Online Research as A Decision Tool for Marketing and Management Strategies Franch M., Mich L., Osti L. University of Trento, Department of Computer and Management Sciences Via Inama, 5, 38100 Trento, Italy Tel. +39 0461 882131 Fax: +39 0461 882124 E-mail:
[email protected]
Abstract
In recent years
communication systems have developed rapidly and innovatively, and the trend seems inexorable. Internet is a typical example. As a consequence of the information concerning the market that has been gathered, marketing and management strategies will certainly benefit from this major trend. However, for this to come about it is necessary first to identify the most suitable method and tools among those under experimentation. In our research we used an online quantitative survey and the Delphi online method to identify future development trends in alpine skiing in the Dolomites. The results obtained confirm the validity of both, although the Delphi method yielded more complete results. The possession of high quality information facilitates the taking of corporate decisions and makes their implementation less risky. The Delphi method seems to be the best one if a company has to take decisions about future trends and the requisite information either does not exist in structured form or is difficult to obtain at low cost and with relative rapidity. Keywords : E-research, Market research, Business strategies
services that match consumer intentions as closely as possible. The transition from mass marketing (largely undifferentiated products for a large number of people) to one-to-one marketing (personalised products) requires businesses to be able to handle information about consumers so that their product range becomes almost unique. Internet is an interesting opportunity from this point of view as well. When used for online market research it provides management with the information it requires to meet market needs easily and cheaply. Attempts have also been made in the field of market research to exploit the advantages of the Web. However, online surveys are still rare, and when they are conducted they relate mainly to such topics as electronic commerce or information technology. This paper discusses how market research can be conducted online on topics other than those normally addressed by this innovative medium, in the conviction that our experience will be replicated to become an effective marketing tool in the near future. Given the scant information available on the use of online surveys as a management tool, the aims of the project were: −
to verify the applicability of online market research (henceforth e-research) in areas other than those – e.g. e-commerce (in particular the sale and purchase of soft- and hardware and books) – in which this kind of research has developed;
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to assess the efficiency of e-research in terms of redemption and response rates and the quality of the data collected. While the advantages in terms of time and costs have already been confirmed by comparison with mail or telephone surveys, there has been little investigation of the completeness and quality of the data collected and their
1. Foreword With the beginning of what has been called the telecommunication era, the rules and strategies of competition in markets have changed. Information management and communication with potential customers have become strategic resources for every type of business. On the one hand, the possession of information and ease of access to it have changed the behaviour of consumers, who have become more aware, critical and demanding. On the other, knowledge of consumer expectations and purchasing behaviour has provided businesses with an unprecedented opportunity to supply products or
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effective use in strategic and operative business decision-making; −
Figure1 - Types of e-research DATA SOURCE
to help our agent Dolomiti SuperSki to take strategic decisions in marketing and management over the next years. The application field of our examination was a research study1 on the trends of development predicted for alpine skiing in the next three-five years, with particular reference to the largest skiing area in Europe: the Dolomiti SuperSki area in the Dolomites, which covers 1180 km of slopes served by more than 400 skiand chair-lifts. In February 1999, Dolomiti SuperSki asked us to carry out market research on their behalf that would yield useful results in less than seven months, so that marketing and management strategies could be planned from the next winter season 1999/2000.
Internal
External
Secondary Company statistics using Intranet and Extranet Access to a database
Primary Internet surveys with automatic observation E-surveys with interaction
We focused on external sources with primary data, and therefore conducted an e-survey with interaction, which is the method which best exploits the benefits of new technologies. There are several steps, each with particular features, to follow in the planning and implementation phases of research of this kind [2]: I) Singling out the population to contact II) Representativeness of the online population III) Planning the electronic questionnaire IV) Circulation of the questionnaire.
In terms of methodology, we used two approaches while conducting the e-research: I)
1) a qualitative survey – which used the forecasting Delphi method [5]. 2) a quantitative survey. This paper presents the results of these two surveys, emphasising the support that they gave to medium-tolong-term strategic decision-making. The results confirm the validity of both types of survey, although the Delphi method yields qualitatively more complete information. We believe that this is due to the nature itself of the method, which involves mediated discussion among experts from the various sectors concerned, each of whom starts from his or her own point of view. Moreover, as far as we know, the Delphi online survey is the first to be experimented in the field of management decision-making. In view of the quality of the information obtained and the time taken to acquire it, the Delphi online survey method seems to be an efficacious and relatively economical support for decisions.
Singling out the population to contact. Sampling is a particularly important and difficult phase in e-research, because only representative results can be generalised to the entire population – which is also outside the Net – but also and especially because there is no public list of all Internet users, with their addresses, who can be invited to take part in surveys. Once the features of the population to survey have been defined, the next step is to sample them. We suggests three possible solutions to these specific sampling problems in on-line surveys [4]. −
Cluster or stages sampling: servers represent clusters from which, at a second stage, the users can be selected. The advantage of this type of procedure is the greater facility of obtaining a list of servers, rather than a list of users; although the users belonging to the same server must be as homogeneous as possible, which means that each cluster must have features as close as possible to those of the entire population.
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Ladder sampling: this kind of sampling starts from a random sample of users connected to a server. In this way a sub-set of Internet users is identified which is not representation of the total population of consumers.
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Snowball sampling: this consists in the creation of an increasingly longer list of users while moving the research forward with the
2. Online research / e-research If a company decides to use e-research to gather data and information, it can choose among various types, dividing them between internal or external research and between primary and secondary data. The following table shows the four different types of eresearch [1]. 1
The survey is part of an on-line market research program financed by the Computer and Sciences Department of Trento University.
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information gathered from the users surveyed. Thus, the information on new names and addresses provided by the users surveyed leads to construction of a sample.
for questions with only one reply in a list of alternatives; 2. check, for questions which allow more than one reply from a list of alternatives; 3. list, for questions based on a list of predefined replies; 4. open, for questions which allow the interviewee to answer freely.
II) Representativeness of the online population. Before sampling the identified population, it is necessary to establish whether it is representative of the entire universe, and therefore whether it is possible to extract a significant sample from it. With the present rate of diffusion of Internet, users have specific characteristics which differ from those of the rest of the population. Consequently, market research on consumer behaviour as regards convenience goods cannot be considered significant: if the research concerns a sample made up only of internet users, a wide range of consumers with different habits and purchasing power will be excluded. By contrast, e-surveys on e-commerce consumer habits are significant. Some authors argue that in certain countries the Internet consumer rate has reached such a high level that there is no longer any question about the representativeness of the universe. We argue along the same lines, stating that on-line users increasingly resemble common buyers and that purchasing habits will soon be the same [4], on the other hand, asserts that the problem of the representativeness of the consumers contacted in an online survey should be compared against the contents and aims of the survey itself. If these concern problems in some way connected with the electronic technology, one may suppose that the individuals contacted via Internet are representative of the population of users. Conversely, if the survey concerns the purchase of food products via Internet, the persons contacted do not statistically represent the population interested in this method of making purchases.
IV) Circulation of the questionnaire. Once the sample has been decided and the questionnaire is ready in electronic interactive form, the last problem is how to circulate the questionnaire around the net. There are three options [3]:
III) Planning the electronic questionnaire. An essential rule is brevity. First in the questionnaire itself, if not in the number of questions at least in their wording. It should be borne in mind that it is costly for the typical internet user to stay on line. Second brevity is necessary in the accompanying letter: people on line are used to short and direct messages, so that a long letter will probably be disregarded. Online users have their own language, and a survey addressed to them should be in their language. When planning an online questionnaire, four different types of question may be used: 1. radio
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Via e-mail: the questionnaire can be sent as an attachment to e-mail. The interviewee must open the file, answer the questions and post the replies using the “mail to” button. Similarly, the questionnaire may be written as part of the e-mail message itself, and the interviewee need only click on the reply button and send his/her answers with the same message. Both these options have advantages and disadvantages: a questionnaire sent as an attachment may be more sophisticated in layout and easier to complete, but it is normally larger in size and is therefore harder to download for those receiving it. There may also be difficulties with software compatibility when opening and sending the message. On the other hand, a questionnaire that is part of an e-mail message is smaller in size, has greater compatibility but cannot be elaborate in graphics and layout.
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Sending the questionnaire to newsgroups interested in its topic: Use of this method encounters difficulties due to forms of access to newsgroups (free or supervised by a moderator) and respect for netiquette rules, which are rather rigid in the case of crowded and specialized discussion groups. Moreover, the representativeness of the individuals contacted may be low, given that they belong to a sub-set of the population with a marked propensity to use the net.
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Putting the questionnaire online: the questionnaire can be part of an Internet site. Thus anyone surfing on the net can complete it and send their replies with the “post action” button. If this method is used, the researcher will have greater sampling problems, since the interviewees cannot be selected from a specific population, and nor can they be
sampled. Moreover, if the questionnaire is not on a visible page, few answers may be obtained.
Figure 2.1 - NASJA associates Female 27,5%
3. The application Male 72,5%
In our study we applied e-research to a field other than those in which experiments have usually been conducted, like Internet user profiles or e-commerce. We wanted in particular to determine whether it was possible to acquire rapid information to support the strategic development strategies of a large organization like Dolomiti Superski2 . We investigated alpine skiing and its future for the next three/five years in the largest skiing resort (the Dolomites) in Europe. The study was structured in two different methodologies. The first was a qualitative Delphi study carried out world-wide on skiing, mountain and alpine tourism experts (writers, climbers, resort operators, columnists, opinion leaders) from various European countries (Norway, France, Switzerland, Finland, Italy). When the Delphi method is used, those involved in the research – each of them an expert in a specific sector and unaware of the identities of the others – exchange opinions on a topic, and the moderator organises the answers. This discussion continues until definite positions for or against have been taken up. The experts expressed distinct opinions about future development in alpine skiing after only 2 rounds.. The second was a qualitative survey carried out among North American skiing journalists. It was decided to involve American journalists in this second survey because the USA economy is usually at least five years ahead of European trends, and it is therefore of significance for a survey of future developments in alpine skiing in the Dolomites. In the cases of both the list of open questions sent to the Delphi experts and of the closed-question structured questionnaire sent to the journalists, the interviewees were contacted by e-mail. Both questionnaires were sent to the interviewees as attachments to the e-mail message, and they were also put online. We thus contacted our sample with an e-mail message which invited them to answer the attached questionnaire or, in the case of compatibility problems, to connect with the indicated URL and to answer directly online. For the quantitative survey, sampling problems were avoided because we took a sample from a list of all the journalists belonging to the North American Snowsports Journalists Association. Figures 2 show the percentages of journalists contacted. 2
Figure 2.2 - NASJA associates with e-mail box Without e-mail 37% With e-mail 63%
Figure 2.3 - NASJA associates with e-mail box per sex Female 30%
Male 70%
Figure 2.4 - NASJA associates contacted via e-mail Female 28%
Male 72%
It will be seen that the percentage of males and females in the entire association was respected in the sample of associates with e-mail boxes. After drawing up a list of all the members of the association with email addresses, we counted 222 individuals. After first contact had been made, we found that 21 addresses were incorrect, so that we ended up with a sample of 201 journalists. We actually managed to contact 53.6% of the total membership of the association and 84.8% of those in the database with e-mail addresses. If we consider the number of replies obtained, we may say that the study was a success. In the period from 6 June 1999 to 30 August 1999 we collected 55 completed questionnaires. Although at first sight this number may appear rather low, it is in fact a 27.4%
http://www.dolomitisuperski.com
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response rate. Since most mail surveys obtain an average of 10-15%, we were satisfied with this first experiment. Analysis of the periods of greater response highlights how rapid this type of survey is. In fact, most of the replies were returned in the days immediately after our first contact letter and the reminders (figure 3). The result would certainly have been better if technical problems had not been caused by a virus, which was not immediately detected, and if there had been no problems with the server. In fact, at the end of the survey we found that the server had not been working for 29% of the time between June and August. If these problems had not occurred, and if all the journalists who tried unsuccessfully to send the
questionnaire had been able to, the response rate would have been 35%. We achieved even better results in the Delphi study. Although not every expert was contactable by e-mail, 73.7% were nevertheless reached. From the 19 experts contacted in the first round we obtained a response rate of 84.2%, of which 75% via electronic support, while in the second round we obtained 81.3% responses, of which 70% via electronic support. Those experts who were not contacted electronically did not have e-mail facilities and therefore could only be reached by fax. As in the quantitative survey, also in the Delphi study we observed a concentration of replies in the days immediately following the first contact or the reminders.
Figure 3: Time distribution of replies server
e-mail
fax
12 11 10 9 8 7 6 5 4 3 2
4. Results and conclusions
Forth reminder
Check of the server
Third reminder
Second reminder (incentive)
First reminder (Virus)
First Contact
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Since the main aim of the study was to experiment with e-research on topics different from IT and ecommerce, and to apply them in management decisions, we now present some of the results obtained by our research. As regards the ability of online surveys rapidly to yield quality information to
The first observation to make is that online market research provides companies with an additional opportunity. At present, this method cannot take the place of traditional telephone or postal surveys.
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support a company’s strategic decisions, there follow a series of results used by the Dolomiti Superski Consortium to define its strategies: −
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from the initial investment in a server and the training of technicians able to do the work. We drew up a table comprising all the costs of a survey from Italy to the States using an eight-page self-completion questionnaire. Using normal mail would cost around 1.23 Euros per surveyee; fax would cost between 2.69 and 3.04 Euros; and e-mail would cost 0.16 Euros.
In the next five years skiers will no longer book winter sports weeks (settimane bianche) but only long weekends. Consequently, the hotels belonging to the consortium will have to define their product range no longer in the standard terms of seven days but much more flexibly, and taking account of tourist needs. The average skier will devote only 3-4 hours per day to skiing. It will therefore be necessary to organise differentiated après-ski activities centred on entertainment. This will require the reorganising the provision of gyms, cinemas, theatres, museums, shops, restaurants.
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The majority of the population will be aged between 50 and 60. Operators should consequently take account of the specific needs of this age group.
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As regards tourism policy for the next five years, the Dolomiti Superski Consortium must bear in mind that tourists will pay close attention to the quality/price ratio and to the distinctive nature of the Dolomite landscape and environment. It will therefore be indispensable further to enhance the difference between the product offered by the Consortium and the standardised American winter resorts.
The main additional advantages of online surveys with respect to traditional ones are their lower costs and time-saving; the possibility of an interactive relationship with the interviewee, improving if necessary the quality of the information exchanged in real time; the possibility of international surveys conducted in conditions that would otherwise be prohibitive for many companies. In more detail [6]: −
Cheapness: costs are considerably less, since it is not necessary to train operators, and there are no printing and mailing costs, etc.. A comparative study among the different ways to circulate a self-completion questionnaire has shown that electronic surveys are the cheapest (sending the questionnaire via email is cheaper than printing it). If the researcher intends to put the questionnaire online there are somewhat more costs arising
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Rapidity: the automation of some procedures – the mailing of the questionnaire, the gathering and analysis of the data – enables the sending and reception of dozens of questionnaires simultaneously by the same person on the same computer. Moreover, the data can be automatically transferred as a single file into statistical programs.
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Interactivity: this facilitates the compilation of the questionnaire and makes it more pleasant; reset and submit are two very simple buttons, but they are also very useful.
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Easier contacts with the population: there are no geographical boundaries to circulation of the questionnaire. At the moment it is possible to contact mainly people with higher educational and income levels, and of younger age. But Internet is becoming increasingly popular among every sector of the population.
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Possibility of interviewing persons who are very busy or very jealous of their privacy: the questionnaire can be completed at a time compatible with work activities. Moreover, online questionnaires ensure anonymity.
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Possibility to use supporting material: Internet allows to accompany the questionnaire with sounds, film clips, images and photographs presenting, for example, new products, banners, and new logos.
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Investigation and survey of the purchasing behaviour of allocentrics: as said, e-surveys at the moment are particularly suited to this kind of consumers.
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Easy applicability of this instrument to most kinds of companies. Market research is either carried out by company personnel or it is contracted out. In the former case, the company must have specialised employees; in the latter, it incurs high costs from contracting-out. Online research can be easily
conducted even by small and medium size companies.
of the data. If they are to be useful, the results should also be presented in a form which enables more rapid decision-making.
The main disadvantages of e-research compared with traditional methods are the difficulty of achieving statistical representativeness; the need to adapt tools and languages to electronic methods for the administration of questionnaires; the need for substantial initial investment in resources and training. In more detail, the main disadvantages are: −
Limits on generalisation of the results: as stated earlier, on-line surveyees are not a random sample, so that problems may arise in generalising the results.
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There is no certainty as to who is answering the questionnaire: as in surveys conducted by fax or mail, it is difficult to be sure who has answered the questionnaire. This difficulty can be overcome by using digital signatures or message cryptography. In the case of online questionnaires, it is also difficult to determined whether a person has answered more than once. However, it should be borne in mind that neither can the actual identities of respondents be determined with self complete questionnaires sent by mail or fax.
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In the light of these results we may conclude that:
Difficulty in conducting long interviews: due to the features of Internet use, which is characterised by quick and direct communication, it is difficult to convince users to complete long questionnaires.
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Compatibility problems of software and technical breakdowns: while conducting the survey, software compatibility problems may arise in the opening and sending of questionnaires (especially when the questionnaire is sent as an attachment to an email), and technical problems may cause breakdowns lasting more than a day, and without it being possible to inform the interviewee. These factors may decrease in the response rate.
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Need to purcha se know-how as well as hardware in order to conduct research from within companies.
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Scarce availability on the market of software packages for the automatic construction of the questionnaire and for statistical treatment
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Online surveys facilitate decision-making, both because of the speed and large scale with which information is obtained, and because of the better quality of the information.
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Online surveys are more efficacious than traditional ones provided close attention is paid to methodological aspects of the entire research design. This principally concerns the coherence between the profile of those interested in the research and that of Internet users. Secondly, it is necessary to select the type of online survey best suited to supporting decisions relative to the problem surveyed (Delphi, focus group, quantitative survey).
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The results of the case described in this paper highlight the superior performance of the Delphi online method (70% redemptions and only two rounds to reach consensus). They suggest its use whenever decisions of high strategic value must be taken on little-known problems which are consequently difficult to investigate using traditional methods.
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