Chapter 7 STANDARDIZED INFORMATION SOURCES GENERAL CONCEPT MULTIPLE CHOICE QUESTIONS 1. Community Tapestry is a segmentation database and is a product of ESRI. This service was explained in Chapter 7 of your textbook. Which of the following illustrates how the service may be used? a. One or more of the 65 lifestyle segments are associated with the users of a product or service. b. The service identifies every zip code in the United States by one of the 65 lifestyle segments. c. By knowing which lifestyle segments are associated with a firm's product or service, decisions may be made to locate the company's distributors in neighborhoods classified by the same lifestyle segments. d. The 65 lifestyle segments are grouped into 12 LifeMode summary groups based on similarities. e. All of the above statements illustrate characteristics of the Community Tapestry service. Answer: (e) Difficulty: (Difficult) Page: 177 2. A form of external, secondary data that collected in a standard format and made available to subscribers is: a. syndicated data b. published data c. trade association's publications d. business periodicals e. syndicated services Answer: (a) Difficulty: (Difficult) Page: 178 3. Standardized services differ from syndicated data services in that in the former each client is provided with: a. data shared from a common database b. the same service as a result of a common process c. no data is used d. intermittent service e. data collected in a standard format Answer: (b) Difficulty: (Difficult) Page: 178 93 Chapter 7: Standardized Information Sources 4. The Nielsen TV ratings would be considered an example of: a. syndicated processing firms b. standardized processing firms c. standardized services firms d. syndicated data services firms e. community tapestry firms Answer: (d) Difficulty: (Difficult) Page: 178 5. A company offering a predetermined method of measuring customer satisfaction would be an example of: a. an experiment b. a syndicated data service firm c. a standardized service d. geodemography e. synthetic services firm Answer: (c) Difficulty: (Difficult) Page: 178 6. Community Tapestry is an example of: a. a syndicated data service b. a customized segmentation system c. a marketing research service for forestry products d. a standardized service e. a synthetic services firm Answer: (d) Difficulty: (Moderate) Page: 178 7. Both syndicated data and standardized services are a form of: a. demographics b. standardized data c. syndicated data d. standardized information e. synthetic services Answer: (d) Difficulty: (Moderate) Page: 178 8. The key advantage of syndicated data is: a. the currency of the information b. the shared costs c. high quality of the data d. data are quickly disseminated to users e. All of the above Answer: (e) Difficulty: (difficult) Page: 179 94 Chapter 7: Standardized Information Sources 9. A disadvantage of syndicated data is: a. current data are not available b. buyers have little control over what information is collected c. it is regulated by the FTC, Syndicated Services Division d. data are distributed only every six months to end users e. All of the above Answer: (b) Difficulty: (Moderate) Page: 179 10. Which of the following is a disadvantage of standardized services? a. The company providing the standardized service may know the idiosyncrasies of the buyer firm's industry. b. Buyers have little control over what information is collected. c. It is regulated by the FTC, Standardized Services Division. d. Data are distributed only every six months to end users. e. The company providing the standardized service may not know the idiosyncrasies of the buyer firm's industry. Answer: (e) Difficulty: (Difficult) Page: 179 11. Which of the following is an area to which standardized information may be applied? a. measuring consumer attitudes and opinion polls b. defining market segments c. conducting market tracking d. monitoring media usage and promotion effectiveness e. All of the above Answer: (e) Difficulty: (Moderate) Pages: 179-180 12. Which of the following was discussed in the textbook as a firm that tracks consumer attitudes? a. ConTrak.com b. Consumer Attitudes America c. the Nielsen TV Index d. Arbitron e. the Harris Poll Answer: (e) Difficulty: (Moderate) Page: 180 13. Which of the following would be best for providing information on members of the industrial market? a. Community Tapestry b. the Gallup Poll-B2B Division c. Business-to-Business Profilers, Inc. d. Dun's Market Identifiers (DMI) e. audits and surveys Answer: (d) Difficulty: (Difficult) Page: 181 95 Chapter 7: Standardized Information Sources 14. The primary benefit of adding digits to the SIC through NAICS is: a. it allows more information for less cost b. it is more efficient c. it provides ready access to business information d. it provides thousands of more specific types of firms instead of the broad categories available through SIC codes e. it is necessary in order to use the new computer software designed to allow access to the NAICS databases Answer: (d) Difficulty: (Difficult) Page: 181 15. Which of the following would be best for providing information on members of the consumer market? a. the Gallup Poll-B2C Division b. Consumer-to-Consumer Profilers, Inc. c. Dun's Market Identifiers (DMI) d. NAICS e. VALS Answer: (e) Difficulty: (Moderate) Page: 181 16. Which of the following statements about VALS is true? a. Consumers are placed into one of eight segments based on their response to a questionnaire. b. VALS questions measure consumers' psychological and demographic characteristics. c. Client firms' product/service usage is linked to specific VALS groups. d. By knowing which VALS group(S) are a firm's target market, firms may use VALS data to more effectively communicate to them in promotional materials. e. All of the above are true statements about VALS. Answer: (e) Difficulty: (Difficult) Page: 181 17. Which of the following is NOT one of the VALS segments? a. RedNecks b. Innovators c. Thinkers d. Believers e. Achievers Answer: (a) Difficulty: (Easy) Page: 182 96 Chapter 7: Standardized Information Sources 18. The primary benefit of geodemography is: a. demographic information may be detailed down to census blocks b. demographic information is available on all standard geographical areas (whether relevant to the application or not) c. demographic information is available on arbitrarily (i.e., area relevant to the application) defined geographical areas d. demographic forecasts may be made quickly and accurately e. demographic data are available in increments as small as millimeters Answer: (c) Difficulty: (Difficult) Page: 183 19. ACNielsen's Scantrack Basic Services and Information Resources, Inc.'s, InfoScan Custom Store Tracking services are: a. market tracking services b. consumer tracking services c. market tracking services at the retail (store) level d. UFO tracking services e. all of the above Answer: (c) Difficulty: (Difficult) Page: 185 20. Which of the following was described as being so important as to be called "the genesis of all the power of GIS in the retail industry”? a. electricity b. Microsoft c. the city block d. zip codes e. the customer's address Answer: (e) Difficulty: (Difficult) Page: 186 21. When tracking data are not collected by scanners, they may be collected by: a. income tax documents b. auditors who prepare the financial statements for the firm and, therefore, have access to sales records c. auditors who conduct retail-store audits d. customers of stores who are surveyed and asked for their recollections of the inventory levels in stores they have recently patronized e. All of the above Answer: (c) Difficulty: (Easy) Page: 188 97 Chapter 7: Standardized Information Sources 22. Standardized information services collect market tracking data at the household level by using: a. video cameras, 35mm cameras, and tape recorders, and scanning devices b. panels of consumers who may use scanning devices, diaries, and home audits c. panels of auditors, diaries of store managers, and video cameras d. consumer protocol data and household pantry inventories e. focus groups, ethnographic studies, and diaries Answer: (b) Difficulty: (Difficult) Page: 189 23. One of the problems with today's complex information technology is ________. Marketing research firms are attempting to deal with this problem by offering products and services labeled "decision support systems," "data mining systems," or "expert systems" like IRI's Builder services or ACNielsen's Category Business Planner. a. data cost more than the value they bring to the decision maker b. information "decay"; the data have lost their value by the time they are processed c. information overload d. "garbage-in; garbage-out" e. the "needle in the haystack" problem; the answer is there but almost never found Answer: (c) Difficulty: (Difficult) Page: 190 24. The Nielsen TV ratings are reported in 210 geographical market areas in the U.S. market. These "TV markets" were devised by Nielsen and they are called: a. DNAs; Designated Network Areas b. DMAs; Designated Market Areas c. DTAs; Determined Television Areas d. TVMs; Television Market Areas e. TNMs; Television Nielsen Markets Answer: (b) Difficulty: (Difficult) Page: 190 25. The Nielsen Television Index collects data on TV viewership using diaries or: a. ACNielsen researchers b. Information Resources researchers c. people meters d. television cameras e. cell phone monitoring systems Answer: (c) Difficulty: (Moderate) Page: 190 98 Chapter 7: Standardized Information Sources 26. Which standardized information service is primarily responsible for providing radio listenership data? a. RADCustomers b. RoperASW's Starch Radio Listenership Studies c. DON'TURNTHATDIAL, Inc. d. Nielsen Radio Ratings e. Arbitron Answer: (e) Difficulty: (Moderate) Page: 191 27. Which of the following services provides measuring the extent to which magazine ads are seen and read? a. MAGAD Readership Service b. Arbitron Magazine Readership Service c. Curtis Publishing Ratings Index d. NOP World's Starch Readership Service e. MAGSRUS.com Answer: (d) Difficulty: (Difficult) Page: 192 28. Which of the following standardized information services firms is developing a device that will automatically record media (radio, TV, or Web pages) to which a person is exposed? a. ACNielsen b. Information Resources, Inc. c. RoperASW d. Arbitron e. AllMediaRecording, Inc. Answer: (d) Difficulty: (Difficult) Page: 193 29. Which of the following standardized information services, a syndicated data service, provides readership scores by type of magazine ad, which helps marketers determine the characteristics of "good" ads? a. GOODAD/BADAD.com b. Adreader.com c. Adnorms d. NTI e. StarchScorer Answer: (c) Difficulty: (Difficult) Page: 192 99 Chapter 7: Standardized Information Sources 30. Which of the following standardized information sources provides information on several media such as magazines, newspapers, television, radio, cable, and so on? a. NBC b. Simmons National Consumer Study c. MultiMediaMavens.com d. Nielsen Multi-Media Markets e. Burke Inc. Answer: (b) Difficulty: (Moderate) Page: 193 31. One company is developing a multimedia recording device that will measure a person's exposure to TV, radio, and even Web pages. The name of the device is: a. personal portable meter (PPm) b. personal portable walkman (PPW) c. the people meter (TPP) d. WebWatcherandBeyond.com e. E-meters Corporation Answer: (a) Difficulty: (Moderate) Page: 193 32. Which of the following market tracking studies provides members of its panel with an ID card they present at checkout counters in grocery and drugstores? a. Scantrack b. DEMOScan c. BehaviorScan d. Procision e. PRIZM Answer: (c) Difficulty: (Moderate) Page: 194 33. What kind of data are recorded continuously from a panel of respondents to measure their exposure to promotional materials (usually TV as well as in-store promotions) and subsequent buying behavior? a. market tracking data b. UPC data c. single-source data d. Nielsen TV Index data e. Longitu-Panel data Answer: (c) Difficulty: (Moderate) Page: 194 100 Chapter 7: Standardized Information Sources TRUE/FALSE QUESTIONS 34. ESRI's Community Tapestry produces a system of identifying neighborhoods based upon 65 segments some of which are named "Suburban Splendor," "Connoisseurs," or "Rural," based upon demographic and consumption patterns. Answer: (True) Difficulty: (Moderate) Page: 177 35. 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. Answer: (True) Difficulty: (Moderate) Page: 178 36. Syndicated data are data that are collected in a standard format and made available to all subscribers. Such data are stored in a common database and the same data are made available to subscribers for a fee. Answer: (True) Difficulty: (Moderate) Page: 178 37. Standardized services refers to data that are collected in a standard format and made available to all subscribers. Such data are stored in a common database and the same data are made available to subscribers for a fee. Answer: (False) Difficulty: (Moderate) Page: 178 38. Because firms subscribing to syndicated data share the costs of data collection and dissemination, the information comes to them at a lower cost than if they collected it themselves. Answer: (True) Difficulty: (Easy) Page: 178 39. Firms subscribing to syndicated data have substantial control over what information is collected and what format the information comes in (i.e., class definitions). Answer: (False) Difficulty: (Easy) Page: 179 40. Standardized services firms are marketing a process more than anything else. Examples include standardized methods of measuring customer satisfaction or providing a system for segmenting the market. Answer: (True) Difficulty: (Easy) Page: 178 101 Chapter 7: Standardized Information Sources 41. A key advantage of a standardized service is the shared costs among many firms of the data that are collected. Answer: (False) Difficulty: (Moderate) Page: 179 42. Tracking consumer attitudes and opinions is not the kind of information that is available from standardized information firms. Answer: (False) Difficulty: (Easy) Page: 180 43. One advantage of the Gallup Poll is that the company has been tracking the same attitudes and opinions over many years, and business executives can track how these attitudes, such as attitudes toward private brands, are changing. Answer: (True) Difficulty: (Difficult) Page: 180 44. Dun's Market Identifiers (DMI) is useful for providing market segmentation information on members of the industrial market. Answer: (True) Difficulty: (Moderate) Page: 181 45. VALS stands for Value Added by Logistical Support and is a tool used in the industrial market. It represents a form of syndicated data. Answer: (False) Difficulty: (Moderate) Page: 181 46. VALS is a system that has identified consumer segments based upon personality traits. VALS has also associated personality traits with purchase behavior. As an example, the VALS segment, "Innovators," are known to make purchases that reflect cultivated tastes for upscale, niche products and services. Answer: (True) Difficulty: (Difficult) Page: 182 47. Although useful information, geodemographic information is limited in that one must use only predefined geographical boundaries such as cities, counties, or state definitions. Answer: (False) Difficulty: (Easy) Page: 183 48. GIS stands for Geodemographic Information Systems. Answer: (True) Difficulty: (Easy) Page: 183 102 Chapter 7: Standardized Information Sources 49. A standardized service for classifying consumer markets is called PRIZMNE. It specializes in GIS and combines census data with proprietary data to categorize neighborhoods into different segments. Answer: (True) Difficulty: (Difficult) Page: 183 50. Consumer products manufacturers do not need certain information such as the number of products they are selling in retailing stores around the nation because they know what they are selling. Answer: (False) Difficulty: (Moderate) Page: 185 51. Tracking studies gather data from retail stores by using either scanner data or by conducting retailstore audits. Answer: (True) Difficulty: (Difficult) Page: 185 52. ACNielsen's Scantrack Basic Services is an example of market tracking data collected at the retail level. That is, data are collected from retail stores scanners. Answer: (True) Difficulty: (Difficult) Page: 185 53. Although tracking data are useful, they are limited to only the "major" types of stores such as supermarkets and mass merchandisers such as Wal-Mart and Target. A major disadvantage of tracking data is that they are not available for convenience stores. Answer: (False) Difficulty: (Difficult) Page: 185 54. One application of GIS that was illustrated in your textbook is that GIS may be used to determine if retail stores, within the same chain of stores, are competing with one another (cannibalizing) in the same city. Answer: (True) Difficulty: (Difficult) Page: 186 55. As market trends emerge, the marketing research industry responds. An example of this has been the recent growth of natural and organic foods. SPINS provides syndicated data by providing tracking data for this growing segment of the food industry. Answer: (True) Difficulty: (Moderate) Page: 187 56. Auditors conducting tracking studies determine sales by using the following formula: Beginning Inventory – Purchases Received + Ending Inventory = Sales. Answer: (False) Difficulty: (Difficult) Page: 188 103 Chapter 7: Standardized Information Sources 57. Auditors conducting tracking studies determine sales by using the following formula: Beginning Inventory + Purchases Received – Ending Inventory = Sales. Answer: (True) Difficulty: (Difficult) Page: 188 58. Whereas market tracking studies are done at the retail store level by either scanning data or auditing, there is no market tracking conducted within households. Answer: (False) Difficulty: (Easy) Page: 189 59. One method that marketing tracking data are collected at the household level is by providing panel members with wands or scanners that they use to scan the UPC codes on the products they purchase. Answer: (True) Difficulty: (Moderate) Page: 189 60. Some methods used to gather marketing tracking data collected at the household level is by providing panel members with wands or scanners that they use to scan the UPC codes on the products they purchase, asking them to keep diaries of their purchases, and by having auditors conduct audits in the consumers household. Answer: (True) Difficulty: (Difficult) Page: 189 61. A disadvantage of scanning data is "information overload." Standardized information firms provide products that help managers attach meaning (intelligence) to the huge volume of data collected. Answer: (True) Difficulty: (Moderate) Page: 190 62. The Nielsen Television Index specializes in providing information on TV ratings. Answer: (True) Difficulty: (Easy) Page: 194 63. For many years Nielsen Media Research used diaries to measure TV viewership. However, today TV ratings are gathered exclusively by having small electronic sensors sewn just beneath the skin on the wrists of panel members. The sensors record all TV signals to which panel members are exposed. Answer: (False) Difficulty: (Easy) Page: 190 64. Tracking data is widely available for products sold through "brick and mortar" stores (stores having physical locations). However, there is no tracking data for products purchased online such as music from Apple's iTunes or other products that have been digitized such as movie videos or books. Answer: (False) Difficulty: (Difficult) Page: 190 104 Chapter 7: Standardized Information Sources 65. The Nielsen TV Index provides data only on how many persons watched a TV show. Data can report how many persons watched an episode of West Wing or Lost but no other data are collected. Answer: (True) Difficulty: (Difficult) Page: 191 66. Arbitron provides syndicated data on radio listenership. Answer: (True) Difficulty: (Easy) Page: 194 67. Radio listenership is recorded at 15-minute intervals and data on gender and age are also collected. Answer: (True) Difficulty: (Difficult) Page: 191 68. NOP World's Starch Readership Service specializes in determining the extent that magazine ads are seen and read. Answer: (True) Difficulty: (Moderate) Page: 192 69. A Starch Readership Service measure of "Associated" measures the extent to which a reader could associate a particular ad with the brand or the advertiser. Answer: (True) Difficulty: (Difficult) Page: 192 70. Adnorms is a standardized service that allows managers to determine the characteristics of TV ads that are most likely to lead to actual purchase of consumer durables such as automobiles. Answer: (False) Difficulty: (Difficult) Page: 193 71. Adnorms is a standardized service that allows managers to determine the characteristics of magazine ads, such as ad size, color, or copy that are most likely to have a high impact on readership. Answer: (True) Difficulty: (Difficult) Page: 193 72. Arbitron is testing their personal portable meter, which is designed to measure the number of types of magazines being read by a panel member carrying the PPM. Answer: (False) Difficulty: (Moderate) Page: 193 73. If a firm were interested in obtaining information on several media such as magazines, Sunday magazines, newspapers, television, radio, cable, outdoor, and Yellow Pages, they could use the personal portable meter. Answer: (False) Difficulty: (Difficult) Page: 193 105 Chapter 7: Standardized Information Sources 74. Single-source data refers to the practice of buying all a firm's information from one, single syndicated data firm thus allowing for a substantial quantity discount in most cases. Answer: (False) Difficulty: (Moderate) Page: 194 75. One of the key advantages of single source data is that they may be used to help managers determine causal relationships. BehaviorScan is a single source service. Answer: (True) Difficulty: (Moderate) Page: 194 APPLICATION QUESTIONS 76. Clay Holladay owns a chain of radio stations. The advertising time he sells to advertisers is directly related to the number of persons who are listening to each station in each radio market. Clay purchases estimates of the number of persons who listen to the different radio stations in each market from Arbitron, a marketing research firm. In every radio market Arbitron gathers the same data; the number of persons listening to every program on each station as well as their age and gender. Arbitron records this information in a database and they offer it to every person who wishes to subscribe to it for a fee. Arbitron is an example of a: a. syndicated processing firm b. standardized processing firm c. standardized services firm d. syndicated data services firm e. community tapestry firm Answer: (d) Difficulty: (Difficult) Page: 178 77. James Murphy owns a small number of upscale of candy and gift shops in a three-state area. The shops are unique in that they offer very unusual candies and gifts made from many different areas of the globe. The products are very expensive and appeal only to a particular type of consumer. James is interested in expanding to other areas of the country but, outside the three-state area he is not at all familiar with the demographics of the cities in the states in which he has an interest. He needs a firm that will allow him to combine geodemography—allowing him to select arbitrary (two-mile circles around proposed site locations) and a standardized service that associates his customer profile—with that of predetermined "types" of customer groups. Once this is done, the service should be able to tell him which proposed site locations have a large number of the desired customer "types" that will likely be good customers for his unique shops. Which service should James select? a. Arbitron Candy/Gift Ratings Index b. Claritas PRIZMNE c. Duns Market Identifiers (DMI) d. Starch Services, Inc. e. NAICS Business Location Service Answer: (b) Difficulty: (Difficult) Page: 183 106 Chapter 7: Standardized Information Sources 78. Mary Elizabeth Yarbrough is a farmer in the San Francisco, California area. She grows herbs thought to be medicinal and other products thought to promote health and nutrition. Her business is quite large but, in the past, she has found it hard to make decisions about which products to add, drop or to consider for future crops because she has a difficult time finding market data. However, she learned recently there is a firm by the name of SPINS that happens to be located in San Francisco that provides data collected by scanners in natural and organic food stores. Her problem, now solved, illustrates which disadvantage of scanner tracking data discussed in your textbook? a. For those products distributed through small stores, not covered by ACNielsen or Information Resources, there is no scanner tracking data. b. Herbs nor any product that is not endorsed by the American Medical Association may be tracked via scanning devices. c. Scanning data is useful only for products that are distributed nationally because all scanner data are reported as a percent of national distribution. d. Scanner data, even from small stores, is reported quickly to decision makers. e. None of the above is true; there is no discussion of this topic in your text. Answer: (a) Difficulty: (Difficult) Pages: 187–188 79. Community Tapestry, an ESRI service, was described in detail at the beginning of Chapter 7 on Standardized Information Sources. Community Tapestry applies a process of segmentation that identifies neighborhoods by the major demographic and consumption patterns, and then determines which of these neighborhood "segment types" is the client's potential customers. Which of the following best illustrates how this service was applied in your text? a. Present customers for a gourmet coffee shop were matched to ESRI segments to determine which segments best represented the coffee shop customers. Once the segments were identified, ESRI could provide maps that identified areas of the country where the such segments were prevalent. This allowed Donofrio's Coffee to determine the best locations for future coffee shops. b. ESRI segments were examined to determine which segments were likely to be gourmet coffee drinkers. Once the segments were identified, ESRI could provide direct mail lists that identified the names and addresses of gourmet coffee drinkers. This allowed Donofrio's Coffee to send these "likely" customers a frequent user card to promote their patronage. c. ESRI has data stored in a common database that identifies zip code areas that offer the most potential in terms of sales for a gourmet coffee shop like Donofrio's. Donofrio's subscribed to this information for a fee and the information was used to help them locate new coffee shop locations. d. Present customers for a gourmet coffee shop were determined. ESRI then, through its Community Tapestry syndicated data service, found census data which identified household addresses of the present customers. This information allowed Donofrio's Coffee to target their customers with promotional offers to induce greater sales during warm months of the year. e. None of the above. There was no example illustrating how Community Tapestry was applied. Answer: (a) Difficulty: (Difficult) Pages: 176–177 107 Chapter 7: Standardized Information Sources 80. Certain products such as gasoline and diesel engines require very precise drilling. Tolerances are extremely small and drill bits that can accomplish the near-perfect drills are very expensive. Unfortunately, the drill bits must be discarded after only a few drills as they sustain distortions that cause them to exceed the tight tolerances. Harold Kushner invented a new method to sharpen high performance metal drill bits to their original specifications. Harold's process meant that companies could extend the life of drill bits. Harold knew that his invention would be a success but he needed to find the users of high-performance drill bits and direct personal sales calls to them. Using both SIC and NAICS Harold was frustrated because, for example, he could compile only very general lists of potential users and many on the lists would not be users of drill bits at all. Harold needed a service that would provide much more specific information about business firms in order to determine if they were really potential customers. Which of the following services would likely help Harold? a. VALS b. the Gallup Poll c. PRIZM d. Dun's Market Identifiers (DMI) e. ESRI's Community Tapestry Answer: (d) Difficulty: (Difficult) Page: 181 108