Leornlng ObJectlves
Standardized
Marketing
Information
Services
The many standardizedmarkdtingintormation servicesthat are available
are important sources of secondary
data for the marketingresearcher.These
commercialservicesare more expensive
than using publishedinformation,but they
are usuallymuch less expensivethan collectingprimarydata.Suppliersof thesedata
sell them to multiplecompanies,allowing
the costsof collecting,editing,coding,and
1 . List three common uses of the information
supplied by standardizedmarketinginformation services.
2 . Define geodemography.
3 . Describethe operationof a diary panel.
4. Describethe oDerationof store audits.
5 . Define UPC.
6 . Define si ng le-source measurement.
7 . Discussthe purposeand operationof
people meters.
analyzingthem to be shared.Becausemultiple companiesmustbe ableto usethe data,
however.the data to be collected-and how
they are to be collected-must be standardized.As a result,suchdatamay not always
be a perfectfit for a company.This is the
primarydisadvantage
marof standardized
keting information.This chapterdescribes
someofthe maintypesandsourcesofstandardizedmarketinginformationservicedata.
ChaDter
8
Marketinq
Information
Standardized
Services
PROFILING
CUSTOMERS
161
Learning Objective
l . L i s tt h r e e c o m m o n
/\
Market segrnentationis common among businessesseekingto inprove their marketing \.,
uses of the
efforts. Effective segmentadondemandsthat firms group tieir customdrsinto relatively
information
homogeneous groups. That enablesthem to tailor marketing programs to the individs u p p l i e db y
standardized
ual groups, thereby making the programs more effective. A common segmentationbase
marketing
for firms selling industrial goods takesinto account the industrv designation or designainformation
tions of its customers, most typically by means of the North American Indusnl'
servrces.
ClassificationSystem(lrtrAICS)codes.The NAICS codesare a systemdevelopedby the
U.S. Bureau of the Census for organizing the reporting of businessinformation, such
as employment, value added in manul-acturing, capital expenditurcs, and total sales.
These codes are used by federal statistical agenciesas a replacement of the Standard
Industrial Classification(SIC) system.ln both systems,major industry sectorsare given
a two-digit code number, and the q.pes ofbusinessesmaking up dre industry are given
additional digits. Exhibit 8.1 demonstrates how a U.S. industry is coded using the
NAICS svstem.
One of the commercial servicesthat is especially popular among industrial goods
Learning ObJe.tlve
and service suppliers is the Dun & Bradstreet International Business Locator, an
index that provides basic data on over 28 million public and private companies worldwide. These records allow salesmanagement to consffuct salesprospect files, define
salesterritories and measure territory potentials, and isolate potential new customers
with particular characteristics.They allow advertising management to select potential
customers by size and location; to analyze and select t]-Ie media to reach them; to
build, maintain, and structure current mailing lists; to generate sales leads qualified
by size, Iocation, and quality; and to locate new markets for testing. Finally, they
allow marketing research professionals to assessmarket potential by territory, to
measure narket penetration in terms of numbers of prospects and numbers of customers, and to r.nakecomparative analysesof overall performance by districts and
salesterritories and in individual industries.
Firms selling consumer goods don't normally target individual customers, because
no single customer is likely to buy much ofany product or service.Rather, firms need to
target groups of customers.Their abiliq' to do this has increasedsubstantiallvsince the
1970 census,which was the first elecffonic census.Since that time, the Census Bureau
has made available computer tapes of the facts that have been gathered and, more
recendy, CD and online formats, which make the data easily usable. Havhg the data
geodemographr.
availablein electronic fomr allows them to be analvzedby arbitrarv geographic bouldaThe availabllity
o'fdemc
ries, and an entire industry has developed to take advantage of this capabiliq'. The
graphic,
consumerbehavior,
geodcmoanplrers, as they are tlpically called, combine census data with their own and llestyledataby arbtfary
survey data or data that they gather ftom administrative records such as motor vehicle geograph
c boundar
esthat
quitesmall.
aretypically
registrations or credit transactions,to produce customizedproducts fbr their clients.
a
Exhibit
a.l
''
lozl,""-.n,"rnr.
NAICS Hierarchy and Codes
Tifle
Manufacturing
Subsector
lndustryGroup
ndustry
U.S.lndustry
334
3346
33461
334612
ProductManufacturing
Computerand Etectronic
ng and Reproducing
l\lanufactur
of Magnetlcand OpticalMedia
Manufacturing
and Reproduction
of Magneticand OpticalMedia
PrerecordedCompactDisc (exceptSoftware),Tape,and Becord
Reprod!clng
ProductClass 3346120 Beproducton of RecordlngMedia
Source: Downloaded frorn http://www.census.gov/prod/eco2l02nLrmlisUintro.pdf,
August 5, 2008.
162
Part 3
DataCollection
Methods
ETHICAL
DILEMMA8.1
Mdp5.1.c..is rheTdrfeti-grereaJ(\d v
sionof a argecreditcardcompany.
The
division
specializes
ln the preparation
of
geodemographic
maps.
To prepare
these
'napsir conb 1e. ir roJ"nal
01 I or cus
tomerscreditcardtransactions
withthe
demographic
datait colectedwhenthe
customers
appiedfor a creditcafd.Then,
with itsproflles
of who is purchasing
what,
ln combination
withcensus
dataon smarl
geographic
areas,
Maps,Inc.,ls abieto developmapsthatdisplay
by zipcodearea
the potentialrnarketfor varioustypesof
products
andservices.
Thecornpany
in
turnsellsthisinformation
to various
mar"
facturers,
wholesalers,
and retailers
after
customizing
the datato the geographic
boundaries
specifled
by the c ient.
.
'
'
ls it ethicalto usecreditcardtransactioninformation
in thisway?
Do the creditcardusershavea r ght
to knowthlsre5earch
is being
conducted?
Shoud t be necessary
for Maps,
lnc.,to get signedreeases
from
individual
cardholders
beforeincor
porating
the individua
s'purchase
transactions
ln the database?
What
mighthappento the qualityof the
datawiththe requirement
of signed
releaSeS?
Mapping software, often calied a geographic information systerr(GIS), combines various kinds of demographic data u,'ith geographic
information on maps. The user can draw a map showing average
income levels of a county and then zoom closer to look at particular
towns in more detail. Most GIS programs on the market can shov
inforn.ntion as detailed as a single block; some programs can sholi.
individual buildings. Seeing the information on a map can be more
useful than merely reading tables of numbers.
Chase Manhanan Bank used GIS analysisto deterrnine d-ratonly
tq.o-thirds of one branch's customers lived in its trade area. $'ith the
other customers working in the area but living elser-here. Further
analysis indicated that many of the customers who lived out of the
area worked at nearby medical centers and tiat, as a group, the
rernote custo[rers might represent more than a half billion dollars
in potential deposits. Thev also discovered that a competing bank
was actually in a better location to atfact this potential business.
Based on the GIS analysis, Clase was able to identifi' oprions for
relocating the existing branch.l
GISs once required mainllame computers and were quite expensive, but today's applications are usually off-the-shelf programs that
can run on personal computers and can be verv inexpensive.Manv
GIS packages are now available, including Businessl,L{P (from
ESRI), GeoMedia flntergraph), Maptitude (Caliper Corporation),
Maplnfo (Pimey Bowes), and Maplinx (Lirxoft Solutions).
Another thing that geodernographersdo is regularly update the
census data through statistical extrapolation. The data can consequendy be used with much more confidence during the years
between the censuses.Another value-added feature that has had a
great deal to do with the successof the industrv has been the analysis performed on the census data. Firms supplying geodemographic
information have cluster-analyzedtle census-produceddata to produce "homogeneous groups" that describe the American population.
Fizure 8.1 shovs the results of some of these data.
For example,Nielsen Claritas(the first firm to do this and still one of the leaders
in the industrvasa memberof the NielsenCompany)useshundredsof demographic
variablesin its PRIZM (PotentialRatingsfor Zip Markets) svstemwhen classif.ing
residentialneighborhoods.This systembreaksdorm over 250,000neighborhood
areasin the United Statesinto 66 qpes basedon consumerbehaviorand lifestyle.
Each of the rypeshas a name that tleoretically describesthe gpe of peopleliving
there, such as Up*'ard Bound, Boomtown Singles,Money and Brains, and Gray
Power.
MEASURING
PRODUff
SALEs
ANDMARKET
SHARE
Firms need to have an accurate assessmentof how they are doing if thev are to succeed in an increasingly competitive environment. One v.ay to accomplish this is to
review internal records and determine how much they have sold into rhe channel of
distribution (that is, wholesalers, distributors, retailers, and the like). Kno$ing how
much product has been shipped to wholesalers and retailers doesn't providc a rimell
understanding of how the product is doing with consumers, however. In addition,
simply totaling salesinvoices provides no information at all about how a company,s
product is doing relative to products from other companies. Historically, there are
severalways of measuring salesto final consumers, including the use of diary panels
of households and the measurementofsales at the store level.
Chapter8
MarketinglnformationServices
Standardized
2007MedianHouseholdIncomoby CensusTract
9200SpalnRdNE
Albuqu6rqus,
NM87111
3!mplr
JunE8, 2007
Latitudo: 35.13876:l
-106.539919
Lo.rgitude:
I
I
,l
I
I
I
I
I
i
lboulYosr lltt ..
2OO7 )rledlan Household Incomc
by Census Tract
i0 - t32,000
- J38,000
fl $32,0111
- f38,001 - #4,so0
1#',ni:':'lifr'
o
thb m.p ahow.20dt I.dhn xou..hold Incd||. by
g,n.lualL6l.
@
download6d on December 20, 2008.
Sourco: http://www.esri.com/softw6re/bao-us/pdfE/onlin6th6matic_map.pdf
153
164
Part 3
(Online) Diary Panels
Leanlng Obiective
^
L,,
3.
D e s c r i b et h e
operationof a diary
panel.
4.
Diary panelsare an important sourceof infomation about productspurchasedbl'
households.
Whether recordedon paperor reportedonline,the key feanrreof a dian'
group'of individualsor householdskeepstrack of purpanel is that a representative
chasesmadeor productsconsumedover a givenperiod of time. In this way, purchasto the largerpopulation.
ing and/or consumptionbehaviorcanbe extrapolated
The NPD Group track a number of food-relatedtrends in the United States.
For example,the National Eating Trends Q"IET) servicehas operateda household
diary panil since1980.Participantskeepa record of all food and drink consumedbrall householdmembersfor a period of two week. Participationis spreadacrossa
one-yearperiod, with about 50 householdsbeginning the recordingprocesseach
week, Duiing t}le two-weekperiod, respondentsare askedto record the narneand
brand of all iood and drink productsconsumedby all membersof the household.At
the end of each day, respondentsreport that day's food consumptionback to the
NPD Group's offices,where they are collectedand analyzed.The panel is demographically
balanced,reflectingU.S. CensusBureaustatistics.'
The NPD Group also offers resultsfrom a large online consumerpanel. The
panel offers accessto more than 3 million adults and teens who have agreedto
respondto surveysand to provide information on purchasingbehavior.Ongoing
rangingfiom autotrackingservicesare providedfor a varietyof product categories,
modveto fashionto toys.'
Store Audits
Leanlng Oblectlve
^
\J
Methods
DataCollection
Describethe
operationof store
audits,
Another way to assessproduct salesand market share is to work with retailers, ratier
than a panel of consumers, to get t}te data. In working with retailers, there are tu'o
basic approaches,store audits and scanners;each involves an actual physical count of
producii bei.tg sold. Scanners reflect the new way, store audits, the old. The vast
Meruncen's Focus
Although the fees for standardizedmarketing information servicesare lower tltan t}te costsof conducting customized marketing research, they can still represent a
significant financial investrnentfor your organization.
Therefore, it is important to carefully evaluatethe likely
usefulnessof any standardizedhformation before purchasingit. The stepsfor defining a marketingproblem
the relevanceof standarare as pertinent to assessing
dized marketing hformation services as they are to
designing a primary marketing researchstudy. A key distinction here, however,is that the provider of standardized information serviceswill not guide you through
the problem formulation process.Learning to navigate
the problemformulationstepsyourselfis one reasonthis
book shouldbe relevantto you asa manager.
Somesandardizedinformation servicesare available
on a subscriptionbasis.You may find yourself, therefore,
in situationswhere your organizationalreadypurchases
certaing?es of sandardizedmarketinginformation on
it is a good idea
an ongoingbasis.In suchcircumstances,
which
your organizathe
d,egree
to
audit
periodically
to
This
receiving.
it
is
information
actually
uses
the
tion
is
not
taking
how
your
organization
may
reveal
review
advantageof its resources,which may prompt you to
better utilize the standardized marketing information
you alreadyhave.The audit might alsoleadyou to conOnce again,if you
cludethe informationis urnecessary.
problems you are
marketing
have carefully defined the
to determine
good
position
facing, you will be ir a
informarketing
standardized
whether subscriptions to
continued
or
terminated.
mationservicesshouldbe
Chapter8
Standardized
[4arketingInformationservices
165
majority of consumer products in the United States are now tracked via scanner.
However, audits are still used in some U.S. stores and in stores in many intemational
markets.
Here's how a store audit works. The research firm sends field workers, called
auditors, to a select group of retail stores at fixed intervals. On each visit, the auditors
take a complete inventory of all products desigaated for the audit. The auditors also
note the merchandise moving into tle store by checking wholesale invoices, warehouse withdrawal records, and direct shipments from manufacturers. Sales to consumers are then determined by the following calculation:
Begindng inventory
1 Net purchases(fiom wholesalers and manufacturers)
- Ending inventory
- Sales
The store audit was pioneered by ACNielsen and served as the backbone of the
Nielsen Retail Index for many years. The method is still used to measure salesin situations where it nay not be possible to rely on scanner data, for whatever reason.
For example, most convenience stores do not scan products at the point of sale.
ACNielsen offers its Convenience Track service, assessingproduct salesthrough convenience stores in 30 local markets. Products audited include soft drinks, gum, candy,
tobacco products, and other products often sold through this channel. The company
takes the auditing records and generates information for each brand of each of the
productsaudired.This information is then availablefor purchase.{
Scanners
Learnlng Obtectlvc
Sincethe late 1970s,ACNielsenhas been replacingits Retail Index servicewith is
5. DefineuPc.
SCANTRACK service.The SCANTMCK serviceemergedfrom t}re revolutionary o
developmentin the grocery industry brought about by the installationof scanning
equipmentto read UniversalProduct Codes(UPCs). UniriersalProduct Codesare
l2-digit numbersimprintedon productsthernselves
or on tagsattachedto tie products.
In general,the first six digrs idendf' the manufacturer,and the next five a particular
productof the manufacturer,
be it a differentsize,variety,or flavor.SeeFigure8.2.
There is a unique l2-digit code for eachproduct.' As the bar code is read by a
fixed or handheldscanner,the scamer identifiesthe 12-digit number, Iooksup the scarul€r
price in the attachedcomputer,and immediatelyprins the descriptionand price of An electronicdevicethat
the item on tie cashregisterreceipt.At the sametirne, the computercan keeptrack automaticaly readsthe
UnlversaProductCode
of the movementof everyitem that is scanned.
imprintedon a product,
Scannersare now so pervasivethat the majorityof retail salesinformationtodayis
looksup the price n an
basedon scannerdata.Using either a sampleof storesto representa channelor a attachedcomputer,and
censusof all storesto representa retail organization,scannerdataare availableacross instantlyprintsthe descfipmultiple oudets,including grocery,massmerchant,drug, specialwarehouseclubs, tion and pr ce of the item
and selectedconveniencestores(though,as we noted above,store auditsare neces- on the cashreglsterreceipt.
sarywith many convenience
stores).Where scanningis available,weeklysales(units
sold at what price) are collectedfiom a retailer'ssystem.ACNielsentakesthesedata
and matchesthe UPC to a descriptionto make the information more usefirl (for
example,shareof category,full fat versuslow fat). In addition,other datasourcescan
be combinedwith this information
For example,causaldata are collectedto help explaintJre"causes"of changesin
sales.Causaldatainclude:
Displayinformation-stores are auditedand itemson displayare recorded.
Featureinformation-features are collectedand coded to identifi. items beins
advertised.
Price changes the systemidentifieschangesvia comparisons
to historicalprices.
166
Part 3
l'4ethods
DataCollection
Behindthe Bars:The Technologyof a Bar Code
Since the introduction of the Univer'salProduct Code (UPC) over 30 years ago,
the symbology has allowed supermarketsto control their inventory more efflciently,
automate the task of reorderingstock, provide a faster and more accuratecheckout
for customers,and gather information for accurateand immediate market analysis'
But when you get down to the bare bars, how exactly does the bar code work?
A UPC bar code symbol conslsts of patterns of black vertical bars with white
spacesand numbers at the bottom of the symbol Togetherthese bars make up the
symbology of the code. Beneaththese bars is a seriesof numbers called a standard,
The thlcknessof the bars and the distance between them define the numbers cont a i n e di n t h e b a r c o d e .
A set of two black bars appear at the beginning,middle, and end of the symbology and are called guard patterns.These patterns provide start-and-stopsignals to
tell a scannerwhere it is readingwithin the code.
T h e t h r e e p a r t st h a t m a k e u p t h e b a r c o d e n u m b e ra r e :
and licensed
a company,assigned
. IJCCComDanv
Prcflx the numberthat identifies
the UCCCompanyPrclixts 614141)
by the UCC(inthe example,
individualproducls,
a company's
. ltemReference
Number lhe numberthat identifies
is 00179)
(in
Number
ltem
Reference
the
the
example,
the
company
by
assigned
from the UCCCompanyPrefixandltem Re{erence
. CheckDigit a digitcalculated
the checkdigitis
of the number(in the example,
Number.usedto ensureuniqueness
the 8 to the far right).
41 4
oo1 7
;;"*,0-rr;;;;#"*
i
I
Check Digit I
Source: Adaoted and exc€tpted fiom httpJ/www uc-council.org/pdf/2003UCC-Press Kit.pdf October 6, 2008
Learnlng oblectlve
o
i,"
Define singiesource
measurement,
sirrgle-soulced:rtl
Datathata ow researchers
to lnk together
Purchase
household
behavlor,
ano
cnarac'tens!rcs,
at the
advertsng exposure
household
evel.
By combining the retail salesand causal data, the effectivenessof various marketing
actions can bi assessed.This is accomplished by estimating what "base" saleswould
have been without the presence of the action. The data alloq' clients to evaluate the
effectivenessof short-term promotions, evaluatepricing changes,follov' new product
introductions, and monitor unexpected events such as product recalls and shortages.
The effect of scannerson the collection of salesand market share data has been
profound. Scannerscan also be used to link purchase behavior with demographic iniormation. Before scannerswere available,the link was usually made using diaries that
are still used effectively. A problem with diaries, however, is that they depend for
their accurary on tie conscientiousnessof those in the panel to record their purchasesas thelr occur. Scanner data are not subject to such recording biases. Several
firms, including Information Resources,Inc. (IRI) and ACNielsen, use scannets and
consumer panels to link purchase behavior to particular households. Some systems
take it a siep further and measure or control media exposure in these households.
Combining all of these data sourcesat the household level produces u'hat has become
known assinglc-s<rurced.lt1r.
Chapter
8 Standardized
Marketing
Information
Services
167
British Slq' Broadcasting(BS\.B), a major satellitetelevisioncompanyin Great
Britain, has teamedup \i.ith TNS Media Intelligencein an effort to track satellite
customerexposureto interactiveadvertisingand gaugeits influence on customer
purchasingbehavior.To accomplishthis, some of the BSlq.B customerswill be
participantson TNS panels,enablingadvertisingexposureto be matchedwith household demographicsand purchasingbehavior.According to Robert Leach, head of
interactiveservicesat BSkvB:"We will be ableto saytlat this personsawthe ad for
Knorr Soup,they interactedwith it for 10 minutes,they went to the shopand bought
this many packetswhen prior to fwatchingthe ad] they only bought this nany packets. You will start to get real single-sourcedata back,which will be useful in measuringeffectiveness
but alsoin termsof targetingadvertising."6
ACNielsen'ssystemis designedto measurenatural consumerbehavioraswell as
test the effectsof different promotionsor advertising.Its HomescanPanel service
maintainsa panelof 125,000participatinghouseholdswhosepurchases
are measured
using a handheldscannerthey use to scanthe LrPC codeson producs brought into
the house.The elecuonicunit then asksthem a number of questionssuch aswhere
wasmade.ageandsexof the shopper.
t-hepurchase
andpricepaid.Although single-sourcemeasurementoffers the opportunity for new market
insights,firms subscribingto theseservicesneedto preparetiemselvesfor the incredible amounts of data they produce. Without proper planning, firms can literally
drowrrin thesedata.That is why decisionsupportsvstemsfor analyzingdata(particularly expertsystems)are becomingincreasinglvimportantin marketingresearch.
MEASURING
ADVERTISING
EXPOSURE
ANDTFFECTIVENESS
Learning
Another area in which tlere is a great deal of commercial information available for /\
\s,
marketers relates to the assessmentof exposure to, and effectivenessof, advertising.
Most suppliers of industrial goods advertisemost hearrilv in trade publications. To sell
space more effectively, t}re various trade publications t'?ically sponsor readership
studies that they make availableto potential advertisers.Suppliers of consumer goods
and services also have accessto media-sponsored readership studies. In addition, a
number of serviceshave evolved to measureconsumer exposureto the various media.
7.
Objcctlvc
Discussthe
purpose and
operation of
people meters.
Television and Radio
The Nielsen television ratings produced by Nielsen Media Researchare probably the
most familiar form of media research to most people. Almost everyone has heard of
the Nielsen ratings and their impact on which television shows are canceled by the
netvorks and which are allowed to continue. The ratings themselvesare designed to
provide estimates of tl-le size and nature of the audience for individual television
proglams.
Data needed to compute the Nielsen ratings are gathered in a variety of ways.
People meters aftempt to measure not only the channel to which a set is tuned, but
also who in the household is watchins. Each member of the familv has his or her own
viewing number. Whoever to.n, on ,h. set, sits down to *atch, or changesthe channel is supposedto enter his or her number into t}le people meter. A.ll of this information is transmined to a cenual computer for processing. In addition, Nielsen
supplements people meter data with information collected using simple electronic
meters that record rvhat channels are being watched (but nothing about who is watching), consumerdiaries.and telephoneinterviews.
Through the data provided by these basic records, Nielsen develops estimates of
the number and percentage of all television households viewing a given television
show. Nielsen also breaks down these aggregateratings by numerous socioeconomic
and demographic characteristics, including territory, education of head of house,
household income, occupation of head of house, household size, and so on. These
people meter
A deviceLrsedto measure
when a television
ls on, to
what channelit is tuned,
and who in the household
is watchingit.
r68
Part 3
Methods
DataCollection
breakdowns assist the television netu-orks in selling advertising
on particular progranN, while drev assistthe advertiser in choos
ing programs that reach houscholds u'ith the desired characteristici. Reiearch Window il.l provides a more detailed overviet'of
how \ielsen pioducc' it. teler.i.ionratines.
Advertisers buying radio tirne are also interested in drc size
and dernographic composition of dre audiences drey u'ill be
reaching. Radio-listeninpl statistics are tvpicall,v gathered using
diaries that are placed in a panel of households. Arbitron, for
example,generatestelephone numbers randomlv to ensure that it
is reaihing households with unlisted numbers and sends diaries
to household melnbers who agree to participate Most radio markets are rated only oncc or twice a vear, although sorre of the
research vvindovv 8.1
Behind the NielsenTV Rotings
Clients use Nielsen Media Research'stelevision audience
research infonnation to buy and sell television time as
well as to make program decisions That information is
t}te currency in all the transactions between buyers and
sellers, which adds up to more than $60 billion in
national and local advertising spending in the Unite.d
Stateseach year.
In the United States, the National People Meter
service provides audience estimates for all national
program sources, including broadcast networks, cable
networks, Spanish langlage networks, and national
svndicators. Local ratings estimatesare produced for television stations, regional cable networl$, MSOs, cable
interconnects, and Spanish language stations in each of
dre 210 television markets in the United States, including electronic metered service in 56 markets.
How the Dqta Are Collected
National Measurement The heart of the Nielsen Media
Research national ratings service in the United States is
an electronic measutement system called the Nielsen
people meter. These meters are placed in a sample of
b,000 households in the United States, randomly
selected and recruited by Nielsen Media Research.The
people meter is placed on each TV set in the sample
household. The meter measures two things what program or channel is being tuned and who is watching.
Which TV source (broadcast, cable, etc.) is being
watched in the san.rplehomes is continually recorded bv
one nart of the meter that has been calibrated to identi!'
which station, network, or satellite is carried on each
channel in the home. Chamrel changesare electronicallv
monitored by the meter.
\4rho is watching is measured by another portion of
the Nielsen people meter that uses an electronic "box"
at each TV set in rhe home and accompan)4nFremole
control units. Each family member in ttre sample household is assigneda personal viewing bufton (identified by
name or synbol) on the people meter. \4/henever the
television set is turned on, a red light flashes fiom time
to tin.re on the meter, reminding viewers to press their
assigned button to indicate if they are watching
television.
Local Measurement In 56 of the largest markets in the
United States, a different metering system provides TV
ratings information on a daily basis.This information is
used by local television stations, local cable systems,
adverrisers.and tlreir agenciesto make programnung
decisions as well as to buy and sell conmercial advertising. In each of tiese markes, approximately 400 to 500
households are recruited, and electronic meters are
attached to each TV set in the sample home. Homes
recruited for local samples are not equipped with people
meters, so the inforrnation is limited to "set tuning"
information from which Nielsen Media Research can
determine which channel the TV set is tuned.
Chapter
8
Standardized
Marketing
Information
Services
169
larger onesare rated four times a year.The ApriVMay surveyis conductedin every
Arbitron market and consequendyis known as tle "sweeps"period. Radio ratings
are q?ically broken down by ageand sexand focusmore on individualthan householdbehavior.
in cono-ast
with television
rarings.
Arbitron hasalsointroduceda portablepeoplemeter,or PPM, wliich is in usein
severalcountries.The PPM is a pager-sizeddeviceto be carriedby consumers.The
devicessenseinaudiblecodesembeddedinto programmingby radio and television
(includingcableT$ so that an accuraterecord can be made of actual
broadcasters
erposureto media.The PPMs are evenequippedwith a motion sensorto veri!' that
the device has been moved (and presumablycarried by the respondent),a basic
requirementfor proper use.Each night, the pafticipantsrecharget}re unit in a base
stationthat alsoautomaticallysendsthe daa collectedduring the day backto a central computerfor processing.d
Diary measurement
is usedto
collect viewing information from
sample homes in every one of the
210 *lniion m.arketsin the United
States rn November, February
May and July of each year. These
measurement
periodsare known in
the industry as "tbe sweeps."This
local viewing information provides
a basis for advertising decisions
and programscheduling.
How the DotaAre
Processed
Householdnrning data fiom both
the national and local metered
samplesfor eachday are storedin
the in-homemeteringsystemuntil
they are automatically retrieved by
Nielsen Media Research'scomputers each night. Data include when tJ-leset is turned
on; which channel is tuned; when the channel is
changed;when the set is off; and, for tle peoplemeter
households,who is viewing, and when that person's
viewhg startsand stops.
Nielsen Media Research'sOoerations Center in
Dunedin, Florida, processes
this information eachnight
for release to the television industry the next day. To
comprehendthe dimension of the task, consider that
Nielsen Media Research collecs hformation fiom
approximately25,000householdssarting about 3 a.m.
each day, processesapproximately 10 million viewing
minutes each day, and has more than 4,000 gigabltes of
daa availablefor customeraccess
the next day.
Sourco: Excerotedfrom "About Nielsen Media Research"
and "lnside TV Ratings," downloaded lrom http://www
,nielsenmedia.com,
October6, 2008.
170
Part 3
lvlethods
DataCollection
Print Media
DILEMMA8.2
ETHICAL
a majortoy rnanufacturer,
Toys4-Klds,
in itssales,
to monitorchanges
wishes
d penetration
andhouseho
roarket
share,
and
throughthe establlshment
that
of a panelof households
maintenance
The
havechldrenages12andunder.
to recordtheir
wl I be asked
households
leanB ue,
purchases
of alltoysandgames.
it
research
director,
believes
the marketlng
wil be bestto withholdthe sponsor's
for the
householdS
namewhenrecruitlng
pane. Shethinksthatlf the Pane
is being
knowthe research
members
conductedby Toys-4Klds,theirreporting
couldbe b ased.
behavior
.
.
.
arevolunteers,
lf the panelmembers
do theyhavea rlghtto knowwho is
the Panel?
sponsoring
for their
lf theyarecompensated
pafticipatlon,
do theyhavea rlght
the
to knowwho issponsoring
panel?
reporting
Doyouthinka household's
ifthe
willbe blased
behavior
Kidsis
knowsToYs4
househoid
theresearch?
sponsoring
There are severalservicestl.rat measure er?osure to, and readership
ol print media. For example, the Starch Ad Readership progran.r
measuresthe effectivenessof magazine advertisemens. Manv thousandsof advenisementsin hundreds of individual issuesare assessed
each year. For each magazineissue,respondentsare askedto indicate
whether thev have read each ad. Four degreesofreading are recorded:
a person who remembered seeing an1' part of the
l. Noted
advertisement in that particular issue.
2. Associated a person who not only noted the advertisement
but also sarvthe advertiser'sname.
3. Read Some
4. Read Most-a
Slng copy.
a person who read any of the advertising copy.
person who read more than half of the adver-
During the course of the interview, respondents also offer colnments on the advertisements tiemselves as well as the brands feanrred in them,
Starch Readership Reports provide insighs into readership for
the ads; they also attempt to gauge reader interest and reactions to
the editorial content and advertising in the magazine Ar important
feature of the reports is the abiliw to comPare readership scores for
a particular ad against (a) the other ads in the issue, and (b) ads o1
similar size, color, and product category. These features of Starch
scoreshelp make them effective in assessingchangesin tleme, copv,
'
layout, use.of color, and so on
Internet
Advertisers also need information about consumers' online activities. It is relativelv
easy to count the number of times that a site or banner ad has been accessed,along
'qriti revenues from online transactions, As with other forms of media' however' it
is a litde more complicated to determine the demographics of tlose accessing a
Web site and this ii important for decisions about which \4/eb sites to choose for
advertising purposes. Nielsen/NetRatings offers its audience rneasurement service
Internet usageat work and at home'
NetView, a syndicated service that assesses
size
and composition, time spent at the site,
audience
detail
a
site's
Regular reports
brands based on the number of differ10
Internet
lists
the
top
and so-on. E iibit 8.2
during a recent one-month period'
brand's
site(s)
ent Internet users who visited the
was
visited
by over 120 million people during
For example, the top brand, Google,
place Yahoo! sites on average
at
second
three
hours
the time period. Users spent over
over the course of the month.
WebTrends is recognizing the growing use of video online and has produced a,
new tracking system to-asses;visitor patterns for Web sites using video regardlessof
media formit. WebTrends Aralvtics generates real-tine insights into online video
use and tracks daily r'rewing trends, including exit points from the video to other
\\reb destinations.
One final area of Internet-oriented measurement is in the media consumption
over cellular phones. Nielsen Wireless recognizes the growing trends in mobile
entertainment and advertising. Mobile phones are not only used for making calls, but
are also increasingly being used to surf the \4/eb and watch video clips. As such,
Nielsen trVireless will track how people use mobile Internet (both the Web and
e-mail), vielv'videos, and make purchaseslike ring tones.
Chapter8
Exhibit
8,2
Standardized
Marketing
Information
Services
171
Top Ten Web Sites by Brand, June 2008
Brand
1. Google
2. Yahool
3. MsN^ryindowsLve
4. Nlicrosoft
5. AOL l\4ediaNetwork
6. YouTube
7. Fox lnteractivelvledia
8. Wlkipedia
UniqueAudience(000)
120,496
T1 3 , 1 8 7
99,741
93,786
91,167
71,398
70,039
52,747
9. eBay
T0.Apple
Time per Person (hh:mm:ss)
T:17:09
3:06:57
2105:25
0.40111
3:35r1l
0:55:59
2:4436
0:21'.01
1:51:34
49,91'1
1:08:33
S o u r c e : " N i e l s e nO n l i n eR e p o r t sT o p l i n eU . S .D a t af o r J u n e 2 0 0 8 , "p r e s sr e l e a s e( J u y 1 4 , 2 0 0 8 ) ,
downloaded from the Nielsen Online Web site, http://w\,1,ry.nielsen-online.com,
August 5, 2008.
Multi-media Services
Erperian Consumer Research (formerly Simmons Market Research)uses a national
probabiliry sample of about 25,000 adult respondents (plus children in the randomly
selected households) and serves as a comprehensive data source allowing the crossreferencing of product usage and media exposure through its National Consumer
Survey. Using stratified sarnpling, Erperian recruits at the household level for participation. Those agreeing to participate are sent a household surveytooklet that collects
information about household usage of an extensive list of products and services.In
addition, each member of the household is sent a personal sur-veybooklet that collects
extensiyemedia usage measuresas well as personal informarion on demographics and
MarueeeR'sFocus
Becausethe providersof standardizedmarketing inforStandardizedmarketing information serrices are
mation servicespresenttlemselvesas expertsin specific nothing more tlan commercial sourcesof secondary
fields and can legitimately claim that other organizations data.Researchers
shouldfeel free to aska variety of imare alreadypurchasingtheir services,it would be easy portant questionsto help evaluatethe quality of standarfor you as a managerto concludethat the information dized marketing information (secondarydata). These
they provide is of high quality. This is not necessarily questionswill help you assess
the extentto which the inthe case,especiallysince the criteria for determining formation(a) fits your specificneedsand (b) is accurate.
quality and appropriatenessdiffer across markethg
Evaluatingthe accuraryof secondarydataincludesan
situations.
assessment
ofwhat is called"the generalevidenceofqualRemember,the providersof standardizedmarketing ity." This involvesa carefulreview of the ability of the
information servicesdo not collect data specificallyfor secondarymarketing information serviceto collect the
your organization. Representativesof these information dataandthe appropriateness
of tle methodsit uses.Don't
suppliershave at best a limited understandingofyour be afraidto askquestions;legitimateprovidersof sound
ulique marketingproblemsand correspondingmarket- marketinginformation havenothing to hide. Bewareof
ing intelligenceneeds.As a result,the burden is on you "super-secret"methodsand sourcestlat can't be shared.
to evaluatethe quality of standardizedmarketinginfor- There'sreallyno needfor much mysteryin the processof
mationbeforepurchasinsit.
datacollection,justsoundmethodsandhardwork.
172
Part 3
Methods
DataCollection
usage,shoppingbehavior,and so on. By taking into account
lifestyle,product/service
both media habis and product usage,the Experiandata allow companiesto better
to the mostpromisinggroups.'"
target,andcommunicate
segment,
MediamarkResearchInc, alsomakesavailableinformationon exposureto various
mediaandhouseholdconsumptionofvarious productsand services.Its annualsurvey
nationaland local newspapers,
of over 26,000adult respondenscoversmagazines,
radio,television,and about550 productand sewicecategories."lnformation is gathered from respondentsby two methods.First, a personalinterviewis usedto collect
and datapertainirg to mediaexposure.Magazine
demographicsand psychographics
readershipis measuredby a recent-readingmethod that asksrespondentsto sort a
deck of magazinelogo cardsaccordingto whetler they (1) are sure they haveread,
(2) are not surethey haveread,and (3) are surethey havenot reada givenmagazine
within the previoussix months.
techniquein which
Newspaperreadershipis measuredusing a yesterday-reading
on the Iist of papersthat circurespondensare askedwhich of the daily newspapers
late in the areawere read or looked at within the previoussevendays.For Sunday
and weekendpapers,a four-weektime spanis used.Radio listening is determined
techniquein which respondensare showna list of five day
througha yesterday-recall
parts;nd are askedhow much time was spentlisteningto a radio during eachtime
period on the previousday. They are then askedwhat stationswere listenedto.
dataare collectedin a similarmanner.
Television-audience
When the interviewis completed,interviewerstien leavea questionnairebooklet
The interviewerpersonallypicla up the booklet,which coversperwith respondents.
household
usageof approximately550 product and servicecategoriesand
sonaland
after
a
short time. The respondentsfor the Mediamark reports are
6,000 brands,
probability
samplingmethods.
selectedusing
SUMMARY
Learning Objective l
Learning Objective 4.
List three Gommonusesof the information
supplied by standardizedmarketing
information servic€5.
The information5uppliedby standardized
marketinginformationservicesis commonly
(2)measure
usedto (1)profilecustomers,
oroductsalesand marketshare,and
(3) measureadvertisingexposureand
effectiveness.
Describethe operation of store audits'
Storeauditsinvolvesendingfield workers,
calledauditors,to a selectgroup of retailstores
at fixed intervals.On eachvisit,the auditors
take a completeinventoryof all products
designatedfor the audit.The auditorsalsonote
movingintothe storeby
the merchandise
invoices,
warehouse
wholesale
checking
withdrawalrecords,and direct shipmentsfrom
manufacturers
and from this information
determinesalesto consumers.
Learning Objective 2
Deline geodemogrcphy.
rcfersto the availabilityof
Geodemogrophy
and lifestyle
demographic,consumer-behavior,
data by arbitrarygeographicboundariesthat
aretypicallysmall.
Learning Objective 3
Desclibethe operation of a diary panel.
The key featureof a diary panel,whether
recorded
on paperor reportedonline,is
groupof individuals
or
that a representative
madeor
households
keepstrackof purchases
productsconsumedover a given periodof
ttme.
LearningObie!!ry s
Define UPc.
ProductCode(UPC)is a 12-digit
TheUniversal
numberimprintedon productsor pricetags
and
the productmanufacturer
that identifies
the particularproduct.The UPCjs readby a
scanner
at the time of Durcha5e.
Lellliltt
obiective 6
D eline si ngIe-sow ce measurement.
refersto
measurement
Single-source
to
have
the
capability
that
organizations
product-purchase
and
data
monitor
Chapter8
advertising-exposure
data by householdand to
relatethat information
to the demographic
characteristics
of the households.
Learning Objective 7
Discussthe purposeand operation of
people meters,
Peoplemetersattemptto measurewhich
household
membersarewatchingwhich
Standardized
MarketingInformationServices
television
channels
at whattimes.Each
memberof the familyhashisor herown
viewingnumber.Whoever
turnson the set,sits
downto watch,or changes
the channelis
supposed
to enterhi5or her numberintothe
peoplemeter,whichis an electronic
device
that storesand transmits
thisinformation
to a
centralcomputerfor processing.
KEY TERMS
(page161)
geodemography
scanner(page165)
single-source
data(page166)
peoplemeter (page167)
RnvrEw QUESTIONS
1.
What is the basicoperationof a storeauditl
Describe how a qpe of businesscan be more successfullytargetedusing the Dun's
BusinessLocator.
What doesit meanto "profile" customersor prospects?
+.
If you were a product managerfor BrandX detergentand you neededup-to-datemarket
shareinformation by small geographicalsectors,would you prefer diary panel data or
storeaudirdatalWhyl
J.
What are the key distinctionsbetweendiary paneldataand scannerdata?
6.
What is the advantage
of usingsingle-source
data?
7.
How are Starchscoresdetermined?
8.
What is the basisfor the Nielsentelevisionradngs?
9.
How do multimediaserr.ices
operate?
DISCUSSIONQUESTIONS,PROBLEMS,AND PROJECTS
l.
Several scenariosare presented below. In each case,there is a need for standardized marketing information. Recommend a seryice or services that could provide the required
information. Explainyour choice.
a. fu part of its advertising-salesstrategy, radio KZZD wants to stress the fact that its
programming appealsto young aduls between the ages of 19 and 25. The advertising
salespeopleneed "numbers" to back up this clairn.
b. Pulitzer Peanut Company has developed a unique sales promotion and television ad
campaign for is J6-ounce container of Spanishpeanuts. It needs to know the following
in order to evaluatethe campaigr:
l. Are people more likely to use a coupon when they've also seen tle television ad?
2. What is the median size ofthe households using a coupon)
3. What is the proportion of new purchasers to past purchasersamong the users of a
coupon?
Part 3
Methods
DataCollection
c. EI[}I Advertising Agency assuredone of is cliens that despite the $200,000 cost of
placing a hdf-page ad in one issueof a national magazine,the actual cost per reader of
the ad would be iessthan two cens. EIVIM is prepadng a repoft to dre client and needs
data to back is assurance.
d. Eco-Soft, Inc., is introducing a software packagethat will make long-range forecastsof
contaminant buildup levels in plans that manufacturepolyester fibers. It needsa current listing of potential customers,org'anizedby plant salesvolume, in order to prioritize its sdes calls for the new package.
e. The advertising agency for a leading brand of disposable rtznrs tor men needs to
choosewhich network television showsmight be best for its ads.
2.
Interview representativesof your local media oudes (e.g., radio sations, television stations, and newspapers)and determine dre extent to which they utilize sourcesof sandardized marketing information. You may wish to use the following questionsas a guideline
for your interviews.
a. Which sourcesdo they use?
b. What specificgpes of information do they obain from the source?
c. How do they use the information?
d. How important is the information in how they do business?
e. How do they rete the accuracyof the information?
f. Do they supplementthe sandardized information with locally collected primary daa?