CHAPTER 7 STANDARDIZED INFORMATION SOURCES LEARNING OBJECTIVES To learn how to distinguish standardized information from other types of information To know the differences between syndicated data and standardized services To understand the advantages and disadvantages of standardized information To see some of the various areas in which standardized information may be applied To understand some specific examples of standardized information sources in each of four areas of application To know the meaning of single-source data CHAPTER OUTLINE WHAT IS STANDARDIZED INFORMATION? ADVANTAGES AND DISADVANTAGES OF STANDARDIZED INFORMATION Syndicated Data Standardized Services APPLICATION AREAS OF STANDARDIZED INFORMATION Measuring Consumer Attitudes and Opinion Polls Defining Market Segments Providing Information on Members of the Industrial Market Providing Information on Members of the Consumer Market Conducting Market Tracking Market Tracking at the Retail Level ACNielsen Scantrack Services InfoScan Custom Store Tracking Retail Store Audits Market Tracking at the Household Level Information Resources, Inc.’s Scankey Consumer Network Household Panel ACNielsen Homescan Panel Diary Audit Turning Market Tracking Information into Intelligence 94 Chapter 7: Standardized Information Sources Monitoring Media Usage and Promotion Effectiveness Tracking Downloaded Music, Videos, and Recorded Books Television Radio Print Multimedia SINGLE-SOURCE DATA KEY TERMS Standardized information Syndicated data Standardized services ESRI's Community Tapestry™ Yankelovich Monitor Harris poll Gallup poll Dun's Market Identifiers (DMI) VALS Geodemographics GIS PRIZM NE P$YCLE NE ConneXions Tracking studies Scanning data Scantrack Basic Services PROCISION C-Store Plus Service InfoScan Custom Store Tracking SPINS Retail-store audits Scankey Consumer Network Household Panel ACNielsen Homescan Panel Diary Audit IRI's Builder services ACNielsen's Category Business Planner SoundScan VideoScan BookScan Nielsen Television Index (NTI) DMA’s (Designated Market Areas) People meter Arbitron 95 Chapter 7: Standardized Information Sources Personal portable meter (PPM) NOP World’s Starch Readership Service Adnorms Simmons National Consumer Study Single-source data BehaviorScan TEACHING SUGGESTIONS 1. Have a business acquaintance whose company uses syndicated data or syndicated service sources describe which ones are used and how they help in making marketing decisions. Managers of local television and radio stations are likely candidates because they typically rely on syndicated data sources. 2. Because tracking services such as Arbitron constantly update their information, companies have little use for old volumes of information. Ask local media companies if they will donate these materials for use in your class. They can be used for in-class exercises where students look up specific facts, or instructors can use them for class demonstration. 3. Ask students to consider how a regional drugstore chain could develop and implement its own single source data system. What demographic, life style, or other data should be in the database? What type of compensation system can be used to keep customers in the panel? What marketing variables could be tested? 4. Geodemographics is an exciting growth area in marketing research. The marriage of computer graphics, data base systems, and tabulation packages has caused this area to blossom. Have students perform library or Internet searches to learn about geodemographics and report their findings to the class. A very good reference is the GIS.com website (http://www.gis.com). See the “What Is GIS?” feature. 5. Because syndicated data and services are the “hidden” side of marketing research, instructors should make use of the examples and exhibits provided in the chapter. Also, some syndicated data companies are quite willing to provide brochures, promotional literature, and other examples of their services. Maintaining a file on these companies is useful in generating class examples. 6. Former students are a possible source of the use of syndicated data sources. Some marketing majors take jobs as media salespersons with newspapers, television stations, cable companies, or the like. If you have a former student who is in this occupation, consider calling him or her and asking if he or she would talk to your marketing research class about how syndicated data and services are used in preparing presentations for prospective advertising clients. 7. Many of the syndicated services deal with media audiences. Ask students why there is so much concern for media audiences. Who uses the data and how? There are two groups of users: (1) media companies and (2) advertisers. The media companies use 96 Chapter 7: Standardized Information Sources the data to profile their markets (audiences) to see if they are hitting the people they think they are, and to compare their share with the shares of competitors. Advertisers use the data to make media choice decisions. They want to select media with audiences that are matched to the target markets for the goods and services advertised. Also, media sales people use the syndicated data in their sales presentations to persuade advertisers to use their medium. 8. Contact a local radio or TV station and ask them to provide a class speaker to illustrate how they use standardized data to evaluate their programs and sell airtime. If the station is part of a group you could ask if the group has a research director. This person would be the ideal contact to provide your class with some real world, local examples illustrating the importance of syndicated data in your area. 9. Call local ad agencies in your area and ask them if they use syndicated ratings from Arbitron or Nielsen Media Services. Ask them if they can provide you with either a guest speaker or some examples of former ratings with explanations of how they use the information. 10. For many years Nielsen Media Research has been recognized for being the leader in TV audience measurement. However, check out Arbitron at http://www.arbitron.com. Arbitron is making significant progress in the audience measurement business. There is a good deal of information about Arbitron services on the web site, and the Portable People Meter that is mentioned in the chapter is described in detail. 11. For some interesting insights into how TV ratings are used, contact your local cable TV company. Cable providers, like the network stations, offer many opportunities for local advertisers to promote their products/services. Most of these companies use syndicated data to help them place ads on the proper cable channel. Representatives, perhaps a salesperson, would make an ideal speaker or provider of useful, locally relevant information for you to use in class. 12. An advantage of GIS is to allow a user to access information on an arbitrarily defined geographical area. A large number of examples and even tutorial information on GIS is available on the ESRI web site (www.esri.com) 13. Have your students study carefully the aspects of IRI’s InfoScan service by accessing IRI’s web site at www.infores.com. Ask them what pieces of information they can get from such a report and ask them how, if they were a brand manager for a brand of mayonnaise, they could use such information. Although they may focus on some of the detailed information from the notes at the bottom of the table, this is a good opportunity to remind them the prime value of such tracking data: it shows a brand manager which of his or her brands are selling as well as sales of the competitor brands. Therefore, this information alone is probably worth the cost of the syndicated data. Having the ability to track the sales of your product against sales of competitors would be important in assessing the performance of strategies/tactics of your 97 Chapter 7: Standardized Information Sources company as well as those of your competitors. Such information is of paramount importance to brand managers. 14. Go to www.gallup.com and go over some of the polling data they provide free of charge. Select a few of these that you think would be appropriate for your marketing research class (their polls change often). Demonstrate these in class and discuss why such information could be of benefit to marketers. Almost always there are several polls that would be of value to political candidates. Remind your students that political marketing is big business for marketing research firms. ACTIVE LEARNING EXERCISES VALS™ You can determine your VALS™ type by completing the VALS™ survey online at www.sric-bi.com/VALS/. You can also learn more about the other VALS™ types at this Web site. Since cultural differences exist, VALS is available in the U.S. as U.S. VALS™ Japan as Japan VALS™ and Great Britain as U.K. VALS™. This exercise provides students with experience in a consumer market standardized service. There is a great deal of information about the various VALS types and how this system has been adapted to different countries. One important point of the exercise is to educate students on the extensive nature of standardized information. Instructors may wish to assign reading of the various VALS brochures that are available on this web site in PDF format at the following location: http://www.sricbi.com/VALS/brochure.shtml Let’s take a closer look at the services offered by Claritas. First, find out how Claritas would describe the types of people who live in your home area ZIP Code in terms of their 66 PRIZM NE segments. Go to www.mybestsegments.com. Look at the top of the screen and click on “ZIP Code LookUp” tab. Enter your five-digit ZIP Code and don’t forget to enter the code that Claritas provides for you underneath the ZIP Code entry blank. You will then get a display that shows as many as five different lifestyle PRIZM NE segments in your home ZIP Code area. Click on each one and learn a little about the people in that segment. Don’t be surprised if the descriptions match you or your neighbors! This exercise is specific to each student’s zip code. However, the point of the exercise is for students to observe the amount of specificity and detail to the PRISM NE segments. Secondly, let’s take a look at some case study examples using Claritas’ services. Go to the Claritas home page at www.claritas.com. Click on “Customer Segmentation Systems.” Next, click on “View a listing of Claritas’ segmentation case studies.” 98 Chapter 7: Standardized Information Sources Claritas has provided several examples illustrating their services across several different industries including retail, restaurant, financial services, non-profit, travel and several others. Pick an industry, or company, for which you have an interest and see how Claritas used one of its standardized information services to help them solve problems. Again, this exercise is specific to students’ choices, but all illustrate how a standardized segmentation system helps a marketer in knowing his/her market and in market targeting strategy. ANSWERS TO END-OF-CHAPTER QUESTIONS 1. What is meant by” standardized information?” Review question. Students are required to review the definition of this concept. Standardized information is a type of secondary data in which the data collected and/or the process of collecting the data are standardized for all users. There are two broad classes of standardized information: syndicated data and standardized services. (See next question.) 2. Distinguish between syndicated data and standardized services. Review question. Students must distinguish between these two. Syndicated data refers to data being collected in a standard format and being made available to all subscribers. Standardized services refer to a standardized marketing research process that is used to generate information for a particular user. 3. What are the advantages and disadvantages of syndicated data? Review question. This question requires students to examine this section of the chapter. The key advantages of syndicated data are shared costs, high quality, and currency of information. Disadvantages of syndicated data include no control over what data is collected, its standardized format, its commitment cost, and its availability to everyone, including competitors. 4. What are the advantages and disadvantages of standardized services? Review question. This question requires students to examine this section of the chapter. With standardized services, the advantages are experience of the company providing the service, reduced cost, and speed of service. The disadvantages are inability to 99 Chapter 7: Standardized Information Sources customize services and the service firm not being knowledgeable of the client’s industry. 5. Name four broad types of applications of standardized information and give an example of each. Review question. This question requires students to study the applications and examples carefully. The applications areas are listed along with the examples provided in the chapter. Application Area Measuring Consumer Attitudes and Opinion Polls Examples Yankelovich Monitor Harris Poll Gallup Poll Defining Market Segments Providing Information on Members of the Industrial Market SIC; NAICS Dun’s Market Identifiers Providing Information on Members of the Consumer Market VALS (SRI), Geodemographics Claritas PRIZM Conducting Market Tracking at the Retail Level ACNielsen SCANTRACK, Procision, C-Store Plus IRI Infoscan, SPINS, Retail store audits Market Tracking at the: Household Level IRI’s InfoScan’s Scankey ACNielsen’s HomeScan Panel Household diaries, Complete Kitchen Audit Turning Market Tracking Information into Intelligence IRI’s suite of builders’ services ACNielsen’s Category Business Planner Monitoring Media Usage and Promotion Effectiveness Soundscan, Videoscan Bookscan, Nielsen Television Index (NTI), People meter, Arbitron, personal portable meter (PPM), Starch Readership Service Adnorms Simmons National Consumer Study 100 Chapter 7: Standardized Information Sources 6. Explain how the standardized service, Dun’s Market Identifiers (DMI) could be helpful in a marketing research application. Review question. Students must relate how this service works. Dun's Market Identifiers (DMI), published by Dun & Bradsteet, provides information on more than 4 million firms that it updates monthly. The real benefit of DMI is its service that provides eight-digit codes to classify businesses. By having more digits, the service can provide many more categories of firms than other classification systems. This is important if a firm is trying to target specific business firms, however narrow their classification. 7. What is geodemography, and how can it be used in marketing decisions? Give an example Review question. Students must define geodemographics and relate an application example. Geodemographics is the term used to describe the classification of arbitrary, usually small, geographic areas in terms of the characteristics of their inhabitants. Aided with sophisticated computer programs, geodemographers can access huge databases and construct profiles of consumers residing in geographical areas determined by the geodemographer. Instead of being confined to consumer information recorded by city, county, or state, geodemographers can produce this information for geographical areas thought to be relevant for a given marketing application (i.e., proposed shopping center trading area). ERSI and Claritas are geodemographers described in the chapter. 8. Explain why VALS would be considered a standardized information service Review question. Students should identify that VALS uses a standardized process. Standardized services refers to a standardized marketing research process that is used to generate information for a particular user. VALS-2 is the procedure or process used by Stanford Research Institute (SRI) that places consumers in segments based on their psychological and demographic characteristics. That is, if a client identifies a geographic target market, SRI can apply VALS-2 to profile the makeup of this area. 9. What are tracking studies? Give an example of how managers would use tracking study data. Review question. Students must define this term and show how it is useful. 101 Chapter 7: Standardized Information Sources By tracking studies we mean studies that monitor, or track, a variable over time. For example, companies conduct market tracking to track sales of their brands as well as sales of competitors' brands over time. The "tracks" moving up and down or remaining stable serve as important monitors as to how the market is reacting to a firm's marketing mix. Many variables may be monitored in a tracking study including market share, customer satisfaction levels, measures of promotional spending, prices, stock outs, inventory levels, and so on. 10. Describe ACNielsen’s Scantrack Basic Service Review question. This question requires students to describe this service. ACNielsen Scantrack Services. ACNielsen's Scantrack Services is based on syndicated retail scanning data and is recognized as an industry standard in terms of providing tracking data gathered from the stores' scanners. There are three components of Scantrack Services. First, Scantrack Basic Services collects data weekly from approximately 4,800 food, drug, and mass merchandise stores representing about 800 different retailers in 52 markets in the United States. ACNielsen Scantrack Basic Services tracks thousands of products as they move through retail stores allowing brand managers to monitor sales and market share and to evaluate marketing strategies. Scantrack reports can be provided at many different levels of information. For example, a report may be ordered for just one category of products across the 52 U.S. markets. Or a report can be generated for one brand in a single market. The other two Scantrack services provide tracking data for products sold in drugstores and mass merchandiser stores through its PROCISION tracking service and also for convenience stores through its C-Store Plus Service. 11. What is a panel that gathers information from consumers by asking them to scan the UPC codes (bar codes) on goods they purchase and bring home? Review question. Students must identify this panel. There are 2 described in the chapter. Information Resources, Inc.’s Scankey Consumer Network Household Panel. Information Resources, Inc. maintains a panel of consumer households that record purchases at outlets by scanning UPC codes on the products purchased. Using IRI's handheld ScanKey scanning wand, panel members record their purchases and this information is transmitted via telephone link back to IRI. In the summer of 2005, IRI had 70,000 shoppers as part of its consumer panel. Like many panels, an advantage of this panel is that it provides not only information on products purchased but also purchase data that are linked to the demographics of the purchasers ACNielsen Homescan Panel. This panel recruits panel members who use handheld scanners to scan all bar-coded products purchased and brought home from all outlets including warehouse clubs and convenience stores. Panel members also record the outlet at which all the merchandise was purchased and which family member made 102 Chapter 7: Standardized Information Sources the purchase, as well as price and causal information such as coupon usage. This panel allows ACNielsen to track data on products whether they are bought in a store with or without scanners and from any store and from any type of store whether it be a warehouse club, supermarket, mail ordered product or a product purchased over the Internet. 12. Explain “information overload” of tracking information can be alleviated through software also offered as standardized services. Review question. This question requires students to describe this software. Category Business Planner is a web-based category planning tool that aids managers in making better decisions based on sales information of products in the consumer packaged goods industry. What is unique about Category Business Planner is that it allows a manufacturer to move from retailer to retailer to view how its product is performing within each retailer's proprietary view of the category containing the product. This allows a manufacturer to evaluate product performance the same way a retail customer would evaluate the manufacturer's product, allowing them to better collaborate when developing their business plans for each product category. 13. Name the standardized information services designed to gather data on downloaded music. Prerecorded video sales. Prerecorded book sales. Natural and organic food sales. Review question. Students will need to find these services’ names. The answers are in the following table. Data Downloaded music Prerecorded video sales Prerecorded book sales Natural and organic food sales Service ACNielsen’s SoundScan ACNielsen’s VideoScan ACNielsen’ BookScan SPINS 14. What company provides syndicated data on TV ratings? Review question. Students should recall the name of this company. ACNielsen 15. What is the firm that is best known for conducting studies of radio listenership? Briefly describe the service it provides. Review question. To answer this question, students are required to learn about Arbitron. 103 Chapter 7: Standardized Information Sources Arbitron provides syndicated data on radio station listening using national and regional panels whose members complete diaries reporting radio listening for one week. Information is recorded on weekly paper-and-pencil diaries to indicate the time of day; how long the station was tuned in; which station was on; where the listening was done (at home, in a car, at work, or other place); and the panel member’s age, gender, and home address. Arbitron has been testing a personal portable meter (PPM), the size of a pager, which would automatically record stations listened to. Data from the diaries are used to measure and report a number of variables that are indicative of radio listenership. Listenership is measured in 15minute intervals and data are also reported by age and gender to aid in profiling audience characteristics. 16. What is single-source data? Review question. Students should find the definition. Single-source data are data that contain information on several variables such as promotional message exposure, demographics, and buyer behavior. 17. Go to the web site of three marketing research companies. Review their list of products and services offered. Which of these are standardized services? Syndicated data? Custom research offerings? Instructors can direct students to Tables 2.1 and 2.2 where the Honomichl “top” lists include the companies’ web site addresses. Because each company is unique, there is no set answer to this exercise. The point is that students must differentiate among standardized services, syndicated data, and custom research. 18. Imagine you are potential franchisee for a Donofrio’s Coffee franchise (see beginning of chapter). Evaluate the Donofrio’s use of the standardized service, Community Tapestry,™ to help you make your decision as to where to locate your franchise Donofrio’s Coffee. Coffee shops tend to draw customers from the nearby market area, and this ESRI service provides a geodemographic analysis of neighborhoods. The U.S. map included in the vignette can be brought down to the neighborhood or community level. Because 75 percent of Donofrio’s Coffee customers are in the Solo Acts group, potential franchisees who have identified store locations that in the middle of heavy Solo Act neighborhoods that have the best chance for success. Those who have identified possible store locations where the life mode categories are not Solo Acts will have much less potential for success, and the Donofrios can warn or discourage them from locating in those areas. 104 Chapter 7: Standardized Information Sources 19. Review the kinds of information gathered by www.gallup.com. Go to the web site and take a look at some of the former studies they report. How could a marketing manager use some of this information? Gallup has two types of studies: news service studies and performance management studies. News service studies concern business, politics, social issues, and life style. From these, a marketing manager can glean information about the health of the economy that might translate into a more or less favorable buying attitude in the public. Political shifts can be tracked, and these may reflect consumer spending changes based on federal, state, and/or local taxes or budgets. Social issues and life style trends and news may also foretell spending shifts or open up the manager’s eyes to emerging opportunities. The performance management studies are directly relevant to marketing manager’s concerns. Here, Gallup measures company performance across several factors including customer engagement with the company, brand strategies, sales force function, and more. 20. Go to a search engine such as Google, Yahoo, or AskJeeves. Look up “GIS.” Describe some of the applications of GIS that some of the sites have described. GIS stands for “geographic information systems.” The search will surely generate a great many hits. The types of application areas that student will find include: GIS education, tutorials (e.g., What is GIS?) GIS data of various types (e.g., GIS Data Depot) GIS jobs (e.g., GIS Jobs Clearinghouse) GIS software (e.g., ESRI) GIS Bulletin boards and information exchange (e.g., GIS consortium) GIS services, mapping, consulting (e.g., MAPINFO) 21. Describe how a marketing manager could make use of single-source data to make (a) pricing decisions and (b) in-store promotions decisions. Single source data is a stream of purchase behavior coupled with demographic, life style, and other consumer-type data. The marketing manager can experiment with various price levels or tactics or in-store promotion alternatives and see the change in purchase behavior. Moreover, the types of customers who changed could be identified by using the demographic and other consumer characteristics data. 22. Contact a radio or TV station or perhaps a newspaper in your town. Ask managers how they measure listenership, viewership, or readership and for what purposes they use this information. In most cases, these firms will be happy to supply you with a standard package of materials answering the preceding questions. Most likely, the radio station source will be using Arbitron and the TV station source will be using Nielsen. There are two major uses of these data. First, the station can 105 Chapter 7: Standardized Information Sources see how it compares to competing stations on a time block-by-time block or show-byshow basis. Second, the station’s sales force should be using the data to identify the audience profiles of various time slots or shows and applying this knowledge to sales presentations to local businesses in an attempt to persuade them to advertise on the station. 23. Given what you know about syndicated services, which firm would you call on if you had the following information needs? a. You want to know which magazines have the heaviest readership among tennis players. Simmons National Consumer Study b. You have decided to conduct a test market but you have no research department within your firm and no experience in test marketing. BehaviorScan conducts market tests. c. You need to know how a representative sample of U.S. households would answer seven questions about dental hygiene. This would require the use of a nationally representative panel such as NFO diary panel. d. You are thinking about a radically new advertising theme but you are very concerned about consumer reaction to the new theme. You want some idea as to how the new theme will have an impact on sales of your frozen dinners. BehaviorScan or InfoScan are designed for such tests. CASE SOLUTIONS Case 7.1 Premier Products, Inc. Case Objective Students must evaluate what standardized services are suited to what marketing situations. 106 Chapter 7: Standardized Information Sources Answers to Case Questions 1. Should Stephanie Williamson assign any, or all, of these tasks to her twenty six member staff? Probably not. Although a staff of 26 is large for some applications, this is a small department for a multinational firm marketing more than 1,000 brands. Rather, Williamson should be very knowledgeable of services offered by external supplier firms and use those that are most appropriate to the problem. 2. Can you recommend a standardized information service that Williamson may consider for Dale Hair? This would be an excellent opportunity to use a standardized information service such as ESRI BIS’s Community Tapestry, as explained in the opening vignette of the chapter. Already knowing the demographics of the target consumers, ESRI BIS could determine which Community Tapestry groups most closely matched the target market. Once these groups were identified, ESRI BIS could identify zip codes around the country that were dominated by the selected groups. These Zip codes could then be used as targets for the proposed direct mail campaigns. 3. What would you recommend for Joy Schurr? Williamson should contact one of the companies measuring consumer attitudes and opinions. The Gallup Poll, for example, has been tracking attitudes toward national v. private brand preference for several decades. 4. What would you recommend for Lisa Henson? This would be a good use of Dun’s Market Identifier’s as described in the text. A service offered by Dun & Bradstreet, the classification system would allow Williamson to locate wholesalers of light bulbs and related products. This list of wholesalers would then give Henson a manageable number of firms to contact in order to sell them on carrying the new product. Wholesalers would allow PPI to gain access to thousands of hardware and other retail stores carrying light bulbs and related products. 107 Chapter 7: Standardized Information Sources CASE 7.2 Maggie J’s Dog Treats Case Objective Students must decide between customized research and standardized information, and they must “discover” what standardized information service is best suited to assessment of the effects of promotional tactics. Answers to Case Questions 1. Do you think it is appropriate to conduct marketing research? Certainly, this is an example illustrating the need to use marketing research. We are told that the executives cannot determine which of the campaigns will perform best and, very importantly, we are told that even a small difference in the effectiveness of the campaigns may play a big role in determining market share, profits and ROI performance. 2. Should Ron Stillman consider a standardized information service? What are the arguments for and against using a standardized information service? Stillman could recommend customized research. In customized research a firm would be called in and significant time would be devoted to developing a research project including considering whether or not a new TV ad/in-store promotion campaign should even be tested. The disadvantage of this is time and perhaps, added expense. We already know that Hall is worried about the significant rise in competition and he feels some sort of promotional response is needed to maintain, or even hopefully, increase Maggie J’s market share. A significant advantage of standardized information services is that they can be done fairly quickly. Also, this seems to be fairly complex problem requiring the measurement of interaction effects among eight different promotional methods. One could make the argument that it would be wise to use the services of a company that had many years of experience with the process required to accomplish the research objectives. 3. Should Ron Stillman consider standardized data or a standardized service? Standardized data will not work here. There are no data relative to the effectiveness of the proposed promotion campaigns. A standardized service uses a process to produce new data for the client and that is what is needed in this case. 4. Which particular standardized information service, discussed in this chapter, do you think Ron Stillman should recommend? Why? This question will require the students to read through the chapter and to think about the applications of the different services mentioned. Students may come up with some interesting suggestions and be able to support them. However, the obvious 108 Chapter 7: Standardized Information Sources choice would be BehaviorScan which is discussed in the last section of the chapter under the heading, “Single Source Data.” Why? Because the service allows for the testing of TV ad copy and, at the same time, for the control of in-store promotions. It would allow Maggie J’s management to know which TV campaign performed the best with which in-store promotion. In addition, it would give them a great deal of information about the demographics and related purchases of those who were responding to the promotions. Once Maggie J’s knows which campaign combinations are most effective, they can begin scheduling a national roll out of the campaigns. 109