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Sources of Marketing Information

A variety of sources can be used to obtain the information necessary to fuel
a marketing information system. These information sources can be grouped
into two main categories: secondary data and primary data. Secondary data
were previously collected for another purpose. Primary data are generated
for a specific purpose when the information is not available elsewhere. It is
normally advisable to search for secondary data before engaging in a primary
data collection process. The secondary data may provide the information necessary
to make a decision, and even if they don’t, they may be useful in developing
the collection process for primary data. Figure 2 illustrates the
possible sources of information for marketing decisions.
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figure 2 • Information sources.
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Secondary Data
As mentioned before, this type of data is already available from other sources
and summarizes information about operations, marketing, human resource
management, financial performance, and other topics of interest to management.
A shrewd manager will make a thorough check of all available secondary
data sources before undertaking primary data collection. Secondary
data can save many personnel hours and a great deal of money. The major
advantages of using secondary data are:
• Cost. It is much less expensive to obtain information from existing sources
than to develop entirely new data. These existing sources may require a
nominal charge for the information, but it will be much less than the cost
of undertaking primary data collection.
• Timeliness. Secondary data are available almost instantaneously. A manager
can have access to data very quickly and therefore does not have to
wait weeks or perhaps months for primary data to be collected, analyzed,
and summarized.
By using secondary data whenever possible, a manager avoids the frustration
of developing the research methodology design, designing the data collection
instrument, pretesting the instrument, devising a sampling plan, gathering
the data, checking all data for accuracy and omissions, analyzing the
data, and summarizing and reporting the results. Instead, a manager can
merely locate the appropriate source and access the information desired. This
process can be completed in a few hours or days, whereas primary data collection
can take weeks or months to complete. However, secondary data collection
does have the following disadvantages.
• Limited applicability. A manager has no assurance that information gathered
by others will be applicable to a particular hospitality operation. For
example, information obtained in New York about the popularity of a
specific menu item is not necessarily useful to a manager operating in another
part of the country. Information that pertains to one operation may
apply only to that operation and be of limited value to anyone else.
• Information may be outdated. Managers need current and accurate information
on which to base decisions. All too often, secondary data are not as
useful as they might be merely because they are not current. For example,
the results of a consumer attitude survey conducted by a restaurant four
years ago would be of limited value to a manager making plans today. During
the four years, a number of changes in consumer attitudes are likely to
have taken place. These changes in attitudes will make the original data
outdated and useful only in a historical sense. If a hospitality manager makes
use of less-than-timely data, the results are likely to be less than satisfactory.
• Reliability. Whenever a hospitality operator uses secondary data as the basis
for a decision, the manager runs the risk that the information may not
be reliable and accurate. A manager would do well to determine who collected
the data and what method of data collection was used. Information
is only as good as the individuals who collect it and the methods they use.
If a study is administered in a haphazard manner, the results and conclusions
should be viewed with caution.
There are two main types of secondary data that can be used by managers
within a firm (see Figure 2 - above). Internal data exist within the firm and can be
obtained with minimal time and effort. Advances in computer technology
have made it easier to obtain this information and provide it to managers in
a form that is useful. External data are not readily available within the firm.
Managers must obtain this data by spending more time and/or money contacting
outside sources. The Internet has made this a much easier task, but
there is still a fair amount of effort involved. The various sources of internal
and external data are discussed below.
INTERNAL DATA. The component of a marketing information system that
is the simplest to design and implement is an internal system, or the component
designed to collect data from within the organizational environment.
When considering the organizational environment, management needs to be
concerned only with information available from within the physical confines
of the organization’s units, whether they are hotels or restaurants. This component
of a marketing information system requires less time and money than
does the competitive environment or externally generated marketing information.
The internal component of a marketing information system is very
valuable to management because it provides a wealth of information.
Management has three main sources of internal marketing information:
guest histories and sales data, employees and management staff, and customer
feedback.
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Pertinent guest information should be obtained by hotels for the purpose of analyzing sales data.
Guest histories and sales data. No rules can tell a manager exactly what
records should or should not be maintained. The management of every
hospitality organization must make this decision based on individual
needs. Within a hotel operation, the minimum records that should be
maintained are both individual and group guest histories. These will permit
management to have knowledge and monitor changes in zip code origin
of guests, length of stay, guest expenditure per day, and other pertinent
data concerning guests. Within a restaurant operation, the records
maintained should include customer counts for each meal period and sales
for each menu item over a specified period of time. Many larger organizations
have a sophisticated management information system in place.
However, for the smaller organization, the design of a management information
system is much easier than it has been in the past. Many pointof-
sale terminals interface with personal computers, making the transfer
of data to off-the-shelf database management and accounting software relatively
easy. By using a personal computer, a manager is better able to
manage the data. The quality and ease of use of off-the-shelf business software
such as Microsoft Office make it far easier for a manager to capture
and analyze large databases. It is more common for managers to conduct
more sophisticated statistical analysis of the database of customers and to
mine the database for keys to increasing the volume of business from current
customers. It is obvious that, with accurate information readily available,
a manager is more likely to consult such marketing information prior
to making a marketing decision.
Employees and management staff. All too often, hospitality management
ignores the wealth of information that is informally gathered by hourly
employees such as front desk personnel, telephone operators, restaurant
service people, and hosts and hostesses. These individuals are in constant
contact with guests, yet they are rarely asked to relay customer comments
and reactions to operational changes, such as new menu items or guest
room décor changes. These employees represent an excellent source of information,
although the information they provide may not be totally objective.
It is a good idea for management to meet with employees on a
regular basis to discuss problems and opportunities. Employees crave
recognition from their supervisors; this recognition increases the employee’s
satisfaction and commitment to the organization. All employees
need to be exposed to some motivational techniques, although managers
often ignore the simple and basic needs of employees as individuals.
Customer feedback. The focus of the marketing concept is the hospitality
operation’s clientele. All aspects of the entire operation should be aimed
at satisfying these individuals. The purpose of using an internal marketing
information system is to solicit opinions and comments from the current
clientele. This can be done in a number of ways, such as having the
manager talk with a few of the customers or having service personnel
check with the customers. One method used frequently is the comment
card. These cards are placed in guest rooms or are provided to the guest
upon checkout or when they have finished a meal in a restaurant. The
purpose is to solicit their opinions and comments concerning the operation’s
quality.
All three internal sources of marketing information are very valuable. Together
they can provide a great deal of useful information with which to make
decisions. Historically, hospitality managers have failed to use these sources
to maximal advantage, but the current competitive situation in the hospitality
industry dictates that all sources of information be used to gain a competitive
advantage and to earn maximal financial rewards.
EXTERNAL DATA. Although externally generated marketing information
is extremely valuable, it is normally not collected on a daily basis, as is the case
with internally generated marketing information. This is due to a much larger
investment of time, money, and other scarce resources required for externally
generated information. Management should consider using a wide variety of
sources of external marketing information. Literally thousands of sources are
available, and these sources are limited only by management’s own efforts to
locate them. A few typical sources of external marketing information are:
Trade associations. Many industries form trade groups that provide data
for their members. These trade associations collect information from their
members and then provide industry averages that can be used to measure
a firm’s relative performance. Some of the popular trade associations for
the hospitality industry are the National Restaurant Association, the
American Hotel & Lodging Association, and the Hospitality Sales and
Marketing Association International. Two of the more popular tourism
associations are the World Tourism Organization (WTO) and the Travel
and Tourism Research Association (TTRA). However, most of the data
for the tourism industry are collected by government travel bureaus.
Travel bureaus. Cities, states, and countries usually form organizations
that are responsible for promoting travel to the area. Most cities have a
chamber of commerce that is responsible for promoting business in the
city and, in some cases, tourism as well. Larger cities and regions form
convention and visitors bureaus for the sole purpose of promoting business
and leisure travel to the region. A chamber of commerce has member
firms from all types of industries, whereas convention and visitors bureaus
tend to have member firms from travel-related industries such as
lodging, restaurants, and tourist attractions. Finally, most states and countries
have government travel and tourism bureaus that are responsible for
promoting travel to that state or country.
Trade journals and periodicals. Many industry, or trade, journals are available
to firms. Trade associations often publish their own journals, but
many other organizations publish periodicals covering certain industries.
Some of the more popular hospitality publications are Restaurants & Institutions,
Restaurant Hospitality, Nation’s Restaurant News, Restaurant Business,
Lodging Hospitality, Lodging Magazine, and Hotel & Motel Management.
The articles in these publications provide information on new
products and advertising campaigns, as well as current trends in the industry.
These articles also provide a valuable resource for case studies involving
successes and failures of industry firms.
Other Periodicals. In addition to trade journals that specialize in a certain
industry, other publications cover business in a variety of industries. Some
of the more popular business publications that cover the hospitality and
tourism industries are Business Week, Wall Street Journal, Fortune, Barron’s,
and Forbes.
Internet. The growth in both the quantity and quality of information
available on the Internet is well documented. Using one or more of the
available Internet search engines will uncover information, some of which
will be highly valuable for managers. A key consideration for managers
is being able to determine the accuracy and usefulness of information gathered
from the Internet.
University sources. Universities and colleges have well-stocked libraries
that can be a valuable resource for firms in the area. These institutions often
have access to many of the other sources of external data. In addition,
universities and colleges form centers to research specific areas such as
hospitality. This information is often free to the public or available for a
reasonable fee.
Government sources. Local, state, and federal governments maintain detailed
data on all aspects of the economy; the data are free or available for
a nominal fee. The United States Census gathers detailed information
about the population and retail business, and the Statistical Abstract of the
United States contains similar information in abbreviated form. Census
and statistical documents are now available in electronic form, enabling
quicker searches and data retrieval. The federal government also collects
information about foreign countries and provides specialists to answer specific
questions and address inquiries.
Syndicated services. Firms such as Harris and Gallup polls, Target Group
Index, Nielsen, and W. R. Simmons specialize in collecting and distributing
marketing information for a fee. These syndicated services provide
information about consumer profiles and shopping behaviors, consumer
responses to sales promotions and advertising, and consumer attitudes and
preferences. This information is useful in focusing on market segments
using aggregate data. These services often advertise in trade publications
and marketing periodicals.
Guides, indexes, and directories. Other valuable sources of external information
include guides, indexes, and directories that are available at
most university libraries and larger public libraries. Guides such as the
Business Periodicals Index provide references by subject matter for articles
in major journals and trade publications. Also, most major publications
such as the Wall Street Journal and the New York Times have indexes that
provide references by subject matter for articles that appeared in those
particular sources. Finally, Lexis-Nexis is an excellent online resource for
data about the performance of publicly traded companies.
A number of guidelines should be followed when collecting external information.
If they are not followed, much time, effort, and money are likely
to be wasted.
1. State known facts. Before undertaking an external study, make an inventory
of all data currently available. It makes little sense to conduct an
extensive study or pay to have one conducted only to produce information
that is available from existing sources. By stating all known facts,
management establishes a base from which to work. This base can be established
by looking at internal sources before proceeding with more expensive,
external information-gathering techniques.
2.List specific goals and objectives. Once a base of information has been established,
a plan must be formulated. Goals and objectives are the basis
for this plan. Without goals and objectives, an external study could easily
go astray and would not yield the information needed by a hospitality
manager. The manager needs to ask, “What do I want to learn? What
types of information about my clientele, my competition, or my own operation
would be most useful?” Having answered such questions, a manager
can begin to formulate potential questions for a survey to provide the
desired information.
3. Collect all relevant data. At this point the actual legwork must be done to
ensure an adequate sample. The information gathered must be both valid
and reliable. Validity is the degree to which the data gathered measure
what they are supposed to measure. Reliability is the degree with which
data consistently measure whatever they are designed to measure. Data
collection is extremely important and not a process to be treated lightly.
The information generated will only be as accurate and valid as the procedures
used to generate the information. For this reason, great care must
be taken to ensure that the information is gathered correctly.
4.Summarize the data and analyze the situation. No matter which data collection
method is used, some type of summary and analysis must be done
to reduce the data into a manageable package. Then management can access
the organized information and use it for a wide variety of decisions.
Primary Data
Primary data consist of original research done to answer current questions regarding
a specific operation. For example, a foodservice manager may attempt
to ascertain consumer attitudes toward new menu offerings or to solicit consumer
perceptions of increased menu prices or different portion sizes. This
type of data is very pertinent to an individual operation but may not be applicable
to other situations.
The advantages of using primary data include the following:
Specificity. These data are tailored to one operation and can provide excellent
information for decision-making purposes.
Practicality. Primary data can provide solid real-life information and a
practical foundation to be used in the decision-making process.
The disadvantages of using primary data include the following:
Cost. For an individual manager, gathering primary data is extremely expensive.
To gather primary data even from a city of 100,000 people may
prove to be a monumental task for an operator and may cost too much in
time and money.
Time lag. Marketing decisions often must be made quickly, yet it requires
a good deal of time to conduct a thorough information-gathering study.
While a manager is collecting the data, the competition may be driving
the hospitality or tourism operation into bankruptcy.
Duplication. While primary data are geared toward a specific operation,
other sources of existing data may closely duplicate the information collected
and would therefore be appropriate for decision-making purposes.
This duplication of effort is very expensive, and primary data collection
should therefore be undertaken only after all secondary data sources have
been exhausted.
In general, the advantages of using secondary data tend to be the disadvantages
of using primary data, and vice versa. As mentioned earlier, before
collecting primary data, it is advisable to perform a secondary-data search to
determine the necessity and scope of a primary-data collection effort. The next
section covers the marketing research process that is followed when collecting
primary data.
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