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I spent a very long time on Amazon and Staples.com recently trying to find a replacement for the little hand-held gadget that I use to clip crossword puzzles out of my newspapers. Typing “Paper cutter” in the search box didn’t get me there. And neither did “Scissors”. I eventually gave up. It wasn’t until I saw it in a good old-fashioned mail-order catalog that I learned it is called a “Gift wrap cutter.” And so I was finally able to go back online and order one.

There are two important lessons here for researchers.  
 
The first is never assume that the way you refer to something is universally understood.
Our clients use a lot of acronyms and short-hand to describe their products, much of which is insider-speak. Testing that terminology with an uninitiated audience helps to overcome this problem. At TRC we have a group called the Questionnaire Review Committee. A member who is not involved in that project reviews the survey instrument prior to fielding. Anything that isn’t understood is flagged for further review
 
The second is that potential customers may not consider themselves as being in the market for a given product, even if they are. 
I didn’t realize I wanted a gift wrap cutter, but it turns out that’s exactly what I needed. A potential research client who isn’t aware of the pricing research options available to him can’t search on “conjoint study providers” to find a suitable research partner.  But he can search on his business objective:  “how to price a product” or “pricing research”. And when that search sends him to us, we can tell him that a conjoint study is an appropriate approach.     
   
The way products and services are presented in the marketplace - their names, labels, tags and descriptions - are important. But if potential customers don’t know of your product, or don’t know how to describe it, we can still reach them based on their need, the job to be done, or a solution to a problem that the product offers. In a research questionnaire, screening for ‘likelihood to purchase X product’ may not capture the same range of potential customers as “likelihood to purchase a product that does Y” would. We need to keep this in mind when deciding who does and doesn’t qualify as a prospective customer in our research questionnaires. And also in marketing our own services.  
 
Tagged in: Pricing Resarch
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trust-is-important-in-purchasing-marijuana-pricing-research

As researchers, we are always interested in understanding consumer choices. We ask respondents to rate importance, rank priorities, and trade-off among complex configuration scenarios. We discuss and make our own trade-offs in terms of design simplicity, project cost and informational objectives. And sometimes we try new approaches.

Anyone who reads the news is aware that there is a whole new consumer product category on the horizon: marijuana is now legal for medical purposes in over 30 states and for recreational use in at least 9 of those states (as of this writing). In partnership with NJ Cannabis Media (www.njcannabismedia.com), we took the opportunity presented by this new consideration dynamic to test a new choice evaluation strategy.

Essentially, we were interested in understanding the roles of 4 factors in adult recreational-use marijuana purchase decisions. A constant sum exercise (allocation of 100 “importance points”) among self-reported current and potential users yielded the following priority distribution:

factors-in-marijuana-purchase-pricing-research-1

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Tagged in: Pricing Research
brandless how-to-measure-brand-equity-with-conjoint
 
I grew up in a family that always seemed to be on the hunt for a good sale. Whether it was clothing, electronics or home goods, we never passed up an opportunity to buy an item for MUCH less than it was two days ago. Now, don’t get the wrong impression, I’m not an extreme couponer by any means. Nor do I sit outside in the cold for hours waiting for the doors to open on Black Friday. But a good sale has my name written all over it—especially clothing. Food and beverages, however, were never really something that we compromised on in terms of price, especially since I grew up in a household that favored organics. We were 100% guilty of buying a product we knew of and trusted rather than a cheaper, lesser known, alternative. I never even thought to buy “Toasted Whole Grain Oats” on the bottom shelf when “Cheerios” was right at eye level and is from a brand I know and trust. And let’s be honest— “Cheerios” just has a better ring to it. 
 

Best Way to Measure Brand Value, Price and Size of a Product 

I always wondered how companies knew exactly what consumers wanted. It never occurred to me that there were survey techniques that could be used to identify needs as well as the best way to price, size and package a product. That is until I started at TRC. I just assumed that companies use the standard question and answer format in order to get the information they desire. Once I began working on surveys, I learned that some companies were already utilizing a conjoint analysis to better understand its consumers’ needs, interests and perceptions. By showing several variations of the same product and only changing minor features across each group (such as the size, cost, packaging and other attributes), these surveys seek to identify the characteristics most appealing to respondents. This, in turn provides companies with the data they can use to assess their brand equity, while also seeing what they can do to modify their product and/or packaging, ultimately to increase sales. But is this enough to retain loyal customers? 
 

What about Off-brand Products? 

It wasn’t until I graduated from college and started working full time that I learned there are stores essentially devoted to off-brand products and are actually thriving. Imagine a store filled not only with “Toasted Whole Grain Oats,” but an off-brand product for everything you use. Yeah, that’s Brandless.com and stores like Aldi. Since realizing that I can fundamentally get the same item for much less, these types of stores have easily become some of my favorite places to shop. They have very minimal, if any, advertising throughout the store, so there is really no pressure when it comes to buying anything. Brandless.com, is just as it sounds. It takes the brand name off of every single item and shows you exactly what you are paying for. And to make it even better, both of these stores have organic products for a fraction of the cost. But, are these types of stores currently being seen as a major threat to well-known companies?
 

Can Optimization Conjoint Research Be Further Optimized? 

Typically, when doing research, we tend to only include brand-name products and services; which makes sense seeing as those are the ones that are most popular and come to your mind first. However, now that there’s this new segment of stores totally devoted to off-brand products, it may be time to break the mold and include generic and “brandless” companies when conducting choice research to measure brand equity. When it comes down to it, it’s only a matter of time before products like “Toasted Whole Grain Oats” begin to take over. How prepared is your company?
 
Tagged in: Brand Equity Conjoint
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statistics-in-market-research-
Last week I was watching the CBS morning news and they had a story about a new study that indicated that your attitude toward gym class as a child shaped your attitude toward exercise your entire life. After watching the story I am convinced that it is another case of causation being confused for correlation.
 
The basics were that kids who reported loving gym class were far more active decades later than kids who reported finding it stressful (“I was always picked last”).  I don’t doubt this correlation. My problem is they spoke of a need to make gym class more inclusive so that all kids grow up to exercise more. In other words, if we can take the stress out of gym for kids who are not good at sports, we can get them to love exercise more. I’m not sure achieving the first part of this is possible and I’m even more certain that even if we do it will not alter future behavior. 
 
I don’t see how you can eliminate the anxiety about gym class without eliminating the physical activity. Sure you could eliminate picking teams and save that humiliation, but once the games begin the kids who are poor at sports will continue to feel anxiety. Even if you simply make it an exercise class, the kids who are out of shape will stand out. Short of one-on-one classes I don’t see how you can fix the problem.
 
Doing so is also not likely to make us more active as adults. The kids who were not good at gym were not good for a variety of reasons but likely they either lacked the natural talent OR more likely the interest in sports that the athletes had. Gym class wasn’t the cause of this! If there had been no gym class I would bet that the kids who didn’t like gym class would still be less active than those that did (those who loved it and/or were good at it). I’d point the “causation arrow” backwards….if you love sports as an adult you probably liked gym class.  
 

Statistical Principles Should Be Explained

It is easy to forget that we have to play a role in explaining statistical principles in our reporting and not just when doing sophisticated work like Discrete Choice Conjoint, Max-Diff, Segmentations and Regressions. Our direct clients likely understand causation and correlation issues, but it is important to know that their internal clients may not. Clear justification for pointing the “causation arrow” must be provided in reports and presentations. Just as important is knocking down attempts to point the arrow based solely on correlation. Otherwise they may walk away with a completely false assumption and not double back with researchers to validate it.  
 

Can You Project Results to the Population? 

This study is also useful in highlighting another common mistake made by internal clients. I was telling an old friend about the study and he said “that can’t be right, you hated gym class and you are far more active now than when we were kids”. Imagine me in a focus group telling my story of how much I hated waiting to be picked for a team and how my memory of that humiliation caused me to exercise more and more as an adult. The internal client stands up and says “That’s how we make people healthier…more humiliation in gym class!” In that case, someone will be in the room to point out that one person’s story is not projectable to the population…but that’s another blog. 
 
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Callmebymyname market-research-conjointIt’s well known that humans respond to personalization. But, as consumers do we respond more when our name is used when we are being sold to, and if so, why? Specifically, are we more likely to react positively to marketing emails that include our name in it? It turns out that we do indeed, as revealed by an interesting new study to be published in the INFORMS journal Marketing Science (authored by Navdeep Sahni, Christian Wheeler (both from Stanford) and Pradeep Chintagunta (Univ of Chicago)).
 
The researchers were specifically interested in understanding whether including a consumer’s name in the subject line of an email had a positive effect – in terms of the number of emails opened as well as subsequent conversion into sales leads. They ran a classic A/B test where everything was controlled to be the same except the inclusion of the consumer’s name in the subject line. This one tweak was sufficient to increase the probability of opening the email by 20%, which then translated to a 31% increase in sales leads and a 17% reduction in those who wanted to unsubscribe
 
What is interesting here is the nature of the manipulated content. It is non-informative about the product and its benefits, yet still has a significant impact on the consumer’s behavior. This would seem to imply that the effect should be generalizable to other products and contexts as well. To test this they ran two more studies where the products differed as well as the relationship of the consumers to the particular companies. The results were consistent with the first study, establishing the generalizability of the results. “Aspects of the advertising message that are seemingly unrelated to the product can affect how consumers process the message, and significantly change outcomes,” said lead author Navdeep Sahni. 
 
There is then the question of why this occurs. While there are competing theories the best one (message elaboration) seems to be that once their attention is drawn using their name, consumers process the information more carefully. This, of course, has a potential downside in that if the message is not relevant to the consumer then the more careful processing could translate into fewer sales leads and more people unsubscribing.   
 
A rather clever 2x2 design was used to tease out this effect – the recipient’s name was included in the body of the email (or not) and a relevant piece of information in the form of a product discount was included in the email (or not). By including the name in the body of the email, the chances of the recipient processing the message increases. By including the discount the relevance of the message itself becomes higher (or not). So if the psychological mechanism at play is message elaboration, then the condition where attention is drawn and a relevant message is presented should provide the most leads – and that is precisely what they find.  
 
Additional (regression) analysis showed how the pieces fit together. Seeing the name increases the likelihood of the message being read and processed, and increases the chance of a positive outcome – if the message is compelling. By itself, the personalization still has an effect but not as much as it otherwise could with a relevant message.      
 
This research does not tell us what happens when more and more marketers start using email personalization. Will consumers get desensitized to the effect? What if the domain is sensitive? Would consumers get offended resulting in a backlash? The answers are not available in this research as the datasets examined here do not fall into these categories. 
 
But, for now, we can say that email marketers could benefit from including the recipient’s name, and can enhance the effect by having a relevant message in the body of the email.     
 
Tagged in: Consumer Behavior
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