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Full text of "Cases And Problems In Marketing Research"

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OSMANIA UNIVERSITY LIBRARY 

Call No. (,S$'$/66t{ C Accession No. 3 ^ 3 



Title 



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CASES AND PROBLEMS IN 

MARKETING 
RESEARCH 



By 
DONALD F. BLANKERTZ 

PROFESSOR OF MARKETING 

WHARTON SCHOOL OF FINANCE AND COMMERCE 
UNIVERSITY OF PENNSYLVANIA 

ROBERT FERBER 

RESEARCH ASSOCIATE PROFESSOR OF ECONOMICS 
UNIVERSITY OF ILLINOIS 

HUGH G. WALES 

PROFESSOR OF MARKETING 
UNIVERSITY OF ILLINOIS 



THE RONALD PRESS COMPANY NEW YORK 



Copyright, 1954, by 
THE RONALD PRESS COMPANY 



All Rights Reserved 

The text of this publication or any part 

thereof may not be reproduced in any 

manner whatsoever without permission in 

writing from the publisher. 



Library of Congress Catalog Card Number: 54-7643 

PRINTED IN THE UNITED STATES OF AMERICA 



PREFACE 



The present volume has been prepared to meet the need for 
materials which will give practice in working with the problems 
encountered in marketing research. It is increasingly recog- 
nized that principles and methodology descriptively studied fail 
to prepare the student sufficiently to deal effectively with mar- 
keting research problems in the field. Too often the student 
is lost when he goes out into the business world and meets a 
problem necessitating original thinking and some use of re- 
search methodology; his background has done little to prepare 
him to handle problems under operating conditions. In this 
book are presented cases and problems designed to be used in 
conjunction with a basic textbook in the introductory course in 
marketing research. The student is faced with practical situ- 
ations to which he can apply research techniques as soon as he 
has mastered them in theory. 

The cases and problems have been carefully selected with 
this objective in mind. They provide all the necessary data and 
fill in the background material, both relevant and irrelevant. 
The student is then asked to resolve the problem, choosing for 
himself the method by which he will reach a solution. Above 
all else, the aim has been to encourage the student to think for 
himself to take little for granted, to sort out what is useful 
from what is not, to examine all procedures critically, and to 
attempt to improvise new methods where existing ones prove 
inadequate. 

The book is organized into nine divisions, each covering a 
major aspect of the research operation. Every division is pref- 
aced by a discussion of several pages which surveys the opera- 
tion in question and attempts to clarify selected issues which 

iii 



iv PREFACE 

tend to be troublesome to the student. Each of these discus- 
sions places the operation in its proper setting and shows how 
the cases presented in the section fit into the total process. 
These discussions will be valuable for review purposes where 
the book is used in a course in applied marketing research which 
follows a first course devoted to principles. They will also pro- 
vide the basic minimum of text materials for those who use the 
book in an introductory course taught by the case method. A 
selected, annotated bibliography at the end of each part gives 
detailed references to further pertinent information in market- 
ing research textbooks and other literature. 

The cases included cover a variety of different areas, situ- 
ations, and levels of difficulty. Their arrangement within a 
particular section has been determined both by considerations 
of logical order and by a desire to place the easier cases early 
in the section. Although most of the cases refer to separate 
situations, occasionally two or more cases have been used to 
trace the same problem through successive operations. This 
sometimes proves to be a more effective teaching method than 
continually taking up new situations. 

In writing this book, the authors have had the privilege of 
obtaining case materials from a number of people and or- 
ganizations. Among them are W. R. Spurlock, Director of 
Marketing Research, Eli Lilly and Company; the Bureau of 
Economic and Business Research of the University of Illinois; 
the Bureau of Business Management of the same University; 
Donald E. West, Director of Market Research, McCall Cor- 
poration, and Harry Rosten, Research Manager, The New 
York Times. There are also many others who, because of the 
nature of the material supplied, prefer to remain anonymous. 
To all of them, our sincere thanks and appreciation. We 
should also like to acknowledge a special debt of gratitude to 
Professor Lincoln Clark for his reading of the manuscript and 
for the many constructive suggestions he offered. 

DONALD F. BLANKERTZ 
ROBERT FERBER 
HUGH G. WALES 
March, 1954 



CONTENTS 

PART I 

PAGE 

FORMULATING THE PROBLEM 3 

1. What Sales Methods To Use? 9 

2. Sales Organizations Plans 10 

3. Marketing a New Product 12 

4. A Local Market Study 15 

5. Is the New Branch Store Profitable? .... 17 

6. A Survey Proposal 22 

7. A Distribution Cost Study 25 

PART II 

PRELIMINARY INVESTIGATIONS 29 

1. Setting the Stage for a Paint Study . . . . 35 

2. Preliminary Investigations for a Small Study . . 38 

3. The Evolution of a Hypothesis 40 

4. Internal Investigation 46 

5. Use of the Consumer Clinic 52 

6. Consumer Panel vs. Store Audit Research ... 56 

PART III 

PLANNING 63 

1. A Radio Audience Survey 70 

2. Proposed Consumer Market Survey .... 75 

3. Use of Internal Data for Studying Magazine Mer- 

chandising Effectiveness 79 



vi CONTENTS 

PAGE 

4. Methods for Study of Installment Credit ... 87 

5. Pretesting a Questionnaire 91 

6. Constructing a Readership Questionnaire ... 99 

7. Proposed Questionnaire for an Ice Cream Survey . 102 

8. Getting a Luggage Questionnaire into Shape . . 106 

9. Following Up on a Department Store Study . . 110 

PART IV 

SAMPLING 115 

1. Random Selection of Sample Members . . . 125 

2. Determining the Characteristics of the Foundry In- 

dustry 127 

3. A Consumer Survey of Philadelphia . . . . 130 

4. Designing a Multipurpose Survey . . . . 136 

5. Designing a Controlled Experiment . . . . 139 

6. A Panel Operation on Consumer Durable Goods 

Purchase Plans 143 

7. Following Up on a Mail Survey 147 

8. Testing the Validity of a Judgment Sample . . 152 

PART V 

COLLECTION OF DATA 159 

1. Obtaining Data on the Operations of a Laundry . 165 

2. Designing Forms for Gathering Internal Data . . 167 

3. Mail Questionnaire Method of Survey . . . 171 

4. Securing Respondent Cooperation .... 173 

5. Selecting Interviewers for a Life Insurance Study . 180 

6. Instruction for Interviewers 184 

7. Depth Interviewing 192 

8. How Can the Data Be Obtained? .... 197 



CONTENTS vii 
PART VI 

PAGE 

EDITING AND TABULATION 203 

1. Editing Responses 208 

2. Preparing and Preceding a Questionnaire . . 211 

3. Preparation of Forms for Manual Tabulation . . 213 

4. Selecting a Method of Tabulation . . . . 217 

5. Cross-Classification Tabulations 223 

PART VII 

ANALYSIS AND INTERPRETATION OF DATA . . . . 233 

1. Validation of a Consumer Survey .... 242 

2. Extent of Use of Business Life Insurance ... 245 

3. Who Listens to Radio Programs? . . . . 251 

4. Evaluating the Effectiveness of Advertising . . 263 

5. When Should Retail Stores Be Open? ... 271 

6. Analysis of Price and Income Data .... 278 

PART VIII 

PRESENTATION AND FOLLOW-UP 285 

1. Preparation of Chart Material 290 

2. Preparation of a Retail Trade Area Map ... 293 

3. Consumer Reaction to Self-Service Meat Marketing . 296 

4. Report on Branch Store Markets and Policies . . 301 

5. Follow-Up on Product Performance Studies . . 312 

PART IX 

ORGANIZATION FOR RESEARCH 317 

1. Administering a Life Insurance Study ... 323 



viii CONTENTS 

PAGE 

2. Setting Up a Consumer Panel Operation . . . 326 

3. Organizing a Department Store Research Department 328 

4. A Research Department for a Pharmaceutical Com- 

pany 333 

INDEX 337 



CASES AND PROBLEMS IN 
MARKETING RESEARCH 



Part I 

FORMULATING THE PROBLEM 

The Nature of the Task 

Marketing researchers not only gather facts and attempt to 
provide solutions to problems, but also must formulate the prob- 
lems themselves. Indeed, the research task in general may be 
characterized as being (1) to pin point problems, (2) to suggest 
possible explanations or solutions to them (these are called 
hypotheses), and (3) to test these explanations or solutions (or 
hypotheses). Each function may be of equal importance. 

But what is a problem? It may be merely to characterize or 
measure marketing phenomena, as the number of customers for 
a firm, the nature and extent of certain activities of dealers, or 
the sales volume by type of outlet. Or a problem may be to 
identify the factors that influence the action or event (or phe- 
nomenon), as purchases made at trade shows, readership of 
trade journals, or the use of credit. Or a problem may be to find 
the relationship if any between two or more phenomena, as 
family size or income or geographical location and volume of 
consumption of a product. Thus, the researcher may be dis- 
covering what actually occurs, why it occurs, and what effect 
it has. 

Sometimes problem formulation is easy. The problems may 
be simple and clear; the same, or very similar, problems may 
have been studied before; or much preliminary work may have 
been done by others. Often, however, the problem is new, or 
complex, or scantily described, or deceptive. Then the re- 
searcher faces one of his most interesting and challenging re- 
sponsibilities: deciding what the problem is. Without a diag- 
nosis, no sound course of treatment can be possible. 

3 



4 MARKETING RESEARCH 

Problem formulation includes several separate, though re- 
lated, aspects: a true understanding of the business situation; 
rephrasing into quantitative or operable terms; specific wording 
of possible explanations or solutions; looking ahead to the steps 
that will follow immediately; and deciding what, if any, research 
is needed. 

Working Methods 

Understanding the business situation which gives rise to the 
problem requires perspective. Much that has been learned in 
accounting, economics, marketing, and other fields is often 
called into play. For example, almost any question regarding 
profitability will involve considerations from the three fields 
noted. Attention to the environment of the specific issuethe 
policies and operations of the company or industry as well as the 
facts of the market placeis needed. Thus the researcher not 
only dissects what information is directly at hand when he be- 
gins, but also adds all that is relevant which his knowledge, ex- 
perience, and imagination can supply. 

A common working method to aid problem understanding is 
to write out all the possibilities which come to mind. This ex- 
plodes the problem into many fields and stimulates thinking. 
Each of the possibilities can then be considered as to meaning 
and implications. ( Case 4 illustrates this method. ) 

Rephrasing problems also adds understanding as well as pro- 
viding needed precision. Indeed, as soon as one attempts to 
write out possibilities, he becomes aware of problems of termi- 
nology. "Jobber," for example, may be synonymous with 
"wholesaler." In a general discussion, this definition may ap- 
pear sufficient, However, concrete expression of specific possi- 
bilities may reveal that in this particular case the company's 
problem pertains to drop shipping (possession without physical 
handling ) . Here, the two terms are clearly not synonymous. 

As another example, a client may claim interest in all aspects 
of the preferences of hotel guests regarding bathroom linens. 
But when this apparently simple question of "What are their 
preferences?" is rephrased into operationally meaningful quec- 



FORMULATING THE PROBLEM 5 

tions, the list grows horrifyingly long. It soon is clear that not 
all preferences are important after all. 

Consider, even, the implications of so simple a term as "cus- 
tomer." For a department store study this might be defined as 
any person purchasing at the store, or as any person using or con- 
suming goods bought at the store, or as any person buying for 
credit, or as any person buying only at the one department store 
(in a given period of time), or as any person buying more at 
the one store than at any other, or in dozens of other ways. Yet 
each term when employed would yield different figures and facts 
useful in different ways to examine different aspects of patron- 
age. 

This is not to imply that the researcher avoids standard ter- 
minology. The use of such terminology is invariably an integral 
part of a study. It must be recognized, however, that in a real 
sense the researcher creates facts (whether numbers, percent- 
ages, or otherwise) by the way he defines his terms. Only care- 
ful definition will reveal the heart of the specific problem. 
Again the common working method is to write out possibilities, 
to discuss them with others, and to test their usefulness. 

As already suggested, writing out possible solutions or expla- 
nations to problems gives scope and direction to the research. 
The problem may be one of high, and rising, sales costs. The 
possible solutions may include: rerouting salesmen, broadening 
the product line, or improving dealer relations. Which are sup- 
ported by the information available? (And, of course, there are 
such related questions as: what types of rerouting, what aspects 
of dealer relationships, and so forth.) More necessary than 
they may seem, more difficult than they appear, these hypoth- 
eses establish the nature and extent of the research that will fol- 
low. 

As the doctor detects some symptoms readily but must seek 
for others by questioning the patient or examining him, so, too, 
the researcher may diagnose some aspects at once but needs to 
go further. What persons will he want to see and what ques- 
tions should be asked? Where can he find clarifications for 
some issues, in what records or books, and how can various pos- 
sibilities be pursued? Certain formulations of the problem 



6 MARKETING RESEARCH 

immediately suggest company data; others obviously call for 
interviews. Thus problem formulation leads to the steps which 
follow. Already some plans begin to take form because they 
are inherent in the situations being considered in the search for 
the problem. 

This preliminary formulation may reveal that there really is 
no problem, or that it is far different from what was anticipated 
at first. Formulation, therefore, is no mere logical or literary 
job; it is an exploration of business possibilities and of the data 
available. 

Work procedures at this stage are governed largely by the 
specific manner in which the problem has arisen and the nature 
of the business situation involved. Among more or less 
mechanical methods that are commonly used in this stage of 
research are, as noted above, the written expression of ideas and 
possible explanations, and the full discussion of them with other 
members of the research staff. An essential step is to break 
problems into the smallest possible pieces for clearer examina- 
tion. Related ideas can then be added and different ideas can 
be cross-related. Out of this expression, division, reassembly, 
and selection comes the concrete (but still preliminary) formu- 
lation. 

Special Difficulties 

The lack of well-developed processes or techniques for prob- 
lem formulation, as is common to other stages of marketing 
research, is a grave difficulty, especially for the beginner. For- 
tunately, an active, curious mind can do much to overcome this 
deficiency. 

The greatest difficulty, perhaps, is that this stage of research 
has no specific boundaries. Without some knowledge and 
data, only crude and probably faulty formula "ions are possible. 
The researcher already has talked to some members of his com- 
pany or read their statements (or met with the client), so that 
to some extent he is already engaged in the internal analysis or 
situation analysis. He probably has moved ahead to some con- 
sideration of methods of gathering data. In fact, to a consider- 
able extent he must already have envisioned the end results at 



FORMULATING THE PROBLEM 7 

the very beginning. For these reasons not all researchers recog- 
nize problem formulation as a separate and distinct phase of 
marketing research, and not all of those who do place it as the 
first step. However, at least for learning purposes, it seems im- 
portant to segregate these functions as sharply, as clearly, and 
as early as possible. 

The Cases in This Part 

Some of the cases which follow are intended to represent 
situations as actually faced when available information is scanty, 
the problem not clear, and the need for research not certain. 
Consideration of these may lead mostly to determination of 
logical next steps, or of sources and types of information needed. 
The challenge is to analyze and use what facts are available and 
to carry problem formulation as far as possible. Although the 
recurring cry for more data will be sounded, it is well to learn 
early that masses of data alone seldom solve problems. The 
information needed is not just any information, but specific 
kinds based on the investigation of that already at hand. The 
cases should arouse curiosity, reveal the benefits of general 
knowledge, and indicate the first order of research problems 
faced. 

Cases 1 through 3 are of this type. Case 1, "What Sales 
Methods to Use?" reveals a common marketing problem in the 
somewhat unusual setting of seed corn distribution. Case 2, 
"Sales Organization Plans/' presents a similar problem of a 
manufacturer of fluorescent lighting fixtures. Case 3, "Market- 
ing a New Product," represents a borderline situation regarding 
the need for research and the usefulness of available informa- 
tion. 

Other cases relate to situations in which more information 
was available to the researchers and in which problem formula- 
tion had been partially completed. These cases provide oppor- 
tunities for careful formulation of hypotheses and rephrasings 
of original statements. Case 4, "A Local Market Study," de- 
scribes the origins of a broad study in which problems have been 
specified in some detail by members of the luggage manufac- 
turers' trade association. Case 5, "Is the New Branch Store 



8 MARKETING RESEARCH 

Profitable?" presents tentative formulations made by the re- 
searchers and thus, as a first reading, may provide vicarious 
experience in problem formulation. 

The other two cases in this part represent special situations. 
Case 6, "A Survey Proposal," resembles both Case 4 in breadth 
and the earlier cases in scarcity of data, but raises the new prob- 
lem of tailoring a dehydrated foods study to meet different 
interests. Case 7, "A Distribution Cost Study/' serves to intro- 
duce the problem of applying these special techniques to the 
situation of a service wholesaler. 

BIBLIOGRAPHY 

AMOS TUCK SCHOOL. Manual on Research and Reports. New York: McGraw- 
Hill Book Co., Inc., 1937. Pages 1-19 contain a discussion of library re- 
search beginnings. Pages 2-4 pin point definition problems and suggest the 
usefulness of preliminary outlines. 

BLANKENSHIP, A. B. Consumer and Opinion Research. New York: Harper & 
Bros., 1943. Pages 31-37 provide a brief discussion of research stages, with 
special application to opinion research. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. The first research step is characterized (pages 115-24) as a 
rough-and-ready view and a feeling of the problem secured through an in- 
formal investigation; and the divergent views of L. O. Brown are noted. 
Problem formulation is covered in the succeeding chapter (8). 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Pages 325-49 summarize all the stages of marketing re- 
search. On pages 350-66 is presented a formalized view of the early steps, a 
view slanted particularly to broad manufacturing problems. 

HEIDINGSFIELD, M. S , and BLANKENSHIP, A. B. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Pages 18-24 include a discussion of 
problem definition. 

HOBART, D. M. Marketing Research Practice. New York: The Ronald Press 
Co., 1950. Pages 3-8 contain an account of research origins and the genesis 
of early projects by Parlin at the Curtis Publishing Company. Defining the 
problem is noted on page 37. 

LORIE, J. H., and ROBERTS, H. V. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. Pages 67-80 provide a discussion 
of the managerial and policy aspects of research origins. Pages 30-39 relate 
to formulating and testing hypotheses, and provide a useful background to 
problem formulation. 

LUCK, D. J., and WALES, H. G. Marketing Research. New York: Prentice-Hall, 
Inc., 1952. Pages 127-39 discuss the first stage in marketing research. 



Part I Cases 



CASE I WHAT SALES METHODS TO USE? 



BACKGROUND 

By the summer of 1952, the Central-Illinois Seed Company 
was selling a substantial volume of seed corn to farmers of Illi- 
nois, Iowa, and Indiana. Although not considered one of the 
big seed corn companies of Illinois, it had been growing contin- 
uously since it was founded about ten years before. The use 
of modern methods of growing and processing made it possible 
for the company to compete on a very favorable basis with other 
concerns in the business. 

The hybrid seed corn companies employed an unusual dis- 
tribution plan. Farmers who were looked upon as leaders in 
their communities were usually given dealer contracts. These 
farmers, who generally turned out to be financially independent 
of any income received from outside activities, served as dealers 
and sold to other farmers during their off -hours. 

The general sales manager of the Central-Illinois Seed Com- 
pany, Mr. Lupton, had divided the states of Iowa, Illinois, and 
Indiana into 12 districts with a district sales manager over each 
territory. Each district sales manager supervised from seventy 
to one hundred twenty local farmer-dealers. The district sales 
manager sought to obtain productive farmer-dealers and to 
stimulate them to sell as much seed corn as possible. 

The selling season starts in the spring between March 1 5 and 
April 1 5, when the seed corn, ordered the previous year, is de- 
livered. When the corn is delivered, the farmer-dealer can fre- 
quently get the farmer to commit himself for the coming year 
for the largest part of his requirements. About 70 per cent of 
seed corn is sold before January 1 for delivery three to four 

9 



10 MARKETING RESEARCH 

months later. The other 30 per cent is sold between January 1 
and delivery time. 

In a few cases, district sales managers had obtained good sales 
results from feed and seed stores. The major hybrid seed corn 
companies, nonetheless, continued to use farmer-dealers. Since 
the practice was firmly entrenched, there seemed little reason to 
depart from it. 

THE PROBLEM 

The general sales manager put the problem in this form: 
"What can be done to help farmer-dealers to get more product 
knowledge, to make more calls, and to sell prospects properly?" 
His main goal was to build up sales volume; but he was uncer- 
tain as to whether to attempt this through regular channels or 
through a new method of distribution. 

DATA AVAILABLE 

Little published information being available, information 
would have to be assembled from primary sources. 

QUESTIONS TO BE ANSWERED 

1 . Is the sales manager's formulation of the problem susceptible 
to research? 

2. Is the problem to find out the relationship of the farmer- 
dealers' product knowledge and their sales? 

3. Is the problem to uncover the number and nature of the 
calls made by farmer-dealers? 

4. Before final formulation of the problem, will it be necessary 
to take into consideration the reactions of farmers to sales 
arguments for the use of hybrid seed corn? 

5. Is the attitude of farmers toward different seeds, alternative 
sources of supply, or other matters important to the problem? 

CASE 2 SALES ORGANIZATION PLANS 

BACKGROUND 

The Great Lakes Manufacturing Company makes fluores- 
cent lighting fixtures for residential, industrial, commercial, and 



CASES IN FORMULATING THE PROBLEM 11 

institutional installations. Because of the nature of the indus- 
try, it contains essentially three types of firms, which operate at 
different competitive levels. The differences are based mostly 
on the marketing functions performed and distribution meth- 
ods used by individual manufacturers. The first group of firms 
can be described as selling to exclusive electrical wholesalers in 
each area; their sales generally include the highest priced light- 
ing fixtures. The second group sells to any electrical whole- 
salers who maintain fixture stocks, and the third group sells not 
only to any wholesaler in any quantity, but also directly to con- 
tractors and consumers. The Great Lakes Manufacturing 
Company has a distribution plan that puts it into the second 
group. 

The Great Lakes Company does not seek contracts on large 
industrial installations, but secures some business from large 
remodeling jobs. The major portion of its business comes from 
smaller installations, including over-the-counter sales by whole- 
salers. 

The present sales staff includes four men who sell exclusively 
for Great Lakes. In addition, fifteen manufacturers' represent- 
atives are utilized. Each group attempts to reach architects and 
construction engineers who must be persuaded to include Great 
Lakes fixtures in their specifications. Electrical contractors are 
also called upon with the same purpose in mind that of recom- 
mending the installation of Great Lakes fixtures to builders. In 
addition to these calls upon technical personnel, representatives 
also reach electrical wholesalers who sell to each of these groups. 

Still another important group, composed of lighting con- 
sultants of public utility companies, is reached by sales person- 
nel. These consultants are frequently asked to make recom- 
mendations to customers who are planning to construct new 
buildings, remodel old ones, or make repairs. 

In order to reach its customers, the company has divided the 
United States into eighteen sales territories. On the average, 
the salesmen make about sixty calls a week in these territories. 
In 1 9 5 1 they accounted for a total sales volume of approximately 
$1,500,000. 



12 MARKETING RESEARCH 

THE PROBLEM 

The company feels that it would be better for the sales organ- 
ization if the manufacturers' agents were replaced by full-time 
company salesmen. 

In exploring the possibility, the personnel manager has put 
classified ads in newspapers and trade journals. Employment 
agencies have also been utilized. In spite of all this effort, the 
results, in so far as obtaining qualified sales personnel is con- 
cerned, have not been too satisfactory. The personnel man 
reported that one agency had sent a number of men who were 
below his standards and another had sent men who were above 
his standards. Out of seventy-five interviews, he had found 
only two men who he felt were desirable enough to be offered 
a contract for employment. 

A very limited amount of sales training is given the new sales- 
men. The sales manager is of the opinion that the average 
salesman can learn all he needs to know in one week. There- 
fore, he concludes that the main job of a salesman in his com- 
pany is that of knowing the products and customers of the 
company. In keeping with this idea, he likes to have salesmen 
make friends with their customers and prospects from the start. 

Compensation of the salesmen is a combination of a com- 
mission with a guarantee. For good salesmen, earnings can be 
as much as $30,000 a year. 

QUESTIONS TO BE ANSWERED 

1. What is the key problem and how can it be formulated? 

2. Is research needed? 



CASE 3 MARKETING A NEW PRODUCT 

BACKGROUND 

In April, 1950, a concern that had been making devices used 
by doctors in the treatment of certain physical handicaps de- 
cided to branch out its manufacturing operations. The decision 
grew out of a desire not only to increase the profitability of the 



CASES IN FORMULATING THE PROBLEM 13 

business, but also to utilize one of the wasted by-products of its 
principal manufacturing operation. <The waste material was 
scrap leather which could be cut into small strips about % inch 
in width and 3 to 4 inches in length. 

The company used heavy packing cartons, made of straw- 
board, for shipping the product to customers. By chance, it 
occurred to the owner of the business that these packing cartons 
could be impregnated with wax, thereby producing a waterproof 
container. After some experiment, he developed an impreg- 
nated container that was insulated with fiber glass and that 
could be used to keep foods either hot or cold over long periods 
of time. Handles for the container were made from the scrap 
leather. Detailed sketches of this insulated box, called "Pic- 
Pac," are given below. 



INSIDE 
LID- 
PRODI 
NAft 


r-'-^ 1 


I f '"" '"'" '" 1UJ 1 ' 
1 

1 

1 

I S 
u. J 


I FIBRE GLASS 
-v INSULATION y / 


^ V ' J 


T r^ 


1 PIC-PAC 

i / 

i 4 C J 


J \ 

JCT-' INSIDE-*' 
/IE CARTON 



HANDLE HOLES 
-FOR LIFTING 




FIBRE-GLASS 
INSULATION 



OUTSIDE 
CARTON 



The major product line of the company, the medical de- 
vices, was distributed directly to drugstores and medical supply 
houses, and by mail order directly to users. It therefore seemed 
that some of these outlets might be employed in the distribu- 
tion of the Pic-Pac to consumers. The reasoning of the owner 
of the company was that this insulated carton could be used by 
consumers to pack picnic lunches (the name of the product sug- 



14 MARKETING RESEARCH 

gests this) and as a container for cooling bottled or canned 
beverages. Hence, drugstores might be used as middlemen for 
distributing this product. In addition, since the carton could 
be shipped in knockdown form and assembled easily by the con- 
sumer, it seemed that a profitable mail-order business might be 
developed. 

The retail price of the item was set arbitrarily at $1 .98. This 
price was justified on the basis of the carton's durability and con- 
venience in cooling and preserving picnic foods, beverages, fruit, 
and game. 

THE PROBLEM 

The owner of the business presented his problem to an adver- 
tising agency for consideration. He wanted to know what chan- 
nels and, particularly, what advertising media would be most 
suitable for marketing his Pic-Pac. It was his opinion that mail 
order would offer the most economical means of putting his 
product on the market, and he, therefore, thought that the ad- 
vertising agency might help him market Pic-Pac through this 
channel of distribution. 

AVAILABLE DATA 

No published data were available on the sale of this or similar 
products. At that time, several insulated containers of a similar 
nature were on the market, manufactured by metal products 
companies, selling from $6.95 to $1 5.00. All of them made use 
of light-weight metals instead of strawboard as the container 
material. They were marketed primarily through retail outlets 
department stores, drugstores, and sporting-goods stores, with 
some supplementary distribution through mail-order sales. 

ACTION NEEDED 

1 . How can available information be used? 

2. For what specific problems is research needed and how can 
these problems be formulated? 



CASES IN FORMULATING THE PROBLEM 15 

CASE 4 A LOCAL MARKET STUDY 

BACKGROUND 

The Luggage Manufacturers' Association is a trade associ- 
ation whose primary efforts in marketing research have been 
directed toward gathering production and sales data from mem- 
bers and seeking standardization in the field. A slump in in- 
dustry sales plus the urging of the executive secretary has led 
to the consideration of a market survey. 

THE PROBLEM 

No study of consumer purchase or use of luggage has ever 
been made. The suggestion that a local market study would 
be most economical for the Association has met with favor. 
Finally, a research group in a large eastern city has been ap- 
proached. The Association has requested that the study be a 
broad one, including such areas as consumer use and purchase 
habits, consumer preferences for prices and styles, and con- 
sumer buying intentions. The study is expected to prove useful 
to individual manufacturers in designing, promoting, distrib- 
uting, and selling their lines of luggage. 

QUESTIONS RECOMMENDED 

The researchers, during negotiations, had requested that the 
directors of the Association, or some representative group of 
members, be asked to state specifically the information they 
desired. The executive secretary thereafter canvassed members 
and obtained this list of questions: 

1. What does the consumer look for when purchasing lug- 
gage? 

2. Does the consumer prefer leather luggage to striped, canvas- 
covered luggage? 

3. Does the consumer look for styling in luggage? 

4. Do female consumers prefer bright colors within and on the 
outside of luggage? 

5. What kind of luggage does the male consumer prefer? 



16 MARKETING RESEARCH 

6. How often does the consumer use his luggage? 

7. How old is his present luggage? 

8. How often does the consumer travel? 

9. What care does he give his luggage when not in use? 

10. Where does the consumer store his luggage? 

1 1 . Did he buy his luggage or receive it as a gift? 

12. Does the consumer purchase luggage for gifts? 

13. Does the consumer know whether the luggage he now pos- 
sesses differs in style and convenience from that which is at 
present being made and sold? 

14. Is the consumer in the market for new luggage? If not, 
how soon will he be in the market? 

15. If the consumer is not considering the purchase of new 
luggage now, would he buy if he were aware that the lug- 
gage made today has better style and is more serviceable? 

16. When purchasing luggage, does the consumer have a def- 
inite price range in mind? 

17. Does the price determine the luggage which is eventually 
purchased, regardless of its type or serviceability? 

INFORMATION AVAILABLE 

Luggage is a highly variable product. Many materials includ- 
ing various leathers, plastics, aluminum, various cloths (such as 
canvas, duck, cotton, and linen), and paper are used alone or to 
cover plywood boxes. Luggage may be lined, as with linen, cot- 
ton, or silk, in various designs and colors, or it may be unlined. 
Colored luggage has been increasing in popularity. Prices vary 
from $1 to well over $100. Types range all the way from hat 
and shoe boxes to large pullman cases with trays. Men's lug- 
gage includes overnight bags, fortnighters, one-suiters, two-suit- 
ers, folding suit bags, valises, suitcases, sports-style bags, foot 
lockers, and even brief cases. Women's luggage includes over- 
night cases, train cases, bus cases, hat and shoe boxes, wardrobe 
hanger cases, and vanity boxes. Moreover, these names are not 
always used in the same way, and nearly every type comes in 
varying sizes. Many trade names are used. Such terms as 
"Gladstone" and "airplane luggage" have various meanings to 



CASES IN FORMULATING THE PROBLEM 17 

the industry, to the retailers, and to the public. Matched sets 
have been given considerable promotion in recent years. 

Distribution is mainly through wholesalers, although many 
manufacturers sell directly to retailers. Outlets include luggage 
and leather goods stores, jewelry stores, department stores, 
men's wear specialty shops, variety stores, sporting-goods stores, 
and pawn shops. During the war a large volume went through 
military outlets. 

ACTION NEEDED 

1. What is the problem here? How can the questions fur- 
nished and the information on hand be utilized to formulate 
the problem? 

2. What really is meant by each of the questions supplied? 
How important is each? 

3. In what ways would answers to the questions be useful? 

4. Have any important questions of consumer use and prefer- 
ence or purchasing behavior been omitted? 

5. How can the questions be grouped or classified? 



CASE 5 IS THE NEW BRANCH STORE 
PROFITABLE? 

BACKGROUND 

The Boris Department Store is a large department store in 
an Eastern metropolitan area. Located in the central shopping 
district, the store does about $50 million annual volume. Al- 
most half of this business comes from residents of the city. The 
balance is spread over fifteen surrounding counties, except for 
a few hundred thousand dollars of sales widely scattered over 
the rest of the country and the world. 

The store has been approached by the landlord of a property 
in a large secondary shopping center. This shopping center, 
known as the Ransom shopping district, is located in a heavily 
populated suburban area which has been growing steadily. 
The landlord was dissatisfied with the low volume of business 
done on his property by the branch store of another, but con- 



18 MARKETING RESEARCH 

siderably smaller, department store in the city; the lease called 
for rental payments consisting of a guaranteed minimum plus 
an additional sum determined by gross sales. The landlord 
offered the lease to the Boris Department Store. 

Before purchasing the lease the store had its research staff 
make an estimate of probable volume of sales. A research 
agency also had been hired to make a consumer survey in the 
Ransom district trading area. This study analyzed the attitudes 
of consumers toward Ransom district and city stores, their pref- 
erences for places to shop, their use of transportation facilities, 
their ages, and many other aspects of their buying habits. The 
study was primarily intended to aid in determining what type of 
operations would be best suited to the market. 

The estimate made was that over $4 million in sales could be 
expected in the first year and more than $6 million per year 
after five years. The previous tenant was doing approximately 
$1,500,000 annually. 

The lease was purchased. After modernizing and air con- 
ditioning the sales floors, the store opened in October. 

THE PROBLEM 

At the end of the first year of branch operation, net sales were 
$4,500,000, or three times the volume previously done on the 
site. Although encouraged by results, the management of the 
Boris Department Store felt uncertain of the success of the new 
branch. Was it really profitable? An answer to this question 
would not only affect plans for the branch, but would also help 
to determine policy on the possible opening of branches in other 
suburbs or nearby cities. A research group was asked to find the 
answer. 

In early conversations with store officials, several issues were 
explored. The most obvious problem seemed to be the ques- 
tion of allocating expenses. The branch was not organized as 
a completely separate unit. Buyers in the parent store also did 
the buying for the branch. Merchandise was received, checked, 
and marked in the downtown, parent store, being taken by truck 
to the branch store when needed there for forward stock. All 
credit and accounting operations were centralized in the parent 



CASES IN FORMULATING THE PROBLEM 19 

store, as were many other operations. Allocation of indirect 
and joint costs, therefore, was a problem. Store officials, how- 
ever, seemed little concerned with profitability in the strict 
accounting sense. Despite considerable use of sales volume as 
an allocation base and the possible use of better bases, it was felt 
that any reasonable division of expenses would demonstrate un- 
questionably that the branch was profitable. 

Neither did store management seem concerned with the effi- 
ciency of branch operations. There appeared to be some 
divergence of views about the degree of adaptation of the 
branch to its particular market. Except for a few different 
brands in a few departments and differences in price lines, the 
branch carried the same merchandise as similar departments 
in the parent store. Some officials believed there should be 
more differences and that buyers should be forced to distinguish 
between the markets. In general, however, efficiency of opera- 
tions was not considered a major problem. Routine data from 
stock control records and accounting and statistical data were 
believed sufficient to detect important weaknesses in operations. 

The principal worry about branch profitability apparently 
stemmed from the same fear which had deterred branch expan- 
sion by many stores in the years following World War II, when 
construction again was possible and when the movement of 
population to the suburbs was well established. This was the 
fear that branch store business was stolen from parent store 
business. 

The smaller trading area of the branch store, of course, was 
encompassed by the trading area of the parent store. This 
meant that Boris customers now could buy a wide range of al- 
most identical merchandise at two different locations. Had 
the convenience of shopping outside of the congested city- 
center area caused customers to shift trade to the new location? 
It was felt that if most branch sales were the result of a mere 
shifting of business from one site to another, then the branch 
was unprofitable. The new expenses incurred in the branch, 
it was believed, had to be justified by new business, an addition 
to the total volume done by the Boris Company. 

Much suspicion existed that a transfer or switching of busi- 



20 MARKETING RESEARCH 

ness actually had occurred. Parent store sales had matched, in 
fact slightly exceeded, the increase in department store business 
regionally as shown by the Federal Reserve Board Index of 
Department Store Sales. This increase, however, was much less 
than anticipated and far below the rate of growth enjoyed by 
the parent store in recent years. Perhaps this was due to the 
siphoning off of downtown trade by the new branch store. 

Insofar as switching of trade was the problem, it seemed im- 
mediately to lead to the problems of buying habits, customer 
preferences, customer characteristics, and the competitive situ- 
ation. The origins of branch business, in short, seemed to in- 
volve many market problems. Had the new branch changed 
buying habits in relation to purchases downtown or in nearby 
cities or secondary shopping centers other than the Ransom 
area? How about travel patterns, types of customers affected, 
competitive changes, and so on? An investigation of such ques- 
tions could illuminate the problems of why and how the branch 
was profitable or unprofitable, especially since many forces were 
operating outside of parent and branch store operations and 
without direct reflection in store records. 

A special problem was the effect of having taken over a site 
on which a branch store had operated. Had this been a major 
factor in developing sales? Few, if any, opportunities to secure 
such sites would exist in the future should more branch open- 
ings be considered. 

QUESTIONS TO BE ANSWERED 

These broad, preliminary considerations suggest several pos- 
sible problems and numerous specific questions for which re- 
search might seek answers. These specific questions include: 

1 . How much new business did the branch develop? 

2. How many new customers were attracted? 

3. How much business was "stolen" from the parent store? 

4. How much new business, if any, would branch operations 
have to add to make the new branch profitable? 

5. Were inactive accounts of the parent store reactivated by 
the branch? 



CASES IN FORMULATING THE PROBLEM 21 

6. Has the branch been "feeding back" business to the parent? 

7. How many Ransom area customers deal only with the 
branch? Only with the parent store? 

8. How many customers deal with both stores, and how do 
they divide their purchases? 

9. What kinds of customers has the branch attracted? 

10. Have some customers of the branch stopped buying from 
the parent store or from all downtown department stores? 

11. How many shopping trips do customers make? Where? 
By what means of transportation? 

12. How have specific competitors in the Ransom shopping 
district, downtown, and in other shopping centers fared? 

DATA AVAILABLE 

No published results of any similar study were available; 
neither could any noncompetitive store be found which had 
made such a study. 

Two research reports on the Ransom trading area were avail- 
able. As already noted, one had been made for the Boris De- 
partment Store prior to purchasing the branch lease. It showed 
ratings regarding women's favorite downtown department 
stores and their reasons for their preferences; their last purchases 
of fourteen categories of goods; how much buying was done in 
specified areas; purchases in the Ransom shopping district, 
time, type, preferences, stores, means of transportation, and 
so on. The other was a basic trading area study delimiting the 
area for wartime purchasing and peacetime purchasing, reveal- 
ing shopping habits, and estimating present and future sales 
potentials. 

Store records on credit purchases in the form of microfilm 
copies of monthly statements provided basic data for measuring 
the place (branch or parent) of purchases, type, and amount. 
Sales slips data were so filed as to render their use for enumerat- 
ing a sample of customers very difficult. The dates when ac- 
counts were opened and all changes in residence were available 
from store records. It was estimated that about one sixth of the 
total parent store sales volume came from Ransom area custom- 
ers. Nearly two thirds of all business was on a charge basis, but, 



22 MARKETING RESEARCH 

when the cash purchases of credit customers were considered, 
more than 90 per cent of all business came from persons with 
credit accounts at the Boris Company. 

An analysis of 11,555 sales slips for purchases made during 
one week in May showed the geographical origin of branch 
customers broken down into nine major areas of the Ransom 
trading area and twenty subareas. 

All regular stock control data, sales data, and other routine 
statistical and accounting data were available. 

A cursory survey of published sources showed the following: 

GOLOFF, J. M. "What Customers Think about Branch Stores/' Journal of Re- 
tailing, October, 1948. 

"Department Stores Hurrying to Suburbs/' Business Week, October 4, 1947, pp. 
24-26. 

CONVERSE, P. D. "Factors Determining Retail Shopping Preferences/' Dun's 
Review, August, 1947. 

A series of articles by E. B. WEISS appearing in the Department Store Economist, 
March through July, 1949; other articles in Printers' Ink, Architectural Rec- 
ord, and Architectural Forum, most of them about individual stores. 

ACTION NEEDED 

At this preliminary stage of the study, the researchers wish to 
formulate the problem, or problems, tentatively but specifically. 

1. Which aspect (or aspects) of the question of branch store 
profitability is central to the problem? 

2. How can the basic problem, as it now appears, be defined? 

3. What are the specific questions involved? 

4. How should the study proceed from this point? 



CASE 6 A SURVEY PROPOSAL 

BACKGROUND 

National Publishers, Inc., an organization of several mag- 
azine publishers, following the lead of other publishers and 
publishing groups, was considering a series of surveys which 
would interest its readers, industry and trade members, and ad- 
vertisers. One survey suggested pertained to dehydrated food 
products. During World War II there had been much public 



CASES IN FORMULATING THE PROBLEM 23 

interest in the military and foreign-aid uses of dehydrated foods 

and in the potential civilian uses. 


THE PROPOSAL 

Late in 1946 a letter was sent by National Publishers to the 
new Dehydrated Foods Council, an organization which at that 
time represented processors and distributors of dehydrated 
foods. This letter outlined plans for the projected series of 
surveys and tentative ideas for a project on dehydrated foods. 

Suggestions were made that a survey of housewives might be 
of greatest general interest and benefit. The most recent of the 
annual consumer surveys and pantry inventories by newspapers 
had covered only dry soup mixes. The percentage of house- 
wives stocking dry soup mixes was 33.3 in the Chicago Sun- 
Times Pantry Poll, and 41.8 in the Omaha World Herald poll. 
Affirmative answers to the question, "Do you buy dry mixes for 
making soup?" were, in the Milwaukee Journal, 56.7 per cent, 
and in the Indianapolis Star, 23.6 per cent. 

The suggestion was made that the present survey cover the 
full range of dehydrated products, the types of families using 
each, frequency of use, methods of purchase, and attitudes to- 
ward these products. Of interest in the latter connection were 
the likes and dislikes that family members who had served in 
the armed forces had acquired through experience with dehy- 
drated foods and how these attitudes might affect market devel- 
opment. Personal interviewing seemed best, though pantry 
counts and magazine surveys might also be used. 

Also suggested was the possibility of a related survey of insti- 
tutional users and of retail outlets handling dehydrated foods. 
In addition, of course, any study would include a discussion of 
industry growth, processes, plans, and other matters. The views 
and cooperation of the Council were solicited. 

THE REPLY 

The reply received from the managing director of the Council 
expressed much interest in a survey such as was proposed and 
offered assistance. Certain qualifications were given, however, 
particularly to the effect that the Council felt it would not be 



24 MARKETING RESEARCH 

good industry policy to have the results published at this time 
if they indicated a lack of popularity for dehydrated foods. 

During the war years, it was stated, the great volume of dehy- 
drated products consisted of potatoes, carrots, sweet potatoes, 
cabbages, beets, and onions. Only a small portion of these 
products found their way to the consumer's pantry, the produc- 
tion being primarily for the armed forces and for foreign aid. 
However, in addition to the soup mixes and other products men- 
tioned, it was certain that any survey which covered all dehy- 
drated foods would disclose the use by consumers of dehydrated 
flakes made from celery, parsley, mint, green peppers, onions, 
and mixed vegetables. 

The industry, it was said, increased from 21 manufacturers 
before World War II to 141 at the close of the war. However, 
many of these producers were not familiar with the technique 
of dehydration, with the result that some of the products made 
were below the standards which had been established by the 
older producers. 

It was to be expected, the Council believed, that the great 
tradition among soldiers to complain about food would extend 
to a whole line of products, including, unfortunately, dehy- 
drated foods. 

Regardless of the outcome of any survey, the Council said 
that its members would be vitally interested in the results. The 
hope was expressed that the problems raised might be discussed 
together before any final plans were made. 

ACTION NEEDED 

1. Should preparations for a survey of dehydrated foods be 
abandoned or should they be continued, in view of the reply 
of the Dehydrated Foods Council? 

2. If continued, how could problems be formulated which 
would serve the interests of all groups involved? 

3. What appropriate hypotheses concerning consumer uses 
and opinions could be set up at this preliminary stage to serve 
as a framework for the survey? 



CASES IN FORMULATING THE PROBLEM 25 

CASE 7 A DISTRIBUTION COST STUDY 

4 

BACKGROUND 

A. R. Merrows, a service wholesaler of grocery lines, operated 
a number of branch houses and sales offices throughout the 
country. Although the company operated its own cannery, the 
bulk of its supplies was purchased from independent canneries, 
company-owned labels being attached to these products. Of 
nine company brands, seven were applied to a small number of 
items, and two, "Made-rite" and "Marvo," were used on wide 
lines of canned goods and dried fruits. Approximately 60 per 
cent of the dollar sales of the company as a whole were made to 
local chains, 1 5 per cent to schools, hospitals, and other institu- 
tions, 1 5 per cent to independent grocers and other retailers, 
and 10 per cent to jobbers. 

THE PROBLEM 

One of the branches was located in the wholesale district of 
an Eastern metropolis. In this Eastern branch, during the early 
'forties, the question arose as to the desirability of making a dis- 
tribution cost analysis. The initial stimulus had come from a 
speech the company's general manager had made during a 
branch office sales convention, in which he said: 

In a survey carried out at our main office, we found that 75 per cent 
of our sales were being contracted with 25 per cent of our accounts. The 
survey revealed further that unless a customer's order averaged $24 or 
more, the firm lost money on it. We do not begin to make a substantial 
profit on an order until the order averages $40 or more. It is possible 
that you people are faced with a similar situation in this market. 

As a result of this sales convention, the management of the 
branch office adopted two remedial measures, one aimed at the 
sales force and the other at customers. The branch sales man- 
ager conferred at length with each salesman to convince him of 
the unprofitability of selling to customers buying less than $200 
annually. Most salesmen proved difficult to convince, assert- 
ing that many of their small accounts actually were profitable 



26 MARKETING RESEARCH 

now or could be built into profitable accounts if they were al- 
lowed to continue selling them. (Although evidence was not 
complete, it seemed later that the branch had been unsuccessful 
in raising any large number of small accounts into the profitable 
volume zone.) 

In those cases in which salesmen had been convinced by the 
arguments presented, they had proceeded to drop a large num- 
ber of accounts which were, as defined by the branch, unprofit- 
able. Obvious, however, was the tendency of these salesmen 
to acquire a large number of new customers in the following 
months, nearly all of these customers exhibiting characteristics 
similar to the ones dropped. 

The remedial measure directed at the retail trade was an at- 
tempt to set minimum limits to the size of the order. The sales 
force was informed that orders weighing less than 250 pounds 
would not be delivered. An average case of goods weighed 42 
pounds, so this meant that orders had to consist of at least six 
cases. The price to the retailer of a case averaged $4. In effect, 
therefore, the branch was endorsing the general manager's re- 
port that the company lost money on orders under $24. 

The difficulty of convincing the salesmen, the uncertainty 
regarding the actual cost situation for the branch, and the less 
than phenomenal results achieved by the rigorous methods 
used, all served to raise the question of the desirability of a dis- 
tribution cost study, and, if needed, the type of study that would 
be most useful. 

NATURE OF BRANCH OPERATIONS 

The branch operated from a multifloor warehouse, part of 
one floor being devoted to office space. On the ground floor, 
21,400 square feet were used for storage and 2,150 square feet 
for shipping and receiving platforms. Incoming goods were 
hauled from nearby city docks to the branch house by inde- 
pendent trucking agencies. More than half of all merchandise 
purchased was transported by steamship. The branch had a 
private rail siding and was within half a mile of a large freight 
station. Deliveries to customers were made for the branch by 
an independent trucking agency. 



CASES IN FORMULATING THE PROBLEM 27 

On the second floor 5,520 square feet were devoted to office 
space, 41 per cent for the sales department, 25 per cent for the 
credit department, 24 per cent for an'order-routing section, and 
10 per cent for administrative offices. Goods were moved in- 
ternally by freight elevators and a metal chute. 

Branch sales of $1,500,000 annually were distributed much as 
were company sales except that institutional sales were slightly 
higher and sales to jobbers slightly lower. The sales depart- 
ment consisted of a sales manager, three sales supervisors, and 
thirty-five salesmen. Salesmen received a basic commission of 
4 per cent and fixed expense accounts, which approximated 1 
per cent of sales. Each owned an automobile to cover the broad 
territories assigned. Within the limits of their territories, the 
salesmen might sell any customer they could obtain. 

Salesmen received mimeographed bulletins from the branch 
offices each day covering all pertinent market data and develop- 
ments. Sales meetings were held twice a month and sales con- 
ventions twice a year. Executives from the main offices were 
principal speakers at these conventions. 

Advertising media used included newspapers, radio, and bill- 
boards. Free consumer deals of the premium type were prac- 
ticed, the services of outside agencies being used. Cooperative 
retailer advertising, advertising allowances, and demonstrators' 
services also were provided, subject to the restrictions of the 
Robinson-Patman Act. 

Credit terms were the same as those generally offered in the 
trade: 1 per cent, 10 days; 30 days, net. These time limits were 
strictly observed by the branch. 

ACTION NEEDED 

1. What type of distribution cost analysis might the branch 
consider making? Why? 

2. What functional expense classifications might be antic- 
ipated? 



Part II 

PRELIMINARY INVESTIGATIONS 

The Nature of the Task 

Following the original formulation of the problem, but pre- 
ceding final plans for the research study, preliminary investiga- 
tions are made of the company, the market, and secondary data. 
These preliminary investigations are, partly, explorations for 
new hypotheses or new ideas and, partly, tests of the concep- 
tions of the problem already formed. They also inform the 
researcher as to the help that may be given, or the warnings pro- 
vided, by previous research and by facts already available. 

The extent and the exact nature of this preliminary research 
varies. The cautious researcher, however, will not proceed with 
the final plans until he has tested his understanding of the prob- 
lem both in the market place and among those who will utilize 
his findings. 

Working Methods 

Depending on the knowledge he has gained, the way in which 
the project has developed, the contacts he has established, and 
his personal preferences, the researcher usually will select one 
of the following three types of investigation with which to 
begin. He may utilize his staff to conduct all three more or 
less concurrently. 

1. Interned Investigation, or Situation Analysis. Having 
necessarily consulted with company officials, the researcher may 
already have progressed from problem formulation to situation 
analysis. Often, indeed, it takes much conversation with exec- 
utives and other company personnel, plus considerable inspec- 

29 



30 MARKETING RESEARCH 

tion of company records, merely to arrive at a clear expression 
of company policies. 

The internal investigation is insurance against missing im- 
portant possible solutions other than those first formulated. 
Conversations with the persons concerned, probing for their 
ideas and assumptions, and inspection of company documents 
and records are the techniques. These methods also help fur- 
ther to sharpen the issues so that a more accurate study can be 
made and a more practical application of results obtained. 

The situation analysis also should uncover the data which 
exist within the company and the form in which they exist. 
Many times the most important and most accurate data are 
buried in accounting, credit, delivery, inventory, or other rec- 
ords. Proper segregation and analysis of these data may provide 
the quickest, cheapest, and most accurate findings. 

In this work the researcher must be on guard against the bias 
of special interests and of preconceptions. 

2. Investigation of Secondary Data. Finding useful informa- 
tion or guidance in published materials is increasingly possible. 
Moreover, research which builds on previous studies usually is 
more productive than research utilizing noncomparable tech- 
niques or producing noncomparable data. Past studies may 
provide usable facts, helpful theories, or special techniques 
adaptable to the problem at hand. 

The information may be secured from various libraries and 
government agencies, from trade associations, and from special 
agencies or private companies. Published material will include 
books, articles, news columns, and reports of various kinds, all 
of these usually located through card catalog files, prepared in- 
dexes, and references uncovered as the search progresses. Al- 
most every marketing research textbook covers the sources of 
information used and the methods employed or gives adequate 
reference to them. 

At this stage of research, it should be emphasized, extensive 
rather than intensive coverage of sources is important. Data 
gathering, as such, whether of primary or secondary data, comes 
later. Although the researcher will not ignore figures and find- 



PRELIMINARY INVESTIGATIONS 31 

ings that solve the problem or contribute to its solution, nor 
even postpone gathering what he finds, locating facts to solve 
the problem is not his real objective at this stage. Rather, he 
seeks to guard against useless repetition, to explore new possi- 
bilities, and to sharpen his tools. 

3. External, Exploratory, or Informal Investigations. Here, 
for the first time, research moves physically out of the office into 
the market place. The prospective respondents, those who will 
be called upon to furnish the basic data of the final, formal 
study, usually are interviewed at this time as well as users and 
distributors of the products. 

One purpose of such interviews is to test assumptions about 
the market, or problem, and the hypotheses developed by those 
doing the study or for whom the study is being done. Another 
purpose is exploration, the uncovering of ideas which cannot be 
visualized just by studying the company or published materials. 
Still another purpose is realism, the development of a "feel" of 
the market, the actual behavior of customers or others, and the 
specific terms in which consumers, dealers, and others think 
about situations. (Realism is particularly useful if a question- 
naire is later formulated.) External investigations may also be 
helpful in the selection of specific techniques of data gathering. 

These techniques include individual personal interviews of 
various kinds, group interviews (or clinics), mail questionnaire 
surveys, telephone calls, and observation (as of purchasers or 
salesmen in stores). Choice depends upon the number and 
geographical distribution of the respondents desired, the nature 
of the problem, and time, cost, and personal preference or ex- 
perience. 

The most common technique is interviewing which to some 
extent utilizes probing, or so-called "depth interviewing" meth- 
ods. Seldom is a fixed set of questions employed. In general, 
the interviewer seeks to get the person talking freely on the 
broad subject, being content to steer the monologue back to 
relevant areas whenever the respondent wanders too far afield. 
Interviews which result in simple yes or no answers rarely are of 
any use. Reports are detailed, including verbatim records of 



32 MARKETING RESEARCH 

statements of particular interest, and may contain not only 
identification but a digest of results and an evaluation. 

The researcher himself, whenever possible, should conduct 
some of these interviews. In sifting the reports of others he 
looks both for the sparkle of a new, unique idea and for general 
trends. Statistical summaries seldom are valid, however, be- 
cause of sampling methods used. Time and again in this proc- 
ess the suggestion of one woman has provided a basic hypothesis 
or even, eventually, a new product. 

Special Difficulties 

So much might be done and so much information usually 
exists that it is possible to become engulfed in data and lose 
sight of central objectives among a mass of details. Contrarily, 
there is the tendency to skim over data and overlook good mate- 
rials. One protection against such dangers is not to begin until 
the problem is sufficiently formulated that a working outline 
or a working method, scope and direction are provided. An- 
other protection is the use of so-called "standard outlines/' * 
The keynote of such an outline is the use of an orderly process 
for covering, assembling, and summarizing what information 
is available and what is missing. 

A related difficulty is knowing when to end the process. For 
the external investigation, the end usually occurs when further 
interviews fail to develop new ideas or important nuances. For 
secondary data the investigation should stop short of true data 
gathering and after the risk of missing anything important has 
passed a point to be chosen only by judgment. The internal 
investigation also should stop short of data gathering before the 
researcher makes a nuisance of himself, and after a probing of 
all important areas. 

1 L. O. Brown, op. cit., p. 354, suggests an outline based on "six major mar- 
keting factors which control the sales and profits of a company, i.e., the prod- 
uct; the company, industry, and competition; the market; channels of 
distribution; sales organization; and advertising." E. S. Bradford, op. cit., pp. 
130-31, presents a detailed list with many subtopics and individual questions. 
The Check List for the Introduction of New Consumer Products, Economic 
Series No. 41, Department of Commerce (Washington, D. C., 1946), exem- 
plifies a standard outline for a specific type of research problem. 



PRELIMINARY INVESTIGATIONS 33 

The Case Problems Presented 

Case I, "Setting the Stage for a Paint Study/' is a transitional 
case. Ample material is provided for an assignment and session 
on problem formulation, although the intent is to raise doubts 
regarding continuation of the study and, if it is carried on, how 
best to utilize the findings. 

Case 2, "Preliminary Investigations for a Small Study," pre- 
sents a study at the inception of the preliminary investigation 
level and without full problem formulation. Plans for internal 
and external investigations are needed, attention being given 
to the limited funds available. A special challenge may be the 
possibility of securing final answers direct from consulting sec- 
ondary sources. 

Case 3, "The Evolution of a Hypothesis/' traces the develop- 
ment of a promotional study with regard to the influence of 
women on sales of a men's-wear store. The case focuses on 
the reports resulting from the informal investigation, interviews 
with consumers, and their bearing on the study. An oppor- 
tunity is provided for students to hold their own interviews on 
this problem for comparison with the reports provided and for 
evaluation of informal interviewing methods and problems. 

Case 4, "Internal Investigation/' shows how a consultant 
went about an internal investigation for a publisher and how 
the findings affected the scope and nature of his study. 

Case 5, "Use of the Consumer Clinic," discusses a technique 
of preliminary investigation which is not, as yet, widely used. 
The study itself was experimental, and imagination is doubly 
needed. 

Case 6, "Consumer Panel vs. Store Audit Research/' again is 
transitional. Other cases also have pushed the research into 
the area of final planning. This one discusses in some detail 
the techniques employed in data gathering. The case is in- 
cluded here, however, because it represents both a research pro- 
posal and a history of how a company attempted to reach a 
decision, based on its own informal investigation of the situ- 
ation. 



34 MARKETING RESEARCH 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. Chapter 1 indicates some 
of the ways in which a preliminary survey may be conducted. 

BLANKENSHIP, A. B. Consumer and Opinion Research. New York: Harper & 
Bros., 1943. Chapter 3 contains a discussion of early research steps, includ- 
ing (pp. 31-34) the situation analysis and (pp. 34-36) the informal investi- 
gation. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc , 1951. The author does not clearly separate either problem definition 
or planning from preliminary investigations. Chapter 7 and pp. 126-33 of 
Chapter 8 include useful examples of schedules for the preliminary investiga- 
tion of specific problems. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Pages 350-54 provide a fine summary statement of early 
research steps and make a clear distinction between internal and external 
analysis; pp. 354-66 give an extended treatment of broad problems of manu- 
facturing encountered in internal analysis. Chapter 18 provides both an ex- 
cellent summary of purposes and thirteen examples of interview reports. 

HEIDINGSFIELD, M. S., and BLANKENSHIP, A. B. Market and Marketing 
Analysis. New York: Henry Holt & Co., 1947. Chapters 4 and 5 provide 
a highly satisfactory summary of internal investigations useful in conducting 
the preliminary step of a broad study or for data gathering. 

LORIE, J. H., and ROBERTS, H. V. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. Chapters 5 and 19 offer good 
material on explorations and preliminary problems encountered in coordi- 
nating research with the needs of management. 

LUCK, D. J., and WALES, H. G. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. Chapter 7 provides good treatment of external preliminary 
investigations together with much illustrative material. 



Part II Cases 



CASE I SETTING THE STAGE FOR A 
PAINT STUDY 



BACKGROUND 

As is not unusual, the major part of a course in marketing 
research in a certain college consisted of carrying out a full-scale 
research project. Numerous considerations entered into the 
selection of the project from among several proposed. 

The project, it was felt, should be practical. The results 
should be useful and profitable, not merely interesting. Such 
a project usually depends upon a cooperative client. It was also 
desirable that opportunity be provided to prepare a published 
report, if warranted, and that there be permission to release all 
but the most confidential data. Problems were preferred that 
were exploratory and experimental, rather than simply cut-and- 
dried. As long as such projects involved relatively little expense, 
the students could afford to risk taking new research paths and 
thereby provide themselves with much additional experience. 
Although full consideration was given to specific proposals 
made, freedom of choice had to be left to the class regarding 
such matters as the scope of the study, emphasis, and methods 
used. Interest in the problem, its feasibility for class study, and 
other considerations also entered into the choice. A proposal 
made by the secretary of the sales division of the Paint Manu- 
facturers' Association seemed to meet these criteria better than 
the projects suggested by other associations and firms at that 
time. 

35 



36 MARKETING RESEARCH 

THE PROBLEM 
The paint project was outlined by the secretary as follows: 

So far as marketing problems in our industry are concerned, one of 
the greatest problems we have always had is to determine why the 
American public is using only about 10 to 25 per cent of the possible 
total of the products of our industry for which there is a definite market 
and need. In other words, paint for only about 10 to 25 per cent of the 
surfaces in this country which should be protected and decorated with 
the products of our industry is being sold. In connection with this 
problem of selling the public on the advantages of and necessity for the 
use of finishing products, we would like to know the answers to the fol- 
lowing as examples: 

1. The color preferences of the public both for inside and outside 
painting. 

2. Preferences for types of paint, such as oil paint, water paint, 
enamels, and the reasons for such preferences. 

3. Average size and extent of paint jobs needed. 

4. Who is responsible for the purchase of paint products men or 
women? 

5. The present attitude of the public toward the quality of paint. 

6. The frequency of repainting interior exterior. 

7. The relative importance of paint to other things for which the 
consumer spends money, such as automobiles, household equip- 
ment, vacations, and so on. 

8. The attitude of the public toward installment buying of paint- 
ing jobs. 

9. The reason why the consumer does not paint more often. 

10. From what source does the public secure its color ideas for in- 
terior painting of homes? 

1 1 . How much painting is done by the home owner, by the painting 
contractor? 

12. What prompts the purchase of paint in most instances: adver- 
tisements, solicitation by painting contractors or paint dealers, 
and so forth. 

No other factual data were given. 

TENTATIVE DEFINITION OF PROBLEM 

A decision was made to hold other possible projects in abey- 
ance and to proceed with the paint study. At first blush the 



CASES IN PRELIMINARY INVESTIGATIONS 37 

most challenging aspect of the problem and the one most im- 
portant potentially seemed to be the emphasis on securing mer- 
chandising results which might aid in advertising, promoting, 
and selling paint of all kinds for home use. This might require 
the collection of data from both consumers and retailers. 

Such a merchandising problem, it appeared, would involve 
consideration of: 

1. Quantities used (in quarts, square feet, or dollars) by types 
(and colors?) of paint related to family income, occupation, 
size and type of dwelling, home ownership, and so on. 

2. Persons doing the painting: family members or others. 

3. Influence of various family members in selecting types and 
colors of paints and in making the actual purchase. 

4. Place and manner of purchase of paints and influence of 
advertising, displays, and so forth. 

5. Paint type and brand preference (and use) and reasons for 
preferences, such as cost, appearance, ease of application, 
ease in cleaning, durability, and quality. 

PRELIMINARY INVESTIGATION 

Among the materials found in a search for secondary data was 
a study entitled Paint , Varnish, and Lacquer by the Consumer 
Research Division, Curtis Publishing Company, published in 
May, 1940. This was a report on 1,741 consumer interviews 
made in October, 1939, in 18 cities from coast to coast. 

Questions asked included the following: when exterior was 
last painted; what interior painting of any kind was done in the 
last three years; what painting for both exteriors and interiors; 
reason for painting; cost; who did the jobs; who purchased the 
paints; who selected the brand and why; who suggested that 
painting be done; what rooms have painted walls; what rooms 
were changed from paper to paint or vice versa, and why; who 
selected color and how; what term "paint styling" means, and 
desire for information about it; seeing or use of paint manufac- 
turer's book on interior decorating ideas and color selections; 
possibility of paying for painting by budget or installment plan; 
alterations or additions desired; need to paint exterior, and, if 



38 MARKETING RESEARCH 

need exists, why it is not being done now; seeing or hearing of 
recent paint advertisements; which advertisements most help- 
ful, best; and proportion of income spent on various items. 

ACTION NEEDED 

1. What decisions concerning the project might have been 
made in the light of the availability of this previous study? 

2. How might the findings of that study be utilized most effec- 
tively in planning the present one? 



CASE 2 PRELIMINARY INVESTIGATIONS 
FOR A SMALL STUDY 

BACKGROUND 

The Modern Display Company is a small firm located in a 
large Midwestern city. The major portion of its business is the 
construction of dioramic exhibits or displays, many of them 
being animated. These displays have been used most com- 
monly in store windows and museums, and at conventions and 
fairs. Clients have included large, nationally known corpora- 
tions as well as many smaller companies. Company exhibits 
were used during the 1930's at the New York World's Fair, the 
San Francisco Exposition, and the Chicago World's Fair. 

The business was organized in the early thirties. Until the 
beginning of World War II it had operated successfully. Then 
the business was closed for the duration because the owner- 
manager went into service. He had special training and ability 
in both art and topographical engineering, and the small busi- 
ness he operated required these skills. 

Re-establishing the business after the war presented new 
problems. Although the owner was able to build up a compe- 
tent staff of about twenty workers, he experienced great diffi- 
culty in soliciting a sufficient volume of business. Just prior to 
the war, sales had run at approximately $12 5,000 a year. In the 
first years after the war, sales had never gone above $75,000 and 
had been as low as $50,000. Unit sales also were far below pre- 
war levels. 



CASES IN PRELIMINARY INVESTIGATIONS 39 

SELLING METHODS 

The company relied for business almost entirely on direct 
mail or on the initiative taken by prospective customers. The 
major appeal used in direct mail promotions was to the durabil- 
ity of displays produced. The mailings often resembled an- 
nouncements more than sales letters. 

Returns from these mailings often had been disappointing. 
For example, the owner had decided the year before to feature 
a dioramic display with a Christmas theme suitable for banks 
and churches. The display was priced low, and could be pro- 
duced profitably only if a hundred or more orders were secured. 
A list was purchased that contained names and addresses of over 
6,000 organizations. A series of four letters was then sent to 
each name on the list. Only ten orders were received. As these 
could have been filled only at considerable loss, the orders were 
canceled. 

At the time that a research consultant was called in, annual 
mailings designed to sell exhibits for use at conventions were 
being readied. Lists of exhibitors had been secured from the 
convention bureau of the local Chamber of Commerce and 
from a number of hotels. Letters were to be sent addressed to 
the "Director of Convention Exhibits" of the companies on the 
list. 

THE PROBLEM 

The owner had approached a free-lance consultant recom- 
mended to him by a business friend. The owner felt that he 
could not afford more than a few hundred dollars for research. 
Although he was eager for any recommendations on securing 
a larger volume of business at a reasonable sales cost, he con- 
sidered direct mail to be the only practical means. The prob- 
lem, as he saw it, was, "What has been wrong with our mailings 
and how can we improve them?" The fee he had in mind was 
$200. 

ACTION NEEDED 

1 . What type of preliminary investigations should the consult- 
ant make? 



40 MARKETING RESEARCH 

2. Should the preliminary investigations actually be merged 
with data gathering, and, if so, in what way and with what 
probable reliance on secondary data? 

3. What possible solutions are there to the company's prob- 
lems? 



CASE 3 THE EVOLUTION OF A HYPOTHESIS 

BACKGROUND 

The Rajah Men's Shop was a high-grade store located in the 
downtown shopping area of a large city. Although advertising 
extensively, it classified itself as a nonpromotional store. Only 
a few clearance sales were held annually. The store did not run 
price events or stress price or bargains in its advertising. Indeed, 
it felt that men's-wear chain stores and most men's-wear depart- 
ments of department stores in the city, the promotional stores, 
were not really competitive. 

Advertising, however, was seldom of the strictly institutional 
variety. The bulk of the advertising, of course, was for men's 
outerwear, and this advertising stressed brand names, partic- 
ularly a line of high-priced clothing with a well-known national 
label carried exclusively by this store in that city. Although the 
store carried a wide assortment of men's and boys' clothing, 
accessories, sportswear, and related items, men's suits provided 
the major line. 

The store wished to make a survey of men in the area which 
would (1) test and expand its knowledge of the characteristics 
of its customers, and (2) provide material to serve as a basis 
for advertising and promotional efforts being directed toward 
cultivating new customers and toward increasing business, or 
strengthening store loyalty among present customers. 

DEFINING THE PROBLEM 

One of the questions raised by a store executive in outlining 
the problem was: Does the influence of a woman on a man's 
shopping decrease with his increased earning capacity? 

Taken alone, this question seemed to be a side issue of rel- 



CASES IN PRELIMINARY INVESTIGATIONS 41 

atively little importance to the merchandising of men's suits. 
Although the dominance of women as buyers was well known, 
it was not believed that this was particularly relevant to men's 
clothing. In so far as it was relevant, the answer to the specific 
question very probably was that woman's role as a purchasing 
agent for the family decreased as income increased. Moreover, 
recent evidence suggested that, at least in secondary shopping 
centers and suburban locations, men were tending to increase 
their participation in family shopping. The fact that many 
women accompanied men who were buying clothing was recog- 
nized, but this was considered a special aspect of personal sales- 
manship apart from advertising problems. 

As a result, the tentative definition of the problem did not 
include any major hypothesis concerning women's influence, 
but simply raised the question: What influence have women 
on customer behavior? 

SITUATION ANALYSIS 

Store records revealed nothing about women except that a 
minority of accounts were in women's names; presumably these 
were single women, widows, or mothers buying boys' clothing. 
The advertising manager revealed that advertisements in subur- 
ban presses often were used to sell boys' clothing. He assumed 
that these advertisements were read mostly by women. Audi- 
ence studies also showed that radio and television plugs had 
many female listeners and viewers. In both cases some atten- 
tion was given to women, but only for gift buying before Christ- 
mas and Father's Day did the store attempt to promote men's 
clothing to women. Even men's furnishings, extensively 
bought by women normally, were advertised only to men. 

The internal investigation indicated that about one fourth 
of the customers came in with their wives. Salesmen were in- 
structed to give at least as much attention in these cases to the 
woman's preferences as the man's, although as unobtrusively 
as possible. The store manager expressed his opinion that 
women unquestionably exerted some indirect influence on the 
men's purchases. In his opinion this influence was transmitted 
by such comments on the part of women as: "You look good 



42 MARKETING RESEARCH 

in blue/' or, "Don't come back with one of those things again/' 
Information from secondary sources also stressed the influ- 
ence of women on men's purchases when accompanying men, 
the dominance of women in purchases of furnishings and acces- 
sories, and their importance in all lines of men's and boys' wear 
sold in department stores. In one instance, the Rajah Shop 
noticed an advertisement in an out-of-town paper by another 
men's store addressed directly to women. It had not been 
known that any men's store used this policy. A letter to the 
advertising manager of that store elicited the following state- 
ment: 

In our stores, especially in the suburban areas, we have noticed that 
the majority of men purchasing clothing are accompanied by women. 
However, to back up our feelings in the matter I am attaching a bibliog- 
raphy which I hope you will find useful. There is no doubt that women 
influence a great deal of spending in this country. But I do not have 
specific facts at my finger tips to give you at the moment. 

The attached bibliography included these items: 

Male vs Female Influence in Buying and in Brand Selection, Vol. II. New York: 
True E. Fawcett Publications, 1950; also 1948 edition. 

The Influence of Women on Buying. New York: Hearst Magazines, Inc , 1948. 

Who Buys. New York: Batten, Barton, Durstine & Osborn, Inc., March, 1946. 

P. D. CONVERSE and C. M. CRAWFORD. "Buying Habits in the Home," Adver- 
tising Agency, XIX (July 26, 1948) . 

"Women Dominate Male Spending, Fairchild Says," Advertising Agency, XIX 
(July 26, 1948), p. 41. 

"Women Still Influence Men in Suit Buying/' Wool Bureau Reports, Tide, 
March 2, 1951. 

This letter was not received until after the external investiga- 
tion was begun. Except by hindsight, however, it is doubtful 
that it would have influenced the interviews greatly in any case. 

INFORMAL INVESTIGATION 

Interviewers were sent into scattered neighborhoods prima- 
rily to interview men, although a specified number of interviews 
with women, or with men and women together, were allowed. 
They were instructed to induce the respondents to talk about 
clothing and to report the conversations. Among subjects to 
be covered were where those interviewed bought their clothing; 



CASES IN PRELIMINARY INVESTIGATIONS 43 

what they looked for, liked, and disliked; and the influence on 
purchases of advertising, window displays, brands, store name, 
salesmen, friends, wives or other women, price, and store serv- 
ices. Respondents were to be identified by age, by an estimate 
of their income or income group, and by other factors. Selec- 
tions and summaries from the more than one hundred reports 
filed follow: 

1. Man, 50, income about $6,500 per year. When younger bought 
at Rajah's and at . . . ; but "they outpriced me/' Not affected by adver- 
tising unless a known brand is sold at a markdown. Usually buys alone. 
Not influenced by wife. Would like to buy in suburbs if stores had 
branches there. 

2. Man, 42, about $8,000. "I have been buying . . . (brand) . . . 
suits for a long time." "I like to buy where I am known and a smaller 
store gets to know you." "I am a stickler for brands." "I have more 
confidence in brands." "Stores carrying national brands stand behind 
the goods." "I went into a store with my wife to buy a hat, and bought 
an overcoat, and then my wife insisted on a blue suit." "My wife insists 
on buying more than I would ordinarily." 

3. Man, 45, about $6,000. Thinks women influence men's shop- 
ping, but "I don't like my wife to help me." 

4. Man, 40, about $5,000. "Married men don't care as much about 
appearance. We don't have to impress women anymore." "A wife 
wants other women to look and think her husband is well dressed." 
Buys when he needs a suit. Does not think income affects price paid. 
"Credit is an equalizer." Brands do not influence him; prices and styles 
do. 

5. Man, 63, a fireman, but with other sources of income, $8,000. "I 
buy all my clothes at ... ." Dealt there 30 to 40 years. "I know a sales- 
man there. He's a good guy. You know, you can kid with him and 
everything. I don't have to go down if I don't feel like it he just sends 
up what I call up and ask for. He knows what I want." "One day I 
said to the wife, 'I want a windbreaker. Want to come along?' She 
says, Tine/ She never interferes. I got a good woman. Anyway, we 
came back with two suits no windbreaker. She's easy going, a good 
judge of clothes, too." "One suit I got I've had quite a while, a good 
suit; but it's too young-looking for me now. One day I walked out of 
the house with it on and the woman next door said, 'Who do you think 
you are, some spring chicken?' I took it off went right back upstairs 
and took it off. Haven't worn it since either." "Used to wear single- 



44 MARKETING RESEARCH 

breasted suits. The salesman says a double-breasted suit looks better on 
me. He's full of that stuff. I've been dealing with him for a long time." 

6. Man, 50, traveling salesman, about $6,000. Buys suits when what 
he has wears out or becomes too small around the waist. "Sometimes 
you put it off too late. Then I buy my stuff wherever I happen to be. 
Most of the time, though, I buy my clothes in .... That's where the 
home office is. I can get my stuff there easier, don't have to kill a Satur- 
day when I'm home. Don't care what name is on the label. I go to 
chain stores that I know. They make their own stuff. I know it's O.K." 

7. Man, 45, shop owner, upper middle income class. Doesn't like 
to shop. "I hate to get dressed up." Wife does all his shopping except 
suits and shoes. 

8. Man and wife, fortyish, middle income class. He didn't have a 
chance to talk much. Wife supplied the talk. He doesn't care to shop. 
Wife buys most of his clothing, even including suits and overcoats. He 
doesn't even go with her, her judgment on purchases apparently being 
final. 

9. Wife, 60, high income. Husband has all suits tailor-made. Re- 
cently he bought a ready-made suit, "and if you ask me, I must say it 
looks like the devil." 

10. Man, 38, about $5,500. In-laws worked at department store, and 
he bought there because of the discount. Now he still goes there be- 
cause he has a job nearby and it is convenient for him. 

11. Man, 40, $8,000. "I'm not much on clothes." Buys a suit every 
two years. "Sometimes my wife goes downtown and buys it. She takes 
my size and goes out and buys it." A builder, he wears old clothes most 
of the time. 

12. Wife, 40, $4,000. "Oh, I never go with him." He buys only one 
suit a year and one pair of slacks. "We have seven children, you know." 

13. Man, 55, $3,500. "When I need a suit, I just go downtown to 
... or ... (several department stores mentioned) and get one." "I 
always take my wife. These salesmen try to push a suit onto you no 
matter how it fits." 

14. Man, 50, upper income class. Buys most suits in ... where he has 
one of his offices and the rest made to order here. Wife goes along some- 
times. Thinks local selection is poor, and must make a special trip 
downtown. 

15. Man, 48, insurance broker, upper income class. Usually buys 
within walking distance of city-center office or where parking convenient. 
Doesn't like department stores. Buys 7 or 8 suits a year. 

16. Doctor, 30, $10,000. Wife is dominant in buying clothes. She 



CASES IN PRELIMINARY INVESTIGATIONS 45 

tells him when to buy. He seems to be proud of the fact that he doesn't 
have much time to think about clothes. Wife usually accompanies him. 
He bought a rayon suit on his own:"I got stuck. FH never go to another 
sale/' 

17. Wife, 30 (man, 45, engineer), $11,000. When married "he 
was already an old bachelor and knew how to dress." "Once I bought 
him some ties and he ranted and raved about them." "Where in h 
salesmen ever get the gall to sell these monstrosities to women." He 
buys loyally at one store, Rajah; formerly (for 15 years) at store in an- 
other city. 

18. Reporter, 45, about $6,000. Buys at no particular place. Used 
to buy at Rajah's before the war but hasn't for a long time. "They're 
high-priced. I don't always have the capital." Used to deal only with 
one salesman there. Wife has no particular influence, he says. "I buy 
what I want and then catch it when I come home." 

19. Man, 35, about $5,000, works for manufacturer of men's apparel 
for a large chain. "My wife is like everyone else. She thinks a $45 suit 
is not a cheap suit and why buy a suit for $90 when you can get two for 
the price." "Nothing like good clothes. I used to buy $3, $5, $8 ties, 
and shirts for $8. People used to ask, 'Where did you get that tie?' or 
'Where did you get that shirt?' That proves it's good, doesn't it?" "I 
still like expensive clothes, but you can't afford those things when you're 
married." "I could buy a suit for $17 at my place that wholesales for 
$51, but I wouldn't enjoy wearing it so why should I buy it?" "Adver- 
tising is the biggest farce in the world." 

20. Man, 50, $3,000. Would rather buy two cheap suits than one 
expensive one because "they all wear the same anyway." He claimed his 
wife didn't influence his buying; but she was there and laughed when he 
said this. 

21. Man, 55, $9-$l 1,000. "When I buy a pair of shoes, I just walk 
in, stick out my foot, and ask if they have any like the ones I'm wearing. 
Haven't changed my shoe style in years." "When you have a bay win- 
dow and narrow shoulders like I do, you don't dare wear anything but a 
conservative suit." 

22. Lawyer, 35, $10,000. Has to have all clothes made to measure, 
as is about 6' 6" tall, Says he could afford more expensive clothes. Pays 
about $60 for a suit; indicates that expensive means around $100. 
Started buying at present store when a law student, and has continued 
because he finds the clothes completely satisfactory. 



46 MARKETING RESEARCH 

ACTION NEEDED 

The selections listed above from the reported interviews were 
chosen largely to reflect findings relevant to the influence of 
women on men's clothing purchases. At the same time, how- 
ever, these selections suggested to the researcher other possible 
hypotheses concerning customer behavior that might be used 
as a basis for the full-scale study of the subject. What are these 
hypotheses and what justification do these interviews provide 
for them? 



CASE 4 INTERNAL INVESTIGATION 

BACKGROUND 

A large university operated its own Press as one of its depart- 
ments. The editoralso the directorwas responsible to a 
governing board of university officials and faculty members. 
The staff included the director, a sales and office manager, an 
advertising and promotion manager, a production manager, a 
bookkeeper, a shipping clerk, and five secretarial and clerical 
assistants. 

The Press did not have its own printing facilities. Printing, 
binding, and other manufacturing operations connected with its 
publication of some twenty to thirty titles each year were con- 
tracted for according to Press specifications. All other business 
operations, as well as editorial activities, were performed by the 
staff. Publications were primarily of scholarly works and of 
books of regional or local interest. The Press did not publish 
fiction or popular books, and it neither sought nor, because of its 
distribution facilities, was able to compete with commercial 
publishers for manuscripts or sales. In addition to current pub- 
lications, the Press had a back list of several hundred books 
previously published and still in print. 

In common with nearly all university presses so operated, this 
one steadily lost money. No one was disturbed by this fact 
until after World War II, when publishing and labor costs 
rose, as did the amount of the annual deficit which had to be 



CASES IN PRELIMINARY INVESTIGATIONS 47 

net from general funds of the university. In 1949 the deficit 
exceeded sales. Because the amount seemed excessive, and be- 
cause the university was under financial stress at the time, con- 
sideration was given to special methods of solution. 

A decision was made to hire outside consultants. Two men 
from the faculty of the School of Business were hired, one to 
work part time for a month on an organizational study and the 
other full time for a month on a study of business methods. In 
general, these men were to work separately. This case concerns 
the activities of the full-time consultant. 

THE PROBLEM 

Preliminary discussions concerning the troubles of the Press 
and the type of study that seemed desirable had centered on 
selling and advertising. Lack of volume appeared to be the 
chief difficulty, and better promotion the chief remedy. The 
hope was that an analysis of the distribution and promotion 
policies and practices of other university presses and commer- 
cial presses, plus the application of sound business practices in 
general, would lead to improvements in operations. Greater 
economies in operation were considered possible, but were not 
thought to be a major problem, except perhaps as organizational 
changes might be involved. 

Thus, it was planned that the man concerned with organiza- 
tional problems would spend all his time in the offices of the 
Press and would make extensive use of its records. The other 
man might wish to familiarize himself with current practices 
and to examine a few records (or confer with the organization 
consultant), but this would be merely a preliminary investiga- 
tion on his part, not his main activity. He was assured, none- 
theless, that all records would be open to him and that he was 
entirely free to develop the study as he saw fit. 

This man began his work by talking to various persons in the 
offices, discovering all the types of records maintained and the 
manner in which they were kept, as well as outside material 
available on university presses, and examining and sampling the 
records. After four days these methods continued to turn up 
new problems and promising leads. 



48 MARKETING RESEARCH 

A new problem thus arose. Should he devote nearly all his 
time to analyzing records contrary to what those hiring him, 
and he himself, had planned? 

DATA AVAILABLE 

Under methods established by the budgeting office of the 
university, the Press prepared monthly, semiannual, and annual 
profit-and-loss statements. From these could be assembled data 
on such natural expense classifications as salaries, postage, and 
travel; but functional expenses could be estimated only crudely 
from these records. 

Duplicate invoices for each individual sales transaction were 
filed numerically and showed the names and addresses of pur- 
chasers (but not classified as to sales agent, wholesaler, book- 
store, library, or individual, except as such classification was 
revealed by discounts or customer listings), dates, list prices, dis- 
counts given, cash or credit terms, postage costs, and return 
allowances. 

From the invoices used to assemble orders and ship them, the 
shipping clerk kept a ledger by individual book titles showing 
the date and number of books received from printers, all ship- 
ments to buyers, shipments to those receiving complimentary 
copies, returns, and the book inventory balance together with 
annual physical inventory counts and adjustments. 

From this shipping room ledger, author royalties and pay- 
ments to subsidizers of publications were calculated. A sep- 
arate record was maintained of amounts paid on each title and 
dates of payment. 

Contracts with authors and subsidizing organizations, both 
university-affiliated organizations and others, were on file. 
These yielded methods of calculating payments by subsidizers 
to the Press and methods of calculating royalties on sales, au- 
thors' copies, other complimentary copies, and other arrange- 
ments. The latter included in some cases provisions for sharing 
promotional or handling costs, or both. 

A production ledger contained detailed quantity and cost 
data on each individual title published regarding contracts with 
firms, deliveries of sheets, bound books, payments made, total 



CASES IN PRELIMINARY INVESTIGATIONS 49 

costs, costs per book, storage of type and "killing" of type, and 
other details connected with production. 

The advertising department had summaries of total monthly 
expenses, lists of complimentary copies issued, and mailing lists. 
Unsummarized but in the files were details on campaigns, on 
placement of display ads and amounts paid, special exhibits, 
and all correspondence. Commissions paid to sales agents were 
available in summary form. 

Outside sources included a recent exhaustive study of thirty- 
five university presses, by Chester Kerr. 1 This included detailed 
discussion of business methods used together with cost data 
(which differed, however, in accounting methods from that used 
by the Press and were not strictly comparable in all regards). 
Also available were articles on various aspects of university press 
operations, contracts used by other presses, and miscellaneous 
materials. 

The preliminary inspection of these records and sources 
hinted at a number of apparently grave internal problems. 
Among these were the following: 

For more than twenty years the Press had used a rule-of- 
thumb method to cover manufacturing costs on subsidized 
books, which were over half of all the books it published. To 
the out-of-pocket costs paid for paper, printing, binding, and 
other production operations was added a flat 10 per cent which 
the subsidizing organization, or author, paid to the Press. This 
amount was supposed to cover the salary of the production man- 
ager, who designed the book and handled all production prob- 
lems. It was also supposed to cover the editorial work of the 
director and others, incidental expenses, and overhead. A cur- 
sory inspection indicated that this sum fell far short of meeting 
actual production expenses incurred by the Press. If so, a more 
complete analysis could establish the fact and lead, perhaps, to 
corrective measures. 

In return for their contributing one third, one half, or even 
all of out-of-pocket manufacturing costs (plus 10 per cent), the 
Press offered its subsidizers widely varying amounts of royalties 

1 A Report on American University Presses (Washington, D.C.: American 
Association of University Presses, 1949). 



50 MARKETING RESEARCH 

running up to 65 per cent of the list price of books. These high 
royalties were presumed to induce optimistic subsidizers to take 
the risk of assuming manufacturing costs. A cursory examina- 
tion suggested, however, that these rates were ridiculously high, 
and that in many cases the Press was guaranteeing itself a loss 
by such contracts. The more books sold, the greater the loss, 
because the amounts netted by the Press could not cover hand- 
ling costs. Further evidence on this point was supplied by an 
examination of the discount schedule of the Press, which was 
33*4 per cent on purchases of 1 or 2 copies, 40 per cent on pur- 
chases of 3 to 24 copies, 41 per cent on purchases of 25 to 49 
copies, 46 per cent on purchases of 50 or more copies, and 50 
per cent on purchases made by representatives abroad for for- 
eign sale. Over and above manufacturing expenses, the Press 
expense as a percentage of the list price of books sold was, appar- 
ently, more than 60 per cent. An inspection of invoices showed 
few purchases, even by wholesalers, of more than 3 copies at a 
time. 

Because manufacturing expense was charged as a current 
operating expense and was a major item in the budget, there 
was a definite pressure to bring out subsidized books. This 
pressure, together with the apparent situation on discounts and 
operating costs, pointed to a possible policy problem. 

Subsidization apparently had another bad aspect. Led to 
believe that subsidized books were loss-proof books, staff mem- 
bers were extremely liberal in passing out free copies. This 
further reduced potential revenue. 

An inspection of the size of editions and the amounts sold 
suggested that the Press was consistently misjudging the market. 
One biographical series of regional interest had 11 titles, 10 of 
which had been issued in editions of 1,500 copies and 1 in an 
edition of 1,000 copies. Only three of these books, however, 
ever had sold more than 556 copies. A hasty inspection of 
records showed that the bulk of sales in nearly all cases was made 
in the first few months after issue, so that a method of forecast- 
ing sales might be feasible. Forecasting could help to deter- 
mine the number of sheets originally printed, the number of 
copies bound, the advisability of retaining or killing type, the 



CASES IN PRELIMINARY INVESTIGATIONS 51 

desirability of reprinting. A quick check on reprints showed 
that only a small fraction of reprinted books actually were sold, 
a particularly disappointing showing on the problem of gauging 
the market. 

Discussions with staff members and an inspection of methods 
of calculating costs revealed another problem. Because the 
sales of most books were very small, a calculation of the cost 
per book of an edition of 500 or 750 was always discouragingly 
high. A frequent solution was to double the size of the edition, 
which automatically reduced substantially the cost per book. 
The apparent cost reduction was, of course, pure fallacy unless 
most of these books actually were sold which the records sug- 
gested rarely happened. More realistic costing, therefore, a 
definite planned loss as against unrealized hopes for profits, 
might be an important economy measure. 

As noted, the number of free copies, or "exempts," seemed 
abnormally high. These were under the supervision of the ad- 
vertising department. In addition to this "no cost" promotion, 
expenses of this department appeared to be way out of line with 
that of other university presses. This might or might not be 
due to the low volume of sales. The general policies of the ad- 
vertising department also were suspect. Major expenditures 
were for display advertising; that is, advertising in newspapers 
and magazines for individual titles, a common practice in com- 
mercial presses but not in university presses with their more 
specialized markets. The timing also seemed to follow com- 
mercial practice and to be badly adapted to the special circum- 
stances of the Press. 

Monthly payments to sales representatives averaging $5.38 
in the South, $10.58 in the West, and $117.98 in the East im- 
mediately suggested a possible sales problem, since these pay- 
ments seemed ineffective in some places, and superfluous or 
overcostly elsewhere. 

Pricing policies and practices also seemed fruitful sources for 
analysis. 



52 MARKETING RESEARCH 

ACTION NEEDED 

1 . Should the consultant on business problems shift his analysis 
primarily to internal records? 

2. Was his internal investigation sufficiently conclusive to sup- 
port a fixed plan for his study? 

3. What problems were most important? 



CASE 5 USE OF THE CONSUMER CLINIC 

NATURE OF THE CONSUMER CLINIC 

The Albion Research Associates, Inc., a general agency, had 
devised a method of exploratory group interviewing to be used 
during the preliminary and planning stages of consumer survey 
research projects. The primary use of this method, called "the 
consumer clinic/' was to assist in the more accurate formulation 
of hypotheses and plans. Although not designed to supplant 
the pretest an advance test under actual conditions of a formal, 
often large-scale, surveyclinics had proved helpful in solving 
questionnaire construction problems. 1 

The clinic consisted of bringing together approximately ten 
persons for a discussion of the project with those in charge of it. 
The discussions usually lasted about two and a half hours, and 
the respondents were paid $1 an hour for their time. House- 
wives, for example, were most easily persuaded to attend meet- 
ings held on weekdays between 2:00 and 4: 30 P.M., times when 
they ordinarily might go shopping. The members of the clinic 
were secured by sending out interviewers to solicit cooperation. 
A truly representative sample was not considered either prac- 
tical or necessary. Efforts were made, however, to secure par- 
ticipation from all age, sex, income, or other classifications 
relevant to the problems at hand. 

Results of the early clinics were difficult to reduce to specific 
statements or tabulations. Secretaries and research assistants 

1 For a similar idea more recently applied by the Grey Advertising Agency of 
New York see G. H. Smith and H. A. Vitriol, "Why We Use Group Explora- 
tions/' Printers' Ink, July 18, 1952, pp. 46-47. 



CASES IN PRELIMINARY INVESTIGATIONS 53 

were used, thereafter, to take full notes on, and impressions of, 
the discussions. Prepared questionnaires also were given to par- 
ticipants. Indeed, it was found that participants would readily 
complete several long questionnaires in addition to discussing 
subjects raised. This made it possible to consider a great variety 
of possible problems. Meetings also were improved by holding 
them in comfortable surroundings and by providing charts, 
large advertisements, samples, or other exhibits as stage settings. 
Four to six separate meetings with different groups of partici- 
pants were held, the number depending on the complexity of 
problems faced and the rate of appearance of new ideas from 
one meeting to another. 

In assessing the consumer clinic as a research device, several 
tentative conclusions had been reached. Although clinics prob- 
ably were more expensive than usual methods, results also 
seemed better. The directors of a project were able to obtain 
information at first hand. Seeing and talking to respondents 
in groups was far more effective than reading interviewer re- 
ports, especially since executives were rarely able to go into the 
field interviewing. Group meetings were particularly effective 
in probing for opinions, attitudes, and motives. Better prob- 
lem formulation, questionnaire construction, and methodology 
planning were believed to result from clinics. 

On the other side of the ledger were the added costs, if exec- 
utive time were counted. In addition, participation in discus- 
sions, despite all a chairman might do, depended heavily on the 
articulateness and aggressiveness of individuals. No matter 
how objective the researcher tried to be, it was easy to be im- 
pressed by statements expressed forcefully and well and to mini- 
mize ideas put forth hesitantly, though careful reading and 
comparing notes later alleviated this problem somewhat. 
Moreover, some tendency existed for participants to follow the 
leader, though definite splits in opinion also were common. 
The researcher directing the meeting might introduce bias 
(quite unwittingly) because of gestures, intonations, or other 
apparent clues to his views. Some suspicion existed also that 
participants tended to become "conditioned" during the clinics, 
causing them to react unnaturally. Nevertheless, most of these 



54 MARKETING RESEARCH 

problems were inherent in interviewing and were not special 
afflictions of clinics. 

After several years' experience with consumer clinics, includ- 
ing their use for projects involving rugs, dish cloths, a beverage, 
and the location of a department store branch, the agency was 
considering using the consumer clinic for a current project, a 
distributive efficiency study. 

THE PROBLEM 

The exploratory study of distributive efficiency, in which 
Albion Research Associates had been asked to participate, was 
financed by a grant from one of the large foundations. The 
study was to be an attempt to formulate possible measures of 
marketing efficiency and a test of the practicality of gathering 
the data needed to make actual computations of marketing 
efficiency in different situations. 

An important segment of the study centered on consumer 
marketing activity. One of the many tentative hypotheses, for 
example, stated that "the marketing costs of consumers rise or 
fall as the number of points to which they must go to do their 
share of the marketing task and the distances they must go out 
of their routine patterns of day-to-day travel in order to reach 
these points increase or decrease." In considering this problem, 
it was thought that it might be more significant to consider the 
basic location of a consumer not as the usual point of residence 
but as being along a line of normal or routine movement an 
orbitoccasioned by his occupational, recreational, and social 
activities. In some instances, time rather than distance of travel 
would be the desirable measuring rod. 

Although origin and destination (O.D.) and other traffic 
studies, as well as store location projects, provided considerable 
data on consumer movements within the metropolitan area to 
be studied, none was sufficiently comprehensive or precise to 
be useful for present purposes. The primary task of Albion Re- 
search Associates, in fact, was to develop and test methods for 
obtaining the required data on consumer activities. 

The data considered necessary included in part the following 
general categories (most of which were subdivided still further) : 



CASES IN PRELIMINARY INVESTIGATIONS 55 
Time Data: 

1. Total time spent in marketing per day by housewives, by 
workers outside the home, by school children, and by other 
family members. 

2. Time spent in getting to and from market areas or individual 
stores. 

3. Time spent in stores and public places of all kinds, plus pos- 
sible breakdowns of activity within stores. 

4. Time spent moving from store to store. 

5. Time spent in traveling to and from work. 

Distance Data: 

1. Total distance traveled per day on trips to work or school, 
social visits, and buying trips. 

2. Distance traveled by types of transportation used, by routes 
traveled, and by travel purposes. 

Other Data: 

1 . Expenditures made by type and amount. 

2. Number of stores visited by type per day, per trip. 

3. Number of unpaid marketing manhours. 

ACTION NEEDED 

Among decisions which had to be made were several pertain- 
ing to the possible use of consumer clinics. Would consumer 
clinics be useful in the preliminary stages of this project? What 
types of questions might be discussed profitably? What sorts 
of questionnaires could be constructed for use at the clinics? 
How many persons should be invited? What types of people? 

Because of the nature of the project, it was certain that sur- 
veys, observational methods, and experimental methods would 
be tested to some degree. Suggestions already had been made 
that small panels be set up, with panel participants to keep diary 
records of various sorts. If such panels were established, might 
clinics composed of panel members be used in order to explore 
such problems as those of recording data? Might a clinic be 
useful after the panels were disbanded to explore the accuracy 
of methods used, the adequacy of compensation, participation 
by family members, and so forth? In other words, how might 



56 MARKETING RESEARCH 

consumer clinics be used in defining and delimiting the prob- 
lems to be explored in this project? 



CASE 6 CONSUMER PANEL VS. STORE AUDIT 
RESEARCH 

BACKGROUND 

The Plumtree Corporation manufactured "Pomate" (a 
special hair preparation) and a line of personal-care products. 
Distribution was mostly through wholesalers. Drug stores 
.originally had been the only retail outlet of importance. Plum- 
tree products now were sold in food stores, department stores, 
and variety stores, through mail order houses, and through other 
miscellaneous outlets. In fact, sales of the major products in 
supermarkets alone rivaled those in drug stores, a welcome 
development profitwise but one which was raising vexing dis- 
tribution problems. 

Since the early 1940's the corporation had subscribed to a 
continuous store audit research service. The corporation had 
no marketing research department, and important research 
decisions were referred to the president, Mr. Ernest Plumtree. 

When first approached by representatives of the agency mak- 
ing the store audits, Mr. Plumtree had not been conscious of 
any pressing need for research. The arguments made, there- 
fore, that store audits were a far better technique than were 
interviews with either retailers or consumers (because interviews 
were subject to error, bias, and memory loss, and often failed to 
produce real facts or accurate numerical data), had not seemed, 
frankly, of much relevance. Nor had claims that a continuous 
study was far superior to static surveys been impressive at the 
time. The furor about the Literary Digest poll failure, although 
recalling painful memories, had not been entirely convincing 
either. In general, he appeared awed by statistical matters and 
suspicious about sampling techniques as applied to business 
affairs. 

What, perhaps, had convinced him most that the corporation 
might benefit by contracting for the store audit service was the 



CASES IN PRELIMINARY INVESTIGATIONS 57 

information it revealed about competitors. It was impressed 
upon him that his principal competitor, through this service, 
already knew a great deal about his 'company's practices and 
accomplishments which he regarded as extremely confidential. 
(A private inquiry convinced him at once that the corporation 
could not afford its own store audit, and that even if it could, 
competitors still could obtain the same information.) The 
amount of up-to-date, detailed information he could obtain on 
his major competitors, of course, was highly attractive. More- 
over, he had seen at once how records on factory sales to whole- 
salers might be completely misleading in assessing current pro- 
motional campaigns, which were of particular concern to him. 
Many other considerations had also entered into his decision 
to subscribe to the store audit service. 

Once made, the decision had never been regretted. Unques- 
tionably, store audit services were a sound business investment. 
Although the fees had seemed large at first, they were but a 
small fraction of promotion costs alone. The information ob- 
tained was extremely helpful in making nearly all major market- 
ing decisions. The corporation had applied the services to two 
other commodities, one of which, however, was discontinued, 
although "Pomate" remained the mainstay of the company. 
Moreover, the detection and assessment of competitive moves 
had on several occasions led to quick and successful imitation 
of the same practices. No doubt, the profit on these ventures 
had paid for research costs in full. 

These matters were fresh in the president's mind because an 
organization offering national consumer panel research services 
recently had made a presentation before all top executives of 
the corporation. The reactions had been favorable. The ques- 
tion facing Mr. Plumtree was: should the corporation contract 
for this service also? If it did, should both the store audit and 
the consumer panel service be used, or should the corporation 
contract only for one? 

STORE AUDIT METHODS 

Store audits were based on a national sample of retail stores. 
Auditors called periodically at these stores to transcribe data 



58 MARKETING RESEARCH 

from store records on all products for which the agency had 
clients. Stores were compensated for their cooperation. Be- 
cause convenience goods stores kept no records of unit sales, it 
was necessary to estimate unit and dollar sales for each package 
size and brand of products studied. This was done by obtain- 
ing two sets of figures: (1) purchases made (from manufacturers 
or wholesalers as shown on invoices) and the prices paid, and 
(2) a physical inventory count. By adding purchases to inven- 
tory at the beginning of the period and deducting inventory 
holdings at the end of the period, the sales, or disappearance, of 
the product could be calculated. (Purchases plus or minus in- 
ventory change could also be used to estimate sales.) Estimates 
of turnover, stock-sales ratios, margins, and out-of-stocks could 
also be computed from these figures. In addition, auditors ob- 
served and gathered information on special purchases, on deals 
or cut-price sales, on advertising, and on window and interior 
displays of products. For purposes of breakdown analysis, all 
cooperating stores were classified as food, drug, and so on, stores, 
as chain or independent organizations, by size, by service or self- 
service, and by city size, county size, and geographical region. 

As a result of these audits, the Plumtree Corporation could be 
provided with these broad categories of data: 

1. Sales to consumers by package size, by brand, by type of 
product, and by commodity group in units and in dollars. 

2. Retailer purchases in total, by number of reorders, and by 
average order size, and by purchases made direct or from 
wholesalers. 

3. Inventories in units, dollars, and total inventory changes, 
days of supply on hand, and out-of-stock items. 

4. Prices paid by dealers and by consumers, special deals and 
sales, and retailer gross margins. 

5. Display and advertising activities by retailers for company 
products and those of competitors. 

All these data, when cross-classified with each other and with 
store classifications, provided a host of breakdown analyses. 
Each variety of "Pomate" was analyzed for the company in rela- 
tion to each of four major competitive products and in relation 



CASES IN PRELIMINARY INVESTIGATIONS 59 

to all minor competitive products. Thus, the share of the 
market and all trends in the market as a whole or by regions, 
city sizes, types of stores, and so on, were periodically available. 
In short, store audits constituted a ''waterfront" job of research 
providing continuously in one "package" a large amount of 
basic market information. This information could be applied 
to a whole range of marketing problems, such as problems of 
pricing, packaging, display, advertising, and selling. Supple- 
menting it with information on competitors obtained from The 
Standard Rate and Data Service, from salesmen, and from other 
sources, the company could not only assess its share of the 
market in total and by many classifications but could also eval- 
uate the results achieved by competitors. 

CONSUMER PANEL METHODS 

The national consumer purchase panel, as operated by the 
organization which had made the presentation, utilized diary 
records to be kept by panel members. These members were 
selected to constitute a cross section of all American families. 
As members dropped out, or were rotated, replacements were 
added to maintain the representativeness of the panel. All pur- 
chases by family members of products being studied were to be 
reported on diary forms provided. The information, to be re- 
corded as soon as the purchaser returned home, varied some- 
what with different types of products. In general, it consisted 
of date of purchase, age and sex of purchaser, complete product 
description including brand, weight or size, type, number of 
units, and price paidand type of store patronized or method 
of purchase. Families cooperating were compensated by receiv- 
ing coupons redeemable for a wide variety of goods. Each 
family unit was identified by such characteristics as number of 
members, age and sex of each, occupation, income, education, 
and location. Again, cross-classification of the data gathered 
made a great number of breakdown analyses possible. The 
panel provided a continuous flow of basic market information 
about the products of a company and those of its competitors, 
and data were useful for a whole range of marketing problems. 



60 MARKETING RESEARCH 

CONFLICTING CLAIMS 

Mr. Plumtree was somewhat disturbed by the conflicting 
claims and adverse criticisms made concerning these two sys- 
tems. Store audits, it was said, were faulty, or were weakened, 
by inability to audit the stores of some large food chains and 
syndicate or variety stores, and also by failure to include door- 
step and mail buying and miscellaneous retail outlets. These 
difficulties, it was asserted, tended to make the sample of stores 
unrepresentative of actual purchases. Moreover, poor retail 
records, disappearances of merchandise because of shoplifting, 
employee thefts, breakage, and other causes contributed to in- 
accuracy in data gathering. On the other hand, it was claimed 
by the proponents of the store audit method that these prob- 
lems could be handled by careful sampling, by proper compensa- 
tion of store managers, and by other auditing and statistical 
practices. 

Panels, it was said, could not be maintained on a probability 
basis, because cooperation of some types of families (such as the 
very rich, the very poor, and illiterates) was difficult or impossi- 
ble to secure; purchases by others than the housewife (or adults) 
tended not to be recorded; consumption of articles outside the 
home frequently was ignored; families were continually drop- 
ping out of the sample; being on a panel made persons act 
atypically; merchandise premiums affected purchases made; 
and, in general, accurate reporting was difficult to obtain. On 
the other hand, it could be claimed that by using great care in 
sampling, by providing families with proper report forms and 
compensation and incentives, by careful selection and pretrain- 
ing of panel members, and by other statistical and control 
devices it was possible to secure continued, accurate, normal 
purchasing reports. 

Mr. Plumtree tended to agree with both sides. He was aware 
that risks went with rewards and that when a new policy ob- 
tained benefits, it also created new difficulties. He was fully 
ready to believe that both systems were practical and reliable, 
although each no doubt possessed inherent limitations. Dif- 
ferences in cost did not seem important. Although he was con- 
cerned with the accuracy of results, particularly as they might 



CASES IN PRELIMINARY INVESTIGATIONS 61 

affect "Pomate," he believed that the answer for his company 
depended primarily on the sorts of information provided. 

COMPARISON OF INFORMATION 

Mr. Plumtree had asked the vice-president of accounting to 
have his statistical department prepare a list of the information 
furnished by each method. In preparing this list, consideration 
was to be given only to data provided in the basic ''package/ 7 
not to data secured by special methods and extra costs. The 
resulting list was as follows: 

Information Provided Only by Store Audit: 

1. Dealer inventories. Stores stocking, amounts on hand, days 
of supply, and out-of-stocks, by product types, major brands, 
sizes, and in total. (By use of factory sales records, whole- 
sale stocks can be estimated.) 

2. Dealer purchases. Number and size of orders, special pur- 
chases, and purchases from manufacturers or wholesalers. 

3. Dealer margins. 

4. Dealer display. Shelf position, internal store displays, and 
window displays. 

5. Dealer advertising. Newspapers, store signs, sales events. 

Information Provided Only by Purchase Panel: 

1. Users and nonusers. Families by types and size using major 
brands, product types, and sizes. 

2. Amounts purchased. Frequency of family purchases in 
units and sizes, average and total purchases, concentration 
of markets among large and small users. 

3. Trends in purchases. Gain or loss of customers. 

4. Age and sex of purchasers. 

5. Brand loyalty. Amount and character of repeat buying, 
brand switching, and number of brands used by types of 
families. 

Information Provided by Both Methods: 

1. Purchases at, or sales by, retailers by product types, brands, 
and sizes. 

2. Types of outlets for sales or purchases made. 



62 MARKETING RESEARCH 

3. Seasonal variations in sales. 

4. Regional and city-size breakdowns. 

5. Retail prices. 

REFERENCES AVAILABLE 

Investigation by Mr. Plumtree and his staff of the literature 
on the subject of consumer panels and store audits revealed the 
following references: 

BIBLIOGRAPHY 

BARTON, S. G. "The Movement of Branded Goods to the Consumer/' in A. B. 
BLANKENSHIP (ed.), How to Conduct Consumer and Opinion Research. 
New York: Harper & Bros., 1946, pp. 58-70. 

CAWL, F. R. "The Continuing Panel Technique," Journal of Marketing, July, 
1943, pp. 45-50. 

CHURCHMAN, C. W. (ed.) et al. Measurement of Consumer Interest. Phila- 
delphia: University of Pennsylvania Press, 1947, pp. 155-63 (a speech by 
S.G. Barton). 

FLEISS, M. "The Panel as an Aid in Measuring Effects of Advertising/' Journal 
of Applied Psychology, XXIV (December, 1940), pp. 685-95. 

FERBER, R. "Twelve Pointers on Selecting a Consumer Panel Service/' Print- 
ers' Ink, CCXXVI (March 4, 1949), pp. 42 ff. 

GANLY, R. H., and CRISP, R. D. A series of articles concerning various aspects 
of panels beginning with the August 8, 1947, issue of Printers' Ink. 

NIELSEN, A. C. "Evolution of Factual Techniques in Marketing Research," in 
Marketing Research and Business Management. Urbana: University of 
Illinois Bulletin, XLIX, No. 44, 1952. 

ROOT, A. R., and WELCH, A. C. "The Continuing Consumer Study," Journal 
of Marketing, VII (July, 1942), pp. 3-21. 

ROVNER, S. "J. Walter Thompson's Panel Shows How Clients Are Doing," 
Editor and Publisher, LXXXI (May 8, 1948), p. 14. 

SELLERS, M. "Pre-Testing of Products by Consumer Juries," Journal of Market- 
ing, VI, No. 4, Part 2 (April, 1942), pp. 76-80. 

STONBOROUGH, T. H. W. "Fixed Panels in Consumer Research," Journal of 
Marketing, VII (October, 1942), pp. 129-38. Reprinted in Marketing Re- 
search: Selected Literature, by H. G. WALES and R. FERBER. Dubuque: 
Wm. C. Brown Co., 1952, pp. 105-12. 

ACTION NEEDED 

1. Is there any basis for deciding that one method is inherently 
better than the other? 

2. Can both methods provide accurate data? 

3. What facts should determine the use by a company of either 
or both methods? 

4. What should Mr. Plumtree's decision be? Why? 



Part III 

PLANNING 

The General Nature of the Task 

The cumulative steps of problem formulation and prelim- 
inary investigations culminate in specific, formal plans. The 
great amount of time often spent in these early stages testifies 
to the critical importance of the decision-making which is done 
at the planning stage. 

Planning consists of establishing specific purposes, choosing 
methods for data gathering, preparing all forms needed to gather 
data, designing a sample, 1 testing plans, and estimating costs. 

* 
Specific Tasks and Working Methods 

Because planning embraces so many activities, these activities 
will be discussed separately and in conjunction with methods 
used in carrying out each separate task. 

Specific Purposes. The heart of this process is the final, con- 
crete, written expression of the hypotheses. 

Too often problem formulation stops at the intermediate 
stage of characterizing information which it is hoped will be 
useful. Correct procedure is to decide purposes in terms of 
ultimates the conclusions and decisions which can be based on 
specified data. 

Although their application is difficult, the methods are sim- 
ple: written expression of all important hypotheses that have 
developed, selection of a limited number of these hypotheses, 
and the clearest possible statement of them. 

From such specific purposes it is possible to decide (1) 

1 This part of planning is considered separately in Part IV. 

63 



64 MARKETING RESEARCH 

whether or not to continue the study and (2) whether or not 
the purposes can be satisfied wholly or partially with second- 
ary data. 

Methodology. Assuming that the project will require pri- 
mary data, a choice of the method, or methods, to be used is now 
made. 

The three principal methods are survey, observation, and ex- 
periment. 

The survey methods are by mail, telephone, or personal inter- 
view. They also may be classified as to type of data gathered. 
Thus, Brown 2 distinguishes between factual, opinion, and inter- 
pretive surveys; and Lorie and Roberts 3 characterize the data 
(also obtainable, in part, by observation or experiment) as be- 
havior, intentions, attitudes, knowledge and habits of thought, 
and "reasons why." 

Observational methods include store audits, pantry inven- 
tories, fashion counts, and traffic counts. 

Mechanical methods of recording data may be considered as 
.a separate category, as subcategories of the other three methods, 
or as a form of observation. They may be used in personal in- 
terviewing (wire or tape recorders, or lie detectors), in group 
.studies (Lazarsfeld-Stanton Program Analyzer or Hopkins Tele- 
vote Machine), to record actions (Purdue Eye-camera, Audi- 
meter, Radox), and in many other ways. 

No mechanical way of choosing the proper method exists. 
For many studies there are a number of alternative methods, 
each of which also might be applied to several different sources 
of information. A general preference exists for the experimen- 
tal and observational (including machine) methods because 
they tend to be more scientific. Unfortunately, these methods 
often are more difficult to apply (and often impossible) and they 
tend to be more time-consuming and costly. In fact, the survey 
method, so often inveighed against, remains as the most com- 
mon tool of research, and a highly useful one. The researcher 
should beware, however, of limiting himself to easy, familiar, or 

* L. O. Brown, op. cit., pp. 296-302. 

8 J. H. Lorie and H. V. Roberts, op. cit., pp. 211-14. 



PLANNING 65 

favorite methods. Awareness of the new techniques and the 
new applications of older techniques is helpful. 

Specific consideration of the methods in relation to the data 
sought often leads to a natural choice. Cost and time factors 
also may help to determine the appropriate method. 

Forms. Forms and schedules used in the collection of data 
include questionnaires for surveys, schedules or forms for record- 
ing observations or experimental data or for recording secondary 
data, instructions and work schedules for the data gatherers, 
and letters to respondents. 

Questionnaire elements include identification of respond- 
ents, explanations, data questions, and request for cooperation. 
The various problems encountered, or rules for questionnaire 
construction, deal with such matters as length, sequence of 
questions, ease of recording answers and making tabulations, 
spacing, clarity, specificity, and leading questions. (See the an- 
notated bibliography which follows for references on these dif- 
ferent aspects.) Most troublesome, perhaps, is the wording of 
the questions, which includes a choice of question types: free- 
response or open-end, check-list or cafeteria, dichotomous or 
yes-no, ranking or intensity-scale, triple-associates, and probing 
or follow-up questions. 

In designing forms the major problems are clarity, compact- 
ness, and ease and simplicity of recording data. 

Working methods vary widely with individuals. Of primary 
importance, the researcher must clearly grasp the exact char- 
acter of the data he is seeking. He also must possess the pa- 
tience to attempt many alternative wordings of questions (or 
designs of forms) and continually to revise and select. Almost 
everything he has learned may prove useful in executing this 
most challenging job of communication. For the beginner, 
interest in the process and ability to plan research are acid tests 
of his prospects for research as a career. 

Testing. Testing may relate to the sample, the questionnaire 
or schedule including the instructions, the interviewers or field 
staff, or the prospective information itself. For example, test- 
ing the production rate of interviewers may avoid serious mis- 



66 MARKETING RESEARCH 

calculations as to time and expense. Additional tests can be 
used to ascertain the adequacy and clarity of instructions which 
are provided interviewers as well as of the questionnaire itself. 

Seldom is it wise to forego a test of the questionnaire or other 
data-gathering form. Pretesting almost always will reveal de- 
fects, and many times very important ones, or suggest improve- 
ments that add to accuracy and reduce time and cost. 

Of special importance, and particularly so if the full, written 
expression of specific purposes has been skimped, is a test of the 
value of the information obtained. This can be done during 
questionnaire formulation by anticipating findings. By assum- 
ing a range of statistical results, tabulating these data, and then 
analyzing them, it can be determined if, or how well, the data 
sought will answer the problems. 

Costs. The researcher may have to estimate costs in some 
detail at the very beginning. With experience and some guess- 
ing, this can be done. At other times a budget figure is pro- 
vided, which serves as a basis for a formal research proposal. In 
still other cases, detailed cost estimates may be the last stage 
of planning, carried out as a means of insuring that the project 
is feasible within the funds allotted. 

In any event, data gathering tends to be the most expensive 
single operation. Until methods are chosen, a sample is de- 
signed, and some testing is done, costs are difficult to estimate. 

Costs may be computed as out-of-pocket expenses with or 
without a fee or supervisory salaries, or as out-of-pocket expenses 
plus 100 per cent in order to cover the general overhead of the 
agency and allow a profit. 

Research Proposals 

All the steps discussed so far may be telescoped into a prelim- 
inary proposal for a research project. If done without design 
of forms or any testing, such a proposal may be subject to con- 
siderable change. The ability to make a satisfactory proposal 
in detail depends on the experience and abilities of the re- 
searcher. He may utilize considerable secondary data and 
some preliminary investigations. 



PLANNING 67 

Such proposals are not a substitute for the steps so far dis- 
cussed, although good ones should minimize the time and effort 
needed later in covering these stages of research. 

The Cases in This Part 

Case 1, "A Radio Audience Survey/' presents the plans made 
for a study as included in a proposal to the manager. Emphasis 
is placed upon deciding the specific purposes of the study. The 
case includes estimates of costs and some sample problems. 

Case 2, "Proposed Consumer Market Survey/' presents the 
problems of an independent retailer. Questions of specific pur- 
poses are involved, although emphasis is given to methodology, 
particularly to the adequacy of the tentative questionnaire form- 
ulated. 

Case 3, "Use of Internal Data for Studying Magazine Mer- 
chandising Effectiveness/' is a full-scale proposal which presents 
problems of specific purposes, methods, and sampling. The 
emphasis is placed on considerations of using internal data. 

Case 4, "Methods for S % tudy of Installment Credit/' is the last 
of these cases presenting rather detailed proposals and covering 
various planning problems. The emphasis is on the choice of 
methods for gathering the data outlined. 

Case 5, "Pretesting a Questionnaire," shows the question- 
naire designed, the results of a pretest of this questionnaire, and 
a revised questionnaire. Designed primarily to provide an ex- 
ample of pretesting, the case can be used to cover many aspects 
of questionnaire formulation. 

Case 6, "Constructing a Readership Questionnaire," provides 
practice in constructing a questionnaire and a covering letter. 

Case 7, "Proposed Questionnaire for an Ice Cream Survey," 
presents a tentative questionnaire. It can be evaluated in terms 
of survey purposes and the "rules" of questionnaire construc- 
tion, or a revision can be attempted. 

Case 8, "Getting a Luggage Questionnaire into Shape," 
focuses on the variety of specific questions suggested for gather- 
ing data of specified types. The many details provided permit 
an examination of the important minutiae of questionnaire 
formication. 



68 MARKETING RESEARCH 

Case 9, "Following up on a Department Store Study/' ranges 
over many aspects of preliminary investigations and planning. 
Thus, it presents an opportunity to review earlier steps in the 
light of planning problems. 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. An old classic, still useful. 
Chapter 1 includes discussions of planning and of earlier research stages; 
Chapter 2, "Planning of Procedure"; Chapter 3, "Psychological Aspect of 
Questionnaire Development"; and Chapter 4, "Further Considerations of 
Psychological Aspects," suggest that most basic principles remain unaltered. 

BLANKENSHIP, A. B. Consumer and Opinion Research. New York: Harper & 
Bros., 1943. Chapter 3 amplifies statements made in Chapter 2 about the 
general nature of planning. In Chapter 4 there is a discussion of the advan- 
tages and disadvantages of the mail, telephone, and personal interview meth- 
ods and the use of combination methods. Chapter 5 covers the type of ques- 
tions which may be used and eight "general rules helpful m proper phrasing/' 
Chapter 6 includes a two-page discussion on length and a detailed examina- 
tion of problems of question sequence. Chapter 7 includes a discussion of 
the pretest (pp. 82-91) for all surveys and of the test-tube study (pp. 91-97) 
prior to, or substituting for, large-scale surveys. Chapter 10 discusses and 
illustrates forms used in all types of surveys. This book may be read for 
problems of question phrasing and for its references to specialized sources. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc , 1951. The elements of planning are covered briefly on pages 1 33-38 of 
Chapter 8. Chapter 10 outlines the pros and cons of the three types of sur- 
veys, includes a discussion of interviews "in depth" and Gallup's "filter" 
questions, and ends with an analysis of a television questionnaire and a state- 
ment of rules for preparing a questionnaire. Chapter 18 provides a highly 
condensed check list for sources of information. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. A comprehensive, well-organized discussion of planning 
is contained in Chapter 19. This chapter also contains an abbreviated list 
of secondary sources (pp. 397-402). Chapter 20 covers communication 
problems, the usual pros and cons of the survey methods, a good explanation 
and illustration of questionnaire elements (particularly of classification of 
data, pp. 427-31), ten "general rules for constructing questionnaires," each 
discussed and illustrated, and a brief consideration of forms for observation 
and experiments. 

EASTWOOD, R. P. Sales Control by Quantitative Methods. New York: Colum- 
bia University Press, 1940. Chapter 9 contains much of the usual discussion 
of advantages and disadvantages, but is notable for the stand it takes against 
business secrecy about data and an analysis of "some deficiencies in the stock 
of statistical data." Appendix B, "Mechanics and Principles Governing the 
Use of the Mail Questionnaire," is a brief statement of fundamentals. 

HEIDINGSFIELD, M. S., and BLANKENSHIP, A. B. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Chapter 6 is primarily devoted to 



PLANNING 69 

a consideration of survey methods but includes a statement on panels, notes 
the observational method in passing, and discusses the "applications of the 
survey technique to business problems." Chapter 7 is an abbreviated discus- 
sion of rules, tests, and formats for developing the questionnaire. 

HOBART, D. M. (ed.) Marketing Research Practice. New York: The Ronald 
Press Co., 1950. Chapter 5 contains a condensed statement of secondary 
data, mail and telephone surveys, panels, and controlled experiments. Chap- 
ter 6 is a brief consideration of questionnaire development with many illus- 
trations. 

LORIE, J. H., and ROBERTS, H. V. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. In contrast to the frontal attack 
of other textbooks, the authors attempt an enveloping movement on prob- 
lems of communication. These exhaustive statements in Part IV, "Com- 
munication and Observation," include Chapter 12, "Introduction," and 
five chapters entitled "Securing Information on . . ." the following: Chapter 
13, ". . . Behavior"; Chapter 14, ". . . Intentions"; Chapter 15, ". . . Atti- 
tudes"; Chapter 16, ". . . Knowledge and Habits of Thought"; and Chapter 
17, ". . . 'Reasons Why.' " Although it is difficult to cull useful short 
assignments from this original text, perhaps the following will be found un- 
usually good in textbook literature : the kinds and sources of response errors 
(pp. 203-7), the summary statement on kinds of information (pp. 208-14), 
observation and self-observation (panels) (pp. 217-24), usefulness of state- 
ments of intention in forecasting (pp. 256-62), and depth interviewing (pp. 
312-15). 

LUCK, D. J., and WALES, H. G. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. Chapter 5, in addition to much of the usual material on 
methods, includes discussions on the relationships between the methods (pp. 
104-8), comparison of mail and personal interview methods (pp. 113-16), 
and features of the panel (pp. 119-24). Chapter 8 contains material with 
illustrations of appraising the need for added facts (pp. 155-56), a detailed 
plan of data requirements (used by a government body to secure bids) (pp. 
157-61), deciding how to secure primary data (pp. 162-64), anticipating the 
findings (pp. 164-66), determining the tasks and costs (pp. 166-68), and 
pretesting (pp. 170-72). Chapter 10 contains an illustrated treatment of 
preparing questionnaires and forms. 

PARTEN, M. B. Surveys, PO//S, and Samples. New York: Harper & Bros., 1950. 
Although avowedly a specialized book, this volume is notable for its bibliog- 
raphy (pp. 537-602) of 1,145 items and for its attention to general principles 
as well as specific procedures and facts. Chapter 2 discusses twelve general 
questions that need answering before detailed plans for surveys or polls can 
be developed. Chapter 3 is a summary of various methods (and their varie- 
ties) for securing information from persons. Chapter 6 is a statement of 
the construction of the schedule or questionnaire, most generally useful, 
perhaps, for discussions of identifying and classifying data (pp. 163-74), forms 
of opinion questions (pp. 181-89), and rating or intensity scales (pp. 190-98). 
Chapter 11 contains an illustrated discussion of mail questionnaire proce- 
dures. 

PAYNE, S. L. The Art of Asking Questions. Princeton: Princeton University 
Press, 1951. The discussion in Chapters 1 and 2 indicates the searching 
questions that researchers can ask themselves in making a preliminary study 
of a problem. Specific problems of question formulation are also treated. 



Part III Cases 



CASE I A RADIO AUDIENCE SURVEY 



BACKGROUND 

The manager of Station WKGP, Philadelphia, believed that 
a study of the complete station listenership might be valuable. 
National time buyers, he thought, were not sufficiently con- 
vinced of the volume of listening in areas outside the Philadel- 
phia metropolitan area. These time buyers tended to use the 
wasteful practice, he felt, of buying time from stations in sur- 
rounding cities, such as in Baltimore, Wilmington, Reading, 
Atlantic City, and Lancaster, to reach areas covered by WKGP's 
signal. In his opinion this resulted in much duplication of pro- 
grams. Additional time on WKGP, he believed, often would 
provide better coverage at lower net cost. 

The station, however, lacked up-to-date, accurate data on sta- 
tion "circulation" and on duplication of listeners among sta- 
tions in the area. In early 1951 no regular radio research service 
was available which provided the data desired. 

TYPE OF STUDY CONSIDERED 

An engineering survey showed that currently WKGP's signal 
could be received in more than sixty counties, or parts of coun- 
ties. These included seven in Maryland, two in Delaware, all 
in New Jersey except a northern tier, and all in the eastern half 
of Pennsylvania, except a few adjacent to New York State. 
Only the BMB Station Audience Reports * covered this entire 

1 The Broadcast Measurement Bureau was organized in 1945 by the Ameri- 
can Association of Advertising Agencies, the Association of National Advertisers, 
and the National Association of Broadcasters as a nonprofit, cooperative organi- 
zation. A mail-ballot study of each county in the United States was published 
in 1946. It contained the number of radio families for each county (and for 

70 



CASES IN PLANNING 71 

area for listenership data useful to Station WKGP. The Spring, 
1949, report showed that in twenty-thcee counties in Pennsyl- 
vania, six in New Jersey, two in Delaware, and one in Maryland, 
at least 10 per cent of all radio families listened at least once 
each week to a daytime program of Station WKGP. In fifteen 
counties listenership was over 30 per cent, and in seven counties 
was over 50 per cent. 

Nighttime programs were listened to by more than 10 per 
cent of radio families in thirty-six counties (one more in New 
Jersey and three more in Pennsylvania) . The total weekly audi- 
ence in these thirty-six counties for nighttime programs was 
approximately 900,000. The weekly nighttime audience in 
Philadelphia County included 80 per cent of the 573,000 radio 
families. Approximately 40 per cent of the total weekly audi- 
ence actually listened six or seven days or nights a week. 

Useful as the BMB data was, it lacked much detail desired by 
time buyers. Moreover, the manager felt certain that through 
technical improvements and new programming the station had 
increased its listenership ^greatly in the past two years. 

Regular radio research* services, such as those of Pulse, Inc., 
and A. C. Nielsen, Inc., commonly used by time buyers, have 
many useful data on program audiences and audience composi- 
tion but not for the entire area covered by the station and not 
in terms of station listenership. For example, the station had 
made a number of experiments with short plugs for give-aways 
or specialty items and had secured a greater number of responses 
than the total rated audience. These services, therefore, did 
not meet the problem the manager had in mind. 

The manager was impressed by studies conducted annually 
since 1938 for a station in Iowa 2 which, he had been informed, 



cities of 25,000 or less, if a station city) and for each station the total weekly 
audience (number of radio families listening to a station one or more times a 
week) and the daytime and nighttime audiences. Study No. 2, BMB Station 
Audience Report, published in the spring of 1949, additionally contained 
listenership for six or seven times day or night, three, four, or five times, and one 
or two times. 

8 See, for example, the 1948 Iowa Radio Audience Survey, conducted by 
F. L. Whan, published by the Central Broadcasting Company, Des Moines, 
Iowa. 



72 MARKETING RESEARCH 

were readily accepted by time buyers. In particular, these 
studies reported a high degree of "out-of-home" listening. 
Such listening was not covered by regular radio research services 
and was growing in importance because of television competi- 
tion. 

The Iowa Survey of 1948, 3 for example, included questions 
on (1) station preferencesstations listened to most, stations 
heard regularly, station liked best for news at major periods of 
the day, and stations preferred for farm programs; (2) radio 
ownership; (3) best-liked programs for adult listeners; (4) types 
of programs liked best; (5) actual listening by half-hour periods 
and by composition of the radio audience; (6) families owning 
portable, nonportable, FM, and auto radios; (7) age of sets; (8) 
amount of time auto radios are used on long trips and on short 
trips; (9) families with some member regularly hearing a set out- 
side the home and the location of such sets; (10) location of sets 
in the home; (11) early morning listening by quarter-hour peri- 
ods; (12) listening from 6 to 7 P.M. by quarter-hour periods; (13) 
amount of listening to the "beginning commercial" and mem- 
ory of item advertised; (14) frequency of use of two or more sets 
at once in the home; and (1 5) criticisms of program heard. 

THE STUDY PROPOSED 

In May, 1951, the manager of Station WKGP called in a re- 
search consultant. The manager, after discussing the station's 
problems, requested that the consultant submit proposals for a 
study along the lines of the Iowa Reports. The proposal sub- 
mitted is reproduced in part below: 

The proposed study would be, basically, a study of the "circulation" 
of all radio stations giving a satisfactory signal within the service area of 
WKGP. The primary purpose would be to show radio service coverage 
and the pulling power of stations. In addition, the study would yield 
important data on types of programs (but limited, if any, detail on spe- 
cific program ratings) and comparative data for television and news- 
papers, all data being considered for their value in selling and buying 
radio time. 

The study would be patterned on the Iowa Radio Audience Surveys, 

9 Ibid. 



CASES IN PLANNING 73 

changed, however, to fit local area interests and problems. Exact 
changes would be worked out later in cooperation with WKGP and by 
testing in the field. Tentatively, the following changes are suggested for 
consideration: 

Elimination of data on: 
Age of radio sets owned. 

Farm program listening (except as a type of program). 
Hearing or remembering specific advertising. 
Hearing criticisms against radio. 

Revision of data on: 

Age classifications, to include males and females under twenty-one. 

City classifications, to allow city-size summaries. 

Newspaper circulation, to include three local papers for daily and 
Sunday editions. 

Autos, to include number and get more detail on use. 

Dual listening and out-of-home listening to get more complete data 
(even on nonradio homes). 

Addition of data on: 

Number of persons in family by age groups and total primary listening 
audience. 

Television families. 

Families using telephone or mail for purchases. 

Cities in which specified shopping goods are purchased. 

Most of these changes affect so-called identification data which are 
economically obtained as a by-product of a survey and which increase 
the number and value of the summaries possible. 

The proper size of the sample to be used to cover the areas lying 
within the service contours of WKGP depends on three considerations: 
the statistical accuracy desired, the acceptability of findings to advertisers 
and their agencies, and the cost. 

The Iowa surveys are based on slightly more than nine thousand 
interviews completed out of, presumably, some eleven thousand to 
twelve thousand five hundred attempted. This is a far larger number 
than is needed to survey Iowa as a state, yet county-by-county data for 
the ninety-nine counties of the state are subject to a considerable margin 
of error. The study proposed would have the great advantage of cover- 
ing a smaller number of geographical units. Serious consideration 
should be given, however, to the need for individual county, or part-of- 
county, data; for any merging of any two geographical units will increase 



74 



MARKETING RESEARCH 



the accuracy of a given sample size or reduce total sample size and cost 
for a specified degree of accuracy. 

Tentatively, it is suggested that a primary sample of approximately 
eight thousand to ten thousand be considered. 

The technique used would be personal interviews supplemented by 
some form of roster, aided-recall, or diary technique. Pre-coded ques- 
tionnaires and punch-card tabulation methods would be used both for 
accuracy and economy. 

The elements of cost for a study of the type and scope proposed are 
estimated as follows: 



COST OF SPECIAL STUDY OF RADIO LISTENERS 





Co 


st 


Activity 


Minimum 


Maximum 


Preparing of questionnaires, pretesting in field, etc. . . . 
Printing of interview forms 
Personal interviews at $1.25 an hour (or less) plus travel 
Hiring, training, and supervising interviewers 
Sample design and other statistical work 


$ 500 
300 
12,000 
600 
500 


$ 750 
400 
16,000 
800 
500 


Editing of returns 
Machine tabulations . . ... 
Planning, administration, analysis, and report prepara- 
tion: the Director's salary . 


250 
400 

2,000 


400 
500 

2,000 


Printing the report * 






Secretarial help and miscellaneous 


350 


500 


Total 


$16,900 


$21,850 









* Assumed done by WKGP in format and quantity desired. 



ACTION NEEDED 
Among considerations raised by this proposal were these: 

1 . Would the eliminations, revisions, and additions of data sug- 
gested make it more usable for WKGP? What other 
changes should be considered? 

2. In what sense are identification data by-products of the sur- 
vey, and how do they "increase the number and value of the 
summaries possible"? 

3. How might the number of sample sub-units be reduced 
without decreasing the value of the findings significantly? 



CASES IN PLANNING 75 

4. How could "circulation" data be applied to specific time 
periods or programs when selling, or buying, time? 

5. Would the study proposed solve the problems the station 
manager had in mind, and was it likely to be worth the cost? 



CASE 2 PROPOSED CONSUMER MARKET 
SURVEY 

BACKGROUND 

The annual sales of the Seldon Department Store were ap- 
proximately $400,000, although it was located in an agricultural 
valley section in a community of less than 3,000. In a sense, 
Seldon, which was on Main Street, combined three stores. On 
one side was a former five-and-ten-cent store, or variety store, 
and the basement and first floor sales area still was used to sell 
general merchandise and limited price lines (indeed, the famil- 
iar red banner of the former store, slightly altered, remained on 
the store exterior). The middle section of the store was nar- 
rower and was used to display and sell women's ready-to-wear. 
At the other side was a section containing office space which 
also was used to display and sell major appliances and floor cov- 
erings. These had been three separate stores at one time, and 
had been joined by the expedient of constructing one small 
doorway in each separating wall. Furniture was both stored 
and displayed upstairs in rooms which once had been apart- 
ments and had never been remodeled. Furniture also was 
stored, and could be displayed, on the second floor of a building 
down the street. 

In its transition to a department store status, the store had 
become badly crowded for space. Storage space was limited 
and poorly located; store walls were jammed with merchandise 
right up to the high ceilings; aisles were narrow. 

The enterprise was steadily expanding its sales volume and 
profits. The proprietor had sufficient capital and owned land 
in the rear for a considerable expansion of sales area. Estimates 
had been prepared of the increase in volume which might be 
obtained in various lilies if these lines were broadened and the 



76 MARKETING RESEARCH 

EXHIBIT 1 
Questionnaire for Consumer Survey, Department Store 



Town 


Other towns 


A 


B 


C 


D 


(state which) 


1. How far do you live from each of these 










towns? Number of miles . . 










2. Approximately how many times have you 










shopped in each of these towns so far this 










year? Number of times 










3. In which of these towns during the past 5 










years have you purchased the items listed be- 
low? (For each item check the town, or 










towns, in which you made purchases. ) 










Furniture for: 










Dining room 










Bedroom 










Living room 










Carpets 










Women's dresses, priced 










at less than $6.00 










at $6.00 to $8.99 










at $9. 00 or more 










Children's clothing 










Men's wear 










Appliances 










Radio or television 










Stove or washing machine 










Other 
















dur 


ing the past 5 


4. Which of the items listed above have you purchased 






5. In which town do you prefer to buy your dresses? (Name of town) 


Why? 




* 



CASES IN PLANNING 77 

6. In which town do you prefer to shop for furniture? 

(Name of town) Why? 



7. Perhaps you would prefer to shop in a different town if the merchants 
offered better assortments, different store hours, better parking, or some 
other conditions. To indicate this, please complete the following state- 
ments : 

A. I would prefer to buy my clothing in (town) # 



B. I would prefer to shop for furniture in (town) ^ 

if 

C. For most shopping other than for food I now prefer to shop in 

( town ) because 



For statistical purposes only : please tell us the following: 

I am married ; single ; other Check which one. 

My husband's age is: Under 25 ; 25 to 50 ; over 50 

My husband's occupation is (Your occupation, if 

not marned.) 

The number of persons in our household is: 

Males under 2 1 2 1 and over 

Females under 2 1 2 1 and over 

For sending the gift of to me, please use this address : 



Name 

Address . 



78 MARKETING RESEARCH 

sales area increased. Various ideas for the expansion and re- 
modeling of the store had been developed and a few of these 
had been incorporated into architectural drawings and estimates 
of cost. 

The proprietor was a man of independent mind who had built 
the business from scratch. He liked to hire consultants, but 
often failed to follow their advice, being content with the stimu- 
lation afforded to his own thinking and the tests provided for 
his own developing plans. On this occasion he secured the serv- 
ices of consultants from a nearby city. The consultants were 
to spend one day in the store discussing plans and records and 
inspecting the store and then submit recommendations for 
changes. 

Among the suggestions offered was that the planned expan- 
sion, which seemed desirable, should not be made until after a 
consumer survey was conducted. 

THE PROBLEM 

A specific question the proprietor had to decide was whether 
or not to conduct some such survey as was recommended. 

DATA AVAILABLE 

The Seldon Department Store had no important competition 
for its lines from stores in the community. Less than twenty 
miles to the south, however, in a community with a population 
of 1 3,000, there was a sizable shopping district with many mod- 
ern stores including several furniture stores, women's clothing 
stores, and chain stores operated by a mail order house and other 
large organizations. Some thirty miles eastward was a town of 
40,000 population, and some forty miles northward was the 
state capital, with a population of well over 100,000. Evidence 
suggested that for shopping goods the major competition was 
with stores in the nearest of those towns and, especially, from 
the large stores in the capital city. 

A major share of the floor space to be added, if the proprietor's 
basic plan was followed, would be devoted to furniture, cloth- 
ing, and appliances. A major share of the increase in volume 
of sales planned would also come from sales of these lines. It 



CASES IN PLANNING 79 

was in regard to this aspect of the contemplated expansion that 
the consultants suggested it might be wise to take out some in- 
surance in the form of a little consumer research. Appended 
to the report were rough plans for such a survey. The survey 
itself would be made by store personnel. Plans included the 
questionnaire on pp. 76-77, which was to be mailed out to a 
sample of women in the area. 

Suggestions in some detail were given concerning the method 
of obtaining the proper sample and of checking results. It also 
was suggested that the company name not be used and that a 
box in the capital city be rented to receive returns; that women 
answering the questionnaire be sent a small gift or some thirty 
or forty cents' worth of stamps, and that if a second mailing was 
needed, fifteen or twenty cents' worth of stamps might be en- 
closed with a promise of the remainder on reply; and that the 
many open-end questions suggested might prove difficult to 
tabulate, especially for store personnel, even though they were 
useful question types for exploration. The entire project, it was 
suggested, might be conducted by the store for an out-of-pocket 
cost of from $200 to $400,*a fraction of 1 per cent of the contem- 
plated investment in expanded facilities. 

ACTION NEEDED 

1. Should the proprietor of the Seldon Department Store ac- 
cept the proposal to conduct a consumer survey? 

2. Would the proposed questionnaire produce the most useful 
data or should revisions in plans be made? 



CASE 3 USE OF INTERNAL DATA FOR 

STUDYING MAGAZINE MERCHANDISING 

EFFECTIVENESS 

BACKGROUND 

The Summit News Company secured a large volume of mag- 
azine sales through drugstores, although newsstand sales were 
large and other outlets were used to distribute magazines. The 
company was convinced that magazines were highly profitable 



80 MARKETING RESEARCH 

merchandise for these drugstores. For example, a study of a 
small group of drugstores in one region of the country had 
shown (1) that magazine sales averaged more than 5 per cent 
of total store sales, (2) that sales of magazines per square foot 
of space used averaged $140 annually, compared to $69 for the 
stores' sale of all items, and (3) that gross margin per square foot 
of space used was $35 annually for magazines, compared to $20 
for all items. 

Many drugstore operators, nonetheless, considered magazines 
as little better than a necessary evil justified only by customer 
convenience. 

Poor dealer relationships and a growing interest in means of 
increasing magazine volume and profitability in retail outlets 
led the company to consider a long-range research program. 

THE PROBLEM 

As originally visualized by the company, the general objective 
of the research program would be to find the most efficient 
methods of merchandising magazines in drugstore outlets. 
This would be done by retail studies and would include a com- 
plete appraisal of dealers' attitudes toward handling magazines. 

QUESTIONS TO BE ANSWERED 

Among the more specific questions the managers of the com- 
pany had in mind were: 

1. What kind of display racks should be used in drugstores in 
various volume classifications? 

2. What sizes of racks should be used in each? 

3. What determines the best location for the rack, or racks, 
used? 

4. How many titles should be carried by each store? 

5. How should the titles be selected? 

6. What determines the best display or positioning of the 
titles carried? 

In addition, the company thought that marketing research 
should be used (1) to develop standard operating statistics for 



CASES IN PLANNING 81 

good magazine departments and (2) to study magazine con- 
sumer buying habits. 

One of the specific problems which arose later concerned the 
type and amount of research, if any, to be conducted, based 
entirely or primarily on existing records. Indeed, this became 
the key problem in the consideration of using research. 

DATA AVAILABLE AND THE PROGRAM PROPOSED 

Magazines for sale over-the-counter in single copies were dis- 
tributed by the Summit News Company under a consignment 
system. This permitted each publisher to decide how many 
copies of each issue should be put on the stands in each market. 
The local distributor allocated the number set by the publisher 
among individual dealers. From time to time during the life 
of each issue, routemen redistributed the copies among dealers 
as they ran short or were found in oversupply. 

Dealers, including drugstore owners, accepted this arrange- 
ment, under which they had no control over their quota, be- 
cause they were permitted to return all unsold copies for full 
credit. Each dealer paid the distributor for the copies he actu- 
ally sold (as measured by the difference between his "draw" and 
his return). Similarly, the local distributor paid the national 
distributor, and the national distributor paid the publisher, for 
the difference between the number of copies sent out and the 
returns. 

A private consultant was hired to draft a detailed proposal 
for a long-range research program, together with budget esti- 
mates and a time schedule. 

In brief, the proposals made envisioned three broad types of 
research. The first type would rely primarily on available rec- 
ords kept by the distributor. The second type would require 
the keeping of special records by drugstores or the actual obser- 
vation of sales persons and customers at the point of sale. This 
might include both direct observation experimental techniques 
and the use of the techniques of cost allocation. The third type 
of research would involve interviews with consumers and with 
dealers. 

In more detail, these possible projects were suggested: 



82 MARKETING RESEARCH 

PROJECT 1 

SUGGESTED STATISTICAL ANALYSIS 
OF THE SALE OF MAGAZINES IN DRUGSTORES 

I. Objective: To test through correlation analysis the effectiveness 
of methods used to sell magazines in drugstores. 

II. Types of questions to be answered. 

1. What effects do differences in methods of displaying, promot- 
ing, and selling have on volume, cost, and profit in the market- 
ing of magazines by drugstores? 

2. How do the various types of stores, when classified by such 
factors as size, location, organization, and lines sold, differ in 
their effectiveness as distributors of magazines? Why? 

3. How widely, and by what means, can all stores imitate the most 
effective ones? 

4. Why do some individual stores excel other stores of the same 
type in selling magazines? 

5. What types of racks are best suited to what types of stores? 

6. What assortments of magazines are proper for different types 
of stores? 

7. What types of stores are most profitable to the distributor? 

8. What stores serve the consumer most effectively? 

III. Methods of study. 

1. A detailed study of distributor records for a sample group of 
stores. 

2. A restricted survey of at least part of the stores in the sample 
to obtain classification data. 

3. Correlation analysis of the data gathered. 

IV. Sample to be studied. 

1. A sample representative of all drugstores served in the ... 
metropolitan area as a whole. 

2. A sample representative of appropriate subdivisions of the area. 

3. A sample large enough to permit selection from it of sub- 
samples and test groups for subsequent field surveys and ex- 
periments. 

V. Data to be gathered from distributors' records for each store in the 
sample. 

1 . Magazine assortments handled. 
a) Full assortment. 



CASES IN PLANNING 83 

b) Minimum assortment. 

c) Special assortments. 

2. Sales volume, in dollars and units. 

a ) Total for all magazines. 

b ) Totals for particular assortments or classes. 

3. Gross margin, in dollars and as a percentage of sales. 

a) Total for all magazines. 

b ) Totals for particular assortments or classes. 

4. Sales over the life of any selected issue, or issues, for selected 
titles. 

VI. Other data from distributors' records. 

1 . Total sales margin in dollars and as a percentage of sales, total 
expenses, and expense breakdowns. 

2. Prices of individual magazines and margins on each in dollars 
and as a percentage of sales. 

3. Draws, sales, and returns for individual magazines and classes 
of magazines. 

4. Percentage of total draws, sales, and returns represented by 
individual magazines and classes of magazines. 

VII. Data to be gathered from distributors' records or from maps when 
possible, otherwise by a physical inspection of stores and, possibly, 
by use of a simple questionnaire. 

1 . Classification of each store by location. 

a) By route. 

b ) By counties, city divisions, or other appropriate areas. 

c ) By downtown, shopping centers, neighborhood, and so on. 

2. Classification by ownership organization. 

a) Chain. 

b) Independent. 

c) Voluntary chain. 

3. Classification by service rendered to the store. 

a ) By frequency of calls by routemen. 

b ) By provision, acceptance, and use of display aids. 

4. Classification by display facilities and methods. 

a) Type of racks. 

b) Number of racks. 

c) Size of racks. 

d ) Location of racks . 

e ) Positioning of titles on racks. 



84 MARKETING RESEARCH 

/) Ratio of magazines sold to magazines displayed, 
g) Scheduling of displays. 

5. Classification by size of stores' sales of all goods. 

6. Classification by lines of goods handled other than magazines. 

7. Classification by ratio of amount of sales to space used. 

a) Total space. 

b) Space used for magazines, amount and as percentage of 
total. 

8. Classification by miscellaneous factors. 

a) Hours open. 

b ) Type of trade (transient, neighborhood, and so on ) . 

c ) Incomes of patrons. 

d) Patronage by special groups (occupation, race, religion, na- 
tionality, and so forth ) . 

e ) Value of magazine stock carried. 

/) Methods of handling small-circulation magazines. 

VIII. Examples of questions for which answers should be sought and 
the breakdowns of data that might be used in the analysis. 

1. What variation is there in the annual volume of magazine 
sales of these outlets? 

a) Number of outlets and percentage of total selling, say, up 
to $1,000, $1,001 to $10,000, and so on. 

b) Average and median size for all stores and for each size 
group. 

c) Reasons for the variations. 

2. What proportion of total distributor volume comes from each 
size group? 

3. What is the relation of assortments carried to the volume of 
sales? 

4. How many and what sorts of stores are not carrying proper 
assortments? 

5. What is the relation between sales facilities and volume of 
sales? 

a) Sales volume by number, type, size, and location of racks. 

b ) Sales volume by kinds of display policy followed . 

6. How many and what sorts of stores are not provided with 
proper racks? 

7. What types of stores secure the highest (and lowest) sales per 
square foot of space devoted to magazines? 

8. How does the rate of sale over the life of an issue vary as among 
stores? 



CASES IN PLANNING 85 

9. What significant differences are there in volume and assort- 
ment of sale at different types of location? 

10. What relationship is there between magazine assortments car- 
ried and types of stores? 

PROJECT 2 
EXPERIMENTAL TESTING OF SALES VARIABLES 

Objective: To hold variables constant while changing singly the various 
factors to be tested to discover the effect on sales of different racks, 
different size racks, different locations of racks in stores, different as- 
sortments, different display methods, and different sales methods. 

PROJECT 3 
DISTRIBUTION COST STUDY OF OUTLETS 

Objective: To discover the relative profitability of different types and 
sizes of stores and the functional costs of handling accounts and to 
establish standards of expense and profitability by assortments and 
the unit or volume sales of titles. 

PROJECT 4 
CONSUMER INTERVIEWS 

Objective: To discover the numbers and types of persons who buy maga- 
zines at stores, how often, for what reasons, with what store prefer- 
ences, and so on. 

PROJECT 5 
SURVEY OF DEALER ATTITUDES 

Objective: To determine dealer attitudes toward handling maga- 
zines, distributor organization, methods, personnel, services, display 
aids, expansion, and so forth. 

PROJECT 6 
COMMODITY COST STUDY IN DRUGSTORES 

Objective: To discover the profitability to stores of sales of different 
types of magazines. 



86 MARKETING RESEARCH 

ACTION RECOMMENDED 

The company had to reach a decision regarding the desirabil- 
ity of launching the research program. A good deal of differ- 
ence of opinion existed as to how worth while Project 1 in 
particular might be to the company. 

Operation on consignment is possible only because the dis- 
tributor keeps detailed and up-to-date records on each dealer. 
As a matter of routine these records reveal such facts as these 
for each important magazine individually and for each group 
of the less important ones: the number received, sold, and re- 
turned for each individual issue; the price paid for each issue; 
the total amount paid for all copies of each issue; and the rate 
at which each issue has sold during its life. 

The officials most closely connected with these operating data 
felt they already utilized them to the fullest extent feasible. 
They pointed out that declining sales at particular stores or on 
particular routes or for particular titles could be detected read- 
ily. Since the prices consumers paid for magazines were set by 
the publishers, and there was no problem of retailers' selling at 
cut prices, gross margins for titles, per issue or over a period of 
time, and for dealers were easily obtained. 

It was argued, therefore, that although researchers would 
have to familiarize themselves with the types of records kept 
and the methods of operation, this was simply "education" of 
persons unfamiliar with the business. This "education" should 
be minimized to save money. What was needed was not to 
play statistical tricks with figures already available, but to gather 
new facts important to better merchandising of magazines. 

Other officials felt that statistical analysis was the proper first 
step in the research program. Not only would it be worth while 
in itself, but it also would be helpful both in determining the 
specific experimental studies to make and also in establishing 
them. 

ACTION NEEDED 

1. What are the merits and defects of the general proposal and 
the tentative plan for a statistical analysis of records? 



CASES IN PLANNING 87 

2. Are the methods proposed well adapted to the specific pur- 
poses stated? 



CASE 4 METHODS FOR STUDY OF 
INSTALLMENT CREDIT 

BACKGROUND 

A public-spirited, influential businessman had become con- 
cerned after World War II with the problems of installment 
credit encountered in his field of business and in national affairs. 
Installment credit, he believed, had become far more than a 
matter of purely monetary policy for both business and govern- 
ment. Yet data on the economic and social aspects of install- 
ment credit were spotty and few. Being accustomed to using 
marketing research, he secured the services of a consultant to 
formulate proposals for a broad study, hoping that the new 
American Foundation, Inc., or some other foundation or busi- 
ness group, might be interested at some later time in conducting 
it. 

Three alternate techniques for conducting such a study were 
proposed. 

A. SURVEY METHOD 

The first, and relatively most simple, method proposed was 
a survey of consumers accompanied by an inventory of their con- 
sumer durables. The main purpose of this operation would be 
to disclose the extent and nature of durable goods purchased on 
the installment plan possessed by families of various types. 

Data to be Gathered: 

1. Characteristics of respondent families, by age, sex, income, occupa- 
tion, education, and nationality of members, home value or rental 
and year obtained, year married. 

2. An inventory of a specified list of durable goods supplemented by 
information on price, make, model, age, month and year purchased; 
new or used purchase; make, model, age and value of trade-ins, if 
any; how bought; period and payment rate if installment purchase. 



88 MARKETING RESEARCH 

3. Installment buying, other than for specified durables, as to items 
bought, last purchase dates, period and amount of installment pay- 
ments. 

4. Income(s) for years in which durables purchased and occupation (s), 
if different from present. 

5. Finances: mortgage, insurance, other assets and obligations. 

6. Future plans for purchase of the specified durables. 

7. Attitudes toward durable goods ownership and buying on time; 
related domestic or housework problems and other needs, entertain- 
ment and social use of durables. 

Objectives: Problems for Analysis: 

1. Influence of individual and family characteristics on the installment 
purchase of durable goods (by individual characteristics, multiple 
correlation, and identity with established socioeconomic groups) . 

2. Number of installment buyers and nonbuyers, total and by types of 
durables. 

3. Number and characteristics of habitual vs. infrequent installment 
buying families. 

4. Kinds and total of durables owned. 

5. Percentage in units and dollars of financed durables to total dura- 
bles, original and depreciated prices. 

6. Rate of accumulation of durables owned and relation to financing 
used. 

7. Used durables purchased, type, total, percentage of all durables, and 
differences in financing new and used goods. 

8. Types, ages, and values of trade-ins and relation to items bought and 
type of financing. 

9. The percentage of weekly (or monthly) income "mortgaged"; the 
peak, low point, and average weekly obligations during the year, in- 
stallment debts, and all debts. 

10. The value of owned durables, and financed durables, as percentage 
of total assets and ratio to liquid assets. 

11. Percentage of total income spent on durables, current and past 
years, and by types of durables and financing. 

12. Ownership of durables, total and by types, by regions and city sizes. 

1 3. The relation of installment durables to standards of living, family 
events, attitudes toward installment buying, social and entertain- 
ment uses of durables. 

14. Future expectations by types of durables and in total, in relation to 
present holdings, financing methods, and income. 



CASES IN PLANNING 89 

Limitations: 

Respondent cooperation will be difficult to obtain, especially among 
some groups, although payment for cooperation should minimize the 
problem. Inaccuracies caused by memory loss and bias, particularly 
on dollar amounts, can be expected; but these could be reduced some- 
what by various techniques and by using dealer records to check prices 
and values. Although the data will be better than those from past 
studies, life-cycle data will be incomplete. Probable cost would ex- 
ceed $ 50,000. A pretest probably should be made first on a local scale 
to iron out interviewing and statistical problems and to arrive at a 
better idea of the type of results that could be obtained by using this 
method. 

B. CONTINUOUS CONSUMER PANEL METHOD 

The second method proposed was the use of a continuous 
consumer panel, perhaps as a special client of one of the panels 
now operating. Although the most costly and long-range type 
of study, it would seem to promise the best and fullest results. 

Data to be Gathered: 

I and 2. Same as for survey method. 

3. Weekly mailed records covering changes in family status and in- 
come, purchases and commitments for durables in some detail, pay- 
ments on durables or loans, family members shopping for durables, 
types of stores at which purchased, disposal of durables other than 
by trade-ins, and car mileage. 

4. Periodic reports on buying expectations. 

5. Special data from follow-up inventories or interviews to explore be- 
havior patterns revealed by other data. 

Objectives: Problems for Analysis: 

1 to 14. Same as for survey method. 

1 5 . Expectations vs .later actualities . 

16. Types of stores at which durables were purchased. 

17. Shopping behavior of families buying durables. 

18. Variations in installment payments by years, seasons, types of goods, 
family-cycle stages, and income changes. 

19. Replacement and use cycles for durables and relation to financing 
means and accumulated investment in durables. 



VU MARKETING RESEARCH 

20. Net changes in depreciated value of durables, as per cent of income 
earned, expended, and committed, and of savings. 

21 . Measurements of consumer holdings other than by dollars. 

22. Possession of durables as deterring or facilitating purchases of other 
durables, in total and by types. 

23. Delinquencies of various kinds, their causes, and action taken. 

24. Determination of appropriate time periods for analysis of durable 
goods purchases and use patterns. 

25. Relation of installment buying to other choices of families and the 
determinants of choice. 

Limitations: 

Such a study would have to be continued for several years to be fruitful, 
and, ideally, should cover a full business cycle. Annual cost might ex- 
ceed $100,000, in addition to cost of the opening survey. Time and 
cost are the principal limitations, although turnover of members and 
other problems of panel operations would also be encountered. 

C. CASE HISTORIES METHOD 

The third method proposed could be used alone or in com- 
bination with Method 1 or Method 2. It contemplates the 
gathering through long, repeated interviews with husbands and 
wives of as complete case histories as possible on the purchase, 
use, and financing of automobiles (or any other single durable) 
during the lives of family members. The data to be gathered 
and the objectives, or problems for analysis, would be similar 
to those outlined for the first two methods. 

ACTION NEEDED 

1 . If the installment credit project is undertaken, which of these 
methods should be preferred, and why? 

2. To what extent would each method help to answer such 
questions as these: 

a) How is installment credit employed during the life cycle 
of individuals and families? 

b) In what ways do the purchases of installment durables 
relate to specific needs of families, to the peaks and valleys 
of these needs, and to the flow of income as contrasted to 



CASES IN PLANNING 91 

the expectations, or realities, of these needs and the bur- 
den of postponing consumptiou? 

c) What is the extent and importance of consumer holdings 
of installment durables as savings and investments? How 
do families accumulate such holdings? How is their ac- 
quisition related to other assets, or savings? 

d) What is the function of the depreciated (trade-in) value 
of installment durables in dividing total stocks, in sustain- 
ing demand over time and during business cycle changes, 
and in accumulating personal and national wealth? 

e) How does installment credit fit into the management of 
family finances, and with what benefits and dangers? 



CASE 5 PRETESTING A QUESTIONNAIRE 

SMALL ACCOUNTS PROBLEM 

The Langdale Department Store, with a volume of sales of 
several tens of millions of dollars and with approximately 300,- 
000 charge account customers, was disturbed about the large 
number of small accounts. A sample taken of accounts by size 
had shown that nearly half of them averaged less than $1 a week. 

A customer survey was authorized to ascertain the reasons for 
the existence of so many small accounts. It was expected that 
this information might lead to remedial action. 

HYPOTHESES USED 

Because the store knew very little about its customers except 
for their number, their total cash and credit expenditures as a 
group, and their addresses, the basic problem appeared to be 
one of characterizing small (and large) customers. Ten possi- 
ble reasons for customers spending only limited amounts at the 
Langdale Department Store were formulated. These were: 

1 . Income. Low income families may make up the bulk of small ac- 
counts. 

2. Family size, composition, type. Smaller families may buy less. Sex, 
age, nationality, and home ownership might influence size of pur- 
chases. 



92 



MARKETING RESEARCH 
EXHIBIT 1 



Study of Department Store Accounts 

About how long have you lived in (city)? Years ; Life ] 
Which member of your family, in this household, does the most shopping 
in downtown department stores? Verbatim Ans. _____ - . 
Also classify the answer: 



Self 
D.K. 



All n; More than half rh Shares 



Male d 
Other Q Female [] 



3. What other family members, in this household, also bought in any of these 
downtown department stores in the past year? * 

Self Q Husband Q; Son Q; Daughter Q Others DDCD D - K - D 

4. Have you, or has any other tamily member in this housenola, ordered any 
goods from these stores by telephone in the past year? Yes Q No [jj 
D.K.Q 

If yes, ask: At which store, or stores? Enter store initials - D.K. Q 

5. A. At which of the five stores, if any, do you or other members of your 

family, in this household, have a charge or credit account? 
G. Q; L O Sa. Q Sc. Q T. Q; None Q; D.K. [J 

B. About how many years ago were each of these accounts opened? 

G. []; L. Q Sa. [j; Sc. PJ; T. Q- ( Enter vears or D -K.) 

C. How many members of the family, in this household, make charges on 

these accounts? Number _ ; D.K. ] 

D. Have any friends, or relatives outside the household, used any of these 

accounts in the past year? Yes Qj No Q; D.K. F] 

If yes, ask: Which accounts? G. Q L. Q SaT Q; Sc. Q; T. Q 

D.K.Q 

6. Are there any charge accounts in these 5 stores which the entire family in 
this household has definitely stopped using? Yes Q; No Q; D.K. fl 

If yes, ask: In which stores? G. Q L. Q Sa. p ; Sc. Q; T. p|; D K. [~| 

7. Including both cash and credit purchases, at which of these 5 stores would 
you estimate your family had done the most buying in the past year? 
Most? (1) _ ; Next most? (2) _ ; Next most? (3) _ ; Next most? (4) _ ; 
Least? (5) _ ;D,K.Q 

8. In the past year has your family bought more for cash than for credit at: 



Greens? 


More 


Less 


About 
same 


D.K. 










Langdale? 










Sardon? 










Scier? 










Taskers? 











* Interviewer instructions called for the respondent to be handed a flash 
eard with an alphabetical list of five stores before asking question No. 3. 



CASES IN PLANNING 



93 



9. A. Do you feel personally that a charge account offers you any special con- 
venience or advantage? Yes Q; No FJ ; D.K. ] 
If yes, ask: What conveniences or advantages? 

B. Do you feel personally that a charge account causes you any special in- 
convenience or disadvantage? Yes Q; No Q]; D.K. Q 
If yes, ask: What inconveniences or disadvantages? 

10. Do you pay your charge accounts In person n? By check Q? By money 
order ["""|? or by some other means |""1? (Describe) D.K. ] 

11. A. Do you read any (city) newspapers? Yes ]; No ]; D.K. []] 

If yes, ask: 



How often: Which ones? 
Sunday only? 
Weekdays only? 
Daily including Sunday? 
B. Do you read department store ads before going downtown shopping? 

D.K. 

I; All 



Bugle 


News 


Star 


D.K. 



































If yes, ask: which store ads? G ]; L Q; Sa. Q; Sc. ]; T. 
C. Which store do you think: 

Has the most reliable ads 

Has the least reliable ads 



Offers the most good bargains in its ads 

Offers the fewest good bargains in its ads 

12. Which of the 5 department stores do you think: 

Has the most courteous and helpful sales persons? , 
Has the least courteous and helpful sales persons? . 

Has the most pleasing appearance inside? 

Has the least pleasing appearance inside? 

Gives you the most value for your money? 

Gives you the least value for your money? 

Offers you the best all-around services? 



1 3 



Offers you the worst services in general? 



D.K. 
D.K. 
D.K. 
D.K. 

D.K. 
D.K. 
D.K. 
D.K. 
D.K. 
D.K. 
D.K. 
D.K. 



A. In which store do you find it easiest in general to locate and inspect the 

goods you wish to see? 

G. p ; L. n; Sa. n; Sc. n; T. n; D.K. n 

B. In which store do you find it hardest in general tolocate and inspect the 

goods you wish to see? 

G. Q L. Q Sa. [3 Sc. Q T. Q D.K. p 
14. Are there any certain items, or types of goods, which you almost always 



Greens? Yes 





;No 





;D.K. 


Langdale? Yes 




;No 


~ 


;D.K. 


Sardon? Yes 


_ 


;No 


~" 


;D.K. 


Scier? Yes 


*** 


;No 


B " B 


;D.K. 


Taskers? Yes 


i 


;No 


- 


;D.K. 



If yes: Ask: Which?. 
If yes: Ask: Which?. 
If yes: Ask: Which?. 
If yes: Ask: Which?. 
If yes: Ask: Which?. 



94 MARKETING RESEARCH 

15. Are any members of your family employed in one of these 5 department 
stores: 

Yes Q No Q]; N.A. [] If yes: Ask: Which store or stores? 

N.A. [jj 

16. Which one of these five department stores is your favorite? 
G. Q L. E; Sa. Q; Sc. n; T. H; D.K. Q 

Why do you like this one (these) oest? 



IDENTITY (Be sure to complete this section) 

Name of respondent 

Address 



Estimated age of respondent: 24 or under Q; 25-34 ]; 35-44 Q; 45-64Q; 

over 64 Q] 

ASK: How many members in your family in this household under 19 ; 

19 or over ; Total : 

Would you mind telling me in which of these groups the family income 

belongs: 
$30 or under per week Q; $31 to $40 Q; $41 to $50 Q; $51 to $70 []; 

$71 to $100 Q; over $100 per week O;N.A. D 

Interviewer's name 

Date of interview 



3. Geographical location. Distance (and travel time) might create re- 
sistance to purchases in the downtown city area and reduce fre- 
quency of shopping. 

4. Shopping habits. The greater the number of charge accounts, or 
stores patronized, or shopped, the smaller may be expenditures at 
this store. 

5. Retail expenditures. Customers buying mostly for cash, patronizing 
mostly small stores, chains, or secondary shopping centers, and those 
who spend relatively little in department stores may have small ac- 
counts. 

6. Trends in charge buying. Small accounts for any given year might 
be small because few if any big-ticket items happened to be pur- 
chased that year by many customers. 

7. Days and hours for shopping. Some customers may have difficulty 
in shopping during regular store hours. 

8. Newspaper reading. Low exposure to newspaper advertising by the 
store may result in small accounts. 

9. Specialized buying. Persons who view the store favorably only for 
a few types of goods might be small buyers. 



CASES IN PLANNING 95 

10. Attitudes. Unfavorable attitudes toward store prices, quality, or 
services might restrict purchases. 

THE QUESTIONNAIRE DESIGNED 

Based on these hypotheses and the results of preliminary in- 
vestigations, both internal and external, the questionnaire on 
pp. 92-94 was designed. 

THE PRETEST RESULTS 1 

Interviewers were sent into widely scattered sections of the 
city. Names and addresses of store customers in the designated 
areas were provided, although some interviews were made with 
noncustomers. 

For the 198 interviews completed, the interview time aver- 
aged 25 minutes, the median time was 25 minutes, and the range 
was from 12 to 35 minutes. Only 18 interviews lasted 30 min- 
utes or more; two were not completed because of respondent 
fatigue. 

Question 1 : The opening question worked very well. 

Questions 2 and 3 : These were troublesome. Interviewers re- 
ported and the questionnaires revealed difficulty in classifying 
answers. Respondents seemed to get confused. Forty re- 
spondents were reported as answering they did most of the 
shopping and fifty-two as saying all, but nineteen of the latter 
then reported other family buyers in Question 3. Thirty-three 
families were reported as having one buyer, one hundred ten as 
having two, and forty-seven as having three or more. How 
could classification be improved? Was a cross-check needed? 

Question 4: Nearly half of respondents reported telephone 
buying and (even more unexpectedly) the great majority of 
these reported telephone buying in two, three, four, and even all 
of the five stores listed. Numerous persons volunteered reasons 
for such buying. 

1 For pretesting techniques, see A. B. Blankenship, op. tit., pp. 82-97; L. O. 
Brown, op. cit., pp. 483-85; and D. }. Luck and H. G. Wales, op. cit., pp. 170- 
72. Only questionnaire aspects are reported for this case. 



96 MARKETING RESEARCH 

Question 5: A few respondents indicated that more than one 
family member had an account at a specific store. One inter- 
viewer felt that answers to 5B were vague and another pointed 
out that 5C was a generality. 

Question 6: Respondent answers included: No, 158; Yes, 20; 
DK, 20. An interviewer, several of whose respondents had an- 
swered Yes, suggested that a Why question be added. 

Question 7: Difficulties in ranking respondents who pur- 
chased at all five stores, or at three or four of them, were re- 
ported, but few respondents failed to answer. 

Question 8: The first two columns ("More" and "Less") 
seemed confusing; it was suggested that questions 5A and 7 
really covered the same ground; a "None" column appeared 
desirable; and it was suggested that the question be restricted 
to stores at which accounts had been reported. 

Question 9: More than five times as many respondents an- 
swered No to 9B as answered Yes. Don't Knows ran heavy. 
Nearly all persons answered Yes to 9A and a majority of these 
gave one reason. 

Question 10: Very few respondents reported other means of 
paying accounts; many reported using more than one. 

Question 1 1 : The word "reliable" bothered both interviewers 
and respondents, "truthful" seeming to be the most common 
interpretation by respondents. Don't Know answers ran al- 
most to 50 per cent and were twice as high for "least reliable" 
and "fewest good bargains" as for alternate questions. Inter- 
viewers were troubled at reporting highly infrequent readers of 
newspapers or ads under Yes. 

Question 12: Most respondents were reluctant to answer in 
terms of "worst" or "least." The question was boring and 
caused respondents to show irritation. A great many respond- 
ents were of the opinion that all stores were equal in terms of 
questions asked. 

Question 13: No particular problems. The question was 
raised as to why this question was separated from Question 12 
and why answers were to be recorded in different fashion. 



CASES IN PLANNING 97 

Question 14: No apparent problems. 

Question 15: Numerous respondents reported no members 
now employed but that one or more had worked in one of the 
stores at some time. 

Question 1 6: Answers willingly given. Considerable diversity 
in reasons reported. Two interviewers reported poor inter- 
viewee reactions because question was repetitious. 

Identity Section: Apparently satisfactory. Refusals to an- 
swer income question were few but were more numerous among 
those interviewers reading the income groups than those hand- 
ing the respondent a typed card. 

THE REVISED QUESTIONNAIRE 

Following the pretest the questionnaire was revised. The 
new questionnaire proposed was as given on pp. 98-100. 

ACTION NEEDED 

A final questionnaire conference was scheduled after revisions 
had been made. Among the questions which the research di- 
rector wished to raise with staff members (after they had in- 
dividually gone over both the pretest results and the revised 
questionnaire) were these: 

1. Is another pretest necessary because of the number and type 
of changes made? 

2. Is the new questionnaire too long? If so, how might it be 
shortened: by draftsmanship? by rephrasings? by omis- 
sions? 

3. Can the sequence of questions be improved? 

4. Are the changes justified? Are they the best that can be 
made? 

5. Can interviewers read the questions easily and tabulate an- 
swers quickly and accurately? Is phrasing and spacing satis- 
factory? 

6. Are there any subjects omitted which should be included? 
Are present additions justified? 



98 



MARKETING RESEARCH 
EXHIBIT 2 



A Study of Department Store Accounts 

1. About how long have you lived in (city)? YEARS ["""[; LIFE fl? D - K - F] 

2. Which member of your family, in this house, does the most shopping in 
downtown department stores? RESPONDENT [""[; OTHER (IDENTIFY) _ 

DOES ALL ; DOES MOST ); SHARES EQUALLY j D - K - 



3. What other family members, in this house, alsobought in any of these 5 
downtown department stores in the past year? * IDENTIFY EACH MEMBER: 
_ NONE ]; D.K. Q] 

4. A Have you, or has any other family member in this house, ordered any 

goods by telephone in the past year? YES Q; NO Q]; D.K. Q] 





G 


L 


Sa 


Sc 


T 


None 


DK 


B If YES, ASK: At which stores? 












C Do you buy all , more than half 
, or less than half of your de- 
partment store purchases by tele- 
phone? D.K. Q] 


X 


X 


X 


X 


X 


X 


X 


5. A At which of the 5 stores, if any, do 
you or other family members, in this 
house, have a charge or credit account? 





X 


X 
X 










X 
X 


B About how many years ago were each 
of these accounts opened? ENTER 

YEARS 




C How many members of the family, in 
this house, have made charges on these 
accounts in the past year? TOTAL 
NO D.K. ["""] 


X 


X 


X 


X 


D Have any friends, or relatives outside 
the house, used these accounts in the 
past year? 

YES Q; NO Q D.K. Q] 


X 


X 


X 


X 


x x 


If YES, ASK: Which accounts? 


X 












6. Are your charge accounts paid in person 
Q? by check Q? or by money order [~|? 

D.K.[j] 


X 


X 


X 


X 


X 


X 


7. Including cash and credit purchases, at 
which of these stores has your family done 
the most buying in the past year? Next 
most? etc. RANK ALL 5. 
















* Flash card with five store names shown. 



CASES IN PLANNING 
8. In the past year has your family bought more for cash or credit at: 



99 





All 
for 
cash 


More 
for 
cash 


4 

About 
same 


Less 
for 
cash 


No 
cash 


No. 
Pur- 
chase 


D.K. 


Greens? 
















Langdale? 
















Sardon? 
















Scier? 
















Taskers? 

















10. 



11. 



9. A Before going shopping do you nearly always |"""|, sometimes | |, or very 
rarely ], read department store ads? D.K. Q] NEVER n 

B In terms of getting wanted information about goods, feeling sure there 
will be a stock left when you get there, and that the goods will really be 

"as advertised," which store's ads do you feel are most reliable ? 

D.K. ] least reliable ? D.K. Q] ALL SAME Q 

C Which store offers the most good bargains in its ads ? 

DtK - EH * ne fe wes t good bargains ? D.K. [""]; ALL SAME Q] 

May I also have your personal opinion on a few matters concerning the ease, 

pleasure, or efficiency with which you can buy at different stores? 

How would you rank these 5 stores in relation to : 

A The courtesy and helpfulness of sales per- 
sons? 

B The appearance of the interior of the store? 

C The ease of locating and inspecting the goods 
you wish to see? 

D The services (such as, adjustments in returns, 
delivery, lunchrooms, and restrooms) given 
you? 

E Being able to get the most value for your 
money? 



G 


L 


Sa 


Sc 


T 


D.K. 































































Are there any items, or types of goods, which you almost always would go 
to get at: 

Greens? YES ; NO ; D.K IF G 

Langdale? YES ; NO ; D.K YES, L 

Sardon? YES ;NO ;D.K ASK: Sa 

Scier? YES ;NO ;D.K WHICH? Sc 

Taskers? YES ; NO : D.K T 



12. Are there any members of your family now employed, or recently employed, 
in any of these 5 department stores? YES [""] NO ["H 

YES, Recently r"];NO P1;P.K. [""] 

If YES, ASK: Which one (or ones)? INITIALS D.K. Q 

13. Which one of these 5 department stores is your favorite? D.K. ] 

Why do you like this one (these) best? . 



100 MARKETING RESEARCH 

IDENTITY (PLEASE BE SURE TO COMPLETE THIS SECTION) 
NAME OF RESPONDENT 

ADDRESS 



ESTIMATED AGE: 24 or less ]; 25-34 Q; 35-44 p; 45-64 ]; over 64 ] 
ASK: How many members in your family, in thisnouse, are under 19 years of 

age ? D.K. Q; are 19 years old or older ? O.K. p 

GIVE INCOME CARD TO RESPONDENT. ASK: Would you please tell me in which 

letter group your family income falls? GROUP D.K. [""] N [*""] w f"1 

N.A.Q 

INTERVIEWER'S NAME 



DATE AND HOUR OF INTERVIEW . 
REMARKS: 



CASE 6 CONSTRUCTING A READERSHIP 
QUESTIONNAIRE 

BACKGROUND 

In 1946 a survey was undertaken for the New York Times by 
a private research organization to determine which of a group 
of well-known newspapers and magazines are read regularly, and 
which are preferred, by persons in a number of selected occupa- 
tions. The group included editors of daily newspapers through- 
out the country, public officials throughout the nation, college 
presidents, and clergymen. The newspapers and magazines 
included in the survey were as follows: 

Newspapers: 

New York Times weekday and Sunday editions separate 

New York Herald Tribune " " " 
Chicago Tribune " " " 

New York Sun (this, as well as the following papers, had a week- 
day edition only) 
New York World-Telegram 
Wall Street Journal 
Journal of Commerce (Chicago) 
Journal of Commerce (New York) 



CASES IN PLANNING 101 

Magazines: 

Nation's Business 

Newsweek 

Time 

United States News 

Business Week 

Fortune 

Two specific questions were to be answered from the survey, 
one on regular readership of these newspapers and magazines, 
and one regarding the respondent's first and second order of 
preference among those newspapers and magazines that he did 
read regularly. It was decided not to ask for any classifying 
information on the questionnaire, though breakdowns were to 
be compiled by region and by occupation. Data on the former 
could be obtained from the postmark, and occupational identi- 
fication, it was thought, could be obtained through the use of 
some sort of code with the questionnaire. 

Mailing of the questionnaire was to be made more or less at 
the same time to several hundred persons in each of the occupa- 
tions selected for study. Names and addresses were secured 
from various trade directories and other lists of people in the 
specific occupations. Because of the brevity of the question- 
naire, it seemed feasible as well as more convenient to have the 
covering letter on one side of a sheet of paper and the question- 
naire on the other side. This meant, however, that the respond- 
ent's name and address would be known if the questionnaire 
were returned. It was thought, nevertheless, that possible non- 
response because of this reason would be very small if it were 
stressed somewhere that individual identities would not be used 
in any way. 

THE PROBLEM 

It was naturally desired to devise a covering letter and a ques- 
tionnaire form that would maximize the response rate. Since 
nearly all the occupations covered were of the sort that would 
give the sample members very little time to spare, it was im- 
portant to make the covering letter and the questionnaire short 



102 MARKETING RESEARCH 

and to the point. Other devices to increase the rate of response 
were also sought, particularly since the schedule for the survey 
did not allow for follow-up mailings. Thus, should a separate 
covering letter be designed for each occupation, or should one 
form of letter be employed throughout? 

A coding method was also needed to distinguish between the 
various occupations, or should this be dispensed with and identi- 
fication made from the names of the respondents on the cover- 
ing letter? 

A final problem concerned the order of listing the newspapers 
and magazines on the questionnaire. According to similar sur- 
veys in the past, there was some reason to believe that the news- 
paper or magazine given top listing in its respective group might 
have some advantage over the others. If that were true, what 
order of listing should be used? 

ACTION NEEDED 

The following things remained to be done before this survey 
could be launched: 

1 . Write a covering letter, or letters. 

2. Prepare the questionnaire form. 

3. Suggest any other means to be used for raising response rates. 

4. Devise a method of coding occupations, if a code were used. 
If not, explain why not. 

5. Specify a procedure for avoiding possible bias caused by the 
order of listing of the newspapers and magazines. 



CASE 7 PROPOSED QUESTIONNAIRE FOR AN 
ICE CREAM SURVEY 

BACKGROUND 

The Lee Dairy Company did not have a marketing research 
staff. The sales manager, however, made occasional use of grad- 
uate students from schools of business. Through one of the 
schools in the area he hired a student, Henry Lodge, on a tern- 



CASES IN PLANNING 103 

porary, part-time basis to plan and conduct a survey on ice 
cream flavors. 

THE PROBLEM 

The sales manager explained that he wished to survey con- 
sumers in the city regarding the selection and use of different 
flavors of ice cream. The Lee Dairy Company produced from 
sixteen to twenty-seven different flavors, the number depending 
on the season. Of these, only vanilla and chocolate were con- 
sistently large sellers, although the total volume sold of other 
flavors was substantial. Sales by flavors varied considerably 
among neighborhoods and outlets. 

The sales manager believed that the company could gain 
greatly were it able to increase the number of flavors of Lee Ice 
Cream which the average retail distributor carried. Equally 
important, however, was the need to provide route salesmen 
with more information on consumer preferences and habits re- 
garding ice cream flavors. Although the problem of flavors 
could not be divorced completely from pricing, point-of-sale dis- 
plays, and other merchandising considerations, or from com- 
petitive factors, the competitive factors were not considered 
important at the moment. Basically, it was desired to secure 
whatever relevant data were obtainable on consumer purchase 
and consumption of ice cream flavors that would aid salesmen 
in selling drugstores, food stores, and other retail outlets more 
effectively. Some of the information, of course, would be 
passed on to retailers to aid them in doing a better sales job. 

The sales manager said that he expected about three hundred 
to four hundred personal interviews to be made with housewives 
in the city. The sample design was up to Mr. Lodge, who also 
was expected to hire whatever interviewers he needed to help 
him. The manager suggested that Mr. Lodge mull over the 
problems, arrange his plans, construct a questionnaire, then talk 
with him again before proceeding further. 

THE PROPOSED QUESTIONNAIRE 

Two weeks later Mr. Lodge returned with the following ques- 
tionnaire, reproduced in full: 



104 MARKETING RESEARCH 

EXHIBIT 1 

Questionnaire for an Ice Cream Survey 

1. What is your favorite brand of ice cream? 

Why? 



2. Would you go very far out of your way to get your favorite brand? 
Yes No 

3. How many brands of ice cream have you used in the last six months? 
(Names) , , , 

4. Have you stopped using any brand completely in this time? Yes No 

5. Why did you stop using this brand? 

6. What was the brand of ice cream you bought LAST, to eat at home? 

7. Was it STORE PACKED? Or FACTORY PACKED? 

8. Where did you buy it? (Name and address) 

9. What flavor(s) did you buy the LAST time? . 



10. Was it the flavor(s) you wanted? Yes No Was it your fa- 
vorite flavor? Yes No 

11. Do you Always, Usually, Seldom, Never, get the flavor(s)> 

you want? 

12. Was there a large selection of flavors from which to choose? Yes No 

Didn't notice How many flavors were there? 

13. Did you buy something else at the same time? Yes No Don't 

remember If YES, what else did you buy? 

14. Do you purchase most of your ice cream at the store where you bought the 

LAST time? Yes No If NO, where do you buy most of your ice 

cream? What flavors? 

15. Why did you buy at that particular store the LAST time? 

16. In what OTHER stores do you purchase ice cream? . 



17. Are there any things about the store where you USUALLY buy ice cream 
which you do not like? Yes No (If the answer is YES, list them. ) 

18. Do you know of any stores that sell ice cream for less than you pay for it in 

the store where you USUALLY buy? Yes No Don't Know (If 

YES, will you name the brand or brands?) 

19. The LAST time you bought Store Packed ice cream, did you receive a gener- 
ous portion? Yes No Don't Know 

20. Do you think that it is more than you would get in other stores with whichi 
you are familiar? Yes No Don't Know 

21. While in any of the stores where you buy ice cream, have you ever noticed 1 

any ice cream advertisement or display? Yes No (If YES, please 

describe it.) 

22. What was the last ice cream advertisement you heard on the radio or tele* 
vision about? 

23. What was the brand? 

24. What was the last ice cream advertisement you saw in the newspaper about? 



CASES IN PLANNING 105 



25. What was the brand? 

26. What type of ice cream do you prefer, Store ^Packed or Factory 

Packed? 

27. Why do you prefer this type of ice cream? 

28. If you buy both Store Packed and Factory Packed ice cream, do you pur- 
chase both at the same store? Yes No If NOT, why not? 

29. Who USUALLY buys the ice cream for home consumption in your family? 

30. Is the selection of the brand and flavor left up to that person? Yes 

No If NO, who makes the selection? 

31. What time of day is it usually purchased? Morning Noon 

Afternoon Before dinner In the evening 

32. What day(s) of the week do you USUALLY buy? . 



33. Do you buy ice cream for home consumption when you are shopping for 
other things? Never Rarely Occasionally Frequently 

34. Do you purchase ice cream from the vending peddlers who canvass the 

neighborhood? Yes No How many times a week? What 

type? Novelties Pints Quarts How much at a time? 

What flavors? Who eats it? 

35. Does you milkman deliver ice cream along with the milk? Yes No 

Don't know Do you ever buy ice cream from him? Yes No 

How many times a week? How much at a time? 

What flavors? 

36. Do you have a deep freezer? Yes No 

37. Do you ever buy ice cream and store it in your deep freezer? Yes No 

How much do you buy at a time? What flavors? 

How long does it last? 

38. Do you make your own ice cream? Yes No Why do you make it? 

. Which do you prefer? Why? 



What flavors? . 



ACTION NEEDED 

In reviewing this questionnaire, the sales manager raised the 
following questions with Mr. Lodge: 

1 . Is the problem well and fully covered? 

2. Is the questionnaire too long? 

3. Are some of the questions, particularly the open-end ones, of 
the best type possible for the problem? 

4. Can the sequence of questions be improved? 

5. How are respondents and their families to be identified or 
classified? 

6. If this questionnaire were pretested, what responses might 
be anticipated? How might such anticipation aid in revis- 
ing the questionnaire? 



106 MARKETING RESEARCH 

CASE 8 GETTING A LUGGAGE 
QUESTIONNAIRE INTO SHAPE 

BACKGROUND 

The associates of Researchers, Inc., were firmly convinced 
that a consistently good output of marketing research depended 
not on individual brilliance but on effective teamwork. This 
principle was incorporated into staff organization and opera- 
tions. During the various stages of each project, the project 
director and his immediate staff would consult with other senior 
and junior staff members at regular meetings concerning the 
problems they faced. 

That these meetings, as all democratic processes, tended to 
be protracted and somewhat confusing was recognized. Yet 
they encouraged original suggestions, led to a broad consider- 
ation of issues, and provided a searching test of all plans. In 
general, it was believed, these methods produced effective re- 
search and provided good training for staff members. 

On one occasion, a questionnaire concerning luggage was 
being drafted for a personal interview survey of families. Drafts 
had been prepared by several staff members and many questions 
that might be used in the survey had been suggested during the 
meetings held on the subject. 

HYPOTHESIS ON LUGGAGE USE 

A basic problem concerned the factors affecting luggage needs 
and ownership. The hypothesis formulated stated: the amount 
and kinds of luggage needed and owned by families will be in- 
fluenced, among other factors, by the type of business, vacation, 
and other travel uses, and by the amount of sharing of luggage 
among family members and others. 

Questions suggested and considered included these: 

1. A. Did you take a vacation this year? 

If YES: How many pieces of luggage did you take? 
B. Do you plan to take a vacation next year? 

If YES: How many pieces of luggage would you probably take? 



CASES IN PLANNING 107 

If NO: How many pieces of luggage would you probably take if 
a trip came up? 

2. A. Do you personally own any luggage that is ustd for traveling? 

If YES: What types? 

B. Is there any other luggage in the family that is used for traveling? 
If YES: Who owns this luggage? What types? 

C. Are there any members of the family that do not own luggage? 
If YES: Who are they? 

3. Is any piece of luggage used by more than one person in your family? 

4. When traveling away from home, what means of transportation do 

you use most often? 

5. When did your family last take a trip together? 

6. A. When did a member of your family last take a trip alone? 

B. What was the purpose, or reason, for that trip? 

C. How many pieces of luggage did take along? 

7. What luggage do you use the most? For what purposes? 

8. Do you ever loan your luggage to other members of the family or to 

friends? CHECK WHICH ONE(S). 

9. Do the various members of the household use one another's luggage? 

10. How many trips away from home have you made during the past 
year? 

1 1 . Not including trunks, how many pieces of luggage did you take with 
you on your last trip? 

12. Were any of the pieces of luggage you took with you on your last 
trip borrowed from persons outside your family? 

13. In your household (A) does each member of the family have his or 
her own personal luggage? or (B) is the luggage family property and 
used by all members? 

14. How many times a year do you (A) use your luggage? (B) loan it to 
a member of your family? (C) loan it to a friend or relative? 

15. Has the family, as a group, or any member or members of the family 
taken a trip, or trips, long enough to involve the use of luggage 
within the last six months? 

If YES: What mode of travel was used? 

Which of the following types of luggage were used? 

16. A. When you travel for pleasure, vacation, or week end, what type 

of luggage do you use? 

B. When you travel on business, or when other members of your 
family travel on business, what type of luggage is used? 

17. Do relatives or friends or family members ever borrow your luggage? 



108 MARKETING RESEARCH 

1 8. A. When did you or members of your family last use luggage? 

(1) For pleasure? 

(2) For business? 

B. When do you expect to use your luggage again? 

(1) For pleasure? 

(2) For business? 

19. How many days are you away from home on an average trip? 

20. Since January 1 (or: In 19 ) , how many times did you yourself use 
any luggage? Which case, or cases, did you use most often? Why 
is this case used most often? 

2 1 . Who travels most in family? 

IF OTHER THAN PERSON BEING INTERVIEWED: Which type, Or typCS, 

of luggage did use? Reasons for use of this type most often? 

22. A. When was it that you last took a trip? The time before that? 

B. How did you travel the last time? 

C. How many pieces of luggage did you take with you? 

D. What style and material were these pieces? 

HYPOTHESIS ON LUGGAGE GIFTS 

Another objective of the study was concerned with the 
amount and types of luggage bought as gifts, the identity of 
purchasers and recipients of gifts, and the occasions for giving. 
Among questions suggested for use were these: 

1 . Have you ever received a piece of luggage as a gift? 

2. If you have received luggage as a gift, on what occasion was it given? 
(A) Wedding? (B) Graduation? (C) Birthday? (D) Anniversary? 
(E) Christmas? (F) Mother's Day? (G) Father's Day? (H) Retire- 
ment? (I) Other? CHECK WHICH ONE(S). 

3. Which pieces of your luggage did you receive as gifts? On what oc- 
casions? 

4. A. When did you last receive a piece of luggage as a gift? 
From whom? For what occasion? 

B. When did you last give a piece of luggage as a gift? 
To whom? For what occasion? 

5. Have you or your family ever received luggage as a gift? 
Ever given luggage as a gift? What occasion? 
How long ago was it? 

6. Have you ever given or received luggage as a gift? 

7. For what occasions would you consider luggage as an appropriate 
gift? 



CASES IN PLANNING 109 

8. Was the last piece of luggage you bought for your own use or for a 



If a GIFT: Would you mind telling me to whom you gave it that 
is, husband, daughter, son, etc.? 

9. A. Have you or your family ever received luggage as a gift? If YES: 
Which member or members? 
From whom was it received? 
What was the occasion? 
When did this happen? 

B. Have you or your family ever given luggage as a gift? 
If YES: Which member or members? 
To whom was it given? 
What was the occasion? 
When did this happen? 
What type luggage was given? 
What price was paid? 

10. Have you or your family received luggage as a gift in 19 ? 

11. How many pieces of the luggage that you or your family now own 
were received as gifts? 

12. Within the last six months has the family, or any individual mem- 
ber of the family, given luggage as a gift? 

If YES : Who bought it for whom? 

ACTION NEEDED 

The questions quoted exemplify the problems faced, al- 
though they do not include all the questions suggested. Many 
are crudely expressed, and typify questions that might be 
drafted on the spur of the moment and culled from the tran- 
script of an open meeting. Almost any question ever worded, 
of course, can be objected to on some grounds. (Indeed, criti- 
cizing the other fellow's questionnaire is a favorite indoor sport 
in some circles.) These were, however, the raw materials of a 
questionnaire that was being constructed. The problem was to 
put this material together into a workable questionnaire. To 
do so, however, raises the following questions: 

1. If many families are interviewed, will the giving of luggage equal the 
receiving, so that data need be gathered only on one or the other? 

2. For what time period should data on gifts be asked and by what 
method? 



110 MARKETING RESEARCH 

3. What are the complexities of luggage use that complicate the word- 
ing of the questionnaire? Might instructions on whom to interview 
simplify the problem? 

4. Which questions exemplify common faults or problems of question- 
naire construction? How might each such question be improved? 

5. Which questions are best for clarity and ease of recording answers? 

6. For each of the two problems, what sequence of questions is best cal- 
culated to yield the answer? 

7. Based on this evidence, would you say an open meeting is a successful 
way to construct a questionnaire? Under what conditions might a 
meeting for this purpose be most effective? 



CASE 9 FOLLOWING UP ON A 
DEPARTMENT STORE STUDY 

BACKGROUND 

The survey made of the customers of the Langdale Depart- 
ment Store (Part III, Case 5, pp. 91 to 100) had proved to be 
of interest and value to store executives, In particular, the study 
had focused attention on the potential value of greater knowl- 
edge of customer actions to the merchandising and promotional 
operations of the store. A follow-up study, therefore, was auth- 
orized to explore some of the many possibilities. 

THE PROBLEM 

After the problem for this study had been formulated, ques- 
tion arose regarding the proper types of follow-up investigations 
that should be made. 

DATA AVAILABLE 

Preliminary problem formulation had resulted in the follow- 
ing statement: 

Project: The relation of customers to merchandise departments. 

Basic problem: How can the store utilize knowledge of customers' be- 
havior in relation to purchases of specific types of merchandise in 
order to increase sales? In particular, how can an identification of 
successful, or key, departments and an analysis of the reasons for their 
success (primarily in relation to customer types and customer be- 



CASES IN PLANNING 111 

havior) lead not only to improved store promotion and increased store 
traffic, but also to profitable imitation of Jheir success by other de- 
partments? 

Hypotheses: 

A. The relation of a large department store to its customers is not that 
of one retail unit to one market, but rather is that of a hundred or 
more small stores to dozens of special markets. 

1 . A large number of customers are loyal not to the store but only to 
one or a few departments. 

2. The store has a few key departments which create most of the 
selective buying. 

3. The customers for many individual departments are so homo- 
geneous by income, geographic location, age, or other character- 
istics as to constitute a special market. 

4. Many customers almost always go to a given department store to 
buy certain merchandise (even shopping goods). 

5. The widespread patronage of upper income families may reduce 
the number of departments patronized. 

B. The volume of store traffic and sales can be increased significantly by 
an understanding and use of the relation of customers to specific de- 
partments. 

1. Some key departments are patronized by a large proportion of all 
store customers, but most arc not. 

2. Large sales volume in some key departments is due primarily to 
reaching a large segment of their potential market. 

3. Promotions in key departments are many times as effective in 
producing store traffic and the sale of related, impulse, or other 
merchandise as are promotions in other departments. 

4. There may be some combination of, say, six or ten key depart- 
ments which will be 90 per cent as effective in developing store 
traffic as are blunderbuss store- wide promotions. 

5. Identification of key departments and an analysis of their reasons 
for success can lead not only to better store traffic but also to 
profitable imitation by other departments. 

6. The greater the number of departmental loyalties the larger will 
be customer expenditures. 

7. Promotions staged by departments with the greatest number of 
customers are the best promotions for the store as a whole. 

C. The merchandising of specific departments can be improved by 
knowledge of their customers. 



112 MARKETING RESEARCH 

1 . Some departments make relatively large sales to a limited number 
of customers, their increase in volume depending mostly on get- 
ting new patrons. 

2. Some departments make relatively small sales to a great number 
of patrons, their increase in volume depending most on increasing 
the size or number of purchases by present patrons. 

3. Price-line emphasis in some departments may be far out of line 
with the relation of store or department customers to price lines. 

4. If many customers for some departments are patrons only at times 
of special sales events, a promotional weakness or failure of these 
departments is indicated. 

5. Knowledge of purchase habits can aid in the selection of advertis- 
ing media in general or of the merchandise of specific depart- 
ments. 

Subsidiary Problems: 

A. How loyal are customers to specific departments and how loyal are 

they to the store? 

Possible measures of loyalty are: 

To Store: 

1 . Patronage only at this department store. 

2. Patronage at 3, 4, 5 (or more) other department stores. 

3. A given dollar amount of purchases (in relation to income). 

4. A given per cent of total family expenditures or total department 
store purchases. 

5. Patronage of or more departments over a given period of 

time. 

6. Spending more here than at any other store. 

7. Expressed intent (or habit) of always starting a shopping trip by 
coming to this store. 

8. Expressed general preference for this store. 

9. Expressed preference for particular aspects of this store. 

To department: 

1. A given percentage of total credit expenditures in any one de- 
partment. 

2. A given dollar amount of purchases (in relation to income) over a 
particular period of time. 

3. A given number of purchases (or purchase visits) over a particular 
period of time. 



CASES IN PLANNING 113 

4. A department with a loyal following defined as one in which, say, 
50 per cent of sales are made to 1 per ce, nt of department patrons. 

5 . Regularity of buying or frequency of purchases. 

6. Expressed intent almost always to buy given merchandise at a 
given department. 

7. Expressed intent to visit department upon entering store. 

8. Expressed preference for particular departments. 

9. Expressed preference for particular aspects of departments. 

B. What merchandise is purchased by (a) distant customers, (b) custo- 
mers who shop infrequently, and (c) customers who spend a limited 
time shopping, and can their purchases be increased by promotion of 
telephone and mail services or by other means? 

Potential Value to Management: 

1. Need for, or desirability of, institutional advertising or activities. 

2. Determination of whether or not the successful cultivation of 
customers in different income brackets depends on particular de- 
partmental appeals, wide assortments or price lines, and so forth, 
so as to appeal more effectively to special groups. 

3. Recognition of key departments for: (1) promotions aimed at all 
income groups, (2) promotions aimed at specific income groups, 
and (3) promotions aimed at specific types of persons. 

4. Recognition of departments that attract only bargain hunters. 

5. Recognition of departments that primarily create store traffic and 
thus aid sales in other departments the most. 

6. Recognition of weak or strong departments in terms of customer 
loyalty, regular patrons, sale patrons, and so forth. 

7. Recognition of departments whose customers are so homogeneous 
(and loyal) as to constitute a special market, and one, perhaps, 
best cultivated by direct mailings. 

Data gathered on a previous customer survey were useful 
in making these formulations and were expected to provide use- 
ful correlations with data gathered on the current study. The 
question arose, however, as to the need for gathering new data 
directly from customers. 

Among the relevant findings of the survey were these: only 4 
per cent of store customers made no purchases for credit or cash 
at other department stores in the city. Of their customers liv- 
ing in the city, however, 22 per cent had credit accounts only at 
Langdale's and 36 per cent of their customers outside the city 



114 MARKETING RESEARCH 

had credit accounts only at this department store. Credit busi- 
ness was over 60 per cent of the total, and when the cash ex- 
penditures of credit customers were counted, less than 10 per 
cent of business came from customers without credit relations 
at the store. Approximately 30 per cent of all their customers 
patronized at least four out of the five largest department stores 
in the city. The higher the income of customers, the greater 
was the tendency to patronize more stores, to utilize credit in 
buying (primarily the regular 30-day charge account), and to 
buy at least part of their goods by telephone. Half of all cus- 
tomers had bought some goods from some department store by 
telephone during the year, and one third had made telephone 
purchases at Langdale's. The same proportions also held for 
purchases by mail. The lower the income, however, the more 
mail buying, contrary to the pattern for telephone buying. 

ACTION NEEDED 

1. How could such hypotheses be tested by consumer inter- 
views, talks with store personnel, or inspection of company 
records? 

2. In what ways might the troublesome problems raised by ex- 
penditures for cash, on which individual customer records 
do not exist, be minimized or solved? 

3. Can the study successfully be restricted to the gathering of 
data from store records? How can it be coordinated with 
the earlier study? 



Part IV 

SAMPLING 



The need for sampling in marketing research arises because 
the limitations of time and resources rarely permit study of all 
the members of a population. Information with regard to the 
total, therefore, has to be obtained by means of a sample, a sub- 
set of the total. Nevertheless, data obtained in this manner 
may be more accurate than those obtained from a complete 
census. The reason for this is that restriction of data gathering 
to a sample of the whole permits more attention to be devoted 
to the many aspects of a survey operation that are likely to bias 
the results. Interviewer training is one of the most important 
of these. Errors produced by sampling variation may be negli- 
gible relative to those caused by misunderstanding of interview- 
ing instructions. Proper attention to the latter in a sampling 
operation may, therefore, yield more accurate results for the 
population than a complete census which eliminates sampling 
errors but leaves room for these other errors. 

Properly designed samples can yield population data with 
only a negligible loss in accuracy and at a fraction of the cost 
of surveying the entire population, and therein lies the great 
value of sampling to market research and to many other disci- 
plines. 

A Review of Some Basic Sampling Concepts 

The Objective of Sampling. The basic aim of any sample 
is to provide the necessary information with the required accu- 
racy at a minimum cost or to maximize the accuracy of the in- 
formation obtainable at a given cost. 

The Meaning of Accuracy. Accuracy in sampling is com- 

115 



116 MARKETING RESEARCH 

pounded of two distinct factors, precision and bias. The former 
derives from the fact that estimates based on samples will neces- 
sarily fluctuate about the true, unknown population values 
(means, medians, standard deviations, etc.), or parameters, be- 
cause of sampling variation, because hardly any sample is likely 
to be a perfect miniature of the population from which it is 
chosen. If a large number of samples of the same size are 
drawn to estimate the same parameter, each sample member 
drawn at random from the population, the estimates based on 
these samples will be scattered around the true population value 
in much the same way that the shots of a rifle aimed at a certain 
target are scattered around the target. The probability that 
any one estimate will fall within a certain range of the true value 
can be worked out by probability theory for different sample 
designs. Conversely, on the basis of this theory, the margin of 
error, or sampling error, that can be expected with a particular 
sample design and sample size is ascertainable at different prob- 
ability levels (always, however, under the assumption of random 
selection). Therefore, once the allowable margin of error and 
the desired probability levelthe precision of the sample are 
given, the sample size and funds needed by each of the various 
sample designs can be computed. 

The other component of accuracy, bias, represents all the in- 
fluences that tend to distort the estimate. Arbitrary selection 
of sample members, prejudicial question wording, preconceived 
interviewer attitudes, faulty editing, and many others can pro- 
duce sample values that will not average out to the true popula- 
tion values, no matter how large the sample. In other words, 
unlike sampling error, bias is largely invariant of sample size, 
and for this reason the basic objective of sampling can be re- 
written thus: to produce no more than a given sampling error 
at minimum cost, or to minimize the sampling error at a given 
cost, depending on the situation at hand. 

Arbitrary vs. random selection. The manner in which the 
individual sample members are selected determines whether 
or not the sampling errors of the estimates can be measured. 
If the sample members are selected at random from the popula- 
tion (which means that each member of the population must 



SAMPLING 117 

have an equal, or known, chance of being selected in the sam- 
ple), probability theory is applicable, the sampling errors are 
measurable, and the reliability of the estimates can be gauged. 
The availability of so-called random sampling number tables * 
and various schemes of systematic selection (such as selecting 
every nth name or address, n being the ratio of the size of the 
population to that of the sample) often reduce the process of 
random selection to a routine matter. 

If, however, the individual sample members are chosen in 
some arbitrary or haphazard fashion, present probability theory 
cannot validly be used to measure sampling errors, and their 
estimation becomes largely a matter of individual judgment. 

Arbitrary selection is still widely used, partly out of habit, 
partly in the mistaken belief of avoiding higher costs associated 
with random selection, and partly in a legitimate sense because 
random selection may be unnecessary. The last is true for 
many pretests, for certain types of taste tests, for audience reac- 
tion studies, and in general for any survey whose principal objec- 
tive is to secure general reactions rather than specific estimates. 
Case 8 in this Part illustrates one such situation. However, 
where the purpose of a study is to secure estimates of certain 
unknown population characteristics, random selection is emi- 
nently desirable, not only as the sole means of measuring 
sampling error, but also for avoiding the bias inherent in most 
arbitrary selection procedures. Even though the final sample 
may not turn out to be perfectly random because of the high 
nonresponse rates often obtained on marketing surveys the 
use of this means of sample selection, combined with assiduous 
callbacks on the nonrespondents, will generally produce more 
reliable data than will arbitrary selection. 

Probability Samples and Judgment Samples. These terms, 
which have gained wide usage, are nothing more than synonyms 
for random selection and arbitrary selection, respectively. A 
probability sample is one whose sampling error is measurable, 

1 A description of the use of such tables will be found in most marketing 
research texts. Also see H. N. Broom, New Random Sampling Numbers, Waco, 
Texas: Baylor University, Baylor Business Studies, I, No. 1, 1949, pp. 10-15. 



118 MARKETING RESEARCH 

a condition that exists only, as has been noted above, when ran- 
dom selection is used. On the other hand, a judgment sample 
is one whose error is not measurable, which holds when arbitrary 
selection is used. It cannot be overemphasized that a sampling 
design, whether it be area sampling, stratified sampling, or any 
other, can be set up either on a probability or on a judgment 
basis; that is, it can be set up so that the sampling variations 
can or cannot be validly measured by means of the sampling 
error formulas. 

Some Principal Sampling Designs 

A wide variety of sample designs are available for use in mar- 
keting research. Perhaps the main ones are the following: 

Unrestricted sampling 2 each sample member is selected 
from the entire population being studied. If random selection 
is used, this means that every member of the population must 
have an equal chance of being chosen. Unrestricted sampling 
is generally desirable if little is known about a particular popula- 
tion, especially if it is relatively small and compact. 

Area sampling a modification of unrestricted sampling 
based on prior subdivision of the population into areas and 
restriction of sample selection to certain of these areas. This 
method does not generally reduce the sampling error relative 
to that of an unrestricted sample of the same size. However, 
it may lead to substantial reductions in cost, particularly where 
large geographic areas are involved, because of concentration 
of the field work. 

Cluster sampling selection of sample members in groups in- 
stead of individually. Thus, a sample of three hundred families 
might be constructed by selecting sixty groups of five neigh- 
boring families instead of making three hundred individual 
selections. This method is especially advantageous where an 

* This is also widely referred to as random sampling, but the use of the word 
"random" in this connection is not recommended, because of the danger of con- 
fusing it with random selection, where the word "random" refers to the manner 
of sample selection. Thus, one could have a so-called "random" sample with 
nonrandom (arbitrary) selection of individual sample members. 



SAMPLING 119 

appreciable part of the interviewers' time may be taken up with 
traveling. 

Stratified sampling prior division of the population into 
strata based on characteristics considered relevant to the sub- 
ject under study, and selection of sample members from each 
stratum. In effect, it is a weighted aggregate of unrestricted 
samples. For stratified sampling to be useful, the following 
three conditions must be met: 

1. Certain relevant characteristics are known to influence 
strongly the subject under study. 

2. Division of the population by the relevant characteristics 
is practicable. 

3. The relative division of the population by these character- 
istics is known with a fairly high degree of accuracy. 

This means, for example, that if city size were known to affect 
substantially the movie attendance characteristics in a certain 
area, the use of stratified sampling could not be considered un- 
less unrestricted samples could be selected from each city-size 
class, in turn, and the relative size of each city-size group in the 
area were known. A stratified sample measuring movie attend- 
ance characteristics could then be constructed by segregating 
the communities in the area into strata by size, and then select- 
ing people at random from each stratum. 

If the number selected from each stratum is proportional to 
the relative size of the stratum in the population, we have a 
proportionate stratified sample; otherwise we have a dispropor- 
tionate stratified sample. The latter is preferable if the various 
strata become less homogeneous with respect to the character- 
istic^) understudy. 

A stratified sample can be constructed even if members of 
each stratum cannot be identified, as long as the relative sizes 
of the strata are known. In other words, a stratified sample of 
families by income level is feasible even if the identities of the 
families in each income level are not known, as long as the ag- 
gregate proportion of families in each income level is known. 3 

8 R. Ferber, "The Common Sense of Sampling/' Current Economic Com- 
ment, XI (August, 1949), pp. 48-56. 



120 MARKETING RESEARCH 

The sampling error of a stratified sample may be considerably 
below that of an unrestricted sample of the same size. This is 
because the stratified design makes use of the additional infor- 
mation regarding the breakdown of the population by the rele- 
vant characteristic(s) and thereby serves to reduce the margin 
for sampling error. The trouble with stratified sampling in 
practice is that, though the relevant stratifying characteristics 
are usually known, we do not always know with any great accu- 
racy the relative sizes of the strata in the population. Because 
of this lack of knowledge, the gains made possible by stratifica- 
tion may be more than offset by variations introduced by inac- 
curate data regarding the sizes of the population strata, a factor 
that unfortunately is frequently overlooked. Any evaluation of 
the desirability of stratified sampling in a particular case must 
take into account the increased sampling error resulting from 
inaccurate population weights as well as the inherent gains due 
to stratification. 

Stratified designs do not preclude the concomitant use of area 
sampling or cluster sampling schemes. Thus, the United States 
might be subdivided into regional strata, such as North, South, 
East, and West, with areas selected within each region and with 
sample members selected from each of these areas in clusters. 
Similarly, the selection of the members of a stratified sample 
could be accomplished either by random or arbitrary pro- 
cedures. 4 

Double sampling selection of a large initial sample, on the 
basis of interviews with which a subsample is chosen for more 
intensive interviewing. It is generally most useful when the 
subject under study is known to be related closely to certain 
characteristics but the distribution of these characteristics is not 
known. If, say, automobile purchase habits are known from 

* A much-maligned term in recent years is "quota sampling/' which is essen- 
tially a synonym for "stratified sampling" arising from the fact that quotas are 
generally established for each stratum. The widespread use some years ago of 
arbitrary selection in filling these quotas has led many to believe that quota 
sampling per se is a biased form of sampling. Unless one defines it specifically 
in this manner, however, the fact remains that quota sampling is nothing more 
or less than stratified sampling and can be applied with either random or arbi- 
trary selection. 



SAMPLING 121 

past studies to be closely related to income, a study of the sub- 
ject in City Z might be conducted by, estimating, from brief 
interviews with an unrestricted sample, the city's income distri- 
bution, and selecting a subsample of the sample number in each 
income bracket for lengthy interviews on their automobile pur- 
chases and preferences. 

Multistage sampling selection of a sample in successive 
stages, most frequently used in constructing area samples. 
Thus, of the families in the United States, a sample on a prob- 
ability basis might be selected in the following four stages: 

1. Combining the 3,000-odd counties in the country into, say, 
one or two hundred groups and selecting a few groups for 
inclusion in the sample. 

2. Within each sample group, selecting one or more areas. 

3. Within each sample area, selecting one or more blocks or 
smaller areas. 

4. Prelisting the inhabitants of these smaller areas and select- 
ing the members of the sample. 

Sequential analysis a radical departure from conventional 
sampling in that the sample size is not predetermined but de- 
pends on the sample results themselves. In other words, by the 
sequential method a running score is kept of the results obtained 
on all interviews made. As soon as this score indicates a con- 
clusive answer one way or another, as computed on the basis 
of probability theory, sampling is stopped and the survey is fin- 
ished. 

Sequential sampling can at times prove a great money-saver 
in marketing research. It is applicable, however, only when all 
the following considerations are met: there must be random 
selection; nonresponse must be practically nonexistent or, if 
existent, appropriate safety devices must be built into the se- 
quential formulas; records must be kept of the sequence in 
which the interviews are made either singly or in groups and 
it must be possible to cumulate and examine the results of the 
interviews periodically; a few key questions amenable to se- 
quential treatment must be available. 



122 MARKETING RESEARCH 

Consumer panels data on most sample surveys are secured 
in one interview with the respondent; these are sometimes re- 
ferred to as one-spot samples. There are many cases, however, 
where repeat interviewing with the same respondents con- 
sumer panels, using "consumer" in the broadest sense of the 
word is desirable. This is true whenever the purpose of the 
study is best served by observing changes in attitudes or behavior 
of the same persons over a period of time, a determination 
which must be made in each individual case. 

The sampling aspects of a consumer panel operation are 
slightly more complicated than the corresponding one-spot 
samples because the following additional considerations must 
be taken into account: 

1. The initial sample size must be large enough to counteract 
panel mortality. 

2. A decision must be made regarding replacement of dropouts. 
Should they be replaced, and if so, how? The most common 
means are by random selection or by attempting to find 
families possessing characteristics as close as possible to those 
dropping out. 

3. Consideration must be given to methods of maintaining 
respondent cooperation and minimizing panel mortality. 
Premium deals sometimes prove helpful. 

4. The danger of bias is, if anything, greater than with one-spot 
samples, as many forms of bias are magnified with time. 
Atypical representation of the sample is commonly thought 
to be one such form of bias. 

Some of the problems involved in setting up a consumer 
panel operation are raised in Case 6 of this Part. 

The Cases in This Part 

The eight cases in this Part illustrate a variety of sampling 
problems. The emphasis is on the broader, operational aspects 
of sampling, though some of the cases (2 and 3) also go into the 
more technical aspects, such as determination of sample size. 
The first case presents a simple exercise designed to acquaint 
the student with the use of random sampling number tables. 



SAMPLING 123 

These tables are basic to many surveys, yet most marketing stu- 
dents are given little opportunity to use them. 

The second case poses some of the problems leading to ques- 
tions of method and sampling. The question of the adequacy 
of a particular sample design is the subject of the third case. It 
presupposes some knowledge of the principal sample designs 
and of their relative merits. 

Designing a sample from the very beginning is the subject of 
the next two cases. The design of a sample to test a particular 
hypothesis is the problem in Case 3, whereas the problem in 
Case 4 is to set up a sample design to answer more than one 
question, a so-called multipurpose survey. 

Case 5 indicates the practical ways in which a controlled ex- 
periment can be designed. The headaches involved in a con- 
sumer panel operation are raised in Case 6, which at the same 
time provides further practice in sample design. 

The value and desirability of follow-up interviews are the 
problems in Case 7. This is a problem that occurs frequently 
in practice but to which relatively little attention seems to be 
given in the classroom. 

Case 8 serves a dual purpose. It shows how a judgment 
sample can prove useful and at the same time serves to high- 
light its limitations and the difficulties involved in validating 
the results. 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. While this book contains 
limited information on various aspects of sampling theory and the applica- 
tions to marketing research, it would be useful to read Chapter 20 and com- 
pare it with recent writings in order to note the changes that have taken place 
on the subject of sampling. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. Chapter 9 presents a general introduction to the subject of 
sampling, with a more detailed discussion on sample design in Appendix A, 
and with practical illustrations of sampling operations in Appendices B to E 
andG. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Chapter 21 contains a brief treatment of sampling pro- 
cedures as advocated some ten years ago, but which have been revised con- 
siderably in more recent books. 

COCHRAN, W. G. Sampling Techniques. New York: John Wiley & Sons, Inc., 



124 MARKETING RESEARCH 

1953. A good general reference work on sampling techniques with emphasis 
on the measurement of sampling errors for samples of different designs. 

DEMING, W. E. Some Theory of Sampling. New York: John Wiley & Sons, 
Inc., 1950. A technical treatment of sampling theory and applications, 
taking up the mathematical bases for the various sampling methods. Chap- 
ter 1 contains a good discussion of survey planning, and Chapter 2 presents an 
excellent treatment of the various types of errors encountered in sample sur- 
veys. The book is replete with illustrative examples and is a valuable refer- 
ence volume. 

FERBER, R. Statistical Techniques in Market Research. New York: McGraw- 
Hill Book Co., Inc., 1949. Chapter 3 discusses the different sampling tech- 
niques; Chapter 7 takes up the theory and application of sequential analysis 
to marketing research data; Chapter 8 goes into the selection of alternative 
sample designs and the determination of sample size; and Chapter 9 is con- 
cerned with the various forms of sample bias. 

HEIDINGSFIELD, M. S., and BLANKENSHIP, A. B. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Chapter 8 gives an outline of the 
usual procedures in external research used to study a population by means of 
a sample. 

LORIE, J. H., and ROBERTS, H. V. Basic Methods of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1951. Part III contains perhaps 
the most thorough exposition of sampling techniques of any elementary mar- 
keting research text. Chapter 7 contains a simple introduction to sampling 
theory and a very clear treatment of the different sampling techniques and 
of the relative merits of probability vs. nonprobability sampling. 

LUCK, D. J., and WALES, H. G. Marketing Research. New York: Prentice-Hall, 
Inc., 1952. Problems of sample design as applied to marketing problems 
with a discourse on the relative advantages of judgment and probability se- 
lection are stressed in Chapter 9. A short note on sample size is to be found 
in Appendix A. 

PARTEN, M. Surveys, Polls and Samples. New York: Harper & Bros., 1950. A 
treatment of means of selecting sample members is contained in Chapter 8. 
A good discussion of sample techniques will be found in Chapter 7 and of the 
factors entering into the determination of sample size in Chapter 9. 

YATES, F. Sampling Methods for Censuses and Surveys. New York: Hafner 
Publishing Co., 1949. A somewhat advanced book on sampling methods and 
sample design requiring some knowledge of mathematics, but essential for 
the student of sampling. 



Part IV Cases 



CASE I RANDOM SELECTION OF 
SAMPLE MEMBERS 



BACKGROUND 

A newspaper in a middle-sized community contracted for a 
survey to determine the characteristics of its readers in relation 
to those of the community as a whole. Information was desired 
on such factors as age distribution, income distribution, occupa- 
tion, sex, and length of residence in the area. 

A personal interview survey was planned to elicit this informa- 
tion. About 300 persons were to be included in the sample, all 
from the community. Selection of the sample members was to 
be made at random in order to obtain numerical estimates of 
the proportions of readers and nonreaders having the required 
characteristics. To yield a final sample of 300, it was estimated 
that an upper limit of 330 names would be required to allow for 
nonresponse and for persons who had moved. 

THE PROBLEM 

For various reasons, sampling was to be restricted to the cor- 
porate area of the city. A fairly recent city directory was avail- 
able listing all the people residing in the city, and this directory 
was brought reasonably up to date with the aid of figures ob- 
tained from the local building permit office on new housing 
construction in the area. For the purposes of this survey, the 
city directory, supplemented in this manner, appeared to be 
adequate. The problem that arose was how to select names at 
random from it. 

The organization of the relevant part of the city directory is 
as follows: 

125 



126 



MARKETING RESEARCH 



I 



q 

H <1 
W 



CASES IN SAMPLING 127 

A section of 468 pages lists all adult residents of the city in 
alphabetical order. A supplement of six pages was added list- 
ing new people in the area, making a total of 474 pages. 

Each page contains two columns of names, with 70 lines to 
a column. The last page, however, contains only 28 lines (of 
two columns). 

Some names occupy more than one line sometimes as many 
as three lines because data on the person's occupation and 
relationship in the family were provided. In addition, the 
alphabetical listing was interrupted by a space of five lines when- 
ever last names began with a new letter of the alphabet. 

ACTION NEEDED 

It was decided to employ a table of random sampling num- 
bers to secure random selection of the sample members: that 
is, to assure each member of the population an equal chance of 
being selected in the sample. One page from a random sam- 
pling number table is reproduced on page 1 26. What is needed 
is a detailed set of step-by-step instructions for selecting the 
sample members by random selection with the aid of this 
random sampling number table. The table on page 126 is to 
be used for illustrative purposes in setting out the procedure. 



CASE 2 DETERMINING THE CHARACTERISTICS 
OF THE FOUNDRY INDUSTRY 

BACKGROUND 

In 1947-48 Illinois was the third largest state in terms of num- 
ber of foundries, having 436 of the 5,452 reported for the 
United States. These 436 foundries were known to be of a 
variety of sizes and types, but little else was known regarding 
their characteristics. Statistical studies of the foundry industry 
had been conducted by government agencies, by associations 
within the industry, and by publications serving the industry, 
but these studies had not contributed greatly toward providing 
statewide information on the characteristics of the industry. 
The people in the industry felt that it was time for such a study 



128 MARKETING RESEARCH 

to be made, and accordingly enlisted the services of a researcher 
to direct the study. 

THE PROBLEM 

The researcher's first task was to lay out a plan for this study 
which, when carried out, would yield the required information 
at minimum cost. In essence, two types of information were 
desired. One type comprised numerical estimates for all foun- 
dries in the state relating to such items as amounts of materials 
used, distribution of product by industry and by geographic area, 
and extent of research operations. In addition, some general 
information, more or less on a qualitative basis, was desired on 
such subjects as working conditions in the foundries, personnel 
policies, degree of mechanization, and community activities of 
the foundries. 

DATA AVAILABLE 

Geographically, the 436 foundries in Illinois in 1947-48 were 
scattered over the state, though concentration was evident near 
the Chicago and St. Louis areas. 

Data on these foundries by type and by number of employees 
in Illinois and in the United States in 1947-48 are shown in 
Exhibits 1 and 2. A list of these firms was obtainable from 
Penton's Foundry List, 1947-48. 

ACTION RECOMMENDED 

Two questions of sampling arose in planning this survey: how 
to obtain the information, and from whom to obtain it. Some 
suggested that the information be sought by personal interview, 
while others maintained that the data could be obtained just as 
easily and much more economically by using mail question- 
naires, an important consideration in view of the desire to 
restrict expenditures. If mail questionnaires had been em- 
ployed, however, something would have had to be done about 
the nonrespondents. 

Should a sample of the 436 firms be selected, or should an at- 
tempt be made to secure information from all the firms? 



CASES IN SAMPLING 



129 



Those favoring the former procedure thought that a carefully 
selected sample, carefully interviewed, should yield as reliable 
information regarding all the firms in the state as a complete 
census. Those taking the other point of view maintained that 
interviews with all the firms were not unwarranted here because 
of the small size of the population, and that the bother of select- 
ing a sample was hardly worth it in such a case. They admitted, 
however, that if the data were to be obtained by personal inter- 
view, considerable savings could be effected if only part of the 
population were interviewed. 

ACTION NEEDED 

A sampling plan had to be prepared outlining the procedure 
to be followed in gathering the data for the study. This plan 
had to include consideration of the following questions: 

1. Should the data be obtained by mail questionnaire or by 
personal interview? If the former, what provision should 

- be made for handling the problem of nonresponse? 

2. Should data be sought from all the firms in the state or from 
a sample of them? If a sample is used, what should its design 
be, and how should the sample members be selected? 



EXHIBIT 1 

DISTRIBUTION OF FOUNDRIES BY TYPE OF METAL CAST, UNITED STATES 
AND ILLINOIS, 1947-48 



Type of metal 


Number of 
U. S 
foundries 


Illinois foundries 


Number 


Percent'of 
total 
U S 


Gra iron 


3,058 
368 
133 
2,676 
2,563 
134 
3,218 


209 
30 
19 
207 
169 
12 
246 


6 X 
8 2 
14 3 
7 
6 6 
9 
7 6 




Malleable 








Total nonferrous 




5,452 


436 


8 





Source: Foundry Industry Data Book, 1947-1948. Compiled by the market research 
department of The Foundry (Cleveland, Ohio). . 

NOTE : Totals do not equal the sum of details, since some foundries produce castings ox 
more than one kind of metal. 



130 MARKETING RESEARCH 

EXHIBIT 2 

DISTRIBUTION OF FOUNDRIES BY NUMBER OF EMPLOYEES, 
UNITED STATES AND ILLINOIS, 1947 









Covered in this study 


Number of 
employees 


United States 


Illinois 


Questionnaire 
replies 


Visits to plants 




Number 




Number 




Number 




Number 






of 


Percent 


of 


Percent 


of 


Percent 


of 


Percent 




found- 


of total 


found- 


of total 


found- 


of total 


found- 


of total 




ries 




ries 




ries 




ries 




1 ,000 or mere . . 


47 


9 


19 


2 3 


7 


3 1 


I 


2 4 


500-1,000 


103 


1 9 


14 


3 2 


8 


3 S 


2 


4 8 


250-500 


29-1 


5 3 


22 


S 


16 


7 


6 


14 3 


100-250 . 


763 


14 


62 


14 2 


28 


12 3 


9 


21 4 


50-100 . . . 


944 


IT 3 


78 


17 9 


45 


10 8 


10 


23 8 


25-50 . . 


1,059 


19 4 


95 


21 8 


SI 


22 5 


6 


14 3 


Less than 25 


2,245 


41 2 


155 


35 6 


72 


31 7 


8 


19 


Total, all foundries 


5,452 


100 


436 


100 


227 


100 


42 


100 



Source: Foundry Industry Data Book, 1947-1948, for the United States and Illinois. 
* Foundries with only 8 employees numbered 24 and accounted for 10.6 per cent of the 
total reporting. 



CASE 3 A CONSUMER SURVEY OF 
PHILADELPHIA 

BACKGROUND 

In the spring of 1947, a sample design was needed for a per- 
sonal interview survey of housewives in Philadelphia concerning 
the use by families of a class of food products. This class of 
food products had been included in pantry inventory studies in 
San Francisco (1941) and in Philadelphia (1946) and in a na- 
tional study of foods used by urban dwellers (1942). Few de- 
tails on either use or users were available, but these studies, as 
well as production figures, showed a rapidly expanding market. 
Approximately 60 per cent of Philadelphia families were be- 
lieved to use the products to some extent. It was estimated that 
with the funds and time available and with the breakdowns 
desired, a sample of about five hundred would be sufficient. 

CHOICE OF SAMPLING METHOD 

Data for a highly stratified sample were not available on a 
reasonably up-to-date basis. A random, or unrestricted, sample 



CASES IN SAMPLING 131 

from the population at large was also considered unfeasible. 
No complete listing of families, or dwelling units, was currently 
available, the last directory for Philadelphia having been issued 
in 1935. Thus a pure random, or systematic random, selection 
based on a physical listing was impossible. A random sampling 
of the population directly would involve walking the more than 
12,000 blocks in the city or the use of the patented Alfred Politz 
mechanical guide, neither of which was economically feasible. 

Stratified sampling with arbitrary selection was deemed pos- 
sible but not satisfactory because of the danger of interviewer 
bias and because of inability to establish sufficient controls over 
respondent characteristics. Besides, the statistician was con- 
vinced that area sampling would yield better results. 

Area sampling, therefore, was chosen as the basic method, 
because it could provide an up-to-date 'listing/' Use of San- 
born maps, however, for automatic selection was far too costly 
for this survey. 

THE SAMPLE DESIGN 

The 1940 Census for Philadelphia listed a total of 533,332 
dwelling units, of which 506,980 were occupied in that year. 
Using one interview to represent 1,000 dwelling units would 
result in a primary sample of 533. 

As a first step this sample was to be geographically stratified. 
All Census subtracts were to be arranged in geographical order 
so that any subdivisions later chosen would yield a solid block 
of land rather than a collection of scattered locations. By 
counting the dwelling units in each subtract during this process 
and making each unit contain approximately 1,000 dwelling 
units, the city would be broken into a primary sample of 533 
areas, each with 1,000 dwelling units. Each area, it was be- 
lieved, would be a more or less homogenous segment of popula- 
tion with respect to socioeconomic factors. 

Proportionality by income groups was then established. 
Within each of the 533 areas in the primary sample, one block 
was to be selected as the block in which interviews would be 
made. This secondary sample of blocks was to be chosen on 
the basis of the latest Federal Reserve Board data on incomes 



132 MARKETING RESEARCH 

through correlation of incomes with rental values. Thus, one 
block would represent each area, and the total sample would 
yield proportional representation to each rental (income) group. 
For example, since Census data indicated that 18.5 per cent of 
Philadelphia families were paying from $20 to $24 in weekly 
rents, or owned homes with this rental value, 18.5 per cent of all 
interviews would be made with families living in blocks in which 
average rentals in 1940 were within these limits. 

It was realized that both rentals and incomes had increased 
since 1940 and that the increases had not been equal. No up- 
to-date data were available which could be used to measure 
these shifts. It was, therefore, assumed that the increases, al- 
though not equal, were roughly proportional. To minimize 
possible distortions caused by this assumption, it was planned 
to divide the income classification into four groups of equal size. 
Basing the selection of families to be interviewed on the char- 
acter of the block itself at the time of interviewing would further 
reduce distortion, it was believed. 

SAMPLE CONSTRUCTION 

Owing to the strong plea of the field supervisor not to scatter 
interviews widely, plus other considerations, the sample design 
was amended. Instead of using 533 areas, each page of the 1 52 
pages of block listings in the 1940 Housing Supplement, Phila- 
delphia Block Statistics, was used as a primary sample unit. 
This accomplished the original objective but with fewer areas. 

Directions followed in constructing the sample were: 

1. Add all monthly rentals shown in the last column on each page of 
Philadelphia Block Statistics, omitting cents. This is Total rentals. 

2. Count the number of figures in this same column. This is Number 
of rental figures. 

3. Divide To tal rentals by Number of rental figures. This equals the 
Average rental per block for the page. 

4. Select that block on the page with the rental nearest to the Average 
rental. Identify this block by average rental, Census tract and subtract 
designation, and block number. 

5. Add total dwelling units on page (column 4). 



CASES IN SAMPLING 133 

If the total is less than 1,500 dwelling units, one interview should be 
made in the designated block. 

If the total is between 1,500 and 2,499 dwelling units, two interviews 
should be made in the designated block; and so on. 

6. Identify each block with half or more nonwhite populations. 

7. Identify each block with apartment houses (an average of four or 
more dwelling units per structure). 

This process yielded the following sample distribution by 
rental groups: 

Quota by Unadjusted 

Rental Group Census Sample 

$14 or less 42 

15-19 60 23 

20-24 99 129 

25-29 93 127 

30-39 125 152 

40-49 58 62 

50-59 25 10 

60-74 16 15 

75-99 8 6 

$100 and over 7 2^ 

533 526 

A check showed that the distortion which had resulted was 
caused primarily by the wide geographical dispersion of most of 
the low rental groups and some of the high rental groups. 
Hence, these groups were lost in the averaging process. Using 
533 areas, it was shown by a test, would reduce the distortion 
only slightly. Instead, a method of adjustment was devised 
by which all high and low rental groups, as shown in Table 2 
of Philadelphia Block Statistics, were listed separately. From 
these lists, representative rental groups could be keyed easily to 
their proper areas, and thus to particular pages. Individual 
blocks were selected in the same manner as described in step 4 
above. In this way, proportionate interviews for the $14-or-less- 
rental group were chosen, as well as interviews for the $1 5 to $19, 
$75 to $99, and $100 and over groups. 

After the extreme rental group quotas were adjusted, the bal- 
ance of the sample was adjusted by minor shiftings to adjacent 
groups. Thus, if fifty-eight interviews were needed in a group 
and sixty-two had been provided by the sampling method, the 



134 



MARKETING RESEARCH 



nearest sample block to the class limit was rechosen, the average 
being taken as, for example, $39.43 rather than $39.60 for the 
block. This completed the income stratification adjustment. 
The adjusted sample distribution compared favorably with the 
Census distribution when rental groups were combined into 
quartiles, though distortions were still present when subrental 
groups were considered. 

The sample method used provided the desired quota of apart- 
ment house interviews without adjustment. Nonwhite inter- 
views came out to fifty-eight instead of seventy. To secure the 
added twelve another Census subtract list was made showing 
all subtracts in the city with 50 per cent or more nonwhites. By 
shifting the average rental by a few cents in three areas the 
necessary adjustment was made. 

THE ADJUSTED SAMPLE 

Despite these difficulties, the consensus was that sample 
accuracy had not been seriously affected by these various adjust- 
ments. The sample provided geographical and income (rental) 
stratification, as well as controls by apartment dwellers and non- 

EXHIBIT 1 







Sample interviews 






Total 








Census 












per cent 






Apt. 


Nonwhite 


Rentals 


of total 


No. 


Per cent 


interviews 


interviews 


$14 or less 


7.8 


42 


7.9 





12 


$14.50419.49 


11.2 


60 


11.3 





22 


$19.50424.49 


18.5 


99 


18.5 


7 


13 


$24.50429.49 


17.5 


93 


17.4 


4 


15 


$29.50-$39.49 


23.4 


125 


23.4 


20 


8 


$39.50-$49.49 


10.9 


58 


10.9 


14 





$49.50459.49 


4.8 


25 


4.7 


4 





$59.50474.49 


3.0 


16 


3.0 








$74.50499.49 


1.5 


8 


1.5 








$99.50andover 


1.4 


7 


1.3 


4 





Total 




533 




53 


70 



CASES IN SAMPLING 135 

whites, which the nature of the food product and the evidence 
of the preliminary investigations revealed were desirable. 

A comparison of the adjusted sample distribution with that 
of the 1940 Census is shown in Exhibit 1, p. 134. 

Apartment house interviews planned were 9.9 per cent of the 
total compared to 10.1 per cent in the Census. Nonwhite inter- 
views totaled 13.1 per cent as against 12.9 per cent for the Cen- 
sus, but owing to an oversight not discovered until too late, the 
distribution of nonwhite interviews by rental groups (of ascend- 
ing magnitude) was: 

Census Sample 

Rentals % of Total % of Total 

$14 or less 178 17.1 

$14.50419.49 19.7 31.4 

$19 50-$24.49 28.4 18.7 

$24.50429.49 18.8 21.4 

$2950439.49 12.5 114 

$39 50-$49.49 20 

$49.50-$59.49 0.8 

$59.50474.49 

$74.50499.49 

$99.50 and over 

Interviewer instructions for selecting families were: walk 
around each block assigned and select the typical structure 
(either apartment house, as assigned, or family type); rotate 
interviews north, south, east, and west as far as possible; rotate 
position on side of the block with corner locations to be used 
in about one interview out of ten; and take occasional upstairs 
interviews in the two-to-four family structures. 

ACTION NEEDED 

Before launching the operation, the sample design outlined 
above was reviewed by the researchers. In doing so, a number 
of questions were raised concerning the merits of this design. 
Specifically: 

1. How good is the geographical distribution of interviews in 
such a sample? 

2. How likely is this design to provide effective representation 
in the sample of different family sizes, occupations, religions, 



136 MARKETING RESEARCH 

and of other population breakdowns that might be relevant 
in studying the use of these food products? 

3. Does the design provide sufficient safeguards against bias 
resulting from shifts in population density since 1940? 

4. How well are the instructions for selecting families likely to 
offset the possibility of interviewer bias? 

5. Is this sample design needlessly complex? 

A brief memorandum is needed evaluating the merits and 
possible shortcomings of this design, with specific reference to 
the five questions raised above. 



CASE 4 DESIGNING A MULTIPURPOSE SURVEY 

BACKGROUND 

Very little has been said or done in the past about setting up 
and conducting surveys that have more than one objective or 
purpose. The design of such surveys requires a little more effort 
and ingenuity than that put into the more common single-pur- 
pose survey, but it is generally not an extremely difficult task; 
and the return from a well-designed survey of this type, in terms 
of the additional information gained as a result of the extra 
effort, can hardly be better. For, once a survey is to be con- 
ducted, any additional expenditures incurred in adding a few 
extra questions to the questionnaire or in altering the sample 
design are likely to be negligible in comparison to the original 
cost of the operation. 

The present case illustrates the sort of problems involved in 
designing a multipurpose survey, the objective of which was to 
supply information on consumers' attitudes toward a particular 
product and to throw light on some questions of sample meth- 
odology. As will be seen in the course of working out this case, 
the design of such surveys is more a matter of ingenuity than of 
technical sampling knowledge. 

THE PROBLEM 

In the summer of 1950 a research organization was asked to 
conduct a survey to determine public attitudes toward prefabri- 



CASES IN SAMPLING 137 

cated housing and to determine the effect of advertising and 
other prefabricated housing literature on these attitudes. The 
survey was to be carried out in a Midwestern city of about 
60,000 population, characterized by a heavy incidence of pre- 
fabricated housing of a variety of brands and forms. The data 
were to be collected by personal interview. 

Since the chances of sampling bias were to be minimized, 
the sample members were to be selected in some random man- 
ner. In other words, a probability sample was to serve as the 
core of the study. At the same time, however, it was desired, 
for future reference, to obtain some information on the possible 
bias involved in collecting data on the same subject by means 
of a judgment sample. If the use of a judgment sample ap- 
peared to produce little or no bias in the data, this method of 
sample selection might be used in the future to obtain similar 
information with less expense than is possible with a probability 
sample. The problem, therefore, became one of laying out a 
sample design that would yield accurate information on atti- 
tudes toward prefabricated housing on a probability basis and 
also provide evidence on the possible bias, if any, that might 
result if the same data were collected through arbitrary selection 
of sample members instead of through random selection. 

ACTION RECOMMENDED 

A number of suggestions were received regarding the manner 
in which the study might be made. One suggestion involved 
selection of the sample members from the population at large, 
part by a probability method and part by leaving the selection 
entirely to the interviewers. Another suggestion would have 
set up a quota system for the judgment sample, giving the inter- 
viewers latitude to select the sample members to fill the quotas. 
Still another suggestion was that the population be divided into 
two areas of more or less equal characteristics, with a probability 
sample being selected from one area and a judgment sample 
from the other area. An extension of this suggestion was that 
the population be subdivided into three areas of more or less 
equal composition; a probability sample would be selected from 
one area, a judgment sample from another, and both probability 



138 MARKETING RESEARCH 

and judgment samples from the third. Such a design, it was 
contended, would enable some evaluation to be made of the 
effect of differences between the areas on the findings regarding 
possible bias resulting from the use of a judgment sample. 

Thus, there was general agreement that selection of part of 
the sample on a probability basis and part on a judgment basis 
was the most desirable way of ascertaining any bias that might 
result in the latter case. Agreement was also fairly widespread 
that some division of the population into areas or strata was 
desirable as a means of insuring comparability between the prob- 
ability and judgment samples. The differences arise in the 
method of obtaining this comparability. In addition to the 
suggestions in this respect cited above, two others deserve men- 
tion. One would divide the population into about six or eight 
areas of more or less equal composition and have every inter- 
viewer conduct both probability and judgment interviews in 
each area. The other suggestion was to make these areas as dis- 
similar to each other as possible; that is, the composition of the 
areas would be homogeneous within and heterogeneous with- 
outthe opposite of the preceding schemeand every inter- 
viewer would conduct both probability and judgment interviews 
in each of these areas. 

DATA AVAILABLE 

With 1950 Census of Population breakdowns not available 
at the time the survey was planned, not too much up-to-date 
information about this city could be found. Its population 
was known to be roughly sixty thousand. The city directory 
supplied an enumeration of dwelling units and block listings as 
well as occupational data by individuals. 

On the basis of the cost and time allowed for the study, it was 
estimated that about five hundred interviews could be con- 
ducted. As many as sixteen experienced interviewers were avail- 
able at the time for use in this study. No previously published 
data describing surveys on people's attitudes toward prefabri- 
cated housing could be located. However, the following refer- 
ences, dealing with the bias in judgment samples relative to 
probability samples, were found: 



CASES IN SAMPLING 139 

BROWN, G. H, "A Comparison of Sampling Methods," Journal of Marketing, 

XI (April, 1947), pp. 331-37. 
CHURCHMAN, C. W. (ed.). Measurement of Consumer Interest. Philadelphia: 

University of Pennsylvania Press, 1947. 
HOCHSTIM, J. R., and SMITH, D. M. K. "Area Sampling or Quota Control? 

Three Sampling Experiments," Public Opinion Quarterly, XII (Spring, 

1948), pp. 75-80. 

ACTION NEEDED 

The basic question is that of designing a sample that will 
yield the desired substantive information, and at the same time 
provide as closely comparable data as possible on the effects of 
resorting to judgment selection. Specifically, the following 
questions must be answered: 

1. What sort of general sample design should be used: unre- 
stricted, stratified, area breakdown, or what? If area or 
strata breakdowns are to be used, on what principles 
should these divisions be constructed? How will the prob- 
ability and judgment methods of selection be fitted into this 
design? Why is this particular design preferable to the 
alternatives? 

2. How should the total number of interviews be split up be- 
tween judgment interviews and probability interviews? 
How many interviewers should be employed in this survey? 
How many interviews of each type should every interviewer 
make? 

3. Exactly what procedure should be used in selecting sample 
members for the probability sample and for the judgment 
sample? 



CASE 5 DESIGNING A CONTROLLED 
EXPERIMENT 

BACKGROUND 

The radio listenership ratings reported by a certain rating 
service exhibited a declining trend over a number of early post- 
World War II years. A user of this rating service was puzzled 



140 MARKETING RESEARCH 

by this phenomenon and desired to investigate it further. Was 
this reported trend a true picture of what was happening in the 
population, or could it be the result of some bias in the method 
used by the rating service to collect the data? This was the 
question that the user of this service asked his researchers to 
answer. 

THE PROBLEM 

On an a priori basis, support could be found for either case. 
The listenership surveys of this rating service were conducted in 
large cities where television stations were in operation. Special 
studies had shown that families purchasing television sets 
tended to reduce their listening to radio. The reported declin- 
ing trend in radio listenership ratings would seem to be entirely 
in accord with these findings. On the other hand, sales of radio 
sets had been well maintained during these early post- World 
War II years. By 1951, about 42 million homes were estimated 
to have one or more radios, the highest such figure ever reported. 
Such a state of affairs would hardly seem to be consistent with 
a decline in radio listenership. 

If the method used by the rating service in collecting the data 
was at fault, one of two recent innovations made by the rating 
service in its procedure seemed to be the most likely culprit. 
Both of these innovations had been made during the period 
under study. One innovation followed from the introduction 
of television when the rating service began to measure listener- 
ship to television as well as to radio. This was done by altering 
its former question on radio listenership to include television 
as well. The former question was: "Were you listening to your 
radio just now?" ( If the answer was "Yes," the respondent was 
questioned about the name of the station and of the program.) 
As revised, the question read: "Was anyone in your home lis- 
tening to the radio or looking at television just now?" (If the 
answer was "Yes," further queries were made about the program 
and station.) 

In this new question, the order of mention of radio and of 
television was alternated. Nevertheless, the fact that listener- 



CASES IN SAMPLING 141 

ship to both media was included in the same question might, it 
was felt, lead to underestimates of listenership to one or both 
media. 

The second innovation consisted of the addition of a ques- 
tion asking the respondent about listenership to radio or tele- 
vision in the household fifteen minutes before. In other words, 
after the original question in its revised form, as shown above, 
was read, and the accompanying questions on program and sta- 
tion, the respondent was asked: "Was anyone in your home lis- 
tening to the radio or looking at television between and 
. . ; or about 15 minutes ago?" (If the answer was "Yes," 
there were follow-up queries on program and station.) 

This procedure was used by the agency as a means of dou- 
bling the size of the sample at a negligible increase in cost, for in 
effect it provided twice as much data on listenership at a par- 
ticular time, although there was no change in the number of 
interviews made. Could it be, however, that this procedure 
might bias the listenership ratings in some form or other? 

Investigation failed to turn up any research done previously 
on this subject, and hence the answer seemed to lie in designing 
a survey that would supply the necessary data. Such a survey 
would have to consist, in essence, of a series of controlled experi- 
ments in which one factor would be altered at a time. 

The exact form the controlled experiment might take was in 
question. Suggestions ranged all the way from using just one 
method in the survey that was, to ask about radio and tele- 
vision listenership separately, followed by queries about listen- 
ership fifteen minutes prior to the interview, in conjunction 
with the listenership ratings provided by the service to using 
four distinct methods. In the latter case, listenership data for 
the same period would be collected from one group of respond- 
ents by the same procedure used by the rating service, from an- 
other group by the method proposed above, from a third group 
by asking one question only about listenership to both media 
fifteen minutes before, and from a fourth group also by asking 
only about listenership fifteen minutes before but using separate 
questions for radio and for television listenership. 



142 MARKETING RESEARCH 

ACTION RECOMMENDED 

In the opinion of some, the rating service should be hired to 
make this survey, so that one could be absolutely sure that the 
survey procedures were the same on the controlled experiments 
as in actual practice. Others maintained, however, that dupli- 
cation of these procedures was no problem anyway inasmuch 
as they were simple and widely knownthe interviews were 
made by the telephone coincidental method and that the use 
of an independent research agency was the only means of assur- 
ing complete impartiality. 

The design of the survey clearly had to be one where data on 
radio listenership would be collected simultaneously in suffi- 
ciently different ways to permit an evaluation to be made of 
the effect, or lack of effect, of each of these two innovations on 
the accuracy of the data. Question arose, however, over the 
number of different program periods to be surveyed. These 
program periods are generally fifteen minutes long in the day- 
time and a half hour at night the frequency with which pro- 
grams change. It was estimated that not more than 5,000 tele- 
phone interviews could be completed with the resources avail- 
able for the survey. Should these interviews be distributed 
more or less uniformly over the day (and night) and over the 
days of the week, as some suggested, or should they be concen- 
trated in particular groups, as others suggested? 

In this connection it is pertinent to note that there is some 
tendency in analyzing listenership data to distinguish weekday 
broadcasts from week-end broadcasts and morning, afternoon, 
and evening broadcasts. It also deserves mention that the rat- 
ing service conducted about four hundred telephone interviews 
for each fifteen-minute broadcast period over an interval of two 
weeks. It might further be noted that ratings of many daytime 
radio programs are in the vicinity of 1 that is, 1 per cent of 
those interviewed during the particular period were listening 
to that program and that ratings on the most popular evening 
shows are not likely to rise much above 10 or 12. 



CASES IN SAMPLING 143 

DATA AVAILABLE 

The information on the conditions ancl the limitations sur- 
rounding the survey has already been provided in the preceding 
sections. One additional pertinent fact is that the survey was 
to be concentrated in one city, a city for which this rating service 
provided continuing listenership data. 

No previous studies could be located on the effect of the two 
innovations in question except for an oblique reference in the 
following publication : 

PAYNE, S. L. The Art of Asking Questions. Princeton, N. J Princeton Uni- 
versity Press, 1951, pp. 69-70, 102-103. 

ACTION NEEDED 

In designing this survey, the following questions have to be 
considered: 

1. Who should be hired to conduct the survey the rating serv- 
ice or an independent research agency? Why? 

2. How should the controls be set up to provide all the neces- 
sary data? Should the regular data provided by the rating 
service be incorporated within these controls or should 
duplicate data be obtained in the course of the survey by 
the same method used by the rating service? 

3. How should the sample be distributed by broadcast periods 
over the week? Should the distribution be fairly uniform 
over the week or should the sample be concentrated in cer- 
tain periods? If the latter, on what basis should this con- 
centration be established? 



CASE 6 A PANEL OPERATION ON CONSUMER 
DURABLE GOODS PURCHASE PLANS 

BACKGROUND 

One of the basic problems of marketing and economic anal- 
ysis is that of forecasting consumer purchases. From the point 
of view of attempting to maintain the economy on an even level, 



144 MARKETING RESEARCH 

the forecasting of consumer durable goods purchases is of par- 
ticular interest because of the often erratic nature of such pur- 
chases and because of their leverage effect on business plans and 
business actions. Efforts to make such forecasts in the past 
have centered largely on the derivation of statistical relation- 
ships for recent years between aggregate expenditures on con- 
sumer durables and other relevant variables (aggregate income, 
time, and so on) and the extrapolation of these relationships 
into the future. 

In general, however, these efforts have not proved very suc- 
cessful, and attention in recent years has been focused on the 
possibility of forecasting such purchases by asking the con- 
sumers themselves. This approach is predicated on the assump- 
tion that purchases of the major durable goods, which involve 
large sums of money, are generally planned well in advance, and 
that by finding out about such plans it would be possible to fore- 
cast actual expenditures for these durable goods. Even if a 
direct correspondence between plans and purchases does not 
exist, it is believed that some knowledge of changes in the out- 
look of consumers with regard to business conditions should 
yield valuable clues as to the future course of consumer durables 
purchases. 

A researcher obtained a grant of several thousand dollars to 
conduct a pilot study on the value of this new approach as ap- 
plied principally to major durable goods ("major purchases" 
defined as those involving an expenditure of $25 or more). A 
continuous consumer panel operation was indicated as the 
means of testing the approach, since it permits checks to be 
made on the realization of any stated purchase plans. Because 
the focus of the study was on major consumer durable goods, 
the project was planned so that scheduling interviews one 
month apart represented a reasonable compromise between 
cost considerations and the desire for accurate information on 
the realization of purchase plans. On this basis, it was esti- 
mated that approximately one year's observation with the panel 
would be needed to check the validity of this new forecasting 
approach. 



CASES IN SAMPLING 145 

THE PROBLEM 

A distinct possibility existed that the type and frequency of 
consumer purchase plans, as well as the relationship between 
plans and realizations, might vary by different population 
groups. The sample, therefore, had to be set up so that infor- 
mation could be obtained on plans and realizations by popula- 
tion groups (income, occupation of head of family, age of head, 
family size, and so forth) as well as for the aggregate. 

Another problem arose, namely, that of incorporating into 
the panel operation a means of detecting and, if possible, elim- 
inating the effects of sampling bias on the nature of the results 
obtained. Sampling bias is particularly likely in a continuing 
panel operation principally because of (a) the repetition of in- 
terviews with the same respondents, and (b) panel mortality. 
These factors are likely to distort appreciably the substantive 
findings, and it was therefore extremely important that the 
study be designed so that such effects could be detected and, if 
possible, measured. 

A third problem arising from the panel operation was that of 
replacing families that drop out of the panel. Dropouts in such 
a study could be expected to be substantial. On what basis 
should such families be replaced? How frequently should re- 
placements be made? 

DATA AVAILABLE 

The panel was to be set up in a city of some 65,000 people, 
which in many respects was thought to be a fairly representative 
American community. Preliminary investigations, however, 
revealed that scant data were available on the characteristics 
of the city's inhabitants. The study was designed in late 1950, 
a time when the results of the 1950 Census of Population had 
not yet been published. The 1940 Census data were judged to 
be outdated inasmuch as the city had expanded greatly in the 
intervening decade and had acquired many new industries. 

A 1950 population estimate for the city was available. Also 
available was a city directory for 1950 which, as far as could be 
ascertained, was reasonably accurate and listed the city's in- 



146 MARKETING RESEARCH 

habitants and the marital status, occupation, and place of resi- 
dence of each by blocks. A block map of the city was also 
obtainable. 

The preliminary investigation revealed little published in- 
formation regarding sampling bias in continuous panel opera- 
tions or regarding panel mortality rates. The only bit of 
information even remotely related to this subject was that non- 
response rates on the usual one-spot personal interview samples 
generally vary between 10 per cent and 20 per cent. 

Pretests with the questionnaire to be used in the study indi- 
cated that between one hundred and one hundred twenty-five 
completed interviews could probably be obtained each month 
for twelve months with the funds made available for the project. 

ACTION NEEDED 

From the sampling viewpoint, the following questions had 
to be answered by the researcher in designing the study: 

1 . What sort of sampling design should be used? How can the 
desired breakdowns be obtained when so little is known 
about the population? How should the sample members 
be selected? 

2. What sort of sampling biases are likely to arise in the course 
of the panel operation? How can the sampling design be 
adjusted to detect such biases if they exist? 

3. How much allowance should be made for panel mortality 
on the various waves of interviews? On what basis should 
replacement families be selected? How frequently should 
replacements be made? 

The researcher was asked to prepare a memorandum on the 
design of the study and dealing with the above questions. How 
would you answer them? 



CASES IN SAMPLING 147 

CASE 7 FOLLOWING UP ON A MAIL SURVEY 

BACKGROUND 

In the fall of 1950, the Bureau of Economic and Business 
Research of the University of Illinois, in conjunction with the 
Division of Marketing of the same University and with the co- 
operation of the Associated Credit Bureaus of America, con- 
ducted a survey of occupational credit ratings. This was a repe- 
tition of an earlier survey on the same subject made by P. D. 
Converse in 1940, and to maintain comparability with that 
earlier study, the same procedure was followed in the later one. 
Mail questionnaires were sent out to some eight hundred credit 
managers half of them store credit managers and the other 
half managers of credit bureausasking them to rate each of 
some forty-odd occupations as good, fair, or poor credit risks. 
Since the meaning of these adjectives undoubtedly varies from 
one person to another, the respondents were asked to define 
each adjective in terms of percentage of defaults. This device 
not only served as a means of quantifying the occupational 
ratings but also provided a vehicle for evaluating the reliability 
and significance of the results. 

A copy of one of the two forms of the questionnaire used in 
the survey is reproduced on pages 148-49. The other form is 
identical with the one shown except for the fact that the order 
of listing of the occupations was reversed. This precautionary 
measure was taken to forestall the possibility that the credit 
ratings or the definitions of the adjectives might be influenced 
by the order in which the occupations were listed on the ques- 
tionnairea possibility that, unlikely as it may seem, proved to 
be an actuality. However, since the forms were alternated 
among the respondents, the resulting bias did not affect the 
validity of the results. 

THE PROBLEM 

The questionnaires were mailed out through the office of the 
Associated Credit Bureaus of America. This was done partly 
to facilitate the mailing of the questionnaires and partly as a 



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means of demonstrating to the credit managers the interest of 
their association in the survey, an interest which, it was thought, 
would bolster the response rate. At the same time, however, 
the arrangement about the mailing was such that no identifica- 
tion of the individual returns was possible except by type of 
credit manager (store or bureau manager) and by city and state 
of residence, as ascertained from the postmark. 

The returns on the survey revealed that 25 per cent of both 
the 400 store credit managers and of the 400 credit bureau 
managers circularized sent in questionnaires. Although this 
response was not out of line with the sort of response rates 
generally encountered on mail surveys, nonrespondents never- 
theless comprised most of the sample, and question imme- 
diately arose regarding the representativeness of the returns. 
Did the returns really reflect the views of all credit managers 
in the sample and, more broadly, of those in the population, 
with respect to the subjects under study? Was there any way 
of determining quickly and economically whether or not the 
returns were biased and, if so, in which direction were they 
biased? 

ACTION RECOMMENDED 

Two alternative courses of action appeared to be open in 
view of the limitations on further work. One alternative was 
to do no further work at all on the matter of representativeness; 
the other alternative was to send out follow-up questionnaires. 
Following the first approach meant that the returns that had 
been received would be analyzed and the results presented as 
based on a judgment sample of unknown representativeness. 
The rationale underlying this approach was that resort to fol- 
low-up questionnaires in such a case was not sound because 
there was no knowing what one had even if a substantial num- 
ber of additional returns were received. Many of these returns 
might duplicate those received on the original mailing, since 
those respondents would also necessarily receive follow-up ques- 
tionnaires. In addition, the fact that no classifying information 
was requested meant that differences between the distribution 
of the respondents on the two mail waves by selected character- 



CASES IN SAMPLING 151 

istics could not be used as a means of indicating the character- 
istics of the nonrespondents, as is sometipies done. 

In other words, it was contended that the additional returns 
received by such a follow-up mailing were not likely to remove 
any bias that might be present in the original returns, because 
the type of person who did not respond in the first place, and 
whose views might differ from those of the respondents, was 
not likely to answer now. It was also contended that to send 
follow-up queries to the respondents might create some irrita- 
tion on their part toward the sponsors of the study. 

On the other hand, those advocating the use of follow-up 
questionnaires asserted that any additional information was bet- 
ter than nothing. Although the new returns might point to 
much the same results as the original ones a phenomenon that 
admittedly might be due to duplication of returns rather than 
to representativeness of the original respondents there was al- 
ways the possibility that bias, if existing, might show up in the 
form of sharp differences in the occupational credit ratings on 
the two sets of returns. Other things being equal, the larger 
the rate of response, the less the likelihood of the presence of 
bias due to nonresponse. And although there was no way of 
avoiding the receipt of follow-up questionnaires by credit man- 
agers who had already responded, a properly worded accom- 
panying letter, it was claimed, should hold duplicate responses 
down to a negligible number and at the same time cause little 
irritation among the former respondents. 

DATA AVAILABLE 

The necessary data pertaining to this survey have already 
been given in the previous sections. In addition, a considerable 
body of literature exists on the forms of bias likely to be en- 
countered in a mail survey. The following references were 
found pertinent to the problem at hand: 

CLAUSEN, J. A., and FORD, R. N. "Controlling Bias in Mail Questionnaires/' 
Journal of the American Statistical Association, XLII (December, 1947), pp. 
497-511. 

ROBINSON, R., "Five Features Helped This Mail Questionnaire Pull from 60% 
to 70%," Printers' Ink, CCXIV (February 22, 1946), pp. 25-26. 



152 MARKETING RESEARCH 

SEITZ, R. ML, "How Mail Surveys May Be Made to Pay/' Printers' Ink, CCIX 
(December 1,1944), pp. 17 if. 

ACTION NEEDED 

1 . If you were the researcher in charge of this study, would you 
recommend the use of follow-up questionnaires or not? 
Why? How would you answer the objections of those favor- 
ing the other course of action? 

2. If you do favor follow-up questionnaires, outline the pro- 
cedures you would use to maximize response (nonduplicated) 
and avoid irritating the sample members. 

3. In either case, how would you interpret the data in your 
analysis of the substantive results of this study? 

CASE 8 TESTING THE VALIDITY OF A 
JUDGMENT SAMPLE 

BACKGROUND 

In the spring of 1946 a qualitative study of magazine interests 
of women was conducted under the sponsorship of the McCall 
Corporation. The purpose of the study was to provide infor- 
mation regarding some of the qualitative aspects of magazine 
reading who reads magazines and why, and to provide com- 
parison with similar studies made in 1939 and 1941. The ques- 
tionnaire used in this study is reproduced on pages 154-56. 

Interviews were scheduled in 153 communities in 32 states. 
All in all, well over 5,000 completed interviews with women 
were contemplated, 

THE PROBLEM 

The sample used in past studies of this kind, and scheduled 
to be used in this one, was designed on a stratified basis with 
judgment selection. To quote from the original report, the 
sample was restricted "to contain only women who live, for the 
most part, in urban places, who are at home when the inter- 
viewer calls, and who show the interviewer any copy of one or 
more of the 22 magazines on the list." (Italics included.) 
Strata were set up by geographic and city-size divisions, and for 



CASES IN SAMPLING 153 

each of the 153 communities selected on this basis additional 
strata were outlined, using marital status and socioeconomic 
status (prosperous, comfortable, getting by, poor) as controls. 

The reasons for using this sample design in the present study 
were principally to maintain comparability with the earlier 
studies and to reduce expenses; to conduct such a study on a 
probability basis on a nationwide scale was felt to be beyond the 
resources available for the project. In addition, it was reasoned 
that the restriction of the study to questions of qualitative im- 
portthe who and the why of magazine readershipshould lead 
to little or no bias in the results because of the use of the judg- 
ment method of selection. 

Although this line of reasoning may seem plausible off hand, 
no empirical evidence was available at the time the study was 
planned to prove or disprove it. Therefore, some sort of test of 
the validity of this point was deemed necessary in order to give 
the results of the study maximum reliability. After some con- 
sideration, it was decided to run a probability sample concur- 
rently with a judgment sample in one of the communities 
selected for study and evaluate the reliability of the national 
judgment sample on the basis of a comparison of the results of 
these two samples. In essence, this evaluation study had two 
objectives: 

1. To compare the findings based on a judgment sample with 
those based on a probability sample with regard to both 
factual data, such as possession of magazines, and subjective 
data, such as reading interest. 

2. To measure differences between those homes where a 
woman was found at home and interviewed on the first call 
and those homes where a woman was found at home and 
interviewed only after one or more callbacks. 

The problem was to set up a sample plan that would fulfill 
these objectives. 

ACTION RECOMMENDED 

To minimize the cost of this experiment and to permit use 
of ABC (Audit Bureau of Circulation) data on magazine circu- 



154 



MARKETING RESEARCH 



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MARKETING RESEARCH 



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lation by counties, it was suggested that the study be made in 
Milwaukee County, Wisconsin. Nearly 99 per cent of the 
population of this county lives in the city of Milwaukee, which 
facilitates the selection of a probability sample. It was also 
suggested that ABC circulation figures be used to check on the 
accuracy of the circulation estimates obtained by the probability 
and judgment samples, even though those figures were between 
one and three years old. If the samples were chosen with this 
purpose in mind, however, there arose the problem of relating 
the results obtained to those for the main study in which, it will 
be recalled, sample members were restricted to women at home 
when the interviewer called. 

A recommendation was also made that in the interest of econ- 
omy, the questionnaire used in this experiment be reduced 
where possible as compared to the one used in the main study 



CASES IN SAMPLING 157 

(page 1 54-56). Much the same questions necessarily had to be 
asked in this survey as were asked on the* nation wide operation, 
but the question was raised whether use of the complete ques- 
tionnaire was needed to produce the desired information. 

DATA AVAILABLE 

Data available for the city, or county, of Milwaukee did not 
go much beyond estimates of its aggregate population, of distri- 
bution of the population by socioeconomic level, and of mag- 
azine circulation. Statistics on dwelling units by local areas and 
blocks could also be obtained. In addition, preliminary cost 
estimates indicated that roughly a thousand interviews could be 
made by each method of selection with the available resources. 

ACTION NEEDED 

The principal task in this problem is to outline a procedure 
for selecting the judgment and probability samples and securing 
sufficient information to fulfill the stated objectives of the ex- 
periment. In the course of preparing this outline, the following 
questions have to be answered: 

1. What strata should be used for the judgment sample? 
What strata for the probability sample? 

2. On what basis should the members of each sample be se- 
lectedon the basis used in the nationwide survey, or on the 
basis suggested in the "Action Recommended" section? If 
the latter, how can the results be carried over to evaluate the 
reliability of the data obtained on the major study? 

3. To what extent, if any, can the questionnaire used in the 
main study be shortened for the purposes of this experiment? 
Which questions can be used to study the possible bias in 
the judgment method in estimating facts, and which ques- 
tions can be used to study bias arising in the judgment 
method in obtaining subjective information? 

4. How can the second of the two main objectives of this ex- 
periment be attained with this sample design? 



Part V 

COLLECTION OF DATA 



A listing of the principal methods used to collect data in 
marketing studies was provided in the introduction to Part III 
(pages 62-69). In the introduction to this Part, we shall re- 
view these methods from the point of view of the problems and 
pitfalls involved in the actual collection of data by these meth- 
ods. 

The three principal methods of collecting data are, it will be 
recalled, by surveys, by observation, and by experiment, with 
mail questionnaires, telephone calls, and personal interviews as 
the main variants of the first method. However, from the point 
of view of the physical processes involved in collecting the data, 
and from the point of view of assessing field problems, the fol- 
lowing fivefold classification would seem to be more relevant: 
internal records, mail questionnaire, personal interview, tele- 
phone calls, and mechanical recording. 1 The relative merits of 
each of these methods are summarized below. 

METHODS OF COLLECTING DATA: ADVANTAGES 
AND DISADVANTAGES 

INTERNAL RECORDS 
Advantages 

1 . Highly economical in terms of the variety of data and num- 
ber of breakdowns obtainable. 

2. Accuracy and reliability of data are generally very high. 

3. Most easily kept up on a continuing basis. 

4. Relatively few problems of data collection. 

1 Other methods, such as inventory polls and group participation methods, 
are not taken up in this review. 

159- 



160 MARKETING RESEARCH 

Disadvantages 

1. Danger of antagonizing officials of the company if demands 
for data are excessive or not well justified. 

MAIL QUESTIONNAIRES 

Advantages 

1. Economical, though sometimes nullified by very low rates of 
response. 2 

2. Wide geographic distribution, if this is desirable. 

3. Elimination of interviewer bias. 

4. Possible greater frankness of response on questions that 
might prove embarrassing in a personal interview. 

5. Certain segments of the population, such as higher income 
groups, more easily contacted in this manner. 

Disadvantages 

1. Time consuming. 

2. Danger of sample bias: returns may not be representative of 
the population. 

8 A well-conducted mail survey will usually have at least a 1 5 per cent return. 
If we assume that a personal interview survey secures a 100 per cent return, a 
personal interview would cost less than each mail questionnaire returned only if 
the variable cost of the former was less than roughly seven times (100 divided 
by 1 5) the variable cost of each mail questionnaire sent out. Variable cost means 
the total unit cost less unit common costs. Common costs in this case represent 
all costs common to both methods; that is, those costs that would be incurred 
irrespective of the method by which the data are collected. 

As an illustration, assume the following: 20 per cent return on mail question- 
naires, variable cost per mail questionnaire, 20 cents. What is the break-even 
point between personal interviews per return and mail questionnaires per return? 
Solution: 100 per cent divided by 20 per cent equals 5 mail questionnaires that 
must be sent out to receive one return. Five times 20 cents equals $1, the cost 
of each mail questionnaire returned with a 20 per cent return and a 20-cent 
variable cost per questionnaire. This means that for a corresponding personal 
interview survey to be no more expensive, the cost per interview would have to 
be no more than $1, the break-even point. The general principle, then, is that 
the break-even point between the two methods occurs when the ratio of the 
variable cost per mail questionnaire to that of the personal interview is the same 
as the percentage returns for the mail questionnaires. 

If callbacks and follow-up letters are used, an increase in unit costs for those 
sent out will occur. On the other hand, callbacks and follow-ups will cause 
returns to be higher, so that the proportionate increase in expenditure resulting 
from follow-ups may be small relative to the increase in the rate of return. 



COLLECTION OF DATA 161 

3. Questionnaire must be relatively short. 

4. Questions must be simple and easily answered. Open-end 
questions not very effective. 

5. No assurance that the individual addressed is the one who 
replies. 

6. Certain segments of the population excluded, such as illiter- 
ates. 

7. Follow-ups necessary to interpret omissions and detect non- 
response bias. 

PERSONAL INTERVIEWS 
Advantages 

1. Detailed information obtainable on behavior and attitudes. 

2. The identity of the respondent is known. 

3. Response rate considerably higher than on a mail survey, 
which tends to improve representativeness. 

4. All segments of the population are approachable. 

Disadvantages 

1 . Relatively expensive. 

2. Danger of interviewer bias. 

3. Problem of cheating and misrepresentation by interviewer. 

TELEPHONE CALLS 
Advantages 

1. Perhaps the least expensive of all, in terms of cost per inter- 
view. 

2. Data quickly obtainable. 

3. Random selection very easy; members of the population 
known. 

Disadvantages 

1 . Method limited to telephone-owning homes. 

2. Interview must be brief. 

3. Questions must be simple, either of the "yes-no" type or a 
type which requires short, factual replies. 

4. Danger of sample bias even for population sampled because 
of the influence of the time when call is made on those who 



162 MARKETING RESEARCH 

respond; for example, evening calls produce a larger number 
of male respondents. 

MECHANICAL RECORDING 
Advantages 

1 . High degree of accuracy of what is being measured. 

Disadvantages 

1. Interpretation of data may be perplexing. Thus, an audi- 
meter may record when a radio is on, but does not indicate 
whether or not anyone is listening. 

2. Danger of respondent bias when respondent is conscious 
that actions or words are being recorded. The use of tape 
recorders in personal interviews is a case in point. 

The Cases in This Part 

The most commonly employed means of gathering data are 
by using internal records, by personal interview, and by a mail 
questionnaire. It is on these three methods that the cases in 
this Part are focused. (Reference might also be made to Case 
6 of Part II, which deals with the collection of data by another 
means.) 

Gathering data from internal records is the subject of the first 
two cases. Case 1 poses the problem of designing forms for 
such data, knowing what is wanted, and Case 2 deals with the 
question of deciding what data should be gathered. 

Gathering data by means of a mail questionnaire is the sub- 
ject of Case 3, while Case 4 poses the problem of securing re- 
spondent cooperation in a survey conducted partly by personal 
interview. 

The next three cases deal with the use of personal interviews. 
Two of the cases are concerned with the training of interviewers, 
perhaps the prime source of bias in this method. Case 5 bears 
on the selection of interviewers for a life insurance survey, 
whereas Case 6 deals with the associated question of the train- 
ing of interviewers. Case 7 raises the question of the value of 
a depth interviewing scheme, including some of the so-called 



COLLECTION OF DATA 163 

projective techniques, in evaluating the factors behind con- 
sumer purchases of a drug product. 

The last case in this Part requires a fair degree of original 
thought, as it raises the question of devising a means of securing 
data in a rather unique situation, that of detecting bias in a per- 
son's response regarding family purchases and habits. 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. Chapters 2-11 give some 
good examples of the psychological problems associated with collecting data 
by interviewing methods. 

BLANKENSHIP, A. B. Consumer and Opinion Research. New York: Harper & 
Bros., 1943. Chapter 4 contains a brief discussion of the basic considerations 
in using mail questionnaires, telephone interviews, and personal interviews. 

BRADFORD, E. E. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. Chapter 1 1 gives a bnef account of interviewing methods. 

BROWN, L O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Chapter 22 has a fine discussion of various methods of data 
collection. 

FERBER, R "Which Mail Questionnaires or Personal Interviews?" Printers' 
Ink, CCXXII (February 13, 1948), pp. 44 ff. A detailed evaluation is made 
of the controversy between those who advocate personal interviews in prefer- 
ence to mail questionnaires, and vice versa. 

GOODE, W. J., and HATT, P. K. Methods in Social Research. New York: Mc- 
Graw-Hill Book Co., Inc., 1952. Chapter 13 contains many interesting 
examples of questions and answers that take place between interviewer and 
respondent; the methods of handling interviewing problems are explained by 
means of these examples. 

HEIDINGSFIELD, M. S., and BLANKENSHIP, A. B. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Major factors in methods of col- 
lecting data are treated briefly in Chapter 9. Selection, training, supervision, 
and compensation of interviewers are also covered. 

LORIE, J. H., and ROBERTS, H. V. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. Chapters 12-17 and 20-21 deal 
in considerable detail with the problems of communication and observation 
that are associated with collecting data, and with the problems of selection, 
training, and supervision of interviewers. 

LUCK, D. J., and WALES, H. G. Marketing Research. New York: Prentice-Hall, 
Inc., 1952. Chapter 5 includes a schematic diagram of the relationships be- 
tween various sources and methods of collecting data. 

PARADISE, L. M., and BLANKENSHIP, A. B. "Depth Questioning/' Journal of 
Marketing, XV (January, 19 5 1 ), pp. 274-88. The most comprehensive treat- 
ment of depth questioning in marketing research problems is to be found 
here. 

PAYNE, S. L. The Art of Asking Questions. Princeton: Princeton University 
Press, 1951. This entire book can be read with profit by research workers 



164 MARKETING RESEARCH 

who must prepare questionnaires or who need criteria for appraising the work 

of others. 
REED, V. D., et al. "Selection, Training, and Supervision of Field Interviewers 

in Marketing Research/' Journal of Marketing, XII (January, 1948), pp. 

365-78. An excellent treatment of the problems encountered in field inter- 
viewing work. 
WALES, H. G., and FERBER, R. Marketing Research Selected Literature. 

Des Moines: Wm. C. Brown Co., 1952. A comprehensive bibliography on 

interviewing techniques will be found on pp. 198-205. 



Part V Cases 



CASE I OBTAINING DATA ON THE 
OPERATIONS OF A LAUNDRY 



BACKGROUND 

The Aswell Power Laundry Company was one of the three 
major laundries serving the area within and surrounding a city 
of about 100,000 population. Most of the company's revenues 
came from laundry operations. 

A number of smaller dry cleaning and laundry establishments 
also operated in this area, but the principal competitors of the 
Aswell Company were the two other major laundries, each of 
which was about equal in size to the Aswell Company. 

In 1946, the Aswell Company suffered a serious decline in 
the volume of its operations. After the war, competing com- 
panies had made substantial inroads into the business done by 
the Aswell Company and, under the existing management, 
there seemed to be little prospect of reversing the downward 
trend. 

This decline in sales, plus poor customer relationships, caused 
the Aswell Company to discharge its manager and employ an- 
other man to fill his place. The officials of the company gave 
the new manager a clear mandate to do whatever was necessary 
to lift the business out of its existing precarious position. 

ACTION RECOMMENDED 

Officials of the laundry were of the opinion that the major 
problem faced by the company was to obtain enough business 
to improve the profit situation. As a corollary to this, they also 
insisted that it would be necessary to raise the profit margin 
sufficiently to provide a more adequate return on the capital 

165 



166 MARKETING RESEARCH 

investment in the business. In line with this objective, they 
suggested that the following four questions concerning the 
laundry's operations be investigated: 

1. Is the profit margin of the business being influenced by poor 
personnel relations between management and company 
workers? 

2. Is the equipment in the plant modern enough to handle a 
sufficient volume to provide an adequate profit margin? 

3. Do we need to increase the number of routes that we now 
have in order to provide a more profitable operation? 

4. Will the investment necessary to achieve some of these goals 
be so high that it will be impossible to go ahead with an 
expansion program? 

THE PROBLEM 

In searching for data with which to study these questions, the 
new manager found that no formal reports of any type had ever 
been prepared for officers of the company. Apparently, the 
business had been operating rather successfully for a number of 
years without any reporting system. Except for the usual laun- 
dry sales slips, no records of any kind had been kept, and only 
occasionally were profit and loss statements made up. The 
company executives felt that it would be wise to engage in a 
study of methods that could be used to provide adequate in- 
formation for the proper management of the concern, at least 
on those matters that had to do with policy. The board of 
directors felt that its function should be that of determining 
policy and that the manager should be the executive officer 
in carrying out these policies. 

ACTION NEEDED 

In view of the above situation, the manager's initial task was 
to determine (a) what data were required to enable a compre- 
hensive study to be made of the laundry's present situation, 
with specific reference to the four areas of investigation recom- 
mended by the directors, and (b) in what manner these data 



CASES IN COLLECTION OF DATA 167 

should be collected. In other words, he had to prepare a sched- 
ule listing: 

1 . The data required for each area of investigation. 

2. The methods and procedures by which such data were to be 
obtained. 

3. Other data that might prove useful in studying this general 
problem and the methods by which they were to be ob- 
tained. 



CASE 2 DESIGNING FORMS FOR GATHERING 
INTERNAL DATA 

BACKGROUND 

As part of a research study of the origins of branch store 
patronage, it was planned to utilize the credit records of the 
Boris Department Store. The data to be gathered concerned 
credit purchases made by customers during specified time peri- 
ods at the downtown parent store, at the suburban branch 
stores, and in total. 

From an alphabetical list of customers in the ledger books, 
9,672 customer names had been drawn in clusters of 62 each. 
A delivery department expert then went through these names 
and addresses, separating out all those falling within the speci- 
fied boundaries of the suburban branch store's trading area. 
The total of names so selected was 1,360, though later elimina- 
tion of accounts showing no activity during either time period 
studied reduced the number to 1,276. This was the sample for 
which internal purchase data were to be gathered. 

NATURE OF THE RECORDS 

Neither sales slips nor ledger records ("history" records) were 
considered usable. Although sales slips offered the possibility 
of securing additional worth-while information, particularly on 
identification of items purchased, multiple unit sales, and iden- 
tity of purchasers, the methods used in filing the slips made it 
extremely burdensome and costly to locate and assemble the 



168 MARKETING RESEARCH 

number of slips involved. The ledger, or "history," records,, 
showing monthly balances and payments for a period of five 
years, were to be used for checking address changes during the 
time periods studied, but they lacked the necessary identifica- 
tion of departments patronized and individual purchases made. 

The decision had been made, therefore, to use microfilm 
records. These records reproduced the monthly statements 
sent to customers (cycle billing not being used by the store). 
Each month the statements of all those accounts in a ledger 
(each ledger contained about one thousand names) against 
which purchases had been made, past due bills rendered, or 
credits issued, were microfilmed. The microfilm for the same 
block (or ledger) of accounts the next month, and the next, was 
spliced on later. Eventually, therefore, each microfilm stored 
in a single box carried in three successive parts a record of all 
account activity for accounts in a given ledger. As the store's 
fiscal year began on February 1, the first roll of microfilm for a 
given year and a given ledger would include all account activity 
for, say, names beginning with Act to those beginning with As 
for February, March, and April. Thus, Mrs. Bertram P. Arri- 
more's account would occur on the film three times (if there was 
activity each month) in three places and always in the same 
sequence of names. 

Because 1 56 clusters of 62 accounts each had constituted the 
primary sample, and two yearly periods covering two quarters 
each had been selected, this meant that 624 separate rolls of 
microfilm would have to be used in the study. (Although this 
appeared to be a large number of microfilms, it was far less than 
the number that would be needed with use of a noncluster ran- 
domly selected sample. The fact that placing microfilms in 
the viewers, locating the names desired, and focusing the ma- 
chines was the most time-consuming and costly operation, had 
dictated, in large measure, the nature of the cluster sample de- 
sign.) The periods chosen were November, 1949, to April, 
1950, inclusive, and November, 1950, to April, 1951, inclusive. 
The branch store had been opened early in October, 1950, and 
a change in credit records made it impossible to distinguish be- 
tween branch and parent store purchases after May, 1951. 



CASES IN COLLECTION OF DATA 169 

The monthly statements mailed to customers and reproduced 
on microfilm carried the following data: a top section showed, 
from addressograph plates, the name, address, and account 
number of the customer. Column 1 indicated the number 
of each department in which a credit purchase had been made 
during the month. Column 2 identified the month, day, and 
year of each departmental purchase (two or more sales slips from 
one department, or multiple purchases on one sales slip, were 
not always indicated separately). Column 3 gave an abbrevi- 
ated description of the item or items purchased, such as hat, 
men's white shirts. Column 4 showed the dollars-and-cents 
totals for each purchase. Also, the statement showed balances 
carried forward, credits, and outstanding balances, all of which 
it had been decided to ignore for purposes of this study. 

PROBLEMS FACED 

Consideration of data desired and trial inspections of micro- 
film records showed that the researchers faced a number of prob- 
lems in establishing satisfactory procedures and designing forms 
for recording and summarizing the purchase data. 

Each department in the parent store was designated by a 
three-digit number. Each department in the branch store had 
the same number as its counterpart in the parent store except 
that it was preceded by the number 1. Thus, the Men's Fur- 
nishings Department in the parent store was designated as 
Dept. No. 1 50 and in the branch store as Dept. No. 1 1 50. Un- 
fortunately, many individual monthly statements when filmed 
were allowed to slip slightly out of position. This resulted in 
blurriness or in part of the department numbers in Column 1 
actually being off the film. From an inspection of a sample 
of films it was estimated that in nearly 10 per cent of cases 
department numbers would be difficult or impossible to record 
from the microfilms. 

At least two methods could be used to assure, or increase, 
accuracy of the department numbers. In nearly one third of 
these cases of bad films, strangely enough the duplicate copy of 
the microfilm in question made identification possible. More- 
over, several members of the store's research staff were familiar 



170 MARKETING RESEARCH 

enough with items carried in both stores, with department num- 
ber assignments, and with the usual methods of item identifica- 
tion, that they could use the descriptions in Column 3 to make 
accurate identifications of department numbers in nearly all 
cases. These persons might be utilized either to refer back to 
films or to examine the data abstracted from them by the orig- 
inal data gatherers to make department identifications when 
these were in doubt. 

Another problem concerned the amount of data to be copied 
directly from records with or without summaries. Ideally, the 
data gatherers should copy all data desired without making any 
computations. This would best assure accuracy of the work. 
Individual accounts, however, varied widely in the amount of 
activity. Although many showed only a few purchases, others 
averaged two, three, or four purchases a month so that several 
pages were needed to record all transactions for such accounts. 
Whatever data might be abstracted initially from the microfilm 
records would be usable finally only when summarized as fol- 
lows: 

For each month of the November, 1948, to April, 1949, period, the 
total number of days on which purchases were made and the dollar 
amounts (rounded to the nearest dollar); 

For each month of the November, 1949, to April, 1950, period, the 
total number of days on which purchases were made and amounts at the 
parent store, at the branch store, and at both stores together; and for 
both periods the grand total of "days purchased" and "amounts pur- 
chased" for each breakdown. 

Should data gatherers copy all data for each individual pur- 
chase shown, with provision for comptometer operators, or 
other specialists, to make the needed summaries later? Or 
should forms and instructions be devised requiring data gather- 
ers to make the appropriate summaries, or part of them, during 
the data-gathering process? If the latter alternative is adopted, 
could a method of internal checks be introduced to assure ac- 
curacy? 

It was estimated that some six hundred hours of work would 
be required to abstract data from the microfilm records and to 



CASES IN COLLECTION OF DATA 171 

summarize these data. Plans were made to secure eight reading 
machines to be used entirely by the data.gatherers. 

ACTION NEEDED 

At this stage it was necessary to: 

1 . determine and lay out the work procedures to be followed, 

2. design the recording forms to be used, and 

3. prepare whatever instructions for staff workers were required. 



CASE 3 MAIL QUESTIONNAIRE METHOD OF 

SURVEY 

BACKGROUND 

To ascertain retailers' experience in the use of television as an 
advertising medium, a mail questionnaire survey was made 
among those furniture dealers who were using TV during the 
third quarter of 1952. Also included in this survey were dealers 
who used television in October, 1949, but who had discontinued 
its use by October, 1952. This was done to obtain a more accu- 
rate and impartial picture of dealer opinion of the usefulness of 
TV advertising. 

A list of TV advertisers in the retail furniture field was ob- 
tained from a quarterly publication of the N. C. Rorabaugh 
Company of New York City, The Rorabaugh Report for Tele- 
vision Advertising. This publication was discontinued as of 
September, 1952. It listed alphabetically by individual TV 
markets all the local-retail advertisers active during the partic- 
ular quarter covered. 

From this report, 190 retail furniture dealers were found to 
have used TV advertising at some time during the period from 
July through September, 1952. Likewise, a check of those deal- 
ers who had used TV advertising in October, 1949, but who no 
longer were using it in October, 1952, revealed that 17 furniture 
retailers fitted into this category. 

To decide which firms should be considered as retail furniture 
dealers, the classified sections of telephone directories were 
used. Thus, firms reported by the Rorabaugh Company as 



172 MARKETING RESEARCH 

using TV were checked against those shown in the classified 
sections as "Retail Furniture Dealers" before being included 
in this study. This tended to exclude retailers who may have 
had only one department handling furniture and who were 
classified under some other more pertinent category in the tele- 
phone directories. 

Because of the nationwide distribution of firms using TV the 
mail questionnaire method of securing data was used. The fact 
that the questionnaire was relatively short and could be fitted 
on one page facilitated the use of this method of data collection. 
Of one hundred ninety questionnaires mailed, seventy-two (or 
38 per cent) were returned; this includes responses received to 
follow-up mailings. Of the seventeen furniture dealers who 
stopped using TV, nine (or 53 per cent) returned their question- 
naires. 

THE PROBLEM 

Because of the interest evidenced in this project, it was de- 
cided to pursue a similar study in the fields of department store 
advertising and financial organization advertising (banks and 
savings and loan associations). This survey, like the preceding 
one, was also to be on a nationwide basis, i.e., covering all the 
TV markets. The problem therefore arose of identifying the 
members of the population, that is, securing the names of de- 
partment stores and financial organizations advertising over TV 
during the period selected for study, which was the second 
quarter of 1953. 

A somewhat different way of solving this problem was called 
for because of the discontinuance of the Rorabaugh Company 
publication. 

QUESTIONS TO BE ANSWERED 

1. How could a listing of the members of this population be 
obtained? 

2. How could a listing be obtained of department stores and 
financial organizations that had used TV as an advertising 
medium but had discontinued it by the second quarter of 
1953? 



CASES IN COLLECTION OF DATA 173 

CASE 4 SECURING RESPONDENT 
COOPERATION 

BACKGROUND 

A marketing research class, as its project for the term, con- 
ducted a study of patronage at local department stores in the 
city. In this study, the class had the active cooperation of one 
of the largest stores, with access to all store records. 

Among the facts most important to the study planned, it was 
felt, were the relative expenditures of different types of families 
at each of the five largest department stores. Interviewing dur- 
ing the preplanning stage led to the belief that it would be diffi- 
cult to obtain accurate figures on such expenditures. 

PLANNING 

Two types of questionnaires were constructed a personal 
interview questionnaire, to be used in interviewing city resi- 
dents, and a mail questionnaire, to be sent to out-of-town cus- 
tomers of the cooperating store. Several different questions 
were to be tested to determine which would best provide an 
accurate ranking of total cash and credit expenditures during 
the past year at the five stores. As a further check on the accu- 
racy of results, a special pre-interview mailing was devised. This 
was to be sent several days before the date of interviewing. The 
questionnaire requested information on department store pur- 
chases made during October and November. Each purchase 
by a member of the family was to be identified by date, store 
name, article, price, and method of purchase (cash or credit). 
The hope was that women would have to refer to statements, 
sales slips, or other records, or that, at least, they would have 
to reconstruct past expenditures with considerable accuracy. 

Assurance that the credit purchases reported were accurate 
when checked against store records would make it far safer to 
assume that cash purchases (unverified) and expenditures re- 
ported at other stores were valid. Respondents did not know 
that any one store was particularly involved or that the answers 
could be verified. 



174 MARKETING RESEARCH 

During the pretesting stage, the purchase-data form was 
mailed to 100 picked credit customers of the cooperating store. 
The following covering letter was used with this mailing: 



EXHIBIT 1 



Marketing Research Class 

School of Business 
Metropolis University 

November 24, 19 
Dear Madam : 

We believe in learning by doing. We are conducting, therefore, an 
actual and practical study as part of our class work. 

The study concerns the services which department stores render you 
and how they might serve you better. The five stores we are studying 
in particular are .... We will greatly appreciate your telling us some 
details concerning your patronage of any or all of these five stores. The 
information we need is indicated on the attached page. 

One of us will call on you during the week of November 29 to pick up 
the facts you are giving us. We hope you will be willing then to answer 
a few questions relating to your opinions of the services rendered you by 
these stores. By helping us you will be helping yourself and other 
shoppers. 

Sincerely yours, 

Members of Marketing 
Research Class 



RESULTS OF PRETEST 

The pretest revealed several difficulties. When follow-up 
interviews were attempted with these persons, fourteen said no 
such letter had been received; twelve could not be located at 
the address given; five persons said they had thrown away the 
questionnaire; one was reported to be on her honeymoon; two 
were dead; one was too sick to be interviewed; four said they had 
lost it; six refused to fill it out; and nine said they would send it 
in later. 



CASES IN COLLECTION OF DATA 175 

The forty-six completed questionnaires, however, when 
checked, turned out to be highly accurate, They were consist- 
ent with answers given in the personal interviews and, more 
important, were very close to the purchases as shown by store 
records. The only discernible error seemed to be the omission 
of an occasional item or purchase. 

Many student interviewers felt that the receipt of the letter 
in advance had done much to encourage cooperation for the 
personal interview. A few felt otherwise. It was decided to 
use the premailing for the final interviewing but to make revi- 
sions calculated to induce greater respondent cooperation. 

THE SURVEYS AND RESULTS 

The form for recording individual department store pur- 
chases was individualized to some extent. Students were to fill 
in the date, the inside address, and salutation (from interviews 
assigned), and the date on which the interview was expected to 
be held, as well as to sign each letter personally. The covering 
letter used appears on p. 176. 

Interviewing by previous classes had never received less than 
90 per cent response. Results this time were severely disap- 
pointing. Of the total city sample of eight hundred fifty-six 
persons, eighty-seven had moved, or the address given was in- 
correct; thirty persons claimed to be too sick to be interviewed 
(a few were dead); one hundred five could not be located despite 
as many as five callbacks (plus phone calls to arrange interviews); 
eighteen widely scattered interviews were not attempted; and 
one hundred thirty-three families refused to cooperate. The 
final number of completed, reliable interviews was four hun- 
dred sixty-seven, of which fifty-nine turned out to represent ac- 
counts which were inactive at the cooperating store. 

Unquestionably, the pre-interview mailing had backfired. 
Apparently, when the family members discussed the form, 
there was a sharp increase in their suspicion that this was really 
some kind of credit investigation. At least it seemed to many 
like "prying into personal affairs/' Reluctance to be inter- 
viewed and on occasion actual hostility were reported. The 
only fortunate aspect was that nonresponse cut across income 



176 MARKETING RESEARCH 

EXHIBIT 2 

Marketing Research Class 

School of Business 
Metropolis University 

January , 19 
Dear Madam: 

We believe in learning by doing. We are conducting, therefore, an 
actual and practical research study as part of our class work. 

The study concerns the services which department stores render you 
and how they might serve you better. The five stores we are studying in 
particular are .... We will greatly appreciate your telling us some de- 
tails concerning your patronage of any or all of these five stores. The 
information we need is indicated on the attached page. The facts that 
you tell us will be treated confidentially. 

I will call on you . . to pick up the facts you are giving us. 

I hope you will be willing then to answer a few questions about your 
opinions of the services rendered you by these stores. By helping us 
you will be helping yourself and other shoppers. 

Please be assured that I am not selling anything and that I have not 
been hired by anyone. I am a student doing this as a part of required 
classwork and not for money. 

Sincerely yours, 



lines and account sizes so that the sample shrinkage actually 
caused little distortion by subgroups in proportionate terms. 

The mail questionnaire, while setting no record in terms oJ 
percentage of responses, worked well. Only one mailing was 
made. Of the eight hundred twenty questionnaires sent tc 
out-of-city families, 39 per cent were returned within sixteen 
days which were reliable and usable. Final returns, including 
those after tabulations were run, were 43 per cent. The cover 
ing letter used with the mail questionnaire appears on p. 177. 

REPRISE 

Two years later, the marketing research class did a somewhal 
similar study, this one on out-of-town patronage of local depart 



CASES IN COLLECTION OF DATA 177 

EXHIBIT 3 

Marketing Research Class 

School of Business 
Metropolis University 

January 10, 19 
Dear Madam: 

We are students doing an actual survey in order to learn market re- 
search. Our success depends very much on you. 

We are doing a practical, useful study of the five largest (name of 
city) . department stores to learn the services these five stores 
render to you and how they might serve you better. 

Only a select few are being asked to cooperate by answering the ques- 
tions on the attached page. It will take only a few minutes of your time, 
but to us it means a critical part of our year's work. 

We assure you that we have not been hired by anyone, that we are not 
selling anything, and that none of us is being paid for this work. 

Won't you please fill out the form now while it is before you. 

Sincerely yours, 

Members of Marketing 
Research Class 



ment stores. A two-page questionnaire was sent to 987 families 
outside the city. The covering letter appears on p. 178. 

One week after mailing (returns had exceeded 33 per cent 
by that time) a follow-up mailing was used. This was sent only 
to those who had not answered as yet. 1 Total returns at the 

1 It was essential to the study that individual mail returns be identified so that 
facts could be keyed with internal data from store records. A system of coding, 
therefore, had been used. This consisted of: (1) assigning a number to each 
name in the sample, (2) giving each letter on the questionnaire a number, (3) 
putting pinpricks over a different letter on each questionnaire, and (4) being sure 
that the correctly coded questionnaires got in the right envelopes. By using a 
master code chart, identifications were quickly made of returned questionnaires, 
and follow-ups could go only to those not answering. 



178 MARKETING RESEARCH 

EXHIBIT 4 

Metropolis University 
School of Business 

January 3, 19 
Dear Madam: 

Experts are almost no help. Only you can tell us the facts. 

We are students learning to do research by doing an actual, practical 
consumer survey. 

No matter how much you shop or how little, your preferences and 
your actions determine how department stores try to serve you and other 
shoppers. So in whatever amount or way you shop your answers are very 
important to us. 

We have arranged the questions about shopping so that you can an- 
swer nearly every one with a simple check ( V ) mark. The many house- 
wives who kindly helped us to make this questionnaire assure us it usu- 
ally takes less than ten minutes to answer. 

Those few minutes of your time, however, are vital to us. For on 
your cooperation depends the success of nearly a full year's effort on our 
part. We haven't much money to spend and can ask only a few repre- 
sentative housewives. So we do need your help. 

All you tell us will be kept confidential. No one will be bothering you 
because of any facts you tell us. 

Just in case you do not do most of the department store shopping in 
your family, would you ask the person who does to answer the question- 
naire? 

We will be grateful indeed to you for checking your answers now and 
mailing them to us in the stamped envelope enclosed. Thank you. 

Sincerely yours, 

Members of Marketing 
Research Class 



end of fifteen days were 55 per cent and (including returns after 
the cutoff date) finally exceeded 62 per cent. 

The follow-up consisted of a business-reply postcard. On the 
reverse side of the card was this message: 



CASES IN COLLECTION OF DATA 179 

EXHIBIT 5 

Dear Madam : 

If you are not among the many housewives who have kindly helped us 
by filling in and returning the questionnaire we sent, we would appre- 
ciate very much your doing so now. 

So that we may plan our classwork won't you please check one of the 
blocks on the attached card and return it to us? Many thanks! 

Sincerely, 



The reply card was addressed to the instructor of the course 
and contained this message: 

EXHIBIT 6 



Marketing Research Students: 
(check one) 

E] I have already mailed your questionnaire. 

Q] I will fill it in and mail it very soon. 

Q I have mislaid your questionnaire. If you will send me another 

questionnaire and stamped envelope at the address below I will be 

glad to fill it in. 

Name 

Address 



An interesting aspect of this follow-up was that the great 
majority of cards returned came in the stamped, self-addressed 
return envelopes originally provided together with the com- 
pleted questionnaires. The daily rate of returns, of course, was 
rapidly falling off on the seventh day when the follow-up was 
mailed. Returns immediately shot upward before again taper- 
ing off. Relatively few persons were motivated to check Block 
3, but the inexpensive follow-up unquestionably boosted re- 
turns. 



180 MARKETING RESEARCH 

ACTION NEEDED 

1. What other methods might have been used to encourage 
respondent cooperation? 

2. How could the appeals used be classified or characterized? 
Were they the right appeals for the situations? 

3. What reasons could be given for the failure of the pre-inter- 
view mailing device used? 

4. How might the letters used be revised? 

5. What advantages, if any, does a school have as compared to 
a company or a private research agency in securing coopera- 
tion? 

6. Would the appeals used have to be changed to adapt them 
to company or agency use? If so, why and how? 



CASE 5 SELECTING INTERVIEWERS FOR A 
LIFE INSURANCE STUDY 

BACKGROUND 

The key questions from a preliminary questionnaire that was 
to be used in a pilot personal interview survey of consumers are 
reproduced on pp. 181-83. The purpose of the survey was to 
investigate the extent to which consumers understood the uses 
and kinds of life insurance that could be incorporated in a 
family budget and to determine how well life insurance agents 
were working with prospects and clients in a full utilization of 
life insurance policies. 

The sample for the study was to be selected by use of a ran- 
dom sampling numbers table and a city directory published by 
Polk & Co. This would provide a random sample which would 
then make it possible to estimate the sampling error. It was 
estimated that about seven hundred families would have to be 
selected in order to provide an adequate sample for the study. 

THE PROBLEM 

A trial run with the questionnaire revealed that consumers 
did not know what kind of policies they had, and that they f re- 



CASES IN COLLECTION OF DATA 181 

quently would ask questions of the interviewer that were of a 
technical nature. In addition, when questions were asked con- 
cerning the investment opportunities that life insurance offers, 
many irrelevant answers appeared. Other questions that raised 
problems were such as this: ''What kind of policy or policies do 
you now have?" Answers were confusing because the respond- 
ent might say, "I think it is twenty-payment life." When asked 
to produce the policy, the respondent might have a twenty-year 
endowment policy. 

It was clear, therefore, that a very careful and conscientious 
job of interviewing would have to be done in order to obtain 
reliable information on the subject. Approximately 20 minutes 

EXHIBIT 1 

Questionnaire for Insurance Survey 

I. Life Insurance as a Tool for Savings and Investment 

A. (1) Do you operate on a family budget? 

(2) Does this budget include a fixed allowance for savings? 

(3) (If answer to 1 or 2 is no) Do you manage to save each 
year? 

B. (1) Where or in what forms do you think your savings are best kept? 

(Number in order of importance) 

( ) Savings Banks ( ) Real Estate 

( ) Government Bonds ( ) Cash 

( ) Corporate Secunties ( ) Insurance 

( ) Own Business ( ) Building and Loan 

( ) Other 

(2) What in your opinion is the most important quality of a savings 
medium? 




( ) Safety of Principal ( ) Inflation Hedge 

( ) Liquid" 
( ) Yield 



( ) Liquidity ( ) Others. 

' ' Yield 



C. (1) In your opinion, does life insurance offer an opportunity for saving 
money? ( ) Yes ( ) No 

(2) Is there any life insurance now in force on your life or on other mem- 
bers of your family? ( ) Yes ( ) No 

(3) How many different individual life insurance policies are in force on 
the members of your family? 



182 



MARKETING RESEARCH 



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CASES IN COLLECTION OF DATA 183 

E. Do you feel that any of these policies represents a fund upon which you 
can draw in an emergency? Yes 

No 

F. Do you feel that any of these policies represents a fund which you can use 
for retirement purposes? Yes 

No 

G. Are you making payments on your house? 




H. 1 . Have you made plans for financing your retirement? 

2. (If answer is Yes) What plans have been made? 

3. (If answer is No) Why haven't plans been made? 

II. A. Has an insurance agent ever offered to coordinate your life insurance into 
an over-all protection plan? Ye 
If Yes 

a) Was this plan made? a) Do you feel that such a service 

Yes would be useful for you? 

No Yes 

b) (If Yes) Was any of No 

your insurance bought b) (If No) Why not? 

to fulfill this plan? 

No 

c) Has any agent offered to 
bring your plan "up to 
date?" 

No 

B. 1. (If there is no life insurance in force in family) Have other plans been 
made for maintaining family financial security in event of the death 
of the breadwinner? Yes No 

2. (If answer is Yes) What are these plans? 

3. (If answer is No) Why haven't plans been made? 



were required for each interview, on the basis of the trial run. 
After allowing for traveling time and callbacks, it was estimated 
that as few as fifteen interviewers might complete the study 
within the period allowed if each had a reasonably heavy load. 
Alternatively, the number of interviewers could be increased, 
say doubled, each assigned so many less interviews, and the 
study could be completed so much faster. 



184 MARKETING RESEARCH 

DATA AVAILABLE 

The following reference was found to contain material per- 
tinent to this problem: 

REED, V. D., et al. "Selection, Training, and Supervision of Field In- 
terviewers in Marketing Research/' Journal of Marketing, XII (Janu- 
ary, 1948), pp. 365-78. 

ACTION NEEDED 

1. What principle should guide the researchers in determining 
the number of interviewers to be hired for this study fewer 
interviewers and more interviews per interviewer, or more 
interviewers, lighter interviewing loads, and speedier com- 
pletion? 

2. What qualifications should the interviewers have for this 
assignment? 

3. What sort of training should the interviewers be given? 



CASE 6 INSTRUCTIONS FOR INTERVIEWERS 

INTERVIEWER PREPARATION 

The questionnaire for a local market study on luggage had 
been pretested, revised, and then reproduced in quantity. The 
.sample design had been laid out, and interviewer assignments 
had been completed. 

Interviewers listed in the files of the research group then were 
called. A meeting was arranged for those hired. Nearly all 
those selected had had considerable interviewing experience. 
Many of them had worked on the pretest. 

The practice of this organization was to provide training for 
new interviewers. This included brief classes in interviewing 
techniques, covering such problems as: how to approach re- 
spondents, encourage responses, and maintain interest; causes 
.and correctives for bias; how to record answers to various types 
of questions, handle questions asked, and fill out reports; meth- 
ods used to gauge the quality of work performed and to check 
t>ack on interviews held; and compensation. New interviewers 



CASES IN COLLECTION OF DATA 185 

also might be accompanied by a field supervisor for early inter- 
views on their first jobs. Interviewers were compensated for 
time spent in such training. 

On most assignments interviewers met together before the 
field work began. They then were given their assignments, 
sufficient copies of the questionnaire, and a sheet of instructions 
for the particular job. The supervisor made a few remarks 
about the purposes and methods of the study, any particular 
problems that were anticipated, and deadlines and compensa- 
tion. Sometimes a trial run of the questionnaire was made be- 
fore the entire group. Most of the time, however, was spent 
in answering questions concerning the questionnaires and in- 
structions distributed for the job at hand. 

THE SAMPLE 

A combination area-quota sample had been designed. Using 
the latest Federal Reserve Board figures on family income dis- 
tribution, five income groups had been established for the city 
being sampled: the A Group (15 per cent of all families) with 
incomes of $5,000 or more; the B Group (28 per cent) with in- 
comes of $3,000 to $4,999; the C Group (22 per cent) with in- 
comes of $2,000 to $2,999; the D Group (20 per cent) with 
incomes of $1,000 to $1,999; and the E Group (15 per cent) 
with incomes under $1,000. 

Using Census data, each income group was considered equiv- 
alent to several average rental groups. Each of the 388 Census 
subtracts in the city then was assigned to a rental group based 
on the average rental for the tract. From these listings random 
choices of tracts were made of sufficient number to be propor- 
tional to the size of each income group. The 34 subtracts thus 
selected became the primary sample units. 

Using Census tables and Block Statistics maps for the city, 
four city blocks were selected from each of the 34 subtracts 
which had rentals within the class limits but which represented 
the spread of rentals as well as the average rentals of all blocks 
in the tract. Thus, 1 36 city blocks were chosen as secondary 
sample units. Four interviews were to be made in each block 
chosen. 



186 



MARKETING RESEARCH 



The sample finally was stratified by family size. Each inter- 
viewer was given an individual quota (varying among the in- 
come groups) for the interviews to be made with families of 
given sizes. These quotas, in total, were distributed as follows: 
sixty families of one member, one hundred thirty-five families 
of two members, one hundred nineteen families of three mem- 
bers, one hundred families of four members, and one hundred 
thirty families of five or more members. This distribution was 
based on Census figures for income groups. 



THE QUESTIONNAIRE 



EXHIBIT 1 



Questionnaire for Luggage Survey 

1. Does anyone in your family, in this house, own luggage? Yes ] No 

D.K.n 

2. How many pieces of luggage are owned? Number _ D.K. Q] 



. _ 

3, A Would you please identify these pieces on these photographs? The pic- 
tures are the only ones we could get. They illustrate shapes and sizes 
to help identify the types you own. The appearance does not matter. 



3A 



4B 



TYPE 



Number of each 

type owned 
Leather covering 
Fabric covering 

(airplane) 
Cardboard covering 



..covering 



Matched set pieces 



A B C D E F 



G 



H 



Other 



3. B What type of covering do these pieces have? ( cardboard, fabric, leather, 

imitation leather, or other) RECORD IN TABLE ABOVE. D.K. Q 

4. A Are any of these pieces parts of matched sets? Yes F] No F] D.K. Q 
B If YES; Which types? RECORD ON LAST LINE OF TABLE. 



.. 
5. A Which of these pieces you have identified was bought last? Type - . 

D.K. Cl 

B What type of covering was it? Type of covering - D.K. Q] 
C When was it bought? Month _ Year _ D.K. [] 
D Whom was it bought for? Self Ph husband PI; or wife f]; other - 

D.K.Q 



CASES IN COLLECTION OF DATA 187 

E Which person bought it? Self Q; husband Q; or wife Q; other 

D.K. Q 

6. A Have you, or others in the family, ever giv*en new luggage as a gift to 

persons outside the home? Yes Q No Q D.K. p 
B -If YES, ASK: When was the last gift bought? Month Year 

D.K.Q 

C Was trie gift for a relative Q or a friend p? D.K. Q 
D For what occasion was it given? (Anniversary, birthday, Christmas, 

going-away, graduation, wedding, Father's Day or Mother's Day.) 

other . D.K.Q 

E What type was it? Type D.K. Q. What type of covering 

did it have? Type of covering DiK. Q 

7. A Has anyone in the family ever received luggage as a gift from persons 

outside the home? Yes Q No Q D.K.Q 
B If YES, ASK: When was the last gift received? Month Year 

D.K.Q 

C For what occasion? ( Christmas, etc. ) D.K. Q 

D What type was it? D.K. Q : What covering? D.K.Q 

8. AWhich is the oldest piece of luggage in the family that is still used for 

trips? Type. ~ "" 



_ . 
B What type of covering has this piece? Type of covering 

D.K.Q 
C In what year was it bought, or received as a gift? Year 



, 
9. A When was the last time any member of the family used luggage? 

Month _ Year _ D.K. Q 
B Which family member or members? All Q; wife Q; husband Q; 

Other _ D.K.Q 
C What kind of trip was it? (Vacation, business, weekend, or visit?) 

Other _ D.K.Q 

10 A Is any piece of luggage in the family used by more than one member of 
the family? Yes Q No Q D.K. Q If YES, ASK: All pieces Q; 
some pieces Q; or only one piece Q? D.K. Q 

B Is any luggage ever lent to persons outside the home? Yes Q No Q 
D.K. Q 

11. A If you were to buy luggage soon what type would it be? Type - 

D.K.Q 

B What kind of covering? Covering - D.K.Q 
C What color? (Brown, tan, black, grey, blue, white.) Other - 

D.K. Q 
D Approximately what price would you be willing to pay? Price $ - 

D.K.Q 
E How many years would you expect such luggage to last? Years - 

D.K. Q 

12. Does anyone in the family actually plan to buy any luggage this year? 
YesQ NoQ D.K.Q 

13. AWhat color is the family luggage? (Brown, tan, black, blue, grey) 

D.K.Q Other _ 
B .How many pieces, if any, are striped? Number - D.K. Q 



188 MARKETING RESEARCH 

14. Would you tell your personal preferences as to using luggage with : 

A Compartments for many different items F] or only a few compart- 
ments p? D.K. [~| N.P. n 

B Cloth linings with cloth pockets IT] or without cloth pockets 

D.K.n N.P.Q 

C- Your initials on it Q, or without initials p? D.K. Q N.P. [J] 

1 5. Is there anything about your present luggage which you dislike or which you 

have found of no use? Yes Q No D D - K - D If YES > ASK: What? 

IDENTITY BE SURE TO COMPLETE THIS SECTION IN 
EVERY CASE. 

Census Tract and Block Number Fa . Type 

Name of person interviewed: Mr., Mrs., Miss 

Address Estimated Age 

How many persons are there in your family (in this household)? 

Wife Q] Husband Q] children 18 or over, number ; other 

children, No. Fl; other adults, No. n. Total No 

No. No. 
Comments (Use back of paper also) : 



EXHIBIT 2 

Instructions for Interviewers Luggage Survey 

Please read carefully and fully. Success in this project depends upon your 
complete understanding of questionnaire procedures. 

1. Purpose of the survey. The purpose of our survey is to determine the size 
and nature of the market for luggage, and to measure the effect on luggage pur- 
chases of income, family size, travel, gift-buying, joint-use, durability, and color, 
material and construction preferences. The survey is expected to aid manufac- 
turers and merchandisers in designing, promoting, distributing, and selling 
luggage. 

2. Who is to be interviewed. Interviews should be made with heads of house- 
holds, either men or women. Presumably most interviews will be with house- 
wives. Avoid interviewing other persons, or more than one person at a time. 

3. When interviews should be made. Tuesday, Wednesday, and Thursday 
between 10 a.m. and 4 p.m. are the best days and hours, but successful interviews 
are possible at nearly all times. 

4. Where interviews are to be made. Each base assignment includes 16 inter- 
views in four blocks adjacent to or close to each other. 



CASES IN COLLECTION OF DATA 189 

It is very important that interviews be made in the blocks specified on the 
individual assignment sheets. To be certain of identification, and in order to 
choose typical dwellings, you should walk around each block before beginning 
the interviews. 

Wherever possible four interviews should be made in each block. The inter- 
views should be distributed also. Make one interview on each side of the block 
unless the typical structure of the four-sided block is not located on all sides. 
Where you find two-story structures to be typical, half of the interviews should 
be with families on the upper floor. Make only one of the sixteen interviews per 
basic assignment in a corner house. 

The family-size quota may be distributed among the four blocks in any way 
found easiest. A recommended way of finding families of the size required is ta 
ask interviewees about neighboring families. Please be certain, however, that 
the quota is accurately filled. The block-assignment sheet may be used for a con- 
venient check sheet. When any one quota is full be sure to ascertain family 
size before beginning each of the later interviews. 

5. Reliability of interviews. Try to complete every interview that is successfully 
begun. If you believe any interviews to be unreliable, mark them as unreliable 
together with a brief comment. All interviews, however, count as part of your 
quota. 

6. Entries on questionnaire before interviewing. Enter the census tract and 
block number from your assignment sheet and the family type (A, B, C, D, or 
E) on the line provided in the final Identity section. 

7. Opening the interview. The following formula usually is successful: 

"How do you do? I am , a research worker ( . ). 

I am making a survey. Will you give me your opinions on a few questions? It 
will not take long." 

If any hesitancy is shown you might add: 'The questions are about luggage" 
showing the photographs at once "It will take only a few minutes of your 
time. May I come in?" 

You may find by experiment that another opening works best for you. 

Try to conduct all interviews inside the house. 

When the person agrees to cooperate, give the following definition of luggage. 

"The kind of luggage we are interested in is the luggage in which you put 
clothes or personal belongings when going on a trip r and which you can carry 
with you (not trunks)." 

Read each question exactly as it appears on the questionnaire. Ignore blocks 

Sin reading the questions. Do not rephrase questions. Do not use introduc- 
y or explanatory remarks. If question is not understood, read it again. If 
still not understood, pass on to the next question. (Words in capital letters are 
for your aid and should not be read to respondents. ) 

Use a soft pencil. Fill in blocks with a small "x." Lines are provided for 
write-ins. Answers to questions 6-D (on occasions for giving gifts), 9-C (type of 
trip taken), 11-C (on color preferences), and 13-A (on color of luggage owned) 
may be recorded by underlining the occasion or colors listed. 

Any spontaneous comments about luggage which seem interesting or impor. 
tant to you should be recorded almost verbatim on the back of the ques- 
tionnaire. 



190 



MARKETING RESEARCH 



8. How to handle individual questions. 
Q-l . If answer is Don't Know 

(1) The person may be confused. Repeat the definition for luggage. 

(2) You may be talking to the wrong family member try to see the 
housewife. If you can get only a DK answer, the interview is no 
good. Try elsewhere. 

If answer is NO. This is a valid answer. Repeat the definition for 
luggage to minimize chance of confusion. If answer is still "NO" BE 
SURE to get name, address, estimated age, and family size. Report all 
such interviews. 

Q-2. Accept estimates or guesses as to number. If person delays in answering 
or takes too much time deciding, go right on to Questions 3 A and B. If 
more than 6 pieces are owned, identify only as total number of leather, 
fabric, or other coverings. Do not try to identify each type as to A, B, 
etc. Record in "Other" space of block. 

Q-3. This is a crucial question. Be as careful as possible in making accurate 
records. 

If persons say a piece of luggage is "not exactly like" any of those shown, 
say "Would you tell me which type shown your piece of luggage most 
resembles?" Be especially careful to do this if a "Gladstone" is men- 
tioned. Straps are unimportant details. 

In recording use the following system of digit recording. EXAMPLE : 
to record ownership of two type A (one of genuine leather and one of 
fabric) and one type C (fabric) 



A 


B 


C 


vv 




V 


V 












V 




V 



Q-4. If matched sets are owned (even if only 1 piece) record types (as A, B, 
etc.) by digit marks in the last line of the Table. 

Q-5. The purpose of this question is to secure data on the last purchase made 
by the family and for the use of the family. Gifts, however, may cause 
confusion. A purchase for a gift to a person outside the home should 
be recorded in Question 6. The receipt of a gift should be recorded in 
Question 7. 

NOTE: In all cases when identity of type and/or covering is certain, do not 
repeat the question for 5-B, 6-E, 7-D, 8-B, 10-A for type and covering 
identity. 

Q-6-D. Read the parenthetical listing of occasions only if the person answers 
"Don't Know" or is confused. 



CASES IN COLLECTION OF DATA 191 

Q-7. If answer to 7-A is NO, proceed immediately to question 8-A. 

Q-8-C. If respondent says "about 1924," or can only estimate the year, indi- 
cate by such notation as following: 1924 (about) or 1924 (cert.). 

Q-9-A. The last use of luggage for any kind of trip or visit away from home 
is desired. 

Q-10-A. Any form of joint use should be counted: separate use of same piece 
or sharing of one piece at one time. 

Q-ll. Ask every part of this question, irrespective of the answer to 11 -A. 
The question should cover actual expectation if a purchase for any 
reason is actually contemplated. If no purchase is contemplated, 
then the question should express the respondent's personal prefer- 
ences and opinions. 

Q-13-A. Underline each color represented in the family luggage. Do not 
record the number of each color or seek to find the predominant 
color. 

Q-14. Distinguish between "Don't know" and "No preference" in record- 
ing answers. Write in the answer if the respondent says to 14-A 
"No compartments" or to 14-B "No cloth linings." 

Q-l 5. Indicate all pertinent remarks and record as many complaints as the 
respondent mentions. Use the comment section at bottom of page, 
or the back of the page, if more space is needed. 

Identity 

Census tract, Block Number, Family Type: Enter these data before the inter- 
view. Check against the assignment sheet immediately after leaving. 
Get name whenever possible either by question or from mailbox, etc. 
Estimate (do not ask) age of respondent. 
Be sure to get family size and membership identification accurately. 



EVALUATING THE INSTRUCTIONS 

Various criteria are used * to evaluate and prepare instruc- 
tions. Some points to be covered, as given by Luck and Wales, 2 
are: 

1 . What the survey is all about. 

2. When the survey is to start and be finished. When to call 
on respondents. 

1 See J. H. Lorie and H. V. Roberts, Basic Methods of Marketing Research. 
(New York: McGraw-Hill Book Co., Inc., 1951 ), pp. 391-96, and L. O. Brown, 
Marketing and Distribution Research (New York: The Ronald Press Co., 1949), 
pp. 500-6. 

1 D. J. Luck and H. G. Wales, Marketing Research (New York: Prentice- 
Hall, Inc., 1952), pp. 246-47. 



192 MARKETING RESEARCH 

3. How many persons are to be interviewed, where and how 
to select them, and what to do about persons not at home. 

4. How to introduce one's self and initiate the interview. 

5. How each question should be asked and which ones are 
contingent on the answers to other questions. 

6. Methods of probing, encouraging responses, and aiding 
memory. 

7. If any items are to be observed, what is to be noted. 

8. How each questionnaire is to be studied and corrected be- 
fore returning. 

9. What to do with completed questionnaires. 

10. When and how she (the interviewer) will be paid for her 
work. 

11. The exact basis on which the quality of her work will be 
appraised. 

Bennett 3 reports that frequent criticisms made by field work- 
ers about instructions are: "too wordy/' "omissions/' "too 
fussy/' "ambiguous," and "insults intelligence." 

How do the instructions for this survey rate in the light of 
such criteria and criticism? 



CASE 7 DEPTH INTERVIEWING 

BACKGROUND 

From German processes secured through the Alien Property 
Custodian the Rilms Chemical Company had developed, and 
soon after the war introduced, TONE-U into the market dom- 
inated by the aspirins and seltzers and occupied by many other 
preparations, or home remedies, for headaches, stomach pains, 
and other minor ailments. 

The product manager for TONE-U felt that the advertising 
copy was too imitative of that of the leaders in the field. More- 
over, he was not certain that anyone really understood the phys- 

8 A. S. Bennett, Report on Researching Researches (New York: A. S. Bennett 
Associates, 1948), p. 12, as summarized in L. O. Brown, Marketing and Distribu- 
tion Research (New York: The Ronald Press Co., 1949), p. 500. 



CASES IN COLLECTION OF DATA 193 

ical and psychological characteristics of users or their ways of 
thinking of their ills and their self-medication of them. Al- 
though TONE-U was still a small factor in the market, its sales 
were increasing steadily, and the company was willing to devote 
considerable funds to building volume. The product manager 
felt confident of larger advertising appropriations to come. He 
was willing, therefore, to spend several thousands of dollars on 
marketing research if he could be convinced that a practical 
study of consumer psychology could be made. 

Together with an executive of the advertising agency he had 
several conferences with a research agency which had consider- 
able experience in psychological and social studies. Encour- 
aged by these discussions he paid a fee of several hundred dollars 
so that the agency could prepare for him a specific proposal for 
a study. 

THE STUDY PROPOSED 
Purpose: 

We will study three groups of people: (1) users of TONE-U to deter- 
mine what characteristics they have in common, (2) users of competitive 
products to ascertain any important differences, and (3) nonusers. The 
essential question is why users buy TONE-U and what it is in their feel- 
ings, habits, and attitudes which accounts for their purchase. Knowing 
these things, the manufacturer and advertiser can direct their work to 
communicate more effectively with the users of TONE-U, to compete 
more effectively with related remedies, and to attract those nonusers 
who can be expected to find it helpful. 

Sample: 

We shall interview approximately 300 persons from the main stream 
of American life, divided approximately equally among the three groups 
mentioned. 

Methods: 

We shall ask these persons questions about the kinds of medicines 
they keep in their homes; what kinds they use only when a doctor tells 
them to; what kinds they use on their own judgment; what they think 
about home remedies and what experience they have had with them; 
what they think about the way these preparations work; why so many 
people use aspirin; what kinds of people they know who do (and who 



194 MARKETING RESEARCH 

don't) use medicine and to describe a particular person as an illustration; 
what kinds of disease they think are the worst; and to tell us a story about 
a picture which we shall show them. We also shall get information from 
them about their occupations, living quarters, education, and where they 
came from. Our interviewers will take notes on the kind of furniture 
they have and the impressions their homes give to a visitor. 

We shall listen to and take notes on what they think about doctors, 
medicines, illness, doctors' patients, self-diagnosis, sick children, and all 
the related topics that come up some because we ask about them, some 
because questions we ask bring other things to mind and we want to 
know what these other things are. Then we shall read over the notes 
about the interviews to interpret the findings, thinking about the atti- 
tudes which have been expressed on the many topics, the likes and dis- 
likes of respondents, their beliefs about who goes to a doctor and who 
does not, and their explanations about how TONE-U works. Also, we 
shall concern ourselves with the question of why they say things, why 
they believe the things they do, and why they keep or do not keep medi- 
cine in the home. 

Then we shall attempt personality interpretations by reading their 
stories over with an eye to the kind of things they imagine; what they 
do or don't imagine can be done about these personal concerns; how they 
feel about people; the diseases, the virtues, and the inadequacies they 
perceive; the wishes, the dreads, the catastrophes they conceive; and how 
they put them to work in the situation. In short, we shall find out 
something of what their private worlds are like. We shall match this 
with a social analysis from what we learn of their homes, jobs, ages, occu- 
pations, and their parents. With that we shall know what kind of per- 
son each one is. Finally, we shall put them into groups people who 
have the same social worlds, people who have the same personalities, 
people who buy a lot of TONE-U, people who buy none, people who 
buy some, people who buy only other remedies. From these we can 
build up composite pictures to answer the questions of the research. 

Application: 

From such a study of the personalities of users we can learn what they 
need, and what they find in TONE-U. This knowledge will establish 
the basic appeals which can be used by the advertiser. From the study 
of social classes involved we can learn what they listen to, which will be 
information to the advertiser about how to state his appeals so his audi- 
ence will hear and accept his words. 



CASES IN COLLECTION OF DATA 195 

The Questionnaire 

The following is a draft of the type of questionnaire we would pro- 
pose to use. Introductory remarks are omitted. 

1. a) Do you now have any of these in your home? Which ones? 

(Respondents will be handed a list of brands.) 

b) Have you had any of them in the past? 

(Interviewers will record comments offered in addition to yes or 
no for the above questions. ) 

c) (If the answer is yes to any of the above, the interviewer will ask 
the following questions.) 

Who made use of the preparations? 

For what purpose were they used? For what ills? Was the aim 
to prevent, to cure, to relieve? 

How often did you use it? Just once? Over a period of time for 
a given difficulty? 

How often do you use it from time to time for different difficul- 
ties? 
How effective did you find the (product name)? 

d) (If the respondent says yes only to aspirin, and no to the others, 
the interviewer will ask the following.) 

Do you keep any medicines in the house (and/or office, where 

applicable)? 

What kinds are they? That is, were they prescribed by your 

doctor? 

What kinds do you have that were not bought by prescription? 

What kinds of medicine do you give to the children (if any)? 

What do you do for minor illnesses? That is, for yourself or 

other members of the family? 

2. I would like you to think of the heaviest user of the preparations 
mentioned earlier (brand names) that you know. 

Why does (s)he use them? What for? How often? 

What is your opinion of the way (s)he uses it? Does (s)he seem to 

feel it helpful? 

What kind of person is (s)he? Could you tell me something of 

what (s)he is like? 

3. I would like you to think of someone you know who practically never 
uses any medicine. 

Why doesn't this person take any medicine? 

What kind of person is (s)he? What's (s)he like? 

Do you think (s)he really doesn't take medicine, or do you think 



196 MARKETING RESEARCH 

maybe (s)he takes real pride in being healthy and doesn't like to 
admit taking anything? 

4. What kind of people prefer to take care of themselves when they are 
sick? (If respondents find this hard to respond to spontaneously, 
interviewers may suggest: children, old people, men, women, work- 
ers, smart people, scared people, etc.) 

Do you think of some particular person who is this way? 
What is (s)he like otherwise? 

5. What kind of people prefer to go to a doctor? 

6. How much home medication do you think a mother ought to give 
her children? What kinds of measures might she take for what 
kinds of illness or complaints? 

7. What's your opinion on why aspirin is used by so many people for 
so many different things? 

8. Why do remedies like TONE-U work on different bodily troubles? 
(If the answer is scanty, the interviewer will ask something along 
this line: What kind of process goes on in the body when remedies 
like TONE-U are taken?) 

9. What kind of illness or bodily disease is worst in terms of the hard- 
ships and handicaps it leads to? 

What kind do you think is most unpleasant? 

10. Now there's just one more thing left. I'm going to show you a 
picture and I would like you to make up a story about it. Tell -what 
the people are doing, how they feel, what they are thinking about, 
-what has happened to them in the past, and what you think is going 
to happen to them in the future. People tell all kinds of stories 
about pictures like this, so just make up any story that the picture 
suggests to you. (Various pictures will be used on various persons 
with differing apparent pains or troubles. ) 

ACTION NEEDED 

The product manager was impressed by the many possibil- 
ities of this study. However, he had some doubts about the 
reactions which some members of the company might have to 
such a study, some doubts about the adequacy of the sample, 
the quality of the interviewers to be used, and the worth of 
some particular questions. Should he accept the proposal? 
Should he accept it subject to some changes and, if so, what 
changes? 



CASES IN COLLECTION OF DATA 197 

CASE 8 HOW CAN THE DATA BE OBTAINED? 

BACKGROUND 

In 1951, a study was undertaken to evaluate the reliability 
and consistency of replies of individual family members on 
sample surveys. The background of this study and the prob- 
lems it sought to answer are given by the following excerpts 
taken from the original project proposal: 

The relative influence of each of the sexes on consumer purchases is 
of considerable interest and importance to marketing, sales, and adver- 
tising people alike. About ten scattered studies have been made during 
the past thirty years in attempts to answer this question for certain com- 
modities, for certain areas, or for certain classes of people. These sur- 
veys have generally taken the form of asking one member of a household 
to state who influences most the purchases of particular commodities. 
In some cases the respondent will be asked to state who does the actual 
purchasing as well. The fact that the respondent happens to be, un- 
avoidably, a family member himself (or herself), and is therefore inti- 
mately concerned on such questions has long been recognized as a 
serious potential bias, how serious nobody knows. 

About the only attempt made to correct for this bias has been to re- 
quest the opinion of college students as to which of their parents exerts 
the dominant influence on the purchases of particular products. How- 
ever, this procedure eliminates one unknown bias (and then only to the 
extent to which the students themselves are not concerned in the reply) 
at the expense of introducing another bias; namely, that due to the stu- 
dent's lack of knowledge as to which of the parents wields the power of 
the purse on particular items. Again the probable magnitude of this 
bias has never been determined. In all the previous studies only one 
member of a family has been questioned and no attempt has been made 
to verify the respondent's replies by securing answers to the same ques- 
tions from the other members of the family. This is obviously the only 
means of ascertaining the reliability that can be placed in the replies of 
the respondents. 

It is therefore proposed to conduct a survey that would answer the fol- 
lowing two questions: 

1. What is the degree of agreement between men and women as to 
the relative influence of the sexes on consumer purchases? 

2. To what extent do children's opinions of the relative influence of 



198 MARKETING RESEARCH 

each of their parents on family purchases agree with those of their par- 
ents? 

At the same time, it is also proposed to test the reliability of various 
other types of questions, e.g., questions on the labor force, income, in the 
same manner. 

THE QUESTIONNAIRE 

The questionnaire designed for the study is reproduced on 
the following pages. It was contemplated that all adult (six- 
teen years of age and over) members of the sample families were 
to be interviewed, and that one copy of the questionnaire would 
be filled out for each family member. 

EXHIBIT 1 

Study of Sample Variability 

1 . a) Has anyone in your household bought any durable goods since last Sep- 
tember, that is, items similar to those listed on Card A? 

Yes 1 No 2 Not sure 3 

b) If yes, what was bought? (Please list items purchased below and answer 
parts c through / of this question for each item.) 

(a) (b) (c) (d) (e) 



c) Which member or members of the family made the actual purchase? 



d) Now, as we all know, the person buying an article is not always the same 
as the one who is most interested in having the purchase made. In the 
case of each of the above items, which member or members of the family 
were most instrumental in getting the purchase to be made? 



e) How was each of these purchases financed? 



/) Why was each of these purchases made at that particular time? 



2. a) Are any of you planning to buy any durable goods between now and next 
September? 
Yes 1 No 2 Notsure 3 

b) If "yes" or "not sure/' what is each of you planning to buy? 

(a) (b) (c) (d) (e) 

Item 

Member(s) 



CASES IN COLLECTION OF DATA 199 

c) Do you know when it will be bought? 



d) Do you know where it will be bought? ( Name of store if possible ) 



e) How do you plan to finance it? 



3. It is commonly known that the wife usually acts as purchasing agent for the 
family although she may be acting after consulting with other members. 
For example, the wife may buy all the linens though various towels and 
handkerchiefs may be bought to satisfy the preferences of the husband or 
of some of the children. Can you give us a rough idea of the relative influ- 
ence, in percentage terms, that each member of your family has upon the 
purchase of each of the following items? Make sure that the total of each 
row is 100 per cent. 

Others (please specify) 
Husband Wife Son Daughter Total 

Car 100% 

Living-room 
furniture 100% 

Table model 

radio 100% 

Phonograph 

records 100% 

Refrigerator 100% 

Dentifrices 100% 

Breakfast 

cereal 100% 

Linens 100% 

4. c) Do you have a family budget in the sense of either 

(1) keeping breakdowns of all expenditures by the week or month? 
Yes 1 No 2 Notsure 3 

or 

(2) planning future durables expenditures on the basis of some schedule? 
Yes 1 No 2 Notsure 3 

b) If you have a budget, which members of the family assist in preparing it? 



5. Do you feel that your family is financially better able or worse able to buy 
durable goods now than, say, a year ago? 

Better 1 Worse 2 Not sure 3 



200 MARKETING RESEARCH 

Is this because: 

a) The family income has changed over the past year? Yes No 1 

Not sure 4 If yes, how? Has your income been rising 2 

falling? 3 

b) Your liquid savings (cash plus money in bank plus U. S. bonds) are now 

different? Yes No 1 Not sure 4 If yes, how? 

Have your savings risen 2 fallen 3. 

c) Other reasons 

6. In the coming six months do you expect your family income to be higher, 
lower, or about the same as in the last six months? 

Lower 1 Higher 2 About same 3 Not sure 4 

7. Is there anything that you believe will be hard to get during the next six 
months because of our mobilization program? 

Yes 1 No 2 Not sure 3 

8. Do you expect our relations with the Communist nations to get better, 
worse, or not to change during the next six months? 

Better 1 Worse 2 Not change 3 

9. a) How many members are there in the family? 



b) How many family members are under 14 years of age? . 



10. a) What is your position in the household 

b) W T hat is your employment status? 

Housework School Looking for work 

Employed Other 

c) If employed, what do you do? 

1 1 . Please indicate your age bracket below. 

Under 20 1 20-34 2 35-49 3 50 4 

12. a) In which of the brackets shown in Card B does your income fall? . 
b) How about the income of the entire family? 



THE PROBLEM 

The collection of data for such a study poses a major prob- 
lem; because of the objective of the study, the data must be 
obtained from the individual family members in such a way 
that each family member has no knowledge of the replies of 
the other family members at the time of the interview. Obvi- 
ously, if the members of a particular family heard of the nature 
of the survey beforehand and had an opportunity to discuss 
their opinions of the subject, the replies of that family would 
be valueless. The same would be true of a questionnaire of 
an individual hearing in advance of the scope of the survey. 



CASES IN COLLECTION OF DATA 201 

The problem is, therefore, essentially one of securing the in- 
formation from the family members rtot only separately but 
seemingly, and paradoxically, simultaneously as well. Tact is 
obviously a major consideration in securing these data, for any 
irritation of sample respondents may well lead to a refusal. 
This matter is of particular importance in explaining the pur- 
pose of the survey to the sample families. For what reason can 
be given for wanting to ask the same questions of the different 
family members? 

ACTION NEEDED 

The sample design has been laid out, the sample families 
have been chosen, the questionnaire has been completed, and 
the interviewers have been trained. The question now be- 
comes one of determining how to approach the sample mem- 
bers. In other words, a complete set of instructions is needed 
describing: 

1 . How the initial contact is to be made. 

2. How the purpose of the survey is to be explained to the 
respondents. 

3. How the actual interviews are to be conducted. 



Part VI 

EDITING AND TABULATION 



Although editing and tabulation are generally considered as 
the beginning of the "winding up*' phase of a research study, 
to be done after the data have been collected, these operations 
may at times be carried out advantageously concomitantly with 
the collection of the data. This is particularly true in situations 
where the possible answers can be determined in advance as in 
the case of dichotomous * and multiple-choice questions and 
where the survey is relatively small and the staff working on it 
relatively few, so that specialization of operations is not feasible. 

A Review of Some Basic Considerations in Editing 

For the most efficient results, editing should be the respon- 
sibility of a number of individuals and not exclusively of the 
one with the title "editor." Specifically, editing concerns the 
following persons : 

1. The interviewer who should review his questionnaires for 
vague or inconsistent replies, illegible answers, and omis- 
sions. 

2. The field supervisor who should check that the interview- 
ers have followed instructions and that answers have been 
provided in the prescribed manner. 

3. The office staff who should: 

a) Verify the internal consistency of the questionnaires in 
so far as possible. 

* Questions where there are basically only two possible, mutually exclusive 
answers, e.g., yes-no, male-female. 

203 



204 MARKETING RESEARCH 

b) Rectify errors and omissions. 

c) Ensure comparability between questionnaires. 

d) Determine the classifications to be used in the subse- 
quent tabulations and analyses of the data. 

Preliminary classifications are generally set up at the time the 
questionnaire is constructed, but the final determination or 
check is best left till the data have been collected. It is a good 
idea to check the final classifications by tabulating a small ran- 
domly selected sample of the returns. Such a pretabulation 
enables corrections to be made to reduce the frequency of near- 
zero categories and of heavy concentration of replies in other 
categories. 

The Case for Preceding 

Whenever the answers possible on a questionnaire can be 
listed in advance, the advisability of preceding may well be con- 
sidered. Placing code numbers directly on the questionnaires 
can be a considerable timesaver. In the case of manual tabula- 
tion, this procedure facilitates the preparation of worksheet 
tables direct from the questionnaires, eliminating the inter- 
mediate step of coding and transcribing the replies to posting 
sheets. In the case of machine tabulation, proper arrangement 
of the questionnaire combined with preceding enables punch 
cards to be made directly from the questionnaires. 

On the other side of the ledger, preceding is not advisable if 
the answers to be classified cannot be foreseen with a high 
degree of assurance, or in the case of long, probing interviews 
where undesirable forcing of replies might be necessary in order 
to categorize them. In addition, preceding must appear unob- 
trusively on mail questionnaires, lest the respondent be con- 
fused by the profusion of numbers. 

Manual vs. Machine Tabulation 

A summary of the main considerations entering into the 
selection of a manual or machine tabulation method is provided 
on the next page. 



EDITING AND TABULATION 205 

Manual Machine 

1 . Useful in small numbers of ques- 1 . Useful* for a large number of ques- 
tionnaires with relatively few ques- tionnaires, with numerous items 
tions, lists of items to be checked, and cross classifications. 

and relatively few cross tabulations. 

2. Useful in depth interviewing in 2. Generally useful for items that can 
which a formal questionnaire is not be classified into meaningful cate- 
used. gories. 

3. Useful in pilot tabulations for plan- 3. A combination of both manual and 
ning machine tabulations. machine may be useful if detailed 

analysis, such as for brand prefer- 
ence, is needed. 

4. Time-consuming in the posting op- 4. Time-consuming in the coding and 
eration. punching stages. 

Mark Sensing. This is a mechanical method somewhat sim- 
ilar to punch card work, except that instead of punching the 
information on the card it is marked with an electrically sensi- 
tive pencil. These cards are passed through special tabulating 
machines which pick up the markings electrically and tabulate 
the results. This method possesses the advantage of elim- 
inating the punching operation, but can be used only where 
clear-cut answers are involved, e.g., yes no and multiple-choice 
questions. Among other uses, it is a popular device for mark- 
ing examinations composed of questions of these types. 

Keysort Tabulation. This is a semimechanical method 
based on the use of cards with circular holes in the margins. 
These cards can be punched in such a way that when a long 
needle is inserted, the punched cards remain on the needles. 
Counting must be done by hand. 

Findex Method. This is based on the use of cards with holes 
already punched in them. The information to be recorded is 
punched on the card by connecting two adjacent holes. A 
special filing drawer is used to hold the cards; when a needle 
or rod is thrust through the front of the file drawer, the holes 
in the cards that have been slotted will be elongated so that 
when the drawer is turned over, all the cards punched for a 
particular hole will drop down into position. The cards are 
then locked in this position, the drawer is turned over to its 
original position, and the cards are then counted. 



206 MARKETING RESEARCH 

Keysort and Findex methods are mainly useful in studies 
based on several hundred cases where the information obtained 
for each case is not too detailed or comprehensive. 

The Cases in This Part 

The five cases in this Part provide practice materials in all 
three of the aspects of the research operation reviewed on the 
preceding pagesediting, coding, and tabulation. Here the 
emphasis is, if anything, more on detail work than on general 
policy considerations, on the actual devising of codes, methods 
of tabulation, and tabular layouts, because it is only after doing 
a considerable amount of work of this type that the beginning 
researcher becomes aware of the various problems arising at this 
stage of the research operation. The first two cases deal with 
editing and coding. The first case deals with the editing of 
responses and devising a coding system for the replies to one 
part of a frozen food questionnaire. The second case involves 
the preceding of a questionnaire for a bacon survey containing 
questions representing a fairly broad range of coding problems. 

Tabulation is the subject of the next three cases. Case 3 in- 
volves the preparation of forms for manual tabulation of a 
jewelry survey where time is the main consideration. 

Case 4 poses the frequently encountered problem of choosing 
a method of tabulation, the subject here being a rather lengthy 
insurance questionnaire. The question of editing the question- 
naire is another part of this case. 

The last case carries the research operation a bit closer to 
completion, involving the specification of cross-classification 
tabulations and the preparation of tentative summary tables 
for a department store survey. The student is asked not only 
to list the tables but to lay out each in detail. 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 

New York: McGraw-Hill Book Co., Inc., 1937. Chapter 14 devotes the 

entire discussion to machine tabulation methods. 
BENJAMIN, K. "Problems of Multiple-Punching with Hollerith Machines." 

Journal of the American Statistical Association, XLII (March, 1947), pp. 46- 



EDITING AND TABULATION 207 

71. A technical knowledge of punch card operations will be useful in under- 
standing the problems described and their solutions. 

BOYAJY, J. S., et d. "Tabulation Planning and * Tabulation Techniques/' 
Journal of Marketing, XIII (January, 1949), pp. 330-55. A summary of the 
steps that must be considered in planning tabulations; some questionnaire 
problems are also discussed. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951, pp. 188-96. A very brief statement on editing and tabulation 
procedures. 

BROWN, L. O. Marketing and Distribution Research. New York: The 
Ronald Press Co., 1949. Chapter 23 contains a summary of the most 
frequently used methods of editing and coding. 

EDWARDS, T. I. "The Coding and Tabulations of Medical and Research Data 
for Statistical Analysis." Public Health Reports, LVII (1942), pp. 7-20. 
An example of the way in which written information as well as punched data 
can be incorporated on the same punch card. 

GREENBERG, A. "A Method for Coding Questionnaires in Market Surveys/' 
Journal of Marketing, XIV (October, 1949), pp. 456-58. The methods by 
which multiple choices can be coded are explained and illustrated. 

HALL, R. O. Handbook of Tabular Presentation. New York: The Ronald 
Press Co., 1946. This is a standard reference work on the rules for prepara- 
tion of all forms of tables. 

HEIDINGSFIELD, M. S., and A. B. BLANKENSHIP. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Editing and tabulation methods 
are summarized in Chapter 10. Some helpful hints are given for the prepara- 
tion of tables which will be useful to beginning students of marketing re- 
search. 

LORIE, [ . H., and H. V. ROBERTS. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. Chapter 22 discusses problems 
and methods of preceding, editing, final coding, and tabulation. 

LUCK, D. J., and H. G. WALES. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. Chapter 12 contains a detailed treatment of editing and 
tabulation methods. 

PARTEN, M. B. Surveys, Polls, and Samples. New York: Harper & Bros., 1950. 
Chapters 13 and 14 contain a treatment of editing and coding. 



Part VI Cases 



CASE I EDITING RESPONSES 



BACKGROUND 

The rapid expansion of the frozen food industry in the 'for- 
ties had caused severe problems of quality control. Many pur- 
chasers of lesser known brands had been dissatisfied with the 
poor quality of products received. Processors with well-known 
brands believed that this problem had been greatly alleviated 
both by improved techniques and experience and by the with- 
drawal from the field of many small companies. Nevertheless, 
the problem seemed sufficiently important to be included 
among other topics in a personal interview survey on frozen 
foods being planned. It provided a possible explanation for 
the limited use of frozen foods, the brand preferences of con- 
sumers, and consumers' attitudes on price. The informal in- 
vestigation, moreover, had shown that many women still 
remembered these past disappointments. 

For the questionnaire constructed for testing in the field, no 
satisfactory classification of complaints by consumers had been 
found. For testing purposes, therefore, it had been decided to 
ask an open-end, exploratory question. The question used was 
worded as follows: 

(A vegetables 
6. Have any frozen (B fruits ever spoiled? 

ANS. A. VEG. YES NO NO ANSWER 

B. FR. YES NO NO ANSWER 

IF YES, ASK: What was the cause of spoilage? 



This question followed one on methods of storage used in the 
home. Interviewers were expected to ask about either vege- 

208 



CASES IN EDITING AND TABULATION 209 

tables or fruits or both, depending on which the respondent 
already had indicated that she purchased. * 

RESPONSES SECURED 

A. For those indicating vegetable spoilage : 

1. One package of corn was "soggy." "I'm not exactly sure but I 
think it must have been poor quality because I thawed it just like 
other vegetables." 

2. Poor handling by the maid. 

3. Once spoiled after three days when refrigerator broke. Won't 
spoil "when kept properly." 

4. Got asparagus twice that was "gritty." "It was so bad we 
wouldn't eat it." 

5. Has lost several packages at different times. Not sure whether 
they thawed before she put them in the refrigerator. 

6. Tried broccoli once. Forgets which brand. Was "rotten." 
Her grocer gave her her money back. 

7. Just last week had some mixed vegetables that didn't "taste 
right." Her family refused to eat them. 

8. "You have to be awful careful not to let them thaw and then 
freeze again." Uses hers right after buying. 

9. Doesn't know why but just doesn't like the taste of (brand) 
green beans. Won't buy again. 

10. Cube compartment was full and a package thawed out. 

11. Says threw lots away when had to buy "strange kinds." Buys 
only (brand) now and has no trouble. 

12. Didn't like the looks of wax beans once. "I said, Into the gar- 
bage with them.' " 

1 3. Not really spoiled but didn't seem "worth the price." 

B. For those indicating fruit spoilage : 

1. Thinks they were spoiled before she bought them. Probably 
"low grade" fruit. 

2. Peaches often get discolored when they thaw out. 

3. Reluctant to say directly that anything had "spoiled," but said 
she had to throw out frozen strawberries because they "did not 
look edible" after thawing. "They were shriveled up and wa- 
tery." 

4. One package of grapefruit segments turned watery. This re- 
sulted in no more purchases of that fruit. 



210 MARKETING RESEARCH 

5. One brand, she forgets which, of strawberries "looked simply 
terrible." Discarded them. 

6. Some peaches looked fine but "tasted like they had acid in 
them." 

C. For those indicating both vegetable and fruit spoilage: 

1. Lima beans were spoiled in store and not noticed 'til home; 
peaches too salty and made them taste very poor. 

2. Thawed out before they were put in freezer cabinet as they were 
purchased downtown and lady didn't get home as soon as she 
expected to. 

3. Complains that frozen foods not always clean. Can see "little 
bits of all kinds of things" in them. 

4. Says that peaches, especially, sometimes taste sour. A package 
of peas she left in too long was no good. 

5. Asks if I don't think frozen spinach "tastes funny" sometimes. 
Had some "funny colored" peaches she refused to serve her 
family. 

6. Wonders what "they put in" frozen foods. Has to cook them so 
long to taste right. Grapefruit once had some "green" in it and 
looked "poisonous." 

7. Corn was "all water" once. Likes (brand) strawberries but 
wouldn't buy other kinds "any more." 

8. Learned you can't keep any frozen foods too long unless you get 
them "right by the coils" after coming from store. 

9. Only lost one "thawed out" package of peas once. Thinks 
most frozen fruits have a peculiar taste. 

10. Fruits tend to "come apart." Had lima beans that were "full 
of spots." 

These were the only "complaints" registered by the 143 re- 
spondents. Approximately 35 per cent reported that they did 
not use frozen foods. Many more families purchased vege- 
tables than fruits. In nearly half of all families frozen foods 
were served the same day that they were purchased. Only a 
small percentage kept them on hand more than two days. 
Among comments of those not reporting spoilage were these: 
"Always keep food frozen and in cube compartment"; "It you 
handle them properly they won't ever spoil"; "I hestitate to keep 
fruits any longer than a day because they start to run if I do"; 
"I can keep them for a week without spoiling." Interviews 



CASES IN EDITING AND TABULATION 211 

were conducted among widely scattered neighborhoods, and 
no formal sample design had been followed. 

ACTION NEEDED 

1. What sort of system of headings or subheadings might be 
devised as a basis for classifying these answers? How should 
each answer have been classified? 

2. Based on the evidence obtained, should the question on 
spoilage be eliminated? Should it be revised, and, if so, 
how? 



CASE 2 PREPARING AND PRECODING 
A QUESTIONNAIRE 

THE SURVEY 

A survey on the consumption habits of consumers with regard 
to packaged bacon was planned for a medium-sized city in 1952. 
After due deliberation among the staff members of the research 
organization planning the study, the following list of questions 
to be included in the questionnaire was prepared: 

EXHIBIT 1 

1 . a) Do you use bacon? Yes No Not Sure 

b) If yes, is it packaged bacon or slab bacon or both? 

Packaged Slab Both N.S 

2. If you were buying a package of bacon right now, would you look for any 
particular brand? Yes No N.S 

If so, which one (s)? 

Armour Oscar Mayer Wilson 

Cudahy Swift Other . 

3. What (other) brands can you name? None N.S 

Armour Oscar Mayer Wilson 

Cudahy Swift Other. 

4. Which of these brands have you heard of? (Show card) 

Armour Swift Reese _ 

Cudahy Wilson None . 

Oscar Mayer Smith 

5. How often do you use packaged bacon? 

Every day Less than once a week 

Every other day Not sure 

Twice a week 

Once a week 



212 MARKETING RESEARCH 

6. At what meals do you use packaged bacon? 

Breakfast Noon Evening N.S. . 



Do you use packaged bacon by itself, with another type of meat, as season- 
ing for vegetables, or in more than one of these ways? 
By itself With meat With veg N.S 

7. Do you usually buy packaged bacon from a meat market or combination 
store? 

Meat market Combination store Both Other 

N.S 

8. Do you prefer any specific brand? Yes No N.S 

If so, which one? 

Armour Oscar Mayer Wilson 

Cudahy Swift Other 

9. Why do you prefer this brand? . 



10. (1) If the store that you go to is out of stock of bacon, what do 

you do: (a) ask for another brand (b) accept a substitute brand only 

after looking in one or two other stores for bacon, or (c) wait 

until bacon is in stock again? (a) (b) (c) 

N.S 

(2) (If a OT b) If so, which brands? 

Armour Oscar Mayer Wilson 

Cudahy Swift Other 

N.S 

1 1 . What qualities do you like your bacon to have? 

12. How often do you buy fresh meat? 

Every day Other 

Every other day Don't buy 

Twice a week Not sure 

Once a week 

13. Family size 

14. Number of children 

1 5. Occupation of head of family: 

Professional Unskilled . 



Skilled White Collar . 



16. Age of housewife: Under 20 20-34 35-49 50+- 

17. Income level: 

Under $1,499 $4,200-6,599 . 



$1,500-2,599 $6,600-10,399_ 



$2,600-4,199 $10,400 and over. 

18. Address 

19. Interviewer 

20. Date 



The questions in this list are not necessarily in the most 
logical order, as they were noted primarily in the order in which 
they were suggested. 

The nature of the information desired was such that it was 
estimated that approximately six hundred completed inter- 



CASES IN EDITING AND TABULATION 21? 

views would be required. Because of this large number of in- 
terviews, a mechanical means of tabulation was to be used, the 
data being transcribed to punch cards and then tabulated by 
machine. To save time and expense, the questionnaire was to 
be precoded. For analytical purposes, it was considered highly 
desirable if the answer to such questions as 2, 3, 4, and 8 could 
be designated by a single code number, so that a glance at the 
code number for any particular question would indicate which 
brands had been named. In this connection, it should be noted 
that slab bacon is not usually sold under any particular brand 
name. 

ACTION NEEDED 

1. Prepare a working questionnaire from the questions in the 
above list, putting them into some logical order. 

2. Precede the questionnaire, showing all codes directly on the 
questionnaire form, making sure that allowance has been 
made for all possible answers to each question. 



CASE 3 PREPARATION OF FORMS FOR 
MANUAL TABULATION 

BACKGROUND 

In 1948, a study of the operating results of retail jewelry stores 
was conducted by the Business Research Bureau of a leading 
university. The purpose of this investigation was to provide 
a standard by which a businessman could compare his operating 
experience and methods with those of similar enterprises in his 
field. Because data of this type had not been presented for 
jewelry stores within the past twenty years, it was felt that a 
retail jeweler would be keenly interested in a study which would 
allow him to compare his own operating results with those of 
other jewelry stores of comparable size. All information sup- 
plied was to be entirely confidential. 

The plan was instituted in 1948 with the expectation that it 
would be continued each year. Questionnaires (one of which 
is reproduced on page 214) were to be mailed to cooperating 



214 MARKETING RESEARCH 

members of a State Retail Jewelers' Association about the 1 5th 
of January each year with a request that the statistics be in the 
hands of the research bureau by February 10 of the same year. 
The reason for the early date of returning the questionnaire 
was to make it possible to give a preliminary report on the re- 
sults to the annual convention of the Jewelers' Association 
about February 20. The detailed report to the association 
members was to be issued in June of each year. 

EXHIBIT 1 

CONFIDENTIAL CODE NO 

Survey of Retail Jewelers 

For detailed instructions and meaning of terms see attached paper. If you 
have more than one store, please enter figures for each on a separate page. 

Enter figures (unless otherwise indicated) for full year. If you operate on a 
fiscal year, rather than a calendar year ending December 31, please give the clos- 
ing date of your fiscal year here: . 

OPERATING RESULTS, 1947 and 1948: 1947 1948 

1. Sales (including sales taxes) $ $ 

2. State O. E. Tax 

3. Federal Excise Taxes 

4. Total Sales Taxes (items 2 plus 3) . . $ $ 

5. Sales, excluding sales taxes (item 1 

minus 4 ) 

6. Net cost of merchandise sold 



7. Gross margin (item 5 minus 6) $ $_ 

8. Total expenses . . ... _ 

9. Income or loss, before income taxes 

(7 minus 8) $ $_ 



EXPENSE BREAKDOWN: 1947 1948 

10. Salaries of owners or managers (see note 

below) $ $ 

1 1 . Wages and salaries, other 

12. Advertising 

13. Rent (if building owner, write "owned" 

AND fill in item 14.) 

14. Building maintenance, depreciation, in- 

surance 

15. Heat, light, water and power 

16. Credit (bad debt) losses 

17. Other expenses 

18. Total expenses (item 8 in "Operating 

Results") $ $ 



CASES IN EDITING AND TABULATION 215 

(Note on salaries: How many owners and/or managers receive salaries?) 
If any owners work in store, but draw no salary, how many? 



INVENTORIES: 

As of December 31, 1946 (or end of nearest fiscal year) $_ 

As of December 31, 1947 " " " " " " $_ 

As of December 31, 1948 " " " " " " $_ 



-/o 

Of 



REPAIR AND OPTICAL WORK: 
What per cent of your total sales is repair work (including engraving)?. 

What per cent of your total sales (item 1 ) is optical work? 

Are these amounts estimates? (yes or no) 

ADVERTISING: 
Give percentage of your advertising expense for these media in 1948: 

Is your breakdown of advertising expense estimated? (yes or no) 

Newspapers % 

Radio % 

Direct mail % 

* Other advertising % 

Total advertising expense 1 00 % 

CREDIT SALES: Give the per cent of your total 1948 sales made in the follow- 
ing ways. Is this breakdown of sales an estimate? (yes or no) 

Cash % 

Charge accounts % 

Installment plan % 

Total Sales 100% 

MERCHANDISE LINES: Please check merchandise lines listed below which 
you earned in 1948, and if possible, give the per cent of your merchandise 
sales which is in these lines. Add other lines you carry which are not listed. 

Check here 
if carried: 

Precious stones and rings % 

Other jewelry (including costume jewelry) % 

Clocks and watches % 

Silverware % 

China and glassware % 

Other goods (describe) % 



* What other advertising media did you use? . 



216 MARKETING RESEARCH 

THE PROBLEM 
The tabular information needed for the project included: 

average operating statement for jewelry stores 

number of stores reporting by size of city and volume of sales 

average operating statement by volume of sales 

average operating statement for the 25 per cent most profitable 

stores reporting 

merchandise turnover by size of store and size of city 
inventory and cost of goods sold by sales volume and size of city 
sales percentages for optical work 
advertising media used by size of store and size of city 
credit sales by size of store and size of city 
percentage of sales that are cash, charge account, and installment 
rent expense by size of store and size of city 
owners' and managers' compensation as a percentage of sales 
number of employees by sales volume 
store hours by size of city 

Manual tabulation was to be used. However, because of the 
time element involved, it was necessary to develop forms for 
tabulation that would permit accurate final results to be ob- 
tained as quickly as possible. 

DATA AVAILABLE 

H. G. WALES and R. FERBER. Marketing Research Selected Literature. 

Dubuque: Wm. C. Brown Co., 1952, Part V. 
K. PHELPS. "A Flexible Method of Hand Tabulation/' Journal of Marketing, 

III (January, 1939), pp. 265-68. 

ACTION NEEDED 

1. What would seem to be the best form for expediting the 
tabulations? Would it be desirable to set up forms per- 
mitting the data to be tabulated as the returns come in? 
If yes, how? 

2. Prepare directions for tabulating the data on these forms. 

3. Devise a system of easily made checks to guarantee accuracy 
in the tabulations, including some means of ready reference 
back to the original returns. 



CASES IN EDITING AND TABULATION 217 

CASE 4 SELECTING A METHOD OF 
TABULATION 

BACKGROUND 

In 1949, the representatives of several life insurance com- 
panies indicated an interest in having a study made on the ex- 
tent to which life insurance is used to cover the financial losses 
that result from the death of key personnel in a business. For 
example, when a company executive dies, expense is incurred 
in replacing the man who has undoubtedly developed special 
skills in handling his work. These costs arise from promoting 
and training another man to take the place of the one who has 
died. Hence, life insurance has been used by some businesses 
to compensate them for losses arising from the death of key 
executives. 

THE PROBLEM 

A research organization was asked to investigate the extent 
to which business life insurance is used in practice. A plan was 
outlined for the work, questionnaires were prepared, interviews 
completed and the data were ready for editing and tabulation. 
The problem then arose of selecting a method of tabulation, 
a problem to which relatively little thought had been given in 
the earlier stages of the project. 

THE QUESTIONNAIRE 

A rather lengthy questionnaire was used in the study. It is 
reproduced in full below. 

EXHIBIT 1 

A CONFIDENTIAL QUESTIONNAIRE TO DETERMINE THE EXTENT OF THE 
USE OF LIFE INSURANCE BY BUSINESS IN SELECTED AREAS 

A. Business data 

1. Operating name of business 

2. Location of principal office 

3. Number of employees 



218 MARKETING RESEARCH 

4. Type of business (check one) ( ) Manufacturing ( ) Wholesaling 
( ) Retailing ( ) Service 

5. Form of business unit (check one) ( ) Sole proprietorship 
( ) Partnership ( ) Corporation ( ) Closed corporation 

6. Description of business 

7. Volume of business (Gross sales) 

B, For sole proprietorships only (Business interest liquidation) 

1. Have arrangements been made for the continuation of the business after 
the owner's death? ( ) Yes ( ) No 

2. (If the answer to question 1 is Yes ) What arrangements have been made? 
( ) Owner's wife will operate the business 

( ) Owner's son will operate the business 

( ) Other relative of the owner will operate the business 

( ) Owner has a definite agreement with a particular person or group of 

persons to purchase the business upon death of the owner at a fair 

and equitable price 
( ) Other arrangements 

3. If there is a definite agreement with a particular person or group of per- 
sons to buy the business at owner's death, is it reinforced by the use of 
life insurance on the owner's life paid for by this person or group of per- 
sons to finance the purchase of the deceased interest? 

( )Yes ( )No 

a) Who drew up the agreement? ( ) Attorney ( ) Life Insurance 
Agent 

b) How much life insurance is in force for this purpose? 

c) What plan is used? 

d) How was the amount arrived at? 

( ) Value of the business agreed upon in the buy and sell agreement 

( ) Estimated value of business 

( ) A percentage of the value of the business to be used as down 

payment 

( ) Arbitrary amount 
( ) Other 

e) Do you feel that the plan now used adequately meets the needs? 
( ) Yes ( ) No ( ) Uncertain 

/) How did you first become interested in the plan you now use? 
( ) Approached by Life Insurance Agent 

( ) Approached by Life Insurance Agent and referred to Home Of- 
fice specialist 

( ) Formulated the plan without motivation outside of the business 
( ) Received suggestion from accountant 
( ) Received suggestion from attorney 
( ) Received suggestion from general insurance salesman 
( ) Other 

4. If there is no plan financed by life insurance involving the sale of the 
business in case of the death of the owner, please complete the following: 



CASES IN EDITING AND TABULATION 219 

tf) Have you ever had explained the use of life insurance plans to liquidate 
the business interest in case of the owner's death? ( ) Yes ( ) No 

b) (If the above answer is Yes) What are the reasons for not entering 
into such a plan? 

c) (If the answer to part (a) is No) Do you think there is a place for life 
insurance in your business? ( ) Yes ( ) No ( ) Undecided 

C. For partnerships only (Business interest liquidation) 

1. Have arrangements been made for the continuation of the business after 
the death of one of the partners? ( ) Yes ( ) No 

2. (If the answer is Yes) What arrangements have been made? 
( ) Take the heirs in as partners 

( ) Take the buyers of the heirs' interest as partners 

( ) Sell out to the heirs and have them continue the business 

( ) Purchase the interest of the heirs 

( ) Surviving partners will inherit the business 

3. If the plan is to have the surviving partner purchase the interest of the 
heirs in case of death of one of the partners, is there in force a "buy and 
sell agreement" to be financed by insurance on the lives of each partner? 
( )Yes ( )No 

a) Who drew up the agreement: ( ) Attorney ( ) Life Insurance 
Agent 

b) How much life insurance is in force for this purpose? 

c) What plan is used? Type of insurance? 
Who pays premium? Beneficiary? 

d) How was the amount arrived at? 

( ) Value of business interest as agreed upon in the buy and sell 

agreement 

( ) Estimated value of business interest 
( ) A percentage of the value of the partnership interest to be used 

as down payment 
( ) Arbitrary 
( ) Other 

e) Do you feel that the plan now used adequately meets the need? 
( )Yes ( )No ( ) Undecided 

/) How did you first become interested in the plan? 
( ) Approached by Life Insurance Agent 

( ) Approached by Life Insurance Agent and referred to Home Of- 
fice specialist 

( ) Formulated the plan without motivation outside of the business 
( ) Received suggestion from accountant 
( ) Received suggestion from attorney 
( ) Received suggestion from general insurance salesman 
( ) Other 

4. If there is no plan financed by life insurance involving the sale of the part- 
nership interest in case of the death of one of the partners, please complete 
the following: 



220 MARKETING RESEARCH 

a) Have you ever had explained the use of a life insurance plan to liqui- 
date the interest of a partner in case of death? ( ) Yes ( ) No 

b) (If the answer is Yes) What are the reasons for not entering into such 
a plan? 

c) (If the answer to part (a) is No) Do you think there is a place for life 
insurance in your business? ( ) Yes ( ) No ( ) Undecided 

D. For closed corporations only (Business interest liquidation) 

1. Have arrangements been made for the continuation of the business after 
the death of one of the stockholders? ( ) Yes ( ) No 

a) Who drew up the agreement? ( ) Attorney ( ) Insurance Agent 

2. (If the answer is Yes) What arrangements have been made? 

( ) Surviving active stockholders will inherit the deceased's interest 

( ) Accept heirs of the deceased as active stockholders 

( ) Allow the heirs to draw dividends but to take no active part in the 

management 

( ) Allow the heirs to sell their interest to outsiders 
( ) An agreement whereby the heirs sell their interest to the surviving 

stockholders 
( ) Other 

3. If the plan is to have the surviving stockholders purchase the interest of 
the heirs in case of death of one of the stockholders, is there in force a 
"buy and sell agreement" to be financed by insurance on the lives of each 
stockholder? ( ) Yes ( ) No 

a) How much life insurance is in force for this purpose? 

b) What plan is used? Type of insurance? 
Who pays premiums? Beneficiary? 

c) How was the amount arrived at? 

( ) Value of business interest as agreed upon in the buy and sell agree- 
ment 

( ) Estimated value of business interest 
( ) A percentage of the value of the corporation interest to be used 

as down payment 
) Arbitrary 
) Other 

d) Do you feel that the plan now used adequately meets the needs? 
( )Ycs ( )No ( ) Undecided 

e) How did you first become interested in the plan? 
( ) Approached by Life Insurance Agent 

( ) Approached by Life Insurance Agent and referred to Home Of- 
fice specialist 

( ) Formulated the plan without motivation outside of the business 

( ) Received suggestion from accountant 

( ) Received suggestion from attorney 

( ) Received suggestion from general insurance salesman 

( ) Other 

4. If there is no plan financed by life insurance involving the sale of the 



CASES IN EDITING AND TABULATION 221 

stockholder interest in case of the death of one of the stockholders, please 
complete the following: 

a) Have you ever had explained the use of a life insurance plan to liqui- 
date the interest of a stockholder in case of death? ( ) Yes ( ) No 

b) (If the answer is Yes) What are the reasons for not entering into such 
a plan? 

c) (If the answer to part (a) is No) Do you think there is a place for life 
insurance in your business? ( ) Yes ( ) No ( ) Undecided 

E. For all business units 

1 . Does the business carry insurance on the lives of the officers of the com- 
pany? ( )Yes ( )No 

a) Which ones: ( ) President ( ) Vice President ( ) Secretary 
( ) Treasurer ( ) General Manager ( ) Other 

2. Does the business carry insurance on the lives of any of the employees who 
would be difficult to replace except at a financial loss? ( ) Yes ( ) No 
a) Type of employee 

3. (If the answer to questions 1 or 2 is Yes) 

a) What were the principal motives leading to the purchase of this in- 
surance? 

( ) Tax advantages 
( ) Protection needed by the business 
( ) Retirement plan for officers 
( ) Other 

b) How many policies do you have and what are their amounts? Plan? 
Policies Amounts Plan 

c) How did you arrive at these amounts? 
( ) A percentage of salary paid 

( ) An estimate of the real contribution to the profits of the business 

by the insured employee 
( ) An arbitrary amount 
( ) Other 

d) Do you feel that your plan adequately meets your needs? ( ) Yes 
( )No. ( ) Doubt 

e) How did you first become interested in the plan which you now have 
in force? 

( ) Approached by Life Insurance Agent 

( ) Approached by Life Insurance Agent and referred to Home Of- 
fice specialist 
( ) Formulated the plan without motivation outside of the business 

) Received suggestion from accountant 

) Received suggestion from attorney 

) Received suggestion from general insurance salesman 

) Other 

4. (If the answer to questions 1 and 2 are both No) 

a) Have you ever been offered an explanation of the use of life insurance 
to protect business values? ( )Yes ( ) No 



222 MARKETING RESEARCH 

b) (If the answer to the above question is Yes) What is your reason for 
not covering the lives of the key men? 

c) (If the answer to question (a) is No) Do you think there is a place for 
life insurance in your business? ( ) Yes ( ) No ( ) Undecided 

F. Comments 



OTHER CONSIDERATIONS 

About five hundred and fifty interviews were obtained with 
this questionnaire. The answers to some of the questions were 
almost entirely of a free response type. Most of the responses, 
however, were definite enough to permit classification by dis- 
tinct groups. 

Only two persons were available for three months' service to 
do the tabulating work. Both were relatively inexperienced at 
manual tabulation work but in spite of this, the director of the 
research project wanted to keep these people busy, so he sug- 
gested that manual tabulation be used. It would cost approx- 
imately $425.00 per month to keep these two workers on the 
payroll for parttime work on this and other projects. 

A considerable number of cross-classifications would have 
to be derived from the data obtained in answer to each question. 
The task of tabulation also would be made more arduous by 
the substantial number of subclassifications that would be 
necessary in the initial tabulation work. 

The schedule called for the tabulation work to begin in Sep- 
tember and be completed by December 1. At each stage of 
the work, careful analysis of the tabular information was to be 
made in order to ascertain if significant results were being 
brought to light, and dummy tables were prepared to guide the 
persons who were immediately responsible for the tabulation 
work. 

ACTION NEEDED 

1. A selection of some method of tabulating the data gathered 
with this questionnaire had to be made. What should that 
method bemechanical, manual, or semimechanical (Key- 
sort, Findex, etc.)? Why? 



CASES IN EDITING AND TABULATION 223 

2. What is the nature of the editing work needed to prepare 
this questionnaire for tabulation by the chosen method? 

3. Prepare a set of instructions for tabulating the data from 
this questionnaire. 



CASE 5 CROSS-CLASSIFICATION 
TABULATIONS 

BACKGROUND 

The Langdale Department Store had completed gathering 
data on a customer survey directed at discovering why so many 
credit accounts of their customers were small. (See Part III, 
Case 5, for details on hypotheses and types of data gathered.) 

Personal interviews made with customers living within the 
city had produced slightly under five hundred usable returns. 
A mail questionnaire to customers outside the city had pro- 
duced slightly over three hundred usable returns. Those re- 
turns had been edited, coded, and the data entered by the store 
through manual tabulation on so-called tally or working sheets 
(illustrated on pp. 226-28). In addition, data from store 
records, principally dollar expenditures, made against each 
credit account during the past year, had been recorded. 

THE PROBLEM 

What summary tables should be drawn from the data com- 
piled on the tally sheets? Numerous factors were involved in 
resolving this question. 

The problem, of course, had been anticipated. During the 
planning stage, attempts had been made to visualize the sort 
of tables that would be needed to test the formulated hypoth- 
eses. Descriptions of about thirty tables had been prepared 
before the final questionnaire form was drawn. For a number 
of the more important tables, statistical findings had been anti- 
cipated and tentative figures entered in the tables. This pro- 
cedure provided a test of the size of minor breakdowns to be 
expected and of the usefulness of the data-gathering forms for 
producing the needed data. 



224 MARKETING RESEARCH 

Plans had called for a sample of a thousand cases. Because 
returns were only eight hundred, some loss in minor universes 
size and in cross-classification opportunities resulted. 

Consideration of the kind of summary tables desired also had 
entered into the design of the tally sheets. The decision had 
teen made that the characteristics appearing most frequently 
in the cross-classifications should be customer income and size 
of customer accounts. A procedure had been adopted, there- 
fore, in advance of tabulation to simplify the construction of 
summary tables, including such cross-classifications. This was 
to be accomplished by sorting questionnaires into groups of 
Upper, Middle, and Lower incomes and into subgroups of 
Large, Medium, and Small accounts, and then by recording 
the responses of each subgroup on a separate tally sheet. (How 
this simplified the work of making summary tables will be 
clearer after inspection of the illustrations given later.) 

The classification of data as recorded on questionnaires or 
on the tally sheets also was a factor. The classifications did not 
determine what summary tables could be made, but they did 
restrict the breakdowns of data which could be made without 
direct reference back to the original questionnaires. No matter 
what preplanning of tables had been done or the means to be 
employed for drawing off summary tables, later analysis could, 
of course, be expected to reveal the desirability of tables not pre- 
viously anticipated. 

Another factor influencing decisions was the desirability of 
simple, one-dimensional tables, or straight runs, as against two- 
dimensional (cross-classification) tables, which are almost es- 
sential for correlation analysis, and as against more complex 
tables, those concerned with more than two dimensions. 

A last factor involved in determining what summary tables 
to construct was the relative preferences for "storehouse" tables 
{convenient summaries of many data but not necessarily well 
adapted to analysis), for working tables (useful relationships), 
and for presentation tables (the sort that might appear in a final 
report presenting the results of the study). 



CASES IN EDITING AND TABULATION 225 

DATA AVAILABLE 

The basic plan of the tally sheet was to reproduce the ques- 
tionnaire vertically down the left side of a large sheet of ruled 
accounting paper, making provision under each question for 
all classifications of data desired. Each questionnaire, after 
editing and coding, was then entered on this tally sheet on a 
separate vertical column. This method is illustrated on pp. 
226-28, using for this purpose and this entire case the ques- 
tionnaire as proposed after the pretest described in Part III, 
Case 5, pp. 91-100. The questionnaire used is shown on pp. 
98-100. 

The tally sheet illustrated on pp. 226-28 was a part of the 
master counter sheet covering all the respondents (60) whose 
family income was in the "Upper" group and whose accounts 
at the Langdale Store the previous year had been "Large." 
Similar sheets assembled such other groups as Upper Income, 
Medium Accounts, and Lower Income, Small Accounts in a 
similar fashion. Each would have the same vertical columns 
on the left. Each questionnaire had a code, or sample, number, 
as shown by the column headings on pp. 226-28, which was 
keyed to a list containing respondent names and addresses, 
thereby permitting checks to be made on the tabulations and 
reference back to the original data, should this be necessary. 

A question such as No. 4, it will be noted, provides no tab- 
ulating problem. The answers Yes, No, and D.K. (D.K. stand- 
ing for Don't Know or Unknown) cover all possible answers 
to the question asked. In contrast, a question such as No. 1 
can be troublesome. Answers might be classified for each year 
separately, although for most purposes the detail would be 
meaningless as well as extremely complex and the number of 
cases in each class would be ridiculously small. On the other 
hand, all answers might be put into only three categories, such 
as 5 years or less, more than 5 years, and inevitably, D.K. 

If the researcher employed broad breakdowns, as illustrated 
above, and in analyzing the data discovered a high correlation 
between size of account and length of residence, he probably 
would want further breakdowns, assuming the group was large 



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CASES IN EDITING AND TABULATION 



229 



enough to permit such an operation. To obtain these break- 
downs, however, would require a tabulation separate from the 
original questionnaires. Should the real answer lie in the realm 
of fractions of a year, then it would be too late; the question- 
naire makes no provision for such breakdowns. (It is the work 
of the preliminary investigations, planning, and pretesting to 
avoid such errors.) In general, it is best, in tabulating, to pro- 
vide for more numerous breakdowns than seem necessary at 
first; for it is easy to merge classifications, but costly to split 
them after original tabulations are completed. 

From the classifications shown above, the types of summary 
tables shown on pp. 229-30 might be constructed. 

Summary Table A is of the one-dimension, or straight-run,, 
type, Its limited usefulness for analysis is apparent; and it will 
be noted that such one-dimensional data constantly reappear 
in the "Total" columns and rows of all summary tables. For 
these reasons, such summary tables often are omitted in analyt- 
ical work, although the facts may be important in presenting 
results and these tables may appear in the final published report. 

Summary Table B is the correlation, or two-dimen$ion y type 

EXHIBIT 2. ILLUSTRATIONS OF SUMMARY TABLES 
SUMMARY TABLE A SIZE OF CUSTOMER ACCOUNTS 



Size 



Large 

Medium 

Small 

Total 



Number of Accounts 



200 
264 
336 

800 



SUMMARY TABLE B SIZE OF CUSTOMER ACCOUNTS, BY INCOME GROUPS 



Size of 
accounts 


Income Groups 


Upper 


Middle 


Lower 


Don't Know 


Total 


Large 
Medium 
Small 

Total 


84 
95 
111 


89 
143 
143 


23 
16 
46 


4 
10 
36 


200 
264 
336 


290 


375 


85 


SO 


800 



230 MARKETING RESEARCH 

SUMMARY TABLE C SIZE OF CUSTOMER ACCOUNTS, BY INCOME 
GROUPS AND AGE GROUPS 



Income and 
Age Groups 


Size of Account 


Large 


Medium 


Small 


Total 


Upper Income 










44 or younger 














4 5 or older 














Age unknown 


__ 








... 


All 


84 


95 


111 


290 


Middle Income 










44 or younger 














45 or older 














Age unknown 














All 


89 


143 


143 


375 


Lower Income 










44 or younger 














45 or older 














Age unknown 














All 


23 


16 


46 


85 


Income Unknown 










44 or younger 














45 or older 














Age unknown 














All 


4 


10 


36 


50 


All Incomes 










44 or younger 














4 5 or older 














Age unknown 














Grand Total 


200 


264 


336 


800 



of table, being extremely useful in revealing relationships and 
the most common of all types of analytical tables. The table 
shown could have been run, and usually would be run, to show 
seven income breakdowns. To simplify the illustration, 
Groups A and B were merged into Upper Income, Groups C 
and D into Middle Income, and Groups E and F into Lower 
Income. 

Summary Table C exemplifies the more complex, three-di- 
mensional table. The complexity of multidimensional tables 
would be even clearer if all seven possible income breakdowns 
plus the six possible age groups had been used in the illustration. 
Even in the more simple form shown, it will be noted that the 



CASES IN EDITING AND TABULATION 231 

analyst would have the chore of splitting up sixteen totals into 
minor categories. For much larger samples, zeroes or single- 
digit numbers tend to appear for some breakdowns in such 
tables. 

The complexity of three-dimensional tables, however, is 
mostly a matter of complexity of analysis. A moment's reflec- 
tion will reveal that they are not much more complex or time- 
consuming to construct than are many two-dimension tables. 
They also have a marked advantage as a storehouse for a great 
deal of data (note how Table B could be constructed quickly 
from the total columns of Table C) and as clues to the inter- 
relationship of market factors in a world that after all is not two- 
sided. 

ACTION NEEDED 

1. How many summary tables should be constructed from the 
data gathered with this questionnaire and of what types? 

2. Design all column headings and line designations for the 
most important tables, including at least two complex-type 
tables. 



Part VII 

ANALYSIS AND INTERPRETATION OF DATA 



The questions that generally arise in the course of analyzing 
a set of data may be grouped under the following headings: 

The reliability of the data 

Formulating and testing working hypotheses 

Interpretation of results 

Verification of findings 

Translation of findings into recommendations for action 

Some pertinent remarks on each of these questions are of- 
fered on the following pages. 

RELIABILITY OF DATA 

An evaluation of the reliability of a set of data not only aids 
the reader or client in arriving at a more complete judgment of 
the validity of the findings, but also serves as a determining fac- 
tor in the selection of analytical techniques, and may even alter 
the findings themselves. Thus, if the data appear to be subject 
to wide margins of error, it is generally foolish to apply highly 
refined and time-consuming analytical techniques to the data 
or to dwell on the apparent implication of relatively minor dif- 
ferences. All one can do in such a case is to concentrate on 
over-all trends revealed by the data and to pass over the fine 
points. 

A set of findings may be altered by an evaluation of data 
reliability if the data are found to possess some bias that can 
be corrected. In such a case the data should be adjusted before 
the substantive analysis is begun, 1 though such corrections 

1 For an example of how this was done, see R. Ferber and H. G. Wales, 
"Detection and Correction of Interviewer Bias," Public Opinion Quarterly, XVI 
(Spring, 1952), pp. 107-27. 

233 



234 MARKETING RESEARCH 

should be made with extreme caution because they may at 
times alter substantially the nature of the final results. 

Now, what does an evaluation of data reliability include? In 
the case of data taken from other sources, there is not much to 
be done other than, perhaps, to transcribe from that source 
whatever information on the question might be deemed perti- 
nent. If the data are compiled by the researcher himself but 
are not based on a sample survey, such as company sales esti- 
mates by territories, the study should include an investigation 
of possible sources of error or bias in the data ranging from the 
origin of the data to the last step involved in obtaining the esti- 
mates. Thus, in judging the reliability of company territorial 
estimates, one might look for possible errors or bias in the man- 
ner in which the salesmen file their reports, how and when the 
reports are compiled in the district offices, possible discrepancies 
between the date a sale is made and the date it is reported, and 
others. 

If the data are obtained from a survey designed especially 
to collect these data, a thorough investigation of their reliability 
must include the two main aspects of the subject, sampling 
error and bias, and, in addition, an attempt may be made to 
validate the data. 

Pros and Cons of Validation 

To validate sample data means essentially to locate informa- 
tion from other sources on the same characteristics covered by 
the sample, which is then used as a yardstick against which to 
gauge the accuracy of the sample data. If in a consumer prefer- 
ence study in City Z, for example, classifying information were 
compiled on marital status, occupation, age, and sex, data on 
the same characteristics might be obtained for that city from 
recent Census material or from other sources. If the sample 
data exhibit much the same distributions for these character- 
istics as the Census or other data such as falling well within 
the range of sampling error the sample is said to be "vali- 
dated." It is perhaps needless to note that a validation analysis 
has no meaning if carried out on characteristics that were used 



ANALYSIS AND INTERPRETATION OF DATA 235 

as sample controls or on characteristics closely related to those 
used as sample controls. 

From an operational viewpoint the applicability of validating 
procedures is restricted by the difficulty of finding accurate data 
regarding the particular population under study. Census-of- 
population data are compiled every ten years only, and for small 
areas may be outdated by the time of release, three or four years 
after the Census date. Other data relating to the same popula- 
tion studied, the same time, the same characteristics, and the 
same definitions are also generally difficult to find. Hence, a 
validation analysis must be interpreted with considerable cau- 
tion, as it is often difficult to ascertain whether differences un- 
covered by the validation procedure are due to a possibly biased 
sample or to lack of comparability between the various sets of 
data. 

Despite these limitations, validation can prove very useful 
in pointing up weak spots in a sample survey, though validation 
cannot serve as a substitute for measurement of sampling error 
or evaluation of bias. At the least, it will indicate the direction 
of the bias; it provides no measure of sampling error, and little, 
if any, evidence as to the nature of the bias. In short, validation 
to a researcher is in some ways analogous to the function of a 
thermometer for a doctor: it acts as a warning signal when 
something is out of order, but like a thermometer it is not a 
foolproof indicator. 

Formulating and Testing Working Hypotheses 

General hypotheses as to the nature of the results that might 
be obtained from the study have undoubtedly been formulated 
at the preliminary investigation and planning stages. At this 
stage, it remains to convert these hypotheses into explicit forms 
that can be tested directly on the data. Where statistical tests 
can be applied, this means setting up the so-called null hypoth- 
esis of statistics to the effect that the observed differences do 
not really exist in the population which is then tested with the 
aid of appropriate significance tests. At the same time it is a 
good idea to review all the data that have been collected with 
an eye toward detecting relationships that might point to addi- 



236 MARKETING RESEARCH 

tional hypotheses or to revising the hypotheses originally form- 
ulated. It is a rare study indeed where all pertinent hypotheses 
have been postulated before the data are collected. 2 

Interpretation of Results 

A number of pitfalls face the researcher in interpreting the 
results of an analysis. Probably the biggest one is the danger 
of unwarranted generalizations. The urge to generalize is un- 
derstandably great, for the value of a set of findings often in- 
increases with its scope. Nevertheless, the possibility of gen- 
eralizing is invariably restricted by the fact that a study is made 
at a particular time, at a particular place, and in a certain way. 
Broadening the scope of the results therefore necessitates care- 
ful prior consideration of how they might be affected by the 
change of time and place, not to mention the effect of different 
methods of obtaining the same data. Even different ways of 
asking for the same information can completely alter the pic- 
ture. 8 

An additional problem involved in generalizing is the danger 
of going beyond the range of the observations. Thus, a study 
may find that savings are linearly related to income for families 
earning between $2,600 and $6,400 per year. To generalize 
solely from this finding that savings are linearly related to in- 
come for all families in that area would not be justified, since 
these data provide no basis for believing that the same relation- 
ship holds for those earning below $2,600 or above $6,400 per 
year. This is one of the basic problems involved in forecasting 
from past relationships, for when one has to consider conditions 
outside the range of the observations, as is often the case, there 
can be no assurance that the same relationships will continue. 

Another pitfall is the tendency to identify correlation with 
causation. If a close association exists between the stork popu- 

* In this connection, rearranging of the data by doing percentaging in vari- 
ous ways, regrouping classifications, etc. often brings to light hitherto unsus- 
pected relationships. Numerous aids for carrying out such analyses are provided 
in the Zeisel reference in the bibliography at the end of this Part, a necessary 
reading for beginning marketing researchers. 

* For an example, see S. Payne, The Art of Asking Questions (Princeton, 
N. J.: Princeton University Press, 1951), chap. 7. 



ANALYSIS AND INTERPRETATION OF DATA 237 

lation and the number of births in the United States, nobody 
is likely to conclude that the former influences the birth rate. 
But if the relationship is a more plausible onesuch as, say, that 
preference for prefabricated houses rises as income level falls 
the urge to label one factor as a cause of the other is often 
overwhelming. It can only be repeated here that lack of corre- 
lation invariably proves absence of causation, but the presence 
of correlation by itself does not prove causation. More positive 
evidence is needed to establish causation, and it is here that a 
priori reasoning plays an important role. 

The confirmation or rejection of hypotheses on the basis of 
statistical tests presents a similar pitfall. If the outcome of the 
tests contradicts the hypothesis, it can be pretty safely rejected. 
But if the outcome is in agreement with the hypothesis, the 
validity of the hypothesis is not necessarily established, for the 
same reason that correlation does not always signify causation: 
the coincidence may be largely fortuitous. It is for this reason 
that most analysts will not say in such a case that ''the tests con- 
firm the hypothesis/' but rather they will take a more cautious 
attitude and say either that "the tests do not disprove the hy- 
pothesis" or "the results of the tests are in accord with the 
hypothesis." 

Verification of Findings 

This step is in many ways analogous to validating survey data. 
The question that one seeks to answer here is: how do the find- 
ings obtained in the present study compare with those obtained 
in similar past studies? If they agree with past studies, so much 
additional support is provided for the validity of this study. If 
they do not agree, an attempt should be made to reconcile the 
differences. In either case, where similar studies do exist (a 
fact that should already have been ascertained at the prelim- 
inary investigation stage), a section on verification should be 
included in the analysis. Such a section may provide strong 
substantiation for the findings, and if it does not, this fact 
should in all fairness be presented anyway. It is much better 
for the researcher who conducted the study to point out possi- 



238 MARKETING RESEARCH 

ble inconsistencies in the results than to have someone else dis- 
cover them at a later time. 

Translation of Findings into Policy Recommendations 

Many studies, especially those for business concerns, call for 
a section on the practical implications of the findings, on what 
sort of action might be indicated by the study. For the re- 
searcher simply to translate his findings directly into the actions 
they might imply cannot only prove dangerous, but may be 
fatal from the point of view of ensuring favorable reception of 
the study. For in translating the findings into recommenda- 
tions for action, the researcher must take account (and show 
that he is doing so) of established practices in the company as 
well as of the feasibility of the actions indicated by the findings. 

A study may point to the desirability of altering and combin- 
ing a firm's sales routes, but existing personnel relationships and 
the desire to maintain the morale of its staff may not render it 
practicable to make such changes except gradually, as salesmen 
leave the company or work their way up. Another study may 
point to an opportunity for increased profits by enlarging the 
scope of operations, but the company may simply not be in a 
position to finance such an endeavor at the time. 

A frequent procedure in cases where a clear conflict exists 
between the nature of the findings and their practicability is to 
present, first, the implications of the findings in the absence 
of practical difficulties (sometimes placed under the heading of 
"long-range objectives"), second, a demonstration of the effect 
of practical difficulties as the findings are converted to policy 
recommendations, and third, the policy recommendations 
themselves. Whatever the method used, a tempering of the 
findings in the light of actual conditions is essential for present- 
ing policy recommendations. 

If the findings are not conclusive enough to warrant submis- 
sion of specific policy recommendations, an additional section 
may be appended outlining what further work is required be- 
fore policy recommendations could justifiably be made. Many 
research reports include such a section more or less as a matter 



ANALYSIS AND INTERPRETATION OF DATA 239 

of course to point out for future reference the areas in which 
further research would seem most fruitful. 

A useful checklist of the main practical considerations that 
should be taken into account in preparing policy recommenda- 
tions is provided by Brown. 4 It is reproduced below: 

1 . The condition of the company and the market should be taken into 
account. 

2. The probable opposition of executives should be analyzed. 

3. Company officials should be given an active part in the interpretation. 

4. The required course of action should be clearly stated. 5 

5. A series of progressive changes should be recommended. 

6. Recommendations should be interpreted into concrete gains from 
following the proposed course of action. 

The Cases in This Part 

The cases in this part concentrate largely on the interpreta- 
tion of data and partly on the translation of the findings into 
policy recommendations. The only exception is the first case, 
which raises the problem of validating a consumer survey in the 
common situation where few data are available for the purpose. 

The other five cases are concerned with the interpretation of 
different types of data. Cases 2, 3, and 4 are problems dealing 
solely with interpretation, all of them relating to sample data. 
In each case, the researcher is faced with a mass of data and the 
problem is to derive some meaning from them. Case 2 in par- 
ticular, on the extent of use of business life insurance, presents 
a hodgepodge of information, which may or may not be relevant 
to the subject, and the researcher is asked to bring some order 
out of it. 

In Case 3, on listenership to radio programs, the data have 
been organized, but the classifications and breakdowns pre- 
sented are so numerous that the problem of interpretation is 
rather complex and presents the danger of unwarranted gen- 
eralizations. 

4 L. O. Brown, Marketing and Distribution Research (New York: The Ron- 
ald Press Co., 1949), pp. 566-71. This list is elaborated upon in these pages. 
6 And even more clearly justified! 



240 MARKETING RESEARCH 

Case 4, on the effectiveness of advertising, poses a problem 
familiar to all advertisers and also raises the question of possible 
remedial action. 

The data in Case 5 are secondary source material and present 
an intermediary type of situation in which recommendations 
for future research are needed on the basis of the material com- 
piled to that time with regard to when retail stores should be 
open. 

The situation in Case 6 is one in which research concerning 
the characteristics of a men's apparel store has been completed 
and the problem is to interpret the results and present policy 
recommendations. 

AMERICAN MARKETING ASSOCIATION, The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. Chapter 16 presents useful 
pointers on interpreting data, and Chapter 19 reviews briefly various statisti- 
cal methods used in analyzing marketing data. 

BLANKENSHIP, A. B. (ed.). How to Conduct Consumer and Opinion Research. 
New York: Harper & Bros., 1946. Chapters 4, 5, 8, and 9 in particular con- 
tain illustrations of analysis of marketing data. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. A brief section on analysis and interpretation of data is included 
on pp. 192-97. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. The last part of Chapter 23 and all of Chapter 24 discuss 
the problems involved in drawing inferences from statistical data and contain 
much useful information on interpreting research findings into business 
policy. 

HEIDINGSFIELD, M. S., and A. B. BLANKENSHIP. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. Of special interest to readers of 
chapter 11 is a discussion concerning the role of the researcher in making 
recommendations. Some writers advocate that research workers should work 
only with inferences and conclusions gathered from data and avoid making 
too many recommendations, leaving the recommendations to the manage- 
ment to make. Others believe that making recommendations is part of the 
researcher's responsibility. 

HOBART, D. M. (ed.). Marketing Research Practice. New York: The Ronald 
Press Co., 1950. The practical examples upon which this book is built con- 
tain many interesting and useful illustrations of analyzing and interpreting 
marketing data. 

LORIE, J. H., and H. V. ROBERTS. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. In the treatment of scientific 
method in marketing research (Chapter 4) the authors give a brief treatment 
of interpretation problems. 



ANALYSIS AND INTERPRETATION OF DATA 241 

LUCK, D. J., and H. G. WALES. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. An extensive discussion of Analysis of data and table ar- 
rangements is contained in Chapter 13. Interpretation of data is treated in 
some detail in Chapter 14 with examples in Chapters 17-19. 

ZEISEL, H. Say It with Figures. New York: Harper & Bros., 1948. This book 
contains much material throughout on analyzing and interpreting numerical 
data and is well worth reading for this reason alone. 



Part VII Cases 



CASE I VALIDATION OF A CONSUMER 
SURVEY 

BACKGROUND 

The sample design described in Case 3 of Part IV, pp. 1 30- 
36, was used for a personal interview survey of families in Phila- 
delphia in 1947 concerning their purchase and use of a class of 
food products. Sampling results were as follows: 

1 . Noncooperation of respondents plus the discarding by the 
editor of several unreliable questionnaire returns reduced the 
number of usable interviews to 479, out of the 533 planned, and 
the number of areas in which interviews were made from 1 52 
to 144. 

2. Families not interviewed fell almost proportionately 
among the rental groups. To adjust the quartiles no more than 
three families had to be shifted from the edge of one group to 
the edge of another, although distortion in some subrental 
groups was larger. (Interviewers did not ask respondents for 
either income or rentals, nor did they make estimates; respond- 
ents were classified on the basis of the rental groups of the 
blocks in which they lived; see page 132). 

3. The subsample of apartment dwellers comprised 52 inter- 
views, or 10.9 per cent of the total. (The 1940 Housing Census 
for Philadelphia showed 10.1 per cent of families living in apart- 
ment houses.) 

4. The 70 planned interviews among nonwhites were com- 
pleted. Interviewers also found that three blocks identified as 
predominantly, or wholly, white in 1940 were solidly nonwhite 
in 1947. The final results, therefore, included 87 usable inter- 
views with nonwhite families, or 18.1 per cent of the total. 
(The 1940 Census showed 12.9 per cent of nonwhites in the 
city.) 

Because of difficulties in sample construction and because of 
these results, serious doubts were raised as to the validity of the 

242 



CASES IN ANALYSIS AND INTERPRETATION 243 

sample, particularly as to whether or not it constituted a repre- 
sentative sample of Philadelphia families. 

METHODS OF VALIDATION 

The principal methods of validation used were to check the 
sample data against data that were available for the population 
for characteristics not employed as sample controls. 

Refrigeration ownership, for example, had not been used in 
any way as a sample control or stratification. Possession of 
mechanical refrigeration was thought to be importantly related 
to the purchase and use of the food products being studied. 
Were the families interviewed representative of Philadelphia 
families with regard to refrigeration ownership? 

Of the families interviewed, 326 reported having electric or 
gas refrigerators, 1 32 had iceboxes, and 21 had none, other types, 
or gave no answer. The 1940 Census estimated that 57 per cent 
of Philadelphia families owned mechanical refrigerators. The 
Edison Electric Institute Bulletin of August, 1945, summar- 
izing a national study made earlier in the year, showed a gain 
of 6 million units over the 15,364,000 mechanical refrigeration 
units reported owned in 1940 by the Census. Thus, mechan- 
ical refrigeration among all U. S. families had increased from 
43 per cent in 1940 to more than 50 per cent in 1945. The 1945 
figures given for refrigeration equipment in occupied urban 
dwellings were: mechanical refrigerators, 68,3 per cent; ice 
boxes, 25.8 per cent; other or none, 5.9 per cent. 

Family size also had been uncontrolled. The family size dis- 
tribution of the total sample as compared with the correspond- 
ing Census data for 1940 for Philadelphia was as follows: 

EXHIBIT 1 
FAMILY SIZE DISTRIBUTION, ALL FAMILIES 



Source 


Members in family All families 


1 


2 


3 


4 


5 or 
more 


N.A. 


Total 


Census 1940 
Sample 1947 


7.8 
5.2 


23.3 
24.8 


22.1 
24.2 


18.9 
21.1 


27.9 
24.4 


0.3 


100% 
100% 



244 MARKETING RESEARCH 

Family-size distributions for nonwhite families were: 

EXHIBIT 2 
FAMILY SIZE DISTRIBUTION, NONWHITES 



Source 


Members in family Nonwhite families 


1 


2 


3 


4 


5 or 
more 


N.A. 


Total 


Census -1940 
Sample 1947 


11 

8 


25 
25 


19 
13 


15 
18 


30 
36 





100% 
100% 



Users of the food product being studied had been reported 
by other researchers as comprising: 34 per cent of San Francisco 
families (Call-Bulletin Study) in 1941; 23 per cent of all urban 
families (General Foods) in 1942; and 55.9 per cent of Phila- 
delphia families (Philadelphia Evening Bulletin) in 1946. The 
latter figure was produced as part of a survey of many items. 
The definition of the class of food product being compared 
was unavailable, except that the earlier study had included all 
varieties of this class of product whereas the latter had not. 
The present study revealed that 64 per cent of families used 
the product some time within the past year. Excluding families 
whose last purchase had been more than one month previous 
to the interview, user families were 56.1 per cent of the total. 
In addition to variance in these percentages because of differ- 
ences in definition, seasonal difference was not checked, the 
time of interviewing for the 1946 survey not being given. 

The Bulletin survey gave the following use-of-product per- 
centages by rental groups (renters and owners had "reported" 
rental values to interviewers) : 



Rentals 

Over $50 
$40 to $49.99 
$30 to $39.99 
Under $30 



Per cent of users 

72.8 
62.3 
53.7 
40.4 



CASES IN ANALYSIS AND INTERPRETATION 245 
The present study, using 1940 rental values, showed: 

Rentals Per cent of users 

$37 and over 85 ( 1st quartile) 

$28.50 to $36.99 73 (2nd quartile) 

$23.01 to $28.49 58 ( 3rd quartile) 

$23 and under 38 (4th quartile) 

ACTION NEEDED 

1. What light do these data throw on the validity of the survey? 

2. Someone suggested that the reliability of the data might be 
increased by weighting the results. Evaluate the desirability 
of this procedure in the present case. 



CASE 2 EXTENT OF USE OF BUSINESS 
LIFE INSURANCE 

BACKGROUND 

The investigation, which was to determine the extent to 
which business life insurance is used by various types of busi- 
nesses, (Part VI, Case 4) had reached the analysis stage. A re- 
search worker had been assigned the job of working out an 
interpretation and analysis of a series of tables that had been 
prepared by one of the statistical clerks who was working on 
the study. 

Two samples had been selected one of business firms and 
the other of life insurance salesmen. The first sample was 
selected to ascertain the extent to which various types of busi- 
nesses carried business life insurance. The sample of life in- 
surance agents was selected to determine the types of policies 
sold by agents for business life insurance purposes and other 
purposes. Exhibits 1 through 8 are based on data collected 
from business firms, and Exhibits 9 and 10 are based on data 
gathered from agents. 

The immediate reaction of the worker on studying the tables 
was, "How do I organize the tables so that an understandable 
interpretation can be made?" After making several futile at- 



246 



MARKETING RESEARCH 



tempts at the assignment, the worker finally got in touch with 
one of the directors of the project and asked for help. 

EXHIBIT 1 
NUMBER OF FIRMS INTERVIEWED, BY FORM OF BUSINESS 



Form of business 


Number of firms 


Corporations . 


323 


Partnerships 


125 


Sole proprietorships 


132 


Total 


580 







EXHIBIT 2 
NUMBER OF FIRMS INTERVIEWED, BY FORM OF BUSINESS AND CITY SIZE 



Form of business 


Number of 
firms 


Percentage 
of group 


Percentage of type 
in entire sample 


A. In two large cities 








Corporations 
Partnerships . . . 
Sole Proprietorships 

Total, all types 


213 
70 
65 


61.2 
20.1 
18.7 


65.9 
56.0 
49.2 

60.0 


348 


100.0 


B. In five small cities 








Coq^orations 
Partnerships . . 
Sole Proprietorships . . . 

Total, all types 


110 

55 
67 


47.4 
23.7 
28.9 


34.1 
44.0 
50.8 

40.0 


232 


100.0 



EXHIBIT 3 
NUMBER OF FIRMS INTERVIEWED, BY TYPE OF BUSINESS ACTIVITY 



Type of business activity 


Number of 
firms 


Percentage 
of total 


Manufacturing 


159 


27.4 


Manufacturing and merchandising 


55 


9.5 


Wholesaling 


64 


11.0 


Retailing 


241 


41.6 


Wholesaling and retailing . ... 


61 


10.5 



CASES IN ANALYSIS AND INTERPRETATION 247 



EXHIBIT 4 

NUMBER OF FIRMS INTERVIEWED, BY TYPE OF BUSINESS ACTIVITY 
AND CITY SIZE 



Type of business activity 


Number of 
firms 


Percentage 
of group 


Percentage of 
type in entire 
sample 


A. In two large cities 

Manufacturing 
Manufacturing and 
merchandising 
Wholesaling 
Retailing 
Wholesaling and retailing 

Total, all types . . 
B. In five small cities 

Manufacturing . . . 
Manufacturing and 
merchandising 
Wholesaling 
Retailing 
Wholesaling and retailing 

Total, all types 


108 

37 
46 
117 
40 


31.0 

10.6 
13.2 
33.7 
11.5 


67.9 

67.3 
71.9 
48.5 
65.6 

60.0 

32.1 

32.7 
28.1 
51.5 
34.4 

40.0 


348 

51 

18 
18 
124 
21 


100.0 

22.0 

7.8 
7.8 
53.3 
9.1 


232 


1000 



EXHIBIT 5 
SIZE OF SAMPLE FIRMS, BY CITY SIZE 



Number of 
employees 


Seven cities 


Two large cities 


Five small cities 


Number 
of firms 


Per cent 
of total 


Number 
of firms 


Per cent 
of total 


Number 
of firms 


Per cenl 
of total 


1-5 


82 
116 
157 
91 
69 
62 
3 


14.1 
20.0 
27.1 
15.7 
11.9 
107 
0.5 


36 
60 
90 
62 
50 
49 
1 


10.3 
17.2 
25.9 
17.8 
14.4 
14.1 
0.3 


46 
56 
67 
29 
19 
13 
2 


19.8 
24.1 
28.9 
12.5 
8,2 
5.6 
0.9 


6-10 


11-25 . . . 


26-50 . . 


51-100 


Over 100 
Not disclosed 


Total, all groups 


580 


100.0 


348 


100.0 


232 


100.0 



248 



MARKETING RESEARCH 



EXHIBIT 6 
SIZE OF INCORPORATED BUSINESSES IN SEVEN SELECTED CITIES 



Number of 
employees 


Number 
of firms 


Number of 
corporations 


Per cent of 
size-group 
incorporated 


Per cent of 
all corpora- 
tions in 
size-group 


1-5 


82 


11 


13.4 


3.4 


640 


116 


37 


31.9 


11.5 


11.25 


157 


81 


51.6 


25.0 


26-50 


91 


70 


76.9 


21.7 


51-100 


69 


63 


91.3 


19.5 


Over 100 


62 


60 


96.8 


18.6 


Not disclosed 


3 


1 


33.3 


0.3 


Total, all groups 


580 


323 


55.7 


100.0 



EXHIBIT 7 
SIZE OF SAMPLE FIRMS, BY FORM OF BUSINESS 



Number of 
employees 


Corporations 


Partnerships 


Sole 
proprietorships 


Num- 
ber 


Per cent 
in size- 
.group 


Num- 
ber 


Per cent 
in size- 
group 


Num- 
ber 


Percent 
in size- 
group 


1-5 


11 
37 
81 
70 
63 
60 
1 


3.4 
11.5 
25.0 
21.7 
19.5 
18.6 
0,3 


26 
41 
35 
16 
5 
2 



20.8 
32.8 
28.0 
12.8 
4.0 
1.6 
0,0 


45 
38 
41 
5 
1 

2 


34.1 
28.8 
31.1 
3.8 
0.8 
0.0 
1.4 


6-10 


11-25 


26-50 


5MOO 


Over 100 


Not disclosed 


Total, all groups 


323 


100.0 


125 


100.0 


132 


100.0 



CASES IN ANALYSIS AND INTERPRETATION 249 

EXHIBIT 8 * 
BUSINESS LIFE INSURANCE CARRIED BY SIZE OF FIRM INTERVIEWED 







Firms that reported carrying 






Key man 


Business 
continuation 


Either 
type 


Number of 


Number 


insurance 


insurance 


or both 


employees 


of firms 




Per cent 




Percent 




Per cent 






Num- 


in size- 


Num- 


in size- 


Num- 


in size- 






ber 


group 


ber 


group 


ber* 


group 


1-5. 


82 


10 


12.2 


6 


7.3 


16 


19.5 


6-10 . . . 


116 


16 


13.8 


15 


12.9 


31 


26.7 


11-25.. 


157 


36 


22.9 


15 


9.6 


50 


31.8 


26-50 .. 


91 


32 


35.2 


9 


9.9 


40 


44.0 


51-100 


69 


27 


39.1 


9 


13.0 


34 


49.3 


Over 100 


62 


41 


66.1 


3 


4.8 


43 


69.4 



* In some cases these figures differ from the sum of figures for the two types 
because some concerns have both types and are therefore listed in both columns. 



EXHIBIT 9 
REASONS GIVEN BY SALESMEN FOR BUYING RESISTANCE OF CLIENTS 



Reason given 


Num- 
ber 
of 
clients 


Number of cases assigned 
specific rank 


1 


2 


3 


4 


5 


6 


Client unable to reach a de- 
cision 


62 

53 
56 
57 
39 

16 


20 

22 
19 
15 
10 




21 

10 
19 
24 
7 

2 


18 

13 
13 
13 
8 

5 


1 

5 
1 
5 
7 

4 


2 

3 
3 

3 

3 





1 

4 

2 


Client unable to understand 
the need 


Cannot afford it .... 


Future of business uncertain . 
Definitely no need for it 
Doesn't believe in life insur- 
ance 



250 



MARKETING RESEARCH 



EXHIBIT 10 
SALES OF BUSINESS LIFE INSURANCE, BY EXPERIENCE OF AGENT 



Years of 
experience 


Percentage 
of 
answers 


Percentage who reported selling 


Business 
continuation 


Key man 


Over 10 


42.6 
24.4 
23,0 
5.3 
4.7 


48.5 
25.7 
18.5 
2.1 
5.2 


53.1 
28.3 
11.1 
1.2 
6.1 


3-10 


1-3 


0-1 


Not stated 



THE PROBLEM 

The worker had some questions to be answered before any 
semblance of reasonable action could be undertaken. His first 
question was, "What is the objective of the study?" The an- 
swer given by the director was, 'To study the extent to 
which business life insurance is used by various types of 
business." 

The next question was, "How many of the tables shall 
be used in the interpretation and should others be pre- 
pared?" 

The answer to this question by the director was, "Use the 
tables and prepare any others that are necessary to fulfill the 
objectives of the study." 

The director added, "Discard any tables that do not seem 
to be suitable for the task assigned to you." 

ACTION NEEDED 

Prepare a one thousand word interpretive report utilizing the 
tables that seem to be appropriate on the Extent of the Uses of 
Life Insurance by Business, with particular reference to: 

1. Characteristics of the segment of the market studied. 

2. Analysis of purchasers of insurance by size, business opera- 
tion, type of operation, and city. 



CASES IN ANALYSIS AND INTERPRETATION 251 

CASE 3 WHO LISTENS TO RADIO 
PROGRAMS? 

BACKGROUND 

In the fall of 1946, a study of radio listenership in Champaign 
County, Illinois, was made by means of the diary method. 
This county contains the twin cities of Champaign-Urbana, a 
number of small villages, and a substantial farm population. A 
sample of 528 adults (18 years old or more) was selected from 
the population of this county, and each adult was requested to 
keep a diary of his radio listening for the week of November 
3-9, 1946. The diary provided space for recording station lis- 
tenership by 15-minute intervals from 6:00 A.M. to midnight 
for seven consecutive days. In addition, classifying informa- 
tion was secured on these adults in an initial personal interview 
on such characteristics as sex, age, education, and place of resi- 
dence. 

THE PROBLEM 

The objective of the study was to determine some of the fac- 
tors that influence listenership to different types of radio 
programs. In other words, what characteristics of an individual 
seem to be most closely related to listenership of various types of 
radio programs? To throw some light on this question, tabula- 
tions were made of female listenership to eighty-eight individual 
programs by three characteristics of the listener: education, area 
of residence, and age. Study of female listenership was empha- 
sized in the study because most men are not able to listen to a 
radio when many programs are on. These eighty-eight pro- 
grams were classified under six major headings: news, religion, 
music, drama, audience participation, and homemaking. 

The results of these tabulations are shown in the accompany- 
ing exhibits. The percentages shown refer to the proportion 
of women in that particular category the total number being 
shown in the row labeled "number in sample" reported listen- 
ing to each program. The last exhibit provides a special break- 
down of sports listenership by sex and education groups. 



252 MARKETING RESEARCH 

EXHIBIT 1 

PERCENTAGE OF WOMEN LISTENING TO SELECTED PROGRAMS, BY 
EDUCATION GROUPS 







T 1 * A 




Education 




Program 




Time 


Grade 
school 


High 
school 


Col- 
lege 








66 


138 


76 


News 

Single Commentators 
Drew Pearson 


Sun. 


5:00 P.M. 


21.2% 


12.9% 


11.8% 


Paul Harvey 


Sun. 


10:00 P.M. 


4.5 


7.2 


5.3 


Gabriel Heatter 


Sun. 


9:00 P.M. 


7.5 


1.4 


1.4 


Gabriel Heatter 


Wed. 


8:00 P.M. 


8.2 


8.4 


6.6 


Round Table Discussions 
Northwestern Reviewing 
Stand 
World Front 


Sun. 
Sun. 


10:30 A.M. 
11:OOA.M. 


* 
* 


* 
1.4 


2.6 
1.3 


Town Meeting of the Air . 

Gossip Columnists 
Louella Parsons 


Thurs 
Sun. 


7:30 P.M. 
8:15 P.M. 


4.5 

2.3 


5.5 
13.8 


9.5 
9.2 


Jimmy Fidler 


Sun. 


8: 30 P.M. 


46 


10.1 


6.6 


Walter Winchell 


Sun. 


8:00 P.M. 


17.8 


26.3 


11.9 


Religion 

Little Brown Church .... 
Local Church Service 
Hymns of All Churches . 
Salt Lake City Choir . . . 

Music 

Classical 
New York Philharmonic . . 
NBC Symphony 
Chicago Theater of the Air . 
"400" Hour 


Sun. 
Sun. 
M-F 
Sun. 

Sun. 
Sun. 
Sat. 
M-Sat 


9:15 A.M. 
11:00 A.M. 
9:30 A.M. 
8:15 A.M. 

2:00 P.M. 
4:00 P.M. 
9:00 P.M. 
7:00 A.M. 


16.7 
4.5 
14.5 

3.0 

* 

1.9 

3.4 

# 


9.4 
6.7 
11.4 
1.5 

3.3 

* 

2.2 
13 


4.4 
5.3 
4.8 
2.6 

11.4 

5.9 
4.3 
4.3 


Semiclassical 
RCA Victor Show . . . 


Sun. 


1:00 P.M. 


2.3 


* 


6.6 


Harvest of Stars 
Hour of Charm 


Sun. 
Sun. 


1:30 P.M. 
3:30 P.M. 


.1.5 

* 


1.4 

6.2 


7.9 
17.1 


Voice of Firestone 


Mon. 


7:30p.M. 


2.3 


9.8 


13.1 


Telephone Hour 


Mon. 


8:00 P.M. 


2.3 


10.5 


15.8 


Contented Program . , , . 


Mon. 


9:00 P.M. 


3.8 


5.4 


7.9 















* Less than 1 per cent 



CASES IN ANALYSIS AND INTERPRETATION 
EXHIBIT 1 Continued 



253 









1 


Education 




Program 




rime 


Grade 
school 


High 
school 


Col- 

lege 








66 


138 


76 


Popular 
Shaeffer Parade 


Sun. 


2:00 P.M. 


5.3% 


1.8% 


8.5% 


Manhattan Merry-Go- 
Round 


Sun. 


8:00 P.M. 


6.8 


11.9 


15.1 


American Album of 
Familiar Music 


Sun. 


8:30 P.M. 


1.5 


12.0 


15.8 


Your Hit Parade 


Sat. 


8:00 P.M. 


9.1 


11.8 


9.2 


Fred Waring 

Folk Music 
Gene Autry 


M-F 
Sun. 


10:00 A.M. 
6:00 P.M. 


1.2 

2.3 


3.6 

5.8 


6.8 
2.0 


Prairie Ramblers; Sage 
Riders 


M-F 


7:00 A.M. 


11.4 


6.5 


4.2 


WLS Barn Dance 


Sat. 


7:30 P.M. 


18.2 


17.9 


11.8 


Dinner Bell Time 


M-F 


12:30 P.M. 


17.4 


6.1 


8.0 


Drama 
Good Drama 
Cavalcade of America . . . 
Lux Radio Theater .... 
Theatre Guild on the Air. . 

Family Type Drama 
Blondie . 


Mon. 
Mon. 
Sun. 

Sun. 


7:00 P.M. 
8:00 P.M. 
9:00 P.M. 

6:30 P.M. 


1.5 
12.1 
4.6 

8.4 


7.3 
19.1 
4.0 

13.4 


6.5 
12.1 
11.5 

7.9 


The Great Gildersleeve . . . 
A Date With Judy 


Wed. 
Tues. 


7:30 P.M. 
7:30 P.M. 


7.6 
6.1 


14.5 
12.0 


9.2 
11.8 


The Aldrich Family 


Thurs. 


7:00 P.M. 


7.6 


12.7 


5.9 


Baby Snooks 


Fri. 


7:00 P.M. 


8.3 


10.8 


3.9 


Detective Shows 
Counterspy 


Sun. 


4:30 P.M. 


4.6 


4.0 


1.3 


Crime Doctor 


Sun. 


7:30 P.M. 


4.6 


5.8 


1.3 


Inner Sanctum 


Mon. 


7:00 P.M. 


6.8 


7.6 


2.6 


Mr District Attorney 


Wed. 


8:30 P.M. 


7.6 


1.5 


6.6 


This Is Your FBI 


Fri. 


7:30 P.M. 


5.3 


8.7 


2.0 


The Lone Ranger 


MWF 


6:30 P.M. 


14.1 


11.9 


5.2 


Comedy and Variety 
Jack Benny Show 


Sun. 


6:00 P.M. 


10.6 


25.7 


21.1 


McCarthy and Bergen .... 
Fred Allen 


Sun. 
Sun. 


7:00 P.M. 
7:30 P.M. 


13.6 

37.3 


26.5 
21.7 


39.5 
30.3 


Victor Borge 


Mon. 


8:30 P.M. 


3.0 


9.1 


13.8 


Bing Crosby 


Wed. 


9:00 P.M. 


12.9 


13.7 


11.8 



254 



MARKETING RESEARCH 
EXHIBIT I Continued 









] 


Education 




Program 




Time 


Grade 
school 


High 
school 


Col- 
lege 


Number in sample 






66 


138 


76 


Housewife Variety 
Breakfast Club 


M-F 


8-00 A.M. 


14.7% 


16.6% 


6.4% 


Breakfast in Hollywood . . 

Family Serial 
One Man's Family . . . 


M-F 

Sun. 


10:00 A.M. 
2 -30 P.M. 


17.6 
6.1 


19.8 
6.9 


9.2 
10.5 


Lum and Abner 


M-F 


7-00 P M. 


19.6 


13.8 


7.4 


Soap Operas 
Our Gal Sunday 


M-F 


11 -45 A.M. 


4.9 


3.9 


1.5 


Guiding Light . ... 
Life Can Be Beautiful . . 
Lorenzo Jones 


M-F 
M-F 
M-F 


12:45 P.M. 
2:00 P.M. 
3:30 P.M. 


6.7 
4.3 
13.3 


5.5 
8.0 
6.2 


3.4 
3.9 
3.4 


Portia Faces Life . . . 


M-F 


4:15 P.M. 


10.3 


4.2 


3.2 


Audience Participation 

Quiz Shows 
Quiz Kids 


Sun. 


3-00 P.M. 


10.6 


5.8 


11.8 


Take It or Leave It 


Sun. 


9:00 P.M. 


7.6 


11.2 


7.9 


Dr I Q 


Mon. 


8:30 P.M. 


6.8 


8.7 


3.9 


Break the Bank 


Fri 


8:00 P.M. 


6.1 


4.4 


1.3 


Twenty Questions . . 


Sat 


7:00 P.M. 


1.5 


* 


5.9 


Studio Interviews 
Queen for a Day 


M-F 


1:00 P.M. 


* 


2.3 


* 


Bride and Groom 


M-F 


1:30 P.M. 


12.8 


7.9 


4.0 


Ladies Be Seated 


M-F 


2: 00P.M. 


7.1 


7.5 


2.1 


Amateur Shows 
Sachs* Amateur Hour 


Sun. 


12:30 P.M. 


20.8 


13.6 


5.9 


Homemaking 
Food Magician 


M-F 


11:00 A.M. 


1.5 


1.5 


1.6 


Betty Crocker 


M-F 


1:30 P.M. 


9.6 


5.5 


3.4 


Mary Lee Taylor 


Sat. 


9:30 A.M. 


1.5 


2.5 


* 



CASES IN ANALYSIS AND INTERPRETATION 

EXHIBIT 2 

PERCENTAGE OF WOMEN LISTENING TO SELECTED PROGRAMS, BY 
AREA OF RESIDENCE 



255 



Program 


Time 


Area of residence 


Urban 


Village 


Farm 


Number in sample 




150 


74 


75 








News 












Single Commentators 












Drew Pearson 


Sun. 


5:00 P.M. 


12.0% 


10 8% 


20.0% 


Paul Harvey 


Sun. 


10:00 P.M. 


5.3 


* v/w /o 

6.8 


5.3 


Gabriel Heatter 


Sun. 


9:00 P.M. 


2.0 


# 


4.0 


Gabriel Heatter 


Wed. 


8:00 P.M. 


7.3 


12.0 


10.7 


Round Table Discussions 












Northwestern Reviewing 












Stand 


Sun. 


10:30 A.M. 


1.3 


<c 


1.3 


World Front 


Sun. 


11:00 A.M. 


* 


1.3 


1.3 


Town Meeting of the Air . . 


Thurs 


7:30 P.M. 


5.3 


10.6 


10.3 


Gossip Columnists 












Louella Parsons 


Sun. 


8:15 P.M. 


167 


4.0 


9.3 


Jimmy Fidler 


Sun. 


8:30 P.M. 


12.0 


4.0 


5.3 


Walter Winchell 


Sun. 


8:00 P.M. 


27.3 


21.6 


28.0 


Religion 












Little Brown Church 


Sun. 


9:15 A.M. 


8.5 


7.7 


12.0 


Local Church Service .... 


Sun. 


11:00 A.M. 


9.3 


5.4 


* 


Hymns of All Churches . . 


M-F 


9:30 A.M. 


5.3 


10.8 


14.7 


Salt Lake City Choir 


Sun. 


8:15 A.M. 


4.0 


3.3 


$ 


Music 












Classical 












New York Philharmonic 


Sun. 


2:00 PM. 


7.1 


6.9 


* 


NBC Symphony 


Sun. 


4:00 P.M. 


3.4 


* 


2.0 


Chicago Theater of the Air 
"400" Hour 


Sat. 
M-Sat 


9:00 P.M. 
7:00 A.M. 


4.1 

2.5 


3.7 
1.7 


# 
2.6 


Semiclassical 












RCA Victor Show 


Sun. 


1:00 P.M. 


4.7 


* 


# 


Harvest of Stars 


Sun. 


1:30 P.M. 


5.6 


* 


* 


Hour of Charm 


Sun. 


3: 30 P.M. 


11.0 


6.7 


4.0 


Voice of Firestone 


Vfon. 


7: 30p.M. 


10.0 


5.4 


10.7 


Telephone Hour 


Vlon. 


8:00 P.M. 


11.9 


5.4 


9.3 


Contented Program 


Mon. 


9:OOp.M. 


8.9 


6.1 


* 


Popular 












Shaeffer Parade 


Sun. 


2:00 P.M. 


5.0 


4.1 


2.7 



* Less than 1 per cent. 



256 



MARKETING RESEARCH 
EXHIBIT 2 Continued 



Program 


Time 


Area of residence 


Urban 


Village 


Farm 


Number in sample '. 




150 

11.0% 

12.3 
14.6 
5.3 

4.7 

3.4 
13.6 

5.7 

5.3 

17.7 
8.5 

13.0 
12.9 
11.3 
14.4 
10.1 

4.7 
3.3 
9.2 
11.6 
6.3 
8.3 

29.0 
34.7 
34.7 
11.9 
11.3 

7.4 
10.6 


74 

15.6% 

12.9 
6.2 

2.7 

2.7 

5.3 
15.3 
6.1 

4.0 
16.5 
7.1 

8.8 
8.0 
10.9 
16.4 
8.9 

4.1 
6.7 
2.8 

12.0 

* 

6.8 

16.2 
25.0 
19.0 
2.7 
20.7 

19.3 
23.0 


75 

7.4% 

3.3 

5.3 

# 

4.0 

15.3 
25.0 
15.4 

9.3 
10.6 
1.3 

6.7 
12.0 
10.0 
10.7 
4.7 

2.0 
4.0 
1.3 
8.7 
11.4 
15.3 

13.4 
14.0 
8.0 
8.0 
9.3 

14.0 
19.4 


Music continued 
Manhattan Merry-Go- 
Round 
American Album of 
Familiar Music 


Sun. 8:00 P.M. 

Sun. 8: 30 P.M. 
Sat. 8:OOp.M. 
M-F 10:00 A.M. 

Sun. 6:00 P.M. 

M-F 7:00 A.M. 
Sat. 7: 30 P.M. 
M-F 12: 30 P.M. 

Mon. 7:00 P.M. 
Mon. 8:OOp.M. 
Sun. 9:00 P.M. 

Sun. 6: 30 P.M. 
Wed. 7: 30 P.M. 
Thurs. 7: 30 P.M. 
Thurs. 7:00 P.M. 
Fri. 7:00 P.M. 

Sun. 4:30 P.M. 
Sun. 7:30 P.M. 
Mon. 7:00 P.M. 
Wed. 8: 30P.M. 
Fri. 7: 30 P.M. 
MWF 6: 30P.M. 

Sun. 6:00 P.M. 
Sun. 7:00 P.M. 
Sun. 7:30p.M. 
Mon. 8: 30p.M. 
Wed. 9:OOp.M. 

M-F 8:00 A.M. 
M-F 10:00 A.M. 


Your Hit Parade 


Fred "Waring . . . . 


Folk Music 
Gene Autry . . . 


Prairie Ramblers; Sage 
Riders 


WLS Barn Dance 


Dinner Bell Time 


Drama 

Good Drama 
Gavalcade of America . 
Lux Radio Theater 
Theatre Guild on the Air. . 

Family Type Drama 
Blondie . 


The Great Gildersleeve . . . 
A Date With Judy 


The Aldrich Family 


Baby Snooks 


Detective Shows 
Counterspy 


Crime Doctor 


Inner Sanctum 


Mr. District Attorney 


This Is Your FBI 


The Lone Ranger 


Comedy and Variety 
Jack Benny Show 


McCarthy and Bergen .... 
Fred Allen 


Victor Borge 


Bing Crosby 


Housewife Variety 
Breakfast Club 


Breakfast in Hollywood . . . 



CASES IN ANALYSIS AND INTERPRETATION 
EXHIBIT 2 Continued 



257 



Program 


Time 


Area of residence 


Urban 


Village 


Farm 


Number in sample 




150 

9.7% 
6.0 

6.0 
6.0 
4.6 
2.6 
3.3 

11.4 
12.6 
8.0 
3.3 
4.3 

1.3 
4.0 
3.3 

11.7 

1.3 

6.6 

* 


74 

3.4% 
19.7 

8.1 
4.1 
4.1 
6.8 
4.1 

5.4 
8.1 
7.5 
1.3 
1.9 

1.3 
6.8 
6.8 

5.6 

2.7 
4.1 
1.9 


75 

10.0% 
30.7 

9.3 
4.0 
9.3 
13.3 
12.0 

8.0 
7.4 
5.3 

7.3 

* 

2.7 
13.3 

7.4 

23.0 

2.7 

2.7 
* 


Family Serial 
One Man's Family 


Sun. 
M-F 

M-F 
M-F 
M-F 
M-F 

M-F 

Sun. 
Sun. 
Mon. 
Fri. 
Sat. 

M-F 
M-F 
M-F 

Sun. 
M-F 


2:30 P.M. 
7:00 P.M. 

11:45 A.M. 
12:45 P.M. 
2:OOp.M. 
3: 30P.M. 
4:15 P.M. 

3:00 P.M. 
9:00 P.M. 
8: 30 P.M. 
8:00 P.M. 
7:00 P.M. 

1:00 P.M. 
1: 30P.M. 
2:00 P.M. 

12: 30P.M. 

11:OOA.M. 
1: 30P.M. 
9:30 A.M. 


Lum and Abner 


Soap Operas 
Our Gal Sunday 


Guiding Light 


Life Can Be Beautiful . . 
Lorenzo Jones 


Portia Faces Life 


Audience Participation 

Quiz Shows 
Quiz Kids 


Take It or Leave It 


Dr. I. Q. 


Break the Bank 


Twenty Questions 


Studio Interviews 
Queen for a Day 


Bride and Groom 
Ladies Be Seated 


Amateur Shows 
Sachs* Amateur Hour 


Homemaking 
Food Magician 


Betty Crocker 


M-F 
Sat. 


Mary Lee Taylor 



258 MARKETING RESEARCH 

EXHIBIT 3 
PERCENTAGE OF WOMEN LISTENING TO SELECTED PROGRAMS, BY AGE GROUPS 









A 


ge 




Program 


Time 


18-24 
years 


25-39 
years 


40-59 
years 


60 
years 
and 
over 


Number in sample 




44 


97 


108 


43 


News 












Single Commentator 












Drew Pearson . ... 


Sun. 5:00 P.M. 


2.3% 


9.3% 


19.5% 


20.9% 


Paul Harvey .... 


Sun. 10:00 P.M. 


4.5 


5.2 


8.3 


2.3 


Gabriel Heatter . . 


Sun. 9: 00 P.M. 


* 


2.1 


2.8 


7.0 


Gabriel Heatter 


Wed. 8: 00 P.M. 


* 


9.3 


11.1 


4.7 


Round Table Discussions 












Northwestern Review- 












ing Stand . . 


Sun. 10: 30 A.M. 


* 


2.1 


* 


* 


World Front . 


Sun. 11:00 A.M. 


* 


3.1 


* 


* 


Town Meeting of the 
Air 


Thurs. 7: 30 P.M. 


1.7 


5.7 


7.0 


11.6 


Gossip Columnists 
Louella Parsons 


Sun. 8: 15 P.M. 


6.8 


7.2 


16.7 


16.3 


Jimmy Fidler . ... 


Sun. 8: 30 P.M. 


2.3 


7.2 


11.1 


9.3 


Walter Winchell . . 


Sun. 8:00 P.M. 


11.4 


17.5 


35.2 


34.9 


Religion 
Little Brown Church 


Sun. 9: 15A.M. 


4.5 


5.9 


10.8 


18.6 


Local Church Service 


Sun. 11:00 A.M. 


2.3 


3.1 


8.3 


12.2 


Hymns of All Churches 
Salt Lake City Choir.. 


M-F 9: 30A.M. 
Sun. 8: 15 A.M. 


* 
* 


15.5 
2.1 


5.6 

2.8 


9.3 

5.8 


Music 












Classical 












New York Philhar- 












rnonic 


Sun. 2:00 P.M. 


5.3 


5.1 


12.5 


5.8 


NBC Symphony 


Sun. 4:00 P.M. 


4.5 


1.0 


2.1 


4.1 


Chicago Theater of 












the Air .... 


Sat. 9:00 P.M. 


2.3 


3.4 


3.9 


1.7 


"400" Hour 


M-Sat 7:OOA.M. 


1.7 


1.8 


3.0 


2.3 


Semiclassical 












RCA Victor Show . 


Sun. 1:00 P.M. 


6.8 


1.0 


2.3 


2.3 


Harvest of Stars . . . 


Sun. 1:30 P.M. 


6.8 


1.0 


3.9 


2.3 


Hour of Charm 


Sun. 3: 30 P.M. 


20.5 


5.2 


7.4 


3.5 



* Less than 1 per cent. 



CASES IN ANALYSIS AND INTERPRETATION 
EXHIBIT 3-- Continued 



259 









A 


ge 




Program 


Time 








60 












years 






18-24 


25-39 


40-59 


and 






years 


years 


years 


over 


Number in sample 




44 


97 


108 


43 


Music continued 












Voice of Firestone . . . 


Mon. 7:30 P.M. 


6.8% 


11.3% 


7.4% 


14.0% 


Telephone Hour 


Mon. 8:00 P.M. 


11.4 


9.8 


7.4 


16.3 


Contented Program 


Mon. 9:00 P.M. 


6.8 


7.7 


4.1 


9.3 


Popular 












Shaeffer Parade 


Sun. 2:00 P.M. 


4.5 


3.1 


5.6 


5.8 


Manhattan Merry-Go- 












Round 


Sun. 8:00 P.M. 


18.2 


13.9 


9.2 


11.6 


American Album of 












Familiar Music 


Sun. 8: 30 P.M. 


12.5 


11.9 


9.7 


10.5 


Your Hit Parade . . . 


Sat. 8:00 P.M. 


11.4 


8.9 


9.6 


2.3 


Fred Waring .... 


M-F 10:00 A.M. 


6.8 


5.2 


* 


* 


Folk Music 












Gene Autry 


Sun. 6:00 P.M. 


9.1 


6.2 


1.8 


10.5 


Prairie Ramblers; Sage 












Riders 


M-F 7: 00 A.M. 


4.5 


8.2 


4.6 


2.3 


WLS Barn Dance . 


Sat. 7: 30 P.M. 


15.0 


18.8 


16.7 


14.0 


Dinner Bell Time . . 


M-F 12: 30P.M. 


1.1 


6.2 


12.0 


9.3 


Drama 












Good Drama 












Cavalcade of America 


Mon. 7:00 P.M. 


4.5 


10.3 


4.6 


7.0 


Lux Radio Theater 


Mon. 8:00 P.M. 


14.8 


14.7 


16.2 


4.7 


Theatre Guild on the 












Air .... 


Sun. 9:00 P.M. 


8.5 


6.2 


5.8 


4.7 


Family Type Drama 












Blondie 


Sun. 6.30 P.M. 


15.9 


13.9 


7.8 


8.1 


The Great Gildersleeve 


Wed. 7: 30p.M. 


15.9 


9.8 


83 


18.6 


A Date With Judy 


Thurs. 7: 30 P.M. 


10.3 


15.5 


7.4 


7.0 


The Aldrich Family . 


Thurs. 7:00 P.M. 


10.3 


21.6 


9.3 


14.0 


Baby Snooks 


Fri. 7:00 P.M. 


3.4 


12.4 


9.8 


4.7 


Detective Shows 












Counterspy 


Sun. 4: 30 P.M. 


6.8 


1.0 


5.1 


3.5 


Crime Doctor .... 


Sun. 7: 30 P.M. 


9.1 


6.2 


2.8 


1.2 


Inner Sanctum 


Mon. 7:00 P.M. 


6.8 


5.2 


5.5 


23 


Mr. District Attorney 


Wed. 8: 30 P.M. 


6.8 


21.1 


6.5 


2.3 


This Is Your FBI . . 


Fri. 7: 30 P.M. 


4.5 


8.2 


5.1 


4.7 


The Lone Ranger 


MWF 6: 30p.M. 


4.5 


18.5 


5.6 


8.1 



260 



MARKETING RESEARCH 
EXHIBIT 3 Continued 









A* 


1* 




Program 


Time 


18-24 
years 


25-39 
years 


40-59 
years 


60 
years 
and 
over 


Number in sample 




44 


97 


108 


43 


Comedy and Variety 
Jack Benny Show 
McCarthy and Bergen 
Fred Allen 
Victor Borge 


Sun. 6:00 P.M. 
Sun. 7:00 P.M. 
Sun. 7: 30 P.M. 
Mon. 8: 30 P.M. 


15.9% 
22.7 
18.2 
4.5 


24.7% 
28.3 
25.8 
10.3 


15.3% 
27.3 
21.7 
6.5 


33.7% 
27.9 
22.1 
16.3 


Bing Crosby 


Wed. 9:00 P.M. 


13.6 


17.0 


11.5 


5.9 


Housewife Variety 
Breakfast Club 
Breakfast in Hollywood 

Family Serial 
One Man's Family . . 
Lum and Abner 


M-F 8: 00 A.M. 
M-F 10:00 A.M. 

Sun. 2:30p.M. 
M-F 7:00 P.M. 


1.2 
6.8 

6.8 
6.8 


22.4 
22.7 

6.2 
14.4 


10.4 
11.6 

6.5 
13.9 


4.7 
10.4 

22.1 
16.3 


Soap Operas 
Our Gal Sunday 


M-F 11:45 A.M. 


4.5 


3.1 


2.8 


2.3 


Guiding Light 


M-F 12:45 P.M. 


2.3 


2.1 


* 


2.3 


Life Can Be Beautiful 
Lorenzo Jones .... 
Portia Faces Life . . 

Audience Participation 

Quiz Shows 
Quiz Kids 


M-F 2:00 P.M. 
M-F 3: 30P.M. 
M-F 4: 15 P.M. 

Sun. 3: 00 P.M. 


6.8 
4.5 
2.3 

4.6 


6.2 
3.1 

5.2 

2.6 


1.9 

7.4 
3.7 

11.1 


11.6 
11.6 
14.0 

22.1 


Take It or Leave It 
Dr. I. Q. 


Sun. 9:00 P.M. 
Mon 8 -30 P.M. 


11.4 
4.5 


7.2 
8.8 


10.1 

7.4 


7.0 
16.3 


Break the Bank .... 
Twenty Questions . . . 

Studio Interviews 
Queen for a Day .... 
Bride and Groom .... 
Ladies Be Seated 

Amateur Shows 
Sachs* Amateur Hour. 

Homemaking 
Food Magician 


Fri. 8:00 P.M. 
Sat 7:00 P.M. 

M-F 1:00 P.M. 
M-F 1:30 P.M. 
M-F 2:OOp.M. 

Sun. 12: 30 P.M. 
M-F 11:00 A.M. 


* 
2.3 

* 

* 

# 

12.5 

* 


7.2 
* 

1.0 
9.3 
9.3 

11.6 
3.1 


* 
3.7 

1.9 
8.3 

2.3 

13.2 
1.9 


4.7 
4.7 

2.3 
2.3 
2.3 

7.1 
2.3 


Betty Crocker 
Mary Lee Taylor . . 


M-F 1:30 P.M. 
Sat 9: 30A.M. 


6.8 

* 


4.1 
2.6 


2.8 
1.4 


14.0 
* 



CASES IN ANALYSIS AND INTERPRETATION 261 



EXHIBIT 4 

PERCENTAGE OF LISTENING BY WOMEN AND MEN TO SELECTED 
SUNDAY PROGRAMS, URBAN LISTENERS 



Program 


Time 


Women 


Men 


Number in sample 




150 


112 


News 

Single Commentators 
Drew Pearson 


5:00 P.M. 


12.0% 


10.7% 


Paul Harvey 


10:00 P.M 


5.3 


7 1 


Gabriel Heatter 


9:00 P.M. 


2.0 


2.7 


Round Table Discussions 
Northwestern Reviewing Stand . . 
World Front 


10:30 A.M. 
11:OOAM 


1.3 

* 


* 
# 


Gossip Columnists 
Louella Parsons 


8:15PM 


16.7 


14 3 


Jimmy Fidler 


8:30 P.M. 


12.0 


12.5 


Walter Wincbell . 


8:00 PM 


27.3 


22 3 


Religion 
Little Brown Church 


9:15 A.M. 


8 5 


39 


Local Church Service . . 


11:00 AM. 


9 3 


5 8 


Salt Lake City Choir 


8:15 A.M. 


40 


1 4 


Music 

Classical 
New York Philharmonic 
NBC Symphony .... 


2:00 P.M. 
4-00 PM 


7.1 
34 


4.a 

29 


Semiclassical 
RCA Victor Show 


1:00 P.M. 


47 


3.6 


Harvest of Stars 
Hour of Charm 


1:30 P.M. 
3:30 P.M. 


5.6 
11.0 


1.8 
6.8 


Popular 
Shaeffer Parade 


2:00 P.M. 


5.0 


3.2 


Manhattan Merry-Go-Round .... 
American Album of Familiar Music 

Folk Music 
Gene Autry 


8:00 P.M. 
8: 30 P.M. 

6:00 P.M. 


11.0 
12.3 

4.7 


8.5 
9.8 

* 


Drama 

Good Drama 
Theatre Guild on the Air 


9:00 P.M. 


8.5 


6.0 



* Less than 1 per cent. 



262 



MARKETING RESEARCH 
EXHIBIT 4 Continued 



Program 


Time 


Women 


Men 


Number in sample 




150 


112 


Family Type Drama 
Blondie 


6:30 P.M. 


13.0% 


13 8% 


Detective Shows 
Counterspy 


4:30 P.M. 


4.7 


45 


Crime Doctor 


7:30 P.M. 


3.3 


63 


Comedy and Variety 
Jack Benny Show 


6-00 PM 


290 


25 5 


Jack Parr 


6:00 P.M. 






McCarthy and Bergen . 


7-00 p M 


347 


29 1 


Alec Templeton 


7:00 P.M. 






Fred Allen 


7:30 P.M 


34.7 


308 


Family Serial 
One Man's Family 


2:30 P.M. 


9.7 


32 


Audience Participation 

Quiz Shows 
Quiz Kids 


3:00 P.M. 


114 


36 


Take It or Leave It 


9:00 P.M. 


12.6 


103 


Amateur Shows 
Sachs' Amateur Hour 


12:30 P.M. 


11.7 


69 


Sports 
College Football (Sat.)* 


Sat P M 


158 


183 


Professional Football b 


Sun. P.M. 


1.7 


6.4 


Baseball 


Sun. P.M. 







* Broadcast on Saturday, Nov. 9. Games included were Army vs. Notre 
Dame and Indiana vs. Northwestern. 
b Bears vs Packers. 
c Included three games, Cubs, Cardinals, White Sox and opponents. 



ACTION NEEDED 

1. What inferences do these tables allow to be made regarding 
the relationship of the characteristics studied to program lis- 
tenership? 

2. Judging by these results, what additional tabulations would 
it seem desirable to obtain? 



CASES IN ANALYSIS AND INTERPRETATION 
EXHIBIT 5 

PERCENTAGE OF LISTENING TO SELECTED SPORTS PROGRAMS BY SEX 
AND EDUCATION GROUPS 



263 



Sex and Education 


Type of sports program 


College 
football 


Professional 
football 


Baseball 


Women 
Grade school 


12.1% 
16.7 
19.1 

12.7 
11.8 
29.4 


4.0% 

3.2 
* 

10.5 
10.3 
4.4 


3.9% 
9.2 
5.5 

11.0 
15.8 
6.7 


High school 


College 


Men 
Grade school . . . 


High school 


College 



* Less than 1 per cent. 



CASE 4 EVALUATING THE EFFECTIVENESS 
OF ADVERTISING 

THE PROBLEM 

One of the principal objectives of the survey on public atti- 
tudes toward prefabricated housing (Part IV, Case 3), it will be 
recalled, was to ascertain the effect of advertising and other 
prefabricated housing literature on these attitudes. The in- 
formation gleaned on this question from the survey was con- 
densed into a number of analytical tables and charts, which 
are reproduced on pp. 264-70. The problem is to determine 
what inferences on this subject would seem warranted from 
an examination of these data. 

DATA AVAILABLE 

Two aspects of the subject are covered in these tables and 
charts, namely, the degree to which literature and material on 
prefabrication is noted, i.e., recalled, and the effect of this 
material on the reader's attitudes toward the product when this 



264 



MARKETING RESEARCH 



advertising is noticed. (In this respect, seeing prefabricated 
houses was treated as a form of advertising, which, of course, it 
is.) Exhibits 1-7 relate to the first question, presenting statistics 
on the percentage of respondents in particular population 
groups reporting notice of any or none of four different forms 
of prefab material: articles, advertisements, manufacturers' pro- 
motional literature, and visual inspection. 

The second question, the effect of prefab literature or sight 
of prefab houses on the respondent's attitude, is treated in the 
charts on pp. 267-69 and Exhibits 10 and 12. The chart on 
page 267 portrays a percentage breakdown of the persons notic- 
ing each form of prefab material according to its effect on them, 



EXHIBIT 1 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB HOUSES 
OR LITERATURE, BY TYPE OF RESIDENCE 



Type of Notice 


Type of present residence 


Standard 
house 


Prefab 


Apart- 
ment 


Total 


Article 


46% 
38 
19 
12 
5 
25 


76% 
69 
31 
100 


52% 
46 
26 
10 

26 


48% 
41 
21 
17 
4 
23 


Advertisement . . 


Promotional literature 


Inspection * 


Not stated 


No notice 


Total 


145% 
345 


276% 
30 


160% 
64 


154%* 
439 


Number of respondents 



* Percentages total more than 100 because many respondents gave more than 
one reply. 

1 Only one out of every nine non-prefab dwelling families reported having 
seen a prefab house. However, there seems to have been some confusion about 
the meaning of this particular question, many persons not realizing that they 
were being asked whether they had seen prefab houses. The only persons who 
acknowledged having seen prefabs, except prefab dwellers, were apparently those 
who had inspected model prefab homes, and possibly not even all of this group. 
A follow-up survey of a subsample of 71 families revealed that actually about 
three fourths of the respondents had seen prefabs at one time or another, at least 
from the outside. Some slight adjustments in the interpretation of the attitudes 
of those who had seen prefab houses was made on the basis of information ob- 
tained from these follow-up interviews. 



CASES IN ANALYSIS AND INTERPRETATION 265 



EXHIBIT 2 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB 
HOUSES OR LITERATURE, BY SEX 



Type of notice 


Male 


Female 


Total 


Article . 


60% 


45% 


51% 


Advertisement 


49 


37 


42 


Promotional literature 


29 


18 


22 


Inspection 


6 


14 


11 


Not stated 


4 


4 


4 


No notice 


19 


26 


23 


Total 


167% 


144% 


153% 


Number of respondents 


168 


270 


438 



EXHIBIT 3 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB HOUSES 
OR LITERATURE, BY MARITAL STATUS 



Type of notice 


Single 


Married 


Other 


Total 


Article 


64% 


51% 


35% 


51% 


Advertisement 


58 


41 


35 


42 


Promotional literature . ... 


22 


24 


11 


22 


Inspection .... 


16 


10 


13 


11 


Not stated . . .... 


2 


4 


4 


4 


No notice 


31 


20 


37 


23 


Total 


193% 


150% 


135% 


153% 


Number of respondents ... 


45 


347 


46 


438 



EXHIBIT 4 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB 
HOUSES OR LITERATURE, BY OCCUPATION 



Type of notice 


Prof., 
Mgr., 
Prop. 


Cleri- 
cal, 
sales 


Skilled, 
semi- 
skilled 


Un- 
skilled 


Other 


Total 


Article . . 


62% 


50% 


37% 


28% 


50% 


50% 


Advertisement .... 
Promotional literature . 
Inspection 


48 
27 
11 


50 
23 
12 


30 
22 
12 


30 
8 
22 


40 
18 
3 


41 
22 
11 


Not stated 


4 


4 


6 


2 


2 


4 


No notice 


12 


21 


31 


30 


27 


22 


Total 


164% 


160% 


138% 


120% 


140% 


150% 


Number of respondents . . 


168 


48 


90 


40 


88 


434 



266 MARKETING RESEARCH 

EXHIBIT 5 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB HOUSES OR 
LITERATURE, BY SIZE OF HOUSEHOLD 



Type of notice 


One 


Two 


Three 


Four 


Five or 
more 


Total 


Article 


35% 


54% 


54% 


52% 


39% 


50% 


Advertisement 
Promotional literature . . 
Inspection 


28 
12 
12 


48 
24 
13 


45 

27 
8 


39 
20 
12 


29 
14 
4 


41 
22 
11 


Not stated 


2 


4 


6 


3 




2 


No notice 


22 


26 


20 


19 


12 


21 
















Total 


111% 


169% 


160%, 


145% 


98% 


148% 


Number of respondents 


40 


135 


109 


100 


49 


433 



EXHIBIT 6 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB HOUSES OR 
LITERATURE, BY AGE OF RESPONDENT 



Type of notice 


Under 21 


21-34 


35-49 


50 and over 


Total 


Article 


75% 


63% 


47% 


39% 


51% 


Advertisement 


62 


52 


36 


33 


42 


Promotional literature 
Inspection 


12 


32 
8 


19 
12 


14 
14 


22 
11 


Not stated 


12 


4 


2 


4 


4 


No notice 


12 


15 


24 


33 


23 














Total 


173% 


174% 


140% 


137% 


153% 


Number of respondents .... 


8 


175 


100 


153 


436 



EXHIBIT 7 

PERCENTAGE OF RESPONDENTS REPORTING NOTICE OF PREFAB 
HOUSES OR LITERATURE, BY INCOME 



Type of notice 


Under 
$1500 


$1500- 
$2599 


$2600- 
$4199 


$4200- 
$6599 


$6600 
and over 


Total 


Article 


42% 


42% 


54% 


52% 


74% 


53% 


Advertisement . . . 
Promotional literature . 
Inspection 


25 
11 
14 


32 
12 
8 


47 
19 
12 


49 
32 
12 


49 
32 
4 


44 
22 
11 


Not stated 


3 


7 


3 


4 


6 


4 


No notice 


33 


25 


26 


13 


13 


21 


Total . . . 
Number of respondents 


128% 
36 


126% 
60 


161% 
129 


162% 
114 


178% 
47 


155% 
386 



CASES IN ANALYSIS AND INTERPRETATION 267 

as ascertained by direct questioning. The relative breakdowns 
by type of material noticed of answers to the question, "What 
do you think are the advantages and disadvantages of prefabri- 
cated houses against standard houses?" are presented in the 
chart on page 268. The category "written material" includes 
all three forms of prefab literature, inasmuch as little difference 
was apparent by the individual forms. 

The number of advantages per disadvantage noted in the 
chart on page 268 and the percentage of respondents preferring 
to purchase a prefabricated rather than a standard house if they 
had only $8,000 to spend is cross-classified against the effect of 
prefab literature in Exhibit 1 0. The base for the percentages in 
the last column in the table is, in each case, the total number 
of respondents reporting the particular "notice and effect" of 
prefab literature. Relative breakdowns by notice of prefab 
material of the preference for prefabricated houses or standard 



EXHIBIT 8 
WHAT PEOPLE THINK OF PREFAB MATERIAL 



ARTICLE 



AO 



MFR'S 
PROMOTIONAL 



SEEN 
PREFABS 




NOT AFFECTED 



FAVORABLE UNFAV. 





10 20 30 40 50 70 80 9O tOO 

PERCENT 



268 



MARKETING RESEARCH 



I 

o 






1 

o 




CASES IN ANALYSIS AND INTERPRETATION 269 

EXHIBIT 10 

ADVANTAGES PER DISADVANTAGE AND PERCENTAGE PREFERENCES BY 
EFFECT OF PREFAB LITERATURE 



Notice and effect 



Ratio of advan- 
tages to 
disadvantages 



Per cent preferring 
prefab at $8,000 



No contact with literature .51 11.8 

Not impressed either way .76 16.5 

Favorably impressed 1.17 41.8 

Unfavorably impressed .77 25.5 

EXHIBIT 11 

PREFERENCE FOR PREFABS AT $8,000 PRICE LEVEL 
NOTICE 

OF MATERIAL 
NONE 

ARTICLE 
AD 

mrs/sssss^ 

iiBM;*iii*S;i;i;!;S;i;S;i;S;S;S;!*S;!;S:S;S;!;S;!;S;S;!;!;i;!;S; 

Mro. MOM Y//////////M, I jljij: j! jiji JM^ 

^MS:S:ii:?:i;i;t;i:i:i;S:i;!:o!?i?!S!i!>!!!ii!S!;!?s!B^^ 
3EEN PREFABS 






10 20 30 40 $0 60 70 60 90 100 

PERCENT 



270 



MARKETING RESEARCH 



houses at the $8,000 price level are shown in the chart on page 
269. A request for individuals to state their preferences be- 
tween prefabricated housing and standard housing at a $12,000 
price level resulted in almost 100 per cent preference for stand- 
ard houses irrespective of notice and effect of prefab literature. 
The last table in this series, Exhibit 12, presents information 
on the notice and effect of prefab material on the main brands 
of prefabricated homes in the area. For each brand, the table 
indicates the number of respondents acquainted with it and the 
percentage distribution of this number by brand preference. 
There is a fair amount of overlapping between columns be- 
cause many of the respondents were acquainted with more 
than one brand. 

EXHIBIT 12 

PERCENTAGE OF PREFAB PREFERENCES STATED BY RESPONDENTS 
ACQUAINTED WITH PREFAB BRANDS 



Brand Preference 


Brand Acquaintanceship 


None 


National 


Gunnison 


Lustron 


Others 


Not 
Sure 


None 


100 


10% 
12 
33 
26 
9 
10 


10% 
4 
38 
24 
8 
16 


10% 
2 
19 
50 
5 
14 


10% 
2 
21 
26 
31 
10 


11% 
89 


National 


Gunnison 
Lustron 


Other 


Not stated 


Total 
Total replies 


100% 
236 


100% 
82 


100% 
125 


100% 
123 


100% 
48 


100% 
9 



In assessing the significance of Exhibit 12, it is pertinent to 
note that the area sampled contained about five times as many 
National homes as Gunnisons, and about five times as many 
Gunnisons as Lustrons. Only a negligible number of each of 
a variety of other brands of prefab houses existed in the area at 
that time, although the total of these other brands was rea- 
sonably large. All in all, it was estimated that prefabricated 
housing constituted about 7 per cent of the permanent one- or 
two-family housing units in the area. 



CASES IN ANALYSIS AND INTERPRETATION 271 
ACTION NEEDED 

An analysis is required of these tables and charts to determine 
the effectiveness of prefabricated advertising and other liter- 
ature. Specifically: 

1. How widespread is the notice of written and other material 
dealing with prefabricated housing? 

2. How effective is this material in altering the individual's 
attitude in favor of prefabricated houses? 

3. On the basis of the answers to the preceding two questions, 
what recommendations would you be prepared to make to: 
(a) increase the notice of prefabricated material, and (b) im- 
prove its effectiveness? 

CASE 5 WHEN SHOULD RETAIL STORES 
BE OPEN? 

BACKGROUND 

A number of merchants in a city of approximately 50,000 
population in Central Illinois asked the manager of the local 
Chamber of Commerce to review the hours at which their 
stores should be open. Discussion with the merchants did not 
offer any solution to the problem because of the great variations 
in opinions. Nevertheless, there appeared to be four major fac- 
tors in the store hour problem that emerged from the discussion, 
namely, competition, employees, efficiency, and customers. It 
was realized that each of the factors had a number of ramifica- 
tions and that agreement on the matter of store hours would 
not be very simple to obtain. The consensus on each of the 
four factors is outlined briefly below: 

Competition. Rivalry between stores always is a leading con- 
sideration, often the only one. Merchants who are open longer 
or at different hours may attract more shoppers, and thus do a 
greater volume of business than those who follow another 
policy. The problem applies both to competing stores in the 
same shopping center and to competition between various cen- 
ters for local and immediate rural trade. 



272 MARKETING RESEARCH 

Employees. Retailing is only one of the many fields in which 
competent workers may be employed, and if other employment 
offers more desirable working hours, retailing may suffer by ob- 
taining lower grades of personnel. Long and wearisome hours 
of work also affect employee efficiency and morale, which in 
turn affect cost, labor turnover, and customer satisfaction. 

Efficiency. The profitability of a store to a great extent de- 
pends upon the efficiency of the workers and the control of 
expenses relative to sales. On the one hand, there is the matter 
of utilizing the fixed investment in the retail plant and inven- 
tory by maximizing the sales volume done with that investment. 
Yet, this must be balanced against the higher variable expenses 
incurred by being open longer hours. Also, if store hours are 
longer than those worked by employees, staggering hours when 
clerks are at work involves additional cost, which varies among 
stores, being heaviest for the smaller stores, particularly those 
with some specialization among their clerks. 

Customers. The first three factors are all related to attract- 
ing customers: longer hours enable more persons to enter stores, 
competent and cheerful sales persons make stores more desir- 
able places to shop, and efficient operation tends to lower prices. 
Beyond these factors, there are those related to the consumers' 
real needs and desires regarding store hours, which must be 
determined before hours can properly be decided. The ulti- 
mate goal of the merchant is customer satisfaction, and this 
must be a dominant factor in his decision regarding store hours. 

The type of shopping center obviously is an important con- 
sideration in studying the customers' needs. Shopping centers 
may be classified as: downtown districts in metropolitan areas; 
smaller cities in which city trade dominates; smaller cities in 
which country trade dominates; and villages whose stores deal 
mainly in convenience goods for a relatively small community. 

In reaching their store-hour decisions, merchants must bal- 
ance relevant factors against one another. For instance, it may 
be decided that the labor situation is so tight that employee 
relations should have foremost consideration. On the other 
hand, the district may be one with strong competition between 
stores and this may be the deciding factor. 



CASES IN ANALYSIS AND INTERPRETATION 273 

If a short-run view prevails, it is unlikely that the decision 
will be best in the long run. If merchants give competition the 
main consideration and do not join their fellow retailers in 
planning store hours, some will probably decide to adopt hours 
longer or different from the others. Competitors are likely to 
retaliate by extending their own hours. This results in raising 
expenses and causing discontent among employees, and may be 
of little benefit to anyone in the long run. 

If, on the contrary, retailers take the long-run view, they will 
give customer and employee interests the weight which is due 
them and will study carefully all factors involved. They will 
understand that lack of uniform hours is a nuisance from the 
shoppers' viewpoint, and that it is not mere number of hours 
but their suitability which brings maximum business. They 
will recognize that store hours really are a community problem 
to be worked out cooperatively, and not a private matter for 
competitive snap judgment. 

THE PROBLEM 

The manager of the Chamber of Commerce discussed the 
matter with the retail merchants and found that an impasse 
had been reached on the problem concerning the hours at which 
the retail stores should be open. The crux of the matter was 
that all merchants agreed that a uniform policy should be 
adopted, but no specific policy was favored by a substantial 
majority in the absence of empirical evidence. It was agreed, 
however, that the manager of the Chamber of Commerce 
should see what data could be obtained on the subject and then 
make some recommendation to the merchants, if possible, on 
store hours, or, if not possible, on deriving whatever additional 
information he might deem necessary for a decision to be made 
on the subject. 

DATA AVAILABLE 

After investigating the subject, the manager unearthed the 
data shown in the following six tables. No other data on the 
subject could be found. 



274 MARKETING RESEARCH 

EXHIBIT 1 
ORDINARY STORE HOURS IN SELECTED CITIES IN ILLINOIS 



City, population group 


Number of 
stores which 
observe 
hours stated 


Total 
hours 
open 


Time of 
opening 


Time of 
closing 


Chicago metropolitan area: 
Downtown Chicago 


Most stores 


8 


9:45 


5:45 


Outlying centers (77) . . . 


20 
1 


8 
8*4 


9:30 
9:30 


5:30 
5:45 




1 


8V2 


9:00 


5:30 




22 


8V2 


9:30 


6:00 




30 


9 


9:00 


6:00 




1 


9 


9:30 


6:30 




2 


More 










than 9 






Suburban cities (12) . 


5 

4 


8 
8V4 


9:30 
9:00 


5:30 
5:30 




3 


9 


8:30 or 9:00 


5:30 or 6:00 


Downstate cities and towns 










(68): 










Population more than 










30 000 (13) 


7 


IVi 


9:30 


5:00 




3 


8 


9:00 


5:00 




3 


8 


9:30 


5:30 


Population 10,000- 










30,000 (20) 


1 


IVi 


9:30 


5:00 




3 


8 


9:00 


5:00 




1 


8 


9:30 


5:30 




1 


8*4 


9:15 


5:30 




2 


8V2 


8:30 


5:00 




9 


8V2 


9:00 


5:30 




3 


9 


8:30 


5:30 


Population less than 










10,000 (35)* 


2 


8 


9:00 


5:00 




3 


8Vi 


9:00 


5:30 




5 


9 


8:00 


5:00 




6 


9 


8:30 


5:30 




1 


9 


9:00 


6:00 




12 


9V2 


8:00 


5:30 




1 


9V2 


8:30 


6:00 




1 


10 


7:00 


5:00 




4 


10 


8:00 


6:00 



Seven of these places had populations of 3,000 or less, and the smallest had 
only 1,400 inhabitants. 



CASES IN ANALYSIS AND INTERPRETATION 275 



EXHIBIT 2 

1 

EVENING STORE OPENINGS IN SELECTED CITIES IN ILLINOIS 



City, population group 


Number 
whose stores 
are open 


Number of 
evenings 
open 


Days when stores 
open in evening 


Chicago metropolitan area: 








Downtown Chicago 


Most stores 


1 


Monday 


Outlying centers ( 77 ) 


1 


3 


Tuesday, Thursday, 








Saturday 




45 


2 


Monday, Thursday 




1 


2 


Tuesday, Thursday 




17 


2 


Thursday, Saturday 




2 


1 


Monday 




6 


1 


Thursday 




5 


1 


Saturday 


Suburban cities (13) 


8 


2 


Monday, Thursday 




1 


1 


Thursday 




2 


1 


Friday 




2 


o 




Downstate cities and 








towns (71) : 








Population more than 








30,000(13) 


7 




Monday 




2 




Friday 




3 




Saturday 




1 






Population 10,000- 








30,000 (21) 


4 




Monday 




1 




Friday 




13 




Saturday 




3 







Population less than 








10,000(37) 


1 


1 


Friday 




28 


1 


Saturday 




8 








276 MARKETING RESEARCH 

EXHIBIT 3 

MORNING CLOSING, COMBINED WITH EVENING OPENING, 
SELECTED CITIES IN ILLINOIS 



City, population group 


Number 
combining 
evening 
opening with 
morning or 
afternoon 
closing 


Number of 
days plan is 
practiced 


Days when plan 
is used 


Chicago metropolitan area : 
Downtown Chicago . . 

Outlying centers 


Most major 
stores 
1 


1 

2 


Monday 
Monday, Thursday 


Suburban cities 


1 

20 
2 


2 
1 

2 


Monday, Saturday 
Monday 
Monday, Thursday 


Downstate cities and towns: 
Population more than 
30,000 . .. 


1 

2 

7 


1 

1 

1 


Monday 
Friday 

Monday 


Population 10,000- 
30,000 


2 
2 


1 
1 


Friday 
Monday 


Population less than 
10 000 


None 















EXHIBIT 4 

MORNING OR AFTERNOON CLOSING, NOT COMBINED WITH EVENING 
OPENING, SELECTED CITIES IN ILLINOIS 





Number 






City, population group 


closing 
morning or 


Day selected 


Morning or 
afternoon 




afternoon 






Chicago metropolitan area: 








Outlying centers .... 


2 


Wednesday 


Afternoon 


Suburban cities 


4 


Wednesday 


Afternoon 


Downstate cities and towns: 








Population more than 30,000 .... 


1* 


Wednesday 


Afternoon 


Population 10,000-30,000 


2 


Thursday 


Morning 


Population less than 10,000 


1 


Wednesday 


Morning 




1 


Wednesday 


Afternoon 




9 


Thursday 


Morning 



1 Not all stores close 



CASES IN ANALYSIS AND INTERPRETATION 

EXHIBIT 5 
TOTAL STORE HOURS PER WEEK, SELECTED "CITIES IN ILLINOIS 



277 



Hours per 
week 


Chicago metropolitan area 


Downstate cities, by popula- 
tion group 


Down- 
town 
Chicago 


Out- 
lying 
centers 


Subur- 
ban 
cities 


More 
than 
30,000 


10,000 
to 
30,000 


Less 
than 
10,000 


46 
46V2-48 




'i 

3 
14 
7 
21 
23 
7 

1 


'6 
1 
1 
3 


4 
4 
2 
2 
1 


*2 
1 
4 
2 
5 
1 


'i 

1 
2 
6 
6 
9 
4 
3 
2 
1 


48V4-50 


50V2-52 
52^2-54 


54V^-56 


56V2-58 


58V2-60 


60V2-62 . ... 
62W64 


68 .... 



EXHIBIT 6 

TIME OF DAY WHEN CONSUMERS LAST SHOPPED, AS PERCENTAGE OF TOTAL 
IN ECONOMIC GROUP, BLOOMINGTON-NORMAL AND DANVILLE, ILLINOIS 



Economic 
Group 


Morning 


Afternoon 


Evening 


Bloom- 
ington- 
Normal 


Danville 


Bloom- 
ington- 
Normal 


Danville 


Bloom- 
ington- 
Normal 


Danville 


A 


60 
36 
31 
30 


27 
34 
41 
22 


40 
58 
60 
57 


73 
66 
56 
78 



6 
9 
12 




3 



B 


C 


D 





ACTION NEEDED 

On the basis of the information contained in these tables, what 
should be the manager's recommendation to the local merchants? 
Should he recommend particular store hours to the merchants? If 
so, which hours, and why? If not, what additional data should he 
recommend be obtained on the subject? Why should these data 
be obtained, and how? 



278 MARKETING RESEARCH 

CASE 6 ANALYSIS OF PRICE AND 
INCOME DATA 

BACKGROUND 

Brown Brothers was a long-established, exclusive men's ap- 
parel store somewhat on the famous Brooks Bros, model. For 
generations it had catered to a select clientele of professional 
men, business owners, and business executives. The store en- 
joyed great prestige in its area. It also had, management be- 
lieved, an exceptionally loyal clientele. 

In recent years, however, sales volume had been somewhat 
disappointing and the profit margin had fallen. Through the 
urging of a young executive, the store eventually hired a research 
agency to examine its buying, pricing, and merchandising pol- 
icies. 

STORE POLICIES 

The store owners and executives were confident that the 
store could increase volume at any time by invading the mass 
market for men's clothing. They had no intention, however, 
of making any such radical departure from store traditions. 
The settled policy was to handle only quality clothing and to 
operate on a full-service, conservative basis. The store had 
been highly successful over the years in cultivating a particularly 
desirable segment of the market. It desired only to adapt its 
policies as might be necessary to maintain its position in this 
special market. 

In characterizing this market, it was estimated that the bulk 
of business for higher-price lines came from men with incomes 
of $11,000 or more per year, and that the bulk of business for 
the medium-price lines came from men with incomes of at least 
$5,000 or $6,000. (The most recent income data at that time 
revealed that 24 per cent of families in metropolitan areas of 
the U. S. had incomes of $5,000 or more. Six per cent of spend- 
ing units had incomes of $7,500 or more. ) Because of those in- 
comes, it was assumed that relatively few customers were single 
men and that most customers were older men. 



CASES IN ANALYSIS AND INTERPRETATION 279 

Despite the high incomes which most customers were be- 
lieved to have, it was thought that the store was heavily depend- 
ent on sales of medium-price lines. As defined by the store, 
high-price lines for men's suits (excluding summer suits) began 
at $95, medium-price lines began at $65, and low-price lines 
began at $45. The division of dollar sales for men's suits was: 
low-price, 20%; medium-price, 55%; high-price, 25%. In ad- 
dition, there was a tailoring department offering a wide selec- 
tion of materials for personally fitted clothes. Volume was 
not large, however, and the store had placed only five adver- 
tisements of tailormade clothes in the past year. 

The advertising budget was distributed, with relatively minor 
exceptions, in proportion to sales volume. The $65 line of 
men's suits, for example, got the biggest appropriation. The 
bulk of expenditures was in newspapers, although all types of 
media, except magazines and transit ads, were used. It was 
believed that few men really shop for clothes, their minds hav- 
ing been made up by the time they enter a store. Advertising, 
therefore, was held to be an important factor in forming cus- 
tomer decisions. To this end, efforts were made to keep the 
store "in the paper" almost daily, to make advertisements dis- 
tinctive, to stress quality and style of merchandise, and to avoid 
bargain appeals. 

FINDINGS 

A random sample of store customers was selected and per- 
sonal interviews were conducted. Data from store records also 
were gathered. Some of these data are contained in the exhibits 
which follow. These exhibits are shown just as they came from 
original tabulation without processing, and are therefore not 
necessarily adapted to the best analysis possible. 

ACTION NEEDED 

1. How should these data be processed or manipulated for 
analysis? 

2. What other cross tabulations of these data should be made? 



280 MARKETING RESEARCH 

EXHIBIT 1 
CUSTOMER INCOMES, BY MARITAL STATUS AND AGE 



\/f_ 'l. rt l 






Income 








Marital 
status 
and age 


Below 

$7,000 


$7,000 
to 
$10,999 


Below 
$11,000 
(Sub- 
total) 


$11,000 
and 
over 


Don't 
know 


Total 


Single men 
21 to 35 


42 


4 


46 


14 


o 


60 


36 to 50 


8 


14 


22 


5 


n 


2 


Over 50 


10 


18 


28 


24 


4 


56 


Don't know . . . 


3 





3 





2 


5 


Total 

Married men 
21 to 35 


63 
76 


36 
46 


99 

122 


44 
36 


6 
5 


149 
164 


36 to 50 


80 


96 


176 


226 


6 


408 


Over 50 
Don't know . . . 


72 
1 


84 
1 


156 

2 


270 
12 


28 
4 


454 
18 


Total .... 

All men 
21 to 35 


229 
118 


227 
50 


456 
168 


544 
50 


44 
6 


1,044 
224 


36 to 50 


88 


110 


198 


232 


6 


436 


Over 50 
Don't know . . . 


82 
4 


102 
1 


184 
5 


294 
12 


32 
6 


510 

23 


Total 


292 


263 


555 


588 


50 


1,193 



NOTE: Further breakdowns were considered undesirable. Incomes had been 
gathered by intervals of $1,000. For all customers the data were: Below $3,000, 
24 men; then in sequence by 1,000's: 30; 66; 88; 84; 80; 62; 51; 70; 50; and 
40; then $1 3,000 or more, 498; and Income unknown, 50. Less than 2 per cent 
of the customers were under 21 years of age. 



CASES IN ANALYSIS AND INTERPRETATION 

EXHIBIT 2 

PLACES AT WHICH CUSTOMERS MADE LAST SUIT PURCHASES, 
BY INCOME 



281 









Income 








Last purchase 
made at 


Below 
$7,000 


$7,000 
to 
$10,999 


Below 
$11,000 
(Sub- 
total) 


$11,000 
and 
over 


Don't 
know 


Total 


Brown Bros 
Tailor Shop 


90 
30 


74 
32 


164 

62 


196 
116 


18 
4 


378 
182 


Other store 


168 


154 


322 


251 


26 


599 


Don't know 


4 


3 


7 


25 


2 


34 


Total . . 


292 


263 


555 


588 


50 


1,193 



EXHIBIT 3 

PLACES AT WHICH CUSTOMERS MADE WINTER SUIT PURCHASES 
DURING PAST THREE YEARS, BY INCOME 



Income 



rurcnases 
in past 
3 years at 


Below 
$7,000 


$7,000 
to 
$10,999 


Below 
$11,000 
(Sub- 
total) 


$11,000 
and 
over 


Don't 
know 


Total 


Brown Bros 


136 


146 


282 


283 


23 


588 


Store U 


21 


29 


50 


33 


5 


88 


Store V . . . 
Stores W, X, Y, Z 
Dept. stores 


74 
21 
26 


64 
30 

23 


138 
51 
49 


138 
49 
14 


11 

4 


287 
100 
67 


1 other store 
2 other stores .... 
3 other stores .... 
Tailors 


83 
16 
1 
39 


102 
11 

36 


185 
27 

1 
75 


183 
42 
6 
145 


16 
2 

6 


384 

71 
7 
226 


Don't know 


8 


1 


9 


17 





26 


Total .... 


425 


442 


867 


910 


67 


1,844 



NOTE: Because of purchases made by individuals at more than one store, 
totals exceed the number in the sample. 



282 



MARKETING RESEARCH 



EXHIBIT 4 

PRICES PAID BY CUSTOMERS FOR ALL WINTER SUITS PURCHASED DURING 
PAST THREE YEARS, BY INCOME 



Prices 
paid 


Income 


Below 
$7,000 


$7,000 
to 
$10,999 


Below 
$11,000 
(Sub- 
total) 


$11,000 
and 
over 


Don't 
know 


Total 


Under $35 


14 

27 
73 
106 

190 

108 
42 
26 

148 

14 
11 
1 
6 
4 

34 
10 


2 
16 
38 
68 

100 

116 

73 
44 

214 

26 
10 
6 
6 
12 

44 

7 


16 
43 
111 
174 

290 

224 
115 
70 

362 

40 
21 
7 
12 
16 

78 
17 


4 
18 
56 
104 

150 

144 
154 
138 

314 

93 
64 
56 
74 
121 

312 
6 




6 
14 

20 

13 
11 
3 
4 

3 

3 
2 
6 

12 



20 
61 
173 
292 

460 

381 
280 
211 

680 

136 
85 
66 
88 
143 

402 
23 


$35444 
$45-$54 


$55464 


Low price . . . 

$65-$74 . . .. 
$75-$84 


$85-$94 
Medium price .... 
$954104 .... 
$105-$114 . .. 
$1154124 .... 
$1254134 .... 
$135 or more . . 

High price 


Don't know .... 
Total . . 


382 


365 


747 


782 


36 


1,565 



NOTE: Because some individuals made purchases in a number of price ranges, 
the subtotals are less than the sum of the persons buying each price line but 
totals exceed the sample number for the same reason. 



CASES IN ANALYSIS AND INTERPRETATION 
EXHIBIT 5 



283 



DISTRIBUTION OF CUSTOMERS BY NUMBER AND TYPE OF WINTER SUITS 
PURCHASED DURING PAST THREE YEARS, BY INCOME 



Type of suits 
bought and 
number: 


Income 


Below 

$7,000 


$7,000 
to 
$10,999 


Below 
$11,000 
(Sub- 
total) 


$11,000 
and 
over 


Don't 
know 


Total 


Ready-made only 
1 suit 


48 
52 
66 
28 
13 
8 
6 A 

221 

10 
6 
6 
5 

2 


29 

11 
4 
1 
2 

6 

24 
18 

292 


17 
55 
56 
29 
12 
12 

H B 

195 

1 

4 
7 
1 
1 

1 

2 

17 

6 
13 

7 
6 
10 
8 H 

50 
1 
263 


65 

107 
122 
57 
25 
20 
20 

416 

11 
10 
13 
6 
1 
3 
2 

46 

17 
17 
8 
8 
10 
14 

74 
19 
555 


4 
57 
94 
62 
39 
32 
30 

318 

8 
18 
25 
24 
13 
19 
12* 

119 

6 
35 
18 
15 
20 
30 1 

124 

27 
588 


9 
10 
9 
1 
4 

6 D 

39 

3 
2 
2 
1 




8 



2 
1 



3 

50 


78 
174 
225 
120 
68 
52 
56 

773 

22 
30 
40 
31 
14 
22 
14 

173 

23 
52 
28 
24 
30 
44 

201 
46 
1,193 


2 suits 


3 suits 


4 suits 


5 suits 


6 suits 
7 or more . . . 
Ready-made 
total . . . 

Custom only 
1 suit 


2 suits . . . 


3 suits 


4 suits 


5 suits 
6 suits 


7 or more 


Custom 
total 

Both types 
2 suits 


3 suits 


4 suits 


5 suits . . 


6 suits 


7 or more 
Both types 
total . . 

N A. 


Grand total 



NOTE: Number of suits in open-end classes: A-46; B-118; C-268; D-54; E-16; 
F-106; G-48; H-62, and 1-284. Breakdowns for purchases of both types of suits: 
Below $7,00042 Ready-made and 48 Custom, total 90. $7,000-$ 10,999 
126 Ready-made and 98 Custom, total 224. $11,000 and over 356 Ready- 
made and 304 Custom, total 660. 



284 MARKETING RESEARCH 

3. In view of the problem of an unexpectedly large open-end 
class, is the income breakdown used the most feasible? 

4. How consistent are, and should be, the findings as to the 
share of their customers' total suits purchases which Brown 
Brothers secures as based on last purchase and 3-year-pur- 
chase data? 

5. What statistical tests of significance might be used on these 
data? In what way and to what degree are the assumptions 
made by management about the store's market and the 
actions of customers proved or disproved? 

6. What inferences may be drawn from these data regarding 
the effectiveness of the firm's merchandising policies? 

7. What recommendations might be based on these data? 



Part VIM 



PRESENTATION AND FOLLOW-UP 



The Nature of the Tasks 

The bitter truth is that a great deal of marketing research 
results in little or no action. The reason is that between tech* 
nical findings and business actions lies a chasm difficult to 
bridge. How difficult is suggested by the fact that today many 
research staffs and agencies employ specialists for writing re- 
ports. But even an effective report, alone or with an oral pres- 
entation, may fail unless presentation is followed up to insure 
that action is taken or that failure to act is specifically justified. 

The major task of presentation is to convey the findings (al- 
most always statistical in nature and often complex) in the 
simplest, shortest, most persuasive, and most practical manner 
possible. The language of statistics and research has to be 
translated into operable terms. 

The task of the follow-up is to avoid losing the practical 
advantages of research because of the pressure of day-to-day ac- 
tivities of busy executives. 

The researcher does not bear sole responsibility for insuring 
that his studies become actions; but his is the principal task. 

Working Methods 

Presentation. In his interpretation of results the researcher 
already has considered the problems of the company and the 
personalities and functions of the executives. In preparing his 
presentation he, as does every writer, gives special attention to 
his "audience." The form of his report, as noted below, will 
depend on this. More directly, he may consult with executives 
as to findings and possible actions. By formulating possible 

285 



286 MARKETING RESEARCH 

alternatives, he can get executives to express their viewpoints 
as to usefulness of findings and the form in which they are most 
valuable. This may secure a far more enthusiastic acceptance 
of findings and recommendations. An alternative is to with- 
hold all findings in order that the final report may be a dramatic 
surprise. 

Most commonly the research findings will be of interest to 
both technicians and nontechnicians. The marketing research 
specialist will want to know about sampling methods, the 
questionnaire used, the supervision of the field staff, statistical 
manipulations, and other technical details. Moreover, the 
specialist may prefer to read his findings in technical language. 
The technical report will be addressed to this group as a separate 
report, or such materials will be included in an appendix to a 
report. 

Research intended to be read by company officials will con- 
tain the fewest possible technical details. It will be designed 
and written to arouse reader interest (without compromising 
accuracy) by headline-style writing, by liberal use of themes, 
catchwords, and analogies, and by much graphic illustration. 
Such a report is called a popular report; and research reports in- 
tended to be read by the general public are nearly always of this 
simplified and dramatized type. 

Compromise reports, however, are common. These are re- 
ports which combine the elements of both technical and pop- 
ular reports. For example, a summary and recommendation 
may be popularized, a major findings section may be some- 
what technical, and appendices may contain highly technical 
details. Sometimes the research staff will present only general 
findings and conclusions to company executives, further de- 
tails and technical aspects being held ready should any execu- 
tive request additional data or proof. 

The translation of statistical data into the language of 
business is a major challenge. The first and most basic step 
usually is to present statistics in the form of charts and graphs 
of various sorts. Map and illustrations (particularly picto- 
graphs) also aid comprehension by nontechnicians, and add 
life to a report. 



PRESENTATION AND FOLLOW-UP 287 

No mechanical devices or tricks, nonetheless, can substitute 
for clear expression of ideas in words arid an appropriate sales 
or business slant to conclusions. Here, near the end of re- 
search, is when a carefully planned beginning pays dividends. 

The most useful tool at this stage is an outline. It acts as a 
guide to the writing and a test of its adequacy, and it offers the 
readers an index to all materials. 

Follow-Up. After the written report has been submitted, 
often at the time of an oral presentation that highlights findings 
and utilizes visual methods to a great extent, it is necessary to 
follow up the report. 

Most commonly this is the function of the research director. 
He performs it often by talking informally with executives con- 
cerned in the days and weeks following submission of the re- 
port. He relies on his knowledge of the company and his close 
friendship with executives to get action. Sometimes a special 
assistant of the company president will be charged with respon- 
sibility for securing adequate consideration of a report by exec- 
utives. Occasionally, as in new product development, the 
research staff may be given direct responsibility to put their 
recommendations into action. A research agency sometimes 
is asked, also, to put recommendations into action; but usually 
reliance is put on effective presentation plus informal follow-up 
procedures. A few companies set deadlines, dates on which 
executives must act or give reasons for not acting. 

Special Difficulties 

The unsolved problem, both in theory and application, of 
the proper borderline between research as a staff function and 
the line functions of management creates many difficulties. 
Not many years ago most marketing research was expected to 
stop short at fact finding. Repeated failures of executives 
(either because of unwillingness, inability, or lack of time) to 
interpret findings and formulate business actions gradually has 
extended the research function. Almost universally (for all 
but the simplest of studies), researchers are now expected to 
reach statistical decisions and to draw conclusions. In many, 
if not most, cases they are expected to formulate specific recom- 



288 MARKETING RESEARCH 

mendations for action. (As has been noted, they even may be 
asked to supervise the execution of their recommendations.) 

It is clear that marketing research is a service or staff function. 
Yet it is generally believed that the researcher capable of 
formulating a business problem for study also is capable of 
understanding operating problems. He should not order or 
command; but he is capable of formulating realistic alterna- 
tive lines of action and of recommending ideas and actions. 
What should be done in an individual case depends on the 
researcher's abilities, his relations with and understanding of 
the company, and the executive personalities concerned. 

Another difficulty is that the technical training needed and 
the literary skill required may not be found in one man. A 
report, therefore, may have to represent the combined efforts of 
several persons. 

A further difficulty is that researchers often fail to leave 
enough time for this report-writing and presentation phase. 
All too often careful fact finding is followed by hasty report 
preparation to meet a deadline. 

The Cases in this Part 

Case 1, ''Preparation of Chart Material," raises the problem 
of translating common forms of statistical data into more effec- 
tive presentation forms. 

Case 2, "Preparation of a Retail Trade Area Map," is a more 
specialized problem which involves far-reaching conclusions 
and preparing both a map and a brief report from the data 
given. 

Case 3, "Consumer Reaction to Self-Service Meat Market- 
ing," poses the problem of rewriting certain introductory and 
technical materials into a report form so that it will be suited 
to other, nontechnical readers. 

Case 4, "Report on Branch Store Markets and Policies," is 
offered primarily for evaluation, the criticism being made of 
many possible aspects of report writing. Opportunity also is 
offered for consideration of graphic presentation and the prep 
aration of an oral presentation. 



PRESENTATION AND FOLLOW-UP 289 

Case 5, "Follow-Up on Product Performance Studies/' re- 
views the situation faced by a company's research staff in 
securing action and poses problems of evaluation or perform- 
ance for many aspects of follow-ups. 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. Chapters 17 and 18 con- 
tain a fairly conventional treatment of the presentation and follow-up on 
research results. 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. There is an especially good section on graphic presentation in 
Chapter 13. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Chapter 25 gives an excellent discussion of the primary 
principles of reporting on research work. 

BUREAU OF THE CENSUS. Manual of Tabular Presentation. Washington, D.C.: 
U. S. Government Printing Office, 1949. An outline of theory and practice 
in the presentation of statistical data for publication in tables. 

COUTANT, F. R. "Market Research Must Hold Executive Attention." Journal 
of Marketing, X (January, 1946), pp. 288-89. The author shows the im- 
portance of research to top management. 

FROTHINGHAM, R. S., et al. "Preparation and Presentation of the Research 
Report." Journal of Marketing, XIII (July, 1948), pp. 62-72. A detailed 
treatment of the ways in which reports should be prepared for various audi- 
ences. 

HALL, R. O. Handbook of Tabular Presentation. New York: The Ronald 
Press Co., 1946. This is considered the standard work related to the prepa- 
ration of tables. 

HEIDINGSFIELD, M. S., and A. B. BLANKENSHIP. Market and Marketing Analy- 
sis. New York: Henry Holt & Co., 1947. The latter half of Chapter 11 is 
devoted to a brief discussion of the form of the report, its presentation, and 
the follow-up that is necessary. 

LUCK, D. J., and H. G. WALES. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. Chapters 15 and 16 give details of the outline of report 
writing as well as a variety of ways in which the findings can be put to work. 

LORIE, J. H., and H. V. ROBERTS, Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. Chapter 19 shows how market- 
ing research can be coordinated with the needs of management. 

SAUNDERS, A. G., and C. R. ANDERSON. Business Reports. New York: Mc- 
Graw-Hill Book Co., Inc., 1941. A good standard reference on the prepara- 
tion of business reports of all types. 

SESSIONS, R. E. "A Management Audit of Marketing Research." Journal of 
Marketing, XIV (January, 1950), pp. 563-71. Discussion of the ways in 
which marketing research keeps pace with company needs, the administra- 
tion of research that can be made to set the pace for operating efficiency, and 
the ways in which the research staff can keep in touch with the realm of 
ideas which determine sales growth and future market position for the com- 
pany. 



Part VIII Cases 



CASE I PREPARATION OF CHART MATERIAL 



BACKGROUND 

A large publishing house had collected some income and 
population data through its Division of Marketing and Re- 
search. These data are shown in table form in Exhibits 1-5. 

EXHIBIT 1 

INCOME DISTRIBUTION OF U. S. FAMILIES, 1939 AND 1947 



Income group 


January 1 


,1939 


January 1 


,1947 




Number 


Per cent 


Number 


Per cent 


A $5 000 & over 


1 360 000 


4.0 


3 721 000 


96 


B. $3,000-$4,999 . . . 


2,168,000 


7.7 


7*056*000 


18.3 


C. $2,000-$2,999 


6,324,000 


18.6 


11,815,000 


30.6 


D. $1,000-$1,999 


12,410,000 


36.5 


10,904000 


28.2 


E. Under $1,000 


11,288,000 


33.2 


5,113,000 


13.3 












Total 


34,000,000* 


100.0 


38,609,000* 


100.0 



Inc. 



* U. S. Bureau of the Census estimates 

Source: Division of Marketing and Research of Macfadden Publications, 



EXHIBIT 2 

INCOME DISTRIBUTION OF URBAN FAMILIES, BY OCCUPATION, 1936 AND 1946 
(In percentages) 



Income 


1936 


1946 


Wage earner 


White collar 


Wage earner 


White collar 


A. $5,000 & over. 
B. $3,000-$4,999 
C. $2,000-$2,999 
D. $1,000-$1,999 . 
E. Under $1,000 


0.1 
1.6 
6.2 
24.4 
20.5 


3.6 
5.9 
11.1 
18.8 
7.8 


1.5 

10.8 
22.1 
16.1 
7.9 


8.4 
8.5 
11.5 
10.3 
2.9 



Source: National Survey of Liquid Assets, Bureau of Agricultural Economics. 
Division of Marketing and Research of Macfadden Publications, Inc. 

290 



CASES IN PRESENTATION AND FOLLOW-UP 291 
EXHIBIT 3 

INCOME DISTRIBUTION OF U. S. FAMILIES, FOR SELECTED YEARS 
(Total families = 100% ) 



Year 


Upper 
(over 
$5,000) 


Lower 
(under 
$2,000) 


Middle 
($2,000- 
$4,999) 




1896... 


1.9% 


96.3% 


1.8% 






1910... 


1.7 


92.1 


6.2 


1 out of 10 


families had more than 










$40 a week 




1921... 


2.5 


86.4 


11.1 






1929 .. 


8.2 


59.5 


32.3 


4 out of 10 


families had more than 










$40 a week 




1933 .. 


3.3 


82.0 


14.7 


2 out of 10 


families had more than 










$40 a week 




1/1/39 


4.0 


69.7 


26.3 






1/1/40 


4.1 


68.8 


27.1 






1/1/41 


4.4 


66.9 


28.7 






1/1/42 


5.7 


58.5 


35.8 






1/1/43 


7.6 


48.7 


43.7 






1/1/44 


8.3 


43.6 


48.1 






1/1/45 


8.8 


42.7 


48.5 






1/1/46. 


8.9 


42.7 


48.4 






1/1/47 


9.6 


41.5 


48.9 


6 out of 10 


families had more than 










$40 a week 





Sources: Charles Spahr, The Present Distribution of Wealth; W. I. King, 
The Wealth and Income of the People of the United States; National Industrial 
Conference Board, unpublished studies; Brookings Institution, America's Ca- 
pacity to Consume; Financial Survey of Urban Housing; National Resources 
Planning Committee; Macfadden Publications, Inc., Division of Marketing and 
Research. 

THE PROBLEM 

The Marketing and Research Division of the publishing 
house wanted to prepare a popular report that would include 
tables, charts, and graphs. The objective was to keep the writ- 
ten copy to a bare minimum and keep reader interest high by 
using a number of unique and pleasing charts and graphs. 

ACTION NEEDED 

From the tables given in this Case, select those suitable for 
preparing charts and graphs. Indicate your reasons for this 
selection. Then prepare the charts and graphs, and write out 
a statement giving the reasons for your choice of the various 
types of charts and graphs you have prepared. 



292 MARKETING RESEARCH 

EXHIBIT 4 

NATIONAL INCOME PAYMENTS, BY DISTRIBUTIVE SHARES, FOR 
SELECTED YEARS 

(Dollar amounts in billions) 



Year 


Total 
income 
payments 


Salaries 
and wages 


Entrepre- 
neurial 
income 


Dividends, 
interest, and 
net rents 


Other 
income 
payments 


1910 


$ 31.1 


$ 148 


* 


$15 2 


# 


1929 


100.0% 
$ 82.6 


47.7% 
$ 52 5 


$136 


52.1% 
$15 3 


$1 2 


1939 


100.0% 
$ 70.8 


63.5% 

$ 42 2 


16.5% 
$11 2 


18.5% 
$11 2 


1.5% 
$62 


1940 . ... 


100.0% 
$ 76 3 


59.6% 
$ 46 5 


15.8% 
$12 


15.8% 
$11 5 


8.8% 
$6 3 


1941 


100.0% 
$ 92.8 


60.9% 
$ 58.2 


15.7% 
$15 8 


15.1% 
$12 5 


8.3% 
$62 


1942 


100.0% 
$117.3 


62.7% 
$ 77.6 


17.0% 
$206 


13.5% 
$13 1 


6.7% 
$60 


1943 


100.0% 
$143.1 


66.1% 
$ 99.2 


17.6% 
$23 5 


11.2% 
$140 


5.1% 
$64 


1944 


100.0% 
$1566' 


69.3% 
$1089 


16.4% 
$24 1 


9.8% 
$15 1 


4.5% 
$8 5 


1945 


100.0% 
$160.8 


69.6% 
$110.2 


15.4% 
$256 


9.6% 
$16 3 


5.4% 
$87 


1946 


100.0% 
$1650 


68.6% 
$1052 


15.9% 
$302 


10.1% 
$18 1 


5.4% 
$11 5 




100.0% 


63.7% 


18.3% 


11.0% 


7-0% 



* Information not available in comparable form. 

Sources: U. S. Department of Commerce; W. I. King, The Wealth and In- 
come of the People of the United States. 

EXHIBIT 5 
CIVILIAN LABOR FORCE, 1940-47 



Year 


Civilian 
labor force 
(im'llions) 


Number 
employed 
(millions) 


Per cent of 
labor force 
employed 


March, 1940 


530 


45 1 


85 1% 


March, 1941 


52.0 


460 


88 5 


March, 1942 


53.5 


502 


93 8 


March, 1943 


52.3 


51 2 


979 


March, 1944 


51.4 


50 5 


982 


March, 1945 


55.7 


53.0 


95.2 


March, 1946 


55.2 


52.5 


95.1 


March, 1947 


58.4 


56.1 


96.1 



Source: Bureau of the Census, U. S, Dept. of Commerce. 



CASES IN PRESENTATION AND FOLLOW-UP 293 

CASE 2 PREPARATION OF A RETAIL TRADE 
AREA MAP 

BACKGROUND 

For many years researchers in the retail field have attempted 
to develop formulas, or 'laws/' to account for the division of 
trade between market areas. The first "law of retail gravita- 
tion" was proposed by William J. Reilly in 1931 and purported 
to divide trade from an intermediate town between two neigh- 
boring cities according to the following formula: 1 



B 



where 



B is the proportion of trade gained by city A from the intermedi- 
ate town, 

B 6 is the proportion gained by city B ; 
P is the population of city A, 
P & is the population of city B, 

D ft is the distance between city B and the intermediate town, and 
D a is the distance between city A and the intermediate town. 

The boundary of a city's trade area in relation to another city 
was determined from the following formula, which was devel- 
oped at a later date: 

Miles between cities A and B 
Boundary for city B in miles = , :=: , 



where B is the smaller city. 

*W. J. Reilly. The Law of Retail Gravitation. (New York: William J. 
Reilly, 1931). 



294 MARKETING RESEARCH 

A formula for estimating the loss of trade of one town to an- 
other was developed by P. D. Converse in 1949, as follows: 2 



where 

B tt is the proportion of trade gained by town A, the outside town, 
B & is the proportion of trade retained by town B, the home town, 
P a and ?& are as before, and 
d= distance between towns A and B. 

The integer, 4, in the above formula is denoted by Converse 
as the "inertia-distance factor of trading at home" and was 
derived on the basis of a series of studies of towns in Illinois with 
a population over one thousand. 

It should be noted that all these "laws" were formulated pri- 
marily with fashion, or shopping, goods in mind; that is, apparel, 
household furniture and furnishings, and similar items. 

THE PROBLEM 

In 1951 the merchants of Fairville, a large town in the Middle 
West, called in a researcher to aid them in analyzing their trade 
position in relation to other towns in the area. What the 
merchants wanted were some benchmarks against which they 
could evaluate the effectiveness of their merchandising meth- 
ods. They planned to evaluate these methods by means of a 
series of retail trade surveys. In effect, they wanted a map 
delineating the "normal" boundaries of their trade area and 
giving some idea of the expected division of trade between them 
and each of the neighboring towns. 

DATA AVAILABLE 

A map of the towns in the vicinity of Fairville is shown on 
page 295, together with the distances in road miles between 

8 P. D. Converse. "New Laws of Retail Gravitation/' Journal of Marketing, 
XIV (October, 1949), pp. 379-84. 



CASES IN PRESENTATION AND FOLLOW-UP 295 
.HIGH CITr 



VICTORIA 




SPRINGTON 



CLAYTON 



RICHLANO 



neighboring towns. The population of each of these towns in 
1950 was as follows: 



Fairville 

Richland 

Clayton 



17,500 
6,900 
9,200 



Springton 
High City 
Victoria 



3,000 

64,000 

6,200 



The materials by Reilly and Converse cited above are highly 
pertinent to this problem. 

ACTION NEEDED 
Three things are needed: 

1. A retail trade area map for Fairville outlining the boundaries 
of its trade area as based on the formulas of retail gravitation. 



296 MARKETING RESEARCH 

2. Estimates of the division of trade between Fairville and each 
of its neighboring towns, other things being equal. 

3. A brief memorandum to the merchants of Fairville outlin- 
ing the uses and limitations of these data and of the retail 
trade area map. 



CASE 3 CONSUMER REACTION TO 
SELF-SERVICE MEAT MARKETING 1 

BACKGROUND 

The following are excerpts from a study that was made to 
ascertain the reaction of consumers to self-service meat market- 
ing. The sections of this study that have been reproduced here 
are taken from a thesis entitled "Economic Analysis of Self- 
Service Meat Marketing/' by William R. Bennett. 

HISTORY OF SELF-SERVICE RETAILING OF MEAT 

The first attempt to prepackage meat seems to have been that of 
the Hudson's Bay Company in Winnipeg, Manitoba, Canada, in 1923. 2 
Meats were wrapped in cellophane and sold by service clerks. Five years 
later Mr. Donaldson, who had conducted the above operation, con- 
vinced Mr. Frank Parsloe of the H. C. Bohack Company, Brooklyn, New 
York, of the feasibility of the plan, and by 1929 the Bohack Company 
was serving prewrapped meats to fifty stores from a central plant. The 
project was abandoned because of improper refrigeration and display 
equipment, lack of meat knowledge by clerks, inadequate wrapping 
materials, and a high percentage of returns to the central plant. 3 

Around 1925 the first transparent flexible film package of meat made 
its appearance. It was not suitable for self-service selling because it was 
not moistureproof and because of the high humidity of self-service cases. 
The wrap did give packer identification, however. 4 

In the early thirties, the Atlantic and Pacific Tea Company conducted 

1 Based upon a study prepared by W. R. Bennett as a doctoral dissertation, 
on file at the University of Illinois library. 

* Meat Merchandising Self-Service Meat Manual. St. Louis: Meat Mer- 
chandising, Inc., 1949, p. 9. 

* Ibid., p. 10. 

*N. Allen. "The Latest 'Know-How* in Prepackaging of Meats," Super 
Market Merchandising, XV (June, 1950), pp. 127-31. 



CASES IN PRESENTATION AND FOLLOW-UP 297 

experiments with prepackaging but discontinued them because of the 
above difficulties. 5 

The Hy-Grade Food Products Corporation conducted experiments in 
1933 by putting precut meat into cardboard bread trays and overwrap- 
ping them with cellophane on a bread-wrapping machine. The project 
was also abandoned because of technical and managerial difficulties. 8 
In 1935 the Loblaw chain in Canada tried a fixture with a display top 
and stock drawers below, but the refrigeration was inadequate. 7 By 
1938 the Sanitary Grocery Company of Washington, D.C., had devel- 
oped a rolled roast wrapped in cellophane and the idea was copied by 
other chains and independents. Legs of lamb were next wrapped in 
cellophane and placed on top of the meat cases. In 1940, chickens were 
prepacked and sold from a service case. 8 

The first self-service case (an old fish and delicatessen case) went into 
operation at the A & P store at 467 Center Street, Jamaica Plains, Massa- 
chusetts, on February 4, 1941, and 1,400 packages were sold from the 
case in the first week of operation. A 30 per cent increase in volume 
was experienced without additional labor cost. 9 In 1941 Empire 
Markets opened a self-service meat department in Schenectady, New 
York; in 1942 Caler's opened a market in Los Angeles, and by the end 
of 1944 there were ten 100 per cent self-service meat departments in 
operation in the United States. 10 By April 1 of 1949, there were in the 
United States 878 self-service meat departments in operation. The 
A. C. Nielsen Company reported 7,754 stores on a partial self-service 
basis as of the same date. 11 

It should be mentioned here that before self-service meat marketing 
could develop, two technological improvements had to be made, inno- 
vations themselves: the development of a satisfactory wrapping material 
for fresh meat, and the development of a satisfactory meat case for self- 
service. It is interesting to note that refrigeration men did not believe 
that such an improvement was possible at the time they were assigned 
the problem. 12 

5 Meat Merchandising Self -Service Meat Manual, p. 10. 
9 Ibid. 

7 Ibid. 

8 Ibid, p. 11. 

9 Ibid. 



11 Prepackaged Self -Service Meats 1949 Report. Chicago: Armour & Co., 
1949, p. 3. 

u Meat Merchandising Self -Service Meat Manual, p. 11. 



298 MARKETING RESEARCH 

THE CHAMPAIGN-URBANA SURVEY 

Limitations of Surveys and Reasons for Present Study 

Analysis of the degree of difference in attributes of households ac- 
cepting the innovation from those not accepting it is not found in the 
above studies. 13 Knowledge of attributes associated with acceptance 
(and rejection) of the innovation should be useful to retailers who are 
faced with the problem of whether or not to convert to self-service, to 
students of marketing who are interested in the study of innovations by 
marketing institutions, and to students of economics interested in the 
theory of innovation. 

The above surveys are concerned primarily with whether or not con- 
sumers approve the innovation, and what they like or dislike about it. 
Inferences regarding the population cannot be made on a probability 
setting on the basis of any of the above surveys because the universes 
were not defined and the samples were not random. 

A number of possibilities were open to the author in a study of con- 
sumer reaction to the innovation. One approach would have been to 
study households before and after the installation of the innovation in 
the community to detect changes in buying patterns and consumption. 
The investigator would have been compelled to find a community in 
which a meat department was being converted to self-service, survey a 
random sample in the store's trade area several weeks before the intro- 
duction of the innovation, several weeks after conversion, and again 
several months later without respondents' knowing they would be sur- 
veyed again. Unless one could find a neighborhood store being con- 
verted, the bounding of the trade area might be a major problem. For 
example, one large food store in Champaign-Urbana has a very large 
country trade and comparatively little town business. Such a study 
would probably necessitate extensive recording of meat purchases by 
households and would extend over a rather long time. Because of these 
problems, the approach did not appear to be feasible. A study of at- 
tributes required the completion of only one questionnaire, did not 
require either memory or recording of meat purchases, and could be 
done with the resources and facilities at the disposal of the author. 

18 For purposes of this study, a household is assumed to have accepted the in- 
novation if half or more of the meat purchased by the household is from a self- 
service meat department. A household is a spending unit (for purposes of food 
buying) that has cooking facilities. Households with over three boarders were 
not included in the sample. 



CASES IN PRESENTATION AND FOLLOW-UP 299 

Definitions 

For purposes of clarity it is necessary to define terms that will be used 
throughout the account of the results of the Champaign-Urbana meat 
survey. 

A self-service meat department is one in which all meat is cut, 
wrapped, heat-sealed, weighed, labeled, priced, and sold from an open 
display case. The term "self-service store" is used interchangeably with 
"self-service department." 

A service or conventional meat department is one in which each cus- 
tomer is served by a clerk who weighs, prices, and wraps each order. 

A partial self-service meat department is one in which fresh meats are 
sold by the conventional method, other meats being sold self-service. 
The partial self-service meat department is grouped with the conven- 
tional departments for purposes of this study, since the main interest of 
the study is in the sale of fresh meats self-service. 

The term town or city refers to the area within the city limits of both 
Champaign and Urbana. 

A call was a visit to a household. 

An interview was a conversation with a representative of a household 
resulting in the completion of Question 1 on the schedule. 

A nonusable schedule was a schedule discarded because of incon- 
sistencies. 

A refusal was a call by an interviewer resulting in the interviewee 
refusing to answer Question 1 on the schedule. 

A final refusal was a call by the author resulting in the interviewee's 
refusal to answer Question 1 on the schedule. 

A callback was the term used to designate an interview made on the 
third or subsequent call. 

An at home was the term used to designate an interview made on one 
of the first two calls. 

Fresh meat refers to fresh beef, pork, lamb, and veaL Cured or 
processed meats are not included. 

Most means over 50 per cent. 

Community Chosen for Survey 

The community chosen for the survey, Champaign-Urbana, Illinois, 
twin cities of 62,404 population (1950), 14 is located in east central 
Illinois and is the home of the University of Illinois. Five self-service 
meat departments, operated by two chains, are located in the town, but 

u Champaign-Urbana News-Gazette, June 15, 1950, p. 3. 



300 MARKETING RESEARCH 

they are grouped in such a way that most of the city (74 per cent of the 
total number of blocks) is more than five blocks from a self-service store, 
making it possible to study the effect of distance from the self-service 
meat department upon acceptance of the innovation. A good distri- 
bution of households among geographic areas was obtained through 
random selection from the population. 

Since the stores are somewhat different in layout and location, one 
can study criticisms and good points of the innovation mentioned by the 
customers of the stores to determine if these differences influence con- 
sumer attitudes. Conventional meat departments of comparable size 
and handling meats of comparable quality are located within three 
blocks of three of the stores and small neighborhood stores are near the 
other two. Champaign-Urbana was also desirable because of the use of 
student interviewers. 

Four of the self-service departments in the town were converted in a 
six-month period in 1949. This limits the study of the effect of time on 
acceptance of the innovation. Dates of conversion of the Champaign- 
Urbana self-service meat departments are shown in Exhibit 1. 

EXHIBIT 1 

DATES OF CONVERSION OF SELF-SERVICE MEAT DEPARTMENTS, 
CHAMPAIGN-URBANA 



Store 


Location 


Date of Conversion 


A 


Champaign 


May, 1949 


B . 


Champaign 


December 1947 


C 


Champaign 


October, 1949 


D 


Urbana 


October, 1949 


E 


Urbana 


November, 1949 



Techniques Used 

In order to be able to state conclusions in probability terms, a random 
sample of 447 households in Champaign-Urbana was interviewed. The 
sample was designed so that the standard error would not exceed 2.5 
per cent. A detailed account of the construction of the questionnaire, 
the use of a pilot survey, the design and selection of the sample, the 
reliability of results, the treatment of nonresponses, the time and dura- 
tion of the survey, the techniques of interviewing, and the handling of 
tabulation is included as a part of the Appendix to the original study. 



CASES IN PRESENTATION AND FOLLOW-UP 301 

ACTION TO BE TAKEN 

1. How would such materials be presented in an introduction 
to an article for The Journal of Marketing? Write this in- 
troduction. 

2. How would such materials be incorporated into a report 
designed for business executives of a chain store organiza- 
tion? 

3. How would such materials be handled in a report intended 
for the general public? 

CASE 4 REPORT ON BRANCH STORE MARKETS 
AND POLICIES 

BACKGROUND 

The findings of a study of branch store markets seemed most 
important in terms of the basic policies pursued by the depart- 
ment store for operating its branches. The basic theme of the 
report, therefore, was the adaptation of these policies to the 
number, types, and behavior of the people who comprised 
the markets for the branches. 

Consultations with the director of the store's research staff 
during the drafting of the report encouraged the research group 
to believe that even a lengthy report would get a full reading. 
It was decided, however, to withhold findings until an oral pres- 
entation could be made. This would be done at a meeting of 
the operating committee (including all top executives of the 
store), which the president and the director of research also 
would attend. At this meeting, executives would be given a 
copy of the written report. 

EXCERPTS FROM A FINAL DRAFT OF THE WRITTEN REPORT 

Shown below are excerpts from the final draft: the table of 
contents (excluding Tables 16 to 37), purposes, summary and 
recommendations (excluding the sections on lower-price lines, 
special study for Branch B, and advertising policy), and a sam- 
ple page from the major findings and from the statistical tables 
sections. 



302 MARKETING RESEARCH 

EXHIBIT 1 

TABLE OF CONTENTS 

PAGES 
I Purposes 3 

II Summary and Recommendations 5 

The basic policy of uniformity ..... 5 
Exception to basic policy branch sales events . . 6 
Exception to basic policy lower price lines . . .6 
Special study of the market for Branch B . .7 

Advertising policy .8 

Future branch policy .9 

Use of credit records for branch store research . . .10 

III Major Findings - 11 

How many customers? .11 

How "independent" or "interdependent" are the markets 

of branches and the main store? 12 

Do branches create plus business? 13 

How well are branch store price-lines adapted to their 

markets? H 

Does the lack of special branch sales fit the market? . .15 
What are the trading areas of the branches and how great 

is their attraction power in these areas? . . .17 

IV Appendix 20 

A. The Methods Used 20 

B. The Sample 22 

C. The Questionnaire Used 23 

D. Statistical Tables 24 

( 1 ) Division of customer business . . . .24 

(2) Proportion of branch customers patronizing the 

main store 24 

(3) Number of store credit customers patronizing 

branches for credit or cash . . . .25 

( 4 ) Family income of customers by stores patronized 2 5 

(5) Size of customer families by stores patronized 26 

(6) Proportion of total branch business by size of 

branch accounts 26 

(7) Size of accounts by stores patronized . . 26 

(8) Division of expenditures of branch patrons by 

stores patronized 27 



CASES IN PRESENTATION AND FOLLOW-UP 303 

(9) Division of expenditures by all store patrons re- 
siding in branch areas . '. . . .27 

(10) Customer age groups by stores patronized . 28 

(11) Families that include preschool children, by 

stores patronized . . . . . .28 

(12) Total size of credit accounts (branch plus main 

store) by income groups . . . .28 

(13) Size of basement store credit account by stores 

patronized .29 

(14) Basement store accounts by income groups . 29 

(15) Customers desiring basement store merchandise 

in branches by stores patronized . . .30 



I PURPOSES 

When first discussed, in September, the general purpose of this study 
was "to analyze such customer actions and purchase patterns as are re- 
yealable in our credit records in order to secure information of value in 
merchandising and promotional activities." (The possibility of extend- 
ing any study by a survey also was noted.) Six specific store problems 
ivere listed under this general purpose. 

A statement of proposals was submitted to each member of the oper- 
iting committee. Each voted that Problem 6 was "both interesting and 
valuable." The wording voted on was: 

Geographical Distribution of Business. To analyze customer patron- 
age at the branches and Philadelphia store to discover interrelation- 
ships of business by types of customers on purchases. Objectives: use 
in credit solicitation, advertising coverage in branches, special promo- 
tional or merchandising problems. 

The discussions held later with store executives, plus published data 
ind interviews conducted with housewives who patronized branch 
tores, revealed these problems: 

. Almost no factual data on branch customers exist. It is not even 
possible to determine their numbers without a laborious search of 
microfilm records over many months. (This not only greatly in- 
creased the difficulties of sampling the records but also forced the 
gathering of much background data before specific issues even could 
be isolated.) 

. A number of branch policies depend primarily on internal operating 
economies, but depend also on important, untested assumptions 



304 MARKETING RESEARCH 

about customers and their actions. For example (the characteriza- 
tion here is highly simplified) : 

A. Centralization of buying; of receiving, checking, and marketing; 
of promotion; of credit operations, and so forth, provides large 
operating economies. The resulting uniformity of branch and 
parent offerings, it is assumed, is not an important restriction on 
sales because: (1) the markets are homogeneous, (2) most 
branch patrons are also patrons of the parent store, ( 3 ) customers 
expect branches to carry "everything," even if in limited assort- 
ments, and (4) for furs, furniture, and other shopping lines most 
branch patrons will come to the parent store in the downtown 
shopping center. 

B. An outstanding exception to uniformity, the absence of basement 
operations in the branches, is necessary because of lack of space 
and because (assumption) the higher-income suburban patrons 
have little interest in these price lines. 

C. Another exception to uniform offerings, the almost total lack of 
special store-wide promotions in the branches, is necessary be- 
cause of the high cost of processing small lots and transporting 
sale merchandise to and from the branches. It is justified also 
(assumption) because most branch patrons are less salesminded 
and because traffic at the parent store is more necessary and more 
difficult to develop. 

D. Newspaper advertising by the present store (with by-lines and 
other devices to show availability of merchandise at the branches) 
also promotes branches. Little individualized branch advertising 
in branch areas is needed. 

The final purposes, therefore, were established as being: 

1 . To gather facts on the shopping actions of branch patrons relevant to 
the problems and assumptions noted. 

2. To assess branch operations in an effort to uncover opportunities for 
increased volume (without losing operating economies) through bet- 
ter adaptation to market realities. 

3. To provide a firmer basis for planning future branch store expansions. 

4. To test the feasibility of using credit records primarily, or even ex- 
clusively, for research of branch problems. 

Special Note: No attempt has been made to analyze transaction or 
sales data as usually gathered, whether by departments or otherwise. 
Instead, an effort has been made to bring new facts to light. The 
temptation to pour the new wine of facts about customer actions into 
the old bottles of sales analysis has been resisted. The primary value of 



CASES IN PRESENTATION AND FOLLOW-UP 305 

customer data is the new insights provided. Although costs of operation 
and sales volume by departments and lines have not been ignored, the 
emphasis of this study lies on people and their shopping actions. 



II SUMMARY AND RECOMMENDATIONS 

That central city stores, although increasing in dollar sales, are getting 
a smaller and smaller share of total business has been established many 
times. Indeed, this fact has been a strong impetus to the branch store 
movement. It is highly probable that this relative decline of downtown 
department stores will continue. 

In short, the great bulk of future increases in sales must come from 
branch stores. 

Markets also are people. The relation of this simple fact to branch 
store operations may have been neglected. After all, little factual in- 
formation on suburban purchasers as people has been available and 
relatively little attention is given to it. 

Store records, for example, indicate that the people who patronize the 
two branches studied are responsible for about 35 per cent of total busi- 
ness. With the addition of a third branch the proportion certainly will 
rise to about 50 per cent. Not at the branches. No. But markets are 
people. 

The basic underlying trends are for these people to prefer the suburbs 
over downtown Philadelphia for shopping and to increase their suburban 
purchases. (They already spend more in the branches than they do in 
the main store downtown.) Thus, these people represent exceptional 
opportunities for increased branch business and for cultivation of their 
business through their relations with the branches. The implications of 
markets as people, in fact, run far ahead of current dollar sales figures. 

The Basic Policy of Uniformity 

The findings of this study fully support the basic policy of branch 
operations. 

Not that branch patrons are entirely like nonb ranch patrons. Op- 
portunities to differentiate, or individualize, children's wear, sportswear, 
Dr other branch departments, or to sell proportionately more of the same 
joods in some price lines and categories unquestionably exist. And such 
problems as parking are far different. Fundamentally, however, the 
narkets are highly similar. 

In fact, the great majority of all branch patrons also are patrons of the 
nain store (and patrons in large part for the same things offered them in 



306 MARKETING RESEARCH 

branches) . Based on the facts of the market found, there seems every 
reason to continue the policy of making branches duplicates, or counter- 
parts, in all essential ways of the main store. 

The only danger suggested by this policy investigation is that the main 
store may dominate policies sometimes for its own good but not for the 
good of the entire operation. Adjustments of operations should be ad- 
justments to the total market. Uniformity which lacks this emphasis 
may result in failure to realize branch potentials. 

Exception to Basic Policy Branch Sales Events 

In fact, the danger just noted seems present now in relation to branch 
sales events. Present policy may be holding present costs in line, and 
protecting main store traffic somewhat, but it is at the cost of neglecting 
some genuine opportunities to increase branch business. The assump- 
tion now made that branch patrons (and potential branch patrons) are 
not as interested in sales as other people is erroneous. The self- 
generation of branch traffic because of convenience also can be doubted. 
The majority of branch customers visit the branches less than once a 
month. 

Store records show that, on a credit basis, branch patrons attend as 
many main store sales events as do other customers. They also report 
attending sales at other downtown department stores, though propor- 
tionately less often than nonbranch customers. 

Approximately two thirds of branch patrons report that they do attend 
sales events at suburban stores. By their answers the great majority of 
branch customers and potential branch customers desire branch sales 
events. 

During one event, lasting fifteen days, the one time when customers 
had a choice of branch or downtown sales, they showed a great prefer- 
ence for the branch. Store records show that during this period 81 per 
cent of Branch A patrons patronized (for credit) only the branch, and 
83 per cent made more than half their dollar expenditures there. This 
factual test clearly indicates high potential of branch sales. 

Nor is this all. The evidence indicates that not only do branches de- 
velop plus business but also extra plus business, some of it from regular 
credit customers, but much of it from otherwise inactive credit cus- 
tomers or from people without credit accounts. (Twenty-seven per cent 
of persons whom the records show made no purchases report attendance 
at sales events.) 

Moreover, expecting customers to come to the main store when 
the branches do not have sales is risky. Although no absolute proof is 



CASES IN PRESENTATION AND FOLLOW-UP 307 

possible with the data gathered, there are many indications that com- 
peting downtown stores siphon off much of this business. (For ex- 
ample, as many patrons of Branch A report attending sales events during 
1952 at sales events of competing department stores downtown as report 
having gone to the main store sales events. The same is true for patrons 
of Branch B.) 

We conclude from the market data that branch patrons, and potential 
branch patrons, very definitely desire branch sales events. 

We recommend that more special sales events for branches be 
planned. Despite the handicap of added expense, it is probable that 
such events can be made profitable. In addition, such sales should do 
much to increase the number of patrons and the amount of patronage 
during regular selling days. Traffic for branch sales events also is the 
easiest to develop of all store traffic. 

Future Branch Policy 

Branch A, in particular, has won for itself a considerable measure of 
"market independence." Nineteen per cent of its customers do not 
patronize (for credit) the parent store. It gets 61 per cent of the busi- 
ness it divides with the parent. It gets more than half of all store busi- 
ness in its area. Its customers as a group certainly do not patronize it 
merely for convenience goods or fill-in items. And if the mail, tele- 
phone, and basement sales of the parent are eliminated, it "competes" 
: ar more strongly with the downtown store than even these figures indi- 
cate. Moreover, much branch business is plus business volume that 
.he parent store itself could never secure. 

These facts indicate the desirability of a policy sufficiently flexible 
o allow a branch to differentiate its offerings to realize sales opportuni- 
ies in its "own" market. These facts also suggest the merit of a policy 
yhich would provide for a considerable amount of separate branch pro- 
notion, a direct cultivation of what is in one true sense its own, separate 
narket. 

The fact remains, nevertheless, that branch and parent customer 
roups are interlocked or overlapping. Exclusive customers of either 
re not as valuable as "mixed" patrons. The success of the enterprise 
ssts on a successful joint cultivation and servicing of customers. To be 
harply remembered, however, is the fact that branches generate most 
f their own business and do not steal it from their parent. Market facts 
Iso prove that you cannot successfully play battledore and shuttlecock 
rith customer habits. If not offered certain merchandise or services in 
ne location, customers will not flock automatically to the other. 



308 MARKETING RESEARCH 

These facts and considerations suggest that a basic policy of "chain 
store" or centralized operations is essential. Acute as some organiza- 
tional problems may become in the future, branch autonomy would 
seem a poor remedy indeed. The danger for policy probably lies in the 
dominance of branch activities by executives most of whom are also and 
predominantly concerned with the welfare of the parent operations. 

The lack of basement operations, or lower-price lines, in the two 
branches studied apparently is causing some loss of potential volume. 
Some remedy, we believe, is needed for Branch B. The market facts 
gathered, however, may be most important in planning future expansion. 
Both branch areas, and especially that of Branch A, are unusual. We 
are convinced that in many areas in which the store might open a branch, 
genuine opportunities for true basement operations exist. The opening 
soon of a competitor's branch with a basement should be watched 
closely. The expansion of suburban areas and the dilution of incomes 
in them makes less and less the opportunity of "aristocratic" branches 
to realize true market potentials. 

Use of Credit Records for Branch Store Research 

The facts about customer actions which are buried in the credit rec- 
ords of the store are such as big manufacturers pay many thousands of 
dollars for each year through consumer panels, store audits, and other 
research. That these data can be valuable in assessing branch opera- 
tions and policy is, we trust, demonstrated by the small example of re- 
search possibilities covered by this study. 

We recommend establishing a continuous branch study based on such 
credit records. We do not recommend, however, that the methods used 
here be repeated. 

First, because it was impossible to identify branch patrons, our sample 
included much deadwood and included far too many nonbranch patrons. 
Samples built up from branch sales slips or current billings would result 
in a great reduction in these wastes in time and money. 

Second, the search of microfilms for data is not recommended. This 
digging backward into the past is exceedingly laborious, time consuming, 
and therefore relatively costly. Once a sample has been chosen 
(with means of keeping it up to date), methods can be established for 
pulling out data at little expense during the regular processing. This has 
proved feasible under regular billing methods and, undoubtedly, could 
be adapted to cycle-billing methods. 

Third, the objectives of the research done should be pinpointed more 
than has been possible in this exploratory study. The executives who 



CASES IN PRESENTATION AND FOLLOW-UP 309 

voted that the problem of "geographical distribution of customers" was 
"both valuable and interesting" found it difficult, understandably, to 
cite specific facts wanted or specific decisions which depended on spe- 
cific market facts. Considerably more attention to the "working as- 
sumptions" underlying branch operations and policies and their depend- 
ence on market situations would greatly increase the value of the research 
done. 

These problems being solved, we would heartily recommend consider- 
ation of establishing a continuing "panel" based on the regular flow of 
data on customer purchases. Such a project need not be costly; but it 
would present to executives basic facts about customers of value in assess- 
ing current operations and in planning future moves. 

Facts Gathered 

Facts as facts are presented in the statistical appendix to this report. 
Our interpretation of them is presented partly in this appendix, but 
largely in this summary and in the section on major findings which fol- 
lows. 

FROM MAJOR FINDINGS: How "independent" or "interdependent" are 
the markets of branches and the main store? 

Department stores have huge trading areas. In Philadelphia they get 
about half of all business from customers living outside the city and 
county of Philadelphia. Their branches, as in this case, are located well 
within the trading area of the parent. 

A basic problem of branch operation, therefore, is the separation of 
branch customer groups from parent store customers and the ways in 
which customers patronizing both divide their patronage. The question 
underlies policies of centralized and uniform operations and decisions 
as to the promotional and merchandising emphasis given to branches. 

Store records reveal its branches had relatively few credit patrons who 
are not also credit patrons of the main store: 

Exclusively Branch Patrons 
Branch A 19% 

Branch B 13% 

Store records reveal, however, that of all credit expenditures by pa- 
trons of the branches, the branches get the major share: 

Percentage of Branch Patrons' Credit Expenditures at Branches 
Branch A 61% 

Branch B 55% 



310 MARKETING RESEARCH 

Although a strong showing for the branches, these figures actually 
understate the true "competitive" position of branches and the main 
store, for the parent gets much business from branch patrons not avail- 
able to the branches themselves. 

This extra business includes mail and telephone purchases, purchases 
of basement store merchandise, and purchases of sales merchandise. 
(During the ten-month period analyzed, there were twenty-two store* 
wide special sales events at the parents store plus ten additional special 
basement store sales. When branch business is compared to personal 
purchases in upstairs departments on regular days, then exclusively 
branch patrons jump from 16 per cent to 24 per cent of the total (an 
increase of 50 per cent) and the proportions making more than half of 
all purchases at the branches jumps from 55 per cent to 66 per cent (an 
increase of 20 per cent). 

Conclusion: Much more important than these facts may be a point of 
view. In any problem of branch and parent, or branch vs. parent, the 
tendency certainly is to consider them as about 20 per cent of total busi- 
ness. But branch customers as people are responsible for 35 per cent or 
more of total business. The addition of a third branch unquestionably 
will mean that customers patronizing only the parent store will account 
for less than half of all business. 

This raises no necessary question as to centralized operations. It does 
suggest a serious danger that policies and activities good for operations 
of the main store may sometimes be unwisely applied to the branches or 
forced upon them. Both the facts and the point of view about the im- 
portance of branch customers will be helpful in discussing later some 
apparent opportunities for increased business. 

Most noteworthy, perhaps, is that exclusive patrons of branches are 
seldom more frequent patrons than those who also purchase at the main 
store in downtown Philadelphia, For the latter as a group, branch store 
purchasing represents extra shopping, not a substitute for downtown 
shopping trips. 

ACTION NEEDED 

1. What graphical methods might be employed for this report? 

2. What improvements can be made in the report: format, 
style, themes, and so forth? 

3. How should the oral presentation, to occupy about thirty 
minutes, be made? 



CASES IN PRESENTATION AND FOLLOW-UP 311 
FROM STATISTICAL TABLES SECTION: 

NUMBER OF DIFFERENT DAYS CREDIT CUSTOMERS PURCHASED AT BRANCHES 

BY STORES PATRONIZED * 

(In percentages) 



Number of different 
days purchased 


Stores patronized 


Branch A 


Branch B 


Main store 
only 


Inactives 


1 to 3 


42 
25 
26 
7 


33 
32 
24 
11 


43 
17 
33 

7 


48 
28 
15 
9 


4 to 9 


10 to 21 


22 or more 


Total . 


100 


100 


100 


100 



* From store records of 617 customers, including, however, only thirty cus- 
tomers of Branch B only. Note that, despite a "vocal minority" of branch 
patrons who when interviewed claimed they were "always running over" to a 
suburban center, about two thirds of all credit customers bought less than ten 
times in ten months, or less than once a month. Even if all cash purchases of 
these credit customers were made on separate days, still less than half would buy 
oftener than once a month (except for the category of Branch B and mam store 
patrons estimated at 64 per cent). Also, even if those patronizing branches 
only one to three times are omitted, to avoid distortion of percentages by occa- 
sional buyers, still one half of patrons buy less than once a month. 

NUMBER OF DIFFERENT DAYS CUSTOMERS PURCHASED AT MAIN STORE 

BY STORES PATRONIZED * 

(In percentages) 



Number of different 
days purchased 


Stores patronized 


Branch A 
and 
main store 


Branch B 
and 
main store 


Main store 
only 


1 to 3 


47 
36 
14 
3 


38 
40 
20 
2 


39 
40 
18 
3 


4 to 9 


10 to 21 


22 or more 


Total 


100 


100 


100 



* Based on store credit records for all types of purchases. Since mail and 
telephone orders are counted, this does not reflect personal visits entirely. It 
will be noted that more than three fourths of customers purchase less than once 
a month. Even if all customers patronizing main store only one to three times 
are omitted, still two thirds are patrons less than once a month. Except for one 
category (patrons of Branch B and main store), it is noteworthy that branch 
visits are moree frequent than visits to downtown stores. 



312 MARKETING RESEARCH 

CASE 5 FOLLOW-UP ON PRODUCT 
PERFORMANCE STUDIES 

BACKGROUND 

Tabor, Inc., a manufacturer of pharmaceuticals and food 
products, had by intensive advertising secured a large volume of 
sales for a personal-use product. 

The product was packed in boxes of twenty-four and forty- 
eight units. Early in the 1940's the company had introduced 
a machine for dispensing single units for consumption at foun- 
tains and lunch counters. By 1947 these dispensers were in 
use in 40 per cent of the stores handling the product and in 
70 to 80 per cent of all stores with fountains and lunch counters. 

The dispensers, however, had proved troublesome. Espe- 
cially in humid weather the apparatus clogged, resulting in 
unsightly, unsanitary, or inoperable dispensers. Soon the 
company felt it necessary to provide each salesman with a repair 
kit. On each call the salesman dismantled, cleaned, and reas- 
sembled the dispenser. 

After the war, the sales department became seriously con- 
cerned over the amount of time spent by salesmen on this non- 
selling activity. No one in the company believed that sales 
through dispensers should be discontinued, even though they 
were a small part of total sales. In addition to being excellent 
advertising, the satisfaction of one trial of the product, the com- 
pany believed, often developed a steady customer for home use 
of the product. 

As a solution for the problem, Tabor, Inc., introduced early 
in 1947 a new type of dispenser utilizing a new, special package. 
By the middle of 1948, 36 per cent of all outlets carrying the 
product had the new-type dispenser (13 per cent still retained 
the old-type dispenser). 

Before long new difficulties became apparent. The 49 per 
cent of stores with dispensers reached by mid-1948 proved to 
be a peak. By late 1950 only 28 per cent had the new-style dis- 
penser, of which one in five was out-of-stock on the special pack- 



CASES IN PRESENTATION AND FOLLOW-UP 31? 

age designed for use in the new dispenser, and nine per cent still 
had the old-style dispenser. 

FOLLOW-UP PROBLEMS 

As the situation developed, the research staff of Tabor became 
cumulatively more convinced that another dispenser was neces- 
sary; but management remained unpersuaded. Well over a 
year after the first formal report had been circulated among all 
department heads and other top executives, and despite a total 
of three special reports on the dispenser problem, no action had 
been taken. 

The research director and staff felt that the methods of pres- 
entation and follow-up might have been faulty. Perhaps they 
had been overconfident about the conclusiveness of the facts. 
The first report, being comprehensive, may have failed to em- 
phasize the main propositions. Perhaps they had been too 
aggressive, or not aggressive enough, in relaying their findings 
and conclusions. Because the first change in dispensers had 
fared so poorly, it could be expected that management would 
be cautious about further changes. In summary, the research 
staff members were reviewing their past actions in order to con- 
sider how they might effectively present the facts gathered. 

REPORTS SUBMITTED ON DISPENSERS 

The first report was submitted in March, 1951. Excerpts 
and condensations from this report follow. 

The Basic Problem is twofold: 1. Our dispensers are in about half 
the retail outlets with fountains and lunch counters, well below the pre- 
war level of 70 to 80 per cent. 2. We are showing continued distribution 
losses, having dropped steadily from a peak of 36 per cent in midsummer 
of 1948 to our present 25 per cent. 

[A table showed the percentage of outlets using old- and new-style dis- 
pensers, and totals, since the introduction of the new-style dispenser 
early in 1947.] 

Moreover, a national survey late in 1950 showed that one store in five 
did not have the special dispensing package in stock. Our records (in- 
complete) show 27,419 dispensers placed in stores. 

Thus, the new dispenser and new package are losing ground. What 



314 MARKETING RESEARCH 

are some of the possible reasons for this? (1) Out-of -stock occurs be- 
cause the new package is an incidental extra. When "out-of-stock" 
occurs, retailers use a regular package. (2) Some retailers object to carry- 
ing the extra item. (3) It is very difficult to tell how many units are in 
the dispenser. Reorders do not get in the "want book" until too late to 
prevent running out. (4) The retailer makes more profit by using a reg- 
ular package, the special package listing for $1 .00 and the regular package 
for 87 cents. (5) Some retailers sell the special package to preferred 
customers, which, since most retailers order in quarter or half dozen lots, 
reduces stock rapidly and causes "outs." 

In conclusion it would seem that: 1. Perhaps a new type of dispenser 
using regular packages from stock, on which we net a larger return, could 
be developed. 2, As a compromise it would be helpful to change the 
special package dispenser so that the amount remaining in it would be 
visible at all times. 3. Steps should be taken continuously to remind 
retailers to keep an adequate stock of the special package at all times. 

This report secured the wholehearted support of a regional 
office; and the letter received in April from this regional office 
was reproduced and distributed without comment to all those 
receiving the report. 

Early in June, 1952, a second report on dispensers was cir- 
culated. Excerpts and condensations follow. 

Current data show we now have dispensers in thirty-three per cent 
of the stores carrying the product (9 per cent with old-style and 24 per 
cent with new-style dispensers), or about 17,000 stores. For the fourth 
straight year dispenser usage has shown a loss. (A table presented the 
annual figures for both styles; another table showed percentage usage by 
regions and percentage changes for each of the five years beginning just 
prior to the introduction of the new-style dispenser.) 

Only in the Southeast (+140 per cent) and in the Southwest (+133 
per cent) has dispenser usage increased. In the five other regions usage 
is down from 8 to 41 per cent, usage in the United States, as a total, be- 
ing down 21 per cent. The percentage of sales of the special package is 
steadily decreasing, from 19.0 per cent in 1949 to 15.3 per cent in 1950 
to 12. 5 per cent in 1951. 

Why is the new dispenser not more successful? There are several 
reasons: 1. The special package is an item of minor importance to re- 
tailers. 2. Retailers make a greater profit on sales at the fountain or 
lunch counter by using regular stock. Because of larger quantity orders 



CASES IN PRESENTATION AND FOLLOW-UP 315 

for regular packages, the average discounts run almost 50 per cent higher 
than for special packages. The net price per unit is 1 .60 cents for the 
regular and 1 .94 cents for the special. 3. When out-of-stock occurs, sub- 
stitution is easily made with the regular packages. 4. Despite the small 
size of the average order (one quarter dozen), turnover of the special 
package is very slow. 5. Inability of fountain help to tell when stock is 
running low. 

How then can dispenser business be regained? By having a new dis- 
penser especially designed for use of regular stock merchandise. This 
would prevent out-of-stock and re-establish a valuable advertising mes- 
sage at many points. If sold through our own salesmen, it could help 
build volume orders. 

Following this report one executive suggested that the com- 
pany design a plastic package. The research staff was asked to 
comment on this suggestion and late in June submitted a mem- 
orandum from which excerpts and condensations follow: 

The proposed plastic package has merit provided we can substitute it 
for the present special package. We do not favor adding another pack- 
age type, unless it is proved by testing in the market that another pack- 
age would be profitable saleswise. The markup on the proposed package 
would give us a margin about half as large as that on regular packages. 

A substantial saving in production, storage, and handling costs can be 
realized by eliminating one package. In the past five years, exclusive of 
storage and handling costs at warehouses, we have invested nearly 
$300,000 in dispensers. The new dispenser has not been too successful. 
Its use has declined for the past four years and only 24 per cent of the 
stores carrying our product now have the new-style dispenser. 

Some of the reasons why the new dispenser has not been successful 
are: 1. Retailers make a greater profit on sale of regular packages; 2. 
Retailers object to carrying an extra package; 3. Turnover is very slow; 
and 4. Fountain and counter help are unable to determine when stock 
is running low. 

It is our opinion that we need a new dispenser for regular-package 
stock. Our recommendation for adopting the new package was made 
after considering the following: Advantages: utility and simplicity; self- 
service feature; would occupy front-counter position; visible supply at 
all times; new display card each time a package is opened; the possibility 
of a substantial saving by eliminating one package or discontinuing dis- 
pensers. Disadvantages: pilferage. Also, does the proposed package 
have equal display value? 



316 MARKETING RESEARCH 

ACTION NEEDED 

In view of the failure of management to act on these reports, 
an evaluation of their effectiveness seemed to be called for. 
This evaluation required consideration of the following ques- 
tions: 

1. Should the reports have included discussions on patent and 
legal problems, threatened raw material shortages, and in- 
ability to replace worn-out dispensers during the war? 

2. Should the relative importance of dispensers to other pro- 
motional efforts have been assessed in the reports? 

3. Had the reports failed to emphasize the main issues? 

4. Were the facts available conclusive or had the analysis been 
faulty? 

5. How should the reports have been presented and what other 
action might have been taken by the research staff? 

6. Should further efforts be made now, and, if so, what efforts 
and why? 



Parf IX 

ORGANIZATION FOR RESEARCH 



Two different organizational problems are covered under this 
heading. One problem is the organization of a staff to work on 
a particular research project, at the termination of which the 
staff is disbanded. The second problem is the formation of a 
presumably permanent research department within a firm 
which would handle a variety of research problems. In partic- 
ular, the latter problem raises the question of the place of re- 
search within the company as a line function, a staff function, 
or a combination of both. 

Organization for a Particular Project 

With either problem, the task of hiring a staff and setting up 
a going organization is much the same. In hiring people for 
a particular research project, however, more emphasis can be 
placed on capability, experience, and knowledge of specialized 
tasks, and less on permanency and potentialities for advance- 
ment. Even in the case of the director of the project, more 
weight can be placed on technical competence and less on 
ability to sell one's self and the value of research. Specializa- 
tion can sometimes be achieved even on a small project by con- 
tracting out some of the work to research agencies concentrating 
on certain operations; for example, tabulating concerns. 

Budgeting for a research project is a fine art learned largely 
through experience. One general rule that can be offered, how- 
ever, is that it is better to overestimate the costs than to under- 
estimate them, as it can prove very awkward to request 
additional funds. At the same time, few things are likely to 
please a client or sponsor as much as to be informed that costs 
will be less than anticipated and that a refund is in order. 

317 



318 MARKETING RESEARCH 

Organization of a Research Department 

Irrespective of the place or form of setup, there are, in gen- 
eral, two broad groups of considerations that affect its organiza- 
tional structure. First, there are external considerations, which 
in an industrial business or firm focus attention upon the rela- 
tionship of marketing research activities to those of other opera- 
tions of a business, such as finance, production, and sales. In 
a research firm, these considerations pertain to the relationship 
of the firm to its clients. The second consideration relates to 
the internal organization of marketing research activities, either 
in a research agency or in the marketing research department of 
a business. 

Line vs. staff form of organization. A line organization 
makes it possible to place marketing research under the vice- 
president in charge of all research activities or under the vice- 
president in charge of some operating division, usually sales. 
Such an arrangement maintains direct lines of responsibility 
from top executives to individual workers. The danger of this 
form of organization is that the marketing research activities 
might be slanted toward research in favor of that particular 
division. This is especially true because the head of a given 
division may tend to develop his work independently, and to 
emphasize his own work without proper consideration of other 
activities which are also necessary functions of the entire enter- 
prise. It also provides some temptation to use research to vindi- 
cate present activities rather than to find out what is actually 
taking place. Thus, an essential quality of good research work, 
an impartial outlook, may be lost. 

The staff organization, also known as the functional organ- 
ization, enables a high degree of specialization in marketing 
research activities to be achieved by other divisions of the busi- 
ness. By this means, special knowledge and skills can be ex- 
ploited within each division as well as outside of it. Thus, 
when the production department runs into special marketing 
problems in connection with product development, the market- 
ing research specialists attached to that division can be called 
upon to help. 



ORGANIZATION FOR RESEARCH 319 

A drawback to the staff type of operation is that coordination 
of activities between marketing researdh functions and those of 
other departments may be difficult, and much time may have to 
be spent in liaison activities. Sometimes lines of authority be- 
come confused, and, as a consequence, it may not be clear just 
who is responsible for research decisions. Since there are more 
persons involved in planning operations, the time consumed in 
arriving at a decision may be greater than in the line organiza- 
tion. Finally, one of the by-products of staff organization is 
the development of specialists to such an extent that an over-all, 
broad point of view may be lacking. This is an ever-present 
danger as the marketing research activities of a business become 
more specialized. 

The "line and staff" organization represents a compromise 
between the two previous forms, seeking to combine the ben- 
efits of both. In effect, the line executives are supported by the 
advice of staff personnel who are added to the main-line activ- 
ities. Hence, marketing research operations relating to mer- 
chandising are placed, for example, as a staff activity under the 
vice-president in charge of merchandising. The function of 
the marketing research man and his assistants in this division 
would be to aid the merchandising executive in formulating 
policy or in arriving at operating decisions. The actual deci- 
sions, however, rest with the merchandising officer. The mar- 
keting researcher merely advises; he has no authority beyond 
that. 

The advantages of this type of organization are its flexibility, 
greater opportunity for making effective use of the abilities and 
desires of personnel (because of the greater variety of jobs), and 
better coordination of activities by the line officers. 

External considerations for a research agency. The external 
considerations facing a research agency revolve around the 
maintenance of goodwill of potential customers and, in par- 
ticular, of its clients. Building up a reputation for competent 
work, supplemented by speeches and articles by executives, is 
about the only way of gaining the goodwill of users of market- 
ing research. Such activities also greatly facilitate the "care 
and feeding of clients/' The latter, however, is a much more 



320 MARKETING RESEARCH 

specialized task. Contact with the client is needed throughout 
the course of a study to insure avoidance of misinterpretations 
and the meeting of client specifications. 

The person in the research agency maintaining this contact 
varies with the agency's size and scope. In large agencies cer- 
tain individuals, so-called "client-service men/' are assigned to 
this work on a full-time basis. Theirs is the responsibility of 
coordinating the clients' wishes with what the agency's research 
personnel are doing. On large-scale or highly technical studies, 
however, the research man in charge may also work with the 
client, since the client-service men are not selected primarily 
for their technical abilities. 

Internal Considerations 

Internal organization problems for marketing research are 
concerned with such matters as the size and scope of organiza- 
tion, allocation of personnel, and space considerations. 

The factors determining the size and scope of a marketing 
research department are numerous and varied. The adjudged 
importance to the company of marketing research work, the 
type of company, its financial situation, and the personalities 
involved all play dominant roles. In the past, companies in 
consumer goods fields have tended to do more extensive market- 
ing research than those producing and selling industrial goods. 
Advertising agencies are generally more active in research than 
other firms of similar sizes, providing it in part as an additional 
service to their clients. The size of research departments tends 
to expand rapidly when a company is prosperous and contract 
sharply when business falls off the very time research is needed 
most. 

The organization of independent research firms depends 
largely on the whims of the owners and the type of business 
available. Some firms attempt to develop a general research 
agency, accepting all types of business, though often subletting 
individual stages of a study to specialized agencies. Other firms 
prefer to remain small and establish a reputation in one par- 
ticular type of research, either in certain stages of a research 
operation, such as editing and tabulating, or in certain research 



ORGANIZATION FOR RESEARCH 321 

fields, such as product-testing, readership surveys, and so on. 
Perhaps the outstanding development in recent years among 
research firms has been the rise of these specialized agencies. 

The Cases in This Part 

The four cases in this Part are divided equally between organ- 
ization for a particular project and organization of a research 
department within a firm. Of the two cases on organization 
for a particular project, Case 1 relates to a contemplated three- 
year project on consumer habits of buying life insurance, and 
Case 2 to a longer-term consumer panel operation within a 
research firm. In effect, the first case deals with organization 
for large-scale research for a limited period, whereas the prob- 
lem in the second case is organization of one particular research 
program on a presumably permanent basis. 

Research for a department store and for a pharmaceutical 
company are the subject of the two cases (3 and 4) on organ- 
ization of a research department. These cases are somewhat 
similar in that both raise questions of function, place, and or- 
ganization of a research department within a firm. Case 4, 
however, poses a problem of a somewhat broader nature, since 
the objective is to integrate economic research with marketing 
research within the same department. 

BIBLIOGRAPHY 

AMERICAN MARKETING ASSOCIATION. The Technique of Marketing Research. 
New York: McGraw-Hill Book Co., Inc., 1937. Contains much material 
on internal organization, including selection of a survey staff (pp. 47-53), se- 
lection of field personnel (pp. 149-63), and organization and operation of 
field work (Chapters 9 and 10). 

BRADFORD, E. S. Marketing Research. New York: McGraw-Hill Book Co., 
Inc., 1951. Pages 298-300 are devoted to a code of professional practices. 

BROWN, L. O. Marketing and Distribution Research. New York: The Ronald 
Press Co., 1949. Chapter 2 presents a general discussion of the different 
users of marketing research with some treatment of the functions and or- 
ganizational structure of marketing research departments. 

CAPT, J. C. "Market Research without a Market Research Department." 
Marketing Series No. 75. New York: American Management Association, 
1949. Discusses ways and means by which smaller companies not having 
regular research departments can undertake research activities. 

HOBART, D. M. (ed.) . Marketing Research Practice. New York: The Ronald 



322 MARKETING RESEARCH 

Press Co., 1950. A good discussion of the type of organizations engaged in 
marketing research (Chapter 2) and of the different forms of research organ- 
izations (Chapter 3). 

LORIE, J. H., and H. V. ROBERTS. Basic Methods of Marketing Research. New 
York: McGraw-Hill Book Co., Inc., 1951. A discussion of what research 
functions should be performed internally for a company (pp. 320-25), includ- 
ing some highly useful suggestions on the use of an outside research agency. 

LUCK, D. J., and H. G. WALES. Marketing Research. New York: Prentice- 
Hall, Inc., 1952. Chapter 2 discusses organization of marketing research, 
with emphasis on the diverse functions of marketing research departments 
(pp. 27-38) and with a list of considerations entering into the use by a com- 
pany of outside research firms and consultants (pp. 44-46). 

NATIONAL INDUSTRIAL CONFERENCE BOARD. Organization for Market Re- 
search. Part I, Studies in Business Policy No. 12, 1945; Part II, Studies in 
Business Policy No. 19, 1946. Contains very useful information on the or- 
ganization of marketing research departments based on actual research de- 
partments. 



Part IX Cases 



CASE IADMINISTERING A LIFE INSURANCE 

STUDY 



BACKGROUND 

In 1952, a study was planned to ascertain consumer buying 
habits and buying motives for life insurance as well as consumer 
attitudes toward life insurance. Although a great deal of atten- 
tion has been given to the selling strategy that life insurance 
companies develop for their sales representatives, little atten- 
tion has been given to the basic factors that influence consumers 
in their purchase of life insurance. If such information could 
be obtained, it would greatly assist in developing a sound basis 
for the marketing of life insurance both from the standpoint of 
personnel selling efforts and from that of advertising programs. 

It was proposed that consumer buying habits with regard to 
life insurance be explored from the viewpoint of units pur- 
chased, from whom purchased, and frequency of purchase. 
Buying motives would be studied in relationship to such factors 
as old age, disability, and death benefits, tax and estate prob- 
lems, or reciprocity arrangements between buyers and sellers. 
While data were collected on these subjects, it was also thought 
possible to gather data regarding the understanding that con- 
sumers have about the types and uses of life insurance as well 
as their expectations regarding agents' services, the major rea- 
sons why people do not buy life insurance, and why they have 
to be influenced by extreme emotional approaches into buying 
insurance. 

The planners of the research project felt that the selling and 
advertising policies of life insurance companies were based 
primarily on the most intelligent guess possible regarding con- 

323 



324 MARKETING RESEARCH 

sumer behavior toward life insurance purchasing. For this rea- 
son, data relating to consumer buying habits and motives would 
be useful in formulating the policies of these companies toward 
their advertising and selling programs, thereby permitting a 
somewhat more objective approach to be taken to these prob- 
lems than was currently being followed. 

THE PROBLEM 

The following statement of objectives provides a more de- 
tailed idea of the aims of this project: 

1 . To study the specific buying habits of consumers in their purchases 
of life insurance by covering solicited and unsolicited sales of life insur- 
ance and relating this to (1) unit size and kind of purchases, (2) type of 
agent (part-time or full-time, age, business handled, and so on), and (3) 
period of time between purchases of life insurance and time over which 
purchases extend; or frequency of purchase. 

2. To investigate the buying motives that are given for the purchase 
of life insurance, such as (1) conservation of personal assets; (2) program 
aspects of death, old age, and disability, (3) credit, (4) debt liquidation, 
(5) taxes, and (6) reciprocity between buyer and seller. 

3. To determine the relationship between the above buying habits 
and buying motives with regard to age, occupation, income, marital 
status, sex, and war service. 

4. To study the relationship between consumers* knowledge of types 
and uses of life insurance with regard to the factors that seem to influ- 
ence them in their purchase of life insurance. It is of especial interest 
to determine whether or not agents are giving consumers the information 
they desire about life insurance and whether or not consumers have con- 
fidence in agents. 

TYPE OF INFORMATION SOUGHT 
Sex 

City size 
Age 

Occupation 
Income 

Ownership 
Amount 
Type of insurance 



CASES IN ORGANIZATION FOR RESEARCH 325 

Per cent of income for insurance 
Form of savings preferred * 

Attitude toward buying insurance 
Have adequate life insurance 
Additional insurance desired 
Settlement plans 
Purpose of insurance 

Marital or family status 

Not married and no dependents 
Not married with dependents 
Wife (or husband) and children 
Wife (or husband) and no children 
Children not with wife (or husband) 
No children not with wife (or husband) 

Home ownership 

Attitude toward life insurance agents 
Bought or been sold 
Initiated purchase with agent 
Number of agents calling on consumers 
Family attitude toward purchase of life insurance 

Method of approach to selling of life insurance 
Request from consumer by mail 
Request agent to call 

Attitude toward insurance as an investment 

Willingness to give complete information to agent 
Own recent economic experiences 
Deal with man or woman agent 
Are savings features valued? 

What information do consumers want about life insurance? 

How long had client known agent from whom insurance was purchased? 

Reasons for purchase of life insurance 
Help agent 
On basis of analysis of life insurance made for consumer 

Promotional materials 

Materials received through mail 

Materials from insurance agents 

Are materials helpful? 

Did materials help select company? 

Did agent help select company, or yourself? 

Basic consumer knowledge about life insurance 

Even though these statements seemed to be workable form- 
ulations for the planners of the project, some troublesome prob- 
lems faced the research workers. For example, it was pointed 
out to them that respondents would be reluctant to report on 



326 MARKETING RESEARCH 

some of the items set forth in the objectives, such as uses for 
debt liquidation, taxes, and establishing a base for credit. Fur- 
thermore, there would be no assurance that the reports of 
respondents would be accurate unless an actual check could 
be made, through life insurance companies, of the policies 
actually held by respondents. 

Approximately $50,000 a year was available for the work over 
a period of three years. From these funds, it would be necessary 
to defray the expenses of interviewing and travel expenses con- 
nected with the study. Travel would involve a distance of 100 
miles a day round trip for the interviewers in reaching the city 
where the interviews would be conducted. Additional expense 
would be incurred in going from one sample household to the 
other. It was estimated that each interview would require about 
45 minutes. It was thought necessary to provide a probability 
sample. 

DATA AVAILABLE 

The following past studies in this general area were available 
at the time this study was planned : 

Life Insurance Ownership among American Families. Ann Arbor: Survey Re- 
search Center, University of Michigan. Published annually 1948-1952. 

YOUNG, J. R. The Life Insurance Buyer in Baton Rouge. Baton Rouge: 
Louisiana State University Business Bulletin, XII, No. 2 (October, 1950). 

ACTION NEEDED 

1. Outline an organization plan for a project of this type. 

2. Prepare a tentative budget for its operation, assuming that 
a director for the project is obtainable at a salary of $9,000 
per year. 



CASE 2 SETTING UP A CONSUMER PANEL 
OPERATION 

BACKGROUND 

In 1950, the Ames Company launched a continuous national 
consumer panel operation. The objective of the operation was 



CASES IN ORGANIZATION FOR RESEARCH 327 

to collect data on all consumer expenditures, on radio and TV 
listenership, and on newspapers and magazines entering the 
home. With these data, analyses could be carried out on such 
varied subjects as the characteristics of consumers purchasing 
specific goods and specific brands, the effect of advertising pro- 
grams on consumer purchases, and the relative effectiveness of 
different advertising media. 

The data were to be collected by the consumer diary method 
on a weekly basis. In other words, sample members were to be 
sent diaries every week containing about twelve or sixteen pages 
in which they were to list all their purchases during the follow- 
ing week, the purchase of each item being recorded individually 
under a specific heading containing a place for the date, size, 
amount spent, brand name, and type of store at which the pur- 
chase was made. At the end of the week the family would re- 
turn that week's diary and begin filling in the new one, which 
would have arrived several days before. To obtain the coopera- 
tion of these families, it was decided that some sort of premium 
plan would have to be instituted, although nobody seemed sure 
what sort of plan would best retain the cooperation of the panel 
members. 

The plans called for a mailing sample of some three thousand 
families scattered over the nation. To handle such a large 
operation, it was estimated that a staff of between one hundred 
and one hundred fifty persons would be required. This staff 
was to be concentrated in one city, for reasons of economy. 

THE PROBLEM 

The task facing the planners of this operation was to prepare 
an organization chart for this staff, breaking it up into depart- 
ments and outlining the function of each department, and to 
set up a procedure to be followed in processing the diaries and 
issuing reports. Such reports would be issued on a monthly 
basis, it was contemplated, with a separate type of report for 
each client. In addition, special analyses and reports would be 
prepared when requested by clients. 



328 MARKETING RESEARCH 

DATA AVAILABLE 

At the time this study was planned, the following published 
material on panel operations was available: 

CHURCHMAN, C. W. (ed.) Measurement of Consumer Interest, Philadelphia: 

University of Pennsylvania Press, 1947. 
GAUDET, H., and C. DANIEL. Radio Listener Panels. Washington, D. C.: 

Federal Radio Education Committee, 1941. 
LAZARSFELD, P. F., and M. FISKE. "The 'Panel* as a New Tool for Measuring 

Opinion," Public Opinion Quarterly, II (October, 1938), pp. 596-612. 
PARTEN, M. Surveys, Polls and Samples. New York: Harper & Bros., 1950. 

Chapter 3. 

ACTION NEEDED 
The following are needed for organizing this operation: 

1. An organization chart showing the division of the staff by 
departments and other major operational units, as needed. 
Administrative positions and responsibilities have to be in- 
dicated alongside the chart. 

2. A flow chart outlining the direction of flow of the work, 
including rough estimates of the timing. 

3. Some sort of premium plan for securing maximum coopera- 
tion from the panel members. 



CASE 3 ORGANIZING A DEPARTMENT STORE 
RESEARCH DEPARTMENT 

BACKGROUND 

A. C. Bertram, Inc., a member store in an Eastern city of one 
of the department store chains, was considering late in the 
forties the establishment of a Marketing Research Department. 
Except for some centralization of buying, the individual stores 
in the chain were largely autonomous in operations. No 
branch stores were operated at the time, although A. C. Bert- 
ram, Inc., was looking forward to branch operations in the 
future. The store's volume of sales had been increasing steadily 
and was now well past $40 million annually. Profits also were 
increasing. The store was organized into six major divisions 



CASES IN ORGANIZATION FOR RESEARCH 329 

headed by a secretary and treasurer, a controller, a merchandise 
manager, a sales promotion manager, a store manager, and a 
personnel director. 

THE PROBLEM 

The formation of a research staff or department had been 
considered several times before and rejected. The executive 
committee of the store considering the proposal at the present 
time seemed to agree, however, that the store now was able to 
afford such a move and that it was desirable at least to try it. 
Discussion centered primarily on organization issues, partic- 
ularly the activities of such a department and the executive to 
whom the research director should be made responsible. 

INFORMATION AVAILABLE 

The origin of department store research in any formal sense 
dates back to 1916. Under the sponsorship of the famous 
Boston merchant, Lincoln Filene, the forerunner of the present 
Research Division of the Associated Merchandising Corpora- 
tion (AMC) was then founded. Research departments in 
stores affiliated with the AMC gradually followed for exchange 
of information with AMC and for independent operations. 
Even in the late forties, however, formalized research in the 
department store field was notably scant. Except in a few 
chains, few department stores had established separate research 
staffs with their own directors. The executives of A. C. Bert- 
ram, Inc., therefore, had no well-established precedent organ- 
izationally, certainly nothing comparable to the divisional plan 
as formulated by Paul M. Mazur. 1 A prevalent idea, in fact, 
was that research needs of companies varied so widely that no 
single organizational plan was feasible. 

ACTION RECOMMENDED 

In considering the activities, or functions, which might be 
performed by the proposed marketing research department, a 
number of points of view developed. Some of the old feeling 

*P. M. Mazur. Principles of Organization Applied to Modern Retailing, 
(New York: Harper & Bros., 1927). 



330 MARKETING RESEARCH 

persisted that most analysis and research were operating prob- 
lems best left to the various executives and their assistants. For 
example, the advertising department, under the sales promo- 
tion manager, regularly checked sales results of advertised items. 
Unless this function was carried on within the division, it was 
argued, the full cooperation of the personnel and even of some 
executives might be hard to secure. Moreover, this was a daily, 
repetitive operation based on a system of analysis already estab- 
lished and was not any new or special problem requiring the 
services of a research department. The counter argument was 
made that in general a researcher could not, of course, be ex- 
pected to be wholly unbiased in his fact-finding and recommen- 
dations if he was in any way checking the work of a man to 
whom he was directly responsible. As to possible failure of an 
executive to utilize what a researcher reported to him, it was 
argued, any executive was eager for real facts or else he wasn't 
"worth his salt/' 

Similar points were made concerning the budgeting and fore- 
casting, expense control, and merchandise statistics operations 
under the controller. During the discussions, the application 
of market research to many other aspects of store operations 
was noted. The personnel and records of the comparison 
shopping bureau, under the merchandising manager, it was 
claimed, might be highly useful in checking on customer service 
problems (customer services were under the province of the per- 
sonnel director), especially in relation to competitor offerings 
and their acceptance. A research department also might be 
asked to study delivery problems and the perennial problem, 
returned goods (under the store superintendent) . Problems in- 
volving displays (window, interior, and other), direct mail, store 
traffic, departmental layouts, store systems, and selling effective- 
ness, among others, were also suggested by some executives as 
potential subjects within the province of a research department. 
It was even proposed that unit control methods and operations 
(of stock control) were a research problem. 

The experience of a store which devoted most of its research 
staff time to detecting and studying difficulties in weak depart- 
ments was related. In this regard, however, the store's own 



CASES IN ORGANIZATION FOR RESEARCH 331 

experience with customer analysis was brought up as a point 
against considering research, particularly the highly statistical 
type, as a broad merchandising and promotion function. 
Through the urging of a former controller, the store had once 
established detailed records for each credit customer on all pur- 
chases. This had proved extremely expensive. The principal 
use to which these records were put was for direct mailings. 
The records showed, for example, which customers had bought 
women's shoes, and these were sent mailings at the time of 
special shoe promotions. No one believed that the results had 
been worth the expense, and one executive expressed serious 
doubts that the experiment as conducted was conclusive evi- 
dence on the value of customer analysis. Full agreement was 
expressed that without frequent consultation some researchers 
were likely to produce broad, interesting, and useless facts. 

In particular, the general merchandise manager remarked 
that all this use of questionnaires and surveys to find out what 
customers wanted to buy was nonsense. All you had to do was 
put an article on the counter. The tens of thousands of cus- 
tomers passing it by within a few days would tell you whether 
they liked it or not by what they bought. The answer would 
be got quicker, cheaper, and more accurately than by any "high- 
falutin research." More generally, he felt that retail research 
differed greatly from research for manufacturers, who were far 
distant from consumers and interested only in their own brands. 
Retail customers were always close at hand. An executive 
could observe them any day by going out on the sales floors. 
In addition, store records provided all kinds of information 
to supplement the numerous outside sources: want slips and 
customer suggestions, unit control records on sales and stocks, 
unit and dollar transaction data, sales slips, delivery records, 
complaints, comparison shopping records, NRDGA reports, 
Federal Reserve Board indices, newspaper studies of the trad- 
ing area, and so on. There was no need to go out and ask cus- 
tomers more questions, unless, of course, researchers had found 
a way to answer the only really puzzling question: Why people 
bought what they did the way they did. 

Despite these and other avowed limitations and weaknesses 



332 MARKETING RESEARCH 

of marketing research, and despite some opposition to some 
aspects of research in general, the fact that good marketing re- 
search could be genuinely useful in some ways to each of the 
major store divisions was reaffirmed. A proposal was made, 
therefore, that a decentralized research department be estab- 
lished with operating units in all, or most, of the store divisions. 
This seemed to have considerable merit as a long-range objec- 
tive. Some day each division might have separate research 
bureaus, or there might be one central staff for storewide prob- 
lems with subsidiary staffs of specialists in the divisions. At 
present, it was agreed, this would be too expensive, and it was 
better to learn to walk before trying to run. A staff composed 
of a director, his assistant, a secretary, and part-time helpers was 
visualized as a beginning. 

The feeling was that the research department should report 
directly to the president or to one of the major executives. The 
secretary-treasurer, in particular, was considered a good possible 
choice. This man was highly regarded in the organization, was 
known to be extremely favorable to research, and had been 
one of the most active proponents of the proposed department. 
In addition, it was considered to be a possible advantage that 
his division would have probably the least direct need for re- 
search studies. 

ACTION NEEDED 

1. Where should the proposed marketing research department 
be located? Why? 

2. What might the principal functions of the department be? 
How might projects originate? 

3. Should the research director participate in policy formation? 
If so, how? 



CASES IN ORGANIZATION FOR RESEARCH 333 

CASE 4 A RESEARCH DEPARTMENT FOR 
A PHARMACEUTICAL COMPANY 

BACKGROUND 

The Eli Lilly and Company laboratories were founded in 
1876 in Indianapolis, Indiana. By 1952 the organization had 
become one of the major producers in the United States of 
pharmaceutical and biological products in both the domestic 
and foreign markets. In maintaining its position of leadership 
in the drug industry, it had continuously engaged in extensive 
research work in both the technical aspects of pharmaceutical 
production and in the marketing and economic aspects. 

The marketing operations of Lilly were extensive, its products 
being sold on a worldwide basis. As a consequence, there was 
need not only for marketing research, but also for basic eco- 
nomic research. For example, operational data had to be col- 
lected on the activities of wholesale druggists, retail druggists, 
and competitors, for use in studies to determine significant dif- 
ferences in each aspect of drug distribution influenced by the 
activities of the various types of business just mentioned. In 
addition, inventory control studies, evaluation of the effects 
of fair trade legislation, and similar studies had to be made in 
so far as these factors influenced the operations of retail drug- 
gists, wholesalers, competing firms, and the Lilly Company. 
Many additional marketing problems derived from the com- 
pany's use of a three-pronged method of distribution the 
wholesaler, the retailer, and the physician. The company rec- 
ognized the wholesaler as the one who acted as a distributor 
for Lilly products, the retailer as the one who dispensed the 
products, and the physician as the one who prescribed them. 
It can be seen, therefore, that the physician was the major link 
in the chain of distribution and that he had to be kept informed 
at all times of special drug products. 

The sales representative who attempted to convince doctors 
of the merits of Lilly products was known as a detail man. . His 
job was that of selling the merits of the drug products made by 



334 MARKETING RESEARCH 

Lilly so that the doctor believed in them sufficiently to use 
them repeatedly in his daily practice. The detail man not only 
had to call on doctors, but also had to keep in close touch with 
pharmacists and wholesale houses to make certain that ad- 
equate stocks of Lilly products were being carried to fill the 
prescriptions that doctors wrote. Whenever possible, a stren- 
uous effort was made to bring new products to the attention of 
all key individualsdoctors, retail druggists, and wholesalers. 
This called for information that would be helpful in doing an 
accurate job of forecasting. 

Many other forecasts were required for company operations 
in addition to those needed for promotional use. The main 
type of forecasts and related data required were as follows: 

1. Forecasts of Eli Lilly: 

a) Total sales. 

b) Commodity sales. 

c) Individual products. 

2. Estimates of market for new products. 

3. Estimates of stock requirements (Eli Lilly Company) for new prod- 
ucts in order to supply market. 

4. Surveys providing comparative price levels of Lilly and competitive 
products. 

5. Incidence of disease data. 

6. Mortality data on given diseases. 

7. Public health data on geographic distribution of diseases and pub- 
lic health services to treat them. 

The Lilly Company also had need for industry studies to pro- 
vide the following information (past and present): 

1 . Volume of medicinal market: 

a) Consumed by a given country. 

b) Produced by a given country. 

c) Exported and imported by a given country. 

2. Channels used by medicinal industry to move products from pro- 
ducer to consumer. 

3. Market potentials for Lilly products by geographical areas for use 
in deploying field manpower and promotional effort effectively. 

4. Determination of normal trading areas for wholesale and retail 
drug trade in each country. 



CASES IN ORGANIZATION FOR RESEARCH 335 

5. Studies of field manpower of Lilly and principal competitors, and 
adequacy of Lilly field force in a given country. 

6. Periodic studies on the adequacy of wholesaler distribution and 
support given Lilly line in each geographical area. 

7. Development of proper frequency for daily calls and town visits 
standards, and methods for territorial scheduling. 

Further information was needed on operations of the com- 
pany that are of primary concern to management in formulating 
its policies, namely: 

1. Plant location. 

2. Annual studies of company performance in scientific research ef- 
forts that lead to new products and to creating additional sales 
volume. 

3. Management problems of mterfunctional interest as assigned or 
approved (excludes sales forecasts and estimates of market); for 
example, utilization of production facilities and their expansion. 

4. Management problems of into/functional interest when requested 
at divisional levels or above (excludes sales forecasts and estimates 
of market); for example, continuation of research on a product. 

5. Periodic reviews of low sales volume products and package sizes 
(Lilly products) for purposes of deletion. 

6. Operational data of competitors, wholesale druggists, and retail 
druggists for use in comparative studies, pricing studies, inventory 
control, and similar factors. 

Certain information was looked upon as being exclusively 
!n the realm of marketing studies. This information covered 
"he following subjects: 

1. Studies to measure and to improve the effectiveness of Lilly pro- 
motional efforts through such channels as advertising, house or- 
gans, direct mail, and personal sales efforts. 

2. Studies on physician and druggist attitudes to company products 
and policies. 

3. Surveys, as needed, on company product need and product accep- 
tance. 

4. Surveys indicating the sales position of Lilly products in their re- 
spective therapeutic fields and geographical areas. 

5. Surveys showing total current consumption of products in given 
therapeutic fields. 



336 MARKETING RESEARCH 

6. Surveys providing comparative price levels of Lilly and competitive 
products. 

THE PROBLEM 

Each grouping of the information needed indicated that 
there would be some overlapping between the classes of data 
sought. The problem which faced the Lilly Company was, 
therefore, to work out a plan of internal relationships that would 
organize the research activities as indicated by the type of in- 
formation sought. Furthermore, there was an external organ- 
ization problem that had to be solved so that the economic 
and marketing research activities could be planned in proper 
working relationship with other divisions of the company, such 
as production, technical product research, finance, and sales. 

The executive structure of Lilly is found in many types of 
business operation; namely, a president, executive vice-presi- 
dent, and other officers who perform the customary activities 
associated with their positions. 

ACTION NEEDED 

1. Work out an organization chart to show the relationship 
of economic and marketing research activities to other divi- 
sions of the company. 

2. How would you organize the economic and marketing re- 
search activities within the research division? Show the 
organizational chart and how groupings of information 
could be handled from the standpoint of internal manage- 
ment of the division. 



INDEX 



Accuracy, meaning, in sampling, 115- 

16 
Advertising, evaluating effectiveness of, 

263-71 
Analysis and interpretation, 233-41; 

problems in, 242-84, 293-95 
Arbitrary selection, 116-17; see also 

Judgment sample 
Area sampling, 118 

Bacon study, preceding for, 211-13 

Bias, 116 

Branch store profitability, problems in, 

17-22, 301-11 
Budgeting for research, 317; problem 

in, 323-26 

Charge accounts, problems in, 91-100, 
223-31 

Charts, use in reports, 286; problems 
in, 290-92, 301-11 

Cluster sampling, 118-19 

Consumer clinic, 31; nature of, 52-54; 
problem in, 52-56 

Consumer panel, 122; data available 
from, 61-62; nature of, 59-61; prob- 
lems in, 56-62, 87-91, 143-46, 326- 
28 

Costs, estimation of, 66; see also Budg- 
eting for research 

Credit ratings, problem in, 147-52 



Data gathering, 31, 64-66, 159-64; 
problems in, 70-75, 110-14, 127-30, 
165-201 

Dehydrated foods, survey of, problem 
in, 23-24 

Department store research, organiza- 
tion for, 328-32 

Depth interviewing, 31; problem in, 
192-96 

Dispenser study, report on, 312-16 

Distnbution costs, problem in, 25-28 

Double sampling, 120-21 

Editing, 203-4; problem in, 208-32 
Experimental methods, 64 
Exploratory investigations, 31-32; see 

also Informal investigations 
External investigations, 31-32; see also 

Informal investigations 

Findex method, 205-6 

Follow-up study, 110-14, 147-52; see 

also Presentation and follow-up 
Forms, 65; design of, problems in, 167- 

71, 213-16; see also Questionnaires; 

Tables 

Foundry industry, problem in, 127-30 
Frozen foods, problem in, 208-11 
Functional organization; see Staff 

function 



Data reliability of, 233-35; problems Hypotheses, formulation and testing 
in/ 242-45, 278-84 of, 29-32, 63, 235-37 

337 



338 



INDEX 



Ice cream stuc|y, 102-5 

Informal investigations, 31-32; prob- 
lem in, 40-45 

Installment credit, problem in, 87-91 

Internal investigation, 29-30; problems 
in, 46-52, 79-87 

Internal records, 1 59-60; problems in, 
165-67, 167-71 

Interpretation of results, 236-39; pit- 
falls in, 236-37; policy recommenda- 
tions, 238-39, 271-77, 278-84; prob- 
lems in, 245-50, 251-63, 263-71, 
293-96 

Interviewer training and selection, 
problems in, 180-84, 184-92 

Investigations; see Preliminary investi- 
gations 

Jewelry survey, tabulation of, 213-16 
Judgment sample, 117-18; problems 
in, 136-39, 152-57 

Keysort tabulation, 205-6 

Laundry operation, collecting data for, 
165-67 

Life insurance study, problems in, 
editing and tabulation, 217-23; in- 
terpretation of results, 245-50; in- 
terviewer selection, 180-84; organ- 
ization for, 323-26 

Line function, research as a, 287-88, 
318-20 

Luggage market, interviewer instruc- 
tions, 184-92; preparing question- 
naire, 106-10; problem in, 15-17 

Magazine merchandising effectiveness, 
problem in, 79-87 

Magazine readership, problem in, 152- 
57 

Mail questionnaires, 64, 160-61; prob- 
lems in, 100-2, 147-52, 171-72 

Mark sensing, 205 



Market for men's clothing, problem 

in, 278-84 
Marketing a product, problem in, 12- 

14 
Marketing efficiency, problem in, 52- 

56 

Marketing research, task of, 3 
Mechanical data collection methods, 

64, 162 
Multipurpose survey, 136; problem in, 

136-39 
Multistage sampling, 121 

Observational methods, 64 
Organization for research, 317-22; 
problem in, 323-36 

Paint study, problem in, 35-38 

Personal interviews, 64, 161; problem 
in, 192-96 

Pharmaceutical company, organization 
for research, 333-36 

Planning, 63-69; costs, 66; forms, 65; 
methodology, 64-65; nature of task, 
63; problem in, 70-1 14; specific pur- 
poses, 63-64; testing, 65-66 

Policy recommendations, consider- 
ations in, 238-39; problems in, 263- 
71, 271-77, 328-32 

Preceding, 204; problem in, 211-13 

Prefabricated housing, interpretation 
of results, 263-71; survey of, 136-39 

Preliminary investigations, 28-34; ex- 
ternal investigation, 31-32; internal 
investigation, 29-30; nature of task, 
29; secondary data, 30-31 

Presentation and follow-up, 285-89; 
problem in, 290-316 

Pretesting, 65-66; problems in, 91-100, 
173-80 

Probability sample, 117-18; see dso 
Sample designs 

Problem formulation, 3-8; nature of 
task, 3-4; problem in, 9-27; rephras- 
ing problems, 4-5 



INDEX 



339 



Questionnaires, construction of, 65; 
problems in, 100-2, 102-5, 106-10, 
173-80, 211-13; testing of, 65-66; 
problem in, 91-100 

Quota sampling, 120 footnote 

Radio listenership, problems in, inter- 
pretation of results, 251-63; plan- 
ning, 70-75; sample design, 139-43 

Random numbers, sample page of, 
126; see also Random selection 

Random selection, 116-17; problem in, 
125-27 

Reports, problems in, 296-301, 301-11, 
3 12- 16; types of, 285-87 

Research department, organization of, 
318-21 

Respondent cooperation, obtaining, 
173-80 

Retail trade areas, problem in, 293-96 

Sales methods, problems in, 9-10, 38- 

39 

Sales organization, problem in, 11-12 
Sample designs, 118-22; problems in, 

130-36, 136-39, 139-43, 143-46, 

152-57 
Sampling, 1 1 5-24; basic concepts, 115- 

18; need for, 1 1 5; objective of, 116; 

principal designs, 118-22; problem 

in, 125-57 

Sampling error, 116; of stratified sam- 
ple, 120 
Schedules; see Forms; Questionnaires 



Secondary data, investigation of, 31-32 

Self-service meat marketing, problem 
in, 296-301 

Sequential analysis, 121 

Shopping habits, preliminary investiga- 
tion of, 40-45 

Situation analysis, 29-30 

Staff function, research as a, 287-88, 
318-20 

Store audit, data available from, 61-62; 
nature of, 57-60; problem in, 56-62 

Store expansion, problem in, 75-79 

Store hours, problem in, 271-77 

Stratified sampling, 119 

Survey methods, types of, 64; see also 
Sampling 

Tables, summary, preparation of, 223- 
31, 285-87; problem in, 278-84 

Tabulation, manual vs. machine, 
204-6; problems in, 208-32, 251-63, 
278-84 

Telephone interviews, 64, 161-62 

Television survey, problem m, 171-72 

Testing, 65-66 

Unrestricted sampling, 118 

Validation, 234-35; problem in, 242- 

45 
Verification of findings, 237-38 

Working outlines, 32, 65, 287