1. Imagine you are the vice president of sales for a large security
company and you have been asked to put together a sales
information system that collects, analyzes, interprets, and
distributes information from the sales force. How would you do it?
What information would you ask salespeople to collect?
2. As a market manager at Lenovo, what key information from outside
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the company would be important to help in the design of a new
laptop for small and medium-sized businesses?
3. The marketing manager for Disney Cruise Line wants to know what
demographic trends will affect the cruise line business over the next
five years. What kind of research is needed to address this
question? Conduct some secondary research and try to identify two
or three important demographic trends that might affect the cruise
line business.
4. The market research director for John Deere has just received a call
from the marketing manager in the company’s lawn tractor division.
The manager wants to know how the new advertising campaign is
being received by current customers. Design a research study for
this research. Be sure to include a problem definition and research
design.
5. The alumni director at your institution wants to know how to serve
the alumni better. Design a survey of no more than 10 questions
that the alumni director can use to ask alumni about their interest in
getting more involved with their school.
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MANAGEMENT DECISION CASE
BMW’S ROAD TO HIGHER CUSTOMER
SATISFACTION: JUST TELL ME WHAT YOU
THINK!
Customer satisfaction and loyalty are critical elements in any
successful marketing strategy, but they are essential when the
product is purchased only once every few years. It was, therefore,
of great concern to luxury automakers like Acura, Audi, and BMW
when in 2014 their customer satisfaction scores all dropped below
the average for the entire automobile industry.
34 For years these
companies had been gathering and using external primary data
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from their own surveys, and also relying on secondary data from
sources like the American Consumer Satisfaction Index, yet
satisfaction was falling. Assuming the luxury automakers were
listening and responding to the data they received from existing
research, it appeared the old modes of research were missing key
insights. Management had a new research deliverable—learn how
we can improve customer satisfaction—and a new research
question—what specific product attributes or service components
are not satisfying our customers?
In situations like this, you don’t know what you don’t know.
Were less-expensive competitors adding features that satisfied
customers at a lower price? Were service amenities like free
loaner cars not valued by the customers? What were the features
or service components that were failing, missing, or just not
valued? Finding a method to ask questions that exposed areas of
dissatisfaction (or missed opportunities to satisfy), and ask these
questions in a way that was representative of the target customers,
became the market research problem. One of these companies—
BMW—learned how to listen and greatly improved its customer
satisfaction scores. It now ranks above the industry average for
customer satisfaction and higher in satisfaction than its luxury
automobile competitors.
35 BMW’s focus on understanding its
customers has helped it reach the top of its market, but its path
was only possible with an understanding of important trade-offs
different types of marketing research require.
Through a worldwide dealer network, BMW makes 10 promises
to its customers and then measures how well the company (and
dealers) keep those promises. Walk into (or visit on the web)
nearly any BWM dealership, from Idaho Falls, Idaho, to Hastings,
New Zealand, and you will see a display of the 10 promises of
service quality.
36 What you don’t see is how difficult it is to
measure and make sense of hundreds, thousands, or, at a country
level, hundreds of thousands of opinions about customers’
satisfaction with activities such as response timeliness, explaining
the bill, or offering a test drive.
In an effort to gather better satisfaction information, BMW UK
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set about to solve two problems at once. Like most companies, it
had a difficult time getting customers to respond to its surveys.
37
And, with 10 promises to measure, the surveys were fairly long
and time-consuming to complete. This led to a falloff in customer
response rates. The second problem was making sense of the
incoming survey data. To make surveys easier for respondents
and for later analysis, market researchers use closed-ended
quantitative questions, typically with a one-to-five- or one-to-sevenpoint scale of very unsatisfied to very satisfied. Customers who
responded answered by bubbling in the appropriate number on
their survey. But, without context as to why they were very satisfied
(or not), it was difficult for BMW to know exactly what to keep doing
and what to fix. More context meant more questions, and more
questions meant fewer responses.
To address this problem and get deeper context, market
researchers often seek to gather deeper, qualitative information
through in-depth interviews, which are often one on one and quite
expensive to administer, or by inviting a small number of
customers (usually around a dozen) to a focus group, where a
professional moderator asks open-ended qualitative questions,
digging out nuances of why customers are expressing a given level
of satisfaction. One downside of both in-depth interviews and focus
groups is that they are not a statistically valid representation of the
population of interest (for example, a target segment such as
Lexus buyers). BMW recognized that focus groups enable the
company to gain deeper context and actionable insights through
qualitative data but do not allow for generalizing the findings to a
large group, so they only provide guidance on what should be
focused on in a broader, statistically valid study.
BMW faced what is, for all market researchers, a series of
trade-offs between different research methods. Qualitative
methods, such as focus groups, brought deeper insights, but at the
cost of being able to apply the findings to a more general customer
target. Other methods, such as quantitative surveys, brought
speed, generalizability, and a higher level of numerical precision
and statistical validity, but lacked an ability to delve deeper and
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understand the heart of what customers value. And, in both cases,
the more information BMW sought, the fewer customers
responded. Realizing a need for richer and more representative
information, BMW set out to find a way to analyze representative
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samples of large amounts of open-ended qualitative customer
responses.
Questions for Consideration
1. Assuming BMW wants to learn more about what customers
value in a luxury driving experience, and then make decisions
based on that research, what kind(s) of market research would
you recommend that might improve BMW’s understanding?
2. BMW is facing the classic quality–quantity–cost trade-off; when
it seeks higher-quality information (represented by more
questions), fewer responses are received or research costs are
higher. Since BMW’s executives all have 25 to 30 years of
experience in the automotive market, what would be the
advantages and disadvantages of trusting their own experience
versus spending more on market research?
3. When problems develop, like what BMW is experiencing in its
research data gathering, a new, often technological solution is
developed to address the issue. What might be some innovative
ways to approach gaining both statistical significance (through
higher response rate) and deeper context (through open-ended
qualitative data)?
MARKETING PLAN EXERCISE
