Marketing Research MKT514J1

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Marketing ResearchMKT514J1 J2Lecture
8Observation Research

• Christine Wightman
• School of Management

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Objectives

• To outline and describe the nature of observation
• To understand the benefits and limitations of
  observation studies
• To describe the main types of machine and human
  observation studies and apply these to marketing
  problems
• To understand the purpose, benefits and
  limitations of consumer panels, retail audits and
  mystery shopping
• To discuss the trend towards ethnographic studies
  in market research

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Observation Research Defined
Systematic process of recording behavioural
patterns of people, objects and occurrences
without questioning or communicating. Watching
for outcomes.
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Observation

• Watching for outcomes
• Outcome must be overt
• Motivation and attitudes unobservable
• Outcome occurs frequently
• Long waits boring and time consuming
• Outcome happens quickly
• Long processes difficult expensive

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Approaches to Observation Research

• natural vs contrived
• disguised vs undisguised
• structured vs unstructured
• human vs mechanical (machine)
• direct or indirect

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Observation Research Advantages

• do rather than say
• actual not self reporting behaviour
• doesnt rely on memory or willingness
• real-time research - at time of occurrence
• usually quicker eg scanners
• avoids bias
• good for observing children

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Observation Research Disadvantages

• cannot infer what caused behaviour
• public behaviour only
• limited future projection
• time consuming eg infrequent actions

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A Classification of Observation Methods
Observation Methods
Personal Observation
Audit
Mechanical Observation
Ethnography
mystery shopping
retail audit
traffic count
TV viewing
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Mechanical Observation

• traffic counters
• physiological measurement
• people meter
• scanner-based research

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Human Observation

• mystery shopper
• one-way mirror observation
• shopper patterns
• content analysis
• humanistic enquiry
• audit
• trace analysis

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A Comparison of Observation Methods
Personal Observation
Mechanical Observation
Audit
Ethnography
Criteria
Degree of structure
low
high
high
low
Degree of disguise
medium
low
high
low
Natural setting
high
high
low-high
high
Observation bias
high
low
low
high
Analysis bias
high
low
low
high
Remarks
flexible
expensive
intrusive
expensive
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Longitudinal and Cross-Sectional Designs
CROSS SECTIONAL
CRITERIA
LONGITUDINAL
Can detect change
No
Yes
Volume of data
Moderate
Very Large
Accuracy
Moderate
Usually high
Representative Sample
Yes
No
Response bias
Yes
No
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Syndicated Research Services
Market research suppliers who collect data on a
regular basis with standardised procedures. The
data are sold to different clients thus reducing
the cost to any one client. Examples
AC Nielsen Taylor Nelson AGB Arbitron
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Features of Continuous Consumer Panels

• Continuous (permanent) sample
• Large samples (5000 households)
• Factual information on purchases
• Opinions motives NOT recorded
• Data captured by postal diary or scanner
• Panel maintenance is the key issue.

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Consumer Panel Information

• Market size by product category brand
• Penetration ( households buying )
• Shares of trade by retail outlet type
• Profile of buyers ( age, SEG )
• Profile of heavy, medium light buyers
• Responsiveness to marketing mix changes
• Brand substitution and cannibalism
• Family brand buying

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Consumer Panel Uses

• Market overview and trend analysis
• Demographic analysis
• Loyalty analysis
• Brand shifting analysis
• Trial and repeat analysis

Source AC Nielsen Company, 1992
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Consumer Panel Issues

• Recruitment and maintenance problems
• Effect of rewards on behaviour
• Respondent conditioning
• Accuracy or pick-up of purchases
• Burden on respondents ( heavy buyers )
• Data overload for buyers
• How data are employed by buyers

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Retail Audits

• Retail sales by product category
• Retail shares of trade
• Sources of delivery to retailer
• Stock cover at rate of sale
• Shavings (display material)
• Facings (packs facing shopper)
• Prices, promotions

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Uses of Retail Audit Data

• Measure sales relative to competitors
• Measure sell-in to the retailer
• Evaluate brands in-store position
• Analyse and correct distribution problems
• Evaluate pricing and promotion strategies
• Track advertising effects

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Uses of Retail Audit Data

• Monitor competitors marketing efforts
• Analyse effect of marketing variables in store
• Analyse sales and marketing efforts by territory
• Track retail build for new or competitive
  products
• Sufficient penetration levels prior to
  advertising

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Retail Audit Issues

• Retail sales not consumer purchases
• Key outlets may not permit access
• Outlets may not scan purchases
• Outlet type not named retailer
• Data overload for buyers
• How data employed by buyers

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Mystery Shopping

• People employed to pose as consumers
• Shop at own and/or competitors outlets
• May simply compare prices, displays etc.
• More likely to assess service interactions
• Often employed to motivate staff.

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Ethnography

• Limitations of structured mechanical
  observation
• Move towards human unstructured observation
• Watching and communicating with respondents in
• natural setting
• Building descriptions of consumer culture
• Learning more about what is usually taken for
  granted