Marketing Research; A Colorado Perspective
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September 2006

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Marketing Research; A Colorado Perspective

By Leigh Kahn

Marketing research is BIG business. Employing over 34,000 people in the United States with total revenues in excess of $6.8 billion (yes – billion with a B), the marketing research industry provides U.S. corporations the information they need to help guide marketing programs, advertising campaigns, develop new products, and track consumer (or business customer) response to their products and those of their competitors. Clearly, with that level of expenditure and market focus, marketing research is recognized as a valued contributor to U.S. business.

So what is the perspective of companies here in Colorado? What is the value marketing research provides to our local corporations and businesses? And, what are the primary research endeavors and hot buttons?

To answer these questions, I went to a variety of companies around the region and asked them to chime in on several key topics:
  • The relative importance of marketing research to their marketing efforts
  • The balance of qualitative research versus quantitative research in their organization
  • The value they believe marketing research provides to their organization
  • And, what their current “hot” buttons are in terms of methodologies or research techniques
The companies include some of the top Colorado corporations: Gates, Hewlett Packard, RTD, Level 3 Communications, Citywide Banks, CH2M Hill, Starz Entertainment Group and Quality Education Data.

Overall, based on this sampling of Front Range companies, research comprises between 2% and 15% of the marketing budget for the client organizations.

On the value of research, the common theme was that having more information about your target audience, their needs, and their response to your products and services allows you to make better decisions, create better programs and reduce risk. Also, research is critical in the product development process providing direction, reaction and refinement.

The most often mentioned top “hot button”—on-line research. For other companies the development of panels or advisory panels has also been an important research tool. And for several, utilizing multiple methodologies in single projects offers additional insight and depth to the research

Now, a look at the perception of marketing research among these top Rocky Mountain corporations:

Gates Corporation
Cyndi Boehm, Market Intelligence Manager, Worldwide Aftermarket

While one person manages marketing research at Gates, there may be 30 or more projects that are conducted in the course of a year. When you consider the size of the company, and the marketing and sales expenditures, marketing research probably comprises about 1-2% of the total marketing and sales budget. In this numbers driven “b to b” environment, about 80% of their research is quantitative.

Cyndi believes there are three key roles marketing research provides at Gates:
  • Value – our information provides insights into our market leadership position versus competition;
  • Growth – evaluating new markets and gaining feedback on products in development;
  • Information and Data – providing input into Gates strategic planning process and quarterly reviews.
Hewlett Packard
Kathy Miner, Product Marketing Manager, Personal Storage

Though HP did not provide expenditure percentage information, the rule of thumb for high tech hardware and software providers is that roughly 10% of the marketing budget is typically spent on marketing research information. Likewise, these types of companies put roughly 75% of their research efforts into qualitative endeavors.

Kathy comments on the value research provides to HP:
The key value marketing research provides to HP is that it mitigates risk in business decision–making. When developing new categories of consumer electronic products we can’t rely on “next bench syndrome” (the ability to turn to the engineer at the next bench—or desk—and ask what features they want). Instead, we need to acquire in-depth, imaginative understanding of user needs, motivators and buying behavior for our targeted consumer segments.

For HP, the current “hot button” technique or method is to utilize consumer advisory panels for frequent feedback and insight on product definition and positioning questions. For a new product category, having an educated group of consumers in their target segment enables them to quickly explain new concepts and get feedback.

Regional Transportation District (RTD)
Susanne Henry, Sr. Market Research Analyst

Marketing Research comprises about 10–13% of the total marketing budget for RTD annually, and they typically complete 2-3 large-scale projects and around 15–20 smaller scales projects. Roughly 90% of the research conducted is quantitative, with several key qualitative projects each year. In addition, the marketing research team is responsible for tracking the results and retention rates of RTD’s direct marketing efforts.

When asked how marketing research provides value to RTD, Susanne responded:
I think our two main roles are making the voice of the customer heard and tracking marketing campaign results. We make the voice of the customer heard through a variety of efforts, such as onboard customer satisfaction surveys, customer panels, focus groups, origin and destination surveys, etc. Through tracking campaign results (most of our direct marketing efforts), we give our marketing department the information they require to know that their efforts made a difference and contributed to the bottom line, and also information to improve campaigns, if necessary.

What are the current research “hot buttons” at RTD?
The current research “hot buttons” are a focus on integration of our survey results with other RTD departments’ work. For example, RTD has revised an origin and destination study that we have done for many years and have moved to applying GIS tools to further analyze the trip data and trip patterns.

Level 3 Communications
Corey Livingston, Director of Customer Insights

Level 3 is another example of a Front Range based corporation who sells and markets to businesses rather than end consumers. This is also an industry in constant change, where technologies are continuously evolving, and companies merge frequently.

So where does marketing research fit given this high-change environment?
Research comprises roughly 3 _ to 4% of the total marketing budget for Level 3. Because of the nature of the business (“b to b” with focused market segments consisting of a few key players), qualitative research comprises roughly 70% of their total research expenditures / projects.

Still, research is a key component to Level 3’s business units. Corey remarks about the value of research at Level 3:
The number one reason we conduct market research is to reduce risk. It takes the “guesswork” out of the decisions and ensures we’re factoring the ‘voice of the customer’ into our business plans. In short, the value market research provides in my organization is that it reduces uncertainty, but it doesn’t eliminate it entirely.

CH2M Hill
Antonette Delauro, Director Marketing Programs

While many of the companies discussed thus far conduct research among end users, clients and business partners, utilizing surveys and focus groups, CH2M Hill research efforts are more focused on the business intelligence aspect of research.

The majority of CH2M Hill’s research efforts are conducted and completed by two full-time research staff members. Qualitative endeavors are very important at CH2M Hill.

Antonette Delauro comments:
Any effort that starts without business intelligence leaves you in the dark. We don’t always get as much as we would like, but anything is better than nothing.
Create the opportunity for your client to tell you what you need to hear; it is so important to create that opportunity and then to listen to what they say

What is the current “hot button” at CH2M Hill? CH2M Hill’s current philosophy is less about research methodologies and more about utilizing research to better recruit employees.

“There is a shortage of GenX engineering and project management professionals to replace the retiring Baby Boomers who are in those roles now. We need to figure out how to use the power of research, and how to more effectively market to attract and retain those people,” said Delauro.

Citywide Banks
Jan Weber, Marketing Director

Citywide Banks is a great example of a growing local company that is increasing their focus on marketing and marketing support activities, including research. While marketing research comprises about 12% of Citywide Bank’s marketing budget this year, that reflects a 100% increase over prior years. The mix in the current year has been roughly 50/50 quantitative/qualitative, however the focus in the future will be more toward quantitative research measures 75/25 in the next couple of years.

When asked about the value marketing research provides to Citywide, Jan Weber said:
Marketing research is an extremely valuable decision making tool at Citywide Banks, providing an unbiased perspective on issues and opportunities key to our business strategy moving forward.

We use extensive market research to guide our decisions regarding new branch locations and geographic expansion as well.

Lastly, our product design and pricing decisions are also enhanced by research, which provides an industry perspective and defines our local market “position” relative to our competitors.

The “hot button” techniques that are of interest to Citywide Banks are website surveys. However, Weber remarked that controlling the quality of the data captured through this channel is a challenging offset to the relatively low cost.

Starz Entertainment Group
Ellen Quest, Executive Director of Media Research

While Starz Entertainment Group (SEG) was not able to provide figures regarding research expenditures, they describe themselves as “avid” researchers, using a variety of research techniques to better understand and stay in tune with consumers’ complex entertainment criteria.

Projects at SEG are split close to 50/50 between qualitative and quantitative designs, with a number of projects utilizing both techniques simultaneously.

In fact, one of their “hot button” techniques is to combine online quantitative studies with online bulletin board discussions to further probe on attitudes, reasons why and diagnostics. Another technique that is “hot” for them is to get a read on specific programming using the dial test technique producing quantitative measures based on 80 centrally recruited respondents. The dial has a plus and minus scale and reactions are continuously aggregated and immediately graphed for those “behind the mirror.” These instant results are then used for the break sessions to further discuss the reasons for their reactions.

Ellen comments on the value marketing research provides to SEG:
SEG uses research as a sounding board for many strategic decisions – such as launching new channels, improving sales communications, and assessing the value of the numerous new television alternatives. Providing a feedback loop from our customers is an integral part of our business process.

Quality Education Data (QED)
Deirdre Martel, Research Director

QED, a division of Scholastic (a $2.2mm company,) is a national research supplier focusing on the educational market.

Since all of QED’s work is research related, focusing on their growth helps put the importance of this effort into perspective. Research sales for the company were up 21% for the year ending May 2006 over the previous year period. Generally, 2/3 of the work for clients is quantitative in nature; 1/3 is qualitative.

Regarding the value QED really provides to their clients (consisting of software, hardware, technology, non-profit and consumer goods marketers focused on the educational market,) Deirdre offered this:
We help them focus their sales and marketing efforts into the educational market, which operates differently. Our work often is to help them test and refine product concepts as they move through the development process. Schools and districts are charged with keeping up with the No Child Left Behind Act, so our clients need to understand if their products and services are effective, align with the NCLB goals and efforts, and offer value to clients to meet those goals.

What are QED’s current “hot buttons”? On-line research is the big topic.
“We are building a proprietary panel of educational respondents. This has always been a difficult group to target as consumer lists and on-line panels currently don’t offer a way to reach these people. Another hot button – is to do more work where we supplement quantitative work with in-depth interviews, allowing us to probe more deeply and gain additional understanding behind the quantitative numbers.”

In summary, market research in the Rocky Mountain region is thriving! Research continues to be a line item within the marketing budget, qualitative and quantitative methods are still being utilized and online is becoming increasingly more important for companies. Research remains one of the most important marketing tools to help mitigate risk, providing the opportunity to answer “What if?” questions in order to make timely and appropriate business decisions. The next time you find yourself wondering what your customers think, it’s probably time to start your next research project and find out!

Leigh Kahn is a veteran market researcher and the owner of Kahn Research based in Castle Rock, CO. Leigh’s marketing research background includes Coors Brewing Company, The Polk Company, National Demographics & Lifestyles, Burke Marketing Research, Martiz Marketing Research and the NPD Group. Leigh founded Kahn Research in 2004, helping clients understand customer needs through qualitative research as well as online and telephone survey research. She is the President-elect for the Colorado American Marketing Association and can be reached at 720-733-8221 or

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