sample. This estimate is called the Standard Error (SE). The SE of a
sample estimate is a measure of the extent to which chance may influence its accuracy.
The formula to determine the SE is given below. where,
n = sample size
X = sample estimate
Xi = measurement for the ith respondent
SE of p% =
where,
n = sample size
p = sample estimate as %
The size of the SE of a sample estimate is influenced by two main factors:
The amount of variation, or scatter, exhibited by the population being measured.
SE a Variation
The sample size.
It may be noted that to reduce SE the sample size needs to be increased. In order to halve
the SE, 4n is required as SE varies inversely with for all practical purposes, the size of the
universe being studied can be ignored. It is only when n > 10 + % of the total population,
that one needs to apply a Correction Factor. This finite population correction has the
effect of reducing the SE. The true SE is times the basic SE where,
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N = population size, and
n = sample size.
4.3 Confidence Levels, Limits and Intervals
Confidence limits (CL) help to construct statements that qualify the sample estimate, in
terms of its probable accuracy. The general form of such a statement is: "The sample
estimate is p %. The researcher is C % confident that the true population value lies
between (p-a) % and (p + a) %".
Simply put, x % CL is a range of values within which the researcher is x % confident that
the true population value lies {i.e., there is only a (100 - x) % risk that it lies outside the
limits}. The more confident the researcher wishes to be, the wider the (CL) range of
values s/he must quote. The following exhibit indicates the proportion of sample
estimates included within certain distances measured in terms of SE from the Mean of the
Universe.
CL (p ± a) % are calculated by multiplying S.E. by some value, and adding/subtracting
the result to the sample estimate to obtain the upper/lower limit. The multiplier to be used
depends upon the level of confidence required.
Level of confidence
Required
50%
68%
87%
90%
95%
99%
99.7%
Multiplier of
SE
2/3
3/2
5/3
5/3
2
5/2
3
Stratified Random Sampling
This involves dividing the entire population (of target respondents) into a number of
mutually exclusive and collectively exhaustive strata. Within each stratum, simple
random samples of appropriate size (whether proportionate or disproportionate to the
population size of the stratum) are drawn. The stratification of the population is done
using the guideline that the parameter variance within a stratum should be small, and
across strata it should be large. Such stratification leads to a better estimate of the
parameter value. The required sample size, too, would be smaller in comparison to the
method of simple random sampling.
A key difficulty in implementing this method is the non-availability of population lists
that have some information about the possible stratification dimensions in many research
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contexts. However, in certain cases like industries and trade establishments, such
information may be available, and the method could be used to great advantage in terms
of economy in sample size and representativeness of the sample,
Both stratified random sampling and cluster sampling (just discussed above) appear to be
similar, because both involve the breaking up of a larger group (population) into smaller
groups. However, an important difference is that all the strata of the population are
automatically included in a stratified sample, while in the case of cluster sampling only a
few (sample) of the clusters are selected.
Cluster sampling is more frequently used. Its advantages are listed below.
•
•
•
Probability sampling can be applied even though master lists - ready sampling framesare not available, but only lists of larger primary units (i.e., blocks, towns, districts,
etc) are available.
The field expenses of collecting data are significantly reduced because, by clustering,
there is an appreciable reduction in travel.
It is very handy in test-marketing situations.
Purposive Sampling
This is not a random sampling technique. Instead, this method searches for a specific
profile based on the target respondent definition for the concerned survey. It is
appropriate for
•
•
A low penetration product, service, habit, or practice, and
Studies in which estimation is not required, and sampling error is of no great
consequence.
It is like finding an endangered species in a forest. They are few in numbers and their
location is unknown. Whoever gets located is interviewed. It does not involve any
selection or rejection logic. The researchers follow various methods, like:
•
•
•
At the point of purchase: This involves asking outlet attendants/owners, or those
standing at outlets and identifying likely people from the traffic to the outlet.
Obtaining appropriate lists: This entails finding out where target respondents (e.g.,
architects) would be listed, obtaining this list, and contacting the people listed. A
Direct Marketing agency's database and membership lists of associations also come in
handy.
Snowballing: This involves asking identified respondents for others who they know
would fit the target respondent definition. They could also ask people who are not
target respondents (e.g., barbers who dye hair) but are likely to
know/interact with target respondents.
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Hybrid Sampling
This is not a random sampling technique, it is a quasi-random sampling. One commonly
used process is 'random location-random address'. It involves identifying 'm' number of
addresses, around which 'x' number of interviews could be conducted. Usually, x is 10. It
can also be something else, as per the researcher. Now, that means 'm' number of
addresses have to be first determined. This is done by dividing the total sample size by
10. Say, if sample size is 250, then 25 (i.e., m) addresses have co be identified, around
which \ 0 interviews would be conducted. These 25 addresses are thus the starting
addresses for the 250 interviews.
Now, to identify these m addresses, first the electoral roll of the selected town / village is
required. From it, the total number of households (addresses) in the roll is ascertained.
The m starting addresses have to be identified from these. So, if the roll has 25,000
addresses, and m = 25, then one starting address per 1000 addresses on the roll has to be
identified. A random number is generated from the first 1000 addresses. Once it is done,
every 1000th address after it is identified as the other starting addresses. Thus, the required
number of starting addresses is identified.
Once the starting addresses are identified, the survey contacts are conducted right there.
Then, the Right-Hand Rule (which involves selecting the right lane, the right turn, and the
right-hand side house while searching the house for the interview) is followed to contact
the every nth address around each starting address. The value of n is determined, in the
above case, by dividing 1000 by the number of interviews to be conducted around each
starting address.
Thus, in this process, the starting address is generated randomly and the other addresses
are identified around it. Some practical remarks are provided below.
There is no relationship between the size of the sample and the size of the population.
It is usually believed that the sample size should be a certain proportion of the
population. Household studies in large cities a ratio of 1:1000 i.e., a sample of 300 for
every 3 lakh households, is considered adequate.
• For industrial research, 10 to 15 % of the population units as a sample size is
considered appropriate.
• Statistically, a sample size of above 300 is considered large. But a sample size of 50 is
considered good enough for some studies.
• No probability sampling is 100 % probabilistic/scientific, because there are various
points at which small deviations would take place in actual selection. Similarly, all
non-probability sampling is not opportunistic. There is always some probability in the
non-probability sampling method used. Non-probabilistic (purposive) sampling
should be made as random and systematic a selection as possible.
•
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4.4 Sampling Distribution of a Proportion
Once the sample is arrived at, it needs to be projected to the universe it represents. For
this purpose, the sample data (which is unweighted data) needs to be weighted (i.e.,
multiplied by the appropriate weight) for it to take the form of the universe data. The
weight for a sample stratum is arrived at by dividing the sample size of that stratum by its
universe size. A small example of the computation of weight is provided below.
A Case
The total sample had two strata—SEC ABC, and SEC DE. The former was 70 % of the
total universe and 50 % of the total sample size. So, the weights for SEC ABC and SEC
DE were 1.4 and 0.6, respectively.
SEC Universe (u) Sample (s) Weight
(w = u/s)
ABC
70%
50%
1.4
DE
30%
50%
0.6
Now, these weights are to be used to project the sample data for SEC ABC and SEC DE,
as the universe data. The formula is a simple multiplication.
Un weighted SEC ABC data * Weight for SEC ABC = Weighted SEC ABC data
The findings from the survey among the sample were as below. The two tables below
provide the data as the number of respondents and % of respondents, sequentially. In each
table, the concerned sample data has been projected to the universe, with the help of the
weights arrived at earlier (i.e., 1.4 and 0.6).
Base
Used products
Once
More often
Used products
Once
More often
Unweighted(nos)
Total
200
ABC DE
ABC
DE
100
Weighted(nos.)
Total
200
100
140
60
30
40
10
15
20
25
26
36
14
21
12
15
15%
20%
10%
20%
20%
25%
26%
36%
14%
21%
12%
15%
The projected data thus generated for the universe data does not affect estimates within
the sub-sample (or sample strata). However, the base for the sub- groups change (as the
proportion of each in the sample and the universe are different). This leads to the total
estimated figure change (e.g., used product once is 15 % in sample, but 26 % for
universe).
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Weight is arrived at for sample strata by
dividing the sample size of those strata by its
universal size.
4.5 Sample Size
The most important question that needs attention at this juncture is:
How to calculate the sample size required yielding a set level of accuracy?
k2 (DF) 2 p (100 – P)
N=
L2
Before computing N, one has to pre-set four terms:
1.
k-
It denotes the multiple associated with the SE in defining CLs. k is directly
proportional to the level of confidence. For a 95 % level of confidence it is 2.
2. L - It represents the limit (above or below the estimate) within the required level of
confidence holds. If accuracy is desired with ±. 5 %, with 95 % confidence,
then L = 5 (and k = 2).
3. DF - It is the design factor of the sample design. The overall effects of any
complexities in a sampling design are summarized by DF, which is used to
multiply the simple SE calculation.
If SE =5 % and DF = 2, then true SE = 10 %.
DF can be different for each variable measured in a survey, and from survey to
survey. The average DF for most surveys is calculated:
where c is the number of interviews per cluster.
Thus, if 1000 interviews are conducted in 50 areas the DF for any estimate
becomes 1.4. It means that the effect of sample design has been used to increase
the error by 40 %, relative to the error, on a simple random sample.
4.
p
- It is the expected answer based on past research or knowledge of correlated
measures. If no estimate of p can be made, it should be set at the level at which it
will have the maximum effect on the sample size of 50 %.n can be
adjusted/changed to be within acceptable budget, either by decreasing level of
confidence (k) or by widening the actual limits (L) as n a k and n a 1/L, and DF
and p cannot be changed.
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174
A Case
The proportion of the population who have a pet is to be estimated. The sample estimate
has to be accurate within 2 %, with only a 5 % risk of greater inaccuracy.
22*1.42* 50(50)
n = ———————
22
= 5000.
If this is not possible due to budgetary constraints then revise, say, the range of accuracy
to 5 % and the confidence level to 90 %. Then, n = 540.
The sample size is also arrived at by first deciding on the differences needed between two
percentages (to be compared post the research), such that the difference is significant at a
particular level of confidence.
The cost elements that increase with the sample size are listed below.
•
•
•
•
•
•
•
•
•
The cost of fieldwork
Data processing
Man-hours
Traveling
Miscellaneous, e.g., stationery
Some possible ways of reducing the total sample size are highlighted below.
Changing the range of accuracy (L)
Changing the level of confidence {k)
Sequential sampling
4.6 Estimation and small samples
There are three sampling techniques:
•
•
•
•
Random sampling (a probability sampling technique)
Clustered sampling (a probability sampling technique)
Purposive sampling
Hybrid sampling
A brief discussion follows on each of these techniques.
Random sampling
It involves including the names of every individual in the universe in the sampling frame,
and assigning each of them a number. Random numbers are then drawn and the
corresponding individuals are contacted. Each Individual has an equal probability of
being selected. It is a called a probability technique as each member has a probability of
being selected. This is the purest form of sampling, but is exorbitantly expensive. Also, it
is not the most statistically efficient method.
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Clustered sampling
It involves two stages.
Stage I Select small units of population, such as wards or districts (i.e., clusters).
Stage II Select individuals at random within these clusters.
It means that a larger area has a greater chance of selection than a smaller one, i.e., the
probability of being selected depends on the size (probability proportional to size, i.e.,
p.p.s.). This results in interviewing an equal number of respondents in each of our
selected areas, regardless of the relative sizes of the areas, and still meets the need to give
an equal chance of selection to every individual in the population.
4.7 Practice Examples
Practically there are three main types of errors in sample-based data:
•
•
•
Sampling error
Non-response error
Response error
These are briefly discussed below.
Sampling errors
These have been discussed earlier in this chapter.
Non-response errors
These occur when an individual is included in the sample to be taken but, for a variety of
possible reasons, is not reached. The people who cannot be reached, despite several
attempts, generally have different characteristics from those who can be reached. The
direction of the error is often unknown. While the maximum non-response error can be
determined, it is difficult to estimate the actual magnitude of the error. However, Politz
and Simmons have provided a technique for these.
In addition to the regular questions, each respondent is asked on how many of k similar
time-periods s/he is at home. Typically, seven groups are set up, with 1/7, 2/7, ..., 7/7 of
the time-periods. Then a total-sample mean is estimated by weighing the separate results
of each group by the reciprocal of the estimate \/k. Thus, those who are not often at home
receive more weight in the computation of the mean.
Response errors
These occur in the collection of data, and include error arising either through
communication, observation, or both. Thus, response error is based on inaccuracy and/or
ambiguity. Inaccurate information may result either from the inability or the
unwillingness of the respondent to provide the desired information. Some of the factors
responsible are:
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176
Time.
Perceived loss of prestige.
Invasion of privacy.
Conflict of opinion.
Cheating on the part of the interviewer.
•
•
•
•
•
Ambiguity involves the errors made in interpreting spoken or written words, or
behavior. Comparison of probability of ambiguity for...
Open – ended question
Dichotomous question
Multiple-choice question
Question
Lowest
Average
Highest
Answer
Highest
Lowest
Average
The factors responsible are:
•
•
•
•
•
Question length
Unfamiliar word(s) used
Ambiguity of word(s)
Two questions combined in one
Lack of specificity.
4.8 Use a Sampling Theory in Research Data Analysis
There are 4 towns with different populations. A researcher needs to conduct 100 adults'
interviews in two areas and, hence, needs to select the areas in which to conduct the
interviews. The population of the towns is as given below.
Town
A
B
C
D
Population
4500
7000
6000
2500
Cumulative
Population
4500
11500
17500
20000
The steps involved to arrive at the sampling procedure are indicated below.
Step 1
1. Divide the total population by the number of interviewing areas required (in this case,
2. In this fashion, the 'sampling interval' is obtained. Here, the sampling interval is
20000/2 = 10000.
Step 2
Generate a random number between 1 and 10000, say 7325. This number determines the
first interviewing area, i.e., Town B.
Step 3
Add the sampling interval to the random number, to get the second interviewing area. In
this case, 7325 + 10000 = 17325; i.e., Town C.
Step 4
Now, the parts of the selected towns (i.e., wards) where the interviews are to be carried
out get selected.
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177
The ward-wise population break-up of the town is necessary for this purpose. In this case,
let us assume the ward-wise population of Town B is as shown below.
Ward
Population
I
II
III
IV
Population
2500
2000
1500
1000
Cumulative
2500
4500
6000
7000
Subtract a random number (in this case, 7325) by the population of the concerned
selected town (in this case, 4500 for Town A). This value for Town A is 2825, i.e., in the
second ward of Town B.(check the cumulative population column for understanding
where 2825 lies).
The discussion that follows now helps understand how to select households in the
selected areas (as above) to conduct interviews. The process used is referred to as Serial
sampling. It involves the use of the electoral register. The steps are outlined below.
Step 1
Divide the total number of electors registered in the area by the number of interviews
required in that area (plus some allowance for non- response) to arrive at the sampling
area. Say the number of interviews to be conducted is 20 and the non-response allowance
is 5, then dividing 4500/25 = 180. This number, here 180, is the sampling interval.
Step 2
Generate a random number between 1 and 180 (the sampling interval), to identify the
first contact address.
Step3
Add the sampling interval to the random number to identify the second contact address,
and so on for the other contacts. As you must have noticed, not all in the town concerned
are registered in the electoral rolls. So, what about the non-electors in the concerned
town(s)? The advice on the steps to be taken to obtain an appropriate representation by
the sample is listed below. Interview the electors.
•
•
Apply differential weighing at the analysis Stage.
Multiply the responses of each non-elector interviewed by:
No. of non-electors found
No. of electors registered
After this is done, the last leg needs to be carried out; i.e., the selection of individuals for
the interview at each selected household.
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178
Two methods are available:
•
•
The Birthday method.
Select the member whose birthday is the next or the one whose birthday had been the
most recent.
The KISH method.
This involves listing all the eligible respondents within a household by sex and, within
the sex groupings, by age from the oldest to the, youngest. The respondent to be
interviewed is then selected through the KISH table.
5. Correlation
5.1 Understanding Correlation
The Pearson Product-Moment Correlation Coefficient (r), or correlation coefficient for
short is a measure of the degree of linear relationship between two variables, usually
labeled X and Y. While in regression the emphasis is on predicting one variable from the
other, in correlation the emphasis is on the degree to which a linear model may describe
the relationship between two variables. In regression the interest is directional, one
variable is predicted and the other is the predictor; in correlation the interest is nondirectional, the relationship is the critical aspect.
The computation of the correlation coefficient is most easily accomplished with the aid of
a statistical calculator. The value of r was found on a statistical calculator during the
estimation of regression parameters in the last chapter. Although definitional formulas
will be given later in this chapter, the reader is encouraged to review the procedure to
obtain the correlation coefficient on the calculator at this time.
5.2 Degrees of Correlation
The correlation coefficient may take on any value between plus and minus one.
The sign of the correlation coefficient (+ , -) defines the direction of the relationship,
either positive or negative. A positive correlation coefficient means that as the value of
one variable increases, the value of the other variable increases; as one decreases the
other decreases. A negative correlation coefficient indicates that as one variable increases,
the other decreases, and vice-versa.
Taking the absolute value of the correlation coefficient measures the strength of the
relationship. A correlation coefficient of r=.50 indicates a stronger degree of linear
relationship than one of r=.40. Likewise a correlation coefficient of r=-.50 shows a greater
degree of relationship than one of r=.40. Thus a correlation coefficient of zero (r=0.0)
indicates the absence of a linear relationship and correlation coefficients of r=+1.0 and
r=-1.0 indicate a perfect linear relationship.
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5.3 Positive and Negative Correlation
What does the correlation coefficient, r, value mean? The value for r is always between 1.00 and +1.00. For values that are positive there is a positive correlation, meaning that
the two variables vary in the same direction (i.e. as X increases Y increases, or as x
decreases Y decreases). For values that are negative there is a negative correlation,
meaning that the two values vary in opposite directions (i.e., as X increases Y decreases,
or as X decreases Y increases). For example, as water temperature increases dissolved
oxygen decreases.
The closer to 1.00 the value for r is, the greater the correlation. So, at +1.00 there is a
perfect positive correlation, and at -1.00 there is a perfect negative correlation. At 0.00
there is no correlation between the two variables. If the value is greater than 0.50 in either
the positive or negative direction, there is likely a significant correlation between the two
variables.
5.4 The Correlation Co-efficient
The correlation coefficient may be understood by various means, each of which will now
be examined in turn.
Scatter plot
The scatterplots presented below perhaps best illustrate how the correlation coefficient
changes as the linear relationship between the two variables is altered. When r=0.0 the
points scatter widely about the plot, the majority fall roughly in the shape of a circle. As
the linear relationship increases, the circle becomes more and more elliptical in shape
until the limiting case is reached (r=1.00 or r=-1.00) and all the points fall on a straight
line. A number of scatterplots and their associated correlation coefficients are presented
below in order that the student may better estimate the value of the correlation coefficient
based on a scatterplot in the associated computer exercise. r = 1.00
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5.5 The Co-efficient of Determination
The squared correlation coefficient (r2) is the proportion of variance in Y that can be
accounted for by knowing X. Conversely, it is the proportion of variance in X that can be
accounted for by knowing Y.
One of the most important properties of variance is that it may be partitioned into separate
additive parts. For example, consider shoe size. The theoretical distribution of shoe size
may be presented as follows:
If the scores in this distribution were partitioned into two groups, one for males and one
for females, the distributions could be represented as follows:
If one knows the sex of an individual, one knows something about that person's shoe size,
because the shoe sizes of males are on the average somewhat larger than females. The
variance within each distribution, male and female, is a variance that cannot be predicted
on the basis of sex, or error variance, because if one knows the sex of an individual, one
does not know exactly what that person's shoe size will be.
Rather than having just two levels the X variable will usually have many levels. The
preceding argument may be extended to encompass this situation. It can be shown that the
total variance is the sum of the variance that can be predicted and the error variance, or
variance that cannot be predicted. This relationship is summarized below:
The correlation coefficient squared is equal to the ratio of predicted to total variance:
This formula may be rewritten in terms of the error variance, rather than the predicted
variance as follows:
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The error variance, s2ERROR, is estimated by the standard error of estimate squared, s2Y.X,
discussed in the previous chapter. The total variance (s2TOTAL) is simply the variance of
Y, s2Y.The formula now becomes:
Solving for sY.X, and adding a correction factor (N-1)/(N-2), yields the computational
formula for the standard error of estimate,
This captures the essential relationship between the correlation coefficient, the variance of
Y, and the standard error of estimate. As the standard error of estimate becomes large
relative to the total variance, the correlation coefficient becomes smaller. Thus the
correlation coefficient is a function of both the standard error of estimate and the total
variance of Y. The standard error of estimate is an absolute measure of the amount of
error in prediction, while the correlation coefficient squared is a relative measure, relative
to the total variance.
5.6 Correlation and Causation
No discussion of correlation would be complete without a discussion of causation. It is
possible for two variables to be related (correlated), but not have one variable cause
another.
For example, suppose there exists a high correlation between the number of popsicles
sold and the number of drowning deaths. Does that mean that one should not eat popsicles
before one swims? Not necessarily. Both of the above variable are related to a common
variable, the heat of the day. The hotter the temperature, the more popsicles sold and also
the more people swimming, thus the more drowning deaths. This is an example of
correlation without causation.
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Much of the early evidence that cigarette smoking causes cancer was correlational. It may
be that people who smoke are more nervous and nervous people are more susceptible to
cancer. It may also be that smoking does indeed cause cancer. The cigarette companies
made the former argument, while some doctors made the latter. In this case I believe the
relationship is causal and therefore do not smoke.
Sociologists are very much concerned with the question of correlation and causation
because much of their data is correlational. Sociologists have developed a branch of
correlational analysis, called path analysis, precisely to determine causation from
correlations (Blalock, 1971). Before a correlation may imply causation, certain
requirements must be met. These requirements include: (1) the causal variable must
temporally precede the variable it causes, and (2) certain relationships between the causal
variable and other variables must be met.
If a high correlation was found between the age of the teacher and the students' grades, it
does not necessarily mean that older teachers are more experienced, teach better, and give
higher grades. Neither does it necessarily imply that older teachers are soft touches, don't
care, and give higher grades. Some other explanation might also explain the results. The
correlation means that older teachers give higher grades; younger teachers give lower
grades. It does not explain why it is the case.
5.7 Practice Examples
Researchers at the European Centre for Road Safety Testing are trying to find out how the
age of cars affects their braking capability. They test a group of ten cars of differing ages
and find out the minimum stopping distances that the cars can achieve. The results are set
out in the table below:
Car
A
B
C
D
E
F
G
H
I
J
Age
(months)
9
15
24
30
38
46
53
60
64
76
Minimum Stopping at 40 kph
(metres)
28.4
29.3
37.6
36.2
36.5
35.3
36.2
44.1
44.8
47.2
Car ages and stopping distances
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5.8 Use of Correlation in Research Data Analysis
A simple correlation may be interpreted in a number of different ways: as a measure of
linear relationship, as the slope of the regression line of z-scores, and as the correlation
coefficient squared as the proportion of variance accounted for by knowing one of the
variables. All the above interpretations are correct and in a certain sense mean the same
thing.
A number of qualities which might effect the size of the correlation coefficient were
identified. They included missing parts of the distribution, outliers, and common
variables. Finally, the relationship between correlation and causation was discussed.
6. Regression
6.1 Understanding Regression
Regression models are used to predict one variable from one or more other variables.
Regression models provide the scientist with a powerful tool, allowing predictions about
past, present, or future events to be made with information about past or present events.
The scientist employs these models either because it is less expensive in terms of time
and/or money to collect the information to make the predictions than to collect the
information about the event itself, or, more likely, because the event to be predicted will
occur in some future time. Before describing the details of the modeling process,
however, some examples of the use of regression models will be presented.
6.2 The Scatter Graph Method
The preceding has been an algebraic presentation of the logic underlying the regression
procedure. Since there is a one-to-one correspondence between algebra and geometry,
and since some students have an easier time understanding a visual presentation of an
algebraic procedure, a visual presentation will now be attempted. The data will be
represented as points on a scatter plot, while the regression equation will be represented
by a straight line, called the regression line.
A scatter plot or scatter gram is a visual representation of the relationship between the X
and Y variables. First, the X and Y axes are drawn with equally spaced markings to
include all values of that variable that occur in the sample. In the example problem, X, the
seconds to put the form-board together, would have to range between 10 and 33, the
lowest and highest values that occur in the sample. A similar value for the Y variable, the
number of widgets made per hour, is from 10 to 35. If the axes do not start at zero, as in
the present case where they both start at 10, a small space is left before the line markings
to indicate this fact.
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The paired or bivariate (two variable, X,Y) data will be represented as vectors or points
on this graph. The point is plotted by finding the intersection of the X and Y scores for
that pair of values. For example, the first point would be located at the intersection of and
X=13 and Y=23. The first point and the remaining four points are presented on the
following graph.
The regression line is drawn by plotting the X and Y' values. The next figure presents the
five X and Y' values that were found on the regression table of observed and predicted
values. Note that the first point would be plotted as (13, 27.57) the second point as (20,
20.88), etc.
6.3 Least Squares Method
The method of least squares assumes that the best-fit curve of a given type is the curve
that has the minimal sum of the deviations squared (least square error) from a given set
of data.
Raw data usually has noise. The values of dependent variables vary even though all the
independent variables are constant. Therefore, the estimation of the trend the dependent
variables is needed. This process is called regression or curve fitting. The estimated
equation (matrix) satisfy the raw data. However, the equation is not usually unique, and
the equation or curve with a minimal deviation from all data points is desirable. This
desirable best-fitting equation can be obtained by the least square method which uses the
minimal sum of the deviations squared from a given set of data.
If you have a data set (x1,y1), (x2, y2),....,(xn, yn) and the fitting curve f(x) has the deviation
d1, d1, .... , dn which are caused from each data point, the least square method produces
the best fitting curve with the property as follows;
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Have a data set (x1,y1), (x2, y2),....,(xn, yn) and the fitting curve f(x) has the deviation d1,
d1, .... , dn which are caused from each data point, the least square method produces the
best fitting curve with the property as follows;
6.4 Practice Examples
The dataset "Televisions, Physicians, and Life Expectancy" contains, among other
variables, the number of people per television set and the number of people per physician
for 40 countries. Since both variables probably reflect the level of wealth in each country,
it is reasonable to assume that there is some positive association between them. After
removing 8 countries with missing values from the dataset, the remaining 32 countries
have a correlation coefficient of 0.852 for number of people per television set and number
of people per physician. The r² value is 0.726 (the square of the correlation coefficient),
indicating that 72.6% of the variation in one variable may be explained by the other.
Suppose we choose to consider number of people per television set as the explanatory
variable, and number of people per physician as the dependent variable. Using the
MINITAB "REGRESS" command gives the following results:
The regression equation is People. Phys. = 1019 + 56.2 People.Tel.To view the fit of the
model to the observed data, one may plot the computed regression line over the actual
data points to evaluate the results. For this example, the plot appears to the right, with
number of individuals per television set (the explanatory variable) on the x-axis and
number of individuals per physician (the dependent variable) on the y-axis. While most of
the data points are clustered towards the lower left corner of the plot (indicating relatively
few individuals per television set and per physician), there are a few points which lie far
away from the main cluster of the data.
6.5 Use of Correlation in Research Data Analysis
A simple correlation may be interpreted in a number of different ways: as a measure of
linear relationship, as the slope of the regression line of z-scores, and as the correlation
coefficient squared as the proportion of variance accounted for by knowing one of the
variables. All the above interpretations are correct and in a certain sense mean the same
thing.
A number of qualities which might affect the size of the correlation coefficient were
identified. They included missing parts of the distribution, outliers, and common
variables. Finally, the relationship between correlation and causation was discussed.
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7. Multiple Regression – Introduction only
7.1 What is Multiple Regression
The general purpose of multiple regression (the term was first used by Pearson, 1908) is
to learn more about the relationship between several independent or predictor variables
and a dependent or criterion variable. For example, a real estate agent might record for
each listing the size of the house (in square feet), the number of bedrooms, the average
income in the respective neighborhood according to census data, and a subjective rating
of appeal of the house. Once this information has been compiled for various houses it
would be interesting to see whether and how these measures relate to the price for which
a house is sold. For example, one might learn that the number of bedrooms is a better
predictor of the price for which a house sells in a particular neighborhood than how
"pretty" the house is (subjective rating). One may also detect "outliers," that is, houses
that should really sell for more, given their location and characteristics.
Personnel professionals customarily use multiple regression procedures to determine
equitable compensation. One can determine a number of factors or dimensions such as
"amount of responsibility" (Resp) or "number of people to supervise" (No_Super) that one
believes to contribute to the value of a job. The personnel analyst then usually conducts a
salary survey among comparable companies in the market, recording the salaries and
respective characteristics (i.e., values on dimensions) for different positions. This
information can be used in a multiple regression analysis to build a regression
equation of the form:
Salary = .5*Resp + .8*No_Super
Once this so-called regression line has been determined, the analyst can now easily
construct a graph of the expected (predicted) salaries and the actual salaries of job
incumbents in his or her company. Thus, the analyst is able to determine which position is
underpaid (below the regression line) or overpaid (above the regression line), or paid
equitably.
7.2 Situation of its use
In the social and natural sciences multiple regression procedures are very widely used in
research. In general, multiple regression allows the researcher to ask (and hopefully
answer) the general question "what is the best predictor of ...". For example, educational
researchers might want to learn what are the best predictors of success in high-school.
Psychologists may want to determine which personality variable best predicts social
adjustment. Sociologists may want to find out which of the multiple social indicators best
predict whether or not a new immigrant group will adapt and be absorbed into society.
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Chapter 10
Presenting Research Findings
This chapter will cover the following areas
Tools to Present Research Findings
1. Tables
2. Charts
3. Histograms
4. Graphs
5. Ogives
6. Lorenz Curves
7. Z charts
Written and Oral Presenting Research Findings
8. Preparing Research Reports
9. Preparing for Oral presentations
1. Tables
1.1 What is a Table
Tables are usually used in quantitative studies where there is a large amount of statistical
data to be presented. This can be descriptive or inferential data. Tables quickly
communicate large amounts of data, displaying any pattern within the data. However,
there are some rules about how tables should be constructed to maximize their
effectiveness:
1.2 Guidelines for Tabulation
Several procedures are available for tabulating and summarizing your data. The frequency
table procedure provides tabulation of single variables. The cross tabulation procedure
provides tabulation of two variables into two-way tables. The descriptive tables procedure
computes summary statistics (means, median, standard deviations, etc.) according to up to
eight breakdown variables. All of these procedures provide numeric and graphic reports. A
specialized appraisal ratio module provides reports for mass appraisal.
1.3 Features of a good table
a) Simplicity
Tables should be kept simple. This may mean using several tables rather than one complex
table. All too frequently, even in the media, tables are overly complex leaving the
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responsibility of interpretation to the reader. The meaning of the table should, by and
large, be immediately obvious.
b) Labeling
Tables should have clear headings identifying what the table is about. Columns should
state their content along with the unit of measurement that is, numbers, percentages,
weight units, monetary value and so on. If appropriate, the question itself should be
displayed and the sample sizes that the results are derived from.
Short titles are better than long ones.
c) Displaying the totals
Tables should add up (or at least explain why they do not). The summary columns and
rows are the ones to which we look for reference and which give meaning to the data.
d) Ordering rows and columns
Randomly distributed rows require the reader to work harder to interpret the table. Tables
where the rows are organized in increasing or decreasing size should therefore always be
used. For example, the most important attribute or the attribute with the highest
satisfaction score should be at the top of the table.
This serves to draw the reader’s eye to the order as well as the data. Where several
columns of data are used, the first data column should make the order.
As with charts, the only digression from this rule comes with ordinal scales such as ‘very
likely’, ‘quite likely’, ‘not very likely’, and ‘not at all likely’. The sequence of these scales
always remains the same inspite of the result.
e) Format of the table:
Several techniques can be used to present tables in a manner that easily separates the rows
and/or columns, and cur-Rent word processing and report writing packaging have made
this much simpler for the writer. The main method of making the data easily readable in
tables involves the use of lines, text and color. Most software packages have a range of
automatically formatted tables available which incorporate the use of all these elements.
1.4 Rounding Errors and Tally Marks
Tables look better where the numbers are rounded. They make it easier for the reader to
relate one figure to another. Of course, there are instances where numbers should not be
rounded and decimal places are important (for example, a table of currency conversion
rates). The following table will provide purchase intention for buying different types of
spreads.
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Purchase
Intention
Margarine
Butter
Jam
Yeast Extracts
Urban
Rural
Urban
Rural
Urban
Rural
Urban
Rural
Purchased
regularly
69%
60%
19%
15%
40%
47%
15%
24%
Purchased
occasionally
19%
10%
48%
20%
35%
25%
29%
33%
5%
20%
14%
43%
18%
20%
28%
12%
6%
7%
18%
19%
7%
7%
26%
26%
Would
consider
purchasing
Won’t
consider
purchasing
1.5 Examples of Presenting Data on Tables
Presenting the data on table has to be appropriate where all the information has to be
allocated properly. See the following example. This is a good example of how the data
can be put in order. This table illustrates different storage conditions in a maintenance
department.
VARIABLES I
SECTION 1
SECTION 2
SECTION 3
SECTION 4
CONTROL
24
30
18
25
LIGHT
10 (light)
13
40
26 (dark)
pH
8 (acid++)
3 (acid-)
52 (base+)
3 (base ++)
TEMP
13 (hot)
24 (warm)
38 (cool)
21 (cold)
2. Charts
2.1 What is a Chart and Types of Charts?
A graph is a chart or drawing that shows the relationship between changing things. They
are a diagram displaying the relationship between numbers or amounts. Common graphs
use bars, lines, or parts of a circle to display data.
A graph or chart is used to present facts in visual form. They are a drawing that displays
the relative sizes of numerical quantities. A graph is one of the easiest ways to compare
numbers.
Graphs can be used to illustrate many types of data and are not limited to the simpler types
such as line, bar, and circle. They should be used to make facts clearer and more
understandable.
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2.2 Pictograms
a) Understanding Pictograms
Pictogram is a handy tool to help you visualize sequence alignments and consensus
sequences. All people need to communicate – but all people do not have the same
preconditions. Pictogram replaces written language for those people who are limited in
their ability to speak, read and write; for example, people with severe learning difficulties.
In practice, Pictogram seves as an alternative way of communicating as well as a support
for thoughts and memory.
Pictogram’s graphic symbols are white against a black background, with a text above that
gives the meaning of the symbol – concepts such as dog, travel, happy, black. The
combination of white against a black background gives optimum contrast to the eye and
renders Pictograms more user-friendly.
b) Examples
Pictograms are an alternative method of communicating that is meant to be both easy and
inspiring to use. However, the system requires a learning process and practical use in order
to acquire and maintain the needed knowledge, just as in the case of written language. The
user must learn to see, interpret, understand and remember the different Pictogram
symbols, aprox. 1,400 at the present time.
As Pictogram builds upon a generalisation, a symbol such as the one for girl, for example,
can depict both a specific girl as well as any girl in the world. The generalisation of
Pictograms is a part of their, diversity. At the same time, the simplicity of the motives
stimulates the users fantasies, drawing out pictures from within.
2.3 Pie Charts
These are used where the component parts of the whole need to be shown, that is, the data
must add up to 100 per cent (see Figure 10.3). They are most frequently used to present:
•
Classification data where the detail of a sample is presented.
•
Market size data the share of the market, sales within a sector of the
market.
•
Brand shares.
Pie charts will convert actual values to percentages, therefore where there are a number of
unknowns or 'not stated' responses causing the data not to total 100 per cent, they should
be used with caution.
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Illustration 01 - Pie chart showing the people using web portals
Others
19%
Netscape
1%
MSN
20%
Yahoo
60%
2.4 Bar Charts
Bar charts are a commonly used method of displaying data in quantitative studies. There
are several different types of bar charts to choose from, depending on the type of data to
be presented. They can be horizontal, vertical or divided.
Horizontal charts are most commonly used with rated data. They have a huge visual
impact and therefore the order of the chart is important. The data is organized to display
the charts in ascending or descending order. The only exception to this is the chart where it
is the scale that is the important variable.
The horizontal bar chart is commonly used to present customer satisfaction and
quantitative concept testing data. The key requirement is to display the rated scale clearly,
either by mean scores or the percentage rating at a particular level.
It is also possible to compare the ratings of several groups of respondents on the one chart:
for example, when looking at the attractiveness of a new concept, the reactions of men and
women can be plotted against each other for comparison.
A cautionary note, though: charts tend to look messy and cluttered if too many bars are
plotted side by side, and this loses the power of the chart and makes it difficult to see what
is going on.
The vertical chart is most commonly used where a measure of size or volume is needed,
for example in market sizing. Charts can be split to display the components or divisions
and trends within a group, for example, web portal usage. See illustration 02
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Illustration 02 - Web portal usage
Ne tscape
Yahoo
BBC
Gee ves
Blue Mountain
Passion up
MSN
CNN
O thers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2.5 Gantt Charts
a) Constructing Gantt Charts
•
Using Excel to Make Gantt Charts
Gantt charts made with Excel are easy to update and maintain. Here's how to do it.
On a piece of scrap paper, make a list of tasks and assign each task tentative start and stop
dates (or durations) and the people responsible for the task. Also list important milestones
and their dates. If you have more than 15 or 20 tasks, split your project into main tasks and
subtasks, then make an overall Gantt chart for the main tasks and seperate Gantt charts for
the subtasks which make up each main task.
Decide what resolution to use in the timeline. For projects of three months or less, use
days, for longer projects use weeks or months, and for very short project use hours. For
these instructions, we will assume you have chosen a resolution of days.
Start the Excel. Under Page Setup, select landscape orientation, and then select the options
to center the chart horizontally and vertically on the page. Also under Page Setup, activate
the "fit to one page" button. (Note that if the text comes out too small, you may have to
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print your chart on two pages and paste together. Even better, adjust the resolution of your
date scale or drop less important tasks to make your chart fit comfortably on one page.)
Still under Page Setup, set header and footer to be blank. (It's better to write the title right
on the spreadsheet rather than use the header for the title. Finally, under Page Setup, turn
off the option to print gridlines.
Set up the cells. You can use the sample (found elsewhere on this web page) as a guide.
Use the border command to draw boxes around the appropriate cells. Enter your
scheduling data. To make the gray bars, which indicate length of task, select the
appropriate cells, then the fill command (one of the buttons near the top).
As the project progresses, fill in the gray bars with black to denote the fraction of a task
that is complete.
•
Situations of usage, examples
A Gantt chart is a graphical representation of the duration of tasks against the progression
of time. Gantt charts are basically used for following:
a
Gantt charts allow you to assess how long a project should take.
b Gantt charts lay out the order in which tasks need to be carried out.
c
Gantt charts help manage the dependencies between tasks.
d Gantt charts determine the resources needed. Useful tools for planning and scheduling
projects.
e
Gantt charts are useful tools when a project is under way.
f
Gantt charts monitor progress. You can immediately see what should have been
achieved at a point in time.
g Gantt charts allow you to see how remedial action may bring the project
back on course.
Gantt charts are a project-planning tool that can be used to represent the timing of tasks
required to complete a project. Because Gantt charts are simple to understand and easy to
construct, they are used by most project managers for all but the most complex projects.
In a Gantt chart, each task takes up one row. Dates run along the top in increments of days,
weeks or months, depending on the total length of the project. The expected time for each
task is represented by a horizontal bar whose left end marks the expected beginning of the
task and whose right end marks the expected completion date. Tasks may run sequentially,
in parallel or overlapping.
As the project progresses, the chart is updated by filling in the bars to a length proportional
to the fraction of work that has been accomplished on the task. This way, one can get a
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quick reading of project progress by drawing a vertical line through the chart at the current
date. Completed tasks lie to the left of the line and are completely filled in. Current tasks
cross the line and are behind schedule if their filled-in section is to the left of the line and
ahead of schedule if the filled-in section stops to the right of the line. Future tasks lie
completely to the right of the line.
In constructing a Gantt chart, keep the tasks to a manageable number (no more than 15 or
20) so that the chart fits on a single page. More complex projects may require subordinate
charts which detail the timing of all the subtasks which make up one of the main tasks. For
team projects, it often helps to have an additional column containing numbers or initials
which identify who on the team is responsible for the task.
Often the project has important events, which you would like to appear on the project
timeline, but which are not tasks. For example, you may wish to highlight when a
prototype is complete or the date of a design review. You enter these on a Gantt chart as
"milestone" events and mark them with a special symbol, often an upside-down triangle.
2.6 Line Charts
A line graph is most useful in displaying data or information that changes continuously
over time. The example below shows the changes in the temperature over a week in
January. Notice that the title of the graph is "Average Daily Temperature for January 1-7
in degrees Fahrenheit".
To the left is a table that shows the date in one column and the corresponding temperature
in the second column. The line graph on the right shows the degrees of temperature going
up the vertical axis (up and down numbers on the left of the graph) and the days of the
week on the horizontal axis (going sideways from left to right). A line connects the points
for the temperature for each day - thus the graph is a line graph.
Illustration 03 – Line Charts
45
40
35
30
25
Temperature
20
15
10
5
0
1
2
3
4
5
6
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3. Histograms
3.1 Drawing a Histogram
A histogram is constructed from a frequency table. The intervals are shown on the X-axis
and the number of scores in each interval is represented by the height of a rectangle
located above the interval. A histogram of the response times from the dataset Target RT
is shown below.
a) Histogram
Illustration 04 – Histogram
The shapes of histograms will vary depending on the choice of the size of the intervals.
Dividing the scores into intervals and counting the number of scores in each interval
construct frequency table. The actual number of scores as well as the percentage of scores
in each interval is displayed. Cumulative frequencies are also usually displayed. A
histogram is defined as a bar graph that shows frequency data. The first step in making a
histogram is to collect data and sort it into categories. To continue, you must label the data
as the independent set or the dependent set. The characteristic you grouped the data by
would be the independent variable and the frequency of that set would be the dependent
variable.
3.2 Advantages and disadvantages of histogram
•
•
•
•
•
Simple way of illustrating the data
Comparison is easy
More clarity
Can combine the data
Complex data can be elaborated
3.3 Examples
•
•
•
•
Brand awareness
Population trend
Distribution frequency
Profit for different years
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4. Graphs
4.1 Factors to consider in drawing graphs
Graphs are used to present trends in figures over a given period. They perform the same
function as bar charts, though they are often used where the prediction of a trend is
required, for example, sales trends, population trends, and economic trends. From line
graphs, predictions can be made based on the trend.
Illustration 05 – Vertical bar chart showing sales of carpet designs
160%
140%
120%
100%
Geometric
80%
Flowered
60%
Plain
40%
20%
Year 5
Year 4
Year 3
Year 2
Year 1
0%
Illustration 06 – Line graph showing trends in claiming to react and behavior
1.4
Index to
Average
1.3
Behavior
1.2
Claims
1.1
1
0.9
0.8
0.7
<35
35-44
45-54
55-64
65+
Age
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4.2 Drawing a Graph with Data
Flow diagrams are a simple and effective means of presenting organizational data. This
data can relate to anything from how the market is structured to how an organization
operates, to how an individual makes decisions. The key issue for the development of a
flow chart is the structure of a process.
These charts need to have an input and a follow through. They are most commonly used to
present supply chain data. Diagrams should be labeled clearly and the stages and
relationships should be easy to follow, however complex the structure of the data
presented is. Rather like a maze, the reader should be able to start at one point and follow
it through to the end, no matter how many diversions
4.3 Maximum and Minimum Value of Graph
Market research reporting has changed over the years. The traditional 10,000 to 15,000
words written report is fast disappearing as many clients opt for content-heavy PowerPoint
presentations. Marketing researchers therefore write fewer and fewer reports and prepare
more and more presentations.
Writing reports is no longer the arduous task it used to be; word processing has changed
the face of document preparation. Amendments, changes in structure, editing and grammar
checking are all now ongoing tasks for the report writer.
Similarly, with presentations, PowerPoint has given the presenter the flexibility to prepare
slides and subsequently hide some of the more detailed data-laden slides which are not
required for the actual presentation. This feature gives clients the flexibility to use the
prepared slides at a later date for any presentations they may be required to make within
their own workplace.
Not only do the findings (in whatever form they are presented) leave documentary
evidence of the study, they also leave a lasting impression of the project and the company
responsible for conducting the study. Few clients will delve further into the data, therefore
the direction and actions taken by the client will usually arise out of the evidence
presented.
5. Ogives
Often in your studies, or working in a business organisation, you may need to answer
questions such as: 'How many fewer people pay tax on their incomes today than twenty
years ago?' or 'How much of our factory's machine downtime lasts longer than 30
minutes?' If you are using a frequency distribution or a histogram, you would have to do
some calculations to get to the answer. But if you were able to draw an ogive or
cumulative frequency curve for your data, you could read off the answers straight away.
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An ogive is drawn with the cumulative frequency total plotted against the upper limit of
the relevant interval. This kind of diagram allows you to read off numbers below (or less
than) a specified value. It's no surprise then that it is sometimes called a 'less-than ogive'
6. Lorenz Curves
6.1 How to Construct a Lorenz curve
The Lorenz curve was developed by Max O. Lorenz in 1905 as a graphical representation
of income distribution. It portrays observed income distributions and compares this to a
state of perfect income equality. It can also be used to measure distribution of assets. Some
doctrines (e.g. Socialism) consider it to be a graphical representation of social inequality
as well as income inequality.
In discussions of personal income, we frequently make statements such as, "the bottom
twenty percent of all households have ten percent of the total income". The Lorenz curve
is based on such statements; every point on the curve represents one such statement.
The Lorenz curve is a graph that shows, for the bottom x% of households, the percentage
y% of the total income which they have. The percentage of households is plotted on the xaxis, the percentage of income on the y-axis.
A perfectly equal income distribution in a society would be one in which every person has
the same income. In this case, the bottom N% of society would always have N% of the
income. Thus a perfectly equal distribution can be depicted by the straight line y = x; we
call this line the line of perfect equality.
6.2 How to Interepret a Lorenz Curve
A perfectly inequal distribution, by contrast, would be one in which one person has all the
income and everyone else has none. In that case, the curve would be at y = 0 for all x <
100, and y = 100 when x = 100.
We call this curve the line of perfect inequality. Note that providing that incomes (or
whatever else is being measured) cannot be negative, it is impossible for the Lorenz curve
to rise above the line of perfect equality, or sink below the line of perfect inequality. The
curve must be increasing and convex to the y axis.
The Lorenz curve is used to calculate the Gini coefficient, which is the area between the
line of perfect equality and the Lorenz curve, as a percentage of the area between the line
of perfect equality and the line of perfect inequality.
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Illustration 07 – Lorenz Curve
7. Z Charts
The Z Chart is like a line graph but it takes a shape of “Z”. The three curves that make up
any Z chart are:
• Raw data
• Cumulative raw data
• Moving average of the data
Take a look at the chart below and it should be obvious why Z charts have that name.
Written and Oral Presentation of Research Findings
8. Preparing Research Reports
•
•
•
•
Know your audience.
Get the structure right.
Pay attention to detail with painstaking checking and editing
Make it look good.
8.1 Focus on the Audience
Reports are written for people to read, digest, and develop action plans for the future.
Targeting the audience for the research has its difficulties. Audiences are often varied and
their needs can differ greatly. Typical audiences for research reports consist of the market
research managers and other managers from areas such as business development, marketing and sales. Almost certainly there will be interested parties at director level. A
researcher needs to balance the needs of these groups within the report.
Market research managers want the report to answer the research brief and give
recommendations for action, but they also want considerable detail on the research
findings (that is, the presentation of the data, sample breakdown, clearly labeled charts and
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so on). Other managers are more concerned with clarity and structure. They want reports
that they can quickly and easily assimilate, and they place more emphasis on the outcomes
of the findings - what action will be taken. These diverse interests make it especially
important that there is close communication with the client to find out at what level to
pitch the findings. It is usually at the most senior level.
Most failings in reporting are caused by the absence of structure, fuzzy findings and a lack
of attention to detail. Audiences are distracted from paying attention to the valuable
content by inadequate signposting, bad grammar, a poor writing style and mistakes in
punctuation and spelling.
8.2 Focus on the Objective
The key to good market research reporting is structure. Structure is apparent throughout
the research process: structure in the formation of the research aims and objectives,
structure in the research design and structure in the data collection process. It is this
structure that makes the market research study a systematic enquiry and not simply anecdotal feedback. Without structure, the mass of data can be overwhelming and serve to
confuse rather than assist business decision making.
The report cannot be prepared without working out the structure first. Sometimes the
structure of the report or presentation is clear from the outset, although in most cases the
structure is worked out as the data is analyzed and the storyline unfolds. This can be an
intimidating time for the researcher, but once the structure has been established, either in
the form of chapters in a written report or in the sections of a presentation, the task is
much easier.
There are two starting points for getting a structure in a report. The first is the proposal
that lays out which subjects should be covered and the second is the questionnaire. The
data analysis arising from the desk research, the qualitative research, and the quantitative
research is an obvious place to start. Tables and charts are assembled for each part of the
study, and if they are in PowerPoint they can easily be regrouped to form partitions that fit
with the outcomes. In this way, we start with a procedural approach and move on to a
more analytical approach.
The main headings and the subheadings will come out of the knowledge that has been
built up on the subject. The researcher will then be in a position to start writing text for
either the slides or the narrative report. However, the structure should not be considered as
set in stone, and it is important that the researcher keeps an open mind. 'Cut and paste'
makes changing the structure very easy. The very act of writing or running through a
presentation serves to focus the mind, and better structures may become apparent.
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A report structure must have a beginning, middle and an end. The beginning consists of
the introduction to the market and background to the study, the middle is usually the bulk
of the report - the detail of the findings - and the end brings the data together to form
conclusions and recommendations.
The typical 'procedural' structure of a report or a presentation for a customer satisfaction
study follows roughly the line of questioning in the questionnaire: that is, an introduction,
how suppliers are chosen, which suppliers are used, how the supplier is rated for
satisfaction and importance on various issues such as product, price, availability and
delivery, customer service and support, followed by the conclusion and recommendations.
There is nothing inherently wrong with this structure, but it may be better to regroup the
data into a story about loyalty and how it can be improved.
8.3 Using terminology which matches the vocabulary of the reader
A writing style for narrative reports and presentations needs to be developed which
communicates the data quickly and clearly. The report must have impact so that a busy
reader can quickly 'gut it' for content. A few rules can be observed in relation to style and
layout of a report:
a Make frequent use of headings to partition the subjects of the report.
b Use bullets and short paragraphs to communicate ideas quickly.
c
d
e
f
Avoid the heavy use of text and use graphics and diagrams wherever possible.
Clearly label all diagrams with headings (as well as sources of data).
Avoid complicated words, jargon and slang.
Avoid long ambiguous sentences making too many points.
After the report has been completed, the author checks the report for structure, readability
and content. It may be that an alternative structure works better for the report, and this can
be played around with to enhance the flow.
Second, the detail of the data has to be checked carefully for accuracy. Is the data correct?
Does the data make sense? Does it need to be included? This stage requires a ruthless
hand, and any superfluous data that does not support the conclusions and
recommendations can be edited out. Remember the requirements of a report; clearly stated
and easy to read.
8.4 Avoid Errors in Grammar and Spelling
The third check is for spelling, grammar, labeling of charts, indexing and readability. This
is best carried out initially by the writer and then again by someone other than the writer.
Corrections are made and the report is ready for printing and binding.
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8.5 Developing an Interesting Writing Style
The same rules apply for presentations, although there will be less text. The structure, data
consistency, spelling and grammar require the same checks as the written report. Where
the client has opted for a presentation rather than a written report, the presentation will
tend to be very content-heavy.
In these cases, the researcher needs to check that the presentation, when used as a standalone document, tells the complete story even though there is no long narrative. It has to
be prepared as if for someone who will pick it up in a year's time, knowing little about the
subject will be able quickly to absorb the findings from the slide deck.
8.6 Use of Visual Aids
The report or presentation document is what the researcher leaves behind. This will be a
lasting impression by which the research will be judged. In addition to the editing that we
have discussed in the previous section, the report must be 'window dressed' to look good.
In the main, this means finding a house style and being consistent in applying it.
8.7 Some Hints when Window Dressing the Report.
•
Keep it simple (fussy borders and colorful templates detract).
•
Do not use colorful backgrounds (they will not print clearly on black and white lasers
and copiers).
Have a title page that shows what the report is about, when it was presented, who
wrote it, and contact details.
•
•
•
•
Use page numbers.
Label all slides and charts.
Be consistent in all aspects of the layout - margins, fonts, heading styles, table
labeling.
•
•
•
•
Do not try to cram too much on to one page.
If in doubt, leave it out.
Learn from the designers - make effective use of white space.
Use a report cover and binding that will stand the test of time.
8.8 Presenting Qualitative Data
Qualitative reports need to tell a story, identify a process and make sense of perceptions
and experiences. To achieve this, the researcher has to reconstruct the data through the
analysis to locate the findings in a clear framework.
Most qualitative studies start with a very loose framework which has been developed at
the proposal stage. At the time of reporting, this framework will have to be tightened.
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Qualitative data can be presented through analytical and How diagrams which
communicate complex issues (such as how buying decisions are made or how a process
works), or they can be located in the well-known established marketing frameworks such
as the four P’s, Ansoff's matrix and so on. Verbatim comments can add emphasis to a
point as they are the words of the market place, not the researcher.
Quotes that are used should be carefully selected to typify the viewpoint under discussion,
though this does not necessarily mean they are representative of the general view. The
report may need to highlight the unique and peculiar as well as the general perspective.
However, quotes should not directly identify any individual respondent and should respect
the rights of individuals to anonymity.
Summary points when presenting qualitative data
•
•
•
Data should be located in a clear framework.
Frameworks can be presented diagrammatically as well as in text. w
Direct quotes, when used, should be indicative of a research finding and located close
to that discussion in a presentation or report.
•
•
Quotes should be grammatically 'doctored' to make sense.
They should respect the confidentiality of the respondent.
Illustration 08 – Using verbatim comments to communicate a point
“…once I got a bill for
Rs.40, 000 for 3 months, I
don’t know how I was
charged”
“…I was charged while I
was not even connected”
“…like abroad, they
should charge a fixed
amount for unlimited
internet usage, without
charging for internet and
phone separately”
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Illustration 09 - The Sample Slide of Qualitative Research Presentation
Price
Positives
Negati ves
Cheaper than private ISPs during daytime
Method of charging is not transparent
“…I believe BT rates are really good, cheaper
than other service providers”
“…once I got a huge bill, I don’t know how I
was charged”
“…I was charged while I was not even using ”
Perception of low price (among current users and
those who haven’t used other ISPs)
“…other ISPs such as AOL and Netscape also
have to go through BT lines, therefore, it’s
cheaper to go straight to BT”
Internet charges + phone charges
“… they should charge a fix ed amount for
unlimited internet usage, without charging for
internet and phone separately”
Packages are not customized
“…I have unlimited time package, which I pay a
lot, but I don’t use that many hours of surfing”
Billing has to be vigilantly monitored. BT does not seems to be capitalizing on the positive
attributes of a ‘perceived’ low price because their charges are not transparent. This is one of
the drivers behind lapsed residential customers.
‡ Activity
List the importance of verbatim in qualitative presentation
‡ Activity
Please list the different ways of quantitative data presentation, and distinguish each other
based on their importance.
8.9 Organisation of the Report
Reporting research findings can take following structure:
Section A
Desk research
Section B
Qualitative
findings
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Section C
Quantitative
findings
205
The procedural approach to structure
Chapter 1
Market size
(From Section A)
Chapter 2
Market structure
(From Section A)
Chapter 3
Buying behavior
(From Section B+C)
Chapter 4
Trends in the market
(From Section A+B+C)
Title page
• Heading of the research
• Date
• Researcher or institution details
Executive summary
• Briefly write all about the research
• It should give a clear idea of research and findings
Table of contents
• Indicate the chapters and contents in a table format
• Page numbers have to be indicated
• Make it easy to find out the chapters or topics
Introduction
• Briefly describe the research
• This will give a clear idea about the study
Methodology and Limitations
• Methodology used for this research study
• Reasons and rational for choosing this methodology
• Limitations of this methodology
Findings
• Details of findings from research
• Tables and graphs etc.
• Reasons of findings
Recommendations
• Opportunities and threats for current and new business
• Areas to be improve
Appendix
• Details of books and other materials referred
• Name of the author and date of publications
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This is a structure built around the problem and the actions required. It focuses on the
interpretation of the data and the translation to loyalty. The changed structure of the report
addresses the rationale for commissioning the research in the first place. It hits at the heart
of what it means for the business and therefore, will have more impact in driving actions,
rather than gathering dust on the marketing manager's shelf.
9. Preparing for Oral Presentations
9.1 Use of Visual Aid
Presentation of a market research study will normally last up to two hours. A presentation
is almost always delivered using PowerPoint slides, which may be supported by other
materials such as video and audio clips. Audiences up to 10 are the norm, with those who
have a key interest in the study in attendance, while others may be sitting on the sidelines.
As with reports, knowledge of the roles and responsibilities of those attending the
presentation beforehand can help the researcher to tailor the presentation to the different
needs of the audience.
What makes a good presentation is a good presenter. However, in market research, the
slides play a more important role than in other presentations as they are the source of the
data.
The presentation itself creates the opportunity to make a good impression, and the
polishing of the researcher's skills in this area is essential. Skills of presenters are
individual and dependent, to a large extent, on the personality of the presenter. However,
there are some rules which can be observed to smooth the process.
Before a presentation, preparation is the key. The last thing people want to see at a
presentation is a presenter reading aloud from the slides - they can do those themselves.
They want to hear what is behind the slides.
They want to hear the presenter talk around the slides, expand on the bullet points, pull out
the important data, draw their attention to the important words in a verbatim quote and to
make links with previous slides (or even future slides, if appropriate). This makes a lively
presentation and leaves the audience with a feeling of added value.
The presenter can take steps to ensure they will be able to do this. First, it is important to
be immersed in the data; to know it inside out. Second, the researcher should know every
chart and what is going to be said when that chart comes up.
Finally the presentation must be rehearsed, even if this is to oneself in front of the
computer. For the novice presenter, it is even better if this rehearsal is done out loud and,
if possible, in front of a tame audience.
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Illustration 10 - Three classifications of frameworks for drawing conclusions and
making recommendations
of Purpose of the section
Section
conclusions
Situation analysis
Marketing
business goals
Examples of frameworks
To summarize the key Life cycle, Ansoff grid, SWOT,
issues and bring them decision making models
together
and To show what can be Porter’s
generic
strategies,
achieved
adoption models for new products,
hierarchical
communication
models
(eg. AIDA)
Recommendations
To show what action is Four Ps, XY grids, flow models
required
process
9.2 Avoid Information Overload
•
•
•
•
Know the data inside out.
Know the presentation structure inside out.
Memorize the slides and the background to the points being made on the slides.
Practice the presentation and what you will say on the day.
On the day, different skills kick in. These are about the performance. It is perfectly normal
to feel a bit anxious before a presentation. The presenter rarely knows everyone in the
audience and it is usual to commence with a round of introductions. In the first five
minutes presenters will need to control their nerves as well as memorizing the names and
responsibilities of all attendees - a tricky task for the novice.
Controlling the nerves is one of the most important tasks. The nervous presenter does not
inspire confidence, and the audience needs to be put at ease about what to expect. Your
heart might be beating faster than it normally does, your breathing may be fast and
shallow and your hands sweaty. The voice moves into tremolo. You fidget and adopt
mannerisms that everyone else can notice except you.
You repeat words and phrases again and again. Your focus is on yourself and you lose
concentration on the presentation. There are some techniques that can be used to control
this, and it is worth looking into them if you suffer from nerves. Confidence can also be
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built by taking a course on presentation skills. However, more than anything, practice at
presentations makes perfect. The more you do, the better you become.
The pace of the presentation in relation to the timing must be borne in mind throughout. It
is very easy to become submerged in questions pertaining to the minute details of the data
slides and then skip over the all-important conclusions and recommendations. It is the
responsibility of the presenter, not that of the audience, to keep an eye on the timing.
‡ Activity
You have been asked to do a presentation on your market research findings to the clients.
Please list the steps you will take to make the presentation a success.
9.3 Answering Questions and Gaining Confidence on the Findings
•
•
•
•
•
•
•
•
•
•
•
•
•
♪
Dress for the occasion.
Control your nerves in a way that works for you. Settle yourself and the audience.
Write down their names.
Prepare your introduction and set the scene on timing and content.
Control any unwanted body movements and habits such as swaying, pacing,
jangling keys.
Do not use closed-up body language such as crossed arms or hand over the mouth.
Sweep the room constantly to make eye contact with everyone in the audience.
Be aware of any phrases or words you are using repeatedly.
Speak clearly and use intonation in your voice.
Smile and use encouraging gestures to the audience, especially if you want their
participation.
Use people's names (but make sure they are correct!).
Address concerns and questions of the members in the audience honestly.
Pace yourself and the presentation - keep your eye on the clock. Leave enough
time for the conclusions and recommendations.
Before you start, work out some appropriate words for concluding the presentation.
My Short Notes
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