Successful and accurate marketing research evolves from a structured eleven-step process. Understanding and solving a marketing problem, as with any problem, can be over or under engineered. Over engineering simply means that unnecessary steps are used in the marketing research plan. Moreover, using too few steps would result in limited information and potentially less accurate results. The challenge is to leverage only the steps necessary to deliver an accurate analysis. In some cases, there will be marketing research projects that require all eleven steps.
The customer landscape is constantly changing
Well-established companies sometimes forget the importance of understanding the demographic anatomy of their current customers. Without information harvested from marketing research, a company runs the risk of losing business to competition. This is especially true if the competitor uses marketing research to inspire direction and drive marketing decisions. Marketing research is not a one-time process. Cultures and sub-cultures within our society are constantly changing—and as a result, consumers do not respond to the same marketing as in the past.
It is irresponsible for a company to not periodically survey their customers so as to better understand their wants, needs, and desires. The International House of Pancakes (IHOP) is far too familiar with the economic rollercoaster caused by stiff and faster moving competition. While the traditional tabletop survey cards are sufficient for improving the quality of service at the local level, a structured marketing research plan is required to provide the information necessary to remain competitive in the market.
The International House of Pancakes is a restaurant chain with over fourteen hundred locations. There are a few locations with overlapping markets, but each market is burdened with its own unique set of challenges. The International House of Pancakes must design a marketing research plan that is managed at the corporate level and deployed at the franchise level, but provides information relevant to all. A plan of this complexity will leverage all eleven steps in the marketing research process.
Burns & Bush (2008) identify the eleven steps of marketing research as: (1) establish the need for market research, (2) define the problem, (3) establish research objectives, (4) determine research design, (5) identify information types and sources, (6) determine methods of accessing data, (7) design data collection forms, (8) determine sample plan and size, (9) collect data, (10) analyze data, and (11) prepare and present the final research report (p. 63). In every marketing research campaign the first step remains the same—establish the need. Both, the corporation and the individual franchises need marketing research. Without information gleaned from the data collected and analyzed during marketing research campaigns, marketing managers at both the franchise and corporate levels cannot make educated decisions. The need for marketing research is constant, and based on the reality that the customer landscape is constantly changing.
Create a structured plan
One of the most difficult steps in the marketing research process is defining the problem. In some cases, many people within the organization have their own interpretation of the problems facing the company. Step two, defining the problem, is critical to the success of a marketing research plan. The International House of Pancakes has enjoyed moderate success in the shadow of an unpredictable economic time. Additionally, they have become complacent as it relates to catering to a changing market.
At the corporate level, the International House of Pancakes needs to define new market areas and better leverage existing opportunities. Franchises need to have a clear snapshot of how they are perceived in the eyes of their customers. Retention of existing customers is the springboard for new business. Creating a profile and understanding the wants, needs, and desires of IHOP’s existing customers will help define the model for marketing campaigns to attract new customers.
The International House of Pancakes is recovering from a loss of 3.1% in the fourth quarter of 2009 (Shauk, 2010). With the majority of consumers tightening their belts, it is imperative for the corporation to find the right marketing mix to survive, prosper, and grow. Marketing research can help determine areas with existing franchises and a lower market share. Information is key in making marketing decisions. The overall marketing research plan is designed around addressing and solving the problem.
Establishing research objectives, the third step in the process, presents a few challenges. Considering that the overall business is down, surveying existing customers will provide only a fraction of the information needed to complete the marketing research analysis. An in-store survey will suffice for capturing information regarding the merit of service, diversity of the menu, and quality of the food. Each franchise will offer an incentive-based survey to each of their patrons.
The franchise-level marketing research campaign will be coupled with a corporate-level survey that is designed to reveal any hesitation by prospective customers to frequent their local International House of Pancakes. The questionnaire will be presented through on-line channels as well as telephone surveys. The overall marketing research objective is to poll a minimum of two hundred individuals in each market area.
The fourth step, determining research design, is significant to the accuracy of information captured during the research campaign. A descriptive research design will be used describe the current customer or prospect. A cross-sectional methodology within the descriptive research approach is the best solution for establishing a benchmark of a particular point in time. The information from these surveys will be used to help recognize and forecast trends.
As part of the fifth step, researchers need to identify information types and sources. The International House of Pancakes has been in existence for over half a century. From the beginning, the company has expanded through franchising. The holding company, DineEquity, also owns the Applebee’s Neighborhood Grill and Bar restaurant franchise (Meece, 2007). Applebee’s and IHOP appeal to two different markets with some overlap. Both restaurant chains operate in the casual dining and family dining categories. Therefore, it would stand to reason that some information from previous marketing research campaigns could be shared.
Secondary data, such as the information captured over the past several years, can be used to backfill missing information from current campaigns. Information from a data provider is necessary for creating a list of contacts for the telephone survey. This secondary data will be broken down into segments based on geography, age, income, and number of individuals in the household. The primary data accumulated during the marketing research campaigns will be joined with the secondary information provided by one or more outside list providers.
The methods for accessing the data, the sixth step, will mostly revolve around unobtrusive techniques such as self-surveys over the Internet. Additionally, a telephone survey will allow a more personal approach. The telephone survey campaign will allow the marketing researchers to cover a wider area in less time than an in-home survey. A savvy researcher can monitor inflections and emotions in the voice of the persons being surveyed to measure the integrity of the responses (Tyebjee, 1997).
The seventh step in the marketing research process involves designing the actual forms used to collect data. One of the challenges is creating questions that will generate responses to satisfy the marketing objectives defined in step three of the marketing research process. The franchise-level in-store surveys, for example, will use a combination of dual-choice categorical scale questions coupled with several synthetic metric scale questions. Questions regarding gender, or any question requiring a simple “yes” or “no” response, will be developed using a dual-choice categorical scale. Questions concerning the quality of service, frequency of visits, or overall rating of a consumer’s IHOP experience will leverage either natural or synthetic metric scale questions. In all cases, the questions will be brief and clear—not leading, loaded, double-barreled, or overstated (Burns & Bush, 2008).
Determining the sample plan and size is a very important eighth step in the marketing research process for the International House of Pancakes. The in-store table card surveys should be used throughout the year to ensure the individual restaurants are listening to the voice of their patrons. A timeline needs to be determined to as the extent of the survey for the marketing research campaign. Information captured within the survey time window will be combined with data from other research initiatives in the same timeframe for final analysis.
Several factors are considered when deciding how many individuals is to be sampled. While accuracy and confidence of the data is a concern, sensitivity to the marketing research budget is a factor. A larger sample equates to more accurate results. Time and budget constraints, along with the logistics of surveying everyone in the target audience, makes it necessary to establish a sample size that will best represent the majority. A stratified sampling approach is recommended for selecting the list of individuals to participate in the telephone survey. The optimum number of individuals to contact, or sample size, is determined by using the confidence interval formula. Variability, confidence level, and accuracy are the three elements considered when leveraging this formula (Birchall, 2009).
Collecting data is the ninth step in the marketing research process. The method by which the data is collected is directly related to the accuracy of the information captured. For example, it is nearly impossible to know for sure who responded to a survey hosted on-line. In contrast, information captured during a telephone survey seems to have more credibility. An in-person method would provide the most credible results, but time and budget for this particular marketing research project limit data collection to telephone surveys, online surveys, and in-store self surveys.
Each data collection method poses certain risks of error. An on-line survey can result in data skewed by bogus responders and a misrepresentation of the population. Telephone surveys are met with challenges associated with the overuse of this conduit by traditional telemarketers. A substantial percentage of telephone survey attempts typically result in a non-response. An individual might refuse to take the survey or break-off during the interview.
Bringing it all together
The tenth step in the marketing research process is data analysis. Interpreting the information collected during the research campaign is accomplished by choosing an analysis type that will produce results to meet the research objective. The research objective is to describe the target audience. The International House of Pancakes’ survey results from current customers combined with the sample data captured from the on-line and telephone surveys can be summarized into percentages and averages.
The data collected across all research channels will be summarized. Categorical questions can be summarized using percent distribution. Depending on the categorical data, a frequency distribution might be used to summarize the findings (Burns & Bush, 2008). Further analysis could include cross-tabulation to better understand the relationship between variables recognized during the marketing research campaign.
The final step in the marketing research process is the preparation and presentation of the findings. The marketing research report is a document that will be used by the key decision makers within the International House of Pancakes executive team. Decisions regarding business direction and overall marketing plans rely on the accuracy of the information contained in the final report. The marketing research report will include a full analysis of the information and recommendations as concluded by the marketing research team. The results will be compiled and presented in an informative manner that will best reflect the efforts of the marketing research team.
The International House of Pancakes is an American icon. But longevity does not equate to success. The company needs to change as society dictates and continue to serve the public at a level that will ensure repeat business and continued growth. Franchises need marketing research to provide information regarding lifestyle, interests, and spending habits of their respective target audiences. Corporate headquarters needs marketing research to help determine the viability of expanding into other geographic areas. The pulse of the community is measured through marketing research.
The eleven-step marketing research process is neither over nor under-engineering a plan necessary to deliver information to help marketing managers of the International House of Pancakes set direction and devise a marketing strategy. Every aspect of the corporation can benefit from a well-designed marketing research plan. The International House of Pancakes’ greatest assets are their customers. Understanding the psyche of these individuals is invaluable.
Birchall, J. (2009). Sampling and samples. Retrieved May 16, 2010, from http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=23&Itemid=1&limit=1&limitstart=2
Burns, A. & Bush, R. (2008) Basic Marketing Research. Pearson Prentice Hall. New Jersey.
Meece, M. (2007). Can the IHOP Corp. do for Applebee’s what it did for itself? The New York Times. [Electronic version]. Retrieved May 15, 2010, from http://query.nytimes.com/gst/fullpage.html?res=9400E3DD173BF932A2575BC0A9619C8B63
Shauk, Z. (2010). IHOP owner’s earnings hobbling back. Glendale News Press [Electronic version]. Retrieved May 16, 2010, from http://www.glendalenewspress.com/articles/2010/03/03/business/gnp-ihop030410.txt
Tyebjee, T. (1997). Telephone survey methods: The state of the art. [Electronic version]. The Journal of Marketing, 43(3), 68-78. Retrieved May 15, 2010, from JSTOR: http://www.jstor.org/stable/1250148