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More Than A Survey

Market research is defined as "a branch of social science which uses scientific methods to collect information about all those factors which impinge upon the marketing of goods and services". It includes "the measurement and analysis of markets, the study of advertising effectiveness, distributive channels, competitive products and marketing policies and the whole field of consumer behaviour".

Unfortunately, all too often the focus in market research is on the collection of new data, largely ignoring the worth that existing information may have in identifying marketing opportunities and issues. In fact, market research organisations often use the terms primary and secondary data for newly collected and existing data respectively, which reinforces the misleading assumption that existing data is inferior. Information vital for decision-making often exists within your business or is publicly available.

Organisations should always question if there are alternatives to collecting new information. Investment in collecting information for other purposes (such as sales transactions and system performance measures) can be further capitalised on by exploring it in light of the decision facing your business. The other advantage of using existing data is that often tens of thousands of records are present compared to hundreds for a survey.

This is exactly what the Water Corporation did when it wanted to evaluate the effect of the "Use Water Wisely" campaign on water consumption. The marketing department's first instinct is to run a survey, asking questions on advertising recall and modification of behaviour. Given that water is such a part of everyday life, it might be difficult for people to reasonably determine if they had changed or not considering the compounding factors of seasons, weather and what day of the week it is. Hence Data Analysis Australia proposed to investigate this issue by interrogating the Water Corporation's water consumption billing data. A regression model was built incorporating all the factors that might explain differences in water consumption, including the advertising campaign, weather and time of year. The model could tell not only how much effect advertising had on water conservation (after adjusting for the other effects), it could also quantify how much water was being saved for every advertising dollar spent.

Sometimes it will be necessary to collect new information, which can be an expensive exercise. However, you may still be able to make the most of your investment by collecting data that:

  • Addresses the information needs of a number of business decisions, or to better understand your customer base on more than one dimension.
  • Is augmented by data that already exists. For example, using your existing information in combination with ABS Census data, or using post-stratification to boost the information content of your data. (You may know these techniques as "predictive analytics".)

Statistical analysis of the data you have, whether it was your organisation's information, publicly available, or newly collected, will allow you to make the most of your information resources.

So, think beyond surveys the next time a marketing decision needs to be made in your business. Only when all information avenues have been exhausted, should you consider the collection of new data - it could be one of the smartest financial decisions you make this year.

September 2005