SECTION A $[40$ MARKS$]$

Read the case study below and answer ALL the questions that follow.

Case Study $$ MARKET RESEARCH COMPANIES RUN OUT OF INFORMATION

A ready supply of information about customers, actual and potential, is vital to marketing managers. Consumers have become increasingly fragmented and sophisticated in their buying habits, while the growth in size of business units calls for information which can be easily analysed and acted upon. Gone are the days when most market research could be done simply by the owner$/$manager of a business listening to their customers.

Specialist data collection companies have come to play an important role in the task of collecting information about buyers. Organizations such as Experian, CACI and Claritas have developed a role in providing socio$-$economic and lifestyle data which is sold on to client companies to make their targeting more effective. With the growth in direct marketing, it is important to many clients to have specific information about each individual customer, rather than a general aggregate for the whole market. This applies to information about new prospects, as well as new and additional information from people already on their databases, which is important because people's circumstances change. In contrast to client firms' need for this information, consumers by the end of the $1990$s were showing increasing resistance to providing information for commercial purposes.

The market research industry has been concerned for a number of years about falling response rates to quantitative surveys. A Market Research Society report of $1997$ pointed out that the public rarely distinguishes between anonymous research, database building, or telephone calls that start off asking for information but end up with a hard sell. A report prepared in $1998$ by the Future Foundation found that only $50\%$ of consumers were happy to provide personal information to firms with which they deal, down from over $60\%$ in $1995.$ A core of people surveyed appeared to be not interested in taking part in data collection exercises at all, and won't fill in questionnaires. The $2001$ UK Census of Population $$ a foundation for many research exercises $$ appears to have fallen short of its claim to be a universal survey of the entire UK population, with reports of up to $2$ million $$missing$$ people. For marketers, this is a worrying development. If the public does not offer information about their needs, wants, attitudes and behaviour, it makes the life of the marketer more difficult.

There are a number of factors that may explain this trend. The first is that many more companies are now seeking to obtain information from buyers. Globally, ESOMAR$$s monitoring of the industry shows that the total market for market research worldwide in $2001$ was US$ $15,890$ million, with The USA accounting for $39\%$ of this total and the EU $37\%.$ The Market Research society estimated that in $2000$ the size of the UK Market Research Industry was $955$ million, with one of the biggest growth areas being opinion research about social or moral issues. In addition, direct marketing companies have been building marketing databases of their own customers. Saturation appeared to be setting in$.$ The result is that we can hardly visit a restaurant, buy a new item of electrical equipment or take an aeroplane journey without being invited to give our comments. Sometimes we are approached unsolicited for our views, whether in the street or by telephone. Information is a key element of a firms' competitive advantage, so they are putting more and more effort into collecting information about customers.

Secondly, consumers are becoming increasingly aware that information which only they can reveal about themselves has commercial value. Research from the Future Foundation suggested that the majority of people were happy to provide personal details if the result was better products or services. However, the public's experience of how well this data is used often falls short of their expectations in terms of how it benefits them personally.

ID$32$

But with so much information gathering going on$,$ is there a danger of "survey fatigue" setting in$?$ Just how many times can a company ask customers questions about what they think of the company, before the whole process of carrying out a survey becomes an irritation in itself? Do customers think that their comments will ever be taken notice of by management? Careful organisation of surveys can improve response rates. Stopping people when they are in a hurry to catch a train will not make an interviewer popular, but approaching them when they are captive with nothing else to do $($e$.$g$.$ waiting for baggage at an airport following a flight$)$ may be more successful.

Developing some form of meaningful relationship with a recipient prior to receiving a questionnaire seems to be important. At its simplest level, an individual would receive a very simple first form. If they complete and return this, it