Researchers embrace technology

Marketing research professionals have overwhelmingly adopted computers, on-line services and the Internet to perform their jobs - and continue to find new ways of making themselves more effective through technology. These are key findings from a survey conductedby the Society of Competitive Intelligence Professionals (SCIP), American Demographics magazine and LEXIS-NEXIS. The results are based on in-depth surveys returned by 608 individuals from two distinct segments of research professionals from across the U.S.: competitive intelligence professionals and market researchers.

Conducting research is the single greatest demand on time for market research and competitive intelligence professionals, taking up more than half of a standard 40-hour work week. In conducting this research, the overwhelming majority (80.8 percent) rely on computer technology for at least some of their research efforts.

Traditional paper-based information sources, such as trade magazines mad daily newspapers, continue to be popular data resources, but the use of on-line information retrieval is rapidly increasing in the market research field. Respondents who access the Internet and/or the World Wide Web were in slightly greater numbers (86 percent) than those who use specific on-line services. Of these, 92.9 percent access the Net to obtain business information.

Between on-line services and the Web, respondents who gather information via personal computer spend an average of 7.7 hours each week on-line. These researchers spend an average of $14,235 per year for online data and information.

More than half of the respondents also rely on market research reports prepared by third-party research firms. Many researchers access these reports on-line, as well. Respondents who use market research reports do so for a variety of reasons. The most common usage for these reports, according to the survey, was to compile competitive intelligence (82 percent), followed by using them as a starting point for primary research or strategic planning (74.2 percent), gathering data for presentations (58.1 percent), making business decisions (56.7 percent) and confirming internal data (47.2 percent).

The majority of respondents (59.2 percent) purchase and/or use these reports during their research efforts. While 86.1 percent of these respondents purchase hard copies of these reports, nearly half (43.9 percent) access market research reports online. Of those who currently don’t access them on-line, 84 percent said they would if they could.

Whether accessed on-line or through traditional sources, marketing research professionals are most interested in big-picture, actionable information, specifically, the activities of competitors. Of the top five types of information ranked by survey respondents, the top four - description of competitors/industry, competitors’ new products, competitors’ product/service pricing and competitor/ industrial financial data - were directly related to what their rivals are doing. The fifth most popular was economic statistics and business trends, providing context for data on researchers’ companies and clients.

With the exception of "competitors’ new products," the most popular types of research information were most often accessed through commercial and consumer on-line services.

Of 2,000 surveys mailed, 608 were returned, for a total response of more than 30 percent. Respondents represented research efforts in dozens of industries, including various types of manufacturing companies, advertising agencies, research firms, pharmaceutical companies, financial services firms, consulting firms, software development companies, electric and gas utilities and telecommunications companies.

More than half (52.6 percent) of the total respondents are responsible for conducting primary and secondary market research in their organizations. Responses were received from 42 states and the District of Columbia.

The research was conducted by Public Relations Partners, Inc., Cleveland.

Americans receptive to flat rates for long distance

AT&T has jumped into the flat-rate competition with other long-distance carriers with what appears to be a solid strategy for stopping the erosion of its market share, according to a new national study by Aragon Consulting Group’s Research Division in St. Louis.

At least one in five households (19.3 percent) say they would be "extremely likely" to switch to an AT&T 15-cent flat-rate program that includes all long-distance and in-state toll calls regardless of when the call is placed, according to the Aragon study.

When respondents were forced to choose one provider among the 14 largest telephone companies that they would prefer to subscribe from for a 15 cent flat-rate offer, AT&T captured more than one in two households (55.3 percent). By comparison, 17.3 percent prefer their local telephone provider; 8.3 percent list MCI; 3.8 percent say Sprint; 8.8 percent mention other companies; and 6.8 percent did not know who they would pick.

"With every nickel decrease in the cost of these bundled services, we found that interest in the flat-rate package went up six-fold as the price dropped from 15 cents to 5 cents a minute, possibly giving Sprint an edge with its 10-cent offering," says Gary Miller, president of Aragon Consulting Group. At five cents a minute, 42.5 percent of people participating in the study say they would be "extremely interested" if the offer were made by their current long-distance provider. Also at five cents per minute, 38.3 percent say they would be "extremely interested" in enrolling in this package if offered by their local telephone company, and 20 percent would give the same consideration to another telecommunications company.

"Flat-rate pricing held the most appeal with younger, higher bill consumers under the age of 40, and those who typically pay monthly telephone bills of $75 or more," says Miller.

A national random sample was drawn to complete Aragon’s research, which produced results with a +5 percent margin of error. The interviews were conducted in September 1996.

Credit card communications influence usage, balance

How much and how well credit card issuers communicate with their customers can affect card usage and dollars charged, a syndicated Inside Track study by Behavioral Analysis Inc. (BAI), Tarrytown, N.Y., has behaviors that can be affected include the dollar size of an individual’s revolving balance and an issuer’s share of a card holder’s "wallet," the study revealed.

"This study uncovered striking differences in revolving behavior among customers of various major card issuers," says Robert Skolnick, executive vice president of BAI. "Not only are some issuers attracting card holders who are more likely to maintain revolving accounts, they are also attracting card holders who  revolve higher dollar amounts."

While on average, one out of three cards have a monthly revolving balance at any given time, the number of revolving balances in an individual issuer’s portfolio can vary greatly, the study found.

For example, only 22 percent of card holders of one major card institution (Issuer A) maintained a monthly balance while a second prominent bank card institution (Issuer B) had more than 50 percent of its card holders carrying forward a monthly balance.

Further, the amount of the balance carried forward by holders of the first institution’s credit card (Issuer A) averaged $1,642 a month while card holders for the second bank card institution (Issuer B) carried forward an average balance of $2,634, an amount 60 percent higher than Issuer A.

The average balance among all customers with revolving charges is $2,063, the study reported. "The study enabled us to see which issuers attracted more revolving card holders, which card holders revolved and the dollar amount revolved," says Skolnick. "We also were able to identify wallet share or the share of a consumer’s total revolving dollars put on any one card. For example, the $2,634 revolved on issuer B’s card represented 43 percent of the total dollars that the holder of card B revolved, in this case about $6,100."

There are at least three factors that could contribute to an issuer’s success, says Skolnick.

  1. A greater effectiveness in communication with card holders;
  2. Stronger ability to target the"right" customers and,
  3. Creating the correct product for their target customers.

Institution B, with its higher balance levels communicated with 62 percent of its customers by including at least one statement insert a month. In contrast, Issuer A reached only 33 percent of their card holders with statement inserts.

On average, 48 percent of all bank card issuers communicated with their card holders through statement inserts each month. Further, Issuer B sent its card holders a greater variety of communications including various card promotions and merchandise offers.

"The study indicates that effective communication can influence card holders when choosing one bank card over another," Skolnick says. "With credit card users carrying an average of 2.5 cards in their wallets and issuers constantly vying for customers’ spending dollars, a card holder’s behavior can be changed if an issuer builds loyal relationships via mail and phone communications."

A look at the demographic profiles of the customers of different bank cards and the product offered also revealed differences that may help explain variations in behavior patterns. For example, holders of card A tended to be older. A large number of these card holders were retired. Further, the majority of the cards from Issuer A were held by individuals in one or two people households. Consumers holding cards issued by B were younger with only a few retired persons in the group. Nearly half of these cards were in households with three or more people.

While the cards issued by both A and B were primarily no fee cards, the average APR on the card issued by A was substantially higher - averaging a little over 16 percent compared to 13 percent.

Twenty ways to market to mature shoppers

Shopping for many mature consumers is a social activity and marketers who create a favorable atmosphere in their stores will earn repeat business, according to Primelife, an Orange, Calif., firm that specializes, in marketing to seniors. The company offers the following tips on marketing to mature shoppers.

  1. Designate "courtesy shoppers" in your stores. These people can be available to help in whatever capacity is necessary.
  2. Provide smaller shopping carts alongside the regular ones. Some mature consumers use them for support.
  3. Make sure employee name tags and all signs are readable. Are they large and in a bold typeface? Are they readable from a distance?
  4. Create a rest area. Arrange an area with comfortable seating, complimentary coffee and reading materials.
  5. Shorten long checkout lines. A possible solution is to develop a number system and always have enough cashiers.
  6. Eliminate narrow, cluttered aisles. Mature consumers appreciate being able to find items quickly. Clear aisles will eliminate the chances of injury to those using their carts for support.
  7. Consider background music. Try playing big band, oldies or light classical during the morning hours when more mature consumers tend to shop.
  8. Explore the ideas of discounts. Offer "early bird" shopper specials during lag times or create theme days.
  9. Have local police patrol the parking area more frequently. Feeling safe is an important aspect of whether mature consumers will choose to shop in a certain location.
  10. Clearly mark restrooms.
  11. Hire mature consumers as salespeople in customer service positions. Your mature customers can relate to these people and often are more comfortable asking them for assistance.
  12. Install drinking fountains that are easy to use and accessible. Touch-sensitive drinking fountains are more friendly to mature shoppers. They should be visible and easily accessible.
  13. Keep the consumer shopper in mind when merchandising. Place items purchased more frequently by mature consumers on lower shelves.
  14. Reduce the risk in purchasing items by offering quality products and services. Mature consumers are wise and value quality.
  15. Consider local cable television, local newspapers and talk radio personalities for advertising and promotions. Keep messages simple and concrete. Newspapers tend to be used more by mature consumers to purchase products. News radio and television are favorites of this age segment.
  16. Consider offering your store for meetings and social activities attended by mature consumers. Contact the director of the local senior center to arrange such meetings. These activities will help introduce your store to mature consumers.
  17. Make product comparisons easier. Simplify your point-of-purchase displays and the advertisements associated with them.
  18. Make the pharmacy area more comfortable for waiting. Provide easy-to-read literature on prescriptions and comfortable chairs.
  19. View sensitivity training as an important training tool for all employees. Understanding mature consumers’ possible physical, psychological and social needs can enable salespeople to better relate to their customers.
  20. Emphasize the quality of your products and services, but make sure that they live up to your claims. Seniors will spend money for quality.

U.S. retail census finds fewer retail outlets, bigger stores

If the latest changes in U.S. retail composition are any indication, Americans are spending more time reading periodicals and less time on rollerblades. News dealers and newsstands experienced a per capita increase of nearly 2 percent in 1996, while sporting goods stores lost more than 8 percent of their outlets on a per capita basis, according to research conduced by Audits & Surveys Worldwide, New York.

Audits & Surveys Worldwide’s National Retail Census is based on a national probability sample of 35,000 outlets of all kinds throughout the country in more than 800 different geographic areas. Data is gathered through on-site, personal store visits.

  • Fully 13 percent of all U.S. retail establishments are automotive related, compared to only 4 percent or 5 percent elsewhere in the world. Despite the relative prominence of automotive retailers, the sector now has 29 percent fewer outlets than it did in 1970.
  • There are 11 percent fewer drug stores in the U.S. than there were in 1970, despite a 31 percent increase in population. The principal reason for the decline is the growth of large chain stores, which has accelerated, expanding 12 percent in the last five years alone.
  • The number of luncheonettes has plunged 25 percent since 1970 as fast-food restaurants (including drive-ins and carry-out shops) have eaten their lunch. Fast-food restaurants’ franchise system and marketing prowess helped them increase their numbers an astonishing 158 percent since 1970, although they experienced a slight decline in 1996.
  • There were 27 percent fewer food stores in 1996 than there were in 1970 as small, independent groceries continue to lose ground to supermarket chains and even equally small convenience stores. Independent groceries and supermarkets have dropped an
    astonishing 16 percent in the last five years, alone. Convenience stores have proven that you don’t have to be big to make it in retailing in the ’90s. Despite their small size, they have gown in numbers by 50 percent since 1980.
  • The growth of discount stores, which resulted in an 109 percent increase in outlets since 1970, came to a halt in 1996, leaving their numbers virtually unchanged as past success has left little room for additional market penetration and as the winning chains move in where the losers leave. There are 6 percent fewer department stores than there were five years ago as competition from discount stores and specialty stores, industry acquisitions and consolidations have each taken their toll.
  • Traditional hardware stores have declined dramatically since 1970, dropping in number by 25 percent. The big winners in the hardware category are home centers which have
    increased 22 percent since 1980.
  • While the number of retail bookstores has declined since 1990, the drop was a modest 3 percent. It appears that book superstores are correct in claiming that they have expanded the market for books (not to mention recordings and gourmet coffee).
  • As department stores change their product mix and pricing policies, catalog showrooms are losing the high-priced comparisons against which they have long sold. Although the stronger continue to survive, catalog showrooms lost more than 5 percent of their outlets in the last year alone.

Fax machines now in over 10 percent of households

According to a recent nationwide survey 10.6 percent of American households now have fax machines. The survey of 9,600 nationally representative households was conducted by Decision Analyst, Inc., Arlington, Texas.

"This survey makes it clear that fax machines are penetrating households at a surprising pace," says Jerry W. Thomas, president/CEO of Decision Analyst, Inc. "Some of it has to do with the proliferation of home-based businesses - and this suggests the home-business sector might be more widespread than previously thought; and some of it is related to people working at home instead of traveling to the office. The fax machine makes working at home more feasible. Lastly, the survey suggests that home fax machines may be gaining currency as simply another mode of personal communication."

The survey also found that home fax machines are most popular among the 35 to 54 age group (with over 13 percent owning home fax machines). Home fax machine ownership falls to 6.9 percent in the 55+ age group.

The presence of home fax machines is highly correlated with household income and education. The higher the income and the better educated the household, the more likely it is to have a fax machine. To illustrate, in households with annual incomes below $25,000, only 3.1 percent of households own a fax machine. However, in households with $40,000 or more in annual income, the ownership rate rises to 16.3 percent of households.

By census region, home fax machines are most common in the west (14.5 percent of households), while households in the midwest are least likely to have a fax machine (7.4 percent).

The survey of home fax machines, conducted in April 1996, has a margin error of +/-1 percent.