Online Survey Quotas Save

Inevitably every market researcher eventually gets to the point where they break down and use a panel finding company such as e-rewards to find the necessary demographics for their survey. These services aren't typically cheap, depending on the results desired. Oftentimes this poses a serious dilemma for those on a strict budget. If counts are off and one more respondent is used the extra money spent could be catastrophic.  Fortunately many online survey companies are adding new features to help save the pocket of corporate America.

One such feature is a survey quota.  This tool actually counts the specific survey responses and shuts down the survey when the total number of responses is reached, ensuring exact numbers. The quotas currently available are only in higher scale tools, but they are definitely worth it. Most quotas operate off of a particular question response, but depending on the tool you can often arrange it to count a particular demographic not mentioned in the survey (Normally the panel provider can give you this).Quotas are definitely a time and money saver when it comes to distributing a survey via a corporate panel provider.

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Using Market Segmentation in Research

Because different groups of people with different characteristics have differing attitudes and opinions about consumer products, market researchers have sought for meaningful ways to identify those segments of the population most likely to be influenced by a particular marketing strategy. Market Segmentation, therefore, refers to the process of dividing a population into groups or segments with similar characteristics in order to conduct more meaningful research by targeting specific groups of consumers. These segments can be created using demographic variables, geographic variables, psychographic variables, or behavioristic variables. By focusing on a particular segment of the population through these variables, market researchers can identify how certain consumers will react to new products or changes in old ones.

Here's an example found in a consumer behavior article by Nancy D. Rhodes from Texas A&M University: "In 1987, Colgate-Palmolive introduced a new product that was a combination laundry detergent and fabric softener. Because it was in a hurry to beat the competition to the stores, C-P neglected to conduct careful market research. The product was targeted to large families. Yet, the product was perceived by members of large families as too costly; large families tend to have tight budgets. Thus, the product failed largely because the company marketed it to the wrong segment. The product would likely have been more successful if marketing efforts had been targeted toward single people, apartment dwellers, and college students. These groups are typically more willing to pay extra for convenience. Thus, an error in market segmentation can be quite costly."

In order to conduct this type of market research, online survey software programs, like Qualtrics, can provide all the essential tools you'd need. As questions of different variables are generated and sent to consumers, a Qualtrics library panel can categorize those responses and segment them into specific groups for future research. This allows market researchers to save time and money by marketing to the right segment of the population.

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Market Research and the Coca-Cola Problem

This is a copy of an article called "When Market Research Fails, or Why They Don't Sell 'New Coke' Anymore" found in the following source: Sadava, S. W. & McCreary, D. R., (1997). Applied Social Psychology. RR Donnelley & Sons Company: Upper Saddle River, NJ. (p 203-4).

"In the early 1980's the makers of Coca-Cola were concerned. Coca-Cola's market share was slipping, and Pepsi's was on the rise. In spite of expensive and extensive ad campaigns, and successfully launching Diet Coke, Coke still dropped 1 percentage point in market share in 1984. Although 1 percentage point doesn't sound like a lot, it accounts for millions of dollars in lost sales - most of the loss going to Pepsi. Furthermore, this was a trend that had started in the mid-1960's and showed no signs of stopping.

"This was not very long after Pepsi's highly successful "Pepsi Challenge" ad campaign. In the challenge, ads showed candid shots of regular Coke drinkers amazing themselves by their preference for Pepsi in a blind taste test. Coke's own taste tests showed a very disturbing preference for the taste of Pepsi, by a 58-42 margin. There was a crisis climate at Coke. Confidence in the product was low. The company believed there was only one explanation for Coke's continual slide: The taste simply wasn't as good as Pepsi's. Consumers preferred a sweeter drink.

"The research and development team took over. Under orders of great secrecy, they were charged with the task of changing the formula for Coke. They were to try make it taste "smoother," and give it less bite. In short, they were to make it taste more like Pepsi. They eventually came up with an altered formulation that beat the classic formula by 6 percentage points in blind taste tests.

"While the formula was being altered, market researchers asked long-time Coca-Cola drinkers how they would feel if Coke "added a new ingredient" to make the drink "smoother." Results indicated that only about 11 percent of confirmed Coca-Cola drinkers would be angry. Notice, the question did not specifically ask the consumers how they would feel if Coca-Cola was replaced with a drink that tasted different. The Coke executives, confident that people would be thrilled with the new formula, went ahead with plans for a new ad campaign and launched the new formula.

"The first negative reaction encountered was at the news conference announcing the new formula. Reporters at the conference challenged the Coke executives with the assumption that the reformulation had been a defensive response to the Pepsi challenge. The Coke people denied that assertion, of course, but unconvincingly.

"The next negative reaction came when long-time Coke drinkers realized that Coke was actually replacing their favorite drink with a Pepsi clone. Many devoted Coke drinkers became extremely upset. People complained and wrote letters in droves. Some people poured New Coke into sewers. Thousands of people each day called the company. In short, the Coca-Cola manufacturers had created a huge mess.

"How could the Coca-Cola people have been so wrong about the reaction of their loyal customers to change in the formula? The easy answer is that they simply asked the wrong questions. They did the taste tests, and they asked about adding a new ingredient to the old formula, but in all of the market research conducted prior to the distribution of the new formula, they never asked customers how they would feel if the makers of Coca-Cola changed Coke. Coke was more than a soft drink to many people. An example of the comments the company received from the thousands of letters written sums up the sentiment: "Changing Coke is just like breaking the American dream, like not selling hot dogs at a ball game" (Pendergrast, 1993, p. 363). People identified with Coke; they had memories of significant times in their lives with Coke. To them, changing Coke was blasphemy.

"After 3 months of bad publicity and complaints, Coke reintroduced the original formula as "Classic Coke," much to the delight of many consumers. New Coke stayed on the market for 5 years and never received more than a 7% market share. The company officials were accused of planning the whole New Coke debacle simply to improve sales of Classic Coke. However, in the words of Coke CEO Roberto Goizueta, "We are not that dumb and we are not that smart" (Pendergrast, 1993).

"Could the Coca-Cola executives have avoided these problems with New Coke? It is difficult to say with certainty. Because they were concerned with developing the product secretly, it would have been impossible to survey a few thousand consumers and ask them how they would react if Coca-Cola changed its formula. The Coca-Cola experience certainly points to the importance of asking the relevant questions. In defense of the marketing researchers who conducted the work for Coca-Cola, it is easy to see after the fact what questions they should have asked. Much more difficult is anticipating what issues are important to consumers in advance of marketing campaign.

"Perhaps the most important lesson that can be taken from the failure of New Coke is that it is important for marketers to consider not just market share and net profits, but also what their products mean in the lives of their customers. According to McKracken (1986), consumer goods became invested with cultural meaning. It is a tribute to the success of early marketing of Coca-Cola that its customers have invested so much meaning in their product. Many of the letters written to Coke to protest the new drink touched on just this sort of feeling: that the makers of Coke were destroying their memories, their identity, and their culture by tampering with "their" Coca-Cola. If market research in the development of New Coke had been sensitive to the values associated with Coca-Cola, they might have been able to circumvent the difficulties in changing the formula. Perhaps they might have decided to abandon entirely the attempt to change the formula.

"A final point that Coca-Cola's experience clearly illustrates is that there are limits to what marketers and social psychologists can persuade consumers to accept. In spite of decades of research on persuasion, and in spit of millions of dollars spent on the ad campaign, the majority of cola drinkers chose not to purchase the product. Consumers do not mindlessly act in accordance with the whims of advertisers. Consumers can have a powerful effect on huge corporations such as Coca-Cola simply be refusing to buy a product that clashes with their own values."

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Why do market research on line.

It is absolutely essential when doing market research to get good data.  Really any kind of research requires good data.  We need a good sized sample that is representative of the population, because faulty data leads to faulty decisions.  Right now the best place to get that data is online. 

Online market research is the best medium with which to reach respondents.  Nearly everyone uses the internet.  My Grandmother even bought a cheap computer so that she can use email and visit her church’s website.   People are even starting to spend more time on line than they are watching television. Now that’s a big deal.  In fact you can probably reach a larger selection of people online than you can any other way, except for maybe door to door.  Not just can you reach all these people but it is a lot cheaper than doing phone calls or going door to door.  There is also the benefit of not annoying the crap out of individuals with that phone call that always seems to come right during family dinner, or their favourite TV show for that matter.  With an online survey you can invite someone to respond to your survey without actually interrupting what they are doing at that moment.  Not to mention that it is easy for the respondent to stop in the middle of the survey (even closing the survey) taking care of something else they needed to do and then clicking on the link again and finishing the survey. 

 Granted there is some worry about data integrity.  Every one worries about some freak taking the survey over and over again messing up the results.  But some market research survey software, such as Qualtrics, gives you the ability to turn on ballot box stuffing, or even better to individualize each survey link for each respondent, ensuring good quality data.  There are a large quantity of online survey software providers that can be used to perform online market research.  Admittedly some of them don’t look very attractive for the survey builder or for the respondent.  But some (Qualtrics once again comes to mind) are pretty intuitive and even offer personalized survey skins for clients. 

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Online Market Research not only Economical, but Ecological

A recent special entitled "The Human Footprint" premiered last Sunday on the National Geographic Channel, it's purpose to show how much American consume. It turns out that "Americans generated 251 million tons of trash in 2006"(National Geographic, April 2007). With these figures, as well as a new revival of ecological thought companies around the globe are trying to put on a new environment-friendly front. One particular way that several companies are trying to save excess paper/expenditures is by conducting online surveys for their market research.

The common assumption that only tree-hugging tech companies are switching to online survey formats couldn't be farther from the truth. From ladder companies to large Las Vegas casinos, most companies are phasing out paper and pencil questionnaires. Although ecological reasons are a large reason for this shift, the fact of the matter is online surveys are often cheaper. For example, recently a concert sponsor decided to use online surveys instead of pencil and paper questionnaires at one of their venues. Not only did they save on the printing and distribution costs, but they were also able to reduce the number of employees needed to process the questionnaires. (Most online surveys will provide you with statisical tools already built into the program.) Another example would be a city which sent online surveys to their citizens through email in order to ask them about a new development. Less employees and less printing equals less tax payer dollars.

Many of the companies who provide this software often provide free trials as well, like Qualtrics. So this new format for market research could even be free. Online surveys are clearly the ecological and economic choice of the future.

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Sample Size…what's the deal?

The paradigm

You have deadlines. It's part of your life as the resident concept-test guru. You have a panel of 1000 consumers from your client base and you estimate a response rate of 50% when using your online survey software tool. That gives you somewhere around 500 respondents… Is this enough to make a sound product-launch decision? You call up your statistician friend and ask "How do I compute a sample size?" and he or she will invariably respond "it depends" with a gleeful look in the eye. Statisticians (I admit, I am one of them) love that "I know something that you don't" feeling.

After describing your problem to your friend, he or she returns to the statistician cave. A few minutes later, he or she returns with some astronomical figure, saying "At most, you will need (your current sample size * some large positive number)". You gawk in befuddled amazement and hang up the phone with lingering disgust in your voice.

Welcome to the never-ending battle between the financially feasible and the statistically significant.

The Problem

First, a few definitions:

• Sampling Error: the degree to which your responses don't carry the true opinions of the population of interest.
• Population: the group you're trying to learn about. In the concept-test case, this is the consumer group that you are trying to sell to. Remember that this is not the group that takes your survey, but the group upon which you would like to draw inferences.

Your statistician friend says "at most" because he or she knows no more about the sampling error you'll pick up in your respondent panel than you do. However he or she does know that by making a few reasonable assumptions, a sample-size can easily be computed.

The Basic Solution

First, one has to realize that sample sizes are computed on several values chosen before the concept test is ever sent out. These include your confidence level, the margin of error you want to allow for, and a variance (or standard deviation). For a very large population size (like any group of U.S. consumers larger than, say a few thousand people) we will assume that the standard deviation is equal to p(1-p). 'p' is a proportion, so p(1-p) will max out when p=0.5. (If you want to see any further discussion of this concept, take a look in a basic statistics book.) We can look at several values for the margin of error and the population size. Note that these computations also rely on the assumption of normally distributed responses.

So, because WordPress lacks the capacity to handle equations, here is the breakdown in pseudo-math.

n0 = ((Z-score)*(standard deviation)^2) /((margin of error)^2)

n = n0/(1+no/N) when n0 > .05*N

N: population size (estimate if you don't know)

n: sample size corrected for finite population size

n0: uncorrected sample size

The Advanced Solution

For more information about sample size consult a good sampling text. Try Sampling: Design and Analysis by Sharon L. Lohr (1999). (Coincidentally, I used the same book to make sure my equations were accurate…count this as due acknowledgment.)

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Training Feedback Using Market Research Tools

Starting a new job can be exciting, creating enthusiasm in the new hire and the employers. However, there is one pitfall that all parties in this situation hope/want to avoid …lack of training. Almost every person who has worked in the United States has been hired on, given the reins, and had no clue what they were supposed to do. It's frustrating and although most companies do implement training programs many use ineffective, inapplicable, or outdated training techniques. What then can companies do to better their training programs?

I received an answer to this quandary, this past week when one of my colleagues used Qualtrics, a market research online survey tool, to examine how effective his companies training program was. This software is designed and used by many different corporation for market research, but it transitions easily into an dynamic aide for human resources.

Not only did my colleague give his trainees a survey at the end of their training session to see how his company could improve the training, but he also tested how effective his training was by rigging the survey software to distribute a quiz. He's also planning to send a survey to the new hires, one month after they have been with the company, eliciting further suggestions for bettering their training program. Simply put, a great idea.

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Market Research and Product Evaluation

During a brand perception and product evaluation survey conducted for a major market client, Qualtrics Survey Software provided the answers to several questions that helped assess their client's perception of the company's goals, mission, products, and services. This type of market research is quick, efficient, and directive when used through online survey software technology. Data results are clear, precise, and easy to interpret through the automated reports created through the system or exportable to Excel, CSV, SPSS, HTML, XML reports. Market research has risen to a new level with the ability to access thousands of responses on important issues through online survey software. The obtainable information can give great insights to companies seeking to take the right initiative, maintain the proper course, or evaluate and research their perception in the market in order to establish and maintain customer satisfaction and company profits.

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