Hitwise is a leading provider of online competitive intelligence services. Every day. the company monitors more than 25 million Internet users and interacts with more than 450.000 Web sites across industry categories in several countries. Hitwise benchmarks its clients’ online presence to competing Web sites. Client firms use this information to optimize their online investment in affiliate programs marketing. online advertising. content development. and lead generation. For example, Heinz is one of me
clients that has hugely benefited from the services offered by Hitwise. Heinz had created nearly 57 varieties of microsites for its brands at the peak of the dot.corn craze. However. today. thanks to Hitwise, Heinz has learned specific online activity is only relevant for core brands such as ketchup, baby food. and beans. For other brands. brand value is delivered via the corporate site.
USES OF PURCHASE AND MEDIA PANELS Purchase panels provide information useful for forecasting sales, estimating market shares. assessing brand loyalty and brand-switching behavior, establishing profiles of specific user groups. measuring promotional effectiveness. and conducting controlled store tests. Media panels yield information helpful for establishing advertising rates by radio and TV networks, selecting appropriate programming, and profiling viewer or listener subgroups Advertisers, media planners. and buyers find panel information to be particularly useful.
The disadvantages of purchase and media panels include lack of representativeness, maturation. and response biases. Most panels are not representative of the U.S. population. They underrepresent certain groups such as minorities and those with low education levels. This problem is further compounded by refusal to respond and attrition of panel members. Over time maturation sets in, and the panel members must be replaced Response biases may occur. since simply being on the panel may alter behavior. Since purchase or media data are entered by hand, recording errors are also possible.
Electronic Scanner Services
Although information provided by surveys and purchase and media panels is useful. electronic scanner services are becoming increasingly popular. Scanner data reflect some of the latest technological developments in the marketing research industry. Scanner data arc collected by passing merchandise over a laser scanner, which optically reads the bar-coded description (the universal product code or UPC) printed on the merchandise. This code is then linked to the current price held in the computer memory and used to prepare a sales slip. Information printed on the sales slip includes descriptions as well as prices of all items purchased. Checkout scanners. which arc now used in many retail stores, are revolutionizing packaged-goods marketing research.
In scanner panels, each household member is given an ID card that can be read by the electronic scanner at the cash register. The scanner panel member simply presents the ID card at the checkout counter each time she or he shops. In this way, consumer identity is linked to products purchased as well as the time and day of the shopping trip, and the firm can build a shopping record for that individual. Alternatively, some firms provide handheld scanners to panel members. These members scan their purchases once they are home. The Nielsen Consumer Panel, called Homescan, is used to record the purchases of approximately 300,000 households throughout the world. The consumer scans the bar codes on purchases with a handheld scanner, which records the price, promotions, and quantity of each item. The information in the handheld scanner is then transmitted to Nielsen through telephone lines. Nielsen uses the information from the scanner and additional information gathered from the consumer to determine such things as consumer demographics, quantity and frequency of purchases, percentage of households purchasing, shopping trips and expenditures, price paid, and usage information. Manufacturers and retailers use this information to better understand the purchasing habits of consumers. The Boston Market example given in the “Overview” section provided an illustration. According to Nielsen’s consumer panel data, 55 percent of respondents purchased a meal for at-home consumption several times a month.
An even more advanced use of scanning, scanner panels with cable TV, combines scanner panels with new technologies growing out of the cable TV industry. Households on these panels subscribe to one of the cable TV systems in their market. By means of a cable TV “split.” the researcher targets different commercials into the homes of the panel members. For example. half the households may see test commercial A during the 6:00 P.M. newscast while the other half see test commercial B. These panels allow researchers to conduct fairly controlled experiments in a relatively natural environment. IRI’s BehaviorScan system contains such a panel.
Using Total TV Households for Testing Total Advertising
Based on cereal consumption research conducted in 2008, more than 90 percent of consumers eat caeeal for breakfast and per capita consumption is very high. Results also indicated that cereal was the favorite breakfast item, and was eaten regularly by three out of four adults. Therefore. General Mills has been promoting Total cereal on national television but is concerned about the effectiveness of its commercials
This example shows how scanner services incorporate advanced marketing research technology, which results in some advantages over survey and purchase panel data
ADVANTAGES AND DISADVANTAGES OF SCANNER DATA Scanner data have an obvious advantage over surveys and purchase panels, since they reflect purchasing behavior that is not subject to interviewing, recording, memory, or expert biases. The record of purchases ‘obtained by scanners is complete and unbiased by price sensitivity, since the panelist is not required to be
overly conscious of price levels and changes. Another advantage is that in-store variables like pricing. promotions, and displays are part of the data set. The data are also likely to be current and can be obtained quickly. Finally, scanner panels with cable TV provide a highly controlled testing environment
The quality of scanner data may be limited by several factors. All products may not be scanned. For example, a clerk may use the register to ring up a heavy item to avoid lifting it. If an item does not scan on the first try. the clerk may key in the price and ignore the bar code. Sometimes a consumer purchases many flavors of the same item, but the clerk scans only one package and then rings in the number of purchases. Thus, the transaction is inaccurately recorded. With respect to scanner panels. the system provides information on TV sets in use rather than actual viewing behavior. Although scanner data provide behavioral and sales information. they do not provide information on underlying attitudes. preferences, and reasons for specific choices
Syndicated Data from Institutions
Retailer and Wholesaler Audits
As Figure 4.4 shows, syndicated data are available for retailers and wholesalers as well as industrial firms. The most popular means of obtaining data from retailers and wholesalers is an audit. An audit is a formal examination and verification of product movement traditionally carried out by auditors who make in-person visits to retail and wholesale outlets and examine physical records or analyze inventory. Retailers and wholesalers who participate in the audit receive basic reports and cash payments from the audit service. Audit data focus on the products or services sold through the outlets or the characteristics of the outlets themselves, as illustrated by the following example. With the advent of scanner data, the need to perform audits has greatly decreased. Although audits are still being conducted, many do not collect data manually but make use of computerized information.
Wholesale audit services, the counterpart of retail audits, monitor warehouse withdrawals. Participating operators, which include supermarket chains, wholesalers. and frozen-food warehouses, typically account for more than 80 percent of the volume in the area
However. audits have limited coverage. Not all markets or operators are included. Also. audit information may not be timely or current. particularly compared to scanner data. Typically.there is a two-month gap between the completion 01 the audit cycle and the publical non of reports. Another disadvantage is that, unlike scanner data. audit data cannot be linked to consumer characteristics. In fact, there may even be a problem in relating audit data to advertising expenditures and other marketing efforts. Some of these limitations arc overcome in electronic (online) audits. as the following example illustrates.