Market research is coming out of the closet. Direct marketing firms have emerged to service the…

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Market research is coming out of the closet. Direct marketing firms have emerged to service the new phenomenon of relationship marketing – lifestyle databases underpinning the mailings of the firms to provide a direct interface between research and practice. Direct marketing company databases hold a mass of fine detail on customers’ purchasing habits. Advances in computer technology have given firms the ability to combine databases to give a fuller picture of customer purchasing habits without ever having to approach a respondent with a questionnaire – the information is directly available. Researchers no longer need to reassure respondents about anonymity, either; instead they offer rewards to consumers in exchange for giving personal information to the researchers. Data mining is the new catchword for market researchers. Using what used to be considered as secondary sources of information, the researchers analyse direct marketing company records to build up an in-depth picture of the lifestyles of millions of consumers. New ways of segmenting markets based on lifestyles and attitudes are being discovered and ways of translating market research into market action are working more quickly and effectively. Because of the speed of analysing such research, market researchers are able to offer high-quality tailored research packages to small firms which previously could not have afforded professional market research. Another area in which market research is being revolutionised is through the Internet. On one Web-based project, 160 out of 400 respondents replied to an email survey within three hours – formerly, this many responses would have taken days to obtain or even weeks using normal postal services. An additional advantage is that such surveys cost around one-third the price of telephone surveys. Currently most of this research is being conducted in the United States, where more people are connected to the Net than is the case in Europe, but eventually Web-based research is expected to outperform all other methods of conducting surveys. The relatively new activity of category management (CM) has also thrown up new challenges for market researchers. The Institute of Grocery Distribution defines CM as: ‘The strategic management of product groups through trade partnerships which aim to maximise sales and profits by satisfying consumer needs.’ In practice, what this means is that manufacturers and retailers need to cooperate in managing certain product categories, rather than concentrating solely on brands. For example, Van den Bergh Foods (manufacturers of margarine and other fats) saw a need to establish retailer-specific market research programmes to develop an understanding of consumers’ motivations to buy margarine. The research programme involved 1200 interviews conducted as customers left the stores, 1300 interviews at the margarine display fixtures in the stores, 200 depth interviews, 76 accompanied shopping trips and 36 hours of video observation. The research was carried out in seven major retail chains. Marked differences between the different retailers were found, so Van den Bergh was able to conclude that marketing, merchandising and even pricing might need to be varied between retailers to take account of differences in consumer motivation between store chains. Ultimately, it seems that such research would be more efficiently carried out if the retailers themselves participated in the costs and shared the benefits – this would, of course, require agreements between the retailers to share information. Such agreements do not present a problem if an independent market research company, of course, carries out the work but the result for the market researchers is that they may find themselves forced into a tight brief that allows little room for creativity. Increasingly, the business community is becoming more information oriented. In a constantly changing world, the need for up-to-date and accurate information is more important than ever before, and market researchers are using (and seeking) new tools for collecting and analysing that information.


1. What might be the limitations of using Web-based research in the UK?

2. What are the advantages and disadvantages of research for category management purposes?

3. How might the disadvantages of category management research be reduced?

4. What ethical problems might arise from the combination of direct mail databases to generate detailed information about consumers?

5. How might creative approaches to Web research increase response rates?




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