Can Internet Really Play a Detrimental Role in Market Research - Term Paper Example

Introduction The coming of the new millennium has brought new and more challenging technologies. Different forms of communications such as Internet, mobile phones and SMS, Internet chat or MIRCs, and e-groups penetrated majority of the countries around the world. Communication through computer – generated networks became very visible. This enables any individual to talk with someone you cannot see in a face-to-face basis, to buy something and have it delivered without having to go out of your home, to research for any information with just one click on the Internet, or to meet new friends. Because of this, various forms of businesses found a new and easier way to reach for their target consumers through the Internet. The old means of market researching is now commonly done through Internet. In lieu of this, a question arises: Can internet really play a detrimental role in market research? The Internet Phenomenon Internet has gone from near-invisibility to near-ubiquity in little more than a year (Cerf, 1997). Most of the higher income earners business establishments today are those pertaining to computer, telecommunications and Internet industries. Even almost all of the schools, universities or colleges are offering online courses. There is almost no student – may it be a primary grader to a university or even a Master’s degree earner – who can admit that they are not dependent on computers and Internet and its functions. To quote what Sturges has cited: “… The global, public access network, or the Internet, is the sum of all such networks that are in communication with one another. The significant thing about the Internet as a carrier of information is that it has no center and has no controlling authority. It grows in an organic way as more networks are added. The early Internet had a primarily military function in the USA, and its distributed structure, both in terms of communication routes and information input, make it resistant to military attack or control…” (Sturges, 1998). Internet has indeed become globally part of man’s every day lives. From merely buying the basic necessities in life to having to get airplane flights. It has been widely useful to the students through their continuous access to faster, easier and reliable sources of different information. It has been very significant to business-oriented individuals because of its wide range of marketing and sales strategies being offered by different web owners. It has been very useful even to the simplest member of the society for you can even sell and buy things from the Internet or get credible information regarding a certain product. Yes, Internet is very much useful to everybody, and we can safely say that one is loosing such big opportunity if he or she has not been accessing to Internet. From a study conducted on July of 1995 alone, the estimated numbers of Internet hosts for each continent are: Table 1. Estimated Hosts Number (http://www.cwrl.utexas.edu/~tonya/309m/class/internet.html, 2004) Meanwhile, a recent survey done by Survey.Net has disclosed that out of 2974 total respondents (taken last May 23, 2004), majority of the people who accessed with the Internet are those ages ranging from 22 – 25 years old. Meanwhile, most of the respondents (26.2%) were presently enrolled in college (as to their highest degree attained) (http://www.survey.net/ip0r.html, 2003). The details are as follow: A separate student survey revealed that 8,624,000 (98%) from the number 8.8 million four-year college students are freely accessing to the Internet spending most of their time online than to any groups (on the average of five hours each week) (http://www.survey.net, 2003). And when we speak of gender who uses mostly of the functions of Internet, there was this study conducted which showed that there was a big difference on numbers between the male and female Internet users. Majority of the men (70%) prominently uses the Internet than women. We can assume that men are more technologically inclined than women, while women are more personal and socially interactive. Fig. 3. Gender Relationship on Frequency of Internet User (Doyle, 1996) As for the future, it is quite risky to predict the future of something as dynamic as the Internet, and who can deny that? There are at least a dozen companies in one single area who are providing services using Internet and the number will surely continuously increase. The projections of Internet-related business could range up to $50 billion at the end of the decade. This is still small compared to the total telecommunications businesses we now have, but its rapid growth and the rich evolution of new products and services clearly suggest that the unpretentious research investments of the federal government have paid off in countless ways, not all of them are simply monetary. Furthermore, there is enough reason to believe that the Internet will transform and evolve education, businesses, government services, and personal activities in ways that are incomprehensible as for today (Cerf, 1997). Internet for Market Research IT market watcher from the International Data Corporation has predicted that despite many predictions to the contrary, the Internet will work as a "powerful ally rather than a decimating nemesis" (Webster 2002). As companies move their strategic operations online, IDC says channel partners will see their resources increase. Because of the Internet's growing role in commerce, it is often thought that there is increasingly less room for channel partners and other types of intermediaries. But to say the middleman will disappear altogether is unrealistic revealed by an analyst with IDC's Internet and eCommerce Strategies research program. It is more accurate to say the role of the middleman will change over time, focusing perhaps less on the core product being sold and more on the ancillary benefits that the vendor has to offer - such as expert support and product information - and aftermarket concerns, such as repairs and add-on sales (Webster 2002). It is for this reason that Internet is seen as one of the most powerful too to do market research. It has been used not only as one of the ‘behind the scenes’ of the marketing mixes but as a marketing strategy itself. Many brands, in an attempt to get the inside track on a niche, cutting edge core target, employ innovative research techniques that allow them to slip below the radar, to capture the elusive insight that they believe will allow them to be considered the 'it' brand in the inner circles. There is an opportunity not just to use the target for insight, but instead to engage them in a new model of research altogether - one that is rooted in reciprocity and the desire to create a brand that is actually built with the core target. Over the last few decades, an evolution of the advertising model from stimulus-response to dialogue-based has been witnessed by many. The 1980s marked a shift in the marketing industry's understanding of the consumer. No longer merely considered a vessel into which advertisers could insert marketing messaging, suddenly there was recognition of the sophisticated 'advertising consumer' (Meadows 1983). The 'advertising consumer' could see through the messaging to the intention behind the commercial, criticizing the style and effect of the message itself: they had become connoisseurs of advertising. This new consumer demanded respect. Companies could no longer just talk at consumers, but had to involve them in the dialogue if they wanted them to respect their brands. It was a difficult lesson, but one that opened up an enormous opportunity for the marketing industry. When a brand got it right, awarding respect where respect was due, brands became further embedded in the hearts of consumers than ever before (Meadows 1983). Much of the brand draw and the ability to create and cultivate a relationship with the customer is an emotional, not rational, decision. As technology allows for the production of products, or even duplication of services, that are incredibly similar, the emotional connection will become the biggest part of a customer's decision-making process (Webster 2002). With the rise of the internet, dialogue became an even more basic expectation of the savvy consumer. The internet allowed consumers to create a dialogue with anyone, with anything - raising their expectations of brands yet again. Amazon is a perfect example. Inherent in its business model is a data-capture process that allows it to personalize its communications, which has, arguably, led to its success as a purely online retailer. Every time a customer makes a purchase, that purchase is logged and subsequent offers can be tailored to ‘Mr. Jones’ who likes deep sea diving and gardening. Amazon is a brand that has a truly personal dialogue with its customers (Webster 2002). Consumer education and power have transformed the old absolutes. There are now groups of consumers who have got used to setting prices for products (priceline.com, letsbuyir.com), 'playing' the market to obtain the trade-off between perishability and price (lastminute.com) - even becoming involved in assembling their own products (Levi's US in-store website or Adidas' Customization Experience). The harnessing of new technologies accentuates the shifting power base (Kelly & Reed 2001). Respect for the consumer is the foundation of brand dialogue, born out of a genuine belief in the valuable role the consumer plays in the success of a brand. Looking at the body of advertising created over the last ten years, there is strong evidence that much of it has been built upon a growing respect and understanding of the sophisticated, savvy, advertising consumer. Brands communicating via a deconstruction of category paradigms work to convince the consumer that they, too, share a belief that classic marketing techniques are absurd (Kelly & Reed 2001). The move toward authenticity, honesty, and self-referential irony is evidence of this shift. Examples of this phenomenon require one to look no further than the high street--French Connection's 'FCUK Fashion' and Virgin's anti-establishment stance poke holes in their competitors' marketing efforts by aligning themselves with existing consumer cynicism. These messages, along with increasing the channels through which consumers can contribute to, comment on, and become part of the brand, all contribute to much deeper relationships between brands and the people who engage with them. In communications, we are moving quite rapidly towards a respect-based dialogue model. Market research techniques and approaches are following suit (Kelly & Reed 2001). On-line Surveys as the Most Common Internet Market Research Tool To build a brand that truly resonates with communities of passion, advertising and therefore, market research, needs not to mirror the cutting edge, but become part of it. The only way to do that is to embed everyone involved into the edge itself (Kelly & Reed 2001). This approach does not just require new forms of research, but is a holistic involvement model that influences the advertising agency process from strategic development to creative development to production. The model relies purely on a mutually beneficial relationship between the consumer, the researcher, the client, the planner, and the creative, all of whom must be willing to leave their egos at the door and embrace a new way of working. Perhaps most frightening to the agency characters involved, all the pretence of 'roles' is stripped away and in its place a collaborative team emerges. The client is not shielded from research findings, the planner does not tweak the insights to retrofit to the creative idea and the creative team doesn't hold their ideas precious. And, perhaps most importantly, the market researcher is not simply responsible for delivering the news. Everyone is a committed member of the team (Kelly & Reed 2001). Online surveys have been found out to be one of the most reliable methods of doing market research through the Internet and it is a method that truly gives results, quicker than the other methods. Online surveys can be of different forms. It may be free or with material incentives. Free online surveys are done with the message for the respondents that the said survey will benefit the company and the product itself. The advantage of this type of online survey is that it will give the company some savings while doing the market research. However, the disadvantage of this is that it is not assured that the target number of respondents will be achieved as there have been reports now that respondents do prefer answering surveys where they will receive any material for incentive. Another classification of online survey is the open ended or close ended questions. Online surveys with open ended questions allow the respondents to think of their ideas about the question. It normally consists of provided spaces or line for which the respondent will need to feel up depending on the questions. Close-ended questions are surveys which are answerable by yes or no or with other choices such as ‘excellent, very good, good, fair and poor’. Ticking the box is the method normally used in close-ended online surveys. Financial impact of using Internet for Market Research Whatever the type of online survey is used, it should be noted that online survey sources are plentiful and can be inexpensive. One of the major contributions of using Internet for market research is a reduction in transaction costs. While the cost of a business transaction that entails human interaction might be measured in dollars, the cost of conducting a similar transaction electronically might be a few cents or less. Hence, any business process involving "routine" interactions between people offers the potential for substantial cost savings, which can in turn be translated into substantial price reductions for customers (http://www.servicemachine.org/start/Definition/Definition.htm#1, 1997). But simply having the tool won't lead to reliable results. Thus, ensuring that the online survey will be done according to the plan and will achieve the target results is a must. There are some tips given to do this (Kiddle and Williamson, 2002): 1) Validate assumptions. A survey shouldn't be a fishing expedition. The company should focus on the effort by having some expectations in mind and then using the survey to test the assumptions. 2) Match the survey type to the objectives. Online surveys aren't good for every purpose. Use Web surveys to get a general sense of what the customers or prospects think about a topic. Then drill down with more focused telephone research, which allows for deeper discussion. Use focus groups only when the company wants to dive deeply into a topic. 3) Make the survey interesting. A lot of lip service is given to survey length, but even long surveys can yield very good response rates if the questions are interesting. Asking people about a specific interaction they've had with the company, or stating that their opinions will be used to create or improve products, increases the chances of engaging the respondent. Most important, seek an audience that cares deeply about the survey topic. 4) Keep it simple. Avoid open-ended questions requiring complicated responses. People don't want to type long answers. Complex questions with a large matrix of responses or a long list of products will also limit results. Keep questions short and specific, and avoid complex, hypothetical questions that require people to make a lot of assumptions. 5) Avoid the most common questionnaire errors. One common mistake is asking demographic questions at the beginning of the survey. It basically tells the person the company is trying to sell them something. Most online survey providers offer sample surveys or tutorials on questionnaire design. Doing upfront research will save the company from making mistakes that could lead to dangerously misleading results. The Future No doubt, the market potential through Internet market research is huge, with the largest youth population in history wielding more control over their own and their parents' spending money than ever before. And then factor in the buying power of Baby Boomer cool-seekers, grasping at the last moments of youth, and no one could question the substantial opportunity that stands waiting for brands that get it right. But how could even a nimble 'street team' model keep up with the speed at which cool becomes mainstream these days? A viral email can reach across the world in nano-seconds, spreading the latest trend to Estonia and Bangladesh before a cool hunter can set up their multimedia presentation. The better the cool hunters become at bringing the mainstream close to the cutting edge, the more elusive the cutting edge becomes. This is the first rule of cool: the quicker the chase, the quicker the flight. The act of discovering what's cool is what causes cool to move on, which explains the triumphant circularity of cool hunting. Conclusion Indeed, there is a bigger marketing opportunity for different businesses if they use internet for doing their much needed market research. Once more and more consumers get to put high trust on the processes involved in online surveys and internet market researches, for sure more and more companies will invest in putting up their own Internet market research sites. Internet is here to stay thus companies and products must make the most out of it. And they are doing that and will continue to do so in the hundreds of years to come. Internet is making people’s lives easier and needless to say, it is helping the company generate more income. This has been the rule of thumb now and in the future. References: A Profile of the Internet. 2004. Retrieved from Cerf, Vinton G. Computer Networking: Global Infrastructure for the 21st Century. 1997. Retrieved from Definition of E-Commerce. 1997. Internet Business, Interest Verlag, Germany Augsburg. Retrieve from Doyle, Mary. 1996. Women in the Internet. Retrieved from Read More