Marketing Research for the Small Company

Author(s): Donald F. Mulvihill

Reviewed work(s):
Source: The Journal of Marketing, Vol. 16, No. 2 (Oct., 1951), pp. 179-183
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1247626 .
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 MARKETING RESEARCH FOR THE SMALL COMPANY
T oo often market research is con- visory help was obtained from a school
sideredthe privilege of large com- of business;this part of the work could
panies only. With limited funds, a small have been done by someone within the
company may dismiss the idea of re- company, but perhaps the value of the
searchwhen it thinksof the complexities objective viewpoint of the outsider
of most market surveys. The need for more than offset the fee.
trainedinterviewerstravelingover large
areas to find the individuals picked Levelsof MarketKnowledge
through a randomizingmethod; for ex- If the company can determine in
pert analysts and interpretersof data; which of several degrees of market
and for elaborate changes in the com- knowledge its product falls, at least
pany's operationwhich may result from areas of doubt may be removed from
the conclusions obtained present ob- some of its communicationsproblems.
stacles that seem insurmountable. In orderto differentiatethese degreesof
Three studies are reported here that market knowledge,fourlevels of knowl-
show how a small company can do a edge should be recognized:
creditablejob with a small budget.1The i. No knowledge of thegeneralproductor
goal in each case has been to make basic serviceclassamongpotentialusers.At
evaluationsof the company'spositionin this stage,the marketis unawarethat
the market. Specifically,the studies at- such a productor serviceis available
tempt to determinethe degree to which fromany company.The need for the
the company has been able to com- productmay or may not be felt by
municateits messageto the market. thosein the market.
These studies deal with simple con- 2. Knowledgeof the generalproductor
cepts of the market and do not attempt serviceclass.At this stage,the market
to arrive at complex conclusions with is aware,in a vague,detachedway, of
attendant confusion in recommenda- the existenceof such a productor
service.
tions. The cost of interviewingwas kept
low by using telephone inquiries. The 3. Knowledgeof the companiesoffering
the productor service.At this stage,
quality of the interviewingwas kept high the marketis awarenot only of the
by using the part-timeservicesof women existenceof the productor service,but
investigators whose primary work was also has a generalknowledgeof com-
for the Bureau of the Census. Super- panieswhichmightoffersucha product
or service.Also,it may be activelyus-
'The authoris indebtedto GeorgeH. Brownof the ing the productto satisfyneedswhich
University of Chicago under whose general guidance have
these studiesweremade.They followsomewhatsimilar alreadybecomearticulate.
lines to those he has used in studies for GeneralMills 4. Knowledge of a particularcompanyand
(See "MeasuringConsumerAttitudes towards Prod- its productor service.At thisstage,the
UctS," THE JOURNAL OF MARKETING, Vol. XIV, No. 5, marketis not onlyawareof companies
April, 1950. pp. 691-698). in general,but also is familiarwith
179
180
180L
their products and their qualities as
differentiatedfromthose of other prod-
ucts of similarwant-satisfyingvalue.
Students of marketing will note that
these stages may be likened to the vari-
ous stages in the advertising spiral set
forth by Otto Kleppner.2 The first two
levels taken together might be likened
to the "pioneer stage"; the third level to
the "competitive"; and the fourth level
to the "retentive." Although such anal-
ogy is not precise, it emphasizes the fact
that, if a determination can be made of
the level of knowledge which is held by
the market in regard to a given product
or service, management will then be able
to make market policy determinations
accordingly. Since, in every market
situation, these three stages may exist
in different proportions at any partic-
ular time, the problem is really one of
determining in which of the stages the
preponderance of the market falls. Even
in those situations where the market is
more or less evenly divided among the
various levels, considerable aid will be
given to the management by a recogni-
tion of that fact.
Preliminary Steps
In an attempt to determine the
knowledge levels held by the possible
users of their services, a trucking com-
pany recently conducted surveys in
regard to its three major activities: in-
dividual charter bus service; contract
trucking; and truck-leasing. In all three
studies, an attempt was made to deter-
mine:
i. The presentusersof the type of service
and how they learnedof it.
2. The degreeto whichothersknewof this
type of service and how they learned
of it.
2 Otto
Kleppner,Advertising Procedure,
Chap.2, "The
AdvertisingSpiral,"(4th ed; New York:Prentice-Hall,
Inc., 195o), pp. 7-30.
THE JOURNL OF
THE JOURNAL MARKETING
OF MARKETING
3. The degreeto which they knew specifi-
cally that the company doing the re-
searchofferedthis service.
4. The determinationof potentialusersot
this service,at least by broadcategories.
Before going into the field, an examina-
tion of the internal records of the com-
pany was made to see the categories of
present users. Discussions of market
concepts with company officials, com-
petitors, and trade association officials
aided in the understanding of the pos-
sible market as envisioned by the trade.
A preliminary inquiry was also made
among present users to determine how
they had learned of the service as a
further aid in setting up the question-
naire used in the sample survey.
CHARTERBus SURVEY
In the case of the individual charter
bus service (renting on either a mileage
or time basis of bus transportation from
one point to another and return), an
analysis of all the present users of this
company's service had been made prior
to the research reported here. From this
preliminary survey and from an ex-
amination of company internal records
throughout the past, it was seen that
the most likely users of this service
might be social clubs, social service
groups, schools, and church organiza-
tions. It was thought that other groups,
such as manufacturers and processors,
retailers, wholesalers, and the general
public, might be possible users of this
service. A non-proportional stratified
sample (an equal number of interviews
were made in each stratum) was set up
for these eight groups, using the Classi-
fied Telephone Directory as a source of
listings of the members of the universe
in the first seven categories and the
general Telephone Directory for the
public. A random sample was drawn,
using the Table of zo5,ooo Random
 MARKETING
NOTES
MMARKETINGNOTES
Decimal Digits prepared by the Inter- three definite marketing policies were
state CommerceCommission.
Many detailed facts of interest to the
truck companywere obtainedthrougha
telephoneinquiryto the membersof the
samples. Although it might be argued
that the use of the telephone listings
possibly excluded some users, this dis-
advantage was thought to be offset by
the ability to obtain more interviews
within a shortertime and at a lowercost.
Also, the company had found that 90
per cent of its patrons placed the order
for bus service by phone. Very simple
conclusions,which neverthelessare im-
portant in makingpolicy decisions,were
obtained from the data:
181
181~~~~~~~~~
established:
i. Extensive direct mail and telephone
campaignswereto be launchedin those
four categories of most likely users.
(The telephonelistings used in setting
up the sample provide a basis for the
sales campaign.)
2. Promotional efforts were to be pri-
marilyupon trip-takingwith secondary
emphasison the use of buses for trips
and on the companyitself.
3. The color and design of the bus was
not to be changedexcept to accentuate
the nameand the fact that on.aparticu-
lar trip the bus was chartered.
CONTRACT TRUCK SURVEY

I. The four categories(churches,social The second study concerned itself

service groups, schools, and social with the degree to which companies
clubs)werefoundto be the mostlikely using trucks knew about contract truck-
usersof individualcharterbusservice. ing (the hiring of truck transportation
2. Organizationsthat took no trips knew
of individualcharter bus service. Both
those organizationsthat took trips and
those that did not take trips knew of
this service primarilyby seeing buses
on the streets.
3. The company sponsoringthe research
was found to be one of the three best-
known bus companies.The other two
companiesalsoengagedin otherpassen-
ger transportationservices, and while
they may have been known for that
reason, they may have been better
known because of their having more
buses actually on the streets.
On the basis of these conclusions,it was
possible for the company to decide that
in so far as bus service was concernedit
was in the retentive stage. Any efforts
to increase its business should fall in the
area of increasing the uses of buses in
general. The company could make de-
cisionsin regardto the promotionof this
service and feel assuredthat it was not
overlookingopportunities among other
groups. As a result of the conclusions,
in which the hirer contracts for the use
of a truck by day or job with the truck-
ing company furnishing both the truck
and the driver). An examination of the
internal records of the company in-
dicated that the universe for such service
was made up of manufacturers and of
wholesalers in certain selected lines. In
this case, the listings of manufacturers
were obtained from a directory service
and the listings of wholesalers from the
Classified Telephone Directory. A prob-
ability sample was drawn and telephone
interviews were conducted with the
members of the sample.
From the data obtained at these in-
terviews, certain conclusions could be
drawn:
I. Approximatelytwo-thirdsof the com-
panies interviewed used one or more
trucks.
2. Of those using trucks, two out of three
used only one truck.
3. Of thoseusingtrucks,about40 percent
owned trucks and 60 per cent hired
trucks.
182 182
4. Most companiesinterviewedknewthat
they could hire trucks but many of
them did not know specificcompanies
by name. The company doing the
researchwas known relatively well in
comparisonwith the other truck com-
panies,but it was knownby only 9 per
cent of the companiesinterviewed.
5. Both the truck on the street and the
salesmen'scalls wereimportantsources
of informationabout truck companies.
In addition to using a questionnaire
similar to the one in the bus survey, an
aided recall survey was added to the
interview to provide a further check on
the knowledge of trucking companies by
the interviewees. Although this in-
dicated that more companies knew more
trucking companies than they had in-
dicated at the start of the interview, it
confirmed the fact that companies hiring
truck service did not know many truck-
ing companies by name nor did they
know the company doing the research.
From this study, the company could
conclude that so far as its contract
trucking service was concerned, it was
in the "competitive" stage and specific
marketing policies could be established:
I. Sales promotional efforts should be
directed at manufacturersand whole-
sale groups to overcome the lack of
knowledgeto the company'sservice.
2. Cost data shouldbe preparedand used
in saleseffortsto showhow hiringtruck
service may be cheaper than owning
trucks.
3. The design and colorof the company's
truckshould accentuatethe name.
TRUCK-LEASINGSURVEY
The third study concerned itself with
the degree to which companies that used
trucks knew about truck-leasing service
(the renting of trucks by companies in
which the trucking company provides a
truck of the type desired by the renter
Unpublishedstudiesby the NationalTruckLeasing
and bearing the renter's name, and in System, Chicago,and Fortune.
7OURNAL OF MMARKETING
THE O70URNAL MARKETING~~~~~
which the driveris on the payrollof the
renter).This type of serviceis relatively
new in the area where the surveys were
made, although some companies have
offered it for a long time in east-coast
cities. It would appear that the most
likely users of such service would be
companiesthat wish to have close con-
trol over the driver so that they might
use him as a salesmanor in some other
capacity as well. Accordingly,listings of
companieswere made, based on the de-
gree to which driver control would be
desirable.As an example,this would in-
clude both wholesale and retail com-
panies such as laundries,bakeries,gro-
ceries,and meat distributors.Originally,
it was planned to interview a random
sample picked from these listings which
again were to be found in the Classified
TelephoneDirectory. After 124 inter-
views had been made, only 6 truck
leasershad been found.This per cent of
incidence of truck-leasers corresponds
to that found in other studies of this
service.3 In order to conserve cost and
time, it was decided that a supple-
mentarystudy shouldbe madeon known
truck leasersand daily renters.A listing
of these was obtained from company
recordsand companysalesmen.The con-
clusionsin this study are limited by the
lack of randomnessof the interviewees,
but are of help to the companyin estab-
lishing its marketing policies in regard
to truck-leasing.It is apparent that so
far as this serviceis concerned,the com-
pany is in the "pioneer"stage. Certain
conclusions could be drawn from the
originalsample:
I. Aboutone-halfof the companies in the
selectedcategoriesdo not use trucks.
2. Ofthoseusingtrucks,about90percent
do not leasetrucksnorhavethey con-
sideredleasingthem.
 MARKTIN
MARKETING NOE
NOTES 183
8

3. Verylittle is knownabouttruck-leasing foundto be usingtrucksand thoughtto

companies.Even amongthoseusingthe
service, few companiesbesides the one
being used are known.
4. Such knowledge of truck-leasing as
exists apparentlyis obtained through
salesmen'scalls and advertisingin the
ClassifiedTelephoneDirectory.
On the basis of these conclusions, cer-
tain marketing policies could be estab-
lished:
i. A censusshouldbe taken by telephone
of groups of accounts thought to be
likely users of truck-leasingservice to
determinemore preciselytheir present
methodof delivery. (For example,calls
might be madeon all linensupply com-
panieslisted in the telephonedirectory.
Such an interviewwould also serve to
communicatethe fact that such service
is available.)
2. A definite,systematic educationalpro- University of Alabama
gram should be directed at companies University, Alabama
desirecontrolof the driver.
3. This programshould include personal
sales calls as well as direct mail litera-
ture.
CONCLUSIONS
From the three studies reported above,
it may be seen that, for a small com-
pany with limited funds at its disposal,
market research can be used to clear up
areas of doubt in regard to its marketing
program by determining the levels of
knowledge held by the most likely users
of its product. If the survey indicates
that the company is definitely in one of
the three stages-pioneer, competitive,
or retentive-the management can make
other determinations of a marketing
nature by an analogous process.
DONALDF. MULVIHILL

EMERGENCY PRICE CONTROLSAND THEIR

EFFECT ON MARKETING*
IN JUNE, 1950, we were well along in a and there was a generalview that prices
recovery from a mild business de- had at last leveled out on a new plateau.
pression. This depression, caused pri- In many ways, the first half of I950
marily by inventory reductions, had representedthe most "normal"period
been both brief and mild. In June, I950, our economy had experiencedsince the
economic activity was again at a high middle I920's. Then came the blow in
level, we were close to full employment Korea. Most of us vigorouslyapproved
of our resources, and a period of stable the action of our governmentin inter-
prosperity seemed in prospect. To be vening in Korea, but all of us could see
sure, prices had risen since the first of ahead a world in which all-out war was
the year, but the rise was moderate, a daily possibility, and which, at best,
such as normally accompanies the re- wouldrequirethe free nationsto become
covery stage of the business cycle, and an armed camp.
prices were substantially below the all- This revolutionin our political think-
time peak levels which had been reached ing had its immediateimpactin our eco-
in mid-I948. The business recession be- nomic behavior. As consumerswe im-
ginning in 1948 had marked the end of mediately remembered the shortages
eight long years of continuous inflation, and inflation which we had so recently
* Condensed from a
speech at the Spring Conference, experienced.
We had better buy those
American Marketing Association, Detroit, June, I95I. new cars and refrigeratorsthat we had